The Circle of Scam Spins On

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The Circle of Scam Spins On

In my Plum Line post today, I took a look at this interesting report from John Hawkins of Right Wing News on how some of the conservative PACs meant to funnel money to Republican candidates have actually been just keeping the donations they get—most or even all them—for the people who run the PACs. What's different about this is that while lots of liberals (myself included) have talked about this kind of thing—I found this recent case of Mike Huckabee scamming his fans into buying secret biblical cancer cures particularly despicable—there haven't been a lot of conservatives willing to talk openly about it. Hawkins explains how the most up-to-the-minute exploitation of campaign finance rules can be worked to line some people's pockets:

For example, let me tell you how conservatives can be (and have been) ripped off by scam groups. Let’s say Ronald Reagan is still alive and someone starts the Re-Elect Ronald Reagan To A Third Term PAC. Because people love Reagan, let's suppose that conservative donors pony up $500,000 to help the organization. However, the donors don't know that Ronald Reagan has nothing to do with the PAC. Furthermore, the real goal of the PAC is to line the pockets of its owner, not to help Ronald Reagan. So, the PAC sets up two vendors, both controlled by the PAC owner: Scam Vendor #1 and Scam Vendor #2. Let’s assume it costs $50,000 to raise the half million the PAC takes in. Then, the PAC sends $100,000 to the first company and $100,000 to the second company to "promote Ronald Reagan for President." Each of the companies then goes out and spends $1,000 on fliers. The "independent expenditures" that show up on the FEC report? They're at 40%. That’s because the FEC doesn't require vendors to disclose how much of the money they receive is eaten up as overhead. The dubious net benefit that Ronald Reagan receives from an organization that raised $500,000 on his name? It's $2,000. On the other hand, the net profit for the PAC owner is $448,000. Is that legal? The short answer is, "It's a bit of a grey area, but, yes, it is legal."

One particularly vivid example Hawkins found was the National Draft Ben Carson for President PAC, which isn't affiliated with Ben Carson, yet raised nearly $13 million in 2014 to promote his candidacy, only a half-million dollars of which actually went to promoting his candidacy. Even if it's technically legal, it's a scam. If I was a conservative, this stuff would enrage me. But similar things have been going on for a long time—lists of conservatives used as repositories of gullible people that can be mined for cash, whether you're selling a phantom political organization or a snake-oil medicine. I wonder when we'll see prominent Republicans condemn it?

The Circle of Scam Spins On

In my Plum Line post today, I took a look at this interesting report from John Hawkins of Right Wing News on how some of the conservative PACs meant to funnel money to Republican candidates have actually been just keeping the donations they get—most or even all them—for the people who run the PACs. What's different about this is that while lots of liberals (myself included) have talked about this kind of thing—I found this recent case of Mike Huckabee scamming his fans into buying secret biblical cancer cures particularly despicable—there haven't been a lot of conservatives willing to talk openly about it. Hawkins explains how the most up-to-the-minute exploitation of campaign finance rules can be worked to line some people's pockets:

For example, let me tell you how conservatives can be (and have been) ripped off by scam groups. Let’s say Ronald Reagan is still alive and someone starts the Re-Elect Ronald Reagan To A Third Term PAC. Because people love Reagan, let's suppose that conservative donors pony up $500,000 to help the organization. However, the donors don't know that Ronald Reagan has nothing to do with the PAC. Furthermore, the real goal of the PAC is to line the pockets of its owner, not to help Ronald Reagan. So, the PAC sets up two vendors, both controlled by the PAC owner: Scam Vendor #1 and Scam Vendor #2. Let’s assume it costs $50,000 to raise the half million the PAC takes in. Then, the PAC sends $100,000 to the first company and $100,000 to the second company to "promote Ronald Reagan for President." Each of the companies then goes out and spends $1,000 on fliers. The "independent expenditures" that show up on the FEC report? They're at 40%. That’s because the FEC doesn't require vendors to disclose how much of the money they receive is eaten up as overhead. The dubious net benefit that Ronald Reagan receives from an organization that raised $500,000 on his name? It's $2,000. On the other hand, the net profit for the PAC owner is $448,000. Is that legal? The short answer is, "It's a bit of a grey area, but, yes, it is legal."

One particularly vivid example Hawkins found was the National Draft Ben Carson for President PAC, which isn't affiliated with Ben Carson, yet raised nearly $13 million in 2014 to promote his candidacy, only a half-million dollars of which actually went to promoting his candidacy. Even if it's technically legal, it's a scam. If I was a conservative, this stuff would enrage me. But similar things have been going on for a long time—lists of conservatives used as repositories of gullible people that can be mined for cash, whether you're selling a phantom political organization or a snake-oil medicine. I wonder when we'll see prominent Republicans condemn it?