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GoneFishin
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4/5/2021 10:43:42 AM
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Here is one of many articles describing the scam.
From NY Times
Online donors were guided into weekly recurring contributions.
Demands for refunds spiked. Complaints to banks and credit
card companies soared. But the money helped keep Donald
Trump’s struggling campaign afloat.
By Shane Goldmacher
April 3, 2021
Stacy Blatt was in hospice care last September listening to Rush
Limbaugh’s dire warnings about how badly Donald J. Trump’s
campaign needed money when he went online and chipped in
everything he could: $500.
It was a big sum for a 63-year-old battling cancer and living in
Kansas City on less than $1,000 per month. But that single
contribution — federal records show it was his first ever — quickly
multiplied. Another $500 was withdrawn the next day, then $500
the next week and every week through mid-October, without his
knowledge — until Mr. Blatt’s bank account had been depleted and
frozen. When his utility and rent payments bounced, he called his
brother, Russell, for help.
What the Blatts soon discovered was $3,000 in withdrawals by the
Trump campaign in less than 30 days. They called their bank and
said they thought they were victims of fraud.
“It felt,” Russell said, “like it was a scam.”
But what the Blatts believed was duplicity was actually an
intentional scheme to boost revenues by the Trump campaign and
the for-profit company that processed its online donations,
WinRed. Facing a cash crunch and getting badly outspent by the
Democrats, the campaign had begun last September to set up
recurring donations by default for online donors, for every week
until the election.
Contributors had to wade through a fine-print disclaimer and
manually uncheck a box to opt out.
As the election neared, the Trump team made that disclaimer
increasingly opaque, an investigation by The New York Times
showed. It introduced a second prechecked box, known internally
as a “money bomb,” that doubled a person’s contribution.
Eventually its solicitations featured lines of text in bold and capital
letters that overwhelmed the opt-out language.
The tactic ensnared scores of unsuspecting Trump loyalists —
retirees, military veterans, nurses and even experienced political
operatives. Soon, banks and credit card companies were inundated
with fraud complaints from the president’s own supporters about
donations they had not intended to make, sometimes for thousands
of dollars.
“Bandits!” said Victor Amelino, a 78-year-old Californian, who
made a $990 online donation to Mr. Trump in early September via
WinRed. It recurred seven more times — adding up to almost
$8,000. “I’m retired. I can’t afford to pay all that damn money.”
The sheer magnitude of the money involved is staggering for
politics. In the final two and a half months of 2020, the Trump
campaign, the Republican National Committee and their shared
accounts issued more than 530,000 refunds worth $64.3 million to
online donors. All campaigns make refunds for various reasons,
including to people who give more than the legal limit. But the sum
the Trump operation refunded dwarfed that of Joseph R. Biden Jr.’s
campaign and his equivalent Democratic committees, which made
37,000 online refunds totaling $5.6 million in that time.
The recurring donations swelled Mr. Trump’s treasury in
September and October, just as his finances were deteriorating. He
was then able to use tens of millions of dollars he raised after the
election, under the guise of fighting his unfounded fraud claims, to
In effect, the money that Mr. Trump eventually had to refund
amounted to an interest-free loan from unwitting supporters at the
most important juncture of the 2020 race.
Marketers have long used ruses like prechecked boxes to steer
American consumers into unwanted purchases, like magazine
subscriptions. But consumer advocates said deploying the practice
on voters in the heat of a presidential campaign — at such volume
and with withdrawals every week — had much more serious
ramifications.
“It’s unfair, it’s unethical and it’s inappropriate,” said Ira Rheingold,
the executive director of the National Association of Consumer
Advocates.
Harry Brignull, a user-experience designer in London who coined
the term “dark patterns” for manipulative digital marketing
practices, said the Trump team’s techniques were a classic of the
“deceptive design” genre.
“It should be in textbooks of what you shouldn’t do,” he said.
Political strategists, digital operatives and campaign finance
experts said they could not recall ever seeing refunds at such a
scale. Mr. Trump, the R.N.C. and their shared accounts refunded
far more money to online donors in the last election cycle than
every federal Democratic candidate and committee in the country
combined.
Over all, the Trump operation refunded 10.7 percent of the money it
raised on WinRed in 2020; the Biden operation’s refund rate on
ActBlue, the parallel Democratic online donation-processing
platform, was 2.2 percent, federal records show.
How Refunds to Trump Donors Soared in 2020
Refunds are shown as the percentage of money received by each operation to date via
WinRed and ActBlue.
Note: Donations and refunds to former President Donald J. Trump include those made via WinRed
for the following organizations: Donald J. Trump for President, Inc., Trump Victory, Trump Make
America Great Again Committee, Save America, and the Republican National Committee. Donations
and refunds to President Biden include those made via ActBlue for the following groups: Biden for
President, Biden Victory Fund, Biden Action Fund, Biden Fight Fund, and the Democratic National
Committee. • Source: WinRed and ActBlue • By Eleanor Lutz and Rachel Shorey
Several bank representatives who fielded fraud claims directly
from consumers estimated that WinRed cases, at their peak,
represented as much as 1 to 3 percent of their workload. An
executive for one of the nation’s larger credit-card issuers
confirmed that WinRed at its height accounted for a similar
percentage of its formal disputes.
That figure may seem small at first glance, but financial experts
said it was a shockingly large percentage, considering that political
donations represent a tiny fraction of the overall United States
economy.
In its investigation, The Times reviewed filings with the Federal
Election Commission from the Trump and Biden campaigns and
their shared accounts with political parties, as well as the donationprocessing
sites ActBlue and WinRed, compiling a database of
refunds issued by day. The Times also interviewed two dozen
Trump donors who made recurring donations, as well as campaign
officials, campaign finance experts and consumer advocates.
Nearly a dozen bank and credit card officials from the nation’s
leading financial institutions spoke for this article on the condition
of anonymity to discuss internal matters.
A clear pattern emerged. Donors typically said they intended to
give once or twice and only later discovered on their bank
statements and credit card bills that they were donating over and
over again. Some, like Mr. Blatt, who died of cancer in February,
sought an injunction from their banks and credit cards. Others
pursued refunds directly from WinRed, which typically granted
them to avoid more costly formal disputes.
WinRed said that every donor receives at least one follow-up email
about pending repeat donations in advance and that the company
makes it “exceptionally easy,” with 24-hour customer service, for
people to request their money back. “WinRed wants donors to be
happy, and puts a premium on customer support,” said Gerrit
Lansing, WinRed’s president. “Donors are the lifeblood of G.O.P.
campaigns.” He noted that Democrats and ActBlue had also used
recurring programs.
Jason Miller, a spokesman for Mr. Trump, downplayed the rash of
fraud complaints and the $122.7 million in total refunds issued by
the Trump operation. He said internal records showed that 0.87
percent of its WinRed transactions had been subject to formal
credit card disputes. “The fact we had a dispute rate of less than 1
percent of total donations despite raising more grass-roots money
than any campaign in history is remarkable,” he said.
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That still amounts to about 200,000 disputed transactions that Mr.
Miller said added up to $19.7 million.
“Our campaign was built by the hardworking men and women of
America,” Mr. Miller said, “and cherishing their investments was
paramount to anything else we did.”
Asked if Mr. Trump had been aware of his operation’s use of
recurring payments, the campaign did not respond.
Mr. Trump’s hyperaggressive fund-raising practices did not stop
once he lost the election. His campaign continued the weekly
withdrawals through prechecked boxes all the way through Dec. 14
as he raised tens of millions of dollars for his new political action
committee, Save America.
In March, Mr. Trump urged his followers to send their money to
him — and not to the traditional party apparatus — making plain
that he intends to remain the gravitational center of Republican
fund-raising online.
A small yellow box and a flood of fraud complaints
The small and bright yellow box popped up on Mr. Trump’s digital
donation portal around March 2020. The text was boldface, simple
and straightforward: “Make this a monthly recurring donation.”
The box came prefilled with a check mark.
ADVERTISEMENT
Even that was more aggressive than what the Biden campaign
would do in 2020. Biden officials said they rarely used prechecked
boxes to automatically have donations recur monthly or weekly;
the exception was on landing pages where advertisements and
emails had explicitly asked supporters to become repeat donors.
But for Mr. Trump, the prechecked monthly box was just the
beginning.
By June, the campaign and the R.N.C. were experimenting with a
second prechecked box, to default donors into making an additional
contribution — called the money bomb. An early test arrived in the
run-up to Mr. Trump’s birthday, June 14. The results were
tantalizing: That date, a seemingly random Sunday, became the
biggest day for online donations in the campaign’s history.
Ronna McDaniel, the R.N.C. chairwoman, crowed to Fox News
about the achievement without mentioning how exactly the party
had pulled it off. “Republicans are thinking smarter digitally,” she
said, and were poised to “outwork, outdo, and outmaneuver the
Democrats at every turn.”
The two prechecked yellow boxes would be a fixture for the rest of
the campaign. And so would a much larger volume of refunds.
Until then, the Biden and Trump operations had nearly identical
refund rates on WinRed and ActBlue in 2020: 2.18 percent for Mr.
Trump and 2.17 percent for Mr. Biden.
But from the day after Mr. Trump’s birthday through the rest of the
year, Mr. Biden’s refund rate remained nearly flat, at 2.24 percent,
while Mr. Trump’s soared to 12.29 percent.
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In early September — just after learning that it had been outraised
by the Biden operation in August by more than $150 million — the
Trump campaign became even more aggressive.
It changed the language in the first yellow box to withdraw
recurring donations every week instead of every month. Suddenly,
some contributors were unwittingly making as many as half a
dozen donations in 30 days: the intended contribution, the “money
bomb” and four more weekly withdrawals.
“You don’t realize it until after everything is already in motion,”
said Bruce Turner, 72, of Gilbert, Ariz., whose wife’s $1,000 donation
in early October became $6,000 by Election Day. They were
refunded $5,000 the week after the election, records show.
Around the same time, officials who fielded fraud claims at bank
and credit card companies noticed a surge in complaints against
the Trump campaign and WinRed.
“It started to go absolutely wild,” said one fraud investigator with
Wells Fargo. “It just became a pattern,” said another at Capital
One. A consumer representative for USAA, which primarily serves
military families, recalled an older veteran who discovered
repeated WinRed charges from donating to Mr. Trump only after
calling to have his balance read to him by phone.
The unintended payments busted credit card limits. Some donors
canceled their cards to avoid recurring payments. Others paid
overdraft fees to their bank.
ADVERTISEMENT
All the banking officials said they recalled only a negligible number
of complaints against ActBlue, the Democratic donation platform,
although there are online review sites that feature heated
complaints about unwanted charges and customer service.
The Trump operation was not done modifying the yellow boxes.
Soon, the fact that donations would be withdrawn weekly was
taken out of boldface type, according to archived versions of the
president’s website, and moved beneath other bold text.
As the campaign’s financial problems became increasingly acute,
the yellow boxes became dizzyingly more complex.
By October there were sometimes nine lines of boldface text —
with ALL-CAPS words sprinkled in — before the disclosure that
there would be weekly withdrawals. As many as eight more lines of
boldface text came before the second additional donation
disclaimer.
Even political professionals fell prey to the boxes.
Jeff Kropf, the executive director of the Oregon Capitol Watch
Foundation, a conservative group, said he had been “very careful”
to uncheck recurring boxes — yet he missed the “money bomb”
and got a second charge anyway.
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2021
How Trump Steered Supporters Into
Unwitting Donations
1623
Recurring donations swelled former President Donald J. Trump’s campaign coffers in September and
October, just as his operation’s finances were deteriorating. Doug Mills/The New York Times
Russell Blatt’s brother, Stacy, who was a supporter of Mr. Trump, died of cancer in
February. Katie Currid for The New York Times
By September, the Trump Trump
operation began to have online
donations recur weekly by default.
10%
By June, the Trump operation
and the R.N.C. had added a
second pre-filled check box.
8 Around March 2020, the pre-filled
check box first appeared on Mr.
Trump’s online donation form.
6
4
Biden
2
0
Jan. 2020 Feb. March April May June July Aug. Sept. Oct. Nov. Dec.
Total online refunds in 2020, in millions
Trump $122
Biden $21
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“Until WinRed fixes their sneaky way of adding additional
contributions to credit cards like they did to me, I won’t use them
again,” he said.
Mr. Brignull, the user-experience designer who also serves as an
expert witness in legal cases involving misleading advertising,
noted that a Consumer Rights Directive in Europe prohibits
companies from deploying a defaulted opt-in tactic for recurring
payments.
“It is very easy for the eye to skip over,” he said. “The only really
meaningful information in that box is buried.”
The ‘Gary and Gerrit’ operation
By last summer, the Biden campaign had begun outraising Mr.
Trump’s team, and the president was hopping mad. For months,
years even, his advisers had been telling him how he had built a
one-of-a-kind financial juggernaut. So why, Mr. Trump demanded to
know, was he off the television airwaves just months before the
election in critical battleground states like Michigan?
“Where did all the money go?” he would lash out, according to two
senior advisers.
Inside the Trump re-election headquarters in Northern Virginia,
the pressure was building to wring ever more money out of his
supporters.
Perhaps nowhere was that pressure more acute than on Mr.
Trump’s expansive and lucrative digital operation. That was the
unquestioned domain of Gary Coby, a 30-something strategist
whose title — digital director — and microscopic public profile
belied his immense influence on the Trump operation, especially
online.
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A veteran of the R.N.C. and the 2016 race, Mr. Coby had the
confidence, trust and respect of Jared Kushner, the president’s sonin-
law, who unofficially oversaw the 2020 campaign, according to
people familiar with the campaign’s operations. Mr. Kushner and
the rest of the campaign leadership gave Mr. Coby, whose talents
are recognized across the Republican digital industry, wide latitude
to raise money however he saw fit.
That meant almost endless optimization and experimentation,
sometimes pushing the traditional boundaries. The Trump team
repeatedly used phantom donation matches and faux deadlines to
loosen donor wallets (“1000% offer: ACTIVATED…For the NEXT
HOUR”). Eventually it ratcheted up the volume of emails it sent
until it was barraging supporters with an average of 15 per day for
all of October and November 2020.
Mr. Coby, who declined an interview request for this article,
outlined his philosophical approach when offering advice to other
ambitious young strategists after he was named to the American
Association of Political Consultants’ “40 under 40” list in 2017:
“Asking for forgiveness is easier than permission.”
Mr. Coby’s partner in fund-raising was Mr. Lansing, the president
of WinRed, which had been created in 2019 as a centralized
platform for G.O.P. digital contributions after prominent
Republicans feared they were falling irreparably behind
Democrats and ActBlue.
The Trump and WinRed operations had been closely aligned since
the platform’s inception — Mr. Trump reportedly helped come up
with the firm’s name — and the president’s re-election operation
amounted to a majority of all of WinRed’s business last cycle, when
it processed more than $2 billion.
Inside the Trump orbit, “Gary and Gerrit” became something of a
shorthand term for Mr. Coby and Mr. Lansing, according to
multiple senior Trump campaign and White House officials.
The two strategists were already well acquainted: They had
worked together at the R.N.C. in 2016, when Mr. Lansing oversaw
its digital operations and Mr. Coby was the director of advertising.
And they were business partners in Opn Sesame, a text messaging
platform, which Mr. Lansing co-founded and served as chief
operating officer for; WinRed said he stepped away from its day-today
operations in early 2019.
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Top Trump officials said they did not know specifically who had
conceived of using the weekly recurring prechecked boxes — or
who had designed them in the increasingly complex blizzard of
text. But they said virtually all online fund-raising decisions were a
“Gary and Gerrit” production.
“The campaigns determine their own fund-raising strategies and
make their own decisions on how to use these tools,” Mr. Lansing
said in WinRed’s statement.
Unlike ActBlue, which is a nonprofit, WinRed is a for-profit
company. It makes its money by taking 30 cents of every donation,
plus 3.8 percent of the amount given. WinRed was paid more than
$118 million from federal committees the last election cycle; even
after paying credit card fees and expenses like payroll and rent, the
profits are believed to be significant.
WinRed even made money off donations that were refunded by
keeping the fees it charged on each transaction, a practice it said
was standard in the industry, citing PayPal; ActBlue said it does
not keep fees for refunded donations. WinRed’s cut of the Trump
operation’s refunds would amount to roughly $5 million before
expenses. (Archived versions of WinRed’s website show it added a
disclaimer saying it would keep its fees around when refunds
surged.)
There is another reason Mr. Trump’s refund rates were so high:
His campaign accepted millions of dollars above the legal cap, a
problem exacerbated by recurring donations. A pianist in New
York, for instance, contributed more than 100 times in the months
leading up to Election Day, going far past the legal limit of $2,800.
She was refunded $87,716.50 — three weeks after Election Day.
While every large-scale campaign winds up accepting and
returning some donations above the legal limit, including Mr.
Biden’s, the Trump situation stands out. Records show that Mr.
Biden’s campaign committee issued roughly $47,000 in refunds
larger than $5,000 after Election Day; Mr. Trump’s campaign
issued more than $7 million.
Trump officials attributed the excessive donations to enthusiastic
supporters and said the surge in postelection complaints was a
result of losing the election, not of the recurring donation tactics.
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The use of prechecked boxes is not unprecedented in politics, and
WinRed said it was simply adopting tactics that ActBlue put in
place years ago. ActBlue said in a statement that it had begun to
phase out prechecked recurring boxes “unless groups were
explicitly asking for recurring contributions.” Some prominent
Democratic groups, including both congressional campaign
committees, continue to precheck recurring boxes regardless of
that guidance. Still, Democratic refund rates were only a small
fraction of the Trump campaign’s last year.
Republicans widely hailed WinRed as one of the standout
successes of the 2020 cycle, and in a memo last October the
company declared itself the “trusted, recognizable platform” for
Republican giving. “Scam PACs, shady operators and outright
fraud is unfortunately a common occurrence in the online political
donation world — particularly on the right,” the memo stated.
“WinRed helps civilize the Wild West of the G.O.P. donation
ecosystem.”
But for some Trump supporters like Ron Wilson, WinRed is a scam
artist. Mr. Wilson, an 87-year-old retiree in Illinois, made a series of
small contributions last fall that he thought would add up to about
$200; by December, federal records show, WinRed and Mr. Trump’s
committees had withdrawn more than 70 separate donations from
Mr. Wilson worth roughly $2,300.
“Predatory!” Mr. Wilson said of WinRed. Like multiple other
donors interviewed, though, he held Mr. Trump himself blameless,
telling The Times, “I’m 100 percent loyal to Donald Trump.”
Trump was just the beginning
All told, the Trump and party operation raised $1.2 billion on
WinRed, and refunded roughly 10 percent of it.
Whatever blowback it received, WinRed was not deterred. Soon
after the November election ended, the two Republican Senate
incumbents in Georgia, David Perdue and Kelly Loeffler, deployed
prechecked weekly recurring boxes in advance of their January
runoffs.
Predictably, refund rates spiked.
Keith Millhouse, a transportation consultant in California, intended
to donate once to Mr. Perdue, with the aim of keeping Republicans
in control of the Senate. He wound up a recurring contributor and
called the practice “repugnant” and “deceptive.”
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“I’m busy like a lot of other people during this Covid era and I just
wanted to get in, make a donation, get done and move on to what I
needed to do next,” he said. “I thought I had done that. Then I find
out that, you know, I’m getting these other charges.”
He canceled the repeating charge when he saw the reminder email.
But by then WinRed had already processed his second $100
“bonus” contribution. He figured it was not worth the hassle to
protest. “Don’t try to sucker it out of me,” he said.
In the final 2020 reporting period, from Nov. 24 through the end of
the year, Mr. Perdue and Ms. Loeffler refunded $4.8 million to
WinRed donors — more than triple the amount refunded by their
Democratic rivals via ActBlue, even though the Democrats had
raised far more money online. The refunds have stretched into 2021
and have been a source of frustration for the Loeffler campaign,
according to a person familiar with the matter.
Now WinRed is exporting the tools it pioneered during the Trump
re-election across the Republican Party, presaging a new normal
for G.O.P. campaigns.
Today, the websites of various Republican Party committees and
top congressional Republicans, including Representative Kevin
McCarthy, the House minority leader, and Senator Mitch
McConnell, the Senate minority leader, include prechecked yellow
boxes for multiple or recurring donations.
And after Mr. Trump’s first public speech of his post-presidency at
the end of February, his new political operation sent its first text
message to supporters since he left the White House. “Did you
miss me?” he asked.
ADVERTISEMENT
The message directed supporters to a WinRed donation page with
two prechecked yellow boxes. Mr. Trump raised $3 million that day,
according to an adviser, with more to come from the recurring
donations in the months ahead.
Rachel Shorey contributed reporting and Kitty Bennett contributed research.
ADVERTISEMENT
Banks and credit card companies were inundated with fraud complaints last fall from the president’s
supporters about donations they had not intended to make. Doug Mills/The New York Times
Keith Millhouse wanted to make one donation to David Perdue, the Georgia Senate
candidate, but unwittingly made an extra donation. Jessica Pons for The New York Times
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