A groundbreaking new report raises serious questions as to whether President Barack Obama’s reelection campaign is knowingly, and illegally, accepting and soliciting donations from foreign nationals.
The Government Accountability Institute (GAI), run by Stanford University research fellow Peter Schweizer, conducted an extensive, six-month investigation examining the potential for fraudulent and foreign funds being funneled to U.S. political campaigns via the Internet.
The "alarming" results detailed in the report, GAI found, highlight "a serious and systemic threat to the integrity of the U.S. election system" that demands a full-scale investigation by federal authorities.
The Obama campaign in particular warrants further scrutiny, the report and subsequent analysis by GAI’s lawyers determined, because it is the organization with the greatest potential to solicit and accept fraudulent and foreign donations online.
The report suggests there is compelling evidence to suggest that the Obama campaign is not only breaking law, but also doing so deliberately.
The Obama campaign oversees one of the most extensive and technologically sophisticated online fundraising operations in history, pulling in more than $500 million via the Internet in 2008, and hundreds of million dollars more during the current cycle.
The vast majority of those donations were less than $200, and federal law does not require campaigns to collect information about the individual making such low-level donations: As of August, the Obama campaign has raised $138 million in such small donations.
Furthermore, the campaign neglects to employ the most basic anti-fraud security measures to ensure that online donations are legitimate and only come from U.S. citizens, making it extremely vulnerable to fraudulent and illegal activity.
A number of investigations into the campaign’s online fundraising efforts in 2008 found thousands of fraudulent small donations, many coming from fictitious persons. In one case, the campaign received $175,000 from Mary T. Biskup, a retired insurance manager from Missouri. Not only is that far above the legal limit for individual donations, Biskup denied making any contributions to the campaign.
The lack of standard security features, such as card verification value (CVV) and address verification system (AVS), which are commonly used to verify the legitimacy of online credit card payments, is "incongruous with the acknowledged technological sophistication of the campaign," the report states.
Additionally, the campaign is willfully paying millions of dollars in higher processing fees by neglecting to install such basic verifications measures. Credit card issuers typically charge a 3.5 percent fee to process payments on websites that do not employ CVV or AVS.
Not using these measures likely cost the Obama campaign about $7 million in additional processing fees in 2008, the GAI estimates.
The campaign’s refusal to secure its online donations is "rather curious," the report states, given that the campaign employs a number of technology experts who operate websites that use CVV for financial transactions.
"Even more curious," the report finds, is the fact that the Obama campaign does use CVV to authenticate purchases at its online merchandise shop.
The Obama campaign has claimed the CVV method is unnecessary because it employs its own (undisclosed) techniques to weed out fraudulent donations.
But as the report points out: "This begs the question: why is it using different techniques when it comes to selling campaign merchandise?"
In addition to the Obama campaign’s lack of standard verification measures, the extraordinary foreign interest in President Obama, winner of the 2009 Nobel Peace Prize, makes the campaign particularly susceptible to illegal foreign donations.
The campaign’s main website, BarackObama.com, receives approximately 43 percent of its traffic from foreign IP addresses, the report found, the majority of which could be from foreign nationals, as opposed to American citizens living abroad.
The level of foreign traffic, according to GAI, "creates significant vulnerabilities for the integrity of the campaign’s donation process."
The GAI report also found ample evidence suggesting the Obama campaign is actively soliciting donations from foreigners, another violation of federal law.
Foreign citizens frequently receive solicitation letters via my.barackobama.com, the campaign’s social media platform created in part by Facebook cofounder and current owner and editor in chief of the New Republic Chris Hughes.
Through this platform, which has no apparent safeguards to prevent foreign citizens from participating, the Obama campaign sends out frequent requests for donations to more than 13 million email addresses.
The GAI looked at a random sample of 65,000 links to the my.barackobama.com site, and discovered that approximately 20 percent originated from foreign locations.
The report cited several examples of foreign bloggers—in China, Egypt, Italy, Holland, Norway, Azerbaijan, and Vietnam—reposting solicitations letters from the Obama campaign, some of which encourage others to donate.
"I imagine many nonAmericans have money transferred to the Obama campaign," wrote one Dutch blogger. "It’s just too easy."
A Norwegian blogger who had posted several Obama campaign solicitations told another blogger who asked about U.S. restrictions on foreign contributions: "I have in practice given money to Obama, I had done it."
Obama campaign solicitations also appear on numerous social media websites around the world. The report found examples of Twitter notifications from Obama campaign manager Jim Messina reposted on a South Korean site. A solicitation from Obama campaign bundler and taxpayer-subsidized green energy investor Steve Westly appeared on the Hong Kong Facebook website.
The report also noted the "curious case" of Obama.com, a website previously (and possibly currently) owned by Robert Roche, an Obama campaign bundler and left-wing Super PAC donor with deep business ties to the communist government in China.
The site, which according to GAI receives more than two-thirds of its traffic from foreign users and foreign-language websites, redirects visitors to the main donation page at BarackObama.com.
Kenneth Sukhia, a Florida attorney retained by GAI to examine the legal implications of the report, wrote that the findings raise "legitimate questions as to a campaign’s knowing failure to use its best efforts to comply with the laws prohibiting foreign contributions."
In particular, the Obama campaign’s apparent willingness to pay millions of dollars to forgo basic online security measures raised serious questions about its motivations, the attorney stated.
"It’s hard to imagine any campaign would pay extra for less security and marketing intelligence, unless it stood to benefit in some way from doing so," Sukhia wrote. "There is reason to suspect that such decisions may be motivated by the belief that more money could be raised through foreign contributions than lost in added fees by declining security tools designed to stop them."
Because the Obama campaign employs a number of individuals that can reasonably be classified as experts in the field of online fundraising, and are presumably aware of the inherent security risks and legal restrictions, the campaign could ultimately be liable for knowingly soliciting and accepting foreign donations.
"The law does not make it a crime to unintentionally or unknowingly receive contributions from foreign nationals," the report notes. "But the law does not allow a person to cast a blind eye to the truth. In other words, no one can avoid responsibility for a crime by deliberately ignoring the obvious."
"It appears that if the Obama campaign has received and retained donations from foreign nationals," Sukhia added, "the on-line Campaign team would be deemed to possess a high level of sophistication and expertise in this area and could not overcome the circumstantial evidence suggesting the knowing solicitation and receipt of such illicit finds."
Sukhia concurred with the report’s suggestion that a formal federal inquiry is warranted, finding "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."
The GAI plans to submit copies of the report to the Federal Bureau of Investigation, the Department of Justice, and several state attorney generals for review.
The report’s findings are especially troubling for President Obama, 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," he said during his 2010 State of the Union Address.
The GAI report appears to provide amble impetus for a Congressional investigation in Obama’s campaign activities, something that could pose serious problems for the president if he is elected to a second term.
Published under: Chris Hughes , Democratic Donors , Government Accountability Institute , Jim Messina , Obama Campaign