[StBernard] Obama Accepting Untraceable Donations

Westley Annis westley at da-parish.com
Sat Nov 1 14:19:18 EDT 2008


Obama Accepting Untraceable Donations
Contributions Reviewed After Deposits

By Matthew Mosk
Washington Post Staff Writer
Wednesday, October 29, 2008; A02



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.

The Obama organization said its extensive review has ensured that the
campaign has refunded any improper contributions, and noted that Federal
Election Commission rules do not require front-end screening of donations.

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.

"They have opened the floodgates to all this money coming in," said Sean
Cairncross, chief counsel to the Republican National Committee. "I think
they've made the determination that whatever money they have to refund on
the back end doesn't outweigh the benefit of taking all this money upfront."

The Obama campaign has shattered presidential fundraising records, in part
by capitalizing on the ease of online giving. Of the $150 million the
senator from Illinois raised in September, nearly $100 million came in over
the Internet.

Lawyers for the Obama operation said yesterday that their "extensive
back-end review" has carefully scrubbed contributions to prevent illegal
money from entering the operation's war chest. "I'm pretty sure if I took my
error rate and matched it against any other campaign or comparable
nonprofit, you'd find we're doing very well," said Robert Bauer, a lawyer
for the campaign. "I have not seen the McCain compliance staff ascending to
heaven on a cloud."

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.

When asked whether the campaign takes steps to verify whether a donor's name
matches the name on the credit card used to make a payment, Obama's campaign
replied in an e-mail: "Name-matching is not a standard check conducted or
made available in the credit card processing industry. We believe Visa and
MasterCard do not even have the ability to do this.

"Instead, the campaign does a rigorous comprehensive analysis of online
contributions on the back end of the transaction to determine whether a
contribution is legitimate."

Juan Proaño, whose technology firm handled online contributions for John
Edwards's presidential primary campaign, and for John F. Kerry's
presidential campaign and the Democratic National Committee in 2004, said it
is possible to require donors' names and addresses to match those on their
credit card accounts. But, he said, some campaigns are reluctant to impose
that extra layer of security.

"Honestly, you want to have the least amount of hurdles in processing
contributions quickly," Proaño said.

Sen. John McCain's campaign has also had questionable donations slip
through.

Dan Pfeiffer, Obama's communication's director, said that "no organization
can fully insulate itself from these problems. The McCain campaign has
accepted contributions from fraudulent contributors like 'A for You,'
'Adorable Manabat,' 'The Gun Shop,' and 'Jesus II' and hundreds of anonymous
donors."

But R. Rebecca Donatelli, who handles online contributions for the McCain
operation and the RNC, said security measures have been standard in the GOP
nominee's fundraising efforts throughout the campaign. She said she was
"flabbergasted" to learn that the Obama campaign accepts prepaid cards.

"Yes, a gift card would go through the same process as a regular credit card
and be subject to our same back-end review," the Obama campaign said in its
response to questions about the use of such cards.

Campaign finance lawyers said there is a long history of debate within the
FEC about how to ensure that donors use their own credit cards.

Election lawyer Brett Kappel said the FEC has never grappled with the
question of cash cards. "The whole system is set up for them to accept the
payment, then determine whether it is legal or not. And if it's not, send it
back. That's what the statute requires," he said.




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