AP Photo AP Photo  

Fraud found in Obama’s online donations

Photo of Neil Munro
Neil Munro
White House Correspondent

President Barack Obama’s 2012 campaign has hundreds of thousands of eager, low-dollar donors — and a tiny trickle of unwilling, defrauded donors.

The latest example comes from David Newman, who found a $15 charge, dated May 6, from the “Obama For America” campaign on one of his debit cards.

Newman had supported Obama in 2008, but “I didn’t sign up to say ‘Do this every three months or every three years when you need money,’” he told The Daily Caller.

“This is completely 100 percent unauthorized,” said Newman, an information technology specialist. The money has since been returned by Bank of America, and the debit card has been cancelled, he said.

Newman’s example follows the publication of two examples of small-scale fraud by Powerline, a conservative blog. For example, “Bill G” told Powerline that he had found a $10 charge to “Obama for America” a few weeks after someone had secretly changed his address in the bank’s database.

The Obama campaign declined to answer TheDC’s questions for this story.

These minor examples of fraud, however, follow the discovery that Obama’s campaigns in 2008 and 2012 adopted shady practices that increased the potential for fraud.

In 2008, for example, Obama’s 2008 campaign accepted donations made via untraceable digital gift cards sold over the counter by Mastercard and Visa. National Journal proved that practice on October 24, 2008, but a recent test by TheDC showed that his campaign is now rejecting donations made via gift-cards.

However, Obama is still using many of the same tech experts that he used in 2008, and is still accepting credit card donations made under incorrect names, according to numerous reports from blogs.

Like in 2008, the 2012 campaign is also not asking donors to provide the three-digit or four-digit CVV number on credit cards. That decision reduces the campaign’s fundraising costs, but increases the chance of fraudulent donations by people who know the primary long number of a credit card, but not the short CVV number.

The practice may have contributed to a 2008 fraud when a woman in Missouri, Mary Biskup, discovered that her name had been attached to $174,800 in credit card donations sent to the Obama campaign. Biskup told the Washington Post that her credit-card was not charged for the donation.

Obama’s campaign is not legally required to ask for the CVV number. It is also not required to confirm that the names given by small-dollar online donors are correct, partly because the campaign automatically collects the real names and addresses attached to donors’ credit cards.

Yet a campaign’s decision to accept the false names attached to small donations can have a broader impact than a few cases of fraud.

That’s because campaigns are free to assume that multiple small-scale donations made via one credit card are from different people, providing that different false names are provided online with each donation.

They’re free to do that even if donors’ fake names are utterly implausible, such as “Adolf Hitler,” “Osama bin Laden” or “Mickey Mouse.”