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Tuesday, September 20, 2016

"But there is special irony in the GOP, so anti-government and hostile to taxes, posing as the tax collector to deceive its small donors into funding the campaign of a billionaire."

GOP dupes small donors to fund Trump's campaign
By Philip N. Diehl, September 20, 2016

Last spring, the Republican National Committee (RNC) unveiled an ingenious new fundraising technique: mailing solicitations that were disguised as delinquency notices. Envelopes were stamped with "NOTICE OF DELINQUENCY" in large bold red print with the return address:
Office of Records
[Recipient's state] Area Assessment
***Immediate Response Requested***
***Immediate Response Requested***
The envelope had the stark appearance of official government mail. "Office of Records" suggested the letter came from a governmental agency. "Assessment" gave the impression the letter was notice of an overdue property tax bill. The enclosed invoice was marked "PAST DUE," which was circled in red. An undated letter began:
This NOTICE OF DELINQUENCY has been sent to you because the Republican Party has contacted you multiple times to ask for your support for the 2016 campaign ...
From this point, the letter reads like a typical partisan fundraising solicitation and was signed by Reince Priebus, Chairman of the RNC.

The mailing was sent to potential donors in at least a dozen states and received extensive, negative coverage in local media across the country, though little national attention. Many who received the letter were late middle-aged or elderly, a population especially vulnerable to such schemes. Some of them reported that, contrary to the letter's claim, they had not been previously contacted by the RNC. Others said they had never contributed to the committee. The RNC declined to acknowledge responsibility for the solicitation at the time and did not respond to questions for this article.

Following criticism from both Republicans and Democrats, the letters stopped in May. Then, on Sept. 1, The Dallas Morning News reported they had resumed.

By all appearances, the letter violates federal law. The U.S. Postal Service website states:
Title 39, United States Code, Section 3001, makes it illegal to mail a solicitation in the form of an invoice, bill, or statement of account due unless it conspicuously bears a notice on its face that it is, in fact, merely a solicitation. This disclaimer must be in very large (at least 30-point) type and must be in boldface capital letters in a color that contrasts prominently with the background against which it appears.
The RNC invoice complies with none of these requirements.

A spokesperson for the U.S. Postal Inspection Service (USPIS), the law enforcement arm of the postal service, said USPIS had not investigated the matter. She did not respond to emailed questions about whether the postal service reviewed the letter before it was mailed, whether it had received complaints about the letter, or whether USPIS had ever conducted an investigation of a mailing by either political party.

For decades, the postal service has been a target of intense criticism and budget cutting by congressional Republicans. A USPIS investigation of RNC fundraising practices could further complicate its relations with the Republican majority in Congress.

The RNC has at least a decade-long record of skirting or violating federal law with its fundraising mailings. The most flagrant case occurred in 2010. As U.S. Census surveys were arriving in the mailboxes of 100 million American households in early 2010, the RNC mailed solicitations that appeared to be Census surveys. The letters arrived in envelopes bearing the words "DO NOT DESTROY" and "OFFICIAL DOCUMENT" in large, bold print, and claimed to contain a "census document." The enclosed survey was entitled "Congressional District Census." Michael Steele, then-chairman of the RNC, signed the accompanying letter.

In order to ensure high response rates to its decennial census, the Census Bureau widely publicizes the fact that the public is required by law to complete and return the Census surveys. The RNC solicitation landed in mailboxes in the midst of the Census Bureau's publicity campaign, thereby ensuring most recipients would open the envelope and read the appeal for donations.

The Census Bureau website warns census survey recipients:
You may be the victim of a scam if someone claiming to be from the Census Bureau asks you for certain information. The Census Bureau never asks for ... money or donations, [or] anything on behalf of a political party.
The RNC letter was just such a scam and drew withering criticism from congressional Republicans and Democrats alike. Bipartisan legislation was quickly enacted prohibiting nongovernmental entities from using the word "census" on the outside of envelopes unless they also bore a disclaimer that it is not a government document.

Just as quickly, the RNC circumvented the new law by placing the word "census" on the enclosed letter but aligning the prohibited word to be clearly visible through the envelope's address window. Steele continued mailing this "loophole letter" while Congress enacted another bill prohibiting this practice, too.

In response to public complaints, the Direct Marketing Association, the industry watchdog of mail order marketers, conducted an investigation and concluded that the RNC mailings violated five of its ethics standards. After communicating its concerns to the RNC, the DMA discovered the GOP committee was preparing to mail an identical solicitation. When the Republicans failed to respond to its concerns, the DMA decided to cite the case in its 2011 "Annual Ethics Compliance Report," suggesting that the mailing violated federal law.

As director of the United States Mint, I oversaw a large direct marketing operation that mailed millions of letters each year in support of our numismatic programs. As with door-to-door fundraisers and salespeople, the greatest challenge a mail order company faces is to get in the door to make a pitch. If the consumer slams the door in your face, you're done. For direct marketers, inducing a customer to open a letter is the equivalent of getting past the front door. Over the years, direct mail companies have made a science of getting consumers to open letters. Most of their techniques are above board, some are legal but ethically suspect, and some violate federal law.

You might think that when a potential donor discovers that a letter is not a delinquency notice but a solicitation, they'd be angry and throw it in the trash. No doubt, many do. But the deception did its job; the letter was opened and read. Often the ruse is not apparent until recipients have read much of the survey or read an accompanying letter, by which time they have been primed to give.

Direct mail campaigns are typically aimed at older, middle-class consumers because, unlike younger consumers, they read and respond to mail. Since U.S. Mint customers are older and middle class, I know this market.

These consumers (and others) take their financial responsibilities very seriously. Failing to pay bills on time is not just an oversight; it's seen as a character flaw. Some who receive the letter will fail to recognize the deception and pay the RNC "invoice" reflexively. Others will feel relief rather than anger when they discover there is no delinquency. Then, having read the letter's account of outrages committed by President Obama and the Democrats, they'll be prepared to respond with a donation.

These letters are sent in massive quantities. If the deception increases response rates by only a few percentage points, the payoff is huge. Once someone has made a contribution, the RNC will fine-tune subsequent solicitations, increasing the odds that a donor will give again and again, multiplying the RNC's return on investment in the scam.

Politico reported that one GOP operative familiar with the practice said it was among the RNC's most lucrative fundraising schemes. "Of course, duping people is the point. ... That's one of the reasons why it works so well. ... They will likely mail millions this year [with] incredible targeting."

At the same time the RNC was duping the party’s small donors with census letters, its chairman was embroiled in a controversy about how the RNC was spending its largesse. His chief of staff and another member of his staff were forced to resign after their record of high-dollar spending on flights, limousines, entertainment, and luxury hotels came to light. The expenditures included a $2,000 tab at Voyeur Hollywood West, a bondage-themed California nightclub.

While this scandal was brewing, the RNC hired Neil Alpert to lead its fundraising efforts. Only three years earlier, Alpert was found to have misappropriated funds of a nonprofit that raised money for youth baseball programs and was ordered to repay $70,000 he'd spent on personal expenses. Alpert left the NRC before the year was out. Within weeks, he was offering to use his GOP contacts to help then-Libyan President Moammar Gadhafi escape the revolution in Libya, even as NATO bombed the country. Offer price: $10 million.

What does it say about the RNC under Steele that he would hire Alpert in the middle of the ethical controversies about the Census mailings and the excessive spending by staff?

No doubt, the Democratic National Committee has been tainted by its own fundraising practices. But there is special irony in the GOP, so anti-government and hostile to taxes, posing as the tax collector to deceive its small donors into funding the campaign of a billionaire.

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