The Obama campaign raised a record $181 million in September and is trumpeting the claim that most of the money is from small donors. However, it seems likely that many of the the "small donors" are actually robo-donors operated for foreigners. There are two key facts in this report.
The unusual Obama.com website redirects traffic directly to a donation page on the Obama campaign's official website, my.barackobama.com, which does not require donors tob enter their credit card security code (known as the CVV code), thereby increasing the likelihood of foreign or fraudulent donations. The website is managed by a small web development firm, Wicked Global, in Maine. One of Wicked Global's employees, Greg Dorr, lists on his LinkedIn page his additional employment with Peace Action Maine and Maine Voices for Palestinian Rights. According to the GAI report, 68 percent of all Internet traffic to Obama.com comes from foreign visitors.
What are the implications?
Because of the lack of a CVV code requirement, the door is opened for OFA to accept robo-donations, or in other words, large numbers of small and automatic donations made online to evade FEC reporting requirements. Although it isn't illegal to decline the use of a secure CVV credit card code for campaign donations, it is illegal to accept campaign donations from foreign sources. Campaigns are required under criminal code not to solicit, accept or receive foreign donations in any amount. The Federal Elections Commission doesn't require campaigns to disclose the names of donors making contributions of less than $200 unless audited. In addition, FEC rules don't require campaigns to keep records of those giving less than $50. These rules combined with the lack of a CVV numbers make it easy for campaigns to get away with taking foreign donations.
So maybe the Obama campaign just made an oversight?
Not to mention, the campaign obviously sees the benefits in using a CVV code to prevent fraud. After all, OFA uses a CVV security code for merchandise purchases. To purchase a sweatshirt or other item in the OFA store, a CVV code must be entered at check out, but the donation page does not require a credit card security code to be used. In addition, the chief technology officer of the Obama campaign, Harper Reed, is a former chief technology officer of the T-shirt company Threadless. Threadless requires a CVV code for online purchases. They clearly know how CVV codes work.
This controversy would have been easy to avoid if the Obama campaign had simply flipped the switch to require CVV numbers for donations like the vast majority of retailers and charities do. The Obama campaign instead left this door open as an invitation to fraudulent donors. The questions are: is there any proof of actual fraudulent donations (rather than just the likelihood), and did President Obama know about it?