President Donald Trump and the Republican National Committee have chosen a fundraising system that profits a former White House staffer and a company invested in by Jared Kushner’s brother ― passing over a cheaper platform that already has contracts with thousands of GOP candidates and committees.
“I am pleased to announce the launch of http://tmagac.winred.com. This new platform will allow my campaign and other Republicans to compete with the Democrats money machine,” Trump announced via Twitter late last month. “This has been a priority of mine and I’m pleased to share that it is up and running!”
What Trump’s announcement did not mention was that the decision to use “WinRed” will potentially funnel millions of extra dollars to a firm owned by Gerrit Lansing, a former RNC staffer who left his White House job only three weeks into the administration after reportedly failing his FBI background screening.
“The victor is always the Trump family and their immediate friends,” said Rick Wilson, a longtime GOP political consultant who has become a prominent Trump critic.
Trump and the RNC said they hoped WinRed would be used by Republican candidates at both the federal and state levels to lower fundraising costs, just as ActBlue has been able to do for Democratic candidates for over a decade.
“WinRed is building infrastructure to unify and modernize Republican fundraising for years to come,” RNC chairwoman Ronna McDaniel said in a news release. “WinRed will help Republicans up and down the ballot to more creatively and efficiently raise campaign dollars online, direct resources where they are needed most, and most importantly win elections in 2020 and beyond.”
This week, the RNC sent a cease-and-desist letter to Anedot, a company that has been used by non-profit groups, candidates and committees of both parties for over a decade, to stop it from using RNC, GOP and the party’s “Official Elephant Logo” on its web site or in its emails to customers. Anedot’s founder, Paul Dietzel, is trying to market a separate, Republican-specific platform ― Give.gop ― as a competitor to WinRed.
RNC spokesman Mike Reed said that Anedot’s history of working with Democrats played into the RNC’s decision not to use it. “It obviously makes more sense for the RNC to work with a platform that is aligned completely with the Republican Party and the president,” he said.
Dietzel said in a statement: “I’m focused on innovating and continuing to serve our tens of thousands of customers around the country. As I’ve said before, we welcome free-market competition.”
WinRed actually uses the payment processing system operated by Revv.com, a company Lansing founded even as he simultaneously worked at the RNC running its digital operation in 2015 and 2016. In his brief stint working for Trump, he served as the White House’s chief digital officer.
Lansing did not respond to HuffPost queries to Revv.com or WinRed.
A HuffPost analysis of Federal Election Commission records shows that Revv had only 17 different federal candidates and committees as clients from 2015 to today, including three affiliated with Trump. Those three accounted for $3.5 million of Revv’s $3.8 million in revenues, or 91%, from federal elections in that time period.
In contrast, Anedot had 1,051 federal elections clients in that time period, and received $11 million in revenues, the analysis found.
“When the free market doesn’t work, you try force,” a GOP strategist familiar with both platforms said on condition of anonymity. Trump and his allies “are definitely trying to bully and strong-arm people to stop using a product used by the masses for years and instead use a product that people have basically rejected for four years.”
The victor is always the Trump family and their immediate friends Rick Wilson, Republican political consultant and Trump critic.
All credit-card processing companies make their money on the percentage point or less spread between what they charge customers and what the card companies charge them. Firms catering specifically to political candidates must also deal with Federal Election Commission disclosure rules ― making such companies attractive to candidates by taking on that burden, even if they charge a slightly higher fee.
One such firm founded in 2004 became ubiquitous among Democratic candidates ― from statehouse runs to presidential campaigns. Indeed, ActBlue’s success in helping Democrats raise hundreds of millions in small-dollar donations in recent years was the impetus for the RNC’s search for a Republican analog.
WinRed was touted as exactly that in its rollout on June 24. Republicans were “finally taking on the challenge of the Democrats’ ActBlue fundraising platform,” the RNC news release proclaimed.
But the fine print on WinRed’s own web site lays out a key distinction between the way it works compared with ActBlue.
While the Democrats’ platform charges a flat 3.95 percent fee on every donation, the GOP’s WinRed charges 3.8 percent plus 30 cents per donation. While that extra 30 cents means little with larger donations ― in the hundreds or thousands of dollars ― it becomes increasingly significant as the donation becomes smaller.
With a $25 donation, the effective percentage rate for the processing fee becomes 5 percent. With a $5 donation – a common request in the world of small-dollar fundraising – the processing fee becomes 9.8 percent.
Those few pennies, multiplied by hundreds of millions of donations, would translate into many millions of dollars extra for Revv.com and Lansing, its owner.
What’s more, about two-thirds of the total processing fee is used to pay Stripe, the credit-card processing company that saw a $30 million investment from Joshua Kushner’s Thrive Capital in 2014. Joshua Kushner is presidential son-in-law and White House aide Jared Kushner’s younger brother. He did not respond to a request for comment Thursday.
If all Republican candidates in the country began using WinRed, their billions of dollars in campaign donations would produce tens of millions in additional revenues for Stripe.
Unlike WinRed, Give.GOP allows the donor to pay processing fees on top of their donation from the beginning ― so that a donor wanting to give a candidate $25 would be charged $26.25 right at the start, with $25 going to the candidate and the rest going to banks and the credit card companies. It also negotiates its own rates with credit card issuers, and does not use Stripe.
This story has been updated to clarify the relationship between Paul Dietzel, Give.gop and Anedot.