Pro-Trump super PAC backed solely by bank executive used donations to fund Facebook conspiracy meme campaign

Key Points
  • A pro-Trump super PAC funded by conservative Texas bank executive Andrew Beal spends hundreds of thousands of dollars on a Facebook meme campaign during the 2016 presidential election.
  • While it is not illegal for super PACs to dedicate their finances to similar trolling campaigns, ethics experts warn that similar efforts are ongoing in the buildup to the 2020 election.
David Muir | DigitalVision | Getty Images

The owner of a pro-Trump super PAC funded solely by billionaire bank executive and poker player Andrew Beal used more than $300,000 in donations to finance a conspiracy-theory-driven Facebook meme campaign to support Donald Trump during the 2016 campaign.

That year, Beal contributed $350,000 to RallyPAC, which was founded and managed by Jake Hoffman, according to Federal Election Commission Records. Most of those donations were funneled toward an obscure media advisory firm called Rally Forge LLC for the purpose of what was only described at the time as "social media."

The owner of the firm is the same Jake Hoffman who ran RallyPAC. CNBC verified that he owned both organizations by matching the address on the PAC's initial FEC registration form to Hoffman's business address in Queen Creek, Arizona. His name appears on both the PAC's forms as its treasurer and as the statutory agent for vendor Rally Forge. Hoffman's LinkedIn account shows he is the president and CEO of the media consulting business.

The PAC made four payments totaling $316,000 to Hoffman's company. He confirmed to CNBC that he then put some of his firm's content on a Facebook channel titled "I Love My Country."

The material posted on the site — during the period from the first payment to Rally Forge in September 2016 into the first week of November — includes right-wing memes that touched on a wide range of conspiratorial talking points against the Democratic nominee in 2016, Hillary Clinton. The memes quoted Trump's accusations that Clinton had been controlled by Wall Street executives and also compared her email scandal to the secret recordings made by disgraced President Richard Nixon in the 1970s.

Hoffman said that his social media campaign reached millions of voters in the climactic months of the 2016 presidential election.

"The digital creative my firm produced was delivered through channels like 'I Love My Country' and reached tens of millions of people in the final weeks of the 2016 election," Hoffman said. "RallyPAC, in collaboration with Rally Forge LLC, ran the most impactful digital operation in 2016 with little resources, given the historic levels of spending by both Democrats and Republicans alike."

CNBC couldn't verify Hoffman's claims about the posts reaching that many people. The "I Love My Country" page had more than 120,000 followers as of Tuesday.

Hoffman did not answer follow-up requests for information about who works for him and to show specific examples of his own work. Rally Forge's website says it "only takes on clients that we believe in" and "we only work with those that fight for truth." According to a video recording posted on his Twitter account, he attended Trump's inaugural and is pictured with Rep. Andy Biggs, R-Ariz.

A Facebook representative did not return a request for comment.

Beal, the super PAC's sole donor, declined to comment through a representative. However, people close to Beal expressed concern about how his money was being used and questioned whether the PAC was a scam. The people spoke on the condition of anonymity.

"I have a personal beef with scam PACs, this possibly being one of them. It really pisses me off to see this," said one of the Beal associates. This person added that Beal does not recall his motivation for writing checks to Hoffman's PAC three years ago, nor does he remember speaking with Hoffman during the campaign. Beal, according to this person, has not heard from him since Trump's election.

Beal is the founder and chairman of Texas-based Beal Bank. Forbes ranks him as having a net worth of $9 billion. He is also a household name among poker fans, as he has taken on some of the world's top players. He created his own pro-Trump super PAC, called Save America From Its Government, during the last presidential election. He spent over $3 million funding it. Beal also acted as an economic policy advisor to Trump's campaign.

Beal is listed as Daniel Beal on FEC filings. He is known as Andrew, which is his middle name.

The revelations about Hoffman come a year after Facebook deleted hundreds of U.S. accounts that peddled fake news to voters during the 2016 election.

"The people behind the activity also post the same click bait posts in dozens of Facebook Groups, often hundreds of times in a short period, to drum up traffic for their websites," Facebook announced at the time.

Hoffman's company also has done work for the nonprofit right-wing organization Turning Point USA, according to Turning Point's latest tax filing, which covers a year from June 2016 through June 2017. The organization, founded by staunch Trump supporter Charlie Kirk, contracted Rally Forge for media and advertising services, the filing shows.

The "I Love My Country" page has dozens of memes highlighting comments Kirk has made about government overreach while blasting Democrats for having what they describe as a "liberal agenda." The page's most recent post claims Planned Parenthood is an "abortion factory" and "it's killing innocent children."

The site has a video section with clips featuring titles such as "Socialism is Slavery of all to All" and "Victimhood is all about Power."

While it is not illegal for super PACs to dedicate their finances to such trolling campaigns, ethics experts warn that similar campaigns are ongoing in the buildup to the 2020 election — particularly as right-wing groups look to undermine Democrats who could potentially challenge Trump.

"This is a very active social media with these people trying to tell Democratic activists who to pick and not to pick," said Richard Painter, who served as chief ethics lawyer in President George W. Bush's administration. "The PACs are probably paying for that. It isn't just bloggers at home."

Painter cited social media attacks against former Vice President Joe Biden, who has not declared whether he will run, and Sen. Amy Klobuchar. Biden is currently embroiled in a controversy, with two women claiming they felt uncomfortable when he touched them without their permission. Klobuchar has been accused of having a bad temper and treating her staff poorly.

Painter said Hoffman likely created the super PAC to line his own pockets as well as to help Trump.

"Super PACs are a way to make money, and this guy has a huge incentive to do this. There's a lack of a system administering it, and that leads to self-dealing," he added.

Facebook itself explained that fake news accounts and postings are often created for financial benefit.

"These networks increasingly use sensational political content — regardless of its political slant — to build an audience and drive traffic to their websites, earning money for every visitor to the site," Facebook said last year.