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Tuesday, September 28, 2021

Trump’s repeating donation tactics led to millions in refunds into 2021

The refunds were some of the biggest outlays that Trump made in 2021 as he has built up his $102 million political war chest — and amounted to roughly 20% of the $56 million he and his committees raised online so far this year.

By: New York Times |
August 8, 2021 10:47:09 am
Former President Donald Trump speaks during the Conservative Political Action Conference in Dallas, July 11, 2021. Trump and the Republican Party returned $12.8 million to donors in the first half of 2021, a sign that their aggressive fund-raising tactics ensnared many unwitting contributors. (Cooper Neill/The New York Times)

Written by Shane Goldmacher

The aggressive fundraising tactics that former President Donald Trump deployed late in last year’s presidential campaign have continued to spur an avalanche of refunds into 2021, with Trump, the Republican Party and their shared accounts returning $12.8 million to donors in the first six months of the year, newly released federal records show.

The refunds were some of the biggest outlays that Trump made in 2021 as he has built up his $102 million political war chest — and amounted to roughly 20% of the $56 million he and his committees raised online so far this year.

Trailing in the polls and facing a cash crunch last September, Trump’s political operation began opting online donors into automatic recurring contributions by pre-checking a box on its digital donation forms to take a withdrawal every week. Donors would have to notice the box and uncheck it to opt out of the donation. A second pre-checked box took out another donation, known as a “money bomb.”

The Trump team then obscured that fact by burying the fine print beneath multiple lines of bold and capitalized text, a New York Times investigation earlier this year found.

The maneuver spiked revenues in the short term — allowing Trump to spend money before the election — and then caused a cascade of fraud complaints to credit cards and demands for refunds from supporters. The refunded donations amounted to an unwitting interest-free loan from Trump’s supporters in the weeks when he most needed it.

New Federal Election Commission records from WinRed, the Republican donation-processing site, show the full scale of the financial impact. All told, more than $135 million was refunded to donors by Trump, the Republican National Committee and their shared accounts in the 2020 cycle through June 2021 — including roughly $60 million after Election Day.

“It’s pretty clear that the Trump campaign was engaging in deceptive tactics,” said Peter Loge, director of the Project on Ethics in Political Communication at George Washington University. “If you have to return that much money, you are doing something either very wrong or very unethical.”

The Trump campaign has previously defended its online practices, with Jason Miller, a spokesperson, saying that only 0.87% of transactions were subjected to formal credit card disputes last year, which would be about 200,000 transactions. Miller did not respond to questions this week about the Trump refunds.

Of the refunds issued this year, $8.1 million came from Trump’s shared account with the RNC, the records show. An additional $2.2 million came from his reelection committee, and $2.5 million was issued by the party itself. The party stopped operating in tandem with Trump earlier this year but still owed refunds from 2020; most of its returned donations came in January and February.

The Times investigation had previously found that the Trump operation, along with the party, had refunded more than 10% of the $1.2 billion it had raised online through the end of 2020. President Joe Biden’s equivalent committees refunded 2.2% of what had been raised online last year on ActBlue, the Democratic donation-processing site, records show.

The Federal Election Commission has since unanimously recommended that Congress prohibit campaigns from prechecking boxes for recurring donations, and legislation to do so has been introduced in both the House and Senate. The state attorneys general in New York, Connecticut, Minnesota and Maryland have also opened investigations into WinRed’s and ActBlue’s practices.

WinRed has sued in federal court to stop the investigation by saying that federal law preempts any state investigation. Last week, the attorneys general sought to dismiss the WinRed suit, arguing in a court filing that consumer protection laws gave them jurisdiction.

The pre-checked recurring box has become increasingly widespread among Republicans using WinRed, including burying the disclosure under extraneous text; Democrats have moved to stop using such boxes entirely.

The two Republican senators who lost the January runoffs in Georgia, Kelly Loeffler and David Perdue, used pre-checked boxes to lead donors into weekly withdrawals, resulting in a rash of refunds. Loeffler and Perdue combined to refund $10.4 million from Nov. 24 through the end of June 2021 — out of a total of $68.5 million raised online during that time.

The Democrats who defeated them, Sens. Jon Ossoff and Raphael Warnock, raised tens of millions of dollars more online — and refunded less than one-fifth as much, around $2 million, during the same period.

Overall, WinRed issued refunds that totaled 12.7% of what it raised the first six months of the year; ActBlue’s refunds were 3.3% of what it collected.

The disparity was even more stark in January of this year, when refunds were surging for Trump and Georgia Senate Republicans. That month, refunds issued by WinRed equaled nearly 28% of what the platform collected in contributions, records show. There was even one day when WinRed issued more in refunds than it reported receiving in contributions.

WinRed said there was simply a greater volume of refunds immediately after elections and noted that refunds had slowed in recent months. In the first quarter of 2021, records show that refunds issued on WinRed equaled nearly 20% of what was raised; that figured dipped to 5.7% in the second quarter.

Trump’s new political action committee, Save America, continues to precheck its “money bomb” and recurring donation box, taking out fresh donations monthly. In addition to the $12.8 million refunded by Trump’s 2020 reelection campaign and party committees tied to it, his new PAC issued nearly $800,000 in refunds in the first six months of the year, 3.75% of what it raised.

ActBlue, which previously allowed campaigns wide latitude to opt donors into repeating contributions, has clamped down on the tactic. In July, the site implemented new rules essentially forbidding political candidates and groups from prechecking a recurring box unless the link to the donation page explicitly says there will be repeating withdrawals.

Digital experts said that many donors do not notice the extra contributions for many months, if at all. Some decide pursuing refunds is too onerous or complex. Older contributors are seen as especially vulnerable to such aggressive digital tactics, campaign strategists say.

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