In an ongoing investigation that began in December 2023, Texas Attorney General Ken Paxton has brought to light alarming practices involving the political fundraising platform ActBlue. This investigation has revealed potential illegal campaign contributions made through straw donations, prompting Paxton to take further steps to address these critical concerns.
ActBlue, a significant player in political fundraising, has been the focus of numerous allegations over its role in potentially facilitating fraudulent donations. One of the key areas of scrutiny has been the platform’s failure to require basic security measures for donations, such as Credit Verification Value (CVV) codes for credit card donations. The absence of these codes opened the door to fraudulent activity, raising questions about the integrity of the contributions flowing through the platform.
Significant Security Improvements, But Concerns Remain
In August 2024, ActBlue responded to mounting pressure from Paxton’s investigation by implementing new requirements for CVV codes on donations made through its platform. This change is seen as a significant step in preventing fraudulent donations. Paxton acknowledged the importance of this shift but emphasized that deeper issues remain.
“This is a critical change that can help prevent fraudulent donations,” said Attorney General Paxton. “But it is most important that we enforce the law and protect the integrity of our elections.”
Paxton’s concerns extend beyond the implementation of CVV codes. His investigation has uncovered that certain features of campaign finance law may incentivize bad actors to use platforms like ActBlue to covertly move money to political campaigns. These activities could involve disguising foreign contributions or exceeding donation limits, both of which violate U.S. law.
Widespread Suspect Donations and Further Action
By October 2024, the investigation had taken a new turn. Paxton uncovered a large number of donations made through ActBlue that appear to be associated with fake identities and untraceable methods of payment. The findings prompted Paxton to file a Petition for Rulemaking with the Federal Election Commission (FEC) on October 21, 2024. This petition requests the implementation of new regulations that would close loopholes allowing illegal activities on fundraising platforms.
The petition details how ActBlue allegedly facilitated a large volume of suspicious donations, many of which were made under false identities and through untraceable prepaid cards. This raised significant concerns that foreign money could be funneled into U.S. elections or that individuals could exceed contribution limits by using false names to donate multiple times.
Paxton’s letter to the FEC suggests two key rule changes to prevent these practices. First, political committees must ensure that the information provided by donors matches the data held by the payment card issuers. Second, political committees should be barred from accepting contributions made through prepaid cards, unless they can verify the identities of the contributors.
“Political committees have an obligation to report the identities of persons who give to them,” Paxton wrote in the petition. “They must reasonably rely on the accuracy of information their donors provide. But it would make no sense for Congress to allow [political committees] to rely on the provision of information by others while at the same time giving others a virtual carte blanche to provide inaccurate information.”
Criminal Referral to the DOJ
In a further escalation of the case, Attorney General Paxton sent a criminal referral to U.S. Attorney General Merrick Garland at the Department of Justice (DOJ) on October 24, 2024, urging immediate action. Paxton’s referral letter outlined that the investigation had revealed how straw donations—donations made in someone else’s name—appear to be a large-scale practice facilitated by ActBlue. These donations likely violate federal laws, including 18 U.S.C. § 1343 (wire fraud), 18 U.S.C. § 1028 (identity theft), and 52 U.S.C. § 30122 (making contributions in the name of another).
The criminal referral underscores the seriousness of the findings, with Paxton urging the DOJ to step in and investigate the alleged illegal conduct that threatens to undermine the integrity of U.S. elections.
“I have made a criminal referral to the U.S. Department of Justice based on the findings from our investigation into ActBlue,” Paxton stated. “It is illegal to engage in election fraud, and it is illegal to obscure one’s identity to flout election rules. The Department of Justice must take immediate action to prevent illegal conduct in our elections.”
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