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Beware of ‘Scam PACs’ and PACs that Scam

Tricks can leave political donors hoodwinked.

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Zhanna Kavaliova/Getty

Fundrais­ing for the 2022 midterm elec­tion and the 2024 pres­id­en­tial elec­tion are already in full swing. The Demo­cratic National Commit­tee bragged that in the first 100 days of the Biden admin­is­tra­tion, it raised $15.4 million. Mean­while the Repub­lican National Commit­tee said it raised $44.4 million. This is all while some corpor­ate donors put their polit­ical dona­tions on hold in light of the Janu­ary 6 insur­rec­tion at the capitol. This will make fundraisers all the more eager to go after indi­vidual donors.

There are two things that polit­ical donors should be vary of: “scam PACs” and PACs that scam through pre-checked boxes on dona­tion webpages.  

Scam PACs, as the name implies, are just bogus groups masquer­ad­ing as legit­im­ate polit­ical action commit­tees. They gather money for a candid­ate or cause and then pocket the cash instead of giving it to the cause or the candid­ate. Scam PACs risk getting into seri­ous crim­inal trouble because they are often guilty of defraud­ing donors.

PACs that scam through pre-checked boxes could also get in legal hot water, or at least they may have to return money that they have raised. 

The 2020 elec­tion was so bonkers between the pandemic and the flurry of lies that scam PACs flew under the radar. But they were there as they have been for several of the past elec­tion cycles.

The crim­in­als running scam PACs target donors left, right, and center. As an indi­vidual who worked at an Alabama call center that soli­cited money for scam PACs told Reuters, “The motto was, ‘Leave your morals at the door.’”

There can be crim­inal consequences for running a scam PAC. For example Kelley Rogers of Anna­polis, Mary­land, who claimed to be rais­ing money for Repub­lican candid­ate for governor Ken Cuccinelli, was sentenced to 3 years. Kyle Prall of Austin, Texas, was sentences to 3 years in prison for rais­ing over half a million dollars through scam PACs named “Feel Bern” (presum­ably targeted at Bernie Sanders support­ers) and “Trump Victory” (presum­ably targeted at Donald Trump support­ers). Scott MacK­en­zie of Arling­ton, Virginia, was sentenced to federal prison time for scam­ming donors through a PAC called Conser­vat­ive Strike­Force and another called Conser­vat­ive Major­ity Fund. He pleaded guilty to making false state­ments to the Federal Elec­tion Commis­sion (FEC). And another convicted PAC scam­mer named Cary Lee Pater­son raised $90,000 for an ostens­ibly pro-Bernie Sanders super PAC called Amer­ic­ans Socially United. He allegedly scammed “James Bond” actor Daniel Craig out of over $47,000.

For years, these scam­mers got away with this activ­ity. But more recently, the Justice Depart­ment has been crack­ing down on scam PACs. This is a good turn of events. As Brendan Fisc­her of the Campaign Legal Center told the Center for Public Integ­rity, “Scam PACs have prolif­er­ated in recent years, and it is about time there is account­ab­il­ity for oper­at­ives who rip off well-inten­tioned small dollar donors who are trying to engage in the polit­ical process.”

A setback for regu­lat­ing scam PACs came in 2019 when a federal judge knocked out an FEC rule that limited the use of a candid­ate’s name by PACs that did not actu­ally support that candid­ate. This rule was aimed at curb­ing a big avenue for scam PACs. But in Pursu­ing Amer­ica’s Great­ness v. FEC, a federal judge ruled that the PAC-naming rule viol­ated the First Amend­ment. And for similar reas­ons, the Federal Trade Commis­sion cannot regu­late polit­ical soli­cit­a­tions through its Do Not Call List because of First Amend­ment concerns.

So that’s the scam PAC prob­lem in a nutshell.

What about PACs that scam? These are other­wise normal polit­ical action commit­tees with ques­tion­able prac­tices of pre-check­ing obscure boxes on their online dona­tion pages that turn what is inten­ded as a one-time dona­tion into a recur­ring one. This is appar­ently what the Trump campaign did in late 2020 as part of its online fundrais­ing efforts.

Some of the Trump pre-checked boxes on the fundrais­ing webpage WinRed allowed the campaign to take more money from a donor on a monthly basis. But some were even more aggress­ive and triggered dona­tions every week. As the New York Times showed in an exposé, many low-income donors had their bank accounts emptied or their credit cards maxed out because of these unau­thor­ized recur­ring dona­tions.

Some Trump donors called their banks or credit card compan­ies to report fraud. The Times noted that “several bank repres­ent­at­ives who fielded fraud claims directly from consumers estim­ated that WinRed cases, at their peak, repres­en­ted as much as 1 to 3 percent of their work­load.” The report also estim­ated that from June 15 to the end of 2020, 12 percent of Trump’s online donors reques­ted refunds.

The RNC appar­ently did the same trick with pre-checked boxes to trig­ger recur­ring dona­tions in 2020, when many donors only meant to give once. And the GOP and other Repub­lican fundrais­ing commit­tees have contin­ued this pre-checked box gambit into 2021, accord­ing to inde­pend­ent journ­al­ist Judd Legum.

The FEC might act to crack down on scam PACs. At an open meet­ing of the FEC on April 22, the commis­sion discussed a memo from the staff’s Scam PACs Work­ing Group, which recom­men­ded improve­ments to help the public avoid poten­tial scam PACs. Accord­ing the FEC, “Chair Shana M. Brous­sard direc­ted the work­ing group to continue its work and expand on recom­mend­a­tions outlined in its memo and discussed during the open meet­ing.”

Mean­while, in Congress, Rep. Katie Porter (D-CA) has a Stop Scam PACs bill. This would be a step in the right direc­tion, though she might consider amend­ing it to cover the pre-checked dona­tion prob­lem too. But the bill is a long way from becom­ing law. Until it does, the rule is for donors is caveat emptor: every polit­ical donor needs to be care­ful that the recip­i­ent is who they think it is, and the amount is too.

The views expressed are the author’s own and not neces­sar­ily those of the Bren­nan Center.