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FEC asks Congress to take action on ‘scam PACs’ that raise millions for campaigns but only enrich their founders

Donald Trump fake moneyA man holds fake currency bearing the image of Donald Trump as he participates in a “Freedom Rally” protest in support of opening Florida in South Beach in Miami, on May 10, 2020.

Chandan Khanna/AFP via Getty Images

  • The FEC is urging Congress to help it take on “scam PACs” that defraud donors.
  • Such PACs raise money for political campaigns but end up enriching their founders instead.
  • All six FEC commissioners urged lawmakers to grant them more power to protect donors.

In a rare case of bipartisan unity, the Federal Election Commission this week unanimously urged lawmakers to tackle so-called “scam PACs” that claim to support a political candidate but end up enriching the founders and their friends.

Per the FEC, such political action committees “solicit contributions with the promise of supporting candidates,” but then disclose “minimal or no candidate support activities while engaging in significant and continuous fundraising.”

The FEC’s six commissioners — three Democrats, three Republicans — believe lawmakers should grant them the authority to directly address such schemes, as well as consider whether it should even be legal to raise funds for a PAC that go almost exclusively to vendors, according to legislative recommendations they approved on Friday. The recommendations urge Congress to explicitly define the PACs’ fundraising tactics and diversion of money raised as fraudulent.

In April 2021, the FBI warned that the scam-PAC problem is “on the rise.”

“It’s fairly easy to start reaching out to potential donors to say, ‘We are backing this candidate or this political issue — please donate,'” FBI Special Agent Eric Miller said in a statement. “The groups can look and sound legitimate, and that’s one of the tough parts of keeping people from being victimized. The red flags aren’t always obvious.”

In some cases, the fraud is somewhat sophisticated. Donations will not merely be directly pocketed by the creator of the PAC but funneled to vendors that they either control or to which they have other financial connections. In some cases — typically the ones that are currently prosecuted — it can be more brazen.

In 2021, James Kyle Bell was sentenced to 46 months in prison after launching two PACs that were at odds with each other: the “Keep America Great Committee,” which ostensibly supported former President Donald Trump, and the “Best Days Lie Ahead Committee,” which was said to support President Joe Biden. Bell raised at least $346,000 through the PACs, according to prosecutors.

In a similar but even more lucrative scheme, three men in 2016 raised roughly $3.5 million for two PACs that were once more in conflict: the “Liberty Action Group,” which was pro-Trump, and “Progressive Priorities,” which purportedly backed Hillary Clinton. According to the Department of Justice, which indicted the men late last year, the groups only spent $19 on any actual political campaigning. One of the alleged conspirators pleaded guilty in August and agreed to hand over more than $800,000. He faces up to 20 years behind bars.

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Read the original article on Business Insider