Human Events Blog

Obama campaign part of foreign donation scandal

The Government Accountability Institute (GAI) spent the better part of 2012 compiling a report on the possible penetration of foreign campaign donations into American political contests, including both the presidential race and congressional campaigns.  The primary subject of their investigation is online donations made by credit card.

Credit cards include a security code, usually three digits in length, known as the Card Verification Value (CVV) code.  If you’ve purchased anything online, you have almost certainly used this code – it’s the “number on the back of the card.”  These codes are regarded as a fairly effective anti-fraud measure, and are very widely used in electronic commerce – about 90 percent of online retail transactions require the buyer to enter their CVV code, and most charity organizations require it for credit card donations received by telephone or Internet.

The GAI discovered that 47.3 percent of congressional donation sites do not use the CVV code, or the other widespread security practice of checking the address provided by donors with the address on their credit card billing account.  It’s a problem with bipartisan dimensions, with one high-profile GOP example of unverified donations being the 2010 campaign website of Florida senator Marco Rubio.  (Rubio’s website has since implemented CVV verification for campaign donations.)

What makes this security lapse troubling is that it opens the door for illegal foreign campaign donations, made via credit card.  The absence of CVV and address verification protocols does not automatically prove the existence of a problem with such foreign donations, but it creates the potential for mischief, particularly when there is a great deal of foreign interest in a particular campaign.  Most campaign videos include a Web address for making donations – that’s one of the big reasons for distributing such videos.  When they receive wide distribution overseas, foreign donors flock to websites that don’t use verification systems to screen out illegal donations.

There is also the danger of automated systems making a high number of small individual “robo-donations” to pump big money into a campaign, in defiance of campaign finance regulations.  A system cranking out a tidal wave of donations of less than $50 apiece can largely escape scrutiny.

These verification systems are so widely used that their omission seems curious, to put it mildly.  This is particularly true in the case of Barack Obama’s re-election campaign.  Questions were raised about the possibility of illegal foreign donations in Obama’s 2008 race, so it strains credulity to think his 2012 campaign operation was unaware of the problem.  (While the media paid very little attention to the story, it became unofficially known as the “Doodad Pro” scandal to conservative bloggers, after one of the crazy fake names invented by Obama’s tsunami of suspicious small donors.  “Doodad Pro” ended up making something like 800 individual donations to the Obama campaign.)

Furthermore, the Obama website also sells campaign merchandise, such as mugs and T-shirts… and those transactions are protected with CVV.  But the actual campaign donations are not.

The other suspicious element of the Obama campaign finance picture is the existence of foreign “redirection sites” that route Internet traffic to Obama’s unsecured donation page.  One such site, Obama.com, has been “purchased by an Obama bundler in Shanghai, China with questionable business ties to state-run Chinese enterprises,” according to the GAI report.  Fully 68 percent of the traffic to Obama.com is of foreign origin.

An entire section of the full GAI report is dedicated to unraveling the mystery of this redirection site.  “The fact that Obama.com is not owned or managed by the Obama campaign is a mystery,” muses the GAI.  “Obama for America owns 392 different domain names bearing either the President’s name or the name of campaign initiatives.  It seems logical that Obama.com would be sought after by the campaign.”

But instead, it found its way into the hands of Robert Roche, an Illinois native who lives in Shanghai, and has developed strong commercial ties with the Communist Chinese government.  He still gets back to the United States often enough to have made nineteen visits to the White House since 2009, including a personal meeting with the President, and several meetings with the White House Chief of Staff.  When Chinese president Hu Jintao was honored with a White House dinner, Roche got to sit at the table with Bill and Hillary Clinton, Senator and onetime Democrat presidential candidate John Kerry, and former President Jimmy Carter.  The only other business executives sitting at the same table were General Electric CEO Jeff Immelt, and Coca-Cola CEO Muhtar Kent.

It’s not clear if Roche still controls Obama.com, since he sold the domain to anonymous buyers in 2010.  But there’s no mistaking the web of foreign links leading overseas visitors to Obama.com… and from there to Barack Obama’s unverified campaign contributions page, where donations can be made without the security that the very same web site applies to the purchase of coffee mugs.  The GAI relays numerous accounts of foreign nationals receiving fundraising letters from the Obama campaign.  Sometimes they repost the letters, complete with links pointing to that wide-open donation page, on their own blogs.

And Barack Obama’s campaign just reported a record-breaking haul of $181 million in September!  In fact, they made a point of boasting about how many of the individual donations were small, and therefore difficult to track.  The potential for campaign finance violations is not proof that it actually happened, but it all looks very suspicious, particularly given the Obama campaign’s history of accepting enigmatic donations.

The GAI has some good, common-sense recommendations for enhancing online donation security, most of which boil down to taking political donations as seriously as Amazon.com takes the purchase of beach novels and comic books.  As they point out, it’s really not difficult to verify the geographic location of donors by tracing their Internet addresses, and subjecting that information to audit by the FEC.

“Transparency is central to good government and accountability,” concludes the report, “and transparency in campaign financing is an essential part of ensuring that the government is run by candidates who are funded and elected by those they are meant to serve: American citizens.”

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