How Fundraisers Convinced Conservatives to Donate $10 Million — Then Kept Almost All of It. Just Desserts.
July 29th 2019
Money Dollars Success (Maklay62)
By Derek Willis and Maggie Severns
After recruiting thousands of donors for the American Conservative Union — the powerful organization behind the annual CPAC conference — a Republican political operative pushed the same contributors to give millions to a PAC that promised to go after then-President Barack Obama, but then steered much of their donations to himself and his partners.
The PAC, called the Conservative Majority Fund, has raised nearly $10 million since mid-2012 and continues to solicit funds to this day, primarily from thousands of steadfast contributors to conservative causes, many of them senior citizens. But it has made just $48,400 in political contributions to candidates and committees. Public records indicate its main beneficiaries are the operative Kelley Rogers, who has a history of disputes over allegedly unethical fundraising, and one of the largest conservative fundraising companies, InfoCision Management Corp., which charged millions of dollars in fundraising fees.
The saga of how politically connected fundraisers used one of the nation’s leading conservative organizations as a springboard for fundraising that mainly benefited the fundraisers themselves sheds light on the growing problem of so-called scam PACs — organizations that take advantage of loosened campaign finance laws to reap windfalls for insiders while directing only a small portion of receipts to actual political advocacy.
Watchdogs have long complained that ethics laws fail to prevent the exploitation of donors by organizations operating with little or no oversight, and even President Donald Trump’s campaign issued a warning this year about “dishonest fundraising groups” using the president’s name to raise funds.
Rogers’ and InfoCision’s work on behalf of the ACU also shows how lax regulation allows big-name political organizations to recruit donors without identifying either the source of the calls or the ultimate beneficiaries of the donations. ACU appears to have had little control over the PAC’s operation and was not the source of its fundraising scripts.
“The individuals — or many of the individuals — who seem to be profiting off of scam PACs are the same people who also provide services to mainstream players,” said Adav Noti, a lawyer who worked for more than 10 years at the Federal Election Commission. “Obviously not every political consultant is fleecing small donors. But the consultants who are fleecing small donors, largely the way they’re able to do that is because they have experience and connections.”
Rogers and InfoCision did not respond to repeated requests for interviews — including lists of detailed questions. But the extent of their operation is detailed in a series of emails and documents obtained by ProPublica and Politico from a person with direct knowledge. In the records, Rogers and his cohorts discuss how to contour their pitches to collect the most money, betting that the most red-meat appeals would draw the most dollars.
“This makes me a little queasy ... which is good,” Rogers wrote after reviewing a script for a fundraising call that questioned Obama’s citizenship. “This is approved.”
The emails raise questions about Rogers’ work ostensibly on behalf of the ACU, which burst to fame in the 1970s and calls its conference “the birthplace of modern conservatism” for its role in elevating Ronald Reagan. The CPAC conference, most recently held at National Harbor, Maryland, is widely considered a crucial point of connection between GOP leadership and the grassroots activists who whip up excitement for the party’s agenda.
In 2010, the ACU enlisted Rogers to find new donors for the organization. To do so, Rogers formed a political nonprofit called the New Conservative Coalition and began soliciting money. It raised nearly $3.4 million between 2010 and mid-2012, although none of that money went to the ACU, IRS filings and records from Colorado show, because prospecting for new donors routinely consumes most or all of the money brought in.
By early 2012, the group appears to have test-marketed pitches to donors that were too extreme or embarrassing to be associated with the ACU itself. The emails reflect the insistence of then-ACU Chairman Al Cardenas, the veteran conservative lobbyist, and others in the organization that no trace of the ACU’s fingerprints be visible in the scripts given to telemarketers.
“Kelley just left me a voicemail that ACU has received a few calls in their office from people who ACU thought had received a [fundraising] call ... [and] been directed to the ACU’s conservative.org website (and then called the ACU office.),” wrote one of Rogers’s colleagues. “... it may be nothing ... but would you double check to make sure their [sic] in NO reference to ACU, conservative.org or Al Cardenas in any script, including the thank you call script?”
After finding references to ACU affiliates in some of the scripts, an operative asked, “I’m assuming we need ALL ACU references removed — is that right?”
“Yes ... just get rid of all of them,” responded another.
At another point, Rogers’ colleagues expressed concern about Cardenas’ Hispanic heritage and the tenor of their anti-immigration message to donors. The script, drafted in January 2012, declared that undocumented immigrants “account for a large percentage of our crime — and prison costs ... and take jobs away from Americans.” Those claims are not supported by evidence.
“Cardenas, the ACU Chairman, is Hispanic,” the consultant working with Rogers wrote. “In an effort to keep this script under the radar I think we should re-name it ‘Obama’s Plan.’”
In an interview, Cardenas said he didn’t recall any disagreements between ACU and InfoCision. He said ACU had been careful to run the fundraising project by its lawyers.
“The only thing I remember is making sure our executive director thought it was a good idea” to seek out new donors, Cardenas said. “Probably, the consultants got upset with the parameters that our legal counsel set.”
Asked why ACU would shield its identity when pitching donors, Cardenas said, “Using our name and my name is something we wouldn’t want to happen because a) it would hurt our own fundraising purposes, and b) we have very little control over content and we didn’t want our reputation to be tainted in any way — but I’m only guessing.”
The ACU executive director at the time, Gregg Keller, declined to comment. The ACU and current director Matt Schlapp did not respond to repeated requests for comment, including an emailed list of specific questions concerning the organization’s dealings with Rogers and InfoCision.
By the end of the summer of 2012, Rogers and InfoCision had broken with the ACU and created a new federal PAC, the Conservative Majority Fund. It began raising money using the New Conservative Coalition donor list and aggressive fundraising tactics, which painted Obama as a shady figure whose real name was “Barry Soetoro” and who “had long-term relationships with terrorists,” according to scripts for calls circulated among people working on the fundraising campaign. Neither claim is accurate. The PAC said it was hiring investigators to press the case that Obama was ineligible to be president.
That message struck gold: $2.8 million poured in from more than 30,000 donors during the five months between July and December of that year alone. To kick off its campaign, the PAC paid $371,000 in August 2012 for a television ad that briefly aired on cable television and urged viewers to call the PAC, where they would be solicited for donations. After August, it ran no television ads and made no expenditures for anything other than fundraising.
FEC records show almost all the money went for calls to donors like Mike Miller, a jeweler in Barrington, Illinois, who gave $500.
“At the time they called, it seemed like such an important thing,” Miller said in a phone interview. “I was assuming they were legitimate.” When told about the group’s lack of spending on disqualifying Obama from the ballot, he said, “If they did this, and didn’t use it for intended purposes, I want my money back.”
On the day after Obama won reelection, the PAC changed its call scripts, telling donors that Obama’s “immediate plans are to pardon the terrorists at Guantanamo, give full amnesty to illegal aliens and give the United Nations the authority to tax Americans,” according to a fundraising script in the emails. There is no evidence that any of those plans were under consideration by the Obama administration. Donors were told that the PAC had hired a team of investigators and lawyers to press for impeachment. There is no evidence in FEC records that it ever did.
The fundraising scripts included suggested responses if the prospective donors said they were unemployed, on a fixed income or had significant medical bills to pay, encouraging them to give a smaller amount. When recipients asked not to be called again, the script instructed the telemarketers to offer to place them on a “restricted list” so that they would not get more than one call every 30 days. If recipients insisted, they would be added to a no-call list.
Rogers has previously come under harsh scrutiny for raising large amounts of money but spending little on the promised advocacy. Former Virginia gubernatorial candidate Ken Cuccinelli sued Rogers for his involvement in a PAC that raised money purportedly to support Cuccinelli’s bid to be governor in 2013 but did not spend any to help Cuccinelli win. The case was settled in 2015. In 2017, Rogers’ Maryland office was raided by the FBI, but no charges were brought.
Election integrity experts have warned that alleged scam PACs are siphoning tens of millions of dollars in political donations into the coffers of fundraisers each year, while misleading donors.
Lynne Archer, 72, gave the Conservative Majority Fund $3,800 between 2012 and 2018. Archer said she tries to be wary of potential scams, but the Conservative Majority Fund had always sounded “like a legitimate group” when it solicited money.
“Damn, I gave a lot to them,” said Archer, who lives in Sugar Land, Texas, and works for her husband at an automobile dealership. “I don’t like that at all.”
Noti, who used to work at the FEC, called the proliferation of scam PACs “incredibly corrosive to American democracy” because of the impact on donors like Archer — many of them elderly — who give money in good faith to political causes.
“It’s going to chase people out of the system once those donors realize their money’s been stolen,” Noti said. “They’re going to be disillusioned and disenchanted, and rightfully so.”
Both Rogers’ Annapolis, Maryland-based Strategic Campaign Group and the Akron, Ohio-based InfoCision, a direct marketing firm, were once staples of GOP fundraising. Rogers’ clients included Kansas Sen. Jerry Moran and National Security Adviser John Bolton, while InfoCision helped raise money for the National Republican Congressional Committee and the National Rifle Association.
When the ACU sought to expand its roster of donors, it contracted with Rogers and InfoCision to make calls to a large number of potential contributors — a time-consuming, and therefore expensive, process known as “prospecting.”
During the spring and summer of 2012, several employees who worked in the political division at InfoCision, along with Rogers and other consultants, began using increasingly aggressive fundraising tactics for ACU — though the organization was never supposed to be named in fundraising materials or scripts.
The scripts tapped into voter concerns about illegal immigration. One, in the midst of the 2012 presidential campaign, declared that there was a “huge scandal” that the group had “recently uncovered,” in which Obama was “now planning to deliberately target 20-million poor Latino immigrants — a desperate effort to win re-election,” according to the emails.
Those pitches led to a flurry of emails discussing the nature of the appeals — and whether they might alienate Cardenas. Rogers was the main conduit for complaints, often relaying concerns from ACU leaders to the fundraisers crafting the various appeals.
Several months later Rogers proposed something else entirely: He and InfoCision would take the lists of donors they had harvested while working with ACU, split off their own fundraising operation, then open it as a PAC and raise money without ACU as a client.
“It’s becoming very apparent to me for many reasons that we are going to have to de-affiliate” the fundraising with ACU, Rogers wrote. “I am still trying to resolve issues with them but I can tell we are headed for trouble.”
Tensions between the ACU and the people operating the donor recruitment operation continued, emails among InfoCision employees indicate, because the PAC’s early fundraising pleas sometimes included references to ACU despite ACU’s wishes that they didn’t.
“We now have to eliminate ALL ACU references” in the materials for the group, wrote Erik Byers, an account executive who helped oversee the work done on behalf of ACU, to his colleagues on June 29, 2012. “Kelley got blasted by ACU.”
Soon after, in early July, Rogers and a handful of other individuals established the Conservative Majority Fund and began raising money.
Because InfoCision telemarketers (called “Communicators”) might recognize that they were reusing fundraising appeals, a company manager stressed the importance of a separate identity.
“We’re starting a new, independent PAC, with an established donor base,” Matthew Birkbeck, then a marketing executive at InfoCision, wrote. “It’s exciting, so sell it! We can’t have the Communicators talking about ACU. There are threats of lawsuits surrounding this!!!”
Calls and emails to Birkbeck were not returned.
By mid-August, Rogers wrote to the ACU that the fundraising operation with them “is completely shut down in all fronts.”
In the months that followed, the InfoCision managers created increasingly provocative call scripts focused on voter fraud, Obama’s (false) country of birth and — after his reelection — launching an impeachment drive to remove him from office.
In addition to Rogers, the InfoCision account manager Byers, a consultant and two other InfoCision employees, including Birkbeck, were involved with the Conservative Majority Fund, according to the emails. All of those people had also been involved with the previous work with the ACU, and the group worked quickly to close accounts and reassign paperwork to the new organization.
Scott B. Mackenzie, a Republican bookkeeper who serves as the treasurer for dozens of political committees, was treasurer of the group, responsible for filing its reports with the FEC.
Mackenzie did not respond to a request for comment. Byers, of InfoCision, did not respond to requests for comment.
The PAC’s executive director was Dennis Whitfield, a former deputy labor secretary during the Reagan administration. Whitfield worked as a consultant for ACU in 2012, according to the group’s website. He also worked with Rogers at Strategic Campaign Group. Whitfield’s name was used to help promote the Conservative Majority Fund, for example on an October 2012 letterabout voter fraud that cautioned: “I mean, imagine how you’ll feel if Obama wins because of all this? We’re scared to death!”
Phone calls to Whitfield were not returned.
The InfoCision staff and Rogers got their first look at a fundraising script and a television ad for the new Conservative Majority Fund on July 5, just two weeks after Rogers floated the idea for opening the PAC. They described an effort to remove Obama from the ballot and raised questions about his eligibility to be president.
“We need to gather 10,000 signatures from each congressional district to have him removed from the ballot,” one script read, before callers asked people for donations. The procedure for removing candidates from the ballot varies by state, but does not require the specific goal claimed by the script. If the donor gave money using a credit card, the caller was instructed to try to upsell them: “I want to let you know that we’re developing some new TV ads about Obama’s past that are going to shock people. We need to get the ads on the air quickly, so can we count on you for an additional gift[?]”
Rogers approved both pitches, according to the emails.
Using the ACU donors and lists of conservative donors pulled from InfoCision’s collection or purchased from other vendors, the new group raked in large amounts of money: Between 2012 and 2018, the Conservative Majority Fund disclosed raising more than $9.6 million, almost entirely from small-dollar donors. At least $9 million of that has been paid to InfoCision for expenses reported as fundraising costs. Strategic Campaign Group, where Rogers works, received an additional $229,000, while Mackenzie was paid $172,000 as the PAC’s treasurer.
In its reporting to the FEC, the Conservative Majority Fund disclosed spending $5.3 million on what it described as expressly political expenditures, but nearly all of it was on fundraising calls — placed by InfoCision — that criticized Democratic politicians, particularly Obama and Hillary Clinton. The Conservative Majority Fund produced two TV ads, but it appears to have spent little money airing them. Most of its recent activity has been phone calls and social media posts supportive of Trump, whose image figures prominently on the PAC’s website.
There’s no further evidence in records that the Conservative Majority Fund was active in the 2012 elections. Nonetheless, the group bragged in various solicitations to donors that it was taking on a range of anti-Obama organizing, which included: employing a “Truth Squad” to lobby states to remove Obama from the ballot; “hiring undercover researchers” to expose attempts by the Obama campaign to commit voter fraud; and putting “media specialists” on television and radio shows, as well as authoring newspaper and magazine articles and social media posts, “giving regular updates on Obama’s dirty tricks.”
ProPublica and Politico did not find any record of experts from the Conservative Majority Fund appearing on television or radio to discuss the election and could find no evidence from the states cited by the group — Alabama, Tennessee, Arizona and Illinois — indicating it lobbied to remove Obama from the ballot. And the Conservative Majority Fund could not have worked in states to stop “phony [voter] registrations,” which an October 2012 letter to donors said it would do. By then, the voter rolls were closed in many states and could not be changed by anyone.
Starting the day after Obama was reelected, employees at InfoCision began circulating plans for a new message for callers: a case for impeaching the president.
“Impeachment is our only option,” said a recording that InfoCision planned to play to potential donors, according to emails circulated among the operatives on Nov. 7, 2012. “And Republicans are already considering Obama investigations. As the nation’s most effective conservative group … We are launching the official ‘IMPEACH OBAMA’ campaign.”
At least from a fundraising perspective, the campaign was a success: In the first six months of 2013, FEC records show, the PAC raised an additional $1.7 million.
At least since 2015, federal regulators have been aware of complaints about the tactics used by the Conservative Majority Fund, as well as other PACs linked to Rogers and Mackenzie, the PAC’s treasurer. But the Conservative Majority Fund continued to operate with relatively little attention from authorities, a reflection of how federal laws do little to protect the public from potential scam PACs, according to watchdogs.
The FEC has twice probed the Conservative Majority Fund’s activities — but the commission, despite being the main federal regulator, is limited in what it can do. In July 2016, the FEC found the Conservative Majority Fund had misreported items on its federal disclosures during the 2013-14 election cycle. It paid a $3,500 fine. In October 2017, the FEC approved an audit covering the last six months of 2012 that found the Conservative Majority Fund had misstated its financial activity.
Both inquiries only skimmed the surface, looking at financial forms submitted to the commission.
The commission rarely chooses to launch full investigations — which allow it to ask questions, interview employees and demand documents from a group — without first having evidence of wrongdoing.
There are also holes in federal law that make it difficult for the commission to exercise meaningful oversight of groups like the Conservative Majority Fund. While the law prohibits raising campaign money while fraudulently “acting for or on behalf of any candidate or political party,” it does little to address a PAC like the Conservative Majority Fund that didn’t do this. The bar for federal law enforcement in proving a broader criminal statute like wire fraud is far higher. Last year, prosecutors in the Southern District of New York for the first time indicted two men for wire fraud who ran PACs that raised money in the name of causes such as autism awareness and helping police.
In a 2016 memo on the issue, two FEC commissioners implored their colleagues to take action against scam PACs but acknowledged that federal law gives political committees “great leeway on how they use the funds” they raise.
“The power of the Commission to directly and comprehensively protect political contributors is limited,” the two commissioners concluded.
In late 2018, the FEC formally asked Congress to take action against “fraudulent PAC practices” by some PACs. “These committees solicit contributions with promises of supporting candidates, but then disclose minimal or no candidate support activities while engaging in significant and continuous fundraising, which predominantly funds personal compensation for the committees’ organizers,” the commission wrote.
When Cuccinelli, the former Virginia attorney general and gubernatorial candidate, sued Rogers and a PAC called Conservative StrikeForce, he said they’d used Cuccinelli’s name to raise more than $2 million, but donated just $10,000 to Cuccinelli’s campaign.
Cuccinelli settled with Rogers and Conservative StrikeForce in May 2015 for $85,000. Cuccinelli’s spokesperson did not respond to an interview request.
In 2017, the FBI raided the Annapolis office of Rogers’ consulting firm. At the time, Rogers said the FBI appeared interested in work his firm did in the 2013 Virginia gubernatorial race, but the FBI did not shed any light on its actions. The pre-dawn raid was a near-unheard of occurence in the political sphere, but it didn’t result in charges being brought against Rogers or the PAC. Rogers’ firm shut down its website and closed the office in Annapolis.
InfoCision, meanwhile, paid a $250,000 settlement in 2018 for “deceptive charitable solicitation calls” in an unrelated case. InfoCision callers initially told potential donors they were not calling to solicit donations when that was not the case, according to the Federal Trade Commission. But the FTC does not have similar jurisdiction over political fundraising, highlighting that business solicitations are more highly regulated than political fundraising.
Election law experts have proposed changes that would discourage scam PACs by broadening anti-fraud provisions in federal election law or enacting an anti-self-dealing provision that prohibits PAC operators from turning an excessive profit. Smaller changes, such as expanding the requirements for PACs to disclose more information to donors who visit their websites, could also help curb the number of scam PACs operating in the political space.
“It seems that it would not be that hard and it should be something that is bipartisan, you would hope,” said Ann Ravel, former chair of the FEC.
The argument for enacting more regulation on scam PACs is “similar to why there’s oversight over nonprofits who take money from individuals in the name of good causes, and then use it to enrich themselves,” Ravel said. “It’s stealing.”
Posted with permission