A conservative political watchdog group is raising the prospect of an “illegal-donor loophole” in the nation’s campaign finance system, and suggesting the grassroots-donor-heavy Obama Campaign may stand to benefit.
In a 109-page report published at a new website CampaignFundingRisks.com, the Government Accountability Institute alleges the current online campaign contribution system lacks accountability and transparency, making it highly susceptible to foreign and fraudulent gifts.
The report’s focus is President Obama’s re-election campaign, which has collected historic sums from online fundraising, relying predominantly on donors who give in small-dollar increments.
Obama and Democrats announced last week that they raised $181 million in September – more than any incumbent president has raised for his re-election in a single month. The funds poured in through more than 1.8 million transactions, 98 percent of which were in increments of $250 or less, officials said.
“Campaigns that aggressively raise money online are soliciting donations from people around the world–whether they intend to or not,” writes GAI president Peter Schweizer and Newsweek reporter Peter J. Boyer in a post on the report at Newsweek/Daily Beast.
The report suggests the Obama campaign is uninhibited in its foreign solicitations, lacks rigorous screening for donors’ citizenship and fails to impose basic e-commerce safeguards, such as requiring donors to provide the Card Verification Value (the security code on the back of a card) to prove a donor is in physical possession of the card.
Under U.S. federal election law, contributions from foreign nationals to presidential campaigns are forbidden.
“People around the world are being asked for donations by the campaigns themselves, simply because they signed up for information on campaign websites,” Schweizer and Boyer write. “The problem: candidate webpages don’t ask visitors from foreign IP addresses to enter a military ID or passport number. Instead, the websites use auto-responder email systems that simply gather up email addresses and automatically spit out solicitations.”
The authors claim the current system is also subject to “robo-donoations”- computer-driven giving to a campaign through various aliases to evade contribution limits and avoid detection. The Federal Election Commission conducts little to no oversight of internet fundraising practices, leaving each campaign to police itself, the report claims.
Schweizer and Boyer present no hard data that show Obama’s 2012 campaign has benefited from widespread foreign or fraudulent donations. They also acknowledge that Republican nominee Mitt Romney could theoretically take advantage of the “loopholes,” as well. The report only purports to illustrate that the possibility for fraud exists.
Conservative blogger Erick Erickson of RedState.com, however, tested out the Obama campaign’s online contribution system and documented the apparent ease with which someone with a foreign mailing address and fraudulent passport number could make a gift via credit card. Erickson concedes, however, that his contribution was ultimately rejected by his bank.
In a post on its “Truth Team” blog, the Obama campaign called the GAI report and its insinuations politically-motivated, citing a history of right-leaning political activism by authors Schweizer and the Government Accountability Institute.
The blog states that “Obama for America” does not accept contributions from foreign nationals and takes voluntary steps to ensure that the campaign is in compliance with federal election law. At the campaign’s Chicago headquarters, staff manually review each transaction flagged as potentially fraudulent by their third-party credit card processing service, officials wrote.
The president’s campaign also requires a copy of a valid passport from any apparently eligible contributor with a foreign mailing address or from a contributor making a gift from a foreign IP address, according to the post. “If they do not offer one in a timely manner, the donation is returned,” the campaign says.
“While no campaign can control who visits their websites, OFA is in no way directing solicitations to foreign nationals nor knowingly seeking foreign contributions—that is the legal standard,” the Obama camp says on its blog.