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Republicans and Reporters Should Treat WinRed With Caution

Republicans need to treat this very, very skeptically. It just sounds scammy to me. It does not protect data or privacy. It does not financially benefit small dollar donors. In fact, it screws them. It operates as a for profit entity. A lot of people not named Trump are going to get amazingly rich off the President and other candidates through this platform.I suspect this is going to be the financial equivalent of Romney's Project ORCA where Election Day comes and the consultants are swimming Scrooge McDuck style through their swimming pools of cash while the NRCC, NRSC, and over 500 candidates are wondering what happened to all the money and donors as everything around them crashes.

For years, Republicans have coveted ActBlue. ActBlue is a progressive fundraising engine started by the grassroots on the left who were frustrated with the Democrats’ ability to block progressive candidates from party fundraising. Through ActBlue, activists could compound small dollar donations and use ActBlue as a pass through entity to candidates. It exploded over time and a non-profit has ActBlue under its wing. Democrat Party operatives often privately complain about it because of privacy and data concerns, but they recognize that ActBlue has become a crucial vehicle to mobilize the progressive grassroots.

Over the years, various conservatives have tried something like ActBlue. For two election cycles at RedState, we used SlateCard, which performed like ActBlue, allowed us to pick a list of candidates we supported, and fundraise just for them. SlateCard went away. ActRight sprung up to do something similar, then died. Someone else tried something. Nothing ever really took hold.

Well, the Republican National Committee, the President, and some from the President’s orbit have decided to try a top-down approach and build it by fiat, but I think we should all be really concerned with the product, privacy, its cost, and how undoubtedly it will be a get rick quick scheme for a select group of consultants.

This is not a non-profit effort to benefit candidates. This is a for profit effort to make consultants rich at the expense of candidates and small dollar donors.

For starters, there is no grassroots base of support here. The GOP is essentially pressuring candidates and campaign committees to demand they come over to their new platform, which they are calling WinRed. In fact, Data Trust is getting involved, which is the outside data entity for the GOP. Showing no regard for data privacy, donors will apparently be tracked through Data Trust. That’s a real problem. It is the chief complaint of Democrat operatives about ActBlue — campaign donors are now up for grabs by others, probably even hackers, beyond the public FEC disclosures.

We’re looking at the serious potential for a select few consultants to create monopolistic conditions within a political party, which never ends well for political parties.

Then there’s the lack of innovation. According too this, WinRed is just a fancy face for Stripe, which is an existing payment processor. So instead of building their own payment system, they are relying on a separate system and making it appear to be unique. But since they are using someone else’s system, they have to pay for that.

This is a valid point from David Nir at DailyKos:

WinRed (Donald Trump named it himself and tweeted a link to its lone functional page) has a long, long way to go to catch up with the $3.5 billion-with-a-b raised through ActBlue since its founding in June of 2004, and there’s good reason to doubt it ever will. For starters, there’s the grifty fee structure: While ActBlue charges a flat 3.95% per contribution, WinRed takes a 3.8% cut plus 30 cents per transaction. That might not sound like a big difference, but it’s huge. On a $5 contribution, ActBlue will net 20 cents. WinRed, however, will take 49 cents, which in percentage terms is a giant 9.8%. What’s more, on a contribution page that lists multiple campaigns, it sounds like WinRed will get 30 cents per donation. (From the site itself: “There is a 3.8% + 30 cents per transaction fee with each donation made.”) In other words, if you split $25 across five candidates, that’s a cool $2.45 for WinRed. ActBlue would take less than a buck.

In other words, the system the GOP has designed from the top, purportedly to engage small dollar donors like ActBlue, will actually cost more to use than ActBlue and apparently won’t even be on a proprietary payment system. It also will seemingly share donor data with Data Trust.

But wait, there’s more. Despite the fancy release that caught the attention of Fox News, Politico, and the Washington Post, it really is not even launching yet and reporters are failing to ask appropriate questions. Go check it out. They’re taking sign ups right now.

The Washington Post headline blares “GOP launches new fundraising platform to capitalize on Republican small-dollar donor base” with comparisons to ActBlue, but without noting it will actually be more costly for small dollar donors than many existing systems, including ActBlue.

But just read this bit from the Washington Post:

The four main party committees have begun phasing their online operations over to WinRed, according to Monday’s announcement: Trump’s reelection campaign, the RNC, the National Republican Senatorial Committee and the National Republican Congressional Committee. The Congressional Leadership Fund, a super PAC focused on electing Republicans to the House, also announced it would adopt the platform.

It sounds very much like there is some arm twisting to make this happen and that raises a serious question — who is going to benefit from this? I assure you, considering they are not even using a proprietary system and are more expensive than some competitors, it will not be the candidates who benefit and it will not be small dollar donors. I am sure the consultants will be able to buy beach houses for their beach houses, but that’s about it.

Republicans need to treat this very, very skeptically. It just sounds scammy to me. It does not protect data or privacy. It does not financially benefit small dollar donors. In fact, it screws them. It operates as a for profit entity. A lot of people not named Trump are going to get amazingly rich off the President and other candidates through this platform.

I suspect this is going to be the financial equivalent of Rommey’s Project ORCA where Election Day comes and the consultants are swimming Scrooge McDuck style through their swimming pools of cash while the NRCC, NRSC, and over 500 candidates are wondering what happened to all the money and donors as everything around them crashes.

One last aside here — for-profit is not bad in and of itself. Profit is good. It allows reinvestment and gives a financial incentive to keep this thing going. But this is designed to profit off small dollar donors, and that is a problem if this is about mobilizing the grassroots.

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