Election '18

Feds Indict Brothers for Scam PACs That Bilked Over $50 Million from Gullible Republican Donors

Scam PACs make pitches across the political spectrum, evading regulators.

Photo Credit: http://autismcampaign.org/about-us/

Federal prosecutors have charged two brothers with bilking Republicans across the country of “more than $50 million” in a giant scam where they posed as conservative political action committees (PACs) dedicated to furthering right-wing causes like supporting law enforcement and opposing reproductive rights.

“These nine PACS—which collectively raised more than $23 million between 2014 and 2017, and more than $50 million the last 10 years—were scams, operated to enrich the defendants and their co-conspirators,” the federal indictment said. “The PACs targeted victims across the country, including in the Southern District of New York, raising funds on the fraudulent basis that donations would support education regarding, and the political campaigns of those who supported, ‘autism awareness,’ ‘law enforcement appreciation,’ and pro-life causes.”

“In truth and fact, virtually all of the money raised was paid to the scheme participants or else used to perpetuate the fraud through additional telemarketing and fundraising expenditures,” the indictment continued. “Less than 1 percent of all donor money to the PACs was spent on political contributions during the relevant time period.”

The men charged, William Tierney, who went by the name Bill Johnson, and his brother, Robert Tierney, were based in Arizona. They were caught after filing falsified campaign finance papers with the U.S. Federal Election Commission, the indictment said. The scam PACs were: Grassroots Awareness PAC, Americans for Law Enforcement PAC, National Campaign PAC, Voter Education PAC, Action Coalition PAC, and Protect our Future PAC. They also “managed, operated or influenced” the Life and Liberty PAC, Republican Majority Campaign PAC, and RightMarch.com PAC, the indictment said.

“The scam PACS purposely solicited and received almost entirely small donations, below the $200 threshold for FEC itemized disclosure requirements,” the indictment said, noting the Tierneys and others “undertook efforts to avoid press coverage of the scam PACs, despite the PACs claims of national advocacy and awareness campaigns. William Tierney also monitored media articles about fraudulent PACS, including in connection with evaluating whether to increase their de minimis political donations to avoid the suspicion of journalists.”

Federal prosecutors said they were looking at other scam PAC schemes, leading to much speculation in the trade press for political campaign operatives about whether the Tierneys were, as some professional Republican fundraisers said, “a bad apple,” or part of a larger trend where conniving individuals pose as political committees to bilk a naïve public.

“This has a lot less to do with the political fundraising industry [than] some particularly bad actors, and unfortunately those people exist in every profession,” Dan Backer, a campaign law attorney who has represented PACs, told CampaignAndElections.com

“Still, Backer noted there’s an ongoing grand jury investigation in Virginia into Conservative StrikeForce, the alleged scam PAC that was linked to Strategic Campaign Group. The Maryland-based firm was raided by the FBI last May.”

The arrests will hurt right-wing fundraising efforts, Rob Carter, a Republican fundraising consultant, told the website. “The short-term ramifications for conservative causes are negative because donors, conservative donors and donors in general, naturally will be more skeptical about giving to anything—at least for a while,” he said. “It looks like [the feds] think they have built an airtight case here or they wouldn’t have moved on it.”

Carter told the trade journal that the scam operation was “only the tip of the iceberg,” which was echoed by Ann Ravel, a former Federal Election Commissioner and Democrat appointed by President Obama. She said that many PACs follow a similar business model where they maintain “at least a patina” of apparent legitimacy by doing some political spending—while their organizers pocket six-figure salaries. That slightly less greedy combination makes them harder to prosecute because they engage in some political activities, even though those actions are fronts concealing a self-dealing scheme.

The scam PACs are not confined to conservative causes, according to an investigation by Politico.com earlier this spring. It wrote:

“The new PACs have feel-good names like Cops and Kids Together and Americans for the Cure of Breast Cancer. They have succeeded in raising millions of dollars from small donors in a matter of months—and spent most of it just as quickly, without supporting political candidates or making a mark on a policy issue. Their activities highlight an unpleasant truth: Political groups often receive less oversight and get more leeway than charities, even though they have to disclose more details about their donations and spending. Indeed, the Federal Election Commission has said it is all but powerless to crack down on scam PACs. ‘A lot of money can be collected without a lot of regulation,’ said FEC Commissioner Ellen Weintraub. ‘It’s like when they asked Willie Sutton, “Why do you rob banks?” He said, “Because that’s where the money is.” ’ ”

It’s an open question if the indictments, coming amid the busy 2018 primary season, will dent the mass communications that shadow anyone who follows politics. If anything, the scripts, telemarketing and other messaging used by the Tierneys and their associates are predictable and stereotypical, according to the descriptions in the indictments.

The “Autism Awareness” pitches “claimed to educate our community about autism spectrum disorder, and mobilize political support for autism research and services to help children with autism and their families.” Americans for Law Enforcement PAC called itself “an urgent effort to raise up the voices of everyday Americans in support of our nation’s police and sheriff’s deputies as they battle crime and keep our communities safe.” The anti-abortion National Campaign PAC said its mission was “to change hearts, change leaders, and change laws until the day arrives when every child is welcomed into life and protected by law.” The PAC’s mailer said, “We want to invest every penny we can in the big races to come, and make sure your donations to us are money well spent.”

The indictment said, “They did not ‘advocate on behalf of,’ or ‘educate [the] community’ about the issues to which they are purportedly dedicated. They were not ‘out there every day, persuading people and changing minds.’ And they did not, for example, ‘provide strong political support to our police officers and sheriff’s deputies’; work on ‘changing leaders and changing laws’ or with ‘allies in churches’ for a pro-life agenda; or ‘work to elect conservative Republicans’ or ‘invest every penny… in the big races to come.’”

Despite the federal indictments, the “Autism Awareness” website, a project of the scam Grassroots Awareness PAC, was still live, soliciting donations and petition signatures, on Wednesday.

Don't let big tech control what news you see. Get more stories like this in your inbox, every day.

Steven Rosenfeld is a senior writing fellow of the Independent Media Institute, where he covers national political issues. He is the author of several books on elections, most recently Democracy Betrayed: How Superdelegates, Redistricting, Party Insiders, and the Electoral College Rigged the 2016 Election (March 2018, Hot Books).