The president’s online donations upgrade

Neil Munro White House Correspondent
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President Barack Obama has redesigned his online donations system to reject some anonymous donations, although his website still accepts donations made with bogus names.

In 2008, reporters discovered that Obama’s campaign website was configured to accept donations from unidentifiable donors, including donors overseas.

But in a test April 4, Obama’s site rejected donations from unidentifiable donors.

Numerous bloggers have decried Obama’s site in the last few days because it does not ask donors to submit the three-digit anti-fraud “CCV” code number when donors are using credit-cards to make online donations.

However, Obama’s campaign is not legally obliged to ask for the CCV numbers, as they are merely required to use only their “best effort” to validate the name, occupation and location of the donor. The CCV number is typically used only to verify that the card is in the card-owner’s physical possession.

The identity of legitimate donors can be verified by comparing the credit card’s main number to the data held by the credit card’s issuer. This ensures that campaigns know the real names of donors, even when donors type fake names into the campaign’s online donation page.

Gov. Mitt Romney’s website does ask for the CCV number.

“That’s good practice,” said Peter Pasi, the executive vice president at Arlington, Va.-based emotive LLC, which raises funds online for many GOP politicians, including Sen. Rick Santorum.

At the Obama campaign, “somebody actively made the decision to turn [the CCV request] off,” said Pasi.

“Why would they do that? I don’t know… [but] they probably did it to get an increased response,” he said.

The Obama campaign did not respond to The Daily Caller.

A Daily Caller reporter tested Obama’s donation system April 4 by donating cash via a pre-paid Visa gift card and an Internet proxy server. The Visa card was bought with untraceable cash, and the proxy server hid TheDC’s online identity.

Even though the identity of the donor was technically unverifiable, TheDC fully complied with federal laws, and provided accurate information to the Obama website.

The Obama website rejected the contribution because the Visa gift-card did not have a known address that could be used to verify the donor’s identity.

That’s much different from 2008, when Obama’s campaign accepted unverifiable donations made via American Express gift cards and identity-hiding proxy servers.

In October, 2008, Obama’s  top campaign aides excused their decision to automatically accept unverified donations with the claim that they would subsequently use manual checks to verify identities.

“We do a very strong job, both with the technology we use and with this very heavy commitment to comprehensive back-end review,” Robert Bauer, general counsel for the Obama campaign, told National Journal, which broke the story.

However, Obama’s campaign also claimed to have had 6.5 million online donors in 2008, who collectively donated $500 million.

The campaign downplayed the scandal before and after the election, even though data released by the campaign showed numerous suspicious donations from overseas, and at least one case where $174,800 was donated via a credit card under the name of a retired person in Manchester, Mo.

Obama fobbed off a TV question about the donations one week before the 2008 election.

“Look, you know, 3.1 million donors would be a pretty hard thing for us to be able to process,” Obama told ABC’s Charles Gibson on Oct. 29.

In fact, banking and industry experts said companies routinely process much larger streams of financial data.

A bank official said Obama’s staffers could use data from their campaign’s bank to identify cases where people were using multiple credit cards to make excess donations or to make donations from overseas.

There was no official and public investigation of the scandal after Obama’s election.

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