Democratic National Convention Day 2: Unity, At Least Regarding News Coverage

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Secret, Foreign Money Floods Into Obama Campaign

Monday, September 29, 2008 9:23 PM

By: Kenneth R. Timmerman Article Font Size






More than half of the whopping $426.9 million Barack Obama has raised has come from small donors whose names the Obama campaign won't disclose.


And questions have arisen about millions more in foreign donations the Obama campaign has received that apparently have not been vetted as legitimate.


Obama has raised nearly twice that of John McCain's campaign, according to new campaign finance report.

But because of Obama’s high expenses during the hotly contested Democratic primary season and an early decision to forgo public campaign money and the spending limits it imposes, all that cash has not translated into a financial advantage — at least, not yet.


The Obama campaign and the Democratic National Committee began September with $95 million in cash, according to reports filed with the Federal Election Commission (FEC).


The McCain camp and the Republican National Committee had $94 million, because of an influx of $84 million in public money.


But Obama easily could outpace McCain by $50 million to $100 million or more in new donations before Election Day, thanks to a legion of small contributors whose names and addresses have been kept secret.


Unlike the McCain campaign, which has made its complete donor database available online, the Obama campaign has not identified donors for nearly half the amount he has raised, according to the Center for Responsive Politics (CRP).


Federal law does not require the campaigns to identify donors who give less than $200 during the election cycle. However, it does require that campaigns calculate running totals for each donor and report them once they go beyond the $200 mark.


Surprisingly, the great majority of Obama donors never break the $200 threshold.


“Contributions that come under $200 aggregated per person are not listed,” said Bob Biersack, a spokesman for the FEC. “They don’t appear anywhere, so there’s no way of knowing who they are.”


The FEC breakdown of the Obama campaign has identified a staggering $222.7 million as coming from contributions of $200 or less. Only $39.6 million of that amount comes from donors the Obama campaign has identified.


It is the largest pool of unidentified money that has ever flooded into the U.S. election system, before or after the McCain-Feingold campaign finance reforms of 2002.


Biersack would not comment on whether the FEC was investigating the huge amount of cash that has come into Obama’s coffers with no public reporting.


But Massie Ritsch, a spokesman for CRP, a campaign-finance watchdog group, dismissed the scale of the unreported money.


“We feel comfortable that it isn’t the $20 donations that are corrupting a campaign,” he told Newsmax.


But those small donations have added up to more than $200 million, all of it from unknown and unreported donors.


Ritsch acknowledges that there is skepticism about all the unreported money, especially in the Obama campaign coffers.


“We and seven other watchdog groups asked both campaigns for more information on small donors,” he said. “The Obama campaign never responded,” whereas the McCain campaign “makes all its donor information, including the small donors, available online.”


The rise of the Internet as a campaign funding tool raises new questions about the adequacy of FEC requirements on disclosure. In pre-Internet fundraising, almost all political donations, even small ones, were made by bank check, leaving a paper trail and limiting the amount of fraud.


But credit cards used to make donations on the Internet have allowed for far more abuse.


“While FEC practice is to do a post-election review of all presidential campaigns, given their sluggish metabolism, results can take three or four years,” said Ken Boehm, the chairman of the conservative National Legal and Policy Center.


Already, the FEC has noted unusual patterns in Obama campaign donations among donors who have been disclosed because they have gone beyond the $200 minimum.


FEC and Mr. Doodad Pro


When FEC auditors have questions about contributions, they send letters to the campaign’s finance committee requesting additional information, such as the complete address or employment status of the donor.


Many of the FEC letters that Newsmax reviewed instructed the Obama campaign to “redesignate” contributions in excess of the finance limits.


Under campaign finance laws, an individual can donate $2,300 to a candidate for federal office in both the primary and general election, for a total of $4,600. If a donor has topped the limit in the primary, the campaign can “redesignate” the contribution to the general election on its books.


In a letter dated June 25, 2008, the FEC asked the Obama campaign to verify a series of $25 donations from a contributor identified as “Will, Good” from Austin, Texas.


Mr. Good Will listed his employer as “Loving” and his profession as “You.”


A Newsmax analysis of the 1.4 million individual contributions in the latest master file for the Obama campaign discovered 1,000 separate entries for Mr. Good Will, most of them for $25.


In total, Mr. Good Will gave $17,375.


Following this and subsequent FEC requests, campaign records show that 330 contributions from Mr. Good Will were credited back to a credit card. But the most recent report, filed on Sept. 20, showed a net cumulative balance of $8,950 — still well over the $4,600 limit.


There can be no doubt that the Obama campaign noticed these contributions, since Obama’s Sept. 20 report specified that Good Will’s cumulative contributions since the beginning of the campaign were $9,375.


In an e-mailed response to a query from Newsmax, Obama campaign spokesman Ben LaBolt pledged that the campaign would return the donations. But given the slowness with which the campaign has responded to earlier FEC queries, there’s no guarantee that the money will be returned before the Nov. 4 election.


Similarly, a donor identified as “Pro, Doodad,” from “Nando, NY,” gave $19,500 in 786 separate donations, most of them for $25. For most of these donations, Mr. Doodad Pro listed his employer as “Loving” and his profession as “You,” just as Good Will had done.


But in some of them, he didn’t even go this far, apparently picking letters at random to fill in the blanks on the credit card donation form. In these cases, he said he was employed by “VCX” and that his profession was “VCVC.”


Following FEC requests, the Obama campaign began refunding money to Doodad Pro in February 2008. In all, about $8,425 was charged back to a credit card. But that still left a net total of $11,165 as of Sept. 20, way over the individual limit of $4,600.


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