A First Step in the Fight Against Scam PACs

Noti said the bill wouldn’t do much to fight one major form of scam PAC. Imagine two unscrupulous PACs. One claims to be raising money for an imaginary group, but rather than spending the money on the group—which, after all, doesn’t exist—it redirects donations to the people who set up the PAC. (A common example of this is paying lavish sums to direct-mail or telemarketing companies that are owned by the principals of the PAC or their associates.) A second claims to be raising money for a real group, but redirects all of its donations to the people who set up the PAC.

Under any commonsense interpretation, both of these are scams, since they are raising money under a pretense and spending it on something else. But if this bill becomes law, it would allow the FEC to crack down on the first but not the second.

“It gets the outright fraudsters as opposed to the more nuanced fraudsters,” says Ann Ravel, a former chair of the FEC and current Democratic candidate for the California state Senate. “I think the problem honestly is people giving money for purposes that money is never used for. It’s broader than the issue [the bill is] addressing.”

Ravel suggested to me that really tackling scam PACs might require both stricter disclosure rules about how money is spent and new limits on overhead expenses. Nonprofit organizations with excessive overhead, for example, face poor ratings from watchdog groups, and can have their tax exemptions withdrawn by the IRS.

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Porter defended the limited scope of the bill.

“We want to be careful and thoughtful here about recognizing that democratic expression is an important thing, and that there are lots of people out there engaged in politics,” she said. “The goal here is not to overstep but to solve this first problem first and then to go back and have conversations with both Republicans and Democrats and independents on the FEC and see if something else is necessary.”

Noti and Ravel are right: Something else is already necessary. Some of the most egregious and lucrative scam PACs, such as the Conservative Majority Fund, which ProPublica and Politico exposed last year, seem likely to escape the FEC’s reach under the new bill, and until they’re reined in, lots of Americans are going to be duped in the name of democracy.

But the reality is that passing more aggressive reforms to target scam PACs will be harder. What Ravel calls the “outright fraudsters” are already personae non grata; the “more nuanced fraudsters” are sometimes also campaign consultants and vendors to the same members of Congress who would have to take up legislation. More sweeping reform might crash on the same partisan shoals other efforts have, too. So in the meantime, the Porter-Crenshaw bill is a good step.

“Americans are free to support different causes,” Porter said. “But I want to make sure that that’s what they’re doing, rather than they’re having their their money essentially stolen.”

It’s hard to disagree with that—unless, of course, you’re raking in money from a dubious PAC.

David A. Graham is a staff writer at The Atlantic.