A disabled veteran and former fake news huckster has squeezed $17 million out of American conservatives with a promise to “fund the wall.” The press has covered the crowdfunding campaign, and even dug a bit into his shady prior endeavors. But I can’t find a single report really analyzing how the man behind this campaign, Brian Kolfage, is benefiting personally. He’s given an audience of disaffected conservatives, frustrated by Trump’s failures, a way to buy the feeling of a successful movement. It’s an unscrupulous way to monetize irrationality and xenophobia, and it’s going to succeed even as the campaign to fund the wall fails.
(Kolfage has sued people in the past for criticizing him. With that in mind, I’ll point out the obvious: this piece shares previously reported facts about Kolfage and his campaign, as well as my opinions based on those facts. For example, the numbers below come from the linked public sources. My conclusion based on those reported facts, that Kolfage is an unscrupulous huckster, is purely my opinion. I do not have any reason to believe that he has broken any laws.)
“Compound interest is the greatest force in the universe.” –unknown, but probably not Einstein.
As of right now, Kolfage’s campaign has raised over $17.5 million that absolutely will not be used to build “the wall.” By law, cash donations to the government go into the general fund, and donors can’t control how it’s used. Kolfage is relatively honest about that, but his proposed solution is obviously not going to work. He is asking Congress to change the law and allow him to earmark the money, but that didn’t go anywhere even under the Republican majority—now that Congress is in recess, the government is shut down, and the Democrats are on the doorstep, it’s futile. Kolfage is putting on a show for his donors, acting out the role of an activist creating a solution, but at the end of the day the money he’s raised is going to sit until it has to be refunded or is redirected to a charity.
Of course, money never just sits idly. It earns interest, and a $17 million pot can easily bring in tens of thousands of dollars a month. It’s not clear who’s collecting that money. Probably it’s GoFundMe, which last week told reporters, “The funds are safely held by our payment processor and we will work with the organizer to transfer funds to an appropriate recipient or refund all donors.” On the other hand, Kolfage’s campaign claims, “We will hold all funds and not release a single penny until we have all legal aspects covered to ensure our money goes only to the wall.” And the GoFundMe donation page itself explicitly says that Kolfage “will receive your donation directly.” I’ve asked Kolfage what’s happening with the money, via email and his Facebook page, but he has not responded.
If GoFundMe releases the money to Kolfage, he could easily get rich off the interest alone. I can’t find any statements he’s made about how he’d use the interest, and he hasn’t responded to multiple requests for comment, so presumably he could simply pocket that money. If he just rolled the pot into 1-month treasuries, a safe investment that would let him disburse or refund the principal at short notice, he would still be earning roughly 2.3% interest. That’s over $30,000 a month. Assuming he held the money until the next election, because that would be the earliest he could reasonably expect the law to change, he would make well over half a million dollars.
What if GoFundMe hangs on to the money, though? If it can’t be withdrawn by an authorized recipient, in theory they will refund donations in 90 days. (I don’t know if Kolfage is an authorized recipient. Their earlier statement suggests that he’s not, but the donation page itself says that he’ll receive the money directly.) Even if they do, it looks like Kolfage is using the GoFundMe campaign to take in money personally, outside of their control. He’s using his GoFundMe campaign page to ask for donors to mail him checks directly, addressed to him personally and made out to “WeFund the Wall.”
I can’t find “WeFund the Wall” registered with the Colorado secretary of state or in the Colorado charities database, even just as a DBA. It’s possible this is just the label Kolfage is putting on the campaign, and that he’s collecting and depositing checks himself rather than organizing an actual nonprofit entity. That’s not illegal, as far as I know, but it leaves a bad taste in my mouth. Charities use corporate entities for many incredibly good and obvious reasons, and I don’t know why anyone would skip that step with a campaign this huge other than laziness or ignorance. Laziness is a weak excuse for such a massively successful fundraising effort, and it’s hard to believe that Kolfage is ignorant given that he’s a business owner with experience managing lucrative crowdfunding campaigns.
How much money has Kolfage taken in personal checks, outside of GoFundMe and its protections for donors? We don’t know. When is he going to refund it? We don’t know. Is he keeping detailed records? We don’t know. Will he have any records he is keeping audited? We don’t know. What’s he going to do with the interest he earns on that money? We don’t know.
Is Kolfage making money with this ugly black hole? Yes, that we know.
It’s the dark side of the attention economy.
Let’s assume GoFundMe’s procedures are ironclad and Kolfage can’t get his hands on the pot or the interest. He’s still benefitting from this campaign, including financially. He used to run a “Right Wing News” page, which Facebook recently took down as part of a crackdown on pages that were “using fake accounts… to drive traffic to their websites” or were simply “ad farms using Facebook to mislead people into thinking that they were forums for legitimate political debate.” He took the blow in stride, using it to make some quick cash. He used GoFundMe to launch a crowdfunding campaign, demanding cash to do “jump start the legal proceedings against Facebook.” He also redirects visitors to a separate site asking for money without making any promises about how he’ll spend it. He’s raised over $70,000 just through GoFundMe, and there’s no way of knowing what he’s pocketed with his independent solicitations.
And of course, attention is life for a huckster. Kolfage is milking it, hard. He’s become more of a right-wing celebrity than ever, with tens of thousands of followers and hundreds of thousands of donations. Most of them are small—the mean donation to the wall fund is $60, and the mode is probably $50—but there are a lot of them, and Kolfage is careful to make sure that his name and face are prominently attached to the campaign. He’ll be able to keep harvesting attention and money from that audience for a long, long time.
According to his Facebook page Kolfage is in DC right now to “meet with lawmakers and lawyers to get this wall funded!” A Congressional recess doesn’t seem like a good time to find lawmakers in DC, but he says he has a deal and that he’ll announce the details next week. I’m skeptical, but it hardly matters. Even if he refunded the donations tomorrow, Kolfage has already used the campaign to build a huge network of followers who will spend money to demonstrate their loyalty to Donald Trump and his agenda. As long as he doesn’t develop any scruples, Kolfage will have years to monetize their fear and anger. He’s going to make a fortune.