Investigation into ActBlue Over Money Laundering Allegations Initiated by 19 GOP AGs

A group of 19 Republican state attorneys general have initiated a criminal investigation into the Democratic fundraising platform, ActBlue, over allegations of money laundering.

Investigations Into ActBlue

Earlier this year, several independent investigative journalists, including the O’Keefe Media Group (OMG) and Election Watch, revealed what appears to be illegal activity involving millions of dollars in campaign donations to ActBlue, which have allegedly been laundered through unsuspecting small donors. This method of breaking up large donations and submitting them under the names of small donors to hide illegal contributions is known as “smurfing.” ActBlue has been suspected of regularly participating in this type of unlawful fundraising since at least Joe Biden’s presidential campaign in 2020.

Committee on House Administration's Investigation

In November 2023, the Committee on House Administration, chaired by Congressman Bryan Steil (R-Wisc.), initiated an investigation into ActBlue to examine reports that the fundraising giant was bypassing campaign donation laws and allowing widespread fraud on the site. The committee expanded its investigation in August 2024. In a letter sent to top officials on the Federal Election Commission (FEC) on August 5, Steil urged them to “immediately initiate an emergency rulemaking to require political campaigns to verify the card verification value (‘CVV’) of donors who contribute online using a credit or debit card, and to prohibit political campaigns from accepting online contributions from a gift card or other prepaid credit cards.”

Letters to Five States

In September, Steil sent letters to five states, urging them to initiate criminal investigations into ActBlue’s alleged illicit activities, citing three specific areas of concern: - Donations significantly disproportionate to an individual’s net worth or previous giving history. - Uncharacteristic donations from party-affiliated registered voters suddenly contributing to candidates of the opposing party. - Unusually frequent donations from elderly individuals or first-time donors. The number of GOP AGs involved in the effort has since increased to 19.

Letter to ActBlue CEO and President

On Tuesday, the 19 Republican Attorney’s General sent a letter to ActBlue CEO and President Regina Wallace-Jones demanding information and explanations regarding the suspicious donations. The letter suggests that there may be donors across the country who are identified in filings with the Federal Election Commission as having donated to candidates through ActBlue (and other affiliated entities), but who did not actually make those donations. This raises concerns about whether ActBlue’s platform is being used to facilitate “smurfing”––a type of money laundering in which donors break up large donations and submit them under different names to disguise who the money comes from and thereby skirt contribution limits in violation of state and federal law.

ActBlue's Fundraising

ActBlue is one of the largest fundraising platforms for election-related donations. Already during the 2024 election cycle ActBlue has raised billions of dollars. But there are concerns about where those dollars came from. It is essential that we know whether political donations—particularly in such large volumes—are being solicited, made, and processed consistent with campaign finance, consumer protection, and other state and federal laws.

Demands for Information

The AGs demanded a response to the following requests for information no later than October 23, 2024: 1. Confirmation that ActBlue requires CVV numbers for all donations made via credit card. 2. A description of when and under what circumstances ActBlue first decided to require donors to submit CVV numbers. 3. Confirmation that ActBlue requires a legitimate address that is tied to the credit or debit card that a donor uses to make a contribution. 4. An explanation of how ActBlue ensures that all donors are persons legally allowed to make donations in the election to which they are donating. 5. An explanation of whether and how ActBlue’s operations are consistent with industry standards for securely processing credit card or other payment transactions. 6. A description of any measures ActBlue utilizes to ensure compliance with 52 U.S.C. § 30121, including whether ActBlue follows the guidance provided by the FEC in FEC Advisory Opinion (AO) 1998-14 on how to identify the nationality of donors. 7. A description of how ActBlue’s platform facilitates automatic, recurring donations from donors and what safeguards ActBlue has in place to ensure that donors do not inadvertently contribute more than they intend.

Bottom Line

The allegations against ActBlue are serious and if proven true, could have significant implications for the integrity of campaign financing. The investigation by the Republican Attorneys General highlights the importance of transparency and accountability in political fundraising. What are your thoughts on these allegations and the ongoing investigation? Share this article with your friends and let them know about this development. Remember, you can sign up for the Daily Briefing which is everyday at 6pm.