[Vision2020] Obama Accepting Untraceable Donations

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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.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/28/AR2008102803413_pf.html