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Political Spending At Trump Properties Plunges Sharply

Reprinted with permission from ProPublica

The number of federal political committees that have spent money in the first half of 2021 at Trump Organization properties has dropped dramatically from the same period two years ago, Federal Election Commission filings show. Those continuing to spend: a smaller circle of loyal supporters of former President Donald Trump and candidates jockeying for his favor in contested Republican primaries.

During the first six months of 2021, 27 federal committees have reported spending $348,000 at Trump Organization properties, with the Republican National Committee accounting for more than half the total. That's a steep decline from the 177 committees that did so during the 2019-2020 election cycle or the 78 committees that spent more than $1.6 million at Mar-a-Lago, the Trump International Hotel in Washington and other company sites in the first half of 2019, filings show.

Of course, that spending came in the run-up to a presidential election in which Trump was the incumbent. The biggest spenders in 2019 were the RNC and Trump's own political committees raising money to support his campaign.

While the RNC is the top spender so far in 2021, many of the other PACs that used Trump properties as venues for fundraising events and other activities appear to have stopped their spending. The National Republican Congressional Committee, the fundraising arm of House Republicans, has not reported spending any money at Trump properties through May of this year after spending $32,532 during the previous election cycle. (National party committees will file reports covering activity in June on July 20, which may show some spending at Trump's facilities.)

Those that have spent money at Trump properties this year represent some of the former president's most fervent loyalists, including Reps. Mo Brooks of Alabama, who is running for an open Senate seat, and Ronny Jackson of Texas, who previously was the White House physician. Overall, 13 of the 23 committees spending this year are connected to current members of the House or Senate.

"Republican candidates are in a delicate moment, I think, because of uncertainty surrounding Trump's future power," said Abby Wood, a professor of law, political science and public policy at the University of Southern California, in an email. "Trump's power in the next election is much less certain than it was from the vantage point of folks spending money (and enriching him) at his properties in 2019."

The drop in political spending comes at a precarious time for the Trump Organization, which in early July was hit with 10 felony charges brought by Manhattan District Attorney Cyrus Vance Jr., as well as additional charges against Allen Weisselberg, the organization's chief financial officer. Both Weisselberg and the company have pleaded not guilty to the charges, but the impact of the investigation and the fallout of the Jan. 6 attack on the U.S. Capitol appear to have damaged the company's business prospects. The Washington Post described the company as at its "lowest point in decades."

The other spenders include congressional candidates advertising their ties to Trump, such as Lynda Blanchard, who is one of Brooks' opponents for the GOP nomination in the Alabama Senate race, and Josh Mandel, who's running for an open Senate seat in Ohio. Brooks, Blanchard and Mandel have each paid to use Mar-a-Lago, Trump's property in Palm Beach, Florida, while Jackson paid for an event at the Trump hotel in Washington.

"It is my intention to do fundraisers at Mar-a-Lago as often as I can, so long as they help generate positive cash flow for my Senate campaign for America First policies," Brooks said in a statement. "I personally thank President Trump for allowing me to use Mar-a-Lago and hope he will continue to be so generous in the future."

The campaigns of Blanchard, Jackson, and Mandel, along with the RNC and the Trump Organization, did not respond to requests for comment. The RNC has spent more money for events at other locations this year, including $529,000 for a donor event at the Four Seasons Resort in Palm Beach in April.

Mar-a-Lago, a private club that also doubles as the former president's residence, has been the leading recipient of federal political committee spending among Trump properties, bringing in at least $283,000 this year, much of it for hosting an RNC donor retreat in May. In addition to getting the venue and Florida weather, politicians holding events at the club stand a good chance of having Trump make an appearance.

The Trump International Hotel in Washington, D.C., and the BLT Prime restaurant located there, have seen a significant drop-off in political spending compared to the first half of 2019. Two years ago, the D.C. hotel and restaurant brought in more than $518,000, according to FEC records. This year, without Trump in the White House nearby, the total is less than $15,000.

"Given Trump is no longer president and there is less need to curry favor with him, congressional incumbents and party committees may choose less expensive venues," said Paul Herrnson, a political science professor at the University of Connecticut.

Congress Probing PPP Loans To Fake Farms

Reprinted with permission from ProPublica

A House committee has opened a formal investigation into how several online lenders may have facilitated fraudulent Paycheck Protection Program loans, following reporting by ProPublica and other news outlets.

The House Select Subcommittee on the Coronavirus Crisis probe seeks answers from Kabbage and BlueVine, online lending platforms that processed hundreds of thousands of government-backed loans to small businesses, as well as Celtic Bank and Cross River Bank, which frequently partnered with the web-based lenders.

Although these highly automated lenders helped the Small Business Administration's $800 billion relief program reach small businesses that weren't being served by traditional banks, they also became targets for cheaters.

"I am deeply troubled by recent reports alleging that financial technology (FinTech) lenders and their bank partners failed to adequately screen PPP loan applications for fraud," said subcommittee chair James E. Clyburn, a South Carolina Democrat. "This failure may have led to millions of dollars in FinTech-facilitated PPP loans being made to fraudulent, non-existent, or otherwise ineligible businesses."

The subcommittee's letters to the targets of its investigation cited stories published by Bloomberg, the Miami Herald, the Project on Government Oversight and ProPublica that found fintech companies account for an outsized amount of the fraud that has plagued the PPP from its inception.

Last week, ProPublica revealed that Kabbage processed 378 loans collectively worth $7 million to single-person businesses that don't appear in corporation records of their respective states. The overwhelming majority identified themselves as farms, typically registered to residential addresses with no discernable agricultural activity.

"The illegitimacy of these purported farms — including potato fields in Florida and orange groves in Minnesota — would have been obvious if even the bare minimum of due diligence had been conducted on the loan applications," the subcommittee wrote in its letter to Kabbage, which was acquired by American Express last fall.

The letter demands a long list of documents, including any records of potential fraudulent activity on the platform, documents describing what resources were devoted to fraud detection, and descriptions of how the company recruited PPP applicants and how it incentivized loan reviewers to process more applications.

Those questions mostly implicate Kabbage's conduct before it became part of American Express, which did not acquire Kabbage's loan portfolio or its servicing arm, which are now incorporated into a separate company. The new company, called K Servicing, continued to process new PPP applications as well as close out those from the first round.

Kabbage is also reportedly under investigation by the Department of Justice over how it calculated PPP loan amounts.

A spokesperson for American Express, who had earlier said that Kabbage complied with all required fraud protocols and reported suspicious loans to SBA, referred questions to K Servicing. Spokespeople from K Servicing, BlueVine, Cross River and Celtic Bank did not respond to requests for comment.

Feds Probing Hundreds Of PPP Loans To Fake Farms

Reprinted with permission from ProPublica

The shoreline communities of Ocean County, New Jersey, are a summertime getaway for throngs of urbanites, lined with vacation homes and ice cream parlors. Not exactly pastoral — which is odd, considering dozens of Paycheck Protection Program loans to supposed farms that flowed into the beach towns last year.

As the first round of the federal government's relief program for small businesses wound down last summer, "Ritter Wheat Club" and "Deely Nuts," ostensibly a wheat farm and a tree nut farm, each got $20,833, the maximum amount available for sole proprietorships. "Tomato Cramber," up the coast in Brielle, got $12,739, while "Seaweed Bleiman" in Manahawkin got $19,957.

None of these entities exist in New Jersey's business records, and the owners of the homes at which they are purportedly located expressed surprise when contacted by ProPublica. One entity categorized as a cattle ranch, "Beefy King," was registered in PPP records to the home address of Joe Mancini, the mayor of Long Beach Township.

"There's no farming here: We're a sandbar, for Christ's sake," said Mancini, reached by telephone. Mancini said that he had no cows at his home, just three dogs.

All of these loans to nonexistent businesses came through Kabbage, an online lending platform that processed nearly 300,000 PPP loans before the first round of funds ran out in August 2020, second only to Bank of America. In total, ProPublica found 378 small loans totaling $7 million to fake business entities, all of which were structured as single-person operations and received close to the largest loan for which such micro-businesses were eligible. The overwhelming majority of them are categorized as farms, even in the unlikeliest of locales, from potato fields in Palm Beach to orange groves in Minnesota.

The Kabbage pattern is only one slice of a sprawling fraud problem that has suffused the Paycheck Protection Program from its creation in March 2020 as an attempt to keep small businesses on life support while they were forced to shut down. With speed as its strongest imperative, the effort run by the federal Small Business Administration initially lacked even the most basic safeguards to prevent opportunists from submitting fabricated documentation, government watchdogs have said.

While that may have allowed millions of businesses to keep their doors open, it has also required a massive cleanup operation on the backend. The SBA's inspector general estimated in January that the agency approved loans for 55,000 potentially ineligible businesses, and that 43,000 obtained more money than their reported payrolls would justify. The Department of Justice, relying on special agents from across the government to investigate, has brought charges against hundreds of individualsaccused of gaming pandemic response programs.

Drawn by generous fees for each loan processed, Kabbage was among a band of online lenders that joined enthusiastically in originating loans through their automated platforms. That helped millions of borrowers who'd been turned down by traditional banks, but it also created more opportunities for cheating. ProPublica examined SBA loans processed by several of the most prolific online lenders and found that Kabbage appears to have originated the most loans to businesses that don't appear to exist and the only concentration of loans to phantom farms.

In some cases, these problems would've been easy to spot with just a little more upfront diligence — which the program's structure did not encourage.

"Pushing this through financial institutions created some pretty bad incentives," said Naftali Harris, the CEO of Sentilink, which helps lenders detect potential identity theft. "This is definitely a case where companies that decided they wanted to be more careful in terms of giving out loans were penalized for doing so."

Presented with ProPublica's findings, SBA inspector general spokeswoman Farrah Saint-Surin said that her office had hundreds of investigations underway, but that she did "not have any information to share or available for public reporting at this time." Reuters reported that federal investigators were probing whether Kabbage and other fintech lenders miscalculated PPP loan amounts, and the DOJ declined to confirm or deny the existence of any investigation to ProPublica.

Kabbage, which was acquired by American Express last fall, did not have an explanation for ProPublica's specific findings, but it said it adhered to required fraud protocols. "At any point in the loan process, if fraudulent activity was suspected or confirmed, it was reported to FinCEN, the SBA's Office of the Inspector General and other federal investigators, with Kabbage providing its full cooperation," spokesman Paul Bernardini said in an emailed statement.

As soon as the pandemic swept across America, Kabbage was in trouble.

The online lending platform had launched in 2009 as part of a generation of financial technology companies known as "non-banks," "alternative lenders" or simply "fintechs" that act as an intermediary between investors and small businesses that might not have relationships with traditional banks. Based in Atlanta, it had become a buzzy standout in the city's tech scene, offering employees Silicon Valley perks like free catered lunches and beer on tap. It advertised its mission as helping small businesses "acquire funds they need for their big breaks," as a recruiting video parody of Michael Jackson's "Thriller" put it in 2016.

The basic innovation behind the burgeoning fintech industry is automating underwriting and incorporating more data sources into risk evaluation, using statistical models to determine whether an applicant will repay a loan. That lower barrier to credit comes with a price: Kabbage would lend to borrowers with thin or checkered credit histories, in exchange for steep fees. The original partner for most of its loans, Celtic Bank, is based in Utah, which has no cap on interest rate, allowing Kabbage to charge more in states with stricter regulations.

With backing from the powerhouse venture capital firm SoftBank, Kabbage had been planning an IPO. Its model foundered, however, when Kabbage's largest customer base — small businesses like coffee shops, hair salons and yoga studios — was forced to shut down last March. Kabbage stopped writing loans, even for businesses that weren't harmed by the pandemic. Days later, it furloughed more than half of its nearly 600-person staff and faced an uncertain future.

The Paycheck Protection Program, which was signed into law as part of the CARES Act on March 27, 2020, with an initial $349 billion in funding, was a lifeline not just to small businesses, but fintechs as well. Lenders would get a fee of 5% on loans worth less than $350,000, which would account for the vast majority of transactions. The loans were government guaranteed, and processors bore almost no liability, as long as they made sure that applications were complete.

At first, encouraged by the Treasury Department, traditional banks prioritized their own customers — an efficient way to process applications with little fraud risk, since the borrowers' information was already on file. But that left millions of the smallest businesses, including independent contractors, out to dry. They turned instead to a collection of online lenders that have sprung up offering short-term loans to businesses: Kabbage, Lendio, Bluevine, FundBox, Square Capital and others would process applications automatically, with little human review required.

For the platforms, this was also easy money. In the first funding round that ran out last August, Kabbage completed 297,587 loans totaling $7 billion. It received 5% of each loan it made directly and an undisclosed cut of the proceeds for those it processed for banks; its total revenue was likely in the hundreds of millions of dollars. A lawsuit filed by a South Carolina accounting firm alleges that Kabbage was among several lenders that refused to pay fees to agents who helped put together applications, even though the CARES Act had said they could charge up to 1% of the smaller loans (a provision that was later reversed). For Kabbage, that revenue kept the company alive while it sought a buyer.

"For all of these guys, it was like shooting fish in a barrel. If you could do the minimum amount of due diligence required, you could fill up the pipeline with these applications," said a former Kabbage executive, one of four former employees interviewed by ProPublica. They spoke on the condition of anonymity to avoid retaliation at their current jobs or from industry giant American Express.

To handle the volume, Kabbage brought back laid-off workers starting at $15 an hour. When that failed to attract enough people, they increased the hourly rate to $35, and then $40, and awarded gift cards for reaching certain benchmarks, according to a former employee with visibility into the loan processing. "At a certain point, they were like, 'Yes, get more applications out and you'll get this reward if you do,'" the former employee said. (Bernardini said the company did not offer incentive compensation.)

In a report on its PPP participation through last August, Kabbage boasted that 75% of all approved applications were processed without human review. For every 790 employees at major U.S. banks, the report said, Kabbage had one. That's in part because traditional banks, which also take deposits, are much more heavily regulated than fintech institutions that just process loans. To participate in the PPP, fintechs had to quickly set up systems that could comply with anti-money laundering laws. The human review that did happen, according to two people involved in it, was perfunctory.

"They weren't saying, 'Is this legitimate?' They were just saying, 'Are all the fields filled out?'" said another former employee. As acquisition talks proceeded, the employee noted, Kabbage managers who held the most company stock had a built-in incentive to process as many loans as possible. "If there's anything suspicious, you can pass it along to account review, but account review was full of people who stood to make a lot of money from the acquisition."

One situation in which Kabbage approved a suspicious loan became public in a Florida lawsuit filed by a woman, Latoya Clark, who received more than $1 million in PPP loans to three businesses. When the funds were deposited into accounts at JPMorgan Chase, the bank discovered that Clark's businesses hadn't been incorporated before the PPP program's cutoff and froze the accounts. Clark sued Chase, and Chase then filed a counterclaim against the borrower and Kabbage, which had originated the loan despite its questionable documentation. In its response, Kabbage said it had not yet completed its investigation of the incident.

Although the Justice Department rarely names lenders that processed fraudulent PPP applications, Kabbage has been named at least twice. One case involved two loans worth $1.8 million to businesses that submitted forged information, and the otherinvolved a business that had inflated its payroll numbers and submitted a similar application to U.S. Bank, which flagged authorities. Kabbage had simply approved the $940,000 loan. American Express' Bernardini declined to comment further on pending litigation.

Shortly after the application period for PPP's first round closed on Aug. 8, American Express announced the Kabbage purchase. But the transaction included none of Kabbage's loan portfolios, either from the PPP or its pre-pandemic conventional loans. The PPP loans had either been sold to SBA-approved banks or bought by the Federal Reserve. Bernardini wouldn't say which banks now own the loans, however, and said that no potentially fraudulent loans had been pledged to the Fed.

In April, an Ocean County, New Jersey, resident contacted ProPublica after seeing his name attached to a Kabbage loan for a nonexistent "melon farm." To see whether it was an isolated incident, ProPublica took basic information the government released after a Freedom of Information Act lawsuit by ProPublica and others and compared it with state business entity registries. Although registries don't pick up all sole proprietorships and independent contractors, the absence of a name is an indication that the business might not exist.

As it turned out, Kabbage had made more than 60 loans in New Jersey to unlisted businesses. Fake farms also showed up repeatedly in the SBA's Economic Injury Disaster Loan Program, according to reports from local news outlets.

A common tie became apparent when the resident of the home to which one nonexistent business was registered said that he was a client of the certified public accountants at Ciccone, Koseff & Company. In March 2020, the firm notified its clients of what it called an "ultimately unsuccessful ransomware attack" that occurred the previous month. According to information filed with Maine's attorney general, the attackers acquired Social Security numbers and financial information.

Several other clients of the accounting firm, including Mancini, the Long Beach mayor, also had loans registered to their addresses. Reached by phone, firm founder Ray Ciccone declined to comment.

But that CPA's data breach didn't account for all of the suspicious loans ProPublica found across the country. Searches for PPP applicants that didn't show up in state registration records yielded hundreds in 28 more states, with dense clusters in Florida, Nebraska and Virginia. Other lenders had nonexistent businesses as well, but fake farms only showed up in Kabbage loans. Most followed a distinctive naming convention, with part of the name of a resident or former resident of the home to which the business is registered, plus a random agricultural term.

PPP loan applications approved by Kabbage, an online lender, to recipients who appear not to exist or say they did not apply, by county.


Source: Small Business Administration Credit: Derek Willis/ProPublica

Some of the fake loans listed addresses of people who'd also legitimately applied for their businesses. Hartington, Nebraska, anesthesiologist Bruce Reifenrath received a PPP loan for his practice in nearby Yankton, South Dakota. That's why the idea of one being approved for a "potato farm" was so strange. "We did a PPP loan last spring and it's pretty extensive, the documentation," Reifenrath said.

Reifenrath was part of a cluster of dubious Kabbage loans in Hartington that also included the home of J. Scott Schrempp, the president of the Bank of Hartington, who confirmed that he did not own a strawberry farm. Schrempp said he had noticed the fake loan, and reported it to the SBA.

The SBA data only reflects approved applications received from lenders, some of which are then caught and not funded. The SBA also periodically updates its dataset to remove loans canceled by lenders. But none of the suspicious loans pulled by ProPublica show undisbursed funds, and they all have remained in the dataset for more than eight months.

One possible mechanism for the invented businesses is a technique known as synthetic identity theft, in which a criminal obtains pieces of personally identifiable information — such as a home address, a Social Security number and a birthdate — and combines it with fake information to build a credit profile. The associated bank account then routes to the fraudster, not the owner of the original information.

None of the residents of the phony farms ProPublica contacted were getting notices that they needed to repay the loans they didn't apply for, because they didn't get any money. But that doesn't mean they're not at risk, according to James Lee, chief operating officer at the Identity Theft Resource Center.

"Just having an address linked to your name on a fraudulent loan can impact your credit," Lee said. It can also pose problems for pre-employment background checks, insurance applications or new identification documents like passports and driver's licenses.

Meanwhile, if not corrected, the fabricated identities will stay in circulation and become better at fooling other financial institutions. "Those records get built into the credit and authentication systems used by government and commercial entities," Lee said. "Each next time they are used and authenticated, the more 'real' they become. That's what makes synthetic identity fraud so insidious."

This, however, is largely not Kabbage's problem anymore.

After its huge blitz of PPP loans last summer, Kabbage had hundreds of thousands of borrowers whose loans would need to be serviced until they were closed out. The loans could either be forgiven, if the borrower demonstrated that they spent most of the money on payroll, or paid back with interest. But American Express didn't acquire the part of Kabbage's business that owned those loans. Instead, a separate entity called K Servicing would handle loan forgiveness and take applications for a second PPP draw that Congress funded in December. The servicer is led by former Kabbage employees and its website looks very similar to Kabbage's, but American Express says it has no affiliation.

If Kabbage was understaffed for the volume of PPP loans it took on before the acquisition, the situation has apparently worsened since then. Reddit, Yelp, Consumer Affairs, Trustpilot, Facebook and Better Business Bureau threads are replete with complaints from customers whose applications were denied or who received no communication from the company. When the SBA changed the rules in February to make the program more generous to independent contractors, K Servicing couldn't incorporate the new forms into its processing system. So it told all new applicants to apply through another company, SmartBiz, which had operated as a mostly online processor of SBA loans even before the pandemic.

K Servicing is run by Kabbage's former head of program management, Laquisha Milner, who also runs her own consulting firm. "Due to extenuating circumstances beyond our control, currently, our processing function is delayed," Milner emailed in response to detailed questions from ProPublica. "We are relentlessly exploring all available options to ensure our existing customers are able to maximize their loan forgiveness."

Jennifer Dienst is a freelance travel and events writer who received her first-draw loan from Kabbage and wants to apply for forgiveness before her window for doing so closes in the fall, but she has been stymied by K Servicing's failure to make the forms available. "Please be patient with us as we prepare for the new forms," a message on the loan portal reads.

Meanwhile, Dienst's account has started accruing interest, which Milner said will not be charged if the loan is forgiven. But it's making Dienst nervous.

"It's always the same response from K Servicing — we're updating our forgiveness forms and they'll be made available soon," Dienst said. "They've been saying that for months."

Clarification, May 18, 2021: This story has been clarified to more accurately reflect the terms of Kabbage's acquisition by American Express.

Astroturf Money: How Hawley And Greene Jacked Their Fundraising Numbers

Reprinted with permission from ProPublica

Two of the leading Republican firebrands in Congress touted big fundraising hauls as a show of grassroots support for their high-profile stands against accepting the 2020 election results.

But new financial disclosures show that Sen. Josh Hawley (R-MO) and Rep. Marjorie Taylor Greene (R-GA), relied on an email marketing vendor that takes as much as 80 cents on the dollar. That means their headline-grabbing numbers were more the product of expensively soliciting hardcore Republicans than an organic groundswell of far-reaching support.

Hawley and Greene each reported raising more than $3 million in the first three months of the year, an unusually large sum for freshman lawmakers, according to new filings with the Federal Election Commission. That's more than the average House member raises in an entire two-year cycle, according to data compiled by the Center for Responsive Politics. The tallies generated favorable press coverage for Hawley and Greene, and they both seized on the numbers to claim a popular mandate.

Politico called Greene's result "eye-popping" and "staggering," a sign that she "appears to have actually benefited from all the controversies that have consumed her first few months in office." The House voted in February to remove Greene from her committee assignments because of her social media posts that promoted far-right conspiracy theories; racist, anti-Semitic, and anti-Muslim rhetoric; and violence against Democratic leaders.

"I am humbled, overjoyed and so excited to announce what happened over the past few months as I have been the most attacked freshman member of Congress in history," Greene said in an emailed statement on April 7. "Accumulating $3.2 million with small dollar donations is the absolute BEST support I could possibly ask for!"

As for Hawley, who was the first senator to say he'd object to certifying the Electoral College results on January 6, Politico proclaimed that his massive increase showed "how anti-establishment Republicans are parlaying controversy into small-dollar fundraising success." Hawley's pollster, Wes Anderson with the political consulting firm OnMessage, said in a memo distributed to supporters that the "fundraising surge" made "crystal clear that a strong majority of Missouri voters and donors stand firmly with Senator Hawley, in spite of the continued false attacks coming from the radical left."

It wasn't until later, when the campaigns disclosed their spending details in last week's FEC reports, that it became clearer how they raised so much money: by paying to borrow another organization's mailing list.

"List rental" was the No. 1 expense for both campaigns, totaling almost $600,000 for each of them. It's common for campaigns to rent lists from outside groups or other candidates to broaden their reach. But for Hawley and Greene, the cost was unusually high, amounting to almost 20 percent of all the money they raised in January, February and March.

The actual return on renting the lists was likely even lower, since it's probable that not all their donations came from emailing those lists. It's not possible to tell from the FEC filings which contributions resulted from which solicitations. Firms that sell lists sometimes demand huge cuts: The top vendor for Hawley and Greene, LGM Consulting Group, charges as much as 80 percent, according to a contract disclosed in Florida court records as part of a dispute involving Lacy Johnson's long-shot bid to unseat Rep. Ilhan Omar (D-MN)

The Hawley and Greene campaigns did not respond to requests for comment. LGM Consulting Group's principal, Bryan G. Rudnick, also did not respond to phone messages or an email.

Far beyond these two campaigns or this one company, small-dollar fundraising has exploded thanks to easy online payments, which are rewriting the playbook for campaign finance in both parties. At the same time, the rise of email fundraising has spawned some aggressive or even deceptive marketing tactics and made plenty of room for consultants and vendors to profit. A move by then-President Donald Trump's 2020 campaign to sign up supporters for recurring payments by default led to as much as three percent of all credit card fraud claims filed with major banks, according to The New York Times. In some long-shot congressional races, consultants could walk away with almost half of all the money raised, The Washington Post reported.

Hawley's and Greene's list rentals show how politicians can pad their fundraising figures — if they're willing to pay for it. There's scant evidence that fundraising success represents broad popular support for a politician outside the narrow slice of Americans who make political contributions, and many of the people on the rented mailing lists may not have been constituents of Hawley's or Greene's. Still, the money is real, and the perception of fundraising star power is its own kind of success in Washington.

"They're juicing their numbers, but their return on investment is still a net gain," said Jessica Baldwin-Philippi, a professor at Fordham University who researches how political campaigns use digital communications. "The money matters, the articles about the money matter and convey power, and it adds to their clout."

The cost to rent a list can be a flat fee, a percentage cut of money raised, or even all money raised after a campaign clears a certain threshold. Donors have limited visibility into where their money goes and may not realize how much is being diverted from the candidate they mean to support.

Renting lists can pay dividends for campaigns because people who respond by donating then enter the candidates' own databases of supporters, and past contributors are much more likely to give again. Candidates with big donor bases can tap them for more money later or turn around and rent their own list to others.

Political professionals have gotten more sophisticated about efficiently converting online outrage into campaign cash. At the same time, candidates who court controversy may increasingly rely on rage-fueled online fundraising as more traditional donors freeze them out. In the aftermath of January 6, Hawley lost the support of some big donors, and major companies such as AT&T and Honeywell pledged to withhold donations from lawmakers who objected to the Electoral College vote.

"The news cycle that emerges out of controversial behavior by a candidate is like a strong gust of wind, and these mechanisms like list-building are the equivalent of sails," said Eric Wilson, a digital strategist who has advised Sen. Marco Rubio and the National Republican Senatorial Committee. "For candidates like Marjorie Taylor Greene and Josh Hawley, who have largely been shunned by traditional corporate donors who are frequently the mainstays for elected officials, especially in off years, they have no choice but to pursue grassroots fundraising. And in order for that to work, they have to continue to make more noise. It is a feedback loop in that regard."

It's not clear how Rudnick compiled his list (or lists). But one clue to the audience that Rudnick may help unlock is who else has hired him. Besides Hawley and Greene, FEC records show that last quarter LGM Consulting also rented a list or provided online fundraising solicitations to:

In the 2020 campaign cycle, the firm's clients included then-Rep. Doug Collins, a Trump ally who lost the Georgia Senate primary; Madison Cawthorn, the 25-year-old congressman from North Carolina who spoke at the January 6 rally; and Laura Loomer, a far-right internet personality who calls herself a "proud Islamophobe" and lost a run for a Florida congressional seat.

Rudnick has his own history of controversy. He was fired by the Pennsylvania Republican Party in 2008 after sending emails to Jewish voters likening a vote for Barack Obama to the lead-up to the Holocaust. "Many of our ancestors ignored the warning signs in the 1930s and 1940s and made a tragic mistake," the email said. "Let's not make a similar one this year!" Rudnick told the Associated Press at the time that party officials authorized the message, but he declined to name them.

Campaigns don't have to disclose whose list an email is being sent to, and fundraising emails aren't comprehensively made public, so it's not possible to tell exactly how Hawley and Greene used the lists they rented. But several of Hawley's fundraising emails contained digital fingerprints tying them to Rudnick: They were sent from a web domain that shares an address with one of Rudnick's companies, and the links to donate include "ASG," short for Rudnick's Alliance Strategies Group.

In one email, sent on March 6, Hawley touted his interview on Tucker Carlson's Fox News show, in which Hawley said Democrats would use the January 6 insurrection "as an excuse to seize power, to control more power, to step on people's Second Amendment rights, to take away their First Amendment rights." Following up on a major media appearance with a fundraising email is an effective technique, Wilson said.

In a second email using the Rudnick-linked domain, Hawley explicitly laid out his goal of posting an impressive fundraising number.

"I will be filing the first FEC financial report I have filed since I stood up for the integrity of our nation's election and the left began their attempts to cancel me," Hawley said in the email. "With your donation of $25, $50, $100 or more before the critical deadline on March 31, we will shock the left — they won't be able to ignore us any longer."

White House ‘Volunteer’ Got $2.4M Medical Supply Contract For Federal Prisons

Reprinted with permission from ProPublica.

A company created by a former Pentagon official who describes himself as a White House volunteer for Vice President Mike Pence won a $2.4 million contract in May — its first federal award — to supply the Bureau of Prisons with surgical gowns.

Mathew J. Konkler, who worked in the Department of Defense during the George W. Bush administration, formed BlackPoint Distribution Company LLC in August 2019 in Indiana, state records show, but had won no federal work until May 26. The Bureau of Prisons chose the company with limited competition for a contract to supply surgical gowns to its facilities.

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Federal Agencies Spent Millions On Masks — Without Knowing Who Made Them

Reprinted with permission from ProPublica.

In scrambling to buy protective equipment for the coronavirus pandemic, federal agencies purchased up to $11 million worth of Chinese-made masks, often with little attention to manufacturing details or rapidly evolving regulatory guidance about safety or quality, a ProPublica review shows.

Some agencies cannot say who made their masks at a time when thousands of foreign-made respirators appeared on the market, some falsely claiming approval or certification by the Food and Drug Administration. Some agencies bought the masks, known as KN95s, from companies that share a U.S. representative with another firm recently accused of fraud by the Justice Department.

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Hundreds Of Federal Coronavirus Contractors Were Hired Without Bids — Or Qualifications

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A firm set up by a former telemarketer who once settled federal fraud charges for $2.7 million. A vodka distributor accused in a pending lawsuit of overstating its projected sales. An aspiring weapons dealer operating out of a single-family home.

These three privately held companies are part of the new medical supply chain, offered a total of almost $74 million by the federal government to find and rapidly deliver vital protective equipment and COVID-19 testing supplies across the U.S. While there's no evidence that they obtained their deals through political connections, none of the three had to bid against competing firms. One has already lost its contract for lack of performance; it's unclear if the other two can fulfill their orders on time, or at all.

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Former White House Official Got Deal To Supply Masks — But Do They Work?

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A former White House aide won a $3 million federal contract to supply respirator masks to Navajo Nation hospitals in New Mexico and Arizona 11 days after he created a company to sell personal protective equipment in response to the coronavirus pandemic.

Zach Fuentes, President Donald Trump's former deputy chief of staff, secured the deal with the Indian Health Service with limited competitive bidding and no prior federal contracting experience.

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Sen. Burr Gives Up Intel Committee Chair As FBI Probe Intensifies

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Sen. Richard Burr will be stepping aside as chairman of the Senate Intelligence Committee during the investigation into his stock trades, Senate Majority Leader Mitch McConnell announced Thursday.

“Senator Burr contacted me this morning to inform me of his decision," McConnell wrote in a statement. “We agreed that this decision would be in the best interests of the committee and will be effective at the end of the day tomorrow."

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Sen. Burr And Brother-in-Law Dumped Stocks On Same Day — Then Market Crashed

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Sen. Richard Burr was not the only member of his family to sell off a significant portion of his stock holdings in February, ahead of the market crash spurred by coronavirus fears. On the same day Burr sold, his brother-in-law also dumped tens of thousands of dollars worth of shares. The market fell by more than 30 percent in the subsequent month.

Burr's brother-in-law, Gerald Fauth, who has a post on the National Mediation Board, sold between $97,000 and $280,000 worth of shares in six companies — including several that have been hit particularly hard in the market swoon and economic downturn.

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Trump Allies Issue Misleading Report On Mail Voting 'Fraud'

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In an April report that warns of the risks of fraud in mail-in voting, a conservative legal group significantly inflated a key statistic, a ProPublica analysis found. The Public Interest Legal Foundation reported that more than 1 million ballots sent out to voters in 2018 were returned as undeliverable. Taken at face value, that would represent a 91 percent increase over the number of undeliverable mail ballots in 2016, a sign that a vote-by-mail system would be a "catastrophe" for elections, the group argued.

However, after ProPublica provided evidence to PILF that it had in fact doubled the official government numbers, the organization corrected its figure. The number of undeliverable mail ballots dropped slightly from 2016 to 2018.

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Sen.Burr Pushes Healthcare Industry Legislation While Trading Its Stocks

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In his 15 years in the Senate, Richard Burr, a North Carolina Republican, has been one of the health care industry's staunchest friends.

Serving on the health care and finance committees, Burr advocated to end the tax on medical device makers, one of the industry's most-detested aspects of the 2010 Affordable Care Act. He pushed the Food and Drug Administration to speed up its approval process. As one of the most prominent Republican health care policy thinkers, he has sponsored or co-sponsored dozens of health-related bills, including a proposal to replace “Obamacare." He oversaw the implementation of major legislation to pump taxpayer money into private sector initiatives to address public health threats. “The industry feels very positive about Sen. Burr," the president of North Carolina's bioscience trade group said during Burr's last reelection campaign. “He's done a stellar job."

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