The Worst Government Money Can Buy

While plutocracy is further installed in Washington, Democratic activists and donors are fighting to fix their own scam- and graft-riddled house.

There’s some big news breaking today among Democratic insiders and activists. As Sam Stein first reported this morning in The Bulwark, ActBlue, the powerhouse Democratic fundraising platform, is being pressed by many top progressive organizations and leaders to crack down on “spammers, scammers and exploitative digital fundraising tactics.” They’ve released an open letter to ActBlue leadership signed by a group of 141 consultants, campaign staff, nonprofit staff, technology vendors, donor organizers and donors including MoveOn, SwingLeft, Indivisible, the Movement Voter Project, and New Blue Interactive along with former digital and/or SMS directors for the Hillary Clinton, Bernie Sanders and Elizabeth Warren presidential campaigns.

Collectively the signers of the letter have raised or donated more than $1.14 billion on ActBlue, nearly 7% of the total since it was launched in 2004.

The issue isn’t new—but putting a focus on ActBlue as a major intermediary is. And the problem is not going to go away without concerted action. Over the summer, even the Kamala Harris campaign was impelled to tell its supporters not to fall for “financial scams” from groups claiming to be raising money on its behalf. As Stein reported then for the Bulwark, sketchy groups with names like “Democratic Power” were sending texts and emails claiming to have the backing of celebrities like George Clooney or Barbra Streisand, promising ridiculous things like a “700%” match, but then pouring the lion’s share of their takings into other vendors they had connections to, rather than the Harris campaign. Stein also reported that another group, “Democratic Victory,” spent hundreds of thousands of dollars on fancy lodging and events in Las Vegas—far more than it gave to Democratic campaigns--while claiming to would-be donors that they were in danger of falling short on being able to “send full support into battleground states to help President Biden and Democrats win.”

As the open letter notes, after Stein’s pieces appeared, ActBlue released a statement affirming that it had “a responsibility to ensure the entities on our platform are using our technology appropriately” and is “committed to building a sustainable grassroots movement.” And later, on Nathaniel Pearlman’s Great Battlefield podcast, ActBlue CEO and President Regina Wallace-Jones said that the organization would do more to protect donors from bad actors and unscrupulous tactics. "There are actions that we can and must continue to take to tamp this down," she said. "This is a frontier of innovation that we’re committed to."

Indeed, in August ActBlue made some changes in its Terms of Service, adding a new section called “Respecting Others” that prohibit clients from using its platform to infringe on someone else’s privacy, or to “mislead, defraud, illegally impersonate, defame, bully, harass, or stalk others.” And it also reminded users running PACs that there should be “no donor concerns or confusion around who and what they are giving to when they donate,” adding that “It's vital that every campaign or organization that uses our platform to fundraise clearly represents who they are and where each donation is going.”

But the problems persist. A new survey of 3,220 donors to Democratic and progressive campaigns and organizations being released today by Blue Tent and Donor Organizer Hub found a whopping 77% want “less panic and urgency in fundraising appeals; more analysis and logic.” An almost equivalent percentage, 75%, said they wanted “fewer fundraising emails and texts.” Seventy percent said they wanted “more evidence based research that shows what kinds of giving, or what organizations, are most effective.” And more than three-fifths said they wanted candidates and organizations to communicate more transparently about how their money would be spent. Barely over half (53%) said they have confidence their money is used effectively.

From Blue Tent/Donor Organizer Hub presentation shared with author

Just over half of the donors who responded to the Blue Tent/Donor Organizer Hub survey said that receiving too many fundraising messages was negatively affecting their giving. Forty percent said they were giving less, while 15% said they were more likely to give anonymously (as a way to protect their inboxes, no doubt). And this is not just hurting organizations’ finances—it’s damaging the ability of organizers to even connect with voters and volunteers. Elana Levin, one of the co-founders of Organizing 2.0, who today runs digital strategy training for New Media Mentors, told me that just weeks ago, they encountered tremendous resistance from people they were trying to call or text to do ballot curing because “every call was assumed to be a spam call. The assumption we had to fight was that anyone who was calling them was asking for money, not calling to help them.” They also said that they knew of a campaign that “couldn’t reach its poll place volunteers because so many had blocked the SMS senders due to spam issues.” People also don’t want to sign onto an online action to avoid getting more spam, they added.

If this isn’t a sign that the whole Democratic fundraising ecosystem is in crisis, I don’t know what is.

The Blue Tent/Donor Organizing Hub survey was conducted by a consortium of groups who queried their members and donors including BR50KLYN, California Grassroots Alliance, Central Valley Matters, CivicShout, Crimson Goes Blue, Field Team 6, Force Multiplier, Indivisible - East Bay, Indivisible - Yolo, Lean Left Vermont, Movement Voter PAC, Partners4Democracy, Resource Generation, Sister District, Showing Up for Racial Justice, and Swing Left. It was not a random representative sample, and given the overall make-up of this list of groups, tilted more toward grassroots small and mid-level donors than high-net worth individuals. Half said they gave no more than $750 in the last cycle. Most (58%) of the respondents are longtime donors, while just over a quarter started donating after 2016. Eighty-six percent identified as white, and women outnumbered men by more than two-to-one (65% to 28%). But even if this isn’t a representative sample of Democratic donors, the large number of responses still give it heft.

Indeed, many progressive movement leaders know how much current extractive practices are hurting. Leah Greenberg, the co-founder of Indivisible, told me she signed the ActBlue letter because, “Every time I get a breathless political scam text, I wince - not just because it's annoying, but because I know that this behavior demobilizes and fosters cynicism across our base.” She added, “For far too many people, these exploitative tactics have become synonymous with the work of responsible actors doing real organizing and campaigning. We have a movement-wide problem here and we need movement-wide solutions. This letter is a great start."

Billy Wimsatt, the founder of the Movement Voter Project, which channeled $77 million in partisan funds to grassroots organizations from more than 30,000 individual donors in the 2024 cycle, told me he signed the letter because “The only way we'll build progressive and Democratic power that lasts is by treating donors with respect, as partners and co-conspirators — not moneybags to manipulate for short-term gain.” He added, “All of us should use our power to be a part of the solution.”

Another signer, Murshed Zaheed, the founder of Pacifica Strategies and a former senior advisor to Senator Harry Reid, said, “The Democratic Party and its accompanying progressive establishment should be in DEFCON1 mode about the state of their digital campaign infrastructure. A decade and half of slash and burn digital tactics focused squarely on fundraising instead of organizing has left the establishment with record fundraising haul and not much to show in terms of either substance or victories.” He added, “Until the progressive establishment including its leaders in tech space show a genuine commitment to treating its base with basic respect as human beings instead of mere ATM machines, they will keep finding themselves in the loser bracket with eventually no base to extract from. Time is now for them to provide more than just lip service and show real leadership and get their shit together to save what we have left and build from there.”

The open letter includes a list of more than two dozen specific ideas and recommendations for ActBlue’s consideration that dozens of digital fundraising practitioners contributed to, according to Josh Nelson of CivicShout, who led the letter’s organizing and whose been working on this issue for years. Some of those recommendations could make it a lot easier for donors to protect their privacy, or at least see when campaigns they’ve donated to have sold or rented their information to others. And others would force vendors using ActBlue to be far more transparent about who they are. Reading some of the suggestions, like requiring an organization that doesn't directly donate to a candidate to say something along the lines of: "Your donation will not directly benefit any political candidate,” you almost have to laugh—why isn’t this the default for ActBlue?

From what I understand, ActBlue is taking the issues raised very seriously and that changes are coming. Coincident to all of this, this morning House Republicans are holding a hearing on “American Confidence in Elections: Prohibiting Foreign Interference” that will likely highlight some rightwing conspiracy theories about ActBlue. Josh Nelson told me he wanted nothing to do with Republicans’ “pathetic attacks on ActBlue” and added that he believed “on the issues addressed in our open letter, WinRed [the main GOP competitor] is far, far worse than ActBlue across the board.”

—Related: If you want to attend a briefing on the Blue Tent/Donor Organizer Hub survey, taking place today from 4:00-5:00pm EST, RSVP here.

Let’s get real

I’m all for figuring out how to make fundraising on our side of the aisle less extractive, more transparent and more accountable. But even if ActBlue makes all the changes advocates are asking for, and a bunch of ethically challenged scam artists and grifters are forced to the sidelines of the politics industry, we’ll still be pretty weak. I just finished reading People Power Change, Marshall Ganz’s powerful new book, and his words keep simmering in my brain. “Redeeming the democratic promise from the clutches of oligarchic rule requires leadership, organizing and action,” he writes. This is not something we can short-cut our way to via better written fundraising emails. He notes:

“A marketlike ideology of radical individualism, instrumental exchange, and competition does not help bring people together. This is especially true when this ideology’s constituent parts can be amplified by using technology that makes it easier to share information and aggregate individual resources than to share commitment to one another to create collective capacity in pursuit of shared purpose. As one of my students put it, ‘I feel overconnected but undercommitted.’”

Our weakness is not only rooted in digital organizing choices that take have verticalized us into big lists that can be farmed for money or volunteer time instead of local, horizontal networks of people who know each other’s faces and concerns. Too many liberal causes have also been advanced by lawsuits and courts rather than community organizing. As Ganz sagely notes, “The genius of the Montgomery Bus Boycott, for example, was that it did not claim to be launching an assault on institutionalized racism but rather focused specifically on the condition of riding on a segregated bus. People’s anger over the daily disrespect of a segregated bus could be focused on a plausible solution for which people could fight. Had the fight been won with a lawsuit, the community might well have benefits but would not have been empowered.”

And today, well-meaning philanthropy also “corrupts the craft of organizing,” Ganz writes. “Too often, power is conditioned on the ability to access the funds of wealthy donors who have colonized civil society with projects that depend on their largesse. This outsized influence of donors shifts the locus of accountability from one’s people to one’s funders, further eroding the power of people at the heart of organizing.”

This even goes for the groups that many of us want to lift up by getting Democratic and progressive donors to shift their giving away from candidates and party committees and toward groups that do year-round community organizing. As Ganz notes, “Ironically, in most community organizations, no matter how hard the staff works to engage them, those they call their ‘base’ do not elect leadership, hold staff accountable, pay for the organization, or govern themselves.”

Dear reader, think about the organizations you belong to and support. The only one that I am part of where I help elect its leadership, govern its operations and pay for its services is my synagogue. The Indivisible group I belong to has no dues, though it is self-governing. I pay dues to the Working Families Party but have no real say in its governance. I donate to groups like MoveOn (which unlike most of the Democratic ecosystem is mostly self-funded) but again, have no say. So ask yourself, if you are feeling powerless—maybe you haven’t been claiming enough of your own power each time you write a check.

Speaking of the power that comes from writing big checks

Congress Meets Wall Street, a 2003 poster that I helped make while with Public Campaign (design by Christopher Ross)

Thirty-two years ago, Texas billionaire Ross Perot ran for president as an independent candidate and managed to get 19% of the vote, losing to Bill Clinton, who got 43% and George H.W. Bush, who got 37%. Perot’s top issue was the rising national debt and the need to reduce government borrowing. Most observers agreed at the time that even though Perot came in third, his surprisingly strong showing—plus his ongoing efforts to stay in the limelight afterwards--helped shift the national debate over deficit spending. So while Clinton’s campaign slogan was “It’s the Economy, Stupid” and he promised a big economic stimulus package called “Putting People First” aimed at helping the middle class, the initial thrust of his administration’s economic program was a $500 billion deficit reduction program.

The effect was predictable: less government borrowing means less pressure on interest rates. The bond markets were ecstatic because lower rates meant higher bond values. Starting in November 1992, bonds started to rally. Nearly a year later they were up 13%. Who benefited from this? Perot, whose 1992 financial disclosure filing showed that most of his $3.2 billion fortune was invested in bonds. Writing in the first issue of The Perot Periodical, a quarterly magazine I started in the fall of 1993, my friend the economic historian Robert Fitch estimated that Perot had made about a quarter-billion-dollars from his run for president and successful advocacy for deficit reduction. An edited version of Fitch’s story ran in The Los Angeles Times and it got picked up all over the place, including the Washington Post.

Ah, the good old days, when dabbling in politics might make a billionaire just 10% richer. According to the Washington Post’s Faiz Siddiqui and Trisha Thadani (gift link), Elon Musk’s net worth has increased more than $170 billion, to $442 billion, since Election Day. Tesla stock alone has risen 69% since November 5, and not because the company suddenly became that much more innovative or competitive. As Public Citizen notes, Musk’s businesses—Tesla, X and SpaceX—are all facing multiple government investigations by at least nine agencies. A story in today’s New York Times also reveals that several Pentagon offices have initiated security reviews of Musk due his allegedly lax behavior.

So far, we know of $277 million that Musk spent backing Donald Trump and other Republicans in this election cycle. So, his return on investment is about 1,595X. (Even if you subtract the $40 billion Musk spent to buy Twitter as a total loss, that only reduces the return on his political spending to 1,451X.) By comparison, Perot spent about $56 million of his own money on his 1992 campaign, for an ROI of less than 5X. (To add more perspective, someone who bought $1000 in Apple Stock in 1997 when Steve Jobs returned to the company would have seen a 1,800X appreciation in the value of their stock—but over 27 years!)

Add to this Musk’s public threat to fund primary challenges to any Republican senator or representative who dares stand in the way of any of Trump’s priorities and we are in completely unprecedented times. Never before has one man been this rich and never before has one hyper-rich man decided to try to buy the entire American political system. The corruption extends to Trump’s Cabinet picks, who collectively are worth at least $11.8 billion, according to US News and World Report, exactly one-hundred times more than Joe Biden’s cabinet.* It turns out that government of, by and for the people can indeed perish from this earth, to be replaced by one that is of, by, and for the billionaires.

Talking about the overwhelming power of concentrated money over politics is not something that will make you popular at parties. It’s dangerously demotivating. Research by campaign finance reformers has found that telling ordinary people how much oligarchs are spending to purchase politicians breeds more cynicism and resignation than outrage. But this is our reality. As Ganz writes in People Power Change:

“Since the 1970s, we have created a political economy in which the interests of the many, who work, are subordinated to the interest of the few, who own. In the United States, we’ve allowed a trifecta that links economic structures that facilitate the accumulation of wealth at the top; electoral processes that have become almost entirely monetized; and a civil society depending on the largest of many of the same people benefits from all the rest, but in philanthropic form. This operates within a Constitutional structure that grows less representative every day.”

….This is the challenge that demands our response. It will require overcoming the divisions, elitisms, and confusions of those with whom sharing values, an interest in change, and hope for a better future is not enough. This will require going back to the basics. The work starts with each other—with people: with the relationships we can build; the stories of our shared values; the resourcefulness to turn our assets into more rather than our deficits into less; the courage to act on what we can, without which nothing can change, including ourselves; and the wisdom to structure our interactions with each other to effectively include the many, not the few.”

Amen, brother. Read the whole book.

*Befitting his social-climbing nature, Barack Obama’s Cabinet was worth about $2.8 billion in his second term.