Fraud Concerns With Overseas Campaign Donations

Campaign finance experts worry online donations make oversight difficult.


August 12, 2008— -- There's more money reaching presidential campaign coffers from Americans overseas this election cycle than any previous one but some campaign finance experts warn it may be impossible to ensure no foreigners are donating to the election funds. While both campaigns say they rigorously vet donations, experts say that the large number of donations, particularly those through the Internet, opens the doors for fraud.

"This is obviously a concern," said Larry Noble, a former FEC general counsel. "There is a limit, frankly, to what they [the campaigns] can do."

Already, Democratic presidential hopeful Barack Obama has received $2.8 million in money donated from Americans abroad, in U.S. territories or military bases – more than what both President Bush and Sen. John Kerry (D-Mass.) raised combined during the 2004 presidential cycle, according to Federal Election Commission records through June, the most recently available.

John McCain has brought in about $380,000, through the same period, the records show.

Although the amount of money raised from abroad is small compared with the candidates' overall war chests, both presidential hopefuls have returned money to individuals who were foreigners.

The McCain campaign recently sent back a $2,000 donation from a donor who an internal investigation revealed was a foreigner.

And the Obama camp returned more than $33,000 in money given to the campaign between Sept. 20 and Dec. 6 last year from three Palestinian brothers living in Gaza, none of whom was a U.S. citizen. The three had made 97 attempts to purchase Obama merchandise from the online store. Only 32 were successful but the failed attempts raised a red flag in the campaign system.

The donations had initially slipped through the system because the three had listed their state of residence as "GA", the common abbreviation for Georgia. The Obama campaign returned final $2,500 of that donation last week.

But both campaigns say they haven't found large numbers of foreigners giving to the candidates and say they have adequate protections to ferret out problematic donors.

"We're taking every available step to ensure that every donation accepted by the campaign is from a US citizen," said Ben LaBolt, spokesperson for the Obama campaign.

Accepting donations from foreigners is against FEC rules, but there is little direct oversight from the agency. Instead, checking donations is left up to the campaign, which is only required to look into donations if certain red flags come up – such as use of a foreign address, bank or passport. If the campaign checks the information or obtains a U.S. passport number, then campaigns aren't liable for any illegal foreign donations. The only exception is if the campaign had actual knowledge the donations were illegal.

For instance, both campaigns also require that donors giving online to attest that they are U.S. citizens and that organizers at foreign fundraisers collect passport numbers from all donors.

The Obama campaign requires all donors from abroad give money through a special "American Abroad" page that forces donors enter a passport number to process a request. The campaign also said that it has now barred individuals overseas from purchasing items in the online store, where the three Palestinian men had given.

The McCain campaign does not require passport numbers for online donations but spokesperson Tucker Bounds said, "We have been very diligent about the integrity of our donations."

Neither campaign has made a huge effort to fundraise abroad. McCain has had three fundraisers in London, one he personally attended, one his wife, Cindy, personally attended and a third that John McCain attended on a teleconference, according to the campaign.

Barack Obama has not attended any fundraisers abroad, although his wife, Michelle, spent a day in London fundraising. The Obama campaign has sent other surrogates to fundraisers abroad, including Democratic National Committee Chair Howard Dean in London, New Mexico Gov. Bill Richardson in Madrid, and former Secretary of the Navy Richard Danzig in Paris, according to the campaign.

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