Texas Sues ActBlue for Deceptive Practices in Campaign Fundraising, Alleging Facilitation of Illegal Donations via Gift Cards and Prepaid Cards
The State of Texas filed an original petition on April 20, 2026, in the 96th Judicial District Court of Tarrant County against ActBlue LLC, seeking temporary and permanent injunctions along with civil penalties. The lawsuit accuses the Democratic-aligned fundraising platform of engaging in false, misleading, and deceptive acts under the Texas Deceptive Trade Practices Act (DTPA).
ActBlue processes small-dollar donations for Democratic campaigns and progressive causes, handling billions in contributions — including $1.78 billion in 2025 alone. The petition claims the company knowingly accepts payment methods like gift cards and prepaid debit cards that conceal donor identities, potentially enabling violations of federal and state election laws, such as bans on foreign national contributions and limits on donation amounts.
Key Allegations
Texas argues that ActBlue has misrepresented its fraud prevention measures to Congress and the public. In 2023–2024, the company assured lawmakers it had robust controls, including rejection of high-risk payment methods like gift cards, to prevent illegal contributions. Internal documents, however, reportedly showed warnings from counsel about risks of “knowing and willful” violations, including acceptance of funds from foreign nationals or in excess of legal limits.
Despite these assurances, ActBlue allegedly loosened controls, ignored fraud indicators, and resumed accepting gift cards and prepaid cards once public scrutiny subsided. The petition quotes internal concerns that such practices could open the door to election influence “from high-risk/sanctioned countries.”
Texas investigators conducted undercover tests in February 2026, successfully making small donations (e.g., $5) using physical gift cards on multiple dates. These transactions processed without flags or rejections, according to the filing.
The state contends that ActBlue shifts responsibility for compliance onto donors and recipient campaigns while profiting from high-volume, low-scrutiny transactions. This allegedly harms legitimate donors and campaigns by devaluing clean contributions and exposing recipients to potential legal risks under federal law (52 U.S.C. §§ 30121 et seq.) and Texas Election Code provisions.
Claims Under the Texas Deceptive Trade Practices Act
The petition brings five specific counts under Tex. Bus. & Com. Code § 17.46:
• Engaging in false, misleading, or deceptive acts in trade or commerce.
• Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of services.
• Representing that services have characteristics, benefits, or qualities they do not have.
• Advertising services with intent not to sell them as advertised.
• Failing to disclose known material information intended to induce transactions.
Supporting evidence cited includes congressional testimony, internal memos from firms like Covington & Burling and Dechert, screenshots of policy statements, and the declaration of investigator Rock Robinson (dated April 17, 2026).
Requested Relief
Texas is asking the court to:
• Issue temporary and permanent injunctions barring ActBlue from accepting campaign contributions via gift cards or prepaid debit cards.
• Impose civil penalties of up to $10,000 per DTPA violation.
• Award attorneys’ fees, litigation expenses, and costs.
• Grant any other equitable relief the court deems appropriate.
The filing emphasizes that the practices cause irreparable harm to the integrity of elections and the state’s ability to enforce campaign finance laws. Under the DTPA, injunctive relief can be granted in the public interest without a separate showing of imminent harm when statutory violations are established.
This case showcases ongoing tensions over online fundraising platforms and election integrity, particularly around anonymous or hard-to-trace small-dollar donations. ActBlue has previously defended its compliance systems in congressional hearings, maintaining that it follows applicable laws while facilitating grassroots participation.
The petition is brought by the Texas Attorney General’s Office in the name of the State of Texas and in the public interest. As of the filing date, no response from ActBlue has been detailed in public records.