Monday’s opening of the Democratic National Convention in Chicago will do more than boost cable news channel ratings.  It’ll open the floodgates even more to the incessant flood of digital appeals filling your donors’ inboxes and likely yours as well.

Bobbing up with increasing frequency in that digital flood will be the sewage of the Scam PACs, the subject of this post. Scam PACs,” political committees that say they are raising money for candidates or causes but pour most of the cash back into fundraising or the pockets of the individuals running the operation.

In fact, weeks before the Convention the flood of cash generated by Vice President Harris’s candidacy clearly demonstrated that conditions for Scam PACs had already  ripened. Ripened to the point where a spokesperson for the Harris Campaign warned of “a surge in activity from so-called Scam PACs” and are “urging our supporters to be careful when they donate.”

To spot a potential Scam PAC to pay attention to the name of the PAC asking for money and do some basic research before donating. By law a candidate must use their name in the name of their campaign committee, and conversely, a group that is not authorized by the candidate cannot use the candidate’s name in the name of its committee.

For example, “Harris for President”, “Harris Victory Fund”, and “Harris Action Fund” are the only three committees raising money directly for Harris, according to a Harris spokesperson.

Example of a Scam PAC

Here’s an example, recently reported by Sam Stein of the  Bulwark and which I promptly copied into my  Outrageous Behavior Notebook.

“The political action committee Democratic Victory emailed out a fundraising solicitation expressing concerns about its financial wellbeing.

‘We’re falling short of last week’s goal by 18%,’ the group’s note read. ‘If we can’t make up that gap asap, it’ll mean we can’t send full support into battleground states to help President Biden and Democrats win.”

“The email asked recipients to chip in $20 or more.  That same day, federal disclosure records show that Democratic Victory also filed an expense. But not to Biden or any other Democratic candidate. Instead, it spent $213,093.83 on lodging at the ARIA Resorts & Casino in Las Vegas, Nevada as well as $11,300 for venue rental at the same on-the-Strip hotel.

“And it wasn’t done there. Democratic Victory would spend hundreds of thousands of dollars building out a November event in Vegas around the Grand Prix, one of the most highly anticipated, lavish, and expensive races on the Formula 1 calendar. Among its purchases: $736,545 for “event space rental,” $41,235 for help putting together “a VIP private viewing suite,” and thousands of more in separate hotel fees—all as the group was telling prospective donors it was struggling to meet its fundraising goals.

“Such expenditures would be considered sizable for the Democratic party’s premier political groups or campaign committees. But Democratic Victory is not that. Since its founding in 2020, it has operated in near obscurity, part of a constellation of generic-sounding PACs secretly run by a group of Democratic operatives and infamous within digital-fundraising circles for their unscrupulous methods….

“But a fuller examination of Democratic Victory’s expenditures does not paint a portrait of a group primarily acting as a helpful cog in the Democratic party’s machinery. It suggests that the PAC chiefly operates almost as a personal piggy bank, funneling small-dollar donations toward other businesses its officers operate—and supporting their lavish travel habits.

Democratic Victory paid Morgan’s PACtion nearly $1.9 million for data services. It paid Penn Avenue Consulting—a firm associated with fellow Democratic Victory officer Stephen Jewett— $284,179 for “strategic consulting.” And on May 22, 2024, it made a $100,000 contribution to a relatively new entity: Virginia is for Voters. State records show that that group was started in April of this year. The people who started it: Morgan and Jewett.

[ You can read even more gory details from Sam’s reporting here. ]

No wonder Josh Nelson, CEO of Civic Shout, a digital advertising platform for Democratic campaigns and progressive nonprofits. “Scammers and grifters have been engaging in these kinds of practices for years. But the examples here are some of the most egregious and brazen I’ve ever heard.”

Back in March, in our post From Ship Building to Ship Wrecking we warned about the all-too-loose standards by which lists are made available with a note that the prevailing philosophy seems to be “bank the money today, tomorrow will take care of itself.”

“Scam PAC” as Defined by the watchdog OpenSecrets

According to OpenSecrets, Scam PACs are entities that raise money under false pretenses, typically claiming to support specific candidates or causes. However, instead of contributing to these efforts, the funds are used for personal gain or excessive overhead. These PACs exploit the lack of stringent campaign finance regulations and the anonymity of online donations to deceive donors​.

Examples of Deceptive Tactics

Here’s a sampling of  the deceptive tactics most frequently used by these fraudulent organizations:

• Matching Gift Misuse: Scam PACs frequently entice donors with promises of inflated matching gifts that do not actually exist. For example, one PAC advertised a “700% MATCH ACTIVE” for donations, suggesting that every dollar donated would be matched sevenfold.

According to Congressional investigators this match was a fabrication, designed solely to create urgency and prompt donations. Once the funds were collected, only a small fraction was directed toward the intended cause, with the bulk of the money going toward administrative costs and consultant fees

• Hyperbolic Headlines in Emails: Scam PACs often use exaggerated or alarming language in their fundraising emails to provoke emotional reactions and drive donations. Headlines like “CRUSH Donald Trump” or “DEFEAT the Radical Left” are typical examples of how these groups use fear-based appeals to manipulate donors.

These emails often give the impression that the PAC is directly supporting a candidate or cause, but the funds raised are often spent on high fundraising and operational expenses rather than on meaningful political action.

The Damage Done by Scam PACs

Rep. Katie Porter’s Scam PAC Report reveals the significant harm these entities cause. Not only do they divert funds from legitimate political campaigns,  but they also betray the trust of individual donors.

Many of these donors believe they are making a meaningful contribution to important causes, only to find out their money was misused.

 Even if you don’t work as a political fundraiser Scam PACs also damage all our nonprofit sector, as donors who are defrauded by these political groups become less likely to donate to other charities. The broader impact is a loss of trust across both political and charitable fundraising efforts.​

Why Are Scam PACs Allowed to Exist?

Scam PACs continue to thrive due to regulatory loopholes and weak enforcement by the Federal Election Commission (FEC). Porter’s report points out that the FEC lacks the resources and authority to effectively combat these fraudulent entities.

Additionally, current campaign finance laws do not impose the same accountability standards on PACs as they do on official campaigns, allowing these groups to operate with minimal oversight.​

Legislative Efforts to Address the Problem

In response to the growing problem of Scam PACs, bipartisan efforts such as the Honest Ads Act and the Stop Scam PACs Act have been introduced. The Honest Ads Act, reintroduced in 2023, aims to close loopholes that allow fraudulent PACs to exploit online political advertising. Meanwhile, the Stop Scam PACs Act, introduced by Reps. Katie Porter and Dan Crenshaw, seeks to give the FEC more authority to investigate and penalize Scam PACs.

However, these bills have faced delays and inaction by Congress, reflecting the perpetual challenge of  getting politicians to enact comprehensive campaign finance reform.​

Criminal Prosecution of Scam PAC Operators

In the absence of effective regulation there is the option of criminal prosecution for the most egregious Scam PAC operators. For instance, Matthew Tunstall was sentenced to 10 years in federal prison for defrauding donors out of more than $3 million during the 2016 election cycle. His PACs claimed to support both Donald Trump and Hillary Clinton but instead used the funds for personal gain. Other prosecutions include the treasurer of the Tea Party Majority Fund, who faces federal penalties for misusing funds and violating campaign finance laws​.

The Role of Ethical Fundraisers

The damage inflicted by Scam PACs goes beyond individual campaigns—they erode trust in the entire nonprofit and political fundraising landscape.

As donors become disillusioned, legitimate causes suffer. It’s essential for all of us to remain vigilant, to be vigilant in guarding the use of our lists…to call out and boycott the bad operators… support legislative efforts like the Stop Scam PACs Act to ensure accountability.

Roger