The $1 million upside for an RNC digital guru – Politico

This post was originally published on this site

The Republican Party’s top digital strategist in 2016 got a nearly $1 million payout from a firm he co-founded that collected online contributions to the party and its nominee, Donald Trump — despite earlier claims that the strategist had severed his ties to the company.

Gerrit Lansing’s joint roles, while legal, have raised questions of cronyism and profit-making at the Republican National Committee — and now sparked an internal review “to prevent a situation like this from happening again,” the RNC told POLITICO in a statement.

Story Continued Below

Republican operatives representing multiple GOP presidential and Senate campaigns said that Lansing pushed them to use the company he co-founded, Revv, to collect their online donations after he was hired for the top RNC job — and that he used the fact that the RNC was using his platform as a selling point. Lansing was subsequently named to a top role in Trump’s White House.

The controversy puts White House press secretary Sean Spicer in an awkward spot. As the RNC’s chief strategist, Spicer denied to POLITICO in mid-2016 that Lansing had any financial stake in Revv.

“He has zero connection to Revv,” Spicer said then. “He had to sever the ties.”

In fact, Lansing never did. He received a $909,000 payout from the company last year.

“The statement that was issued last year was based on information provided by Gerrit,” Spicer told POLITICO this week.

Revv allows for one-click donations across multiple campaigns, which makes it easier for donors to give once they’re in the company’s database. Revv makes its money by taking a small slice — typically 1 percent or less — of each contribution for itself.

Revv’s relationship with the RNC and Trump has given it an invaluable database of credit card information, vaulting it from a newcomer to a dominant player in the obscure-yet-lucrative corner of the digital campaign world.

Lansing’s stake is so valuable that he was unwilling to cut financial ties to the company in order to clear White House ethics requirements, which was one of the reasons he left the administration in February, after a month, according to two people familiar with the matter.

Lansing declined to comment on the circumstances of his departure and said that none of his $909,000 payment was derived from the RNC’s direct use of Revv but instead came from its other clients.

“I am extremely proud to have founded and personally financed an app that revolutionizes the way Republicans raise money online,” Lansing said in a written statement. “Revv helped solve one of the largest tech problems on the right and I look forward to continuing that work.”

POLITICO documented Lansing’s links through federal financial disclosures released last month, Federal Election Commission filings, email records and interviews with more than a dozen officials and strategists who interacted with Lansing, Revv and the RNC.

Ron Steslow, who served as digital director on the Carly Fiorina campaign, said Lansing came to his office to pitch Revv in May 2015, ten days after he was announced as the RNC’s chief digital officer. Lansing began working full-time at the RNC the following month.

“I asked Gerrit if the RNC was okay with him pitching a product he owns and running the business while holding a senior position there—and I noted how bad that looked,” Steslow recalled. “He said he had negotiated a deal and had permission, alluding to the fact the RNC had had difficulty finding qualified candidates for the role. So essentially their competitive advantage was the conflict of interest itself. I was really bothered by the audacity of that.”

In client pitches, Lansing’s Revv co-founder, who continued to run the business after Lansing started working for the RNC, would sometimes copy Lansing on messages to prospects, using his Revv.co email address, according to emails reviewed by POLITICO.

Those on the receiving end saw the inclusion of Lansing on the emails as a pressure tactic. “It was very blatant,” said one GOP strategist who received such an email but wished to remain anonymous to protect relationships in the close-knit political digital world.

Lansing said none of his Revv income came from the RNC account. The party’s joint fundraising committee with Trump’s campaign, as well as the presidential campaign itself, were Revv’s largest patrons. Together, they paid the company more than $2.5 million in the last six months of 2016, according to FEC records.

The RNC said in a statement that it “had an understanding Gerrit would not receive any compensation from Revv while also employed by the RNC and was unaware of any compensation he received until financial disclosures were publicly released. Gerrit remained a passive owner but was not to take outside income from Revv while employed by the RNC.”

Lansing said he received only a single payment from Revv, in December following the election. He also said the majority of the $909,000 payment consisted of repaying a personal loan to the company. The loan was valued at between $250,000 and $500,000, according to his financial disclosure, and he pocketed between $15,000 and $50,000 in interest.

The payout Lansing received from Revv in 2016 was more than four times his $220,000 salary as the chief digital officer of the Republican National Committee.

Lansing was on payroll at the RNC through the end of 2016, receiving a paycheck as late as December 21.

The RNC has now begun an internal inquiry: “The RNC is currently conducting a review and will implement new procedures for staff to prevent a situation like this from happening again.”

Federal disclosures outline the extent of Lansing’s connection to Revv dating to the firm’s founding in December 2014. Lansing is still the majority shareholder in Revv and estimated the value of his ownership share at between $1 million and $5 million in his filing.

In its statement, the RNC said Lansing was “not involved in negotiations to use the platform” at the party and that Revv “provided a product that filled a role the committee needed in order to compete with Democrat online fundraising.” (Trump himself has once weighed in personally on Lansing, tweeting in 2013, “I am hearing that @NRCC Digital Director @lansing is doing great work expanding and modernizing @GOP social media. Good – we need it.”)

Brad Parscale, Trump’s digital director, said that while he understood the potential perception of a conflict he was unaware Revv was owned in part Lansing when he selected it. Parscale said he picked Revv because it was “technologically superior.”

“I thought it was technologically advanced over all the other choices,” he said.

Yet others, most of whom would only speak anonymously, said it was clear that Revv leveraged its relationship with the RNC to scale up quickly.

“I asked what their plan was to grow that user base fast enough to be valuable in the current election cycle,” Steslow said of his meeting with Lansing and another Revv co-founder. “Their answer was their relationships at the RNC and NRCC —and that the RNC would be switching to Revv very soon, bringing all of those donors onto the platform.”

With Lansing installed atop the RNC’s digital shop, the RNC switched to Revv to process donations. After he became the Republican nominee, Trump dropped the vendor he had used during the primary, Targeted Victory, in favor of Revv. Targeted Victory declined to comment.

Revv makes its money by charging clients 4 percent of every donation, plus a 30-cent transaction fee, according to its website. Most of those funds go to pay credit-card fees to Visa or MasterCard, and a share goes to Stripe, the processing platform on which Revv is built.

Revv gets to keep the rest as profit. It is impossible to track exactly how much money Revv made in 2016 — it counts more than 130 clients, Lansing said— because most campaigns list payments to Stripe, not Revv.

An archived version of the company’s page on a startup website said it had credit-card information stored for 6,500 users a week before the Iowa caucuses. Now, Revv touts more than 100 times that: “In less than two years, Revv processed over $300,000,000 in donations from over 3 [million] donors with over 800,000 saved profiles,” its website says.

Ben Schreckinger contributed to this report.