EP. 30 — SWINDLED AND SCAMMED

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Weston Wamp: I'm Weston Wamp, and this is Swamp Stories, presented by Issue One.

Weston Wamp: Eventually scam artists run into the same dilemma. What they claimed to be true, proves not to be.

If you buy a fake watch, the scam is revealed when you take it to get repaired. When Bernie Madoff’s clients asked for their money back, it wasn’t there. 

Although it may take years in some cases, what goes around usually comes around for scam artists. And of course, law enforcement plays a big role in this.

But an emerging trend in the world of political fundraising has enticed crooks to prey on the elderly and others — with few laws on the books to stop them.

Unlike a counterfeited item or a ponzi scheme, what they’re selling won’t show up in the mail and for that matter you may never know whose pockets your contributions are ultimately lining. What’s left often are good people who are swindled into turning their money over to grifters.

This is Episode 30 — Swindled and Scammed

Roger Sollenberger: It's really a variation on just your traditional nonprofit scheme. A fake nonprofit will call and scam somebody say, “Oh yeah, your money is going to help breast cancer victims.” And then it never does. It just goes to pay like telemarketers. 

Weston Wamp: Roger Sollenberger of the Daily Beast has been investigating a new super PAC phenomena. He spoke to me about his reporting.

Roger Sollenberger: It's the same thing except with PACs, they have this new loophole where they're not really obligated by state and federal reporting laws. And they can walk in this narrow gray sphere between the FEC and the FTC and all the laws regulating nonprofits. So they found a way to run what is, at least right now, appears to be a sort of quasi-legal, nonprofit scam.

Weston Wamp:  There’s a reason the IRS closely scrutinizes nonprofits and the Federal Trade Commission maintains strict rules about charitable fundraising. And the FBI also often warns about charity scams. There’s even a National Association of State Charity Officials, made up of state leaders who oversee how charities are regulated because charities are fertile ground for scam artists. 

That’s why charities have become very tightly regulated over the years.

But contrary to charities, virtually nothing about super PACs is closely regulated. Dark, undisclosed money flows into them regularly, and they openly coordinate with campaigns — despite both practices explicitly being prohibited by law. 

In fact, super PACs, which can look a lot like a nonprofit to the non-discerning eye, can raise money just about however they want to. Emails, texts, call centers, you name it. 

There are basically no rules and even if there were, there is not really a cop on the beat considering the Federal Election Commission’s historic dysfunction. Except in the most extreme cases that gain the attention of the Department of Justice.

Roger Sollenberger: I've gone through donor lists and called donors. And they were elderly people, almost all of them. Almost all of them were Trump supporters or had been lifelong Republicans and they had no idea that they were giving to a political committee. They thought that they were giving to nonprofits, some interest group that would actually help the people they cared about. And these groups didn't help anybody except for the people who were running their vendor businesses.

Weston Wamp: And there’s an important clarification to be made here.

When we’ve covered super PACs, we’ve generally been talking about the kind that exist to support a specific candidate — they are certainly underregulated and there are all sorts of other problems, but at least they are doing what they say they are.

But at the end of the day, a super PAC is really just an account that’s established with the federal government that is required to disclose its large donors and is prohibited from working directly with a candidate’s campaign committee.

Anyone can start a super PAC — and for any reason. To advocate for anything. Or pretend to.

Roger Sollenberger: They will create an entity for veterans, they're very popular. These veterans, Alliance for Veterans, law enforcement, Americans for Wounded Law Enforcement, firefighters. And a lot of these are targeted at conservative donors, especially at elderly people as well. 

Weston Wamp: These scam PACs, posing as legitimate organizations to rip off everyday Americans, are only the beginning of the story.

Below the surface, shameful, but sophisticated scam artists are having a heyday with the nearly unregulated super PAC playground.

Weston Wamp: Writing for Salon late last year, Sollenberger exposed a serial scam PAC affiliate who lives just up the road from me in East Tennessee. Despite the millions he’s made, you won’t find his name on any of the disclosure reports of the super PACs that he’s milking for cash.

Roger Sollenberger: Man, Alan Bohms is a pretty fascinating character. I came to him when I was looking at a scam PAC last year called the American Wounded Veterans PAC. And it caught my attention because the way you identify these things is you see, well, how much money they're taking in and how much money are they actually spending on politics, on political action, which is what they're supposed to do. And some of the ratios are just insane, like a group will take in $7 million from its donors and then pay like $50,000 for actual political activity and then the rest of that money essentially goes back to paying themselves and their friends through these different companies, these vendors that the PAC uses. And this PAC was one of them and I was trying to identify who was involved with this PAC. And it's really tough sometimes because they'll put just someone's placeholder name on it.

But Alan Bohms has never had his name on a PAC and he wasn't connected them in stories. He's one of the guys that gets paid by the PACs, so I found him through a vendor that was getting paid by one of these PACs. And then I started pulling that thread and I connected him to this huge network that's tens of millions of dollars a year that they're just sort of siphoning off of unsuspecting donors and this network is paying themselves. 

Weston Wamp: The sheer scope is astounding. 

Roger Sollenberger: There are tiers to this thing and they do level up to pretty major scam artists. And we're not just talking a hundred dollars from somebody, they get into the millions, tens of millions of dollars that just go straight into these black holes.

They'll tier them up, they'll put sort of ghost people, and they'll shuffle all these names around so it becomes really hard to find out who's the big fish. And in this instance, it wasn't even Bohms, who was making millions of dollars a year by the way, it actually leveled up to another network, this other company that was completely invisible. It had headquarters in Wyoming. It was run by some Wyoming corporate agent. So as much as I could figure out, it seems like there's always a bigger fish.

Weston Wamp: If Republicans and Democrats can’t agree on anything else regarding super PACs, surely they can agree that there’s a problem when fraudsters are using political committees to rake in millions for themselves. Last year, Democrat Katie Porter and Republican Dan Crenshaw teamed up to introduce a commonsense bill that would have been a step in the right direction to combating scam PACs. But in the middle of a pandemic, it never got a vote. 

Roger Sollenberger: The way to close the loophole is through legislation. That will allow the FEC to actually take action and shut these things down and will allow them to quash them and not let them spring up again, because you can take down a PAC here and a PAC there, but it doesn't disincentivize new ones from springing up, which they do every year. With Alan, I actually saw it happen year after year. He'd shut down this company and then for the 2020 election year, he'd open up another one.

Weston Wamp: So what’s Alan up to now, you’re probably wondering. I assumed all the publicity had to have been bad for his scam PAC business. But Sollenberger has heard otherwise.

Roger Sollenberger: I did get a tip, I guess it was just last week from somebody who said that he was connected in some way to Alan Bohms and one of these organizations that Bohms works with, and he said that Alan told his source that he was making too much money to spend.

And that he was buying real estate in Florida and was taking all these people on vacations. And I mean, it just sounds like a classic, I don't want to say money laundering, that's a criminal thing. But it sounds like he's doing just fine and has to find some way to hide this money.

Weston Wamp: The super PAC era has brought endless complexities and record amounts of cash. But the least told story is the rampant abuse of these political vehicles to con unsuspecting Americans into giving to what sounds like a good cause.

Hopefully, sooner than later, new bipartisan legislation will be introduced to thwart scam PACs. If so, it will be an important step to addressing other indefensible super PAC loopholes that continue to be exploited.

On the next episode of Swamp Stories, we’ll have another Conversations episode that you won’t want to miss.

Weston Wamp: Thanks for listening to Swamp Stories, presented by Issue One, the country's leading political reform organization that unites Republicans, Democrats, and independents to fix our broken political system. Please subscribe to the podcast and share it with your friends. Even better, rate and review it on iTunes to help us reach more listeners. You can find out more at swampstories.org. I'm your host Weston Wamp. A special thank you to executive producer, Ethan Rome, senior producer Evan Ottenfeld, producer Sydney Richards, and editor Parker from ParkerPodcasting.com. Swamp Stories was recorded in Tennessee, edited in Texas and can be found wherever you listen to podcasts.

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