In the world of political fundraising, two platforms dominate the landscape. Republicans rely on WinRed, while Democrats use ActBlue, a fundraising giant that has helped process billions of dollars for left-wing candidates and political action committees (PACs). ActBlue, in particular, has long been heralded as a trailblazer for its digital fundraising tools that efficiently gather small-dollar donations from a wide base of supporters. However, recent allegations suggest that ActBlue’s practices may not be as above board as they seem.
A group of Republican lawmakers and 19 state attorneys general are now investigating ActBlue for allegedly skirting campaign finance laws through a money-laundering technique known as “smurfing.” The accusations, if proven, could have major implications for Democratic fundraising efforts and potentially lead to serious legal consequences.
The trouble for ActBlue began in August when whistleblowers came forward with allegations that the platform was using questionable methods to process donations. These accusations prompted Rep. Bryan Steil (R-WI), chairman of the Committee on House Administration, to call for an emergency investigation into ActBlue’s practices. Steil’s committee sent a letter to top officials at the Federal Election Commission (FEC), urging immediate action.
In the letter, Steil called on the FEC to “initiate an emergency rulemaking” that would require political campaigns to verify the card verification value (CVV) of online donors and prohibit the use of gift cards or prepaid debit cards for campaign donations. This move was aimed at tightening oversight of online contributions and ensuring compliance with existing campaign finance laws.
The urgency of Steil’s request underscores the seriousness of the allegations. The lack of stringent verification processes, such as not requiring a CVV for donations, opens the door for fraudulent donations or money laundering activities. The implications of such behavior are far-reaching, as they could distort the flow of campaign finances and provide an unfair advantage to one political party over the other.
At the heart of the investigation is the accusation that ActBlue is engaging in “smurfing.” Smurfing is a well-known money-laundering technique where large sums of money are broken into smaller transactions to avoid detection by regulatory agencies. These smaller transactions are often spread across various accounts to stay below financial reporting thresholds.
This technique is illegal and is typically used by criminals to launder money without drawing attention from law enforcement. If ActBlue is involved in such practices, it would mean that vast sums of money are being funneled into Democratic campaigns without proper oversight, violating both state and federal campaign finance laws.
The accusations from 19 state attorneys general suggest that ActBlue may be structuring political donations in ways that help donors avoid regulatory scrutiny. They have demanded answers from ActBlue’s legal counsel, asserting that the American public deserves to know if the platform is complying with the law.
The Patriot Act, passed after the 9/11 attacks, introduced strict regulations to combat money laundering, including requirements to report any financial transaction over $10,000. These rules were designed to prevent illegal activities such as terrorism financing and large-scale money laundering. However, if a fundraising platform like ActBlue were to structure transactions in smaller amounts through smurfing, it could potentially avoid detection while channeling significant funds into political campaigns.
If ActBlue is found guilty of these allegations, it would represent a major violation of campaign finance laws and could result in hefty fines, criminal charges, or both. Furthermore, it would severely damage the platform’s reputation, possibly forcing Democratic candidates to find alternative fundraising methods at a critical point in the election cycle.
The group of state attorneys general leading the investigation has set an October 23, 2024 deadline for ActBlue to respond to their inquiries. This deadline comes well before Election Day, indicating that the investigation could have a direct impact on the upcoming elections. Depending on the outcome, this probe could significantly alter the political fundraising landscape.
Political fundraising is a fierce battleground, with both parties vying for every dollar they can get. Any illegitimate advantage could sway electoral outcomes, making the allegations against ActBlue particularly concerning. If the platform is indeed engaging in smurfing, it would constitute blatant election interference, giving Democrats an unfair edge in the all-important race to raise funds.
The Republican-led investigation, along with the state-level probe, highlights the growing concern over how campaign donations are solicited, processed, and reported. For now, the focus remains on ensuring transparency and legality in political fundraising. Whether ActBlue’s practices will withstand scrutiny remains to be seen, but one thing is clear: this investigation is unlikely to conclude quietly.
As the October 23 deadline approaches, both political parties—and the voters—will be closely watching the outcome. Should ActBlue be found in violation of campaign finance laws, it could shake the very foundation of digital political fundraising, reshaping how future campaigns are financed.
