The mysterious CAPE PAC has netted more than $570,000 from apparently snookered donors. Where is the money going?
Noam Neusner, a former White House speechwriter for President George W. Bush, thought he had given $250 to Ohio GOP Senate candidate Josh Mandel.
Instead, Neusner was one of nearly 3,000 donors who stumbled onto a network of look-alike campaign websites that have netted more than $570,000 this year in what some are calling a sophisticated political phishing scheme.
The websites have the trappings of official campaign pages: smiling candidate photos and videos, issue pages, and a large red "donate" button at the top. Except that proceeds from the shadow sites go not to the candidates pictured, but to an obscure conservative group run by an Arizona activist.
Such doppelgänger sites exist for nearly three-dozen prominent GOP figures, including presidential nominee Mitt Romney, House Speaker John Boehner, House Majority Leader Eric Cantor, and donation magnets such as Reps. Michele Bachmann of Minnesota and Allen West of Florida.
Peter Pasi, who specializes in digital GOP fundraising, said the group is "exploiting donors." "The intent is to trade on someone else's name for your benefit," he said. Republican officials are concerned that the group, the Coalition of Americans for Political Equality PAC, is siphoning away money from needy GOP candidates while duping donors.
"The only thing they are doing is lining their pockets and funding their own operation," said Chris LaCivita, a strategist for West, whose campaign lawyers recently filed a complaint against CAPE PAC with the Federal Election Commission.
A critical unanswered question is who, if anyone, is profiting from the enterprise. More than $250,000 of the group's spending -- nearly half -- has gone to two companies with limited paper trails, neither of which has been hired by any other federal campaign in the last two years, federal records show.
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CAPE PAC Chairman Jeff Loyd, a former county GOP chairman in Arizona, declined an interview about the group. He said in an emailed statement: "Our candidate websites, videos, and get-out-the-vote messages clearly state who we are and our mission." "If a donor inadvertently gives to CAPE PAC and requests a refund, we immediately comply," Loyd said. "These instances have been few and far between ... [we] are unaware of any issue that remains unresolved."
CAPE PAC's model is to buy Google ads -- about $290,000 worth, as of the end of June -- to promote its network of candidate sites whenever people search for prominent GOP officials. A search for "Mitt Romney," for instance, often leads to two sponsored results: Romney's official site and CAPE PAC's mittromneyin2012.com.
Once on a CAPE PAC site, users would have to notice fine print at either the top or bottom of the page revealing that they were not on the official page of their favored politician. A dozen donors, including some experienced Washington hands such as Neusner, had no idea they had contributed to the group before National Journal Daily contacted them.
"Clearly, it's deceptive and it's wrong and it's hurting good, Republican conservative candidates," Neusner said. He has since asked for a refund, which he said the group is processing.
It is impossible to tell how many of the almost 3,000 people who have given to CAPE PAC have done so mistakenly. CAPE PAC said it has a "100 percent refund policy" when donors ask; it issued more than $50,000 in refunds in the second quarter.
"I've been swindled," said one D.C. veteran, who spoke on condition of anonymity because the donor's job includes directing campaign contributions. "I was under the impression that I was giving to the Romney campaign. I'm certainly going to be asking for my money back."
The donor noted that if seasoned political professionals are being fooled, then many more lay donors are likely giving in error.
"It confused me, and I do this for a living," said Patrick Raffaniello, a Washington lobbyist with two decades' experience whose bookkeeper gave $2,250 to CAPE PAC thinking it was going to Rep. Dave Camp of Michigan. Raffaniello thought his bookkeeper errantly gave to Camp's PAC, not directly to his reelection campaign as Raffaniello had intended, and he sought a refund. He did not know until contacted by National Journal Daily where his money really went.
"That's pretty sophisticated phishing," he said. "It looks official. It looks as good as anything .... I'm glad I got my money back."
CAPE PAC's network of microsites does not appear to break election law; the group discloses itself as the operator on every page. But "just because it's legal doesn't make it right," said Pasi.
The group first made waves in March, when it bought search ads for GOP Sen. Scott Brown of Massachusetts. Brown and his Democratic opponent, Elizabeth Warren, had pledged to swear off outside advertising. Warren said the CAPE PAC ads violated their agreement and Brown paid a fine for not honoring the pledge.
CAPE PAC has been on the radar of Boehner's political operation, as well. "Our campaign continues to monitor this situation, and we're concerned that some donors are finding CAPE PAC's site very confusing," said Boehner spokesman Cory Fritz. He urged donors to call a campaign before making online contributions.
CAPE PAC's biggest expenditure has been on Google ads promoting candidates. After search ads, the most money went to a pair of Delaware-incorporated companies with almost no public profile -- both of which got money from CAPE PAC on June 30 and then registered domain names 10 days later.
A $178,200 payment went to Fly-Ur-Flag for "media and advertisements." It is not clear who operates the firm, or who its other clients of any kind are. The company received the CAPE PAC payment on June 30 and registered its website domain -- flyurflag.biz -- on July 9. The bare-bones website has no contact information and lists no staff.
"We are currently managing over 30 campaigns across the United States of America for the 2012 election cycle," the site claims.
CAPE PAC lists 33 candidates it supports.
Another $85,000 went to GoMobile Technology. Although the domain for that firm -- gomobiletech.net -- is now registered, no website has been launched.
No other federal candidate or committee has hired either Fly-Ur-Flag or GoMobile Technology this election cycle, according to FEC records. In his statement, Loyd said that, "Aside from our vendor agreements, none of the members of CAPE PAC have any relationship with these vendors."
Loyd is also CEO of a digital marketing firm, Paperleaf Media, according to his LinkedIn profile. The company touts its expertise "in understanding were [sic] to advertise to drive traffic that will convert into new customers."
Through June 30, the most recent data available, CAPE PAC has paid Loyd more than $2,300 in "director fees."
It has also paid $15,000 to the D.C. area public-relations firm of Kirsten Fedewa. Fedewa returned a message left for CAPE PAC and said that she would pass questions on to Loyd or Nicholas Spears, who has been paid about $800 as a CAPE PAC director. Instead, CAPE PAC emailed Loyd's written statement. Fedewa declined to answer questions in a follow-up call, saying she is a consultant, not a spokeswoman for the group.
GOP activist Sarah Bowman of Iowa has also received more than $4,100 for "public-relations" services.
CAPE PAC has a strong Web presence, with nearly 100,000 followers on Twitter and 50,000 on Facebook. In a press release touting its work for Rep. Jeff Flake of Arizona, who is running for Senate, CAPE PAC claimed to have promoted a #VoteFlake hashtag on Twitter, posted a YouTube ad, and placed a "polling-place locator" on its website. The YouTube video had only 170 views as of the end of August; no one other than CAPE PAC's Twitter account appears to have used the #VoteFlake tag.
"We are troubled with its deceptive website and collection of donations," Flake spokesman Andrew Wilder said.
To aid Allen West, CAPE PAC stated in a July press release that it "secured airtime" that month. But a veteran media buyer and West's campaign could find no record of such an ad airing on TV.
For donors such as Jesse Knight of Salt Lake City, who contributed $250 to CAPE PAC, the biggest question is what is happening with his money.
"I thought I was donating it to Romney," Knight said. "That's what they portrayed." Knight accidentally clicked "donate" multiple times. CAPE PAC officials were accommodating in returning his duplicative donations, he said.
But it wasn't until a reporter contacted him that he learned he hadn't contributed to Romney at all. "I want 100 percent going to the guy I'm voting for," Knight said.
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