This sting-within-a-sting is surprisingly similar to what the Daily Telegraph pulled on the pro-Trump Great America PAC a few weeks ago — namely, testing whether operatives in a candidate’s orbit would be willing to accept money from foreign sources to influence an election. The specific issue in the Telegraph sting was using a 501(c)(4) group to launder Chinese money en route to the PAC, which is illegal. A Republican consultant allegedly proposed having the (fake) Chinese donor’s contribution sent to a firm he owned, ostensibly as payment for services rendered, at which point the money would be donated by the firm to two 501(c)(4) organizations and then the C4s would donate in turn to the Super PAC. C4s aren’t required to disclose their donors, which would have made it difficult to trace the money back from the PAC to the Chinese donor.
The Project Veritas sting involves fewer steps. A donor arranged to send $20,000 from a shell company organized in Belize to Americans United for Change, a left-wing 501(c)(4) that’s been at the center of the recent Project Veritas videos. There’s no suggestion of laundering, but the contribution is obviously designed to influence an election — and C4s aren’t supposed to accept foreign money for that purpose. They can take foreign contributions to fund civic “education,” but not for political activities. Although that loophole is fairly easily exploited:
For 501(c)(4) nonprofits, also known as “social welfare” organizations, which include some of the biggest 2012 spenders, there’s a big upside to banking foreign money that’s not for pure politics, according to Owens. Tax law says 501(c)(4)s can’t make politics their primary purpose, and so these groups carefully track their spending so that more goes toward ostensibly nonpolitical activities than toward politics. An injection of nonpolitical foreign cash, Owens says, frees up other American money for overtly political ads or mailers.
An infusion of $20,000 from a foreign donor can be earmarked for “education,” freeing up $19,999 in the C4s’ treasury that was donated by Americans for new political activities. In effect the foreign donor is paying for the politicking even though formally he’s paying for educational stuff. Although maybe Americans United for Change thought that shell game would be too cute if the FEC came sniffing around after watching the video below. As you’ll see, the $20,000 donation ended up being returned — but only after AUFC had figured out that it’d been stung.
Most of that comes in the first third of the video. The rest is devoted to watching Bob Creamer peddle influence in return for the contribution, including legal help for a (fake) rich Syrian who wanted to come to the United States. As Phil Kerpen notes, he seems awfully vague at times about whether he’s working for the Clinton campaign or for an outside group like Democracy Partners and AUFC. There are supposed to be strict lines of separation legally between those entities, aren’t there? Exit question: How many people did PV have working on these stings? It seems like a dozen at least.