How Trump Steered Supporters
Into Unwitting Donations
Online donors were guided into weekly
recurring contributions. Demands for refunds spiked. Complaints to banks and
credit card companies soared. But the money helped keep Donald Trump’s struggling
campaign afloat.
New York Times
By Shane Goldmacher
April 3, 2021
Stacy Blatt was in hospice care last
September listening to Rush Limbaugh’s dire warnings about how badly Donald J.
Trump’s campaign needed money when he went online and chipped in everything he
could: $500.
It was a big sum for a 63-year-old battling
cancer and living in Kansas City on less than $1,000 per month. But that single
contribution — federal records show it was his first ever — quickly multiplied.
Another $500 was withdrawn the next day, then $500 the next week and every week
through mid-October, without his knowledge — until Mr. Blatt’s bank account had
been depleted and frozen. When his utility and rent payments bounced, he called
his brother, Russell, for help.
What the Blatts soon discovered was $3,000 in
withdrawals by the Trump campaign in less than 30 days. They called their bank
and said they thought they were victims of fraud.
“It felt,” Russell said, “like it was a
scam.”
But what the Blatts believed was duplicity
was actually an intentional scheme to boost revenues by the Trump campaign and
the for-profit company that processed its online donations, WinRed.
Facing a cash crunch and getting badly outspent by the Democrats, the
campaign had begun last September to set up recurring donations by default for
online donors, for every week until the election.
Contributors had to wade through a fine-print
disclaimer and manually uncheck a box to opt out.
As
the election neared, the Trump team made that disclaimer increasingly opaque,
an investigation by The New York Times showed. It introduced a second
prechecked box, known internally as a “money bomb,” that doubled a person’s
contribution. Eventually its solicitations featured lines of text in bold and
capital letters that overwhelmed the opt-out language.
The tactic ensnared scores of unsuspecting
Trump loyalists — retirees, military veterans, nurses and even experienced
political operatives. Soon, banks and credit card companies were inundated
with fraud complaints from the president’s own supporters about donations
they had not intended to make, sometimes for thousands of dollars.
“Bandits!” said Victor Amelino, a 78-year-old
Californian, who made a $990 online donation to Mr. Trump in early September
via WinRed. It recurred seven more times — adding up to almost $8,000. “I’m
retired. I can’t afford to pay all that damn money.”
The sheer magnitude of the money involved is
staggering for politics. In the final two and a half months of 2020, the Trump
campaign, the Republican National Committee and their shared accounts issued
more than 530,000 refunds worth $64.3 million to online donors. All campaigns
make refunds for various reasons, including to people who give more than the
legal limit. But the sum the Trump operation refunded dwarfed that of Joseph R.
Biden Jr.’s campaign and his equivalent Democratic committees, which made 37,000
online refunds totaling $5.6 million in that time.
The recurring donations swelled Mr. Trump’s
treasury in September and October, just as his finances were deteriorating. He
was then able to use tens of millions of dollars he raised after the election,
under the guise of fighting his unfounded fraud claims, to help cover the
refunds he owed.
In effect, the money that Mr. Trump
eventually had to refund amounted to an interest-free loan from unwitting
supporters at the most important juncture of the 2020 race.
Marketers have long used ruses like
prechecked boxes to steer American consumers into unwanted purchases, like
magazine subscriptions. But consumer advocates said deploying the practice on
voters in the heat of a presidential campaign — at such volume and with
withdrawals every week — had much more serious ramifications.
“It’s unfair, it’s unethical and it’s
inappropriate,” said Ira Rheingold, the executive director of the National
Association of Consumer Advocates.
Harry Brignull, a user-experience designer in
London who coined the term “dark patterns” for manipulative digital marketing
practices, said the Trump team’s techniques were a classic of the “deceptive
design” genre.
“It should be in textbooks of what you
shouldn’t do,” he said.
Political strategists, digital operatives and
campaign finance experts said they could not recall ever seeing refunds at such
a scale. Mr. Trump, the R.N.C. and their shared accounts refunded far more
money to online donors in the last election cycle than every federal Democratic
candidate and committee in the country combined.
Over all, the Trump operation refunded 10.7
percent of the money it raised on WinRed in 2020; the Biden operation’s refund
rate on ActBlue, the parallel Democratic online donation-processing platform,
was 2.2 percent, federal records show.
How Refunds to Trump Donors
Soared in 2020
Several bank representatives who fielded
fraud claims directly from consumers estimated that WinRed cases, at their
peak, represented as much as 1 to 3 percent of their workload. An executive for
one of the nation’s larger credit-card issuers confirmed that WinRed at its
height accounted for a similar percentage of its formal disputes.
That figure may seem small at first glance,
but financial experts said it was a shockingly large percentage, considering
that political donations represent a tiny fraction of the overall United States
economy.
In its investigation, The Times reviewed
filings with the Federal Election Commission from the Trump and Biden campaigns
and their shared accounts with political parties, as well as the
donation-processing sites ActBlue and WinRed, compiling a database of refunds
issued by day. The Times also interviewed two dozen Trump donors who made
recurring donations, as well as campaign officials, campaign finance experts
and consumer advocates. Nearly a dozen bank and credit card officials from the
nation’s leading financial institutions spoke for this article on the condition
of anonymity to discuss internal matters.
A clear pattern emerged. Donors typically
said they intended to give once or twice and only later discovered on their
bank statements and credit card bills that they were donating over and over
again. Some, like Mr. Blatt, who died of cancer in February, sought an
injunction from their banks and credit cards. Others pursued refunds directly
from WinRed, which typically granted them to avoid more costly formal disputes.
WinRed said that every donor receives at
least one follow-up email about pending repeat donations in advance and that
the company makes it “exceptionally easy,” with 24-hour customer service, for
people to request their money back. “WinRed wants donors to be happy, and puts
a premium on customer support,” said Gerrit Lansing, WinRed’s president.
“Donors are the lifeblood of G.O.P. campaigns.” He noted that Democrats and
ActBlue had also used recurring programs.
Jason Miller, a spokesman for Mr. Trump,
downplayed the rash of fraud complaints and the $122.7 million in total refunds
issued by the Trump operation. He said internal records showed that 0.87
percent of its WinRed transactions had been subject to formal credit card
disputes. “The fact we had a dispute rate of less than 1 percent of total
donations despite raising more grass-roots money than any campaign in history
is remarkable,” he said.
That still amounts to about 200,000 disputed
transactions that Mr. Miller said added up to $19.7 million.
“Our campaign was built by the hardworking
men and women of America,” Mr. Miller said, “and cherishing their investments
was paramount to anything else we did.”
Asked if Mr. Trump had been aware of his
operation’s use of recurring payments, the campaign did not respond.
Mr. Trump’s hyperaggressive fund-raising
practices did not stop once he lost the election. His campaign continued the
weekly withdrawals through prechecked boxes all the way through Dec. 14 as he
raised tens of millions of dollars for his new political action committee, Save
America.
In March, Mr. Trump urged his followers to
send their money to him — and not to the traditional party apparatus — making
plain that he intends to remain the gravitational center of Republican
fund-raising online.
A small yellow box and a
flood of fraud complaints
The small and bright yellow box popped up on
Mr. Trump’s digital donation portal around March 2020. The text was
boldface, simple and straightforward: “Make this a monthly recurring donation.”
The box came prefilled with a check mark.
Even that was more aggressive than what the
Biden campaign would do in 2020. Biden officials said they rarely used
prechecked boxes to automatically have donations recur monthly or weekly; the
exception was on landing pages where advertisements and emails had explicitly
asked supporters to become repeat donors.
But for Mr. Trump, the prechecked monthly box
was just the beginning.
By June, the campaign and the R.N.C. were
experimenting with a second prechecked box, to default donors into making an
additional contribution — called the money bomb. An early test arrived in the
run-up to Mr. Trump’s birthday, June 14. The results were tantalizing: That
date, a seemingly random Sunday, became the biggest day for online donations in
the campaign’s history.
Ronna McDaniel, the R.N.C.
chairwoman, crowed to Fox News about the achievement without
mentioning how exactly the party had pulled it off. “Republicans are thinking
smarter digitally,” she said, and were poised to “outwork, outdo, and
outmaneuver the Democrats at every turn.”
The two prechecked yellow boxes would be a
fixture for the rest of the campaign. And so would a much larger volume of
refunds.
Until then, the Biden and Trump operations
had nearly identical refund rates on WinRed and ActBlue in 2020: 2.18 percent
for Mr. Trump and 2.17 percent for Mr. Biden.
But from the day after Mr. Trump’s birthday
through the rest of the year, Mr. Biden’s refund rate remained nearly flat, at
2.24 percent, while Mr. Trump’s soared to 12.29 percent.
In
early September — just after learning that it had been outraised by the Biden
operation in August by more than $150 million — the Trump campaign became even
more aggressive.
It changed the language in the first yellow
box to withdraw recurring donations every week instead of every month.
Suddenly, some contributors were unwittingly making as many as half a dozen
donations in 30 days: the intended contribution, the “money bomb” and four more
weekly withdrawals.
“You
don’t realize it until after everything is already in motion,” said Bruce
Turner, 72, of Gilbert, Ariz., whose wife’s $1,000 donation in early October
became $6,000 by Election Day. They were refunded $5,000 the week after the
election, records show.
Around the same time, officials who fielded
fraud claims at bank and credit card companies noticed a surge in complaints
against the Trump campaign and WinRed.
“It started to go absolutely wild,” said one
fraud investigator with Wells Fargo. “It just became a pattern,” said another
at Capital One. A consumer representative for USAA, which primarily serves
military families, recalled an older veteran who discovered repeated WinRed
charges from donating to Mr. Trump only after calling to have his balance read
to him by phone.
The unintended payments busted credit card
limits. Some donors canceled their cards to avoid recurring payments. Others
paid overdraft fees to their bank.
All the banking officials said they recalled
only a negligible number of complaints against ActBlue, the Democratic donation
platform, although there are online review sites that feature heated complaints
about unwanted charges and customer service.
The Trump operation was not done modifying
the yellow boxes. Soon, the fact that donations would be withdrawn weekly was
taken out of boldface type, according to archived versions of the president’s
website, and moved beneath other bold text.
As the campaign’s financial problems became
increasingly acute, the yellow boxes became dizzyingly more complex.
By October there were sometimes nine lines of
boldface text — with ALL-CAPS words sprinkled in — before the disclosure that
there would be weekly withdrawals. As many as eight more lines of boldface text
came before the second additional donation disclaimer.
Even political professionals fell prey to the
boxes.
Jeff
Kropf, the executive director of the Oregon Capitol Watch Foundation, a
conservative group, said he had been “very careful” to uncheck recurring boxes
— yet he missed the “money bomb” and got a second charge anyway.
“Until WinRed fixes their sneaky way of
adding additional contributions to credit cards like they did to me, I won’t
use them again,” he said.
Mr. Brignull, the user-experience designer
who also serves as an expert witness in legal cases involving misleading
advertising, noted that a Consumer Rights Directive in Europe prohibits
companies from deploying a defaulted opt-in tactic for recurring payments.
“It is very easy for the eye to skip over,”
he said. “The only really meaningful information in that box is buried.”
The ‘Gary and Gerrit’
operation
“Where did all the money go?” he would lash
out, according to two senior advisers.
Inside the Trump re-election headquarters in
Northern Virginia, the pressure was building to wring ever more money out of
his supporters.
Perhaps nowhere was that pressure more acute
than on Mr. Trump’s expansive and lucrative digital operation. That was the
unquestioned domain of Gary Coby, a 30-something strategist whose title —
digital director — and microscopic public profile belied his immense influence
on the Trump operation, especially online.
A veteran of the R.N.C. and the 2016 race,
Mr. Coby had the confidence, trust and respect of Jared Kushner, the
president’s son-in-law, who unofficially oversaw the 2020 campaign, according
to people familiar with the campaign’s operations. Mr. Kushner and the rest of
the campaign leadership gave Mr. Coby, whose talents are recognized across the
Republican digital industry, wide latitude to raise money however he saw fit.
That meant almost endless optimization and
experimentation, sometimes pushing the traditional boundaries. The Trump team
repeatedly used phantom donation matches and faux deadlines to loosen donor
wallets (“1000% offer: ACTIVATED…For the NEXT HOUR”). Eventually it ratcheted
up the volume of emails it sent until it was barraging supporters with an
average of 15 per day for all of October and November 2020.
Mr. Coby, who declined an interview
request for this article, outlined his philosophical approach when
offering advice to other ambitious young strategists after he was named to the
American Association of Political Consultants’ “40 under 40” list in
2017: “Asking for forgiveness is easier than permission.”
Mr. Coby’s partner in fund-raising was Mr.
Lansing, the president of WinRed, which had been created in 2019 as a
centralized platform for G.O.P. digital contributions after prominent
Republicans feared they were falling irreparably behind Democrats and ActBlue.
The Trump and WinRed operations had been
closely aligned since the platform’s inception — Mr. Trump reportedly helped
come up with the firm’s name — and the president’s re-election
operation amounted to a majority of all of WinRed’s business last cycle, when
it processed more than $2 billion.
Inside the Trump orbit, “Gary and Gerrit”
became something of a shorthand term for Mr. Coby and Mr. Lansing, according to
multiple senior Trump campaign and White House officials.
The two strategists were already well
acquainted: They had worked together at the R.N.C. in 2016, when Mr. Lansing
oversaw its digital operations and Mr. Coby was the director of advertising.
And they were business partners in Opn Sesame, a text messaging platform, which
Mr. Lansing co-founded and served as chief operating officer for; WinRed said
he stepped away from its day-to-day operations in early 2019.
Top Trump officials said they did not know
specifically who had conceived of using the weekly recurring prechecked boxes —
or who had designed them in the increasingly complex blizzard of text. But they
said virtually all online fund-raising decisions were a “Gary and Gerrit”
production.
“The campaigns determine their own
fund-raising strategies and make their own decisions on how to use these
tools,” Mr. Lansing said in WinRed’s statement.
Unlike ActBlue, which is a nonprofit, WinRed
is a for-profit company. It makes its money by taking 30 cents of every
donation, plus 3.8 percent of the amount given. WinRed was paid more than $118
million from federal committees the last election cycle; even after paying
credit card fees and expenses like payroll and rent, the profits are believed
to be significant.
WinRed even made money off donations that
were refunded by keeping the fees it charged on each transaction, a practice it
said was standard in the industry, citing PayPal; ActBlue said it does not keep
fees for refunded donations. WinRed’s cut of the Trump operation’s refunds
would amount to roughly $5 million before expenses. (Archived versions of
WinRed’s website show it added a disclaimer saying it would keep its fees
around when refunds surged.)
There is another reason Mr. Trump’s refund
rates were so high: His campaign accepted millions of dollars above the legal
cap, a problem exacerbated by recurring donations. A pianist in New York, for
instance, contributed more than 100 times in the months leading up to Election
Day, going far past the legal limit of $2,800. She was refunded $87,716.50 —
three weeks after Election Day.
While every large-scale campaign winds up
accepting and returning some donations above the legal limit, including Mr.
Biden’s, the Trump situation stands out. Records show that Mr. Biden’s campaign
committee issued roughly $47,000 in refunds larger than $5,000 after Election
Day; Mr. Trump’s campaign issued more than $7 million.
Trump officials attributed the excessive
donations to enthusiastic supporters and said the surge in postelection
complaints was a result of losing the election, not of the recurring donation
tactics.
The
use of prechecked boxes is not unprecedented in politics, and WinRed said it
was simply adopting tactics that ActBlue put in place years ago. ActBlue
said in a statement that it had begun to phase out prechecked recurring boxes
“unless groups were explicitly asking for recurring contributions.” Some
prominent Democratic groups, including both congressional campaign committees,
continue to precheck recurring boxes regardless of that guidance. Still,
Democratic refund rates were only a small fraction of the Trump campagn’s last
year.
Republicans widely hailed WinRed as one of
the standout successes of the 2020 cycle, and in a memo last October the
company declared itself the “trusted, recognizable platform” for Republican
giving. “Scam PACs, shady operators and outright fraud is unfortunately a
common occurrence in the online political donation world — particularly on the
right,” the memo stated. “WinRed helps civilize the Wild West of the G.O.P.
donation ecosystem.”
But for some Trump supporters like Ron
Wilson, WinRed is a scam artist. Mr. Wilson, an 87-year-old retiree in
Illinois, made a series of small contributions last fall that he thought would
add up to about $200; by December, federal records show, WinRed and Mr. Trump’s
committees had withdrawn more than 70 separate donations from Mr. Wilson worth
roughly $2,300.
“Predatory!” Mr. Wilson said of WinRed. Like
multiple other donors interviewed, though, he held Mr. Trump himself blameless,
telling The Times, “I’m 100 percent loyal to Donald Trump.”
Trump was just the beginning
All told, the Trump and party operation
raised $1.2 billion on WinRed, and refunded roughly 10 percent of it.
Whatever blowback it received, WinRed was not
deterred. Soon after the November election ended, the two Republican Senate
incumbents in Georgia, David Perdue and Kelly Loeffler, deployed prechecked
weekly recurring boxes in advance of their January runoffs.
Predictably, refund rates spiked.
Keith Millhouse, a transportation consultant
in California, intended to donate once to Mr. Perdue, with the aim of keeping
Republicans in control of the Senate. He wound up a recurring contributor and
called the practice “repugnant” and “deceptive.”
“I’m busy like a lot of other people during
this Covid era and I just wanted to get in, make a donation, get done and move
on to what I needed to do next,” he said. “I thought I had done that. Then I
find out that, you know, I’m getting these other charges.”
He canceled the repeating charge when he saw
the reminder email. But by then WinRed had already processed his second $100
“bonus” contribution. He figured it was not worth the hassle to protest. “Don’t
try to sucker it out of me,” he said.
In the final 2020 reporting period, from Nov.
24 through the end of the year, Mr. Perdue and Ms. Loeffler refunded $4.8
million to WinRed donors — more than triple the amount refunded by their
Democratic rivals via ActBlue, even though the Democrats had raised far more money
online. The refunds have stretched into 2021 and have been a source of
frustration for the Loeffler campaign, according to a person familiar with the
matter.
Now WinRed is exporting the tools it
pioneered during the Trump re-election across the Republican Party, presaging a
new normal for G.O.P. campaigns.
Today, the websites of various Republican
Party committees and top congressional Republicans, including
Representative Kevin McCarthy, the House minority leader, and
Senator Mitch McConnell, the Senate minority leader, include prechecked
yellow boxes for multiple or recurring donations.
And after Mr. Trump’s first public speech of
his post-presidency at the end of February, his new political operation sent
its first text message to supporters since he left the White House. “Did you
miss me?” he asked.
The message directed supporters to a WinRed
donation page with two prechecked yellow boxes. Mr. Trump raised $3 million
that day, according to an adviser, with more to come from the recurring
donations in the months ahead.
Rachel
Shorey contributed reporting and Kitty Bennett contributed research.