Presidential Campaign Conceals Donor Information, Sparking Debate on Transparency
When WinRed, the company that processes nearly all online Republican campaign contributions, recently released its enormous trove of donor data for the first half of the year, donations were conspicuously absent for one presidential candidate: Gov. Ron DeSantis of Florida.
It was no technical glitch. The DeSantis campaign worked with WinRed in a way that prevented the disclosure of donor information, ensuring that the campaign’s small donors would remain anonymous, according to a person familiar with the campaign.
The arrangement appears to be the first of its kind for a presidential campaign since WinRed’s founding four years ago and could presage a return to an era in which far less information on small donors is made public, at least for Republicans.
Representatives for Mr. DeSantis declined to describe details of the arrangement. The person familiar with the campaign said the aim was to prevent other campaigns from poaching Mr. DeSantis’s donors.
Consequences of Concealing Donor Information
But the move has other effects, including obscuring exactly how many — or how few — online donations Mr. DeSantis has received.
His dependency on larger contributors has been a source of concern for his campaign, after his first financial report last month revealed that less than 15 percent of his $20 million haul had come from donors who gave less than $200. News emerged on Tuesday that Mr. DeSantis had replaced his campaign manager as part of a broad shake-up.
Matt Mackowiak, a Republican consultant based in Texas, said he was not convinced of the value of concealing small donors — “Generally, small donors don’t care about disclosure,” he said — but he also did not see much of a threat to transparency in the campaign’s arrangement.
“To me, the single most important aspect of the transparent philosophical debate is: Is somebody buying influence?” Mr. Mackowiak said. “You’re not going to buy anyone with a $200 or less donation.”
Until recent years, he noted, small donations were never broken out in federal campaign finance disclosures. In a sense — and to the all but certain dismay of those who push for transparency — the move by the DeSantis campaign suggests a return to a previous era when those contributions remained anonymous.
The Rise of WinRed and ActBlue
WinRed was set up in 2019 as a conservative answer to ActBlue, a nonprofit group that since 2004 has served as the central platform to process online donations for Democratic candidates and causes. ActBlue has been widely credited with establishing Democratic dominance in small-dollar fund-raising, and Republicans had long been eager for their own version.
Unlike ActBlue, the heart of WinRed is a for-profit company. But its political action committee, like ActBlue’s, has served as a conduit for contributions to campaigns. Donors would give to the campaign through a webpage run by WinRed, which then distributed the money to it.
In the 2020 election cycle, WinRed received and forwarded over $2.2 billion in online contributions; ActBlue was a conduit for more than $4.2 billion.
While political campaigns are not required to itemize contributions under $200, the PACs for WinRed and ActBlue have to provide information on every donor. Their filings offered the public the only details about campaigns’ small-dollar contributions.
WinRed has fought the requirement that it disclose every donor. It is currently in litigation with the Federal Election Commission and seeks to raise the threshold to $200, arguing that the requirement is burdensome and is not in keeping with the drastic growth of small-dollar donations.
Legal Questions and Considerations
A spokesman for WinRed did not respond to requests for comment.
WinRed recently started offering “merchant” accounts, in which the company acts not as a conduit, but as a typical payment processor. Mr. DeSantis’s campaign chose this option, the person familiar with the campaign said, cutting WinRed’s PAC and its disclosure requirements out of the picture.
It appears to be the first time a presidential campaign has opted for this arrangement. The former chief executive of WinRed, Carl Sceusa, is currently the chief financial and chief technology officer of the DeSantis campaign.
The difference in disclosure is vast.
WinRed’s filing last week showed that Mr. Trump’s main fund-raising committee processed 1,328,930 donations in the first six months of the year. It showed nothing about Mr. DeSantis, whose campaign reported only 15,462 donations above $200 on his campaign’s Federal Election Commission filing. There was no information about the donors who gave less than $200. His campaign has said he has topped the 40,000 donors needed to make the first debate stage, but only a fraction of them are now disclosed.
“Using the payment processor model allows them to not have to itemize those donors,” said Adav Noti, senior vice president and legal director at the Campaign Legal Center, a nonprofit campaign ethics group. “That’s a business question, not a legal question.”
The vendor arrangement raises some legal questions, Mr. Noti said: First, whether WinRed’s merchant arm is, itself, a de facto political group, which would have to register as a political action committee.
Implications for DeSantis’s Campaign
“F.E.C. rules are pretty clear that payment processors can’t be partisan,” Mr. Noti said.
The strategy may be most notable for what it could suggest to competitors about Mr. DeSantis’s campaign.
“To the extent that unitemized contributions could tell you something about a candidate that might be valuable, it’s that they are regional, in one place,” Mr. Mackowiak, the strategist, said. “The only thing I can think of is that their small donor base may be primarily Florida-based, and they didn’t want to appear like a regional candidate.”