Illegal Campaign Donations Spur Calls For Change

presidential spending

hide captionChart the pace of spending in the presidential race.

As Barack Obama's fundraising machine leaves the old milestones for political money in the dust, some mysterious would-be donors have turned up among the 3.1 million contributors. The oddities raise questions about both the campaign's vetting procedures and the archaic state of campaign finance laws.

Almost all of the strange contributions came over the Internet — a fundraising tool that Obama has used far more effectively than any other politician.

Conservative blogger Pamela Geller started combing through the Obama donor lists last summer for her blog, Atlas Shrugs. Others followed, including The New York Times and The Washington Post. Donors surfaced with names such as Es Ech and Doodad Pro. A conservative activist says he contributed to Obama under the name Osama bin Laden.

The McCain campaign has picked up on the theme of illegal contributions. Last week campaign manager Rick Davis held a press call just to discuss Obama's fundraising. "He talked about being the most transparent campaign seen to date, in fact challenged other people on their transparency," Davis said. "If there are problems, they should be disgorged. And look, they should be cleaned up."

The Obama campaign says it is constantly scrutinizing the donor lists and improving the screening devices. It says many of the problem donations are caught down the line and the contributions refunded.

But there's an obstacle to a quick cleanup of the fundraising problems: the sheer volume of Obama's fundraising. Over the course of the campaign, Obama has raised some $605 million; the campaign says about half came from small donors, almost all of whom give online using credit cards. Last month alone, the campaign took in more than $5 million per day on average, with an average donation of less than $100.

In other words, there's been a torrent of contributions to be processed.

Credit card political contributions aren't much different from online shopping transactions. But there are varying levels of screening.

Critics say the Obama campaign hasn't been as rigorous as it needs to be and that the campaign should release the names of small donors ($500 to $200). The campaign says those 2 million or more names would overwhelm a normal database — an assertion challenged by this week by Slate.

But Paul Houghtaling, a Democratic consultant on campaign finance and compliance, says there's no perfect screener for bogus online contributions: "Although you could minimize them with certain tools that are available to the so-called merchant, you're not going to be able to eliminate all of them."

Houghtaling has developed a system for cross-checking Internet political contributions. It's in use by some other Democratic organizations, but not the Obama campaign.

One obvious question about this mystery money is donor motivation. Es Ech and the others have yet to surface and explain themselves. Nobody interviewed for this story thought influence-buying was a factor. "What, someone is going to present himself to the campaign as Doodad Pro?" said one campaign finance lawyer, laughing at the idea.

Houghtaling says he thinks the phony names are a device for enthusiastic low-income donors who are sharing a credit card. "There's nothing you can do to prevent someone from going out and collecting $100 from all of his buddies and then writing a check for a thousand bucks," he says. "In a similar fashion, there's nothing you can do to keep someone from collecting $100 each from 10 friends and then making a credit card contribution."

Either way, though, it's against the law, which requires identification of anyone who gives more than $50 and prohibits giving in the name of another.

Yet at this point in the campaign, there's no great legal incentive for the Obama campaign to ramp up its vetting process and divert workers from urgent pre-election jobs.

Campaign finance lawyer Larry Norton should know; he's a former chief counsel to the Federal Election Commission. "Look, they can deal with the FEC after he's elected president," he says. "The system is very deliberately set up so all this is worked out after the elections are over."

It turns out the McCain campaign has some similar problems, which Obama's staff was happy to detail. One online donor to McCain listed his name as Jesus II. But truth to tell, it doesn't appear that illegal donors are running rampant through either campaign.

It's also true that in this new world of Internet fundraising, there's no standard for an acceptable problem rate. There's certainly nothing like that in the campaign finance law itself. Norton says, "You've got an entire system that really is designed to deal with the 1976 election" — that is, the first election held under the modern campaign finance laws.

Later this year, McCain's campaign will face a mandatory audit by the Federal Election Commission. That's part of the contract signed by McCain when he accepted public financing.

But Obama didn't get into the public finance system. So it's up to the FEC, with its three Republicans and three Democrats, to decide whether it will audit the Obama campaign's books.

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