by Robert Schmad
Security measures implemented by the largest payment platform used by Democratic candidates to process political donations failed to address GOP concerns that spurred the payment processor to respond in the first place.
In 2023, Republican Florida Sen. Marco Rubio and Republican Wisconsin Rep. Bryan Steil both raised concerns that ActBlue not requiring users to input a credit verification value (CVV), the three numbers on the back of credit cards, when making donations increased the risk of fraudulent contributions being made. ActBlue has since required that donors using debit or credit cards on their platform input CVVs. The requirement, however, can be easily circumvented by donating through PayPal, Google Pay or Venmo, all of which are still options on ActBlue.
Prepaid gift cards, which have been singled out by Republicans as a possible vector for fraud, have no CVVs and can be uploaded to PayPal, Google Pay or Venmo. This allows individuals to make contributions through ActBlue while at no point providing a CVV. WinRed, the conservative equivalent of ActBlue, also allows donors to make contributions through Google Pay.
After becoming aware of this apparent loophole, the Daily Caller News Foundation reached out to Republican members of Congress working on the Secure Handling of Internet Electronic Donations (SHIELD) Act — legislation introduced in September that would require online political payment processors like ActBlue to collect “card verification value[s] as a condition of the acceptance of online contributions made through the use of credit or debit cards in elections for Federal office” and bans the use of prepaid gift cards for such contributions.
ActBlue, while publicly dismissive of probes into its security measures, hired a lobbyist on Sept. 9 to advocate on its behalf while Congress considers the SHIELD Act, according to a disclosure.
Republican Oklahoma Rep. Stephanie Bice’s chief of staff told the DCNF that “the congresswoman is aware of this loophole and working to address it.” Bice is one of the bill’s co-sponsors.
“The SHIELD Act prohibits political committees from accepting contributions from prepaid gift cards,” the staff of the House Administration Committee, where the bill has been referred, told the DCNF. “That prohibition is intentionally written broadly to cover direct and indirect transactions such as those that go through Venmo, PayPal, or Google Pay. If enacted, the legislation would require political committees like ActBlue to change their terms of service or agreements with third party payment networks to ensure the prohibition is not violated.”
Steil, in an October 2023 letter to ActBlue, said that prepaid cards could be used to launder otherwise prohibited funds, such as those from foreign sources, and allow them to flow into American political committees. While there are allegations of ActBlue being exploited to facilitate illegal donations, there is no conclusive evidence to support such claims.
Though evidence of widespread fraud is scant, the Federal Election Commission has suggested that requiring the use of CVVs can improve donor security, noting in response to a letter sent by Rubio regarding ActBlue that it had previously “approved a requester’s proposed use of credit card security codes to verify the contributor’s physical possession of the credit card as part of its alternative verification process to meet the requirements for matchable contributions under the Presidential Primary Matching Payment Account Act.”
ActBlue did not respond to the DCNF’s request for comment.
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Robert Schmad is a reporter at Daily Caller News Foundation.
