The Federal Election Commission has taken a step called for by Texas Attorney General Ken Paxton to crack down on possibly fraudulent contributions to donor groups such as ActBlue, the massive Democratic fundraising operation.
In a notice, the FEC said it would take public comments on Paxton’s request to create new rules that tighten the use of credit, gift, and prepaid cards to fundraising groups such as ActBlue.
Paxton, who has investigated donations to the group, claims that “fraudsters” and foreign contributors can use gift and prepaid cards to make illegal donations.
“Our investigation into ActBlue has uncovered facts indicating that bad actors can illegally interfere in American elections by disguising political donations. It is imperative that the FEC close off the avenues we have identified by which foreign contributions or contributions in excess of legal limits could be unlawfully funneled to political campaigns, bypassing campaign finance regulations and compromising our electoral system,” Paxton said when he filed his request with the FEC.
In his petition, he said the potential for fraud is also with Republican sites, such as WinRed.
The problem is proving that the donor using credit, gift, and prepaid cards is the person who paid for it. Paxton’s investigation suggested that it is easy for fraudsters to make “straw donations” via the cards.
The FEC cited Paxton’s petition for legal changes in its notice in the Federal Register.
It said: “The petition asserts that ‘There has been substantial public reporting regarding potentially fraudulent transactions on political committee online platforms. Certain platforms appear to facilitate straw donor transactions, where a contributor disguises his identity by attributing his contribution to another, unaware person.’ The petition further states that ‘prepaid cards are a favorite tool of fraudsters,’ and that ‘specific security measures can mitigate this problem,’ such as comparing the identifying information supplied by contributors to the name, address, and other billing information on file with the issuer of the credit card used to make the contribution.”
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In August, ActBlue said it would require donors using credit cards to provide CVV codes. Paxton’s office said that was a good move but wants more done.
The public comment ends in late January.