A network of shady political groups at the center of a new class action lawsuit for bilking donors out of tens of millions of dollars appears to be attempting a legal work-around in order to continue pulling in the money and evading government scrutiny.
The 17 groups in the network bear the tell-tale signs of “scam PACs”—entities which present themselves to donors as nonprofit charities but register as political groups with the government. The loophole allows the groups to operate in a gray zone outside the reach of the different federal agencies that regulate nonprofits and political groups.
Rep. Katie Porter (R-CA), who has taken steps to hold these groups liable, offered a brief definition of what she calls a “disgusting” scheme.
“Scam PACs are political action committees designed to look like they benefit a legitimate political campaign or cause, when in actuality all the money the PAC collects is going into the pocket of a scammer,” Porter said in a statement to The Daily Beast.
Over the last 18 months, this one network has taken in $40 million from donors in the name of supporting police, firefighters, veterans, paramedics—even people with autism. The money, however, goes almost entirely to telemarketing and consulting outfits. The groups in this particular network pay a number of those companies, but share six of them, and pay them often on the same day. Those payments alone have totaled more than $10 million this year, and other murky companies…