Foreign Funds

Obama campaign under fire for possible overseas donations

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October 9, 2012

A groundbreaking report published Monday raises startling questions about the Obama campaign’s potentially illegal practice of accepting and soliciting online donations from foreign nationals, experts say.

At the very least, the report—which found that the Obama campaign likely pays millions more in additional fees to avoid using standard verification methods for online credit card donations—exposes the true record of a president who has repeatedly denounced the alleged influence of foreign funds in U.S. elections.

"I don’t think American elections should be bankrolled by America’s most powerful interests, and worse, by foreign entities," President Barack Obama said during his 2010 State of the Union Address.

Obama adviser David Axelrod repeated this charge throughout the 2010 election cycle, even going so far as to accuse organizations like the U.S. Chamber of Commerce and Republicans Super PACs of being "front groups for foreign-controlled companies"

Federal campaign law prohibits U.S. political campaigns from knowingly accepting or soliciting donations from foreign nationals.

"The president and Democrats in general tend to be self-righteous about campaign finance issues, and yet obviously they are doing far less than they could themselves to enforce limitations on foreign donations," said Scott Walter, executive vice president at the Capital Research Center.

The Obama campaign, which is on track to become the first billion-dollar presidential campaign, reported raising $181 million from more than 1.8 million individuals in the month of September. However, just two percent of those donations were above the reporting threshold ($250) set by the Federal Election Commission (FEC). The average donation was $53, barely above the $50 limit threshold, under which campaigns are not even required to record a donor’s name.

The report, authored by the Government Accountability Institute (GAI), suggested that small donations such as these, which can be collected without scrutiny from the FEC, compounded by the Obama campaign’s unwillingness to adequately secure its online payment page, create "significant vulnerabilities for the integrity of the campaign’s donation process."

In some cases, the Obama campaign was found to have sent solicitation emails to foreign citizens, some of whom admitted having donated money—raising questions as to whether the campaign was knowingly violating the law.

"Given President Obama's rhetoric about foreign influence in our elections, you'd think they'd bend over backward to ensure the very highest standards for his own campaign," David Keating, president of the Center for Competitive Politics, told the Washington Free Beacon. "There are simple things they could do to make people a lot more confident, but it appears they haven’t done that."

Kenneth Sukhia, a Florida attorney who analyzed the legal implications of the GAI report, wrote that the findings provided "clear justification for further investigation" into whether the Obama campaign "disregarded their responsibility under [the law] to ensure that the Campaign is not knowingly soliciting contributions from foreign nationals."

Scott Coffina, a former assistant U.S. Attorney, said the Obama campaign’s solicitation and acceptance of foreign donations was "definitely investigation worthy."

"There’s certainly a question of willful blindness [with respect to foreign campaign donations]," he told the Free Beacon. "Why would anybody, especially a political campaign, pay more for less adequate security measures? Clearly there is a vulnerability in the law that may be being exploited."

Though the findings of the GAI report do not necessarily prove that the Obama campaign is knowingly breaking the law, further investigation would be a "legitimate use of law enforcement" that could shed light on these concerns, Coffina said.

Regardless of whether a formal investigation is launched, the optics may prove troubling for a president who has sought to portray himself as more ethical than his opponents with respect to campaign financing.

"It seems pretty clear they are trying to maximize their odds of getting donations without anything like honest disclosure," Walter told the Free Beacon. "It would be nice, at least, if the left and the Obama administration would stop being so self-righteous about campaign finance law."

The Obama campaign—whose lawyers reportedly tried to block the release of the GAI report—sought to downplay the recent allegations.

"We take great care to make sure that every one of our more than three million donors are eligible to donate and that our fundraising efforts fully comply with all U.S. laws and regulations," campaign spokesman Adam Fetcher told The Daily Beast.

Obama faced similar criticism for not employing standard verification methods in 2008, when his campaign cemented its reputation as one of the most successful online fundraising operations in history.

The Obama campaign, which often touts its immense network of small donors, and has suggested it will be outraised by Republican opponents seeking to "buy the election," has become increasingly reliant on large donations from wealthy liberals.

Earlier this year, the president renounced his prior objection to so-called Super PACs, third party groups that can raise unlimited amounts of money.

Priorities USA, a prominent pro-Obama Super PAC, recently outraised its Republican counterpart in the month of August. Additionally, the Obama campaign and its affiliate organizations have outraised Republicans through the end of August, $774 million to $736 million.

Walter said the GAI report, copies of which were submitted to the Federal Bureau of Investigation, the Department of Justice, and several states attorney general for review, could spur a congressional investigation, as well as changes to election law.

"I’m generally not a fan of lots of regulations of donations, but I think we can all agree that foreign nationals shouldn’t have the same freedoms to contribute that American citizens do," he said. "It would be nice if Congress was willing to honestly look into this."