PACs masquerading as charitable organizations have created a massive new scam for political gain
October may be Breast Cancer Awareness month but there is one organization reportedly capitalizing on the month of observance for personal gain. According to Daily Beast political reporter, Roger Sollenberger, the American Breast Cancer Coalition (ABCC) is an organization people are being urged to avoid.
While the name appears to be synonymous with other charitable, non-profit organizations, it has actually been exposed as a political organization "posing as a charity spends nearly all of its money on fundraising." While that practice is nothing new, Sollenberger notes what is not registered with the Federal Election Commission (FEC) and it appears to be a legal loophole that is working in their favor.
"Rather than trying to actually address breast cancer, the ABCC appears to be a scheme to extract millions of dollars in donations, mostly from small contributors," Sollenberger highlights. According to documents filed with the Internal Revenue Service (IRS), the ABCC has managed to generate approximately $3.57 million in donations in just the past two years.
Although ABCC is not the only type of shady organization of its kind, Sollenberger explains how this particular non-profit is "more brazen." The organization is reportedly categorized as a "527" political group which the writer describes as "an apparently recent (and legal) tactical shift to make investigations more difficult for the public, the press, and regulators."
As a 527 political group, organizations are registered as tax-exempt non-profits that are supposed to operate for the purpose of influencing "selection, nomination, election, appointment, or defeat of candidates for federal, state, or local public office."
Since the group reportedly masquerades as a charitable organization, it falls in line with what's called a 527 "shadow group."
Eric Friedman —the head of Maryland's Montgomery County Department of Consumer Protection— weighed in with details about how these types of organizations operate. After years of investigating similar organizations, Friedman managed to bring down a fraudulent ring of shady political action committees (PACs).
"Scammers are clever and constantly moving," Friedman said. "So it looks like the trajectory started as phony charities, who then decided they were better off operating as phony FEC groups, and now the latest transition—just in time for Halloween, I guess—is to be a phony PAC registered with the IRS instead of with the FEC."
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