Feds Have Lots of Questions About These GOP Donations

The campaign for Rep. Marjorie Taylor Greene (R-GA) says it received $3.5 million this year in small-dollar contributions—so small, in fact, that the campaign doesn’t even need to reveal its donors.

The Federal Election Commission, however, is skeptical.

Last week, the FEC asked the Greene campaign to check its books and make sure those numbers were right—did it really raise nearly 80 percent of its money this year from small-dollar donors? If the past is any precedent, all the campaign will need to do is say yes, and that will be it.

At issue is a rule governing the privacy of small-dollar donors, who have been giving to Republican campaigns in record numbers—sometimes unwittingly. Until a donor gives a campaign a total of $200 for an election—the “itemization threshold”—the campaign doesn’t have to disclose any details, including the donor’s identifying information. Their name, their location, and the name of their employer can remain private, known only to the campaign.

The Political Donations That Have the Feds Running Scared

This means that if Greene’s numbers are correct, she would have received donations from more than 17,700 anonymous individual contributors in the first six months of the year—a sizable amount for a freshman congresswoman.

As Republicans increasingly cash-in on low-dollar fundraising efforts, the FEC has been asking GOP campaigns more and more questions. According to The Daily Beast’s analysis of FEC data, the agency has sent 14 such notices to campaigns since June, citing millions in questionable unitemized donations. Only three of them went to Democrats.

Asked about the uptick, former FEC Commissioner Ann Ravel told The Daily Beast that while the itemization rule was not much of an issue in the past, it does have an “element of potential for fraud” and merits more attention.

“It never really came to our attention while I was there, so I didn’t even think about this as a concern then. And I do think it’s a concern,” said Ravel, who stepped down from the agency in March 2017.

Some of the targeted campaigns are prominent names. The campaigns for House Speaker Nancy Pelosi (D-CA), Rep. Alexandria Ocasio-Cortez (D-NY), and Rep. Dan Crenshaw (R-TX) all received letters in August flagging more than $1 million in unattributed contributions each. (Pelosi is one of the top Democratic fundraisers in the country, and progressive Ocasio-Cortez has always relied on small-dollar grassroots contributors.)

The feds also asked House Minority Leader Kevin McCarthy (R-CA) last month to explain why he reported nearly $800,000 in anonymous donations from a filing at the end of 2020. And Rep. Elise Stefanik (R-NY), a newcomer to GOP House leadership, was flagged for nearly $300,000.

The FEC also sent an alert in August to Missouri senatorial candidate Mark McCloskey, a Republican who alongside his wife pleaded guilty in June to misdemeanor weapons charges after wagging guns at Black Lives Matter protesters outside their St. Louis home. The agency wants to know whether the McCloskey campaign properly reported more than $400,000 worth of anonymous small-dollar contributions in its debut FEC filing this July.

On one hand, it’s possible to view any sizable anonymous contributions as deserving scrutiny. And experts agree that the disclosure rules offer potential loopholes for illegal contributions and other financial chicanery. But they also believe that, on the whole, those risks are low. They argue that the surge of small-dollar donations is actually a healthy sign for democracy.

GOP Wants to Pay Bodyguards With Donations. FEC: Not So Fast

Paul S. Ryan, vice president of policy and litigation at Common Cause, told The Daily Beast that despite the lack of transparency, he welcomed the influx of unitemized contributions.

“I am a watchdog of money in politics, but my take on this may not be what one might assume,” Ryan said. He believes that in general, the growth of small-dollar donors is “a really good thing for democracy” and is “in some ways the antidote to the special interest donor.”

Jordan Libowitz, communications director for Citizens for Responsibility and Ethics in Washington, another government watchdog, agreed. He said he would “much rather have my politicians sponsored by three million people giving $1 than one person giving $3 million.”

And unitemized donations have recently surged among Republicans, a group famous for courting megadonors.

For instance, ex-President Donald Trump’s campaign reported a huge spike in small-dollar donors over the last four years. In 2016, the campaign raised $86.7 million from donors who gave him less than $200 total, according to FEC data. But in 2020, Trump pulled in $210 million—an approximate 260 percent increase. And while then-candidate Joe Biden’s 2020 campaign raised more low-dollar money, roughly $319 million, Trump’s haul comprised a larger share of his total—nearly 45 percent, compared to Biden’s 38 percent.

GOP Cash Machine’s Behavior Is ‘Nothing Short of Scandalous’

The trend can be traced to the GOP’s consolidation behind the WinRed online fundraising platform. Some of WinRed’s practices, however, have questionably deceived small-dollar donors, bilking them for more than they’re aware of. And Libowitz suspects these reporting problems could also trace to WinRed.

“People have raised questions of whether these were truly unitemized donations, or whether some donors gave more than $200 and the campaigns wanted to keep the names off of it, or something else untoward,” he said. “But news reports have shown Republicans kind of struggling to understand low-dollar fundraising since they’re now using WinRed, which has its own reporting issues. Now suddenly there’s a ton of people giving $20 to candidates, and so maybe they just can’t keep up.”

But, like its Democratic counterpart ActBlue, WinRed automatically itemizes its small-dollar contributions, even if the donor hasn’t hit the threshold. This is reflected in Greene’s data. However, she only reported raising $1.2 million via WinRed—less than half the $3.5 million cited by the FEC.

But because campaigns aren’t required to provide documentation off the bat, their responses to the FEC’s questions run short. For instance, Rep. Matt Gaetz (R-FL) and Sen. Josh Hawley (R-MO), who each got flagged for unitemized reporting earlier this year, simply told the FEC that yes, their numbers were correct. They haven’t been publicly asked to prove it.

Adav Noti, general counsel for the Campaign Legal Center, called the unitemized process a “mixed blessing.”

“There are many ways in which the system is better off with lots of small donors. It’s really hard for lots of small donors to buy an officeholder. Whereas large donors can call in favors, a small donor can’t do that, so from an anti-corruption perspective there’s a benefit,” Noti said.

State GOPs Can’t Explain Millions In ‘Trump Victory’ Cash

He added that while the FEC “does a pretty decent job staying on top of” unitemized reporting, “there were certainly whispers” about the Trump campaign’s numbers “and whether they were in fact under $200 or from lawful sources.”

Some of those whispers hinted at illicit foreign influence, specifically from Middle Eastern countries like Saudi Arabia, which some have claimed, without much evidence, illegally gave tens of millions of dollars to the 2016 Trump campaign in the guise of unitemized microdonations.

Ravel, the former FEC Commissioner, noted those same reports, and observed that the FEC previously “may have had much less understanding about that scenario in terms of how that money could be wired.”

But Noti said if law enforcement suspects significant illegality—such as straw donors or bogus debit cards—it’d be relatively easy to check bank records. “It is a potential source of abuse but has some built-in protections that mitigate some of the danger,” he said.

The Biden campaign was never asked to account for its unitemized reporting. The Trump campaign was asked only once, regarding its whopping $19.4 million in small-dollar contributions during the weeks surrounding the 2016 election.

The campaign’s explanation was brief: “To the best of the Committee’s knowledge, none of the unitemized contributors exceeded $200 in aggregate for the election cycle.”

The FEC let it go at that.

Read more at The Daily Beast.

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