EXCLUSIVE: Less than two months ahead of the presidential election – with concerns of foreign interference again at the forefront – a conservative political group is raising "serious concerns" about millions of donations reported by a major Democratic fundraising platform.
A preliminary computer analysis by the Take Back Action Fund, obtained exclusively by Fox News, has found that nearly half of all 2019 donations to ActBlue were made by people claiming to be unemployed.
Action Fund President John Pudner questioned the veracity of those donations and called it a loophole that must be closed for the sake of election integrity.
"After downloading hundreds of millions of [dollars in] donations to the Take Back Action Fund servers, we were shocked to see that almost half of the donations to ActBlue in 2019 claimed to be unemployed individuals," he said. "The name of employers must be disclosed when making political donations, but more than 4.7 million donations came from people who claimed they did not have an employer. Those 4.7 million donations totaled $346 million ActBlue raised and sent to liberal causes."
The trend is continuing this year: An Action Fund examination of 2020 data from January through August showed an uptick in "unemployed" donations through ActBlue, to 50.1% this year.
ActBlue defends the integrity of its donations and said many come from retirees and people who aren't counted as employed, such as homemakers.
According to the findings of the Action Fund – a nonprofit that aims to "educate the public on conservative solutions for political reform" – 48.4% of ActBlue donations last year, prior to the massive loss of jobs that came with the onslaught of the coronavirus pandemic, came from those who did not list an employer or who claimed to be unemployed.
Pudner said the large number is a red flag that some donations may be illicit contributions from foreign interests attempting to impact U.S. elections.
"It is hard to believe that at a time when the U.S. unemployment rate was less than 4 percent, that unemployed people had $346 million dollars to send to ActBlue for liberal causes," Pudner said, adding that "4.7 million donations from people without a job ... raised serious concerns."
ActBlue, created in 2004, bills itself as a "powerful online fundraising platform available to Democratic candidates and committees, progressive organizations, and nonprofits that share our values for no cost besides a 3.95% processing fee on donations."
"And we operate as a conduit, which means donations made through ActBlue to a campaign or organization are considered individual donations," its website explains.
But critics, including the Action Fund, contend that the website allows credit card donations that are not verified, so anyone from any country in the world can donate without a paper trail.
"ActBlue's insistence on refusing to allow banks to verify their donations is an invitation to foreign programmers or others to send money through them using fake American names, and we encourage them to start letting banks verify the identity of donors to stop the potential for millions of dollars to influence our election," Pudner said.
Last year, the Republican Party created a competing fundraising platform called WinRed to counter ActBlue's prowess in small-donor sourcing.
According to the Action Fund, an analysis of WinRed's 4.9 million donations totalling $302 million found that only 4% came from people who did not list an employer or were unemployed. This year, the rate is 5.6%, according to the data.
"We purposely wanted to examine 2019 first, because, before COVID-19, the unemployment rate was at 4 percent or below. It's hard to believe that millions of Americans who were out of work had $346 million to spare to give to ActBlue for liberal causes," Pudner said.
Precisely determining if the donations were authentic and genuinely from those who were unemployed requires further time and resources, he said.
"Auditing these suspect donations to determine if millions lied by indicating they were unemployed when in fact they were not, or if their names were just being used by a foreign programmer or someone else to move money without their knowledge, will take time," Pudner said. "We've planned a series of forensic procedures to identify whether or not these donors of record exist or not, if they made the contributions themselves, and whether they were legally able, and whether or not they are potential 'straw' donors, making the contributions after being given the money and direction by someone else."
In response to questions by Fox News, a representative for ActBlue said "it is best security practice to refrain from publicly sharing any detailed information about how we analyze contributions."
"But we use an array of data sources, internal validation and third-party services to verify the validity of transactions. We take the security of our platform and integrity of donations very seriously," the spokesperson said. "We report every contribution to federal candidates that comes through our platform, and you can look those up on the FEC. We report the information donors enter about their occupation and employer, and we do see a significant portion of donors who report their status as not employed, such as retired donors or full-time parents."
The issue of unauthenticated political donations was also brought to light by The Washington Post in 2008, which was at the time "allowing donors to use largely untraceable prepaid credit cards that could potentially be used to evade limits on how much an individual is legally allowed to give or to mask a contributor's identity."
In 2015, the Action Fund said millions of dollars "could be moved by allowing unverified credit card contributions," and Pudner said that even today, ActBlue continues to use such an "unverified system."
"We found it took other vendors only a matter of hours to switch their system to allow verification of donations and thus prevent the possibility of illegal foreign money being moved into campaigns," Pudner said. "Choosing to use an untraceable system has a higher cost in terms of the risk of credit card fraud and also tends to incur higher bank fees. And this untraceable system allows someone with a gift card to make donations in anyone's name, even if that person never actually made that donation, or even if that person doesn't exist at all."
Despite such claims, ActBlue currently holds the highest level of certification as a service provider.
Both WinRed and ActBlue note on their donation pages that law requires donors to list their employer and occupation.
"The problem," Pudner said, "is on the back end where ActBlue does not allow banks to verify the identity of the cardholder, meaning someone could buy endless gift cards and list any name they wanted and leave the employer line blank or type in words like 'not employed,' 'unemployed.'"
"With half of ActBlue donors indicating they do not have an employer, we recommend they start letting their payment processors verify donations to stop any foreign or other illicit donations by simply listing themselves as an unemployed American," Pudner added.