Politics for Profit
More than 7,000 political action committees (PACs) operate on the election playing field, and most are diligent, effective, and transparent. But as in any industry, from auto repairs to wedding photographers, there are operatives out to make a fast buck.
The business of a PAC is to invest monies from contributors directly to campaigns, and some conduct independent expenditure efforts to oppose candidates or advocate issues that impact voters.
Some slick players are evidently running PACs to simply line their own pockets. For instance, meet Jack Daly. From January 2017 to July 2018, Daly, who serves as chairman and treasurer of the Draft Sheriff David Clarke for Senate PAC, was paid over $585,000 for his services. That’s about 30 percent of the organization’s total income, but there was even more spent on fundraising expenses. One hitch, however: the Wisconsin sheriff and conservative activist has called the PAC “a scam.” He explained to the Milwaukee Journal Sentinel that, “they don’t need my permission to [fundraise]. Every time I talk to people and say, ‘No, I’m not running for Senate, hang onto your money.’”
So, what does the Clarke for Senate PAC actually do? In 2016, Daly’s group spent $5,000 on tickets and expenses for President Trump’s inauguration. His PAC also paid $12,000 to be a sponsor of the 2017 Conservative Political Action Conference, incurring another $10,000 or more in expenses, including $1,000 for meals and lodging at the Trump International Hotel.
One of the most notorious political profiteers is Scott Mackenzie. In the 2016 election cycle, he served as the treasurer of no less than 22 political action committees. Some of the organizations affiliated with Mackenzie include the Black Republican PAC which, since 2012, has raised $2,512,759, while donating $134,605 to candidates. Over the last four years, his Conservative Strikeforce PAC raked in a whopping $11,114,614 but dedicated less than seven percent of that nest egg on political action.
According to political investigative site Open Secrets, one of Mackenzie’s groups, Freedom’s Defense Fund, paid 69 percent of its income to firms linked to Mackenzie.
Sham PAC vendors cash in on the racket too. InfoCision, a robo-call agency, has worked for many conservative campaigns and causes including presidential candidate Ben Carson, Citizens United, National Right to Life PAC, and something called the Committee to Defend the President. During the past five years, political committees have paid InfoCision at least $24.8 million to send recorded messages to prospective donors, keeping more than half for their services. Former employees have alleged the company preys on elderly people, and an investigation by Bloomberg Markets Magazine revealed that the company held onto 78 percent of the donation money it collected on behalf of the American Diabetes Association. At one point, the American Cancer Society reported that InfoCision kept 100 percent of what raised plus charging them more than $113,006 in fees for services.
Political profiteers are not just fleecing donors from one side of the spectrum. In the last four years, 21st Century Democrats have raised $7.1 million from donors, and blew through $5.2 million of it on salaries, overhead, and fundraising expenses. The group asserts that it funds “a diverse array of candidates who show unusual promise to advance our progressive goals,” and contributes “in some of the most competitive races.” However, it gave $11,847 to candidates (.0015 percent of its gross) but spent more than 30 times that amount on promoting itself in the media.
Last year former MSNBC host Krystal Ball created the People’s House Project to help Democratic candidates. So far, the group has raised $734,419 and paid its founder and staff almost half if its income ($339,300); candidates were allotted about 10 percent, and the rest, incredibly, covered the cost of doing business.
And here’s a huckster who does business on a bipartisan basis: Brian Hampton, treasurer of Put Vets First PAC, uses veteran’s issues to solicit funds. Since 2016, his group has raised over $4 million, but only $14,000 (.0035 percent) has been used to help Democrat and Republican candidates. Over $1.7 million was paid to one vendor, Outreach Calling, a telemarketing company which has raised more than $118 million on behalf of a dozen charities – two of which have been forced to close by New York regulators. According to New York state government records, Outreach Calling keeps 90 percent of the money it brings in.
Yet another PAC associated with Hampton, the Center for American Homeless Veterans, was the target of a 2017 consumer warning by the St. Louis Better Business Bureau and early this year became subject to investigation by the Virginia attorney general's office and several U.S. House committees.
There is some good news in all this. Campaigns & Elections magazine quotes Republican strategist Tony Marsh as saying: “The rise of scam PACs has created new energy for federal investigators.” Last May, the FBI raided the offices of Scott Mackenzie, and Outreach Calling executives have been banned for life from fundraising in New York. In January, InfoCision agreed pay $250,000 to settle a civil complaint filed by the U.S. Department of Justice on behalf of the Federal Trade Commission.
Again, almost all political action committees are professionally run and have above-board business practices. They represent the legitimate interests of conservatives, liberals, farmers, chiropractors, defense contractors, labor unions, and more. But just as a consumer checks the ingredients and not just the labels in a supermarket, political donors must remember caveat emptor when spending money on politics.
Peter B. Gemma is an award-winning freelance writer whose articles have appeared in the DailyCaller, the Washington Examiner, and Military History.