Everything You Wanted to Know About the Obama Online Fundraising Scandal in Less Than 5 Minutes!

Since it is apparently too much effort for the mainstream media (National Journal excepted) to be bothered to investigate what is potentially one of the largest campaign finance fraud scandals ever, we thought we’d set the table for them.  Here’s a “Cheat Sheet” if you will on how the story broke and what the important issues are:

  1. In early 2007, Obama tells Silicon Valley mogul, Marc Andreeson, to “watch how I run my campaign – you’ll see my leadership skills in action”.   Which makes the following account all the more concerning.  Can we expect more of the same should Obama assume the seat in the White House?
  2. Rumors begin to circulate that the Obama campaign is accepting foreign and other illegal contributions.  Atlas Shrugs blog breaks the story on July 23 and confirms the rumors.
  3. On October 22, a citizen does his own investigative work and gives an online donation to the Obama campaign with a the fake name of John Galt along with a fake address.  Several bloggers quickly follow up on this story with their own investigative work and find that they too can donate to the Obama campaign with fake names and addresses.  Most disturbingly, foreign citizens were also able to donate using their foreign issued credit cards with fake foreign addresses.
  4. By now, it has become common knowledge that the Obama campaign is the ONLY campaign to NOT disclose their “under $200” campaign donor list.  No substantive reasons are given by the Obama campaign.
  5. On October 24, it is confirmed by the National Journal that the Obama campaign has turned off address verification on their website.  This is highly irregular – in fact, it’s quite unheard of.  Essentially, turning off address verification (known as AVS) enables donors to fake addresses and circumvent donor limits.   This means foreigners can give illegal donations and motivated Obama supporters can exceed the $2300 campaign limit! As Internet and e-commerce professionals, we launch this blog to raise the issue of how highly irregular and potentially unethical it is to turn off online credit card address verification.
  6. In light of the aforementioned and in light of the record $150 million haul Obama brought in during the month of September from over 600 thousand new, mostly unidentified, donors, this blog attempts to size the problem.  We calculated that over $181 million of Obama’s donations fall into the “potentially fraudulent” category.
  7. On October 29, the Obama campaign is quoted favorably in the Washington Post as checking for fraud on the “back-end”. The Obama campaign did not elaborate on what this means and the Washington Post didn’t bother to ask.
  8. Since the Obama campaign turned off the easiest and most obvious way to stop campaign finance fraud, this blog and the National Journal proceeded to explore other ways in which the Obama campaign could prevent campaign finance fraud.   We determined that the Obama camp could use IP addresses (unique identifiers for computers with geographic information) and BIN numbers (unique identifiers of credit cards with geographic information) to prevent fraudulent and foreign donations on the “back-end”. Unfortunately, all records indicate that the Obama campaign does NOT use these simple and cheap methods to prevent illegal donations.
  9. With public pressure mounting on the Obama campaign to disclose his donor list (despite the apathy from the New York Times and Washington Post), Charlie Gibson of ABC News asks Obama why he won’t disclose his donor list.  Obama said it would be too difficult to process. RED FLAG!  Isn’t this the internet generation candidate?  Shouldn’t it be easy for computers to process these records?
  10. It turns out that the answer is “Yes!”.  The liberal online publication, Slate, proves how easy it is to process the donor list.  The National Journal also proves how easy it is by talking to the bank that houses the Obama campaign records.

In summary, the Obama campaign is the FIRST and ONLY presidential campaign to turn off online address verification when raising money online.

The Obama campaign also chooses to not to use free or cheap tools that allow them to screen foreign IP address and foreign credit cards.

Finally, unlike the Clinton and McCain campaigns, the Obama campaign refuses to disclose their donor list.

It’s up to the reader to decide whether or not there is something unethical going on here.  But if you’d like to help create more transparency and have the Obama donor list see the light of day, please do sign the petition.

9 Comments to “Everything You Wanted to Know About the Obama Online Fundraising Scandal in Less Than 5 Minutes!”

  1. […] donations fall into the ‘potentially fraudulent’ category” (summary of situation here [go to Point 6]; detail […]

  2. JC says:

    There’s an IP spoofing vulnerability on his donation page, too.



  4. […] campaign donors Can any of you Obama supporters explain how you condone this: Everything You Wanted to Know About the Obama Online Fundraising Scandal in Less Than 5 Minutes! | O… __________________ The fairies went from the world, dear, Because men’s hearts grew cold: And […]

  5. […] Everything You Wanted to Know About the Obama Online Fundraising Scandal in Less Than 5 Minutes! | O… […]

  6. AnonyMousey says:

    How are donations refunded?

    Obama’s campaign keeps claiming that bad donations are being given back. How is this being done? Are the credit card numbers of the donations being tracked, and donations charged back to those credit cards? Can chargebacks be done to gift cards? Are refunds instead being done by mailing a check to the name and address of the donor? Is interest until the check is cashed being kept? If a check is used but the name or address is wrong, what happens to the money? Is it legal to send a check if a fake donor claimed to be a (real) third party? (If I gave an illegal $25,000 donation in his Auntie’s name and address, would she get a check?)

    Who has John Galt’s money?

  7. […] What am I talking about? Go read this. […]

  8. Tony says:

    As of October 27, 2008 and according to “opensecrets.org”
    The Obama campaign finance reports have disclosed 90.7% of their contrubtions



    while McCain has only 87.1% that is a more than 3% differenece, maybe the polls will be just as close.

    Chuck Baldwin 79.3%
    Bob Barr 63.1%
    Cynthia McKinney 76.6%

    Reply from Mike@obamashrugged:Unfortunately, these numbers are rather misleading. Opensecrets only reports on those donations above $200: “METHODOLOGY: The numbers on this page are calculated from contributions of more than $200 from individuals, as reported by the candidates to the Federal Election Commission.” However, our problem is with the over $180 million worth of online donations that fall below the $200 threshold. These are the potentially fraudulent donations that Obama refuses to disclose.

  9. […] I’m still waiting for the investigations into vote fraud that occurred in many polls around the country.  And, most importantly, Obama’s highly-questionable fund raising scheme. […]

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