Elections

Published — February 21, 2020

‘Scam PAC’ treasurer sentenced to federal prison

A Scales of Justice statue. (AP )

Introduction

The Center for Public Integrity is a nonprofit newsroom that investigates betrayals of public trust. Sign up to receive our stories.

ALEXANDRIA, Va. — A federal judge today sentenced political operative Scott B. Mackenzie to 12 months and one day in prison for making false statements to the Federal Election Commission.

Mackenzie — one of Washington’s most prolific and controversial political fundraisers — has served as treasurer of more than 50 federal political action committees. At least a dozen of these purported to raise money for political and social causes, but they spent most of the money they raise from unsuspecting donors on fundraising, salaries and overhead.

Mackenzie said after the hearing Friday morning in Alexandria he is done with politics after a career spanning more than three decades.

“I just want to fade away,” Mackenzie told the Center for Public Integrity. His attorney, Andrea Moseley, declined further comment.

Political fundraiser Scott Mackenzie’s biography as seen on now-defunct website. (Screenshot)

Federal District Judge Liam O’Grady also sentenced Mackenzie to two years of probation after he completes his prison sentence in Cumberland, Maryland. Mackenzie must pay $172,200 in restitution.

Brett Kappel, a campaign finance lawyer at the law firm Akerman, said Friday’s decision is “a historic campaign finance prosecution” — the first time he’s aware a professional PAC accountant has been sentenced to prison for filing false reports with the FEC.

“If the Justice Department was seeking to send a message to others tempted to get into the ‘scam PAC’ game, that message came through loud and clear,” Kappel said. “These are not victimless crimes and people will go to prison for them.”

Proliferation of ‘scam PACs’

Mackenzie is the latest treasurer of so-called “scam PACs” to be sentenced to prison for misleading federal regulators and donors.

Mackenzie, a resident of Arlington, Virginia, pleaded guilty in October to one felony count of making a false statement to the FEC. Prosecutors alleged Mackenzie submitted “a number” of false and fraudulent statements from 2011 to 2018 on behalf of two PACs: Conservative StrikeForce and Conservative Majority Fund. 

One of Conservative StrikeForce’s leaders, Kelley Rogers, pleaded guilty to wire fraud in 2019 in connection with his work with the PAC. 

During Friday’s hearing, Moseley tried to distance Mackenzie from Rogers and the “sophisticated” scheme prosecutors alleged they used to mislead donors. She argued for leniency. 

“Rogers was the mastermind,” Moseley told the judge. “This case, I submit to you, is far overreaching.”

Prosecutors said Mackenzie’s actions were “deliberate and calculated” and Rogers’ “scheme” wouldn’t have worked without his extensive knowledge of FEC regulations. Assistant U.S. Attorney Kimberly Pedersen asked O’Grady for a lengthier sentence to send a message to the treasurers of so-called “scam PACs,” which she says are proliferating and pose a “very real, menacing threat to our society.” 

A Center for Public Integrity analysis shows that the number of PACs that spend most of their money on fundraising and overhead is sharply on the rise.

During the last two decades, the United States saw a significant spike in the number of PACs that raise most of their money from small-dollar donors before plowing much of it back into salaries, administrative costs and raising more cash, according to a Center for Public Integrity analysis of more than 68.7 million campaign finance records compiled by the Center for Responsive Politics.

Mackenzie was among the first to run PACs that were fundraising- and overhead-intensive — and he’s remained prolific well into 2019.

Of the dozens of PACs for which Mackenzie served as treasurer, 12 raised the majority of funds from individuals giving less than $200 and spent most of that money on fundraising, wages and administration. 

Those 12 PACs raised and spent $46 million from 2002 to 2018. About 68 percent went to fundraising, wages or administration.

Mackenzie’s PACs — the Conservative Majority Fund, the Tea Party Majority Fund, the Virgin Islands GOP political committee and the committees of long shot Republican candidates, among them — are part of a growing trend in politics.

“Scam PACs have proliferated in recent years, and it is about time there is accountability for operatives who rip off well-intentioned small dollar donors who are trying to engage in the political process,” said Brendan Fischer, director of federal reform for the nonpartisan Campaign Legal Center. “That being said, Scott Mackenzie’s conduct was egregious: there is still a compelling need for Congress to pass legislation to prevent scam PACs.

A history of controversy

Some conservatives have long criticized Mackenzie and his political practices, such as representing PACs that raise money from donors but spend little of it on the causes the PACs champion.

Among them: Republican Ken Cuccinelli, the former Virginia gubernatorial candidate who today serves as President Donald Trump’s acting director of U.S. Citizenship and Immigration Services.

In 2014, Cuccinelli’s gubernatorial campaign sued Mackenzie, some of his associates and the Conservative StrikeForce PAC for propagating a “national fundraising scam,” eventually reaching a $85,000 settlement

Mackenzie has ties to direct mail companies that have raked in cash from donors. Since 2004, those companies collected millions from political committees for which Mackenzie served as treasurer.

He was an employee of BMW Direct Inc., and one of its spinoffs, Base Connect Inc. Mackenzie is not listed as an employee of Base Connect’s spinoff, Forthright Strategies.

Over the years, the FEC has repeatedly cited Mackenzie and PACs he’s worked with for violating federal campaign finance laws. Penalties typically came in the form of modest civil fines.

For example, Mackenzie and the Conservative Majority Fund in 2016 agreed to pay a $3,500 fine stemming from various campaign money disclosure errors.

Also in 2016, Afghanistan and Iraq Veterans for Congress PAC agreed to pay a $5,850 fine for failing to file accurate campaign finance disclosures. Mackenzie served as the PAC’s treasurer when the FEC first began investigating the group.

But most recently, in August, Mackenzie and the Tea Party Majority Fund agreed to pay a much larger penalty — a $100,000 fine — for numerous campaign finance reporting errors and failures that violated federal law.

The Tea Party Majority Fund has spent millions of dollars on services from telemarketer InfoCision, which itself has run afoul of federal regulators, paying a $250,000 fine from the Federal Trade Commission in 2018. 

Mackenzie also served for a time as treasurer for a PAC and super PAC formed in 2013 by former National Security Adviser John Bolton, which later faced questions for its work with disgraced data company Cambridge Analytica.

Former Interior Secretary Ryan Zinke came under fire in 2017 for directing money to companies associated with Mackenzie. 

Mackenzie got his start in politics in 1979 when he joined Ronald Reagan’s presidential campaign in Los Angeles as deputy treasurer. He moved to Washington, D.C., in 1980 and remained active in Republican politics.

Read more in Money and Democracy

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