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A federal crackdown on consultants operating so-called scam PACs could be a boon to fundraisers. At least according to some practitioners.
In the wake of last month’s FBI raid on Strategic Campaign Group, a GOP consulting firm, C&E spoke to numerous fundraisers and general practitioners within the industry about the current legal environment. And while it remains unclear precisely what the FBI is investigating, speculation has swirled among fundraisers that it’s part of a more wide-ranging investigation covering what some in the industry label scam PACs.
“As a legitimate political and charitable fundraiser, anything that helps get rid of bad actors, and that includes scam PACs, is good for what we are trying to do for both Republican candidates as well as charities,” Rob Carter, a longtime GOP fundraising consultant, told C&E. “I think it’s very welcome.”
In the wake of the feds’ raid on Strategic Campaign Group’s Annapolis offices, the company’s president Kelley Rogers told reporters he suspected it was connected to his firm's involvement with The Conservative Strikeforce, which dates back to 2013.
That work triggered a 2014 lawsuit from former Virginia Attorney General Ken Cuccinelli (R), who sued Strategic Campaign Group after the PAC raised $500,000 from donors with the promise of it going to his gubernatorial campaign, but only $10,000 was forwarded. The PAC, which raised $3.38 million between 2013-2014, and Strategic Campaign Group settled with Cuccinelli for $85,000.
Concerns in the industry over this type of Super PAC have grown over the past cycle, particularly given the opportunity the 2016 presidential race presented to raise outside dollars. The main criticism of such groups is the massive amount of donor money they spend on consulting or other administrative fees; often spending only a tiny fraction of what’s raised to support the candidate they were set up to aid. Scott Mackenzie is one of the operators who is often at the center of the storm. In fact, he’s served as treasurer for several PACs that have been the subject of FEC complaints, including Conservative Strikeforce.
The hope among many in the industry that C&E spoke to is that the action is actually part of a larger effort to crack down on PACs like Conservative Strikeforce and Patriots for Trump, a Super PAC that caught the attention of the GOP presidential nominee during last year’s general election.
Patriots for Trump raised money using the then candidate’s name without his authorization last fall. It was shut down days before the November election after Trump’s lawyers insisted the group stop using his name to raise money. Mackenzie also served as treasurer for Patriots for Trump.
“In a lot of these instances where there is smoke there is fire,” said Carter, a former finance chairman for the Maryland Republican Party. “They’ve been building these specific cases for a while. I’ve got to believe the FBI is on to something here.”
If the investigation does relate to 2016 activity, that could indicate the bureau is moving faster with its industry probes. It took roughly two years for the FBI’s Washington Field Office, whose agents raided Strategic Campaign Group, to conduct the investigation that led to the illegal coordination conviction of GOP consultant Tyler Harber. And following that case, DOJ indicated increased scrutiny on the industry was coming.
Rogers didn’t respond to a request for comment from C&E. A Justice Department spokesman declined to comment on its investigation.
Republican strategist Tony Marsh does see the recent raid as a sign the feds are ramping up enforcement on such PACs.
“The FBI has clearly signaled they’re more concerned with fraudulent activity associated with campaigns and their consultants and have been working more aggressively with the FEC to find and investigate these kinds of things,” said Marsh, a veteran practitioner. “The rise of scam PACs has created new energy for federal investigators.”
Despite that new energy, fundraisers like Carter say there’s still not enough of a deterrent to curb this type of bad behavior, which in most cases transpires in a legal grey area.
“I don’t think anyone is going to bust rocks over running a scam PAC,” said Carter.
In fact, he suggested the problem was likely to persist.
“It’s not specific just to one or two scam PACs or organizations, and it’s not specific to Republicans or conservative causes. There are a lot of people who made a lot of money off Hillary Clinton this last time around,” he said. “It’s out there. And it makes it tougher for those of us doing this for legitimate and just causes.”