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New filings show how Republican lawmakers raised millions

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New financial disclosures show Representative Marjorie Taylor Greene of Florida and Senator Josh Hawley of Missouri raked in millions of dollars of donations in early 2021. ProPublica reporter Isaac Arnsdorf joined CBSN to discuss his reporting that found the politicians use those donations to tout grassroots support while consultants and vendors profit behind the scenes. Since this video aired, CBSN has reached out to both the Hawley and Greene campaigns, but has not yet heard back.

Video Transcript

VLADIMIR DUTHIERS: New financial disclosures are showing how two high-profile Republicans were able to pull in a record number of donations in the first few months of 2021. Senator Josh Hawley and Congresswoman Marjorie Taylor Greene each reported raising more than $3 million between January and March of this year. The lawmakers made headlines after it appeared both had benefited from the controversy surrounding them around that time.

A new report out from ProPublica says the politicians are using those fundraising halls to tout grassroots support, while consultants and vendors profit off of those donations behind the scenes. Isaac Arnsdorf has been following the story. He is a reporter for ProPublica, and he joins us now to talk about his reporting. So Isaac, as we mentioned, Hawley and Greene each reported raising more than $3 million in the first three months of the year. Is this unusually high for a freshman lawmaker to be raising in the case of Marjorie Taylor Greene?

ISAAC ARNSDORF: It definitely is. I mean, it's more than the average House member raises in an entire two-year cycle, and obviously, a lot of House seats aren't that competitive, but it's a huge number for her as a freshman lawmaker, and it's also a very big number for Hawley who isn't actually up for reelection until 2024.

ANNE-MARIE GREEN: Yeah, and it was such a huge number that both lawmakers got a lot of free publicity about it because it's sort of eye popping. There's no debate about them raising the money, but ProPublica looked into this, and there is something interesting about how they raised the money. What did you discover?

ISAAC ARNSDORF: That's right. They got a lot of good press out of it, and if you actually look at some of the fundraising emails, they said it was clear that that was their goal, that they wanted to post an impressive number, and they wanted to get those headlines because they wanted to be able to say this validates what we've been doing. This shows that the people stand with the controversial positions that we've been taking.

But what we were able to do using the new FEC disclosures is take a look under the hood at how did they actually manage to raise that much money. Now, they weren't able to do it in the way that a lot of sitting lawmakers historically have done, which is, a lot of corporate PACs and those kinds of donations. And that's because a lot of companies have said, we're not going to give money to a politician, to elected officials who oppose certifying the election results.

So that left them with-- that was options closed, and so they turned to grassroots, online fundraising, small dollar donations, or what's sometimes called the online outrage machine. And campaigns have gotten very sophisticated about turning online outrage into campaign cash, but it can be expensive to do. And in their cases, both of them, their top expense was renting lists. And so what that means is basically, you pay someone else to borrow their mailing lists, so then you can send emails to their mailing list asking for money.

And so just what that means is, it's not really an organic groundswell of support. What you have here, what you're actually looking at is pay a lot of money in order to reach very hard-core, committed people who have donated money in the past and trying to get them to donate to you. Now, that's not to say it's not necessarily a good investment for the campaign because they did manage to raise a lot of money out of it, and those are donors who they might be able to go back to in the future, and they got those headlines that they wanted, if you remember.

It's just to say that it costs both campaigns, while they raised $3 million, spent $600,000 on renting these lists. And part of why that's so expensive is the companies that bank the lists take a big cut. So we don't know exactly what the fee structure was in their particular case, but the top vendor that both campaigns used for another campaign, we've seen a contract where they charge $0.80 on the dollar.

So they can take a very large cut, and donors may not actually realize that when they're thinking they're giving money to support a candidate, a lot of that might be going to a vendor.

- So Isaac, if such a large portion of the gains made by politicians like Hawley and Greene is being spent on paying for these lists rentals, explain to our audience why politicians are willing to pay for it.

ISAAC ARNSDORF: I'm sorry, are willing to pay for it? Well, again, they got the headlines they wanted. That's a certain kind of the perception of fundraising star power is valuable for those candidates who are then able to get those headlines and make the presentation that they want and sort of establish themselves as leaders within the party. It's also, again, not to diminish the money is real. They did raise a lot of money. And then they also have expanded their own database of supporters who they can come back to in the future to ask for more money.

ANNE-MARIE GREEN: Yeah, because they do get to keep the list, right? And you write that they can then use that as a revenue source because they can then rent out their lists.

ISAAC ARNSDORF: Right. They get to keep the people on the lists who responded, who donated.

ANNE-MARIE GREEN: Right. So I want to go back to this whole idea of tapping into the outrage machine online. I think that's really fascinating. And you do point out that small dollar fundraising has really exploded, not to take away from them. It has really exploded. It's a lot easier to make these donations online. It's a couple of clicks attached to a link on an email, but also, as you point out, it's become sort of-- there's the professional level of approaching this has emerged.

Organizations are much more efficient at converting that outrage into money. I think it's something that we're seeing in all aspects of our lives that sometimes we feel like we're gravitating towards a certain position or a certain website. We don't realize that we're being engineered into doing that. Can you talk a little bit more about just how strategies have changed and evolved to tap into those small dollar donors?

ISAAC ARNSDORF: So a really good example is what we can see, actually, Hawley did in this instance, which is he went on Tucker Carlson's show, he gave a pretty inflammatory interview about January 6, and then he paid to rent this list, and he followed up with an email to that list, a list that the campaign knew was going to be full of people who probably watched Tucker Carlson's show and have given money before. And he sends an email to this list saying, check out my interview with Tucker Carlson and give me money to show that you stand with me and are basically sticking it to the left. And that's a very sophisticated and effective technique of raising money in this way that campaigns have gotten very good at.

But I think what's important to understand about this is it's a kind of feedback in the sense of how the incentives that it creates for lawmakers be the business model, so to speak. The way that it influences their behavior, they know that if they can create controversy, get a lot of news coverage about that controversy, they know how to solicit donations out of that, convert that outrage into money.

ANNE-MARIE GREEN: M-hm. It's really fascinating stuff. Isaac Arnsdorf, thank you so much.

ISAAC ARNSDORF: Thanks.

ANNE-MARIE GREEN: So we should note that we reached out to Congresswoman Green's office and Senator Hawley's office. Both declined to comment saying, that this is a campaign issue.