The Election Fairness Institute (EFI), led by State Senator Mark Finchem (R-Prescott), identified what it believes is a money laundering scheme involving the Democratic political fundraising platform ActBlue, which EFI is referring to as “magic mortgages.”
EFI, a public interest nonprofit, said bad actors have potentially committed campaign finance violations and tax evasion, with possible ties to bulk cash smuggling. Several U.S. attorneys have expressed interest in investigating.
“This goes far beyond ‘Smurfing,’” EFI said in a press release, referring to the practice of using elderly, retired straw donors to launder contributions to mostly Democratic candidates. Experts say they believe Democratic operatives are conducting the Smurfing to hide illegal donations from foreigners, corporations, unions, or individuals who have exceeded contribution limits. In another document, EFI stated, “ActBlue’s massive political war chest appears to have been generated by a series of fictitious sales through off-the-books cash funds.”
EFI continued, “The net-net, that is, the combined net total of all transactions that fit the profile as mentioned above, is equal to $164,217,000. These transactions reach far beyond the notion of coincidence. However, as if their repetitive process is not enough to establish a strong case for racketeering, the dates of the massive transactions should raise even more questions.”
EFI was alerted to the alleged scheme when “Senior Research Analyst Shawn Taylor discovered 422 identical contributions made on June 30, 2023, to a Tennessee State Representative via ActBlue, with many donor addresses and phone numbers found to be invalid.” When they further investigated, they discovered “inflated property sales linked to several multimillion-dollar transactions across multiple properties in California and Texas. Transactions often involved multiple ‘sales’ on the same day with private cash lenders, raising red flags for money laundering.”
EFI listed the circumstances surrounding several of the suspicious transactions. They generally involved someone selling the same home repeatedly on the same day to different buyers. For example, records allegedly showed that an expensive house in Dallas, Texas, was sold three times by the owner to three different buyers on January 10 or 11 earlier this year. One of the sales was three times the amount of the previous sale.
Heightening its suspicions, EFI noticed the “transactions coincide with major election cycles.” EFI said it believes it was intended to circumvent McCain-Feingold campaign finance restrictions on soft money contributions. Soft money contributions are donations to political parties or organizations for activities other than directly supporting a candidate’s campaign, such as voter registration drives, issue advocacy, or party-building efforts. Among other prohibitions, that law, officially called the Bipartisan Campaign Reform Act (BCRA) of 2002, requires disclosure of funding sources for electioneering communications and restricts coordination between candidates and independent groups.