Mimsy Were the Borogoves

Editorials: Where I rant to the wall about politics. And sometimes the wall rants back.

Obama campaign skirts campaign finance law

Jerry Stratton, October 25, 2008

Heh. When I first read on the Ace of Spades that the Obama campaign had turned off basic security on their donations page, I figured their web site—and a few other blogs—would be the last I’d hear about it. Given how far in the tank for the Obama campaign places like the New York Times are, they would never write about it.

I was wrong. They wrote about it. They wrote about it to whitewash it. Not just silent, but complicit.

To be fair to the Obama campaign, officials there have said much of their checking for fraud occurs after the transactions have already occurred. When they find something wrong, they then refund the amount.

That misses the entire problem with the scandal. The reason they have to check afterwards is that they’ve turned off the automatic verification that everyone else (including the McCain campaign) uses. The Obama campaign is much less likely to find something wrong if all they do is scan donations later. They don’t know what the donor’s real name and address is; only the credit card company does. So all they can check for are obvious problems like “Doodad Pro” or “Saddam Hussein” giving them money.

When you give your credit card numbers to a business, you are also expected to give one or more of a signature, a name, a street address, and a zip code. When fraudulent use is easy, such as on-line, you’re expected to give as many of the latter as possible. The business is supposed to send your name, address, and zip code off to the verification service; it sends back a code depending on how many items matched (American Express checks name, address, and zip code; Visa/MasterCard checks the address and zip code).

What it doesn’t do is send back actual identifying information about the customer, for very valid privacy reasons. Which means that without using the address verification system, there is no way to follow campaign finance laws.

Mark Steyn writes about his own experiences accepting credit cards:

If they’d really wanted “to be fair”, the Times would have pointed out that, in order to accept donations from “Della Ware” and “Saddam Hussein” et al, the Obama website had, intentionally, to disable all the default security settings on their credit-card processing.

I took a look at the inner sanctum of my (alas, far more modest) online retail operation this afternoon and, in order to permit fraud as easy as that which the Obama campaign is facilitating, you have to uncheck every single box on the AVS system, each one of which makes it very explicit just what you’re doing—ie, accepting transactions with no “billing address”, no “street address” match, no “zip code” match, with a bank “of non-US origin” (I’ve got nothing against those, but a US campaign fundraiser surely should be wary), etc.

When you’ve disabled the whole lot one step at a time, then you’ve got a system tailor-made for fake names and bogus addresses.

The Obama campaign might not be breaking the law by accepting fraudulent donations. According to FEC spokesperson Robert Biersack, “Currently, there is no requirement to track donations by credit card numbers.” Nick Shapiro of the Obama campaign confirms that they don’t keep credit card numbers for verification purposes.

And that’s a good thing; we don’t want businesses to store our credit card numbers; it increases the risk that our credit card numbers will be hacked. Combined with the campaign’s disabling of automatic verification, though, this does mean that illegal donations to the Obama campaign are virtually if not completely undetectable.

Unenforceable laws penalize honesty

Without an investigation, we can’t know if they’ve disabled this basic functionality due to incompetence, malice, or some weird populism that says even folks who don’t know their own names and addresses ought to be able to contribute. But that’s not what I came to talk about today. I came to talk about the draft.

Sorry, wrong talking point.

This is emblematic of a larger problem, and one that’s been bothering me for a long time: we pass a lot of feel-good laws without thought for how they’ll be enforced.

Here’s another example from four years ago. Campaign finance law limits the kinds of issue advertising third-parties can create when they reference current campaigns. A guy named David Hardy made a documentary on the second amendment. He finished it right around the time the campaigns started heating up. His documentary contained interviews with many current politicians—and he expected those to make the better ads—so he asked the FEC if that was going to be okay. The FEC said, no, it wasn’t okay.

At the same time, a guy named Michael Moore was coming out with a movie that focussed on one candidate, George Bush. Moore’s team didn’t ask the FEC for permission; they just went ahead and advertised their movie. Other people complained to the FEC; the FEC ruled that their ads were okay under a “media exception”.

In each case, the FEC took the easy approach: someone asked ahead of time, they were restricted; someone just went ahead and did it, they weren’t restricted. The FEC didn’t have to get involved.

Suppose that the Obama campaign’s practice of accepting donations without verification needs to be investigated. Who is going to do it? If the Department of Justice started investigating it would be decried as a partisan attempt at influencing the election. And really, there’s a good point there. We only have two major parties; there’s always a very good chance that the organization doing the investigation and the organization under investigation are from opposing parties. In an election, that just doesn’t look good. We’re already seeing complaints that the Republicans are being partisan by complaining about this potentially fraudulent practice!

But laws should either be enforced or removed, not kept for special occasions.

I don’t know about the laws restricting maximum donations or the laws restricting foreign donations, but a lot of campaign finance reform laws are McCain’s. Campaign finance regulation has been a McCain priority for years, including the recent McCain-Feingold law. He may be learning the hard way that some laws only restrict the honest.

April 3, 2012: Obama campaign opens the floodgates to foreign and fraudulent donations

Looks like the creepy ad campaign didn’t bring in enough money, so the Obama 2012 campaign turned off verification on their credit card donations similar to what they did in 2008.

Remember when President Obama complained about how bad it was to “open the floodgates for special interests—including foreign corporations—to spend without limit in our elections”? He was lying about that, but now he’s gone and done what he ranted against. Without verification, foreign corporations and even domestic corporations can enter whatever names and addresses they want for small donations—multiple times over, making huge donations. The President gets to rave about all his small donors, because all of those big donors will look like small ones in the database.

Verification isn’t something you turn on when you set up credit card payments. You have to deliberately turn it off.

November 1, 2008: A proven reformer

If any one thing can highlight the difference between the two campaigns, it’s this: one campaign blocks anonymous donations and provides a list of not only the above $200 donors they’re required to by law but also the below $200 donors that they don’t have to. The other has deliberately disabled address and name verification on their web site so that anyone can donate as often as they want under as many names as they want; and does not provide the under $200 donor list that might highlight illegal donors.

Senator McCain acts in accordance with the campaign finance reform he’s championed for so long; his campaign has designed his web site to be open and honest. Senator Obama treats hope and change with lip service; his campaign has changed his web site to deliberately disable the basic checks that hinder illegal donations.

I can understand that McCain doesn’t get credit for maintaining a web site that doesn’t enable fraud, and that lists even the donations he isn’t required to list. That’s what we expect of a reformer. But did we really expect the hope and change campaign to work so hard and pay so much to enable illegal donations?

I’m actually not a huge fan of these laws, but I do expect public officials to follow the law. If Senator Obama believes that donors should be able to remain anonymous, and if he believes that foreign donations should be legal, he should introduce a bill to congress rather than deliberately configure his web site to look the other way.

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