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Sunday, May 14, 2023

Shady Fundraising

Many posts have discussed campaign finance.

David A. Fahrenthold and Tiff Fehr at NYT:
A group of conservative operatives using sophisticated robocalls raised millions of dollars from donors using pro-police and pro-veteran messages. But instead of using the money to promote issues and candidates, an analysis by The New York Times shows, nearly all the money went to pay the firms making the calls and the operatives themselves, highlighting a flaw in the regulation of political nonprofits.

In theory, it is a political nonprofit called a 527, after a section of the tax code, that can raise unlimited donations to help or oppose candidates, promote issues or encourage voting.

In reality, it is part of a group of five linked nonprofits that have exploited thousands of donors in ways that have been hidden until now by a blizzard of filings, lax oversight and a blind spot in the campaign finance system.
Since 2014, the five groups have pulled in $89 million from small-dollar donors who were pitched on building political support for police officers, veterans and firefighters.

But just 1 percent of the money they raised was used to help candidates via donations, ads or targeted get-out-the-vote messages, according to an analysis by The Times of the groups’ public filings.


The campaign-finance system is built to police who puts money into politics, legal experts say. These groups embodied a flaw: The system is poorly prepared to stop those who raise money and channel it somewhere other than candidates and causes.

By minimizing their aid to candidates, the consultants who helped set up the five nonprofits avoided scrutiny from the Federal Election Commission and most state watchdogs, and put their groups under the jurisdiction of a distracted and underfunded regulator, the Internal Revenue Service. As a result, their spending records were posted not on the F.E.C.’s easily searchable site, but on a byzantine I.R.S. page written in bureaucratic jargon

“Constructing an elaborate self-licking ice cream cone, or fund-raising cycle that feeds itself, that’s not an exempt purpose,” said Matthew Sanderson, a lawyer at the firm Caplin & Drysdale who has advised Republican campaigns, using the I.R.S.’s term for an allowable use of the groups’ money. “The fund-raising has to be for something.”


The organizations’ calls were recorded by Nomorobo, a company that collects robocalls so it can help customers block them. The company’s founder, Aaron Foss, said it had recorded tens of thousands of calls from just these four groups — putting them among the most prolific and longest-running robocallers his network has ever tracked.

The calls captured by Nomorobo were made using a powerful new technology, a “soundboard,” according to a spokesman for the groups’ largest vendor for fund-raising calls, New Jersey-based Residential Programs, Inc.

A soundboard is a computer program, preloaded with snippets of recorded dialogue, down to uh-huhs, thank-yous and mother-in-law jokes. By clicking buttons, an operator anywhere in the world can “speak” to donors in colloquial English without saying a word.

“One, it keeps everybody on script. Two, you don’t hear the foreign accent. And three, you don’t hear the call center noise,” Mr. Foss said.

“If you say, ‘Are you a robot?’,” Mr. Foss said, “there’s a button that says, ‘No.’”