I have not spent nearly enough time on this issue, but given the centrality of Barack Obama’s amazing internet fundraising machine to everything he’s been able to accomplish in the primary and general elections, it’s been staggering to discover the extent to which his website has been deliberately designed to permit donations without the safeguards other campaigns and online businesses use. A lot of credit goes to Kenneth Timmerman of Newsmax (more here) for beginning the serious investigation of Obama’s sources of funds – Newsmax has run a lot stories over the years that have contributed to its devalued credibility as a source, but on this one it was dead-on, as subsequent investigations have confirmed. The Washington Post had a piece yesterday giving an overview of the various types of illegal fundraising that the structure of the website enables:
Sen. Barack Obama’s presidential campaign is allowing donors to use largely untraceable prepaid credit cards that could potentially be used to evade limits on how much an individual is legally allowed to give or to mask a contributor’s identity, campaign officials confirmed.
Faced with a huge influx of donations over the Internet, the campaign has also chosen not to use basic security measures to prevent potentially illegal or anonymous contributions from flowing into its accounts, aides acknowledged. Instead, the campaign is scrutinizing its books for improper donations after the money has been deposited.
+++
In recent weeks, questionable contributions have created headaches for Obama’s accounting team as it has tried to explain why campaign finance filings have included itemized donations from individuals using fake names, such as Es Esh or Doodad Pro. Those revelations prompted conservative bloggers to further test Obama’s finance vetting by giving money using the kind of prepaid cards that can be bought at a drugstore and cannot be traced to a donor.
The problem with such cards, campaign finance lawyers said, is that they make it impossible to tell whether foreign nationals, donors who have exceeded the limits, government contractors or others who are barred from giving to a federal campaign are making contributions.
+++
The Obama team’s disclosures came in response to questions from The Washington Post about the case of Mary T. Biskup, a retired insurance manager from Manchester, Mo., who turned up on Obama’s FEC reports as having donated $174,800 to the campaign. Contributors are limited to giving $2,300 for the general election.
Biskup, who had scores of Obama contributions attributed to her, said in an interview that she never donated to the candidate. “That’s an error,” she said. Moreover, she added, her credit card was never billed for the donations, meaning someone appropriated her name and made the contributions with another card.
If you are keeping score at home, that’s five different kinds of illegality that can come from reduced security on the web:
(1) Donations by foreign nationals
(2) Donations in excess of legal limits
(3) Identity theft/credit card fraud, resulting in donations of stolen funds
(4) Donations by domestic individuals not entitled to give money
(5) Donations by individuals whose identity may be embarrassing to the campaign
Moreover, it appears that – as has traditionally been true of voter fraud – it will be exceptionally difficult to follow the trail to apprehend the real donors, precisely because of the use of false or stolen identities. In fact, it may take some time to even get a handle on the scope of the problem.
How’d the campaign do this? RedState’s tech guru, Neil Stevens, walks through some of the technical changes that had to be made to the standard website credit-processing system, a subject that has produced something of a cottage industry in the right side of the blogosphere in the last week or two, and which I haven’t adequately covered in the links above – more here (with a roundup and explanation of methods, most notably disabling the Address Verification System), here, here, here, here. It’s quite clear not only that the campaign has not had adeqaute safeguards in place but that routine ones were deliberately disabled, and their vague response has basically been “trust us.” New politics, indeed.
Remember: Obama’s campaign is itself his only executive experience (he has claimed it as significant experience himself), and fundraising is the single most impressive thing his campaign has done, the core operation from which everything else flows. And at the core of his web-money machine (as Mark Steyn notes, the web has done two-thirds of Obama’s fundraising in September) is a deliberate effort to permit evasion of the law. Whether Obama personally authorized that or not, it is very much relevant in evaluating how he has conducted his campaign. After all, if he’s elected, a lot will happen on his watch without his express permission. And the people inside his campaign are likely to be the same ones holding jobs in his Administration.
Just an additional note. I did some testing on my own just to verify that the security settings on Obama’s donation page were turned off. Indeed, I was able to submit a small donation under a fictitious name and address. There was no input requirement for the three digit security code on the back of the card. What was very interesting to me was that ALL of the standard security settings were in force on the checkout page for Obama merchandise.
For the record, I also checked McCain’s donation page with identical parameters and my donation was rejected because of a non-matching address.
Normally I don’t care too much about political rough play but this is so blatant that the campaign has to be thinking they’ll get a pass for this cheating.
I don’t know if it’s good for America to elect an administration that gets by on getting passes from normal enforcement. But who will keep them in check? Will it be racist to expect them to play by the rules?
There are no rules if you are Democrat/Liberal!
First off, based on the evidence provided, I agree that the Obama team should make its donors public and crack down on the ease in which they can give.
As should the McCain team, which apparently received donations from people named “The Gun Shop” and “Adorable Manbat” (https://thecaucus.blogs.nytimes.com/2008/10/25/democrats-and-republicans-feud-over-donor-data/ )
Transparency is good and, despite there being no explicit rules requiring it for small donations, doing so would be a positive, proactive step that both campaigns should do in tandem. (Fat chance of that occurring, though).
HOWEVER….this story, along with the Acorn nonsense, smells to this Obama supporter like pre-emptive sour grapes by the Right in an effort to de-legitimize what increasingly looks like a strong Democrat win this Tuesday. I mean, really: What percentage of Obama’s war chest do truly believe is comprised of fraudulent donations? 1%? Do you really think that 1% of the 500 million+ Obama has raised would make any difference whatsoever?
Ryan, the Obama campaign must think it would make a difference, or else why would they take the proactive step of disabling security so as to allow the fraudulent donations?
Just did the math… 1% of $500 million is $5 million… which would just about cover the cost of his infomercials on Wednesday night.
It’s not a question of whether or not he derived significant benefit (which he clearly did) from ignoring even the most basic online security measures, it’s the fact that he’s not above reproach and it’s clear that this policy was not oversight but rather completely intentional.
I’m an Obama supporter (barely), and I do think that the ACORN business is overblown, but this online donation stuff reeks.
Oh boy Crank, you have out done yourself. You are keenly aware this plot would trip off every money laundering and anti-terror safeguard put in place since 9/11? But then again the Feds are just turning a blind eye to this level of fraud. Riiiight
Ryan, the Obama campaign must think it would make a difference, or else why would they take the proactive step of disabling security so as to allow the fraudulent donations?
And that’s exactly the point. It makes no sense to disable the AVS feature as the cost to implement is far less than the cost of catching the fraudulent transactions AFTER the fact, as they are claiming they are doing.
Furthermore, it’s laughable to believe that they’re actually scouring these transactions like they say they are. The purpose of the AVS disabling is to allow fraudulent transactions in the sense that donors can go above and beyond the $2300 maximum, plus it also allows for foreign donors as well.
The only fraudulent transactions the Obama campaign is returning are ones where the donor’s credit card was used without his or her knowledge and then complained when they received the charge.
However, people like George Soros donating thousands of dollars above the $2300 threshold under names such as Mickey Mouse with different addresses is of no concern to the Obama campaign.
Furthermore, returning these donations months down the road allows them to enjoy the float as well.
More transparency please!!
Ryan, if you read the article at your link you’ll come across this paragraph:
The McCain campaign Web site features a searchable database of all of its donors, including those who contribute $200 or less that the F.E.C. does not require campaigns to itemize on reports, which has earned plaudits from campaign finance watchdogs.
This type of searchable database is exactly what the Obama campaign is NOT providing.
Hi Ryan,
I wanted to reiterate my earlier point–when I did my little empirical test on Obama’s website, I found that the security settings were turned OFF for donations and turned ON for merchandise purchases. More evidence is needed, but my initial thought is that a) the Obama campaign has purposely turned off the donation security settings to let any and all fraudulent donations pass through without checking–but when it comes to sending out real merchandise, they don’t want to run the risk of fraudulent credit card chargebacks, and b) since the default settings were disabled, this is a calculated decision.
I don’t feel like testing this personally and it’s a bit late in the game, but another test would be to see if you can donate over the individual $2300 limit in small Hi Ryan,
I wanted to reiterate my earlier point–when I did my little empirical test on Obama’s website, I found that the security settings were turned OFF for donations and turned ON for merchandise purchases. More evidence is needed, but my initial thought is that a) the Obama campaign has purposely turned off the donation security settings to let any and all fraudulent donations pass through without checking–but when it comes to sending out real merchandise, they don’t want to run the risk of fraudulent credit card chargebacks, and b) since the default settings were disabled, this is a calculated decision.
I don’t feel like testing this personally and it’s a bit late in the game, but another test would be to see if you can donate over the individual $2300 limit in small <$200 donations. The campaign claims that they are checking on the backend of the transaction, but as a systems person this seems a specious argument--the accounting controls should be built into the donation page. Believe me, it does not give me any joy to report these findings.
Eek! Apologies for the multiple posts–I think our fiber optic cable across the Chesapeake Bay must be on the fritz again…
I’m sure they are checking -really hard- on the back end to make sure these contributions are legit.
I’d like to start this election over with new candidates. Someone make this happen.
I’ve got it – the perfect candidate:
-Someone who can run a large organization
-Someone who knows what it’s like to spend a lot of money on devalued assets
-Someone who is not an “insider”
-Someone who is not afraid to speak his mind, no matter how unpopular his views may be
Who am I describing?
Hank Steinbrenner.
I agree, let’s call this election off and ask for 2 new candidates.
I also heard that the Obama campaign is using mannequins to make it seem like 50,000 – 100,000 people are showing up at his events. And they have hijacked telephone lines so that pollsters think they are calling random people but in fact keep calling Obama supporters.
As someone who has built 2 different credit card interfaces for 2 different websites I feel like I’m a bit of an expert on this. And if I had done what the Obama campaign is doing not only would I have been fired for allowing massive fraud, its likely the company would lose the services of our credit card processor for not following COMMON BUSINESS PRACTICES. Nobody in the real world does this.
Moreover, if the Obama campaign is worried about little old ladies who don’t understand the InterWeb, it’s trivially easy to allow partial AVS matches so that you only need the street address *or* the zip code.
The fact that they aren’t is, in my mind, gross negligence if not criminal. Because let’s be honest here: EVERYONE knows how to put in their billing information correctly. The Obama campaign is not doing this to help people donate, they’re doing it to help themselves using the Chicago Way.