SC attorney general says Democratic donor platform ActBlue may have broken rules

COLUMBIA — South Carolina’s attorney general is questioning whether a major fundraising platform for Democrats committed fraud. State Democratic leaders and a representative of the platform contend the allegations are nonsense.

The allegations are outlined in a letter released Monday from Attorney General Alan Wilson to the CEO of Massachusetts-based ActBlue — a platform that processes donations to Democratic campaigns. ActBlue acts as a pass-through, sending donations made online to candidates in exchange for a percentage fee.

Wilson says ActBlue may have split large donations into smaller donations to avoid campaign limits, which he likened to a “smurfing” money-laundering scheme. He also says the platform may have allowed for “straw donors,” when one person makes a donation on behalf of another.

In the letter, Wilson writes that his office found specific examples of South Carolina donors making so many contributions that it appeared “implausible and highly suspicious.” The letter makes no direct accusations. Sprinkled throughout are terms such as “may,” “if true” and “raise the question.” It asks for additional information about the process that ActBlue uses to verify donor information.

“Alarmingly, some of these individuals list their occupations as ‘unemployed’ or report jobs that could not be reasonably commensurate to the total amount of financial contributions made by others in similar positions,” he wrote. “The allegations also raise the question of whether contributions were made without the reported donors’ consent or awareness, which is equally troubling.”

The information is based on public records, according to the letter. It does not specify whether the donations were made to state or federal candidates, although it does say that either could be in violation of the law.

The letter was sent to ActBlue on Thursday. Wilson is asking for a response by Sept. 6.

In a statement, an ActBlue spokesperson declined to address Wilson’s letter specifically but said the platform enforces strict anti-fraud policies. The spokesperson also confirmed the platform is cooperating with Wilson.

“We are aware of recent attempts to spread misinformation about our platform,” the statement reads. “These false so-called ‘allegations’ are intentionally designed to mislead the public.”

State Democratic leaders also dismissed the claims from Wilson, saying that a donation made through ActBlue includes all the same required information as any other political donation.

“It’s all reported. It’s all there. There’s no way to do straw donors,” Jay Parmley, state executive director for the Democratic party, told the Gazette Monday afternoon. “(Wilson) would rather make a stupid point that has no basis in fact than doing a little bit of research.”

Parmley described ActBlue as a “godsend” that made it much easier for candidates to receive donations.

“This is not going to go anywhere, but (Wilson is) going to try and confuse the electorate, make people think there’s something wrong,” Parmley said.

This is not the first time Republicans have raised questions about ActBlue.

Virginia’s attorney general, Jason Miyares, sent a similar letter in early August. Indiana’s attorney general Todd Rokita announced his office was looking into “allegations” last Wednesday. Both are Republicans.

In Maryland, right-wing filmmaker James O’Keefe alleged a laundering operation for donations through ActBlue in the spring based on information that experts dismissed as dubious.

Whitney Michael, a senior advisor with Wilson’s office, did not provide specifics about what prompted the letter other than saying the issue was “brought to our attention.”

“This isn’t a blue or a red issue. This is a transparency issue,” Michael said.

Michael said that ActBlue has promised to provide additional information, and next steps would be based on that information.

Fake donations do have a history in South Carolina.

In 2012, then-Lt. Gov. Ken Ard resigned after being indicted for campaign violations. He pleaded guilty and was sentenced to five years’ probation and 300 hours of public service.

This included a straw-donor scheme that involved Ard giving money to others to be donated to back to the campaign, falsely inflating the number of donations that he received. He also paid a $48,000 ethics fine for using money from his campaign to pay for personal items, like clothes, football tickets and a flat-screen TV.

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