Everyone has a price.

Manage newsletters

View in browser

With Roger Sollenberger, Political Reporter

Pay Dirt is a weekly foray into the pigpen of political funding. Subscribehere to get it in your inbox every Thursday.

 

The Big Dig this week… How Google’s Fundraising Gift to Republicans Became a Democratic Bonanza—and Created Unintended Whiplash

Amid a chorus of conservative bellyaching last summer—unfounded as it may have been—that Google was intentionally wielding its Gmail spam filter to limit the reach of Republican fundraising emails, the tech giant proposed a solution. 

 

With the permission of the Federal Election Commission, the company created a controversial pilot program that would take the filter out of the equation, allowing all political groups to receive direct access to inboxes, undercutting the GOP’s claims of ideological bias. (Those allegations may in reality be a self-own, reflecting the spammy and intimidating language of many GOP fundraising pitches.)

 

But when Google ended that equal access program in January, it wasn’t Republicans who were complaining—it was Democrats.

Undo send

 

According to Democratic fundraisers who spoke to The Daily Beast for this article, the “abrupt” end to Google’s Verified Sender Program (VSP) dealt an unintended but significant setback to small-dollar progressive groups who had taken the company up on its offer.

 

Kenneth Pennington, founder of Middle Seat—a leading Democratic digital fundraising firm—alleged to The Daily Beast that some of his progressive clients were “irreparably damaged” by the way Google handled the experiment.

 

“Before the VSP program, there was a status quo in place about how senders were getting into inboxes which was fine, and it worked well for campaigns using typical best practices for email marketers,” Pennington said. “This program then incentivized people to make changes that hurt their sender reputation, and then with five days’ notice, Google announced they were shutting it down in a way that irreparably damaged the small-dollar campaigns that enrolled.”

 

Last week, Sen. Chris Murphy (D-CT) weighed in, calling the fallout a “giant assist from Google to the billionaire donor class.”

 

The big flip-flop

 

The irony is thick.

 

First, the same Republicans that Google was trying to placate largely spurned the voluntary program. The GOP’s decision appears in part related to an anti-discrimination lawsuit the Republican National Committee filed against Google last October. After all, if the RNC had taken advantage of the offer and seen a benefit, Republicans would have been hard pressed to convince a court that Google was intentionally targeting conservatives. Google later revealed in a January court filing that the RNC never joined the program.

 

An RNC spokesperson didn’t reply to The Daily Beast’s request for comment.

 

In a rare 6-0 bipartisan decision this January, the FEC tossed an RNC complaint that said Google had intentionally deployed its technology with a political bias against Republicans, constituting “illegal in-kind contributions” to Joe Biden and other Democratic candidates. The complaint cited a North Carolina State University study, but the authors later said their work was being misrepresented and “has nothing in it that demonstrates that someone is deliberately trying to turn the elections.”

 

Second—after the Democratic National Committee predicted that, as a result of Google’s proposed program, “Donors will be harmed, and confidence in our democracy and its leaders will be undermined”—Democrats jumped all over the opportunity, and saw a dramatic boost in email engagement.

 

But that created an unforeseen problem, according to fundraisers. The rapid growth set them up for a major contraction. When Google announced it had decided to kill the VSP in late January, it was now mostly Democrats who found themselves unexpectedly in the spam bin.

 

Hair of the dog

 

Karin Roland, director of product at progressive digital fundraising house ActionKit, said her firm’s clients saw their email engagement on average double under the program. But when Google announced last call, clients got hit with a “post-VSP hangover.”

 

“After the program ended, campaigns saw increased spam reports, what we’ve called a ‘post-VSP hangover,’” Roland said. The hangover has begun to ease for some campaigns who have made proactive adjustments, she said, adding that it was “still way too soon to see the long-term effect.”

 

Bad reputation

 

According to Pennington, the VSP had a vicious recoil.

 

“With emails, your reputation is built over time, as an address incrementally sends out a larger and larger list to people who open those emails and show that they want to receive them,” Pennington explained.

 

“When you end the program and those emails go back to the promotions inbox, then those same people suddenly aren’t opening emails,” he said. When open rates drop suddenly, Google begins to see those emails as spam.

 

“The abrupt nature of it ending overnight with no phase-out caused the pollution of the data set of who’s an active user and who’s not,” he said. “I believe this was unintentional, but when you’re a monopoly then sometimes even unintentional things can have dangerous consequences.”

 

Best practices

 

Reached for comment, Google spokesperson José Castañeda told The Daily Beast that the company was always clear about the end date.

 

“As we made clear from the beginning, the Verified Sender Program pilot would operate for a limited period ending on January 31st,” Castañeda said. He added that Google “encouraged program participants to follow bulk sender best practices” and “cautioned all bulk senders that spammy activity during the pilot would impact participants following the conclusion of the pilot.”

 

Today, Google claims the program had “bipartisan” participation from more than 100 campaigns. But the company refused multiple times to describe that partisan breakdown. The company announced its final decision to end the program in a court filing on Jan. 24.

 

“If I were Google, I wouldn’t have done the program in the first place,” Pennington added. “If I’m a big corporation holding onto a monopoly, then I’m not getting involved in the political conversation.”


Read the full story here.

 

Advertisement

 

From Roger’s Notebook...

Singh like a canary. Former FTX crypto executive and friend of Sam Bankman-Fried, Nishad Singh, pleaded guilty on Tuesday to multiple charges, including conspiracy to break campaign finance laws. Singh—the third FTX official to flip on SBF—could prove a high-value witness against his former boss in the alleged campaign finance scheme, which is said to involve straw donations (contributions made in the name of another person or corporate entity). Singh was a major donor, giving $9.3 million to Democratic groups in 2020, and more than $8 million for the 2022 cycle, according to FEC records.

 

But something in SBF’s superseding indictment doesn’t quite add up. At one point, the document notes that SBF and his alleged co-conspirators “made over 300 political contributions, totaling tens of millions of dollars.” The following paragraph says that “an internal Alameda spreadsheet noted over $100 million in political contributions,” noting that FEC records don’t reflect any 2022 political contributions by Alameda. (Alameda is the crypto hedge fund tied to FTX.)

 

OpenSecrets data, on the other hand, shows that SBF and his crew put about $75 million toward the 2022 midterm elections. That’s still not more than $100 million. It’s unclear where that $30 million went, but it could reflect SBF’s donations to politically engaged “dark money” nonprofits, which he has previously admitted making.

 

Land of 10,000 audits. The FEC fined the Republican Party of Minnesota more than $100,000, according to two reports published this week. The fines stemmed from an audit of the party, with one $53,000 penalty dating to 2018—for failing to properly maintain about $1,000,000 in employee and expense records—and another $58,500 fine from 2020, for accepting excess donations and failing to timely and accurately report receipts and disbursements.

 

That brings the party’s total penalties to five, adding up to about $300,000. As of Jan. 31, the committee has $3,387.81 on hand, with more than $380,000 in debt.

 

House money. A joint fundraising committee for the scandal-battered Rep. George Santos (R-NY) just got two new FEC notices. One of them points to inconsistent cash on hand totals, and the other flags excess contributions made back in late July. Those excess contributions came from just one donor, Raymond Tantillo, of Tantillo Auto Group—which happens to be one of the clients of Santos’ enigmatic company, the Devolder Organization.

 

According to the FEC, Tantillo made a maximum $11,600 donation out to the Devolder Santos Victory Committee in July, on top of an initial $5,800 donation two months prior. The Daily Beast previously reported that members of the Tantillo family gave a combined $44,800 to Santos’ political operation.

 

The cash on hand discrepancy is related to an amended year-end report that Santos’ new treasurer filed on Feb. 20, which claims the committee started the period with $1,777.54 in the bank. That’s inconsistent with the $3,465.48 that the committee reported having on hand at the close of the previous period.

 

The original year-end report, filed by Santos’ old treasurer Nancy Marks, also showed a $1,777.54 starting balance. The amended report was submitted by Santos’ new treasurer, “Andrew Olson,” whose existence no media outlet has been able to confirm. The treasurer must respond to the FEC by April 5, the letters say.

 

Mod squad. Rep. Cori Bush (D-MO) was hit with an FEC complaint this week, alleging that her campaign misspent $60,000 in security payments to her now husband. The complaint, filed on Thursday by right-leaning watching Foundation for Accountability and Civic Trust, said that “Bush and her campaign committee may have used campaign funds for personal use.” the complaint comes on the heels of a Fox News report that Bush’s husband collected $60,000 in 2022 for security services despite not holding a private security license, which is necessary in the St. Louis area. At the same time, the campaign also spent more than $225,000 with a security firm and another $50,000 in personal protection fees to another individual.

 

Fine and dandy. Notorious scam PAC operator Matt Tunstall—who pleaded guilty to fraud, money laundering, and campaign finance violations—might soon find himself in hock. In a court filing this week, federal prosecutors sought a forfeiture money judgment against Tunstall for nearly $790,000, which they say “represents the properties involved in and/or the amount of proceeds traceable, directly or indirectly to the violations.”


In December, Tunstall admitted to using two PACs—Liberty Action Group PAC and Progressive Priorities PAC—to solicit about $4 million in public donations in 2016, under the false premises of supporting the GOP and Democratic presidential nominees. Instead, the Justice Department said, Tunstall and two co-conspirators kept the money to enrich themselves and bankroll more fraudulent solicitations.

 

More From The Beast’s Politics Desk

Matt Gaetz

An obscure defamation case in Georgia could actually yield more information about Donald Trump and Rudy Giuliani’s communications than what the Jan. 6 Committee could get. Jose Pagliery tells you why this sleeper case is one to watch.

 

From COVID origins to the U.S-Mexico border to Ukraine aid and social media “censorship,” House Republicans eager to impugn the Biden administration are jockeying to plant their flags on the most coveted political ground. Sam Brodey takes you inside the House GOP’s new turf war.

 

Months and sometimes even years later, Donald Trump’s campaign still hasn’t paid some local police departments for overtime earned while working his rallies. Jake Lahut has an exclusive on Trump’s latest stiff.

 

We'll be back next week with more Pay Dirt. Have a tip? Send us a note and subscribe here.

 
Daily Beast
FacebookTwitterInstagram

© 2023 The Daily Beast Company LLC I 555 W. 18th Street, New York NY, 10011

 

Privacy Policy

 

If you are on a mobile device or cannot view the images in this message, click here to view this email in your browser. To ensure delivery of these emails, please add [email protected] to your address book. If you no longer wish to receive these emails, or think you have received this message in error, you can safely unsubscribe.

https://elink.thedailybeast.com/oc/5581f8dc927219fa268b5594ia9wj.jba/69ceac17