AG Paxton: Texas investigation into ActBlue uncovers suspicious donations

A nearly year-long investigation into ActBlue, a Democratic Party online donation platform, alleges a large number of suspicious donations have been made, resulting in Texas Attorney General Ken Paxton petitioning the Federal Election Commission to get involved.

On Monday, Paxton petitioned the FEC to consider implementing new regulations to prevent straw donations from being made on online political fundraising platforms.

Since launching the investigation, Paxton said it’s been publicly reported that potentially fraudulent transactions have occurred 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 states.

Alleged straw donations are being made through the use of prepaid credit cards, which he says “are a favorite tool of fraudsters.”

Paxton’s office launched an investigation into ActBlue in December to determine if the platform’s operations were compliant with all applicable laws. In response to the investigation, Act Blue implemented a new measure in August requiring donors using credit cards to provide “CVV” codes. Paxton says this alone isn’t enough to prevent straw political donations from being made.

The OAG’s investigation says it found a large number of suspicious donations that were made “through obscured identities and untraceable means,” necessitating FEC action.

Through the use of prepaid cards it “appears that straw donations are systematically being made using false identities, through untraceable payment methods,” Paxton said.

Texas’ FEC petition includes partially redacted findings from the OAG’s investigation and recommends that the FEC implement regulations to close fundraising loopholes “that jeopardize American election integrity.” The FEC previously considered implementing such regulations, which ActBlue vocally opposed.

ActBlue’s opposition “is no longer tenable” in light of Texas’ investigation, Paxton said. “If not corrected by the FEC, bad actors can – with trivial ease – illegally funnel foreign money into American elections, exceed political contribution limits, and more.”

“Our investigation into ActBlue has uncovered facts indicating that bad actors can illegally interfere in American elections by disguising political donations,” Paxton said. “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. I am calling on the FEC to immediately begin rulemaking to secure our elections from any criminal actors exploiting these vulnerabilities.”

ActBlue says it’s raised more than $15.8 billion online since 2004.

In the third quarter of fiscal 2024, it says “6.9 million unique donors gave over 31 million contributions to 18,396 campaigns and organizations, totaling over $1.5 billion.”

“This quarter was the largest in ActBlue history,” it said.

Donors gave small amounts totaling $4.2 million to pro-abortion organizations in the quarter, a more than 208% increase from Q3 of 2020. They also gave small amounts totaling more than $5 million to pro-gun control groups, a 48% increase from the same period in 2020, it says.

ActBlue notes that 67.4% of all contributions were made with a saved payment method or digital wallet; 71.8% were made from a mobile device, a 14.8% increase from the third fiscal quarter of 2020.

“The record-breaking surge of small-dollar donations in Q3 2024 has clearly demonstrated the power of grassroots energy in shaping America’s political landscape,” ActBlue said. “As the Democratic Party heads into the final stretch of the campaign, these contributions are fueling races across the country, from local contests to the presidential election. Democrats are positioned to fight for victory in November, driven by this commitment and enthusiasm.”

Last month, U.S. House Oversight Chair Rep. James Comer, R-Ky. raised concerns with the Treasury Secretary that ActBlue was being used to evade campaign finance laws, The Center Square reported.

The federal and Texas investigations were launched after U.S. Sen. Marco Rubio, R-Florida, demanded answers from the FEC in April 2023 about ActBlue’s “schemes to garner illegal campaign donations.”

Rubio cited reports saying that “numerous individuals, including senior citizens, have purportedly donated to ActBlue thousands of times a year” but many “had no idea that their names and addresses were being used to give thousands of dollars in political donations, with most of these ‘donations’ going to ActBlue. It should come as no surprise that ActBlue serves as a vessel for fraud, considering the intentional lack of security engrained within their donation processes and systems.”

Over the last several months, ActBlue has argued that small donations represent “a new standard for grassroots political engagement. Donors from across the nation showed incredible generosity and a new sense of energy and momentum in electing Democrats up and down the ballot.”