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With Roger Sollenberger, Political Reporter

Pay Dirt is a weekly foray into the pigpen of political funding. Subscribehere to get it in your inbox every Thursday.

 

The Big Dig this week… The Secret Website Behind a $140 Million ‘Scam PAC’ Network

Americans for The Cure of Breast Cancer. Autism Hear Us Now. The National Police and Sheriff’s Coalition. American Wounded Veterans. The Firefighters Support Association.

 

While these groups all sound like they support different and worthy causes, they have one conspicuous common denominator—they’re all actually Political Action Committees. 

 

They’re also among the 43 PACs listed as clients on a mystery call center’s secret website uncovered by The Daily Beast. And about half of them were named in a recent class-action lawsuit.

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That secret website is home to a sprawling network of what appear to be “scam PACs”—a derisive name for groups that style themselves as a charities while being registered as political committees, recycling the majority of donations back into shady fundraising and telemarketing groups that are often tied to the PAC operators themselves.

 

What makes this secret call site so unique is, in fact, its website, which offers a rare glimpse into the workings of a shadowy, largely unregulated—and extraordinarily lucrative—operation. (The website is archived here.)

 

According to The Daily Beast’s analysis of Federal Election Commission filings, the 43 client PACs on the call center website have raised more than $140 million in the last two election cycles alone. That’s a staggering amount of money—more than former President Donald Trump has raised in total for his flagship Save America PAC.

 

The call center has so many PAC clients that it maintains two lists. They feature some of the most notorious groups in the country, including Law Enforcement for a Safer America, a sort of scam PAC clearinghouse that was the subject of a CNN investigation in 2020.

 

Scam PAC Rats

 

Upon reviewing the website, Jordan Libowitz, communications director at Citizens for Responsibility and Ethics in Washington, said the groups fit the “scam PAC” bill.

 

“This seems like a clear scam where the only reason the PACs exist is to drive money back into these companies,” Libowitz told The Daily Beast.

 

Brendan Fischer, a campaign finance law expert and deputy executive director of watchdog group Documented, said that federally registered scam PACs are lightly regulated.

 

“The FEC has little authority to regulate misleading fundraising appeals, and PACs are allowed to spend their money on almost anything,” Fischer told The Daily Beast. He noted that while candidates cannot use campaign funds for self-enrichment, “PACs are not subject to those restrictions.”

 

While the website’s owners appear impossible to trace, the client list offers at least one clue: about half the PACs listed on the site are also at the center of a class-action lawsuit filed in federal court for the Middle District of Pennsylvania in 2021, and which remains unresolved.

 

That lawsuit identifies a network of 24 PACs and four companies, tying all of them to one man: Richard Zeitlin. (Zeitlin has denied wrongdoing.) 

 

PAC Man

 

These PACs purport to advocate for veterans, police, firefighters, and sick or disabled children, ostensibly by endorsing lawmakers who will stand up for those issues. But according to the lawsuit, the Zeitlin companies “place millions of calls on behalf of these Scam PACs seeking donations for the sole purpose of having those funds funneled back to the Zeitlin Companies by the Scam PACs’ complicit treasurers.”

 

The website is chock full of other information: scripts for payment processing and “rebuttals” to donors, as well as what appears to be a set of automated soundboard operating instructions for answering questions from difficult, impecunious, or skeptical donors. (The call center keeps a list of charity clients, too, but more on that later.)

 

The most notable element in the payment processing scripts is that they never tell donors that their PAC donation is not tax deductible until after the payment has gone through.

 

The automated soundboard replies are also revealing, especially considering that many targeted donors are elderly.

 

Sounding off

 

For instance, in a scenario where a potential donor doesn’t know their own address, the soundboard operator asks the donor, “Do you have a piece of mail that you can get it from?”

 

The soundboard replies also suggest the operators might be deceiving donors about having made contribution pledges that they didn’t actually make—or at the very least don’t remember making.

 

For instance, if a donor is told they’ve been contacted because they made a prior pledge, but they don’t recall if or when they made that pledge, the board operator is instructed to respond, “I show here we spoke with you a few weeks back.” If the donor asks again, the operator is instructed to respond, “I don’t show the exact call date. My records indicate it was sometime last month.”

 

Script reading

 

Then there’s the question of whether the target donor understands that they aren’t giving to a charity, but a registered political group. Here’s how the script sidesteps that issue.

 

If the customer asks for the phone number for the PAC, the response is, “Unfortunately I don't have that information.” The operator then offers to give the PAC’s website address.

 

(The script acknowledges that this donor might be too sophisticated, offering a side note that tells the operator, “This will be a dead deal.”)

 

The PAC sections also have what appear to be call scripts. They often dance around outright saying what a PAC actually is—especially when the question is about tax status.

 

But not all call center clients are PACs. Some, it turns out, are registered as charities. They’re just not as lucrative. And in order to dance around federally regulated nonprofit laws, they have to be more crafty.

 

Charity stripe

 

For example, there’s the “Firefighter Cancer Alliance,” run out of Knoxville, Tennessee, by former scam PAC operator Alan Bohms. The FCA website no longer exists, but according to an archived version from 2022, it was actually a program of the Volunteer Firefighter Alliance. (So is another charity listed on the page, the National Volunteer Firefighter Alliance.)

 

According to tax records, the VFA raised about $6.6 million in 2020. The document also claimed it spent only $1.9 million on professional fundraising. And while the organization lists a number of notorious telemarketing companies as payees, it’s nowhere near the same ratio that the PACs exhibit.

 

However, the filing also says the group’s total fundraising costs came out to $4.1 million. It’s not immediately clear exactly where that money went. Salaries ate up another $341,000, and management expenses were about $708,000—which together equal the costs for the organization’s actual programs ($1.2 million). Most of those appear to involve direct mail.


Read the full story here.

 

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From Roger’s Notebook...

History Lesson. After Silicon Valley Bank’s spectacular collapse due to bad mortgage investments—the second-largest bank seizure in U.S. history, which spurred fears of a run on the banks—a new super PAC appeared with a conspicuous name. On Tuesday, Republican treasurer Dustin McIntyre created the “1907” super PAC. If that does indeed reference a year in American history, as it appears, it would be the year of the massive bank run that caused a global financial crisis and, subsequently, the creation of the Federal Reserve—a  favorite target of conservative fiscal hawks.

 

Aftershocks. Soon after SVB was put into government receivership, federal regulators seized assets of another major financial player—Signature Bank—the third largest seizure in U.S. history. Unlike SVB, however, Signature Bank was reportedly under criminal investigation related to its money laundering standards in the crypto sphere. (The state of New York’s top financial regulator said the closure was related to “a significant crisis of confidence in the bank’s leadership.”)

 

But also unlike SVB, Signature Bank has direct and longstanding financial ties to political players—namely, former president Donald Trump and the Kushner family. And that could be a gift to New York’s investigation into Trump’s finances. In 2018, The New York Times reported that the state’s Department of Financial Services had requested information from the bank about the credit lines it extended to the Kushners, regarding whether those loans were “overly risky” and in violation of laws against predatory behavior.

 

The seizure indicates that New York prosecutors could now have direct access to Trump’s financial records with the bank—no subpoenas required.

 

Aftershocks, cont’d. It appears there have already been political consequences for Norfolk Southern, the railroad company involved in the catastrophic derailment that led to the release of toxins in East Palestine, Ohio. Its corporate PAC reported three voided contributions this week—Reps. Cynthia Johnson and Vickie Sawyer ($250 and $1,000, respectively) and a $5,000 gift from the PAC for the National Association of Manufacturers.

 

Have Mercer. The notorious Mercer family right-wing financiers may be gearing up for 2024. According to an FEC filing on Tuesday, the Mercer-backed super PAC “Make America Number 1” just brought on a new treasurer. Notably, the new bookkeeper is a professional political compliance consultant, and will replace the Mercer’s family accountant, Jacqueline James.

 

Make America Number 1 was relatively quiet for the 2022 midterms, and for a while had been completely inactive—though it still managed to incur legal fees. In December, it refunded $620,000 to patriarch Robert Mercer.

 

House arrest. Last week, a federal jury convicted former Ohio House Speaker Larry Householder, along with accomplice and former Ohio GOP chair Matt Borges of a sprawling racketeering and bribery conspiracy.

 

The verdict, delivered after a scant nine-and-a-half hours of deliberation, capped the largest corruption case in the state’s history. The scheme involved bribes worth more than $60 million in political aid from nuclear energy company FirstEnergy, laundered through dark money groups. In exchange, Householder would lead the House in its efforts to pass and secure a $1 billion bailout for FirstEnergy. The two men each face up to 20 years in prison.

 

More From The Beast’s Politics Desk

Matt Gaetz

For a potential presidential candidate, Ron DeSantis seems to be a bit of a shy one—so much so that he wants venues to separate him from the press and some voters. Jake Lahut and Zach Petrizzo have the story—including an anecdote about DeSantis eating pudding with his fingers for some reason.

 

This week, the Manhattan District Attorney offered to let Donald Trump testify to a grand jury—but only if he waived the immunity. Jose Pagliery has an exclusive from a former DA partner about why that’s bad news for Trump.

 

Kevin McCarthy is in a tough spot. Some Republicans want legislative achievements; others won’t work with Democrats to accomplish those goals. Sam Brodey and Ursula Perano take you inside the loggerheads.

 

Matt Gaetz’s new congressional attorney self-identifies as a “raging misogynist”—and that’s not even the worst of his tweets. He deleted them when we reached out for comment, but I saved the receipts.

 

We'll be back next week with more Pay Dirt. Have a tip? Send us a note and subscribe here.

 
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