Campaign finance experts surprised by Trump Camp’s reported ‘cash bomb’

  • Experts are baffled and stunned by the report of the Trump campaign’s ‘money bomb’ ploy.
  • An investigation by the New York Times detailed how supporters were tricked into making recurring donations.
  • So far, it is not clear whether the reported actions are illegal or just unethical.
  • See more stories on the Insider business page.

Elderly donors who gave a few hundred dollars to former President Donald Donald Trump’s reelection campaign were shocked to see thousands drained from their accounts. Refund requests have skyrocketed in the last months of the campaign. The spikes that followed in Trump’s credit card fraud complaints have even reached the radar of the largest banks in the United States.

A New York Times investigation published on Saturday detailed a recurring donation scheme known as “the money bomb” that the Trump campaign used to fill its coffers in the final months of the campaign through the Republican Party WinRed fundraising platform .

The tactics included adding pre-checked recurring donation boxes to the bottom of fundraising emails and creating an opt-out system instead of an opt-in for recurring donations. And as the time approached the election, the fine print of these bright yellow donation boxes became smaller and more confusing, prompting donors, including many seniors, to apply to make thousands in contributions.

Asking for recurring donations is a common practice for Democratic campaigns and non-profit organizations as well, but the methods of the Trump campaign were particularly alarming for many experts.

“The groups do this all the time in a non-toxic way and, of course, Trump, being Trump, did it 72 million times in the wrong direction and started looking like a fraud,” Beth Rotman, National Director of Money and Politics in the group Common Cause defense, said Insider.

The payments, according to The Times, essentially functioned as an “interest-free loan” from Trump’s donors for his campaign, which faced turbulence and financial turmoil in the months leading up to the November 3 elections. Finally, tens of millions of donations were repaid over the course of 2020, with WinRed pocketing transaction fees.

As Insider’s Tom LoBianco reported, former Trump campaign manager Brad Parscale set aside nearly $ 200 million in TV ads with the expectation that an increase in last-minute donations would cover the cost, a misstep that “has left the re-election effort erupted since the beginning of October.”

The Trump campaign’s recurrent donation maneuver perplexed and shocked even the most seasoned campaign finance professionals interviewed by Insider.

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Plates in the candidates’ courtyard are displayed outside the First Wing polling place in Danville.

Paul Weaver / Pacific Press / LightRocket via Getty Images


‘A complete copy’ of a plan

Fred Wertheimer, the president of Democracy21, who has been a leader in major financial campaign battles and ethical reform in Congress and in the courts for the past four decades, told Insider that “I have never seen anything like this”.

“I’ve never seen anyone do what the Trump campaign just did,” said Wertheimer, arguing that the behavior of the Trump campaign constituted abuse against the elderly and is “below the bottom of the barrel” of acceptable fundraising tactics.

“This is a complete imitation, they knew exactly what they were doing,” he added. “They knew they were deceiving people into signing up for what they thought was a contribution, when in fact they were signing up for various contributions. So when they were caught, they sent the money back. It’s like a bank robber gets caught. and said, ‘Oh, well, I returned the money.’ “

The highly unusual nature of the methods of the Trump campaign was also reflected in the impressive rate of refunds. While it is routine for presidential campaigns – especially those that operate on a large scale – to return some contributions to donors who have inadvertently yielded the legal limit, the sheer number of reimbursement requests and the increase in reimbursements have affected experts and insiders.

In all, the Trump campaign reimbursed $ 122 million in online donations, including 10.7% of its donations collected through WinRed, the Times reported. In contrast, President Joe Biden reimbursed just $ 21 million in donations online and 2.2% of donations that came through ActBlue.

“I’ve been here for almost six years and I can’t think of anything like this where people didn’t know they were making recurring contributions,” Jordan Libowitz, director of communications for Citizens for Ethics and Responsibility in Washington (CREW), told Insider . “Repaying 10% of donations is a huge and unbelievable amount.”

On a Monday’s long extract issued through his Save America PAC, Trump denied the article’s main claims, arguing that the Trump campaign always promptly reimbursed donations when requested, pointing to a contribution rate of less than 1% subject to formal disputes through media companies. credit card. He also attacked The Times reports as “a totally misleading and one-sided hit” and continued to falsely claim that the 2020 elections were stolen.

donald trump melania trump

Former President Donald Trump and former First Lady Melania Trump.

Bill O’Leary / The Washington Post by Getty Images


The law does not always explain campaign financial maneuvers

All experts interviewed by The Times and Insider agreed that the actions of the Trump and WinRed campaign cross an ethical line, especially in relation to elderly donors who say they have been duped. But it is not yet clear whether their stratagems go against campaign finance or consumer protection laws.

“This is not a common thing we have seen before,” said Libowitz. “It may be that this is something without much regulation around it, just because the laws follow the issues.”

Rotman of Common Cause told Insider that the new revelations about the Trump campaign present an excellent opportunity for agencies like the Federal Election Commission and legislators in Congress to set new regulations and updated standards for requesting recurring online donations.

“It’s not really a scam, but it’s a potential trick,” said Rotman of Trump’s camp tactics. “You are talking about cheating attempts and you need antitrust regulations and statutes. And you can do that with clearer guidance and oversight. It shouldn’t be so easy for people to be perplexed as to how much they are giving and how often.”

Craig Holman, campaign ethics and finance lobbyist for the Democracy Watch group Public Citizen, told Insider that federal campaign finance laws and the Internal Revenue Code primarily prohibit soliciting campaign donations over the legal limit, not necessarily the tactics used in these requests.

“I have never seen a fundraising practice for party candidates and committees like this before, but the laws and regulations governing requests are very flexible,” said Holman. “It can be argued that the solicitation method would likely cause illegal contributions beyond the contribution limits, but it appears that refunds were made in such cases, so it is unlikely that legal action can be taken against the Trump and WinRed campaign.”

Meredith McGehee, executive director of the Issue One campaign finance reform advocacy group, told Insider that Trump campaign activities raise new questions about the intersection of campaign finance and consumer protection, including whether fundraising platforms like WinRed will be maintained to the same standards as other companies, especially for actions that can be seen as predators of the elderly.

“The basic consumer law is that you give consumers a clear and noticeable notification that a promise is going to happen. It seems that in the case of the pure consumer law, it failed to test people who know what they are getting into,” she said.

In the long run, WinRed’s mandate to profit and reach its democratic opponents on the Democratic side in the online fundraising game creates a more permissive incentive structure to cut shortcuts, reaching into ethical gray areas like this, added McGehee.

“It is important to note that WinRed is structured as a for-profit entity as opposed to ActBlue, which is a non-profit. When you are a for-profit company, the incentives to make these things clear are less strong – they are a business and their job is to make money, “she said. “Since they are operating as a company, the question I would immediately ask is: is this good business practice?”

Even if the Trump campaign and WinRed do not face immediate consequences from federal agencies, the blunt accusations can undermine the platform’s ability going forward and, by extension, the GOP.

“Highly unethical and deceptive fundraising practices will inevitably take their toll,” Holman told Insider. “It is very unlikely that these donors will make a campaign donation again to Trump and WinRed.”

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