FEC considers rule changes to combat election fraud from fraudulent donations

In August 2024, the Federal Election Commission (FEC) announced it would be taking public comments regarding a request from Texas Attorney General Ken Paxton. Paxton has been investigating the fundraising organization ActBlue, asserting that the platform enables illegal political contributions through credit, gift, and prepaid cards. He highlighted how these payment methods can allow 'bad actors' to disguise their identities and bypass campaign finance regulations. Paxton’s findings raised alarms about the potential for both fraudulent donations and foreign contributions to infiltrate American elections. The FEC noted that Paxton's investigation pointed to a troubling trend among various online political donation platforms and called for new rules to address these vulnerabilities. Paxton’s proposal specifically mentions the misuse of prepaid cards, which he claims are popular among fraudsters for making so-called 'straw donations.' These contributions are made in the name of another individual without their knowledge, creating significant risks for transparency in the electoral process. He has emphasized that it's easy for individuals to hide their true identities when donating through these channels, thus complicating efforts to enforce compliance with legal contribution limits. The FEC’s notice referenced Paxton’s suggestion for strict security measures that would require online platforms to validate donor identities by cross-referencing submitted information with records maintained by card issuers. This approach is aimed at mitigating the risk of fraudulent transactions while ensuring that contributions comply with existing laws that govern political donations. Furthermore, Paxton acknowledged that the issue is not limited to ActBlue; he indicated that similar vulnerabilities exist on Republican fundraising sites like WinRed. Both platforms have come under scrutiny due to their potential facilitation of these questionable donation practices. As this situation unfolds, ActBlue has responded by implementing a new requirement for donors using credit cards to provide CVV codes, a step that Paxton's office has deemed a positive initial move. However, they believe more stringent regulations are necessary. The public comment period regarding Paxton's petition is set to conclude at the end of January 2025, as discussions surrounding campaign finance and electoral integrity continue to gain traction in the wake of these developments.