Backlash Ensues as RNC's WinRed Fundraising Hammer Falls
While any semblance of cohesion among Democrats was unraveling last week amid the Pelosi-AOC squabble, Republican waters were also roiling -- and not only below the surface.
Republican national party leaders decided to publicly strong-arm state and local GOP officials, as well as some members of Congress, in a battle over the best way to raise small-dollar donations from the conservative grassroots.
Now those forces are pushing back against what they regard as both a money and a data grab antithetical to bedrock GOP free market principles, according to RealClearPolitics interviews with more than a dozen state party officials, veteran national campaign operatives and fundraising experts.
One Republican National Committee member called the push to consolidate all Republicans around one fundraising platform “Obamacare for GOP fundraising,” while an executive for a state party labeled the effort “crony capitalism” of the worst kind.
“It’s about freedom, it’s about ‘Don’t tread on me, don’t tell us what we have to do,’” a top state GOP party official said in describing the backlash to RCP. “It gets beyond the pragmatism of finances – you’re taking liberty away.”
Others question exactly who at the top of the GOP food chain is profiting from the consolidation that they describe as Washington stomping on the grassroots in a purported effort to, paradoxically, generate grassroots donations.
“There’s this rush to force everybody to use this product rather than giving them time to look at it and make informed decisions – it just seems kind of shady,” the RNC member said.
The Republican officials and operatives who are part of the backlash requested anonymity out of fear of reprisal after a week of threats and legal action.
Both sides hope the RNC meeting in Charlotte, N.C., at the end of the month will provide an opportunity to hash out their differences and plot a more constructive path forward after nearly two weeks of recriminations on both sides of the divide.
The national Republican Party started off last week imploring state parties and members of Congress and federal GOP candidates to sign up for WinRed, the Trump-endorsed fundraising platform its supporters say is designed to make the party more competitive in the small-dollar donor chase with ActBlue, the Democrat’s fundraising juggernaut.
Brad Parscale (pictured, with RNC Chairwoman Ronna McDaniel), who served as the digital media director for Trump’s 2016 campaign and now is the campaign manager for his 2020 re-election campaign, led the charge.
“There’s a reason President Trump and all the major campaign committees are united behind WinRed: it has the best technology and data integration that will lift all conservative boats and actually help Republicans win in 2020,” he said in a statement to RCP.
The pitched battle over digital fundraising comes at key time for Republicans. Over the last 15 years, Democrats have dominated small-dollar giving with ActBlue, a platform used by more than 14,500 party candidates, including many progressives.
In 2018, ActBlue raised an unprecedented $700 million and helped Democratic congressional candidates vault over their GOP rivals to win back the House majority. It also has propelled rising stars such as Indiana Mayor Pete Buttigieg and Sen. Kamala Harris in the Democratic primary.
Republicans have long tried to counter it, and this year argue they have finally found a way: convince their party members to consolidate around a single fundraising platform and marry the technology to the GOP’s superior voter data repository known as Data Trust. When also melded with Trump’s massive small-dollar donor list, supporters describe the result as a river of donations that will flow to all Republicans.
There’s one big problem. Many Republicans are happy with a trusted private fundraising platform they’ve been using for years and have aggressively rejected Washington’s heavy-handed, top-down push.
The Give.GOP Factor
Donor lists and voter data are the very lifeblood of political operations and can make or break a campaign. Not surprisingly, candidates and the highly paid consultants who run their campaigns ferociously guard their data territory. Any attempt to snatch it raises suspicions that the donors will be overwhelmed with Republican pitches or have their information handed over to the highest bidder, commercial or political.
“I would like to think that we in the states have a pulse on or sensitivity to the Trump voter,” one state party official told RCP. “We get it – we get what they’re fighting for, we get the underdog, and they have to be protected. We have to protect these small donors.”
Another fundraising platform, Anedot, years ago built up its own GOP online fundraising powerhouse. Forty-five out of 50 state parties are using it, as are 111 incumbent House campaigns and 22 incumbent Senate campaigns, among other GOP fundraising operations, according to figures the company provided and the interviews with state party officials and several GOP fundraising experts.
But then a precursor to WinRed, a processing platform called Revv that was founded by former RNC digital guru Gerrit Lansing, got into the game and built a following of its own.
Before WinRed’s launch a few weeks ago, Lansing says Revv had a total of 150 members of Congress as clients, as well as a handful of state parties, state groups, political action committees and governors.
In 2016, Revv also had the RNC and other party committees as clients, along with the Trump campaign, boosting its fundraising volume to roughly $650 million. During the 2018 midterm cycle, that figure dropped to $176 million and most of it was generated by President Trump’s campaign and the RNC.
Meanwhile, a source with knowledge of Anedot’s books stated that “Anedot processed more than $300 million for campaigns in the 2018 cycle, far outpacing any nearest GOP competitor” for the same time period.
The idea behind WinRed is to have down-ticket campaigns surf off the big wake of the Trump campaign and national party committees. To do that, as many GOP candidates as possible need to jump in and get behind the effort, the RNC and others argue.
An RNC memo addressed to “interested state parties” and emailed July 8 started off with a soft sell. Extolling WinRed as being built on a “proven fundraising technology” after years studying ActBlue, the memo explicitly stated that state GOP committees could continue using their existing processing “for the time being.”
“We will alert you when WinRed begins processing for state accounts,” the memo stated. The email was from Chris Carr, political director for Trump Victory, a joint fundraising committee for Trump, the RNC and several state party committees. Included in the cc below was Lansing, the WinRed and Revv owner and CEO.
But only one day later, the soft pitch gave way to threats as the RNC laid down the law, vowing to withhold national party committee investments and data from federal candidates and state parties who don’t sign-up for the WinRed platform.
During a recent briefing of GOP chiefs of staff on Capitol Hill, party officials also offered $20,000 to $30,000 in discounts for party dues if the members’ campaign committees sign up for and use WinRed.
RNC officials also sent an eight-page cease-and-desist letter to Paul Dietzel, a Republican digital strategist who created and runs Anedot, which has thousands of clients, including churches and charities along with Republicans and Democratic fundraising committees. The National Republican Senatorial Committee and Republican Governors Association sent similar letters.
Earlier this month, Dietzel, an unsuccessful candidate for a Louisiana congressional seat in 2014, launched Give.GOP, a platform that provides a directory of Republican members, candidates and party committees and organizations that conservative donors can utilize. The RNC took issue with Dietzel’s use of the RNC logo and trademark on the website without permission.
Give.GOP has since shed the RNC, NRSC and RGA logos and trademarks. But Dietzel asserts that Give.GOP has superior online fundraising technology and his fees are nearly nonexistent compared to WinRed’s 3.8% cut per donation (plus a 30-cent bank processing fee). His supporters say he has built up trust with GOP clients over the years for taking a strong stance on privacy and not sharing data to enhance his profits.
Dietzel says he’ll only charge a $1 fee for an “insider” newsletter he’ll put together for donors who utilize Give.GOP to provide more information about Republicans members, candidates and other Republican fundraising efforts.
“Give.GOP’s service for donors is built on top of Anedot’s almost 10 years of serving thousands of grassroots campaigns,” he told RCP. “Give.GOP empowers donors to help Republicans win across the board and is the only way for donors to ensure that 100% of their donation goes directly to campaigns they support.”
Republican national party officials have hit back hard, pointing to Dietzel’s own profit motives and his previous fundraising work with Democrats.
“Anedot positions itself as a nonpartisan entity. It obviously makes more sense for the RNC to work with a platform that is aligned completely with the Republican Party and the president,” said RNC spokesman Mike Reed.
Anedot’s backers say the RNC uses plenty of technology companies that aren’t completely GOP aligned to efficiently run its operations, including Facebook, Square and Salesforce. They also point out that Revv itself depends on Stripe, a liberal-leaning Silicon Valley payment processor.
WinRed’s supporters also say the company has spent hundreds of thousands of dollars making sure it’s compliant with federal election laws and they question Give.GOP’s legality. Dietzel says he is confident that its online platforms are operating legally and has a proven track record to show for it.
“The fact is that Give.GOP retained experienced counsel and compliance specialists throughout the process of building its platform, and the Federal Election Commission has examined and approved Give.GOP’s donor-oriented business model umpteen times,” Dietzel said. “WinRed has to resort to this nonsense because their product is a flop and they know it.”
Another Republican digital strategist who supports the migration to WinRed described “an existential threat from ActBlue. They are unified behind one platform. Unless we come together behind a solution, we’re not going to be able to survive on an ongoing basis.”
The strategist said 60 House Democrats raised $1 million, 30 raised $2 million and eight raised more than $2 million during the 2018 cycle, giving them a huge early advantage when buying TV ad time.
The Stripe Factor
After the RNC threats last week, both Democrats and Republicans said that the success of ActBlue, which operates as a nonprofit, was not due to national Democrats forcing campaigns to use it.
“This is hilarious,” one self-identified Democrat remarked on Twitter. “Democrats don’t all use @ActBlue because we were forced to by the DNC. We use it because we tested it against rival platforms and it was undoubtedly the best. This is absolutely NOT the way to build a Republican equivalent to ActBlue.”
Others counter the criticism of Anedot’s work with Democrats by noting that WinRed uses a liberal-leaning payment processor called Stripe. A Daily Caller story last week said Stripe, a Silicon Valley firm, has a “checkered history” of arbitrarily restricting use of its platform from companies whose political speech it doesn’t like. It also noted that Saikat Chakrabarti, the controversial chief of staff to Rep. Alexandria Ocasio-Cortez, was one of Stripe’s founding engineers before he left to become “a major political activist in his own right.”
Republicans worry that Stripe or other WinRed business partners could wind up with GOP donor data, and more broadly these critics are fundamentally opposed to the creation of one digital platform with a self-imposed GOP monopoly.
“The free market has always been the best way to run things efficiently,” an executive director for a state party tells RCP. “Give.GOP will only help the situation, not hurt the situation. It’s about getting more money into the hands of candidates and 100% of the money into the hands of candidates.”
The official also argued that “there’s a reason why Kmart built stores across from Walmart – there’s no difference here in the pool of [customers, and in this case, donors], and the two platforms are going to generate more income than one. The spirit that wants to change Washington, D.C. … we want things done right, done transparently, get rid of the swamp. We don’t want to think that the RNC is part of the swamp.”
These Republicans are most suspicious about who is making money on the WinRed platform and question why a small coterie of former RNC and other national party committee officials appear to be spearheading the push.
“There’s a very tight-knit group of people who have negotiated this deal and have rushed it through,” a senior GOP strategist said in an interview. “Nothing says innovation like threatening to sue your competitors. That just on its face should tell you everything you need to know about the technology [being inferior].”
A Trump campaign official unequivocally said that “no Trump campaign employee benefits financially from WinRed, which is an effective tool to aggregate fundraising for the GOP.” An RNC spokesman also denied any party committee employees are profiting from the fundraising platform.
Not everyone is convinced. Skeptics point to the possibility of opaque “affiliate” side deals common in the political fundraising industry that don’t show up in FEC reports.
At least one former RNC official stands to reap a windfall. Lansing, the RNC’s top digital strategist in 2016, is now the head of WinRed and has a 60% stake in the company, with 40% going to Data Trust, according to sources familiar with the ownership breakdown.
Data Trust, a limited liability company, operates more like a nonprofit in that all of its profits are churned back into its efforts to build the data repository. This is intended to better micro-target Republican voters, an area in which Democrats are now playing catch-up, according to Lansing and other GOP experts familiar with Data Trust’s operations.
“WinRed was specifically set up to fund Data Trust, which helps every GOP campaign in the country,” Lansing said in a statement. “Democrats don’t even have their own Data Trust, and they’re having a huge battle over it now.”
“The GOP just made a huge leap ahead in the party infrastructure battles over the Dems,” he added.
In 2016, however, Lansing’s nearly $1 million payout from a digital fundraising processing firm he founded raised questions about profit-making while serving in a party committee role. A 2017 Politico story cited Republican operatives on multiple GOP presidential and Senate campaigns who said Lansing pushed them to use the company he co-founded, Revv, to collect donations after he was hired by the RNC. In fact, they asserted, he used his official party role as selling point.
The story and an apparent misrepresentation about Lansing’s dual role by Sean Spicer, the RNC’s chief-strategist-turned-White-House-press-secretary, created a controversy that sparked an internal national party committee review. Spicer said his false statement in 2016 was based on information Lansing had given him at the time.
Lansing went on to become a top White House aide, but the stint only lasted a month because his role in Revv was reportedly so valuable he was unwilling to cut financial ties to the company in order to clear White House ethics requirements.
Party operatives are still questioning the proprietary of those twin roles, as well as the motivation by Lansing and his supporters to have the party consolidate behind WinRed, which is built on Revv’s platform.
Other suspicions stem from the conservative grassroots’ distrust of former Mitt Romney supporters and NeverTrumpers who are now part of the D.C. political fundraising ecosphere. (WinRed supporters counter that the Anedot/Give.GOP side now has long-shot Trump intra-party challenger Bill Weld as a client. Anedot backers point out that a Never Trump PAC was a Revv client before Trump won the primary.)
Republican state party officials and others want a detailed explanation of why the RNC believes WinRed will produce more GOP donations than Give.GOP and Anedot and exactly who will control the data after the 2020 election is over.
“Jerry McGuire said, ‘Show me the money,’” one Republican official told RCP. “Well, show me the money. Show me a direct line between A and B and access to more donors. There’s no demonstrable numbers that anybody has been shown.”
“I sat through a one-hour Give.GOP webinar, and I have 10 times more information [about it] than I have about WinRed,” the official said. “That’s it – there’s a whole lack of something that’s proven, and the lack of disclosure about how it’s set up and what’s on the back end, and who profits from it.”
Party officials say there have been other recent carrot-and-stick approaches to migrating Republicans around the country to the singular Data Trust voting repository as well.
But Republicans being pushed toward WinRed said this time feels different, especially because Anedot and Give.GOP are offering a better rate, which enables campaigns to keep more of the donor money.
“It was never overt as it is now – ‘You sign up with WinRed or we will not support you,’” said one top official at a state party. “This is strange. This is not how they roll this stuff out. It was ‘ready, fire, aim’ this time.”