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  • Writer's pictureThe San Juan Daily Star

How a record cash haul vanished for Senate republicans

President Joe Biden departs Marine One on the South Lawn of the White House, in Washington Aug. 29, 2022. One fund-raising scheme by the National Republican Senatorial Committee involved text messages that asked provocative questions, including “Should Biden resign?” A request for cash that followed did not reveal where the money was going.

By Shane Goldmacher

It was early 2021, and Sen. Rick Scott wanted to go big. The new chair of the Senate Republican campaign arm had a mind to modernize the place. One of his first decisions was to overhaul how the group raised money online.

Scott installed a new digital team, spearheaded by Donald Trump veterans, and greenlit an enormous wave of spending on digital ads — not to promote candidates but to discover more small contributors. Soon, the committee was smashing fundraising records. By the summer of 2021, Scott was boasting about “historic investments in digital fundraising that are already paying dividends.”

A year later, some of that braggadocio has vanished — along with most of the money.

The National Republican Senatorial Committee has long been a critical part of the party apparatus, recruiting candidates, supporting them with political infrastructure, designing campaign strategy and buying television ads.

By the end of July, the committee had collected a record $181.5 million — but had already spent more than 95% of what it had brought in. The Republican group entered August with just $23.2 million on hand, less than half of what the Senate Democratic committee had before the final intense phase of the midterm elections.

Now top Republicans are beginning to ask: Where did all the money go?

The answer, chiefly, is that Scott’s enormous gamble on finding new online donors has been a costly financial flop in 2022, according to a New York Times analysis of federal records and interviews with people briefed on the committee’s finances. Today, the NRSC is raising less than before Scott’s digital splurge.

Party leaders, including Sen. Mitch McConnell, are fretting aloud that Republicans could squander their shot at retaking the Senate in 2022, with money one factor, as some first-time candidates have struggled to gain traction. The NRSC was intended to be a party bulwark yet found itself recently canceling some TV ad reservations in key states.

The story of how the Senate GOP committee went from breaking financial records to breaking television reservations, told through interviews with more than two dozen Republican officials, actually begins with the rising revenues Scott bragged about last year.

The committee had squeezed donors with hyperaggressive new tactics. And all the money coming in obscured just how much the committee was spending advertising for donors. Then inflation sapped online giving for Republicans nationwide. And the money that had rolled in came at an ethical price.

One fundraising scheme used by the Senate committee, which has not previously been disclosed, involved sending an estimated millions of text messages that asked provocative questions — “Should Biden resign?” — followed by a request for cash: “Reply YES to donate.” Those who replied “YES” had their donation processed immediately, though the text did not reveal in advance where the money was going.

Privately, some Republicans complained the tactic was exploitative. WinRed, the party’s main donation-processing platform, recently stepped in and took the unusual step of blocking the committee from engaging in the practice, according to four people familiar with the matter.

The texts had been part of a concerted push that successfully juiced fundraising, though it used methods that experts say will eventually exhaust even the most loyal givers.

One internal NRSC budget document from earlier this year, obtained by the Times, shows that $23.3 million was poured into investments to find new donors between June 2021 and January 2022. In that time, the contributors the organization found gave $6.1 million — a more than $17 million deficit.

Scott declined an interview request. His staff vigorously denied financial struggles, said some of the canceled television ads had been rebooked, and argued the digital spending would prove wise in time.

“We made the investment. We’re glad we did it. It will benefit the NRSC and the party as a whole for cycles to come,” said Chris Hartline, a spokesperson for Scott and the committee.

Yet as Republican chances to retake the Senate have slipped, a full-blown case of finger-pointing has erupted across Washington, with Scott a prime target. His handling of the committee’s finances has become conflated with other critiques, especially a flawed field of Republicans who have found themselves outspent on television.

Scott’s please-all-sides decision to stay out of contested 2022 primaries has been second-guessed, including by McConnell. Scott’s detractors accuse him of transforming the NRSC into the “National Rick Scott Committee” — and a vehicle for his presidential ambitions.

“The spending wouldn’t matter if the polling numbers looked better,” said Liam Donovan, a Republican lobbyist and NRSC donor. “To the extent the red wave is receding, people look for someone to blame.”

The financial fortunes of the group alone will not sink Republican chances in November. A super political action committee aligned with McConnell has more than $160 million in television reservations booked after Labor Day.

Hartline dismissed those questioning the group’s digital spending as “disgruntled former staff and vendors.” He said the $28 million invested had tripled its file of email addresses and phone numbers and added 160,000 donors.

“Our goal is to build the biggest GOP digital file to help the party now and in the future,” he said. He declined to discuss the texting scheme.

Hartline said the Senate Democratic arm has more money because it had not yet spent significantly on television. Scott, he said, had strategically spent early, with nearly $30 million on ads aiding Republicans through July.

That sum, however, is actually less than the $37.4 million the GOP committee reported in independent expenditures for candidates as of the same date two years ago.

A Huge Online Outlay

For months last year, the National Republican Senatorial Committee was far and away the nation’s biggest online political advertiser, outspending every other party committee combined and pouring money into platforms like Google at levels almost unseen except in the fevered final days of 2020.

The sums were so breathtakingly large — peaking at more than $100,000 a day on Facebook and Google — that some concerned Democrats began to study the ads, fretting that somehow Republicans had unlocked a new sustainable way to raise money online.

They had not.

The Senate Republican bet had been this: By spending vast amounts early, the party could vacuum up contact information for millions of potential donors who could then give repeatedly over the coming months.

The internal budget document showed the shortcomings of the approach. The first month of outreach investment, June 2021, was projected to generate $3.2 million for the committee by November 2022. But the other $22 million in investments over the next seven months combined were projected to add up to a narrow net loss by Election Day.

Still, the document showed the digital department was asking for more: an additional $12 million in February and March. Hartline dismissed the document as a “potential draft budget.”

Not long after, the spending spigot was cut off. The committee went from being the biggest political spender on Facebook to being completely absent on it. No Facebook fundraising ads ran from April to late August, company records show.

Digital fundraising has dried up across the Republican spectrum in recent months, and the NRSC has been hit hard. Online donations to the committee plunged by 37% between the first and second quarters of this year. If not for $10 million in transfers from the Republican National Committee, the Senate arm would have spent more than it raised this cycle.

In the most recent six months that fundraising data is available, the NRSC in 2022 has raised $15 million less than during the same six-month period in 2020.

The tight finances stand in contrast to the House Republican campaign arm, which entered August with $110 million — spending 57% of the money it had collected, compared with the Senate committee’s 95%.

‘Reply YES to Donate’

The unsolicited text messages seeking contributions to the Senate Republican committee began buzzing phones in mid-2021 — often without identifying whom they were coming from.

“This is URGENT!” read one such flurry of messages. “Do YOU support Trump?”

Then came the key line: “Reply YES to donate $25.”

Those who wrote back “YES” automatically had a $25 donation to the National Republican Senatorial Committee charged to their credit cards, though the initial message said nothing about the destination, and there were no links to click to find out. The committee used a tool that paired donors’ phone numbers with credit card information saved on WinRed.

The Times documented the practice through interviews with people who had received such texts and made donations, Republican officials familiar with the tactic and a review of thousands of messages flagged by the spam-blocking app RoboKiller.

It is not clear how many people donated in response to the texts. But demands for NRSC refunds, a key metric of donor dissatisfaction, have soared, with the amount returned to donors quadrupling, from less than $2 million in 2020 to more than $8 million now.

The Senate Republican refund rate equals 6.6% of direct individual donations this cycle; the Senate Democratic committee’s rate is 1.67%.

WinRed declined to comment on stopping the Senate committee from using the tactic. The committee is still using the “reply YES to donate” function in texts, but it is now disclosing itself as the sender of the messages.

All told, the Senate committee has poured more than $26 million into expenses marked as texting-related since 2021, part of a digital budget that ballooned so quickly that Republicans, even inside the committee, are talking about a financial autopsy to examine whether there have been potential conflicts of interest.

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