Saturday, October 25, 2008

Harmless Error?

UPDATE below:

I reported yesterday that Obama disabled routine credit card processing safeguards and so took contributions without bothering with the back-of the-card security code or checking whether the name and address matched the cardholder. Wondering if Obama's campaign funding fraud matters? That's akin to asking whether campaign finance reform was right. Agreeing with MaxedOutMama, I'm against it. Ten days from now, McCain may well agree. But most lefties love it.

As a reminder, the kernel of Federal campaign finance law is caps on individual contributions. Transparency and enforcement is accomplished by public disclosure of donor identities and amounts. But though total funding is public, the law does not require campaigns to desaggregate individuals who give $200 or less in each election cycle. 2 U.S.C. § 434(b)(3). To prevent indirect avoidance of the cap, the law prohibits persons from making, and campaigns from knowingly accepting, contributions "in the name of another person." 2 U.S.C. § 441f.

Were Obama's alias contributions merely de minimis, it might not matter. But, as Pajamas Media's Donald Kent Douglas reports:
It turns out that half of Obama’s haul in 2008 has come in contributions of $200 dollars or less. These small donations do not require public disclosure under FEC guidelines, and the Obama campaign refuses to make public its list of contributors. Obama earlier announced he’d accept public financing if the GOP nominee did the same (and then, of course, broke his pledge in June after realizing he’d far surpass previous fundraising records). So there’s a pattern. By keeping his donor list secret now, the Illinois senator has heightened speculation of financial impropriety. Not only can Obama’s inside operatives organize massive bundling operations outside the law, there are no safeguards against the new "fat cat" contributors who bundle their own cash. Hillary Clinton’s Norman Hsu scandal from late-2007 points to the kind of abuses possible under the current regime.
Conclusion: It seems clear the Democratic Presidential campaign intentionally opened the floodgates for fraud. Were the fake-name contributions limited to crazies and curious Republicans, that might not matter. But the Democrats raised over $300 million from sources they did not have to identify and thus could be evading the individual limit. We don't know whether fraud was common--but the suspicion attaching to half of Obama's funding is hardly harmless. Making the recent fall in contributions suspicious.

Apparently, ACORN did "'minimal to non-existent' checking to make sure voter registrations were authentic despite claims otherwise." Obama's not ACORN--but his campaign acted similarly.

Obama promised that lobbyists "have not funded my campaign." Question: How would he know?


Sunday's Washington Post picks up the story:
Sen. Barack Obama's record-breaking $150 million fundraising performance in September has for the first time prompted questions about whether presidential candidates should be permitted to collect huge sums of money through faceless credit card transactions over the Internet.

Lawyers for both the Republican and Democratic parties have asked the Federal Election Commission to examine the issue, pointing to dozens of examples of what they say are lax screening procedures by the presidential campaigns that permitted donors using false names or stolen credit cards to make contributions.

"There is so much money coming in and yet very little ability to say with certainty that you know who is giving it," said Sean Cairncross, the Republican National Committee's chief counsel.

While the potentially fraudulent or excessive contributions represent about 1 percent of Obama's staggering haul, the security challenge is one of several major campaign-finance-related questions raised by the Democrat's fundraising juggernaut.

Concerns about anonymous donations seeping into the campaign began to surface last month, mainly on conservative blogs. Some bloggers described their own attempts to display the flaws in Obama's fundraising program, donating under such obviously phony names as Osama bin Laden and Saddam Hussein, and reported that the credit card transactions were permitted. . .

But clearly invented names have been used often enough to provoke an outcry from Republican critics. Donors to the Obama campaign using false names such as Doodad Pro and Good Will gave $17,375 through 1,000 separate donations, with no sign that they immediately tripped alarms at the campaign. Of more concern, Cairncross said, are reports that the campaign permitted money from 123 foreign nationals to enter its accounts.
I presume that the "1 percent" number represents obvious phony names or foreign addresses. Question: how much of Obama's haul came from fraudulent, but plausible-sounding, names?


A Clinton-appointed Federal Judge seemingly intentionally made multiple contributions under the $200 limit on disclosure disaggregation to evade Federal law:
Utah's chief federal judge violated judicial rules by contributing to Barack Obama's presidential campaign.

Judge Tena Campbell, a President Clinton appointee, donated $100 to the Democratic candidate on Aug. 28, 2007, according to campaign disclosures filed with the Federal Election Commission.

The disclosure lists Campbell's profession as "lawyer" and her employer the "govtt." The address listed on the contribution is Campbell's court chambers.

It wasn't her only donation. Campbell contributed multiple times for a total of $300, but only her last donation was made public. Campaigns are not required to release the names of contributors until they donate more than $200.

The Obama campaign verified the donations and plans to return the money.
(via reader Josh A.)

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