The Golden Era for Political ‘Con Artists’ Posing as Charities 1

Much to the delight of conservatives, Donald Trump changed politics in a number of seismic ways. But one smaller consequence of his presidency has proven a true parasite for conservatives: the rise of scam Political Action Committees posing as charities.

Legal and campaign finance experts say these groups—many of which have chosen causes championed by former President Trump to prey on his supporters—stand out precisely because they mislead donors into thinking their contributions aren’t political and will benefit a legitimate charitable cause. But the reality is these cleverly named PACs are exploiting loose election laws to funnel contributions back to the scammers.

The Daily Beast surveyed the top 25 grossing PACs that style themselves as law enforcement and veterans support groups. We found they collectively pulled in more than $85 million over the last four years. For perspective, that’s about $18 million more than the two top-raising House campaigns combined over that same time period.

Of the 25 super PACs in The Daily Beast’s survey, the biggest moneymaker was Law Enforcement for a Safer America, which CNN profiled in October for exploiting mostly elder donors under the guise of support for “Blue Lives Matter.” Like most scam PACs, the group primarily spent on fundraising efforts—$12.8 million of the $13.9 million it raised—and devoted just a little more than $500,000 on political expenditures, per OpenSecrets data.

Another major moneymaker, Honoring American Law Enforcement (HALE), raised $4 million in 2019 and 2020, and devoted about $3.1 million, or nearly 75 percent, to fundraising and “administrative” costs. And another PAC, Coalition for American Veterans (CAV)—a group with a Twitter account that has six followers and officially claims to support conservative causes—pulled in $7.1 million during the 2020 cycle and spent $6.1 million on fundraising. They only spent $357,724 on federal elections.

For comparison, a PAC called Veterans for Responsible Leadership spent only $191 of its $400,000 on fundraising and $238,000 on federal election spending.

Of the 34 functional PACs established over the last four years that support veterans’ special interests, The Daily Beast only identified four that appeared to spend most of their money on political efforts. In contrast, all the veterans’ affairs PACs established before 2016 appear legitimate.

Scam PACs, of course, aren’t new. They’ve been around since the Citizens United decision opened the door for super PACs in 2010—just in time for the rise of the Tea Party. But what is an innovation over the last four years is PACs seeming to disguise themselves as charities.

“It used to be you had to worry about phony nonprofits, but there clearly was a shift around that time, when scammers changed from phony charities to phony PACs,” Eric Friedman, the director of the Montgomery County Office of Consumer Protection in Maryland, told The Daily Beast.

Friedman, whose small team has spent the last 10 months unraveling a scam PAC network, explained the “next to impossible” challenges of nailing fraudsters to rights.

“The telemarketers they hired get the money, but virtually all of it goes back to the people who run the PAC, because they run those companies,” Friedman said. “And they’re not even real companies. They’re just names and a virtual mailbox, and they’re not registered—you won’t see them anywhere else. And there are so many of them that you have to keep tracking from one to the next to the next and it never ends, like shark teeth, so it’s next to impossible to follow the flow of money.”

For instance, one of the largest vendors to these questionable PACs is a Wyoming company called Political Marketing Services, which received $6.8 million from seven PACs last year—all claiming to support police, veterans, and firefighters. The company uses virtual office space and is registered through a corporate agency that obscures the true owner of the company.

Adav Noti, former general counsel for the Federal Election Commission and now chief of staff at campaign finance watchdog, Campaign Legal Center, says these groups were “very much on the radar” while he was at the FEC.

“The ‘pure scam PACs’—the ones who use a candidate’s name or platform—are exploiting the campaign process itself, but these fake charities are exploiting laws,” Noti told The Daily Beast.

And Robert Maguire, a political nonprofit investigator for transparency watchdog Citizens for Responsibility and Ethics in Washington, explained that, while charity telemarketing is regulated by the Federal Trade Commission, that agency has no jurisdiction over political fundraising. And the FEC, he said, appears to lack the willpower to take action.

“The problem is the first line of defense is the FEC. But the FEC is asleep at the switch a lot of the time and can’t muster the will to hold these groups accountable,” Maguire said. “The main agency that’s receiving all this data is not acting as the first line of defense, and many scammers get away with it entirely, or for a very long time.”

The FEC declined comment for this article, but pointed to the Commission’s 2018 Legislative Recommendations to Congress, specifically where the agency recommended that Congress consider prohibiting “fraudulent PAC practices.” In 2016, Democratic FEC Commissioner Ellen Weintraub and then-Commissioner Ann Ravel, also a Democrat, released a memorandum on their “Proposal to Attack Scam PACs.”

The FEC says it’s hamstrung by the letter of the law—literally one word—and has recommended Congress rewrite the statutes. And there is an effort to do just that.

Rep. Katie Porter (D-CA), a former consumer protection attorney, has co-sponsored legislation with Republican Rep. Dan Crenshaw of Texas to help put an end to scam PACs.

“It is disgusting that these con artists would take advantage of people trying to participate in our democracy, for their own personal gain,” Porter told The Daily Beast.

“In my career as a consumer protection attorney, I have never met anyone—Democrat, Republican, or Independent—who likes to get cheated,” Porter said. “That’s the core of the issue here: fraudulent organizations taking advantage of hardworking Americans, particularly our seniors and our veterans.”

Last year, Porter and Crenshaw worked directly with the agency to write their bipartisan legislation. That bill, “Stop Scam PACs,” offers a simple fix: strike one operative word—the word “fraudulently”—from the Federal Election Campaign Act.

“Federal law prohibits ‘fraudulently’ misrepresenting a person as speaking or acting on behalf of a candidate or political party. However, the meaning of the word ‘fraudulently’ in this context is unclear, which has created a real roadblock for the FEC,” Porter said. “So, per the FEC’s explicit request, my bill strikes ‘fraudulently’ from the statute.”

Porter and the FEC seem to believe the word “fraudulently” establishes too high of a bar for the FEC to go after scam PACs. And they believe that just striking that one word could help the FEC crack down on these organizations.

While it seems like Porter and Crenshaw’s bipartisan, common-sense legislation would be easy to get through Congress, they’ve struggled to find traction. The bill died last year in committee, though Porter notes she will reintroduce it this year.

But, as Noti put it, reining in this charity scheme shouldn’t be political; this is about ending a scam.

“It’s really nonprofit scammers figuring out a better way to scam,” Noti said. “They’re players in the political world, because they’ve chosen this specific form. In a way, that is corrosive to democracy, because that’s the same thing that ‘real’ scam PACs do: abuse the campaign finance system. But no, it’s not explicitly political.”

Friedman, whose office has spent the last ten months unraveling a scam PAC network, agreed.

“There’s no political action going on,” he said. “There’s actually virtually nothing going on. The telemarketers they hired get the money, but virtually all of it goes to the telemarketers. So there’s nothing political about it except for the word ‘political’ in ‘political action committee.’”

Of the 12 donors that The Daily Beast spoke with for this article, none understood that they were giving to a political committee. (Nearly all of the donors we spoke to would only talk to The Daily Beast under the condition of anonymity, citing privacy concerns.)

Many of these duped donors were seniors, and they said they thought their contributions were going directly to services or institutions supporting the causes that the PACs played up in their solicitations. For instance, CNN’s investigation of Law Enforcement for America found that about 80 percent of its 2019 donors were retirees.

Cody Alford—an oil and gas technician in Imperial, Texas—cast his vote for Trump in 2020, and he has given $1,365 to CAV since 2018. He told The Daily Beast he thought the group did charity work for veterans, “like for VA hospitals, mental support.”

Alford said he didn’t appreciate groups exploiting conservative causes. “You shouldn’t use these people that are trying to help you and support you. Armed forces, fire departments, police forces—that should be kind of off limits,” Alford said. “Like, you’re selling me Girl Scout cookies and you’re not giving that money to Girl Scouts.”

Another donor, an unaffiliated conservative woman in her eighties, told The Daily Beast that it was “horrible” to learn how the American Veterans Initiative PAC had spent her money. “I thought I was giving to veterans’ families and children of veterans,” she said. Over the past two years, she’s donated more than $2,500 to four scam PACs claiming to support veterans, and one that said it backed law enforcement.

While the law requires these groups to tell contributors they are political committees, the solicitations, often phone calls, play down the disclaimers. All donors contacted by The Daily Beast said they were solicited over the phone, and most of the phone calls were recordings.

Noti spoke to the problem, and cited his own personal experience.

“My mother-in-law got one call, actually, and it was very cleverly worded,” he said. “So carefully that anyone can’t accuse them of fraud, which made me think that they had some shady lawyer behind it.”

“That’s why criminal prosecution is such a blunt instrument,” Noti continued. “It requires a high level of proof, but clever scammers can probably avoid that. We need the FEC to have civil jurisdiction to fine these people, because they’ll probably stop if there’s a meaningful financial threat.”

The FEC does require all committees to list the name of their treasurer. Many of them, however, use virtual office spaces and phone numbers that make it difficult to contact the owners. And as long as there’s such a high standard to prove fraud and shut down these PACs, these groups will continue to operate largely with impunity.

Two donors told The Daily Beast that they’d recently gotten another round of robocalls from CAV.

“It’s a shady deal, but it’s kinda funny that you mention it, because they’ve been calling the last few weeks,” Alford said.