Imitation Is Not Always Flattery

Political Cartoons | claytoonzActBlue is the principal not-for-profit (NFP) fundraising arm of the Democratic Party, both nationally and locally. It was launched in 2004 to function as a mechanism to finance liberal causes, particularly political campaigns, and rapidly became a phenomenal success, particularly for the two Obama campaigns. A commercial, for-profit organization called WinRed (apocryphally named by Donald Trump) entered the scene in 2019 to compete with ActBlue’s extraordinarily successful performance. The focus of both is to secure financial contributions from a broad populace of supporters in affordable, small-dollar amounts through online appeals.

In the 2020 presidential election, both organizations battled for campaign funds, waging a furious competition marked by periodic statements of which raised the most money as a measure of candidate popularity. On April 4, 2020, The New York Times published a detailed report of tactics employed by WinRed with respect to its efforts to encourage donations and outdistance ActBlue. VoxFairfax has excerpted portions of the story to provide some sense of the comparative activities of the two.

“Bandits,” said Victor Amelino, a 78-year-old Californian, who made a $990 online donation to Mr. Trump in early September via WinRed. It recurred seven more times – adding up to almost $8,000. “I’m retired. I can’t afford to pay all that damn money.”

“Bandits,” said Victor Amelino, a 78-year-old Californian, who made a $990 online donation to Mr. Trump in early September via WinRed. It recurred seven more times – adding up to almost $8,000. “I’m retired. I can’t afford to pay all that damn money.”

WinRed had employed a “default” box online that, if not unchecked, caused recurring contributions without affirmative action by the donor. Instructions to avoid the recurring withdrawals were buried in fine print.

The sheer magnitude of the money involved is staggering for politics. In the final two and a half months of 2020, the Trump campaign, the Republican National Committee and their shared accounts issued more than 530,000 refunds worth $64.3 million to online donors.

Over all, the Trump operation refunded 10.7 percent of the money it raised on WinRed in2020; the Biden operation’s refund rate on ActBlue … was just 2.2 percent, federal records show.

The Times noted that “the money that Mr. Trump eventually had to refund amounted to an interest free loan from unwitting supporters at the most important juncture of the 2020 race.” . . . . 

In the course of its efforts, WinRed doubled down with a second pre-checked box to default donors further into recurring donations. The Times noted that “the money that Mr. Trump eventually had to refund amounted to an interest free loan from unwitting supporters at the most important juncture of the 2020 race.” Subsequently having lost the election, P45 strong- armed the RNC and WinRed to continue its questionable tactics to raise funds for his own PAC, Save America.

“You don’t realize it until after everything is already in motion,” said Bruce Turner, 72, of Gilbert, Ariz., whose wife’s $1,000 donation in early October became $6,000 by Election Day. They were refunded $5,000 the week after the election, records show.

 WinRed, as a commercial, for-profit enterprise, receives 30 cents of every donation plus 3.8 percent of the amount given, earning more than $118 million the last election cycle. Intended small donor contributions ballooned into credit-busting amounts for those least able to afford the charges. In its own words, WinRed praised its operations with the claim that it “helps civilize the Wild West of the GOP donation ecosystem.” It’s difficult to reconcile that assertion with statements by donors who called the process predatory.

In New York, the Times reported, a pianist “contributed more than 100 times in the months leading up to Election Day, going far past the legal limit of $2,800. She was refunded $87,616.50—three weeks after Election Day.”

In New York, the Times reported, a pianist “contributed more than 100 times in the months leading up to Election Day, going far past the legal limit of $2,800. She was refunded $87,616.50—three weeks after Election Day.”

The old adage that imitation is the sincerest form of flattery loses all meaning comparing ActBlue and WinRed.  Although there are as yet no signs that any prosecutors are considering legal action against WinRed, at least one intraparty dispute has arisen in Minnesota. An RNC member from the Gopher State challenged the fundraising results as WinRed reported $202,126 raised with $103,607 paid to IMGE, an Alexandria, VA,-based marketing company.

As the RNC, Trump, and WinRed amped up fundraising appeals between July 2020 and Election Day because the Democrats were outpacing them, the rate of refunds burgeoned to $122 million. As the Times report noted, refunds continued after November 3. Over the same period, ActBlue refunded $21 million.

(Photo: NRCC)

Note from the NRCC to donors.

According to the report, in the final two months of 2020, more than 530,000 refunds were made, totaling $64.3 million, an average of $121 each. “WinRed even made money off donations that were refunded, by keeping the fees it charged on each transaction,” according to the Times.

The RNC-WinRed partnership remains in place. Individual donors and state party organizations are likely to have more to say about the use of campaign funds. Perhaps more imitation without any expectation of flattery is the order of the day.

 

 

 



Categories: elections, Issues, National, politics

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