Several members of Congress have been targeted by thieves who nabbed hundreds of thousands of dollars combined from their campaign accounts as fraudsters and cybercriminals continue to exploit entities involved in federal systems for major gains, according to Federal Election Commission filings reviewed by the Washington Examiner.
Federal campaigns and political action committees reportedly hemorrhaged at least $2.7 million in 2021 due to theft and fraud, which has also been rampant in separate government-run systems like the taxpayer-backed COVID-19 relief system. Thieves have recently obtained roughly $713,000 from campaigns for four lawmakers, who have in some cases recouped the sums, FEC documents dated between December 2022 and January show.
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“The reality is that there are just straight up criminals who are using the internet to steal money from victims, and it’s not just Nigerian princes anymore,” Dan Backer, a campaign finance lawyer for the litigation and political firm Chalmers & Adams, told the Washington Examiner. “As a consequence, every campaign and political entity ought to look at their financial controls and think about beefing them up.”
Fraud has been rippling through the highest levels of government, with $71,000 notably stolen from President Joe Biden’s campaign account in 2020.
The biggest hit out of the four lawmakers has been against Sen. Jerry Moran (R-KS), whose campaign treasurer, Timothy E. Gottschalk, informed federal regulators on Dec. 8 that $690,000 in fraudulent spending was racked up.
There were two payments deemed unauthorized from a campaign vendor, and Moran recovered over $168,000 in November 2022, according to the document. Moran’s campaign reported the incident to the Republic County Kansas Sheriff’s Office, and the case has been transferred to both the FBI and its Kansas branch, according to the letter. The FBI did not reply to the Washington Examiner’s requests for comment.
The FEC approved a “safe harbor” provision in 2007 that encourages campaigns and PACs to implement “internal controls” to “prevent misappropriations and associated misreporting” of their finances. Nevertheless, the regulator doesn’t impose or seek “civil penalties” over incorrect filings, according to the provision.
“Note that the FEC has jurisdiction over civil enforcement of federal campaign finance laws and regulations,” Judith Ingram, a spokeswoman for the FEC, told the Washington Examiner. “Enforcement authority for criminal violations of the Federal Election Campaign Act rests with the Public Integrity Section of the U.S. Department of Justice.”
“Other areas of federal and state law, such as those related to mail fraud, would apply to situations not specifically addressed by campaign finance laws and regulations,” she added.
Another lawmaker targeted by a thief is Rep. Neal Dunn (R-FL), who lost roughly $11,000 in November 2022, according to an FEC filing. Dunn’s campaign treasurer, Caleb Crosby, told the regulator in a Jan. 27 letter that the campaign was “victimized” by “an external check fraud situation” and is investigating the matter.
“Campaigns are often prime targets for fraud,” Leah Courtney, a spokeswoman for Dunn, told the Washington Examiner. “Unfortunately, a criminal or criminals recently targeted our campaign, Friends of Neal Dunn by intercepting a payment to one of our vendors. As soon as the check was intercepted, my team went into action to trace the origin of the fraud. We determined that the crime happened externally and the fraudulent disbursement is under investigation by the Committee’s bank to recover funds.”
Rep. Russell Fry (R-SC), a freshman congressman, has told regulators that there were seven “fraudulent” expenditures taken in November from his campaign account. The expenditures totaled $2,600 and were used by the thief at Walgreens, Nordstrom, the North Face, and Safeway, according to Raw Story, which reported on the congressional theft.
“Unfortunately, like many Americans, our debit card information was stolen and used without our permission,” Phillip Habib, a campaign spokesman for Fry, told the Washington Examiner. “This incident highlights the threats Americans face and the importance of companies securing our card data. Thankfully, all funds were returned.”
The fourth lawmaker targeted as of late was Rep. Matt Gaetz, who’s campaign revealed in a Tuesday FEC filing that over $362 was stolen. The payments were made between Nov. 26 and Dec. 6 with Apple, according to the filing.
“The committee discovered a series of charges on the campaign card that they believe to be fraudulent, and disputed these changes with the card provider,” said the filing. “The committee will properly report the reversed charges when they are credited back to the card.”
Kendra Arnold, executive director for the Foundation for Accountability and Civic Trust, a watchdog group, told the Washington Examiner that political campaigns clearly face “similar” fraud and theft threats like that of the public. Lawmakers, however, could be getting targeted specifically because of their high-profile nature, she said.
“Generally, any fraud and theft is required to be timely reported to the FEC,” said Arnold.
In order to combat fraud, the FEC has released numerous recommendations. Some of these include mailing checks “promptly and directly” to vendors, considering the usage of a check lockbox service, and enrollment in a bank’s fraud detection program.
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Ultimately, campaigns need to be “layering” their security measures by limiting who has access to checks and credit cards, according to Backer.
Campaigns would benefit from “greater education” on basic cybersecurity risks, such as not clicking on suspicious email attachments and avoiding vendors with spotty resumes, he added.
