- Experts are puzzled and baffled by the “money bomb” trick reported by the Trump campaign.
- An investigation by the New York Times found how backers were tricked into making recurring donations.
- So far it is unclear whether the reported acts are illegal or just unethical.
- You can find more articles on Insider’s business page.
Senior donors who donated a few hundred dollars to former President Donald Trump’s re-election campaign were shocked when thousands were withdrawn from their accounts. Refund requests rose in the last few months of the campaign. The resulting increases in Trump-related credit card fraud cases have been put on the radar by even the largest banks in the United States.
A The New York Times investigation was published on Saturday details a recurring fundraising program, reportedly dubbed the “Money Bomb”, that the Trump campaign used to replenish its coffers through the GOP fundraising platform WinRed in the last months of the campaign.
The tactic involved adding pre-activated recurring donation fields at the end of donation emails and creating an opt-out system instead of an opt-in system for recurring donations. And as the time got closer to the election, the fine print of those bright yellow donation boxes got smaller and more confusing, causing donors, including many older ones, to unwittingly sign up to make thousands of contributions.
Asking for recurring donations is also common among democratic campaigns and nonprofits, but the Trump campaign’s methods have been particularly alarming to many pundits.
“Groups do this in a non-toxic way all the time, and of course Trump as Trump did this 72 million times in the wrong direction and it looked like a fraud,” said Beth Rotman, national director for money and politics at Common Cause advocacy. said insider.
According to The Times, the payments essentially acted as an “interest-free loan” from Trump’s donors for his campaign, which was subject to upheaval and financial turmoil in the months leading up to the November 3rd election. After all, tens of millions of donations were refunded over the course of 2020, with WinRed pocketing the transaction fees.
How Insider Tom LoBianco reportedFormer Trump campaign manager Brad Parscale had booked nearly $ 200 million in television commercials with the expectation that a last-minute spike in donations would cover costs, a misstep that “stalled re-election efforts in early October” .
The Trump campaign’s recurring fundraising trick confused and shocked even the most seasoned campaign funding experts interviewed by Insiders.
Candidate Courts signs are displayed outside the First Ward polling station in Danville.
Paul Weaver / Pacific Press / LightRocket via Getty Images
“A complete rip-off” of a plan
Fred Wertheimer, the president of Democracy21Insider, who has led major campaign funding and ethical reform battles in Congress and in court for the past four decades, told Insider he “had never seen anything like it”.
“I’ve never seen anyone do what the Trump campaign just did,” Wertheimer said, arguing that the Trump campaign’s behavior was an abuse of the elderly and “under the bottom” of acceptable donation tactics lie.
“This is a complete rip off, they knew exactly what they were doing,” he added. “They knew they were making people sign up for one post when they really signed up for multiple posts. Then when they got caught they sent the money back. It’s like a bank robber was caught and said, ‘ Oh well, I returned the money. ‘ “
The highly unusual nature of the Trump campaign’s methods was also reflected in the amazing refund rate. While it is routine for presidential campaigns – especially large-scale campaigns – to reimburse some contributions to donors who have unwittingly exceeded the legal limit, the sheer number of reimbursement requests and the surge in reimbursements stood out to experts and insiders alike.
Overall, the Trump campaign reimbursed $ 122 million in online donations, including 10.7% of donations raised through WinRed, The Times reported. In contrast, President Joe Biden only reimbursed $ 21 million in online donations and 2.2% of donations made through ActBlue.
“I’ve been here for nearly six years and can’t think of anything in particular that people didn’t know they were making recurring contributions,” said Jordan Libowitz, Washington director of communications for Citizens for Ethics and Responsibility (CREW), Insider said. “The 10% refund of donations is a huge, unbelievable amount.”
In one long Monday explanation Trump, issued through his Save America PAC, denied the main claims in the article, arguing that the Trump campaign always promptly refunds donations upon request, indicating that a contribution rate of less than 1% was the subject of formal disputes by credit card companies . He also attacked the Times’ coverage as “an utterly misleading, one-sided hit track” and continued to falsely claim that the 2020 election was stolen.
Former President Donald Trump and Former First Lady Melania Trump.
Bill O’Leary / The Washington Post via Getty Images
The law does not always take into account campaign funding measures
Experts interviewed by The Times and Insider all agreed that the actions of the Trump campaign and WinRed cross an ethical line, particularly when it comes to older donors who say they have been betrayed. However, it’s not yet clear whether their tricks violate campaign funding or consumer protection laws.
“This is not an everyday thing that we’ve seen before,” said Libowitz. “It could be an unregulated thing just because laws follow problems.”
Common Cause’s Rotman told Insider that the new Trump campaign revelations represent an excellent opportunity for agencies like the Federal Electoral Commission and lawmakers in Congress to set new, updated rules and standards for soliciting recurring online donations.
“It’s not really a scam, but it’s a potential ploy,” Rotman said of the Trump camp’s tactics. “You talk about tricks and you need rules and laws against tricks. And you can do that with clearer guidance and enforcement. It shouldn’t be so easy for people to wonder how much they give and how often.”
Craig Holman, campaign funding and ethics lobbyist for the democracy watchdog group Public Citizen, told Insider that federal campaign funding laws and the Internal Revenue Code mostly just prohibit raising campaign donations beyond the legal limit, not necessarily the tactics used by is applied to these requests.
“I’ve never seen a fundraiser for candidates and party committees like this before, but the laws and regulations around inquiries are pretty lax,” Holman said. “It could be argued that the promotional method would likely cause illegal postings beyond post limits, but it appears that refunds have been made in such cases, so it is unlikely that legal action can be taken against the Trump campaign and WinRed . “
Meredith McGehee, Campaign Funding Reform Executive Director Issue One told Insider that the Trump campaign’s activities raise new questions about the interface between campaign funding and consumer protection, including whether fundraising platforms like WinRed are subject to the same standards as other companies , especially for actions that might be viewed as prey for seniors.
‘The basic consumer right is that you give consumers a clear and tangible notification that a commitment is about to be made. In the case of pure consumer law, it sounds like it doesn’t take the test of people who know what they’re getting into passed, “she said.
In the long term, WinRed’s mandate to make profits in the online fundraising game and to catch up with their political opponents on the democratic side creates an incentive structure that allows them to compromise and get into ethical gray areas like these, added McGehee.
“It’s important to note that WinRed is structured as a for-profit company as opposed to ActBlue which is a nonprofit. When you’re a for-profit company, the incentives to get these things straight are less strong – they are a business and their job is to make money, “she said. “Since you are a company, I would immediately ask the question, is this good business practice?”
Even if the Trump campaign and WinRed don’t have immediate ramifications from federal agencies, the damned allegations could harm the platform’s ability in the future, and thus the GOP as well.
“The highly unethical and misleading fundraising practices will inevitably take their toll,” Holman told Insider. “It is very unlikely that these donors will donate to Trump and WinRed again for a campaign.”