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Explosive Report: Obama Campaign Website Lacks Important Tool to Prevent Illegal Donations

Oct. 8, 2012 11:16am

This past Thursday, TheBlaze teased a potential scandal surrounding President Obama’s donors. Now, we might know what that scandal is. According to a report by the conservative nonprofit Government Accountability Institute (GAI), and an explosive series of stories on Breitbart.com and the Daily Caller, the Obama campaign website appears to be built with an uncharacteristic lack of security where foreign donations are concerned.

Despite donations from foreign sources being illegal under Federal law, all campaigns, whether at the congressional level or the presidential level, have insufficient security to prevent these donations, according to the GAI Report. The problem afflicts an alarming number of politicians, across all parties.

However, for reasons that remain unclear, the Obama campaign stands apart from its peers in its lack of security preventing these donations. The most dangerous vulnerabilities for the campaign appear to lie in two separate channels – specifically, the website Obama.com, and the lack of a requirement that users input CCV codes when donating online through their credit cards.

To begin with, Obama.com is owned by Shanghai executive and former Chicago resident Robert Roche, a powerful Obama bundler with enough financial clout to break bread with the President, Secretary of State Hillary Clinton, and even Chinese President Hu Jintao, at the same time. Breitbart elaborates on Roche:

In 2011, Mr. Roche obtained one of the most sought-after pieces of real estate in Washington, DC: a seat at the head table for President Obama’s State Dinner for Chinese President Hu Jintao. How Roche—a man whose infomercial company hawks fitness equipment, cell phones, and breast enhancement products—landed a seat alongside Secretary of State Hillary Clinton, former President Bill Clinton, Sen. John Kerry, former President Jimmy Carter, and Chinese President Hu Jintao remains unclear.

Since 2009, White House Visitor Logs list the name Robert Roche at least 19 times, despite the fact Mr. Roche’s primary residence is in China.

Mr. Roche, who is originally from Chicago, is a co-chair of the Technology Initiative for the Obama campaign.

According to Acorn International’s prospectus, the success of Mr. Roche’s company hinges on maintaining access to state-run media and “preferential tax treatments and subsidies” doled out by the People’s Republic of China (PRC).

That a powerful bundler owns the Obama.com website is unsurprising, given that the site redirects to the fundraising page for the Obama campaign. However, the fact that it is Mr. Roche specifically may strike some as dangerous, especially given that Roche lives in a foreign country, and thus might find it easy to fundraise off of foreign business connections. Indeed, this concern is even more potent, given that 68% of the traffic to Obama.com comes from foreign sources, according to the report.

Nevertheless, these details could be considered less damning if the report didn’t also find a level of credit card security within the Obama fundraising apparatus that is below even industry standard. Why? Because unlike most web merchants, the Obama campaign does not require those making a donation to enter their CCV code – a 3-4 digit code that appears on the back of most credit cards, and that indicates the location of the cardholder. This particular omission is not only problematic from the perspective of campaign security, but also economically irrational, according to the Daily Caller’s Matthew Boyle:

Obama for America does not require online credit card donors to input Card Verification Value data to confirm that a political donor is legally authorized to charge contributions to a given credit card. GAI said CVV data consists of “a three or four digit number generally imprinted on the back of the card” in order “to verify that the person executing the purchase physically possesses the card.”

GAI notes that the Obama campaign’s failure to use such security measures in its online donation system likely costs it “millions of dollars in additional fees” because “card processors charge higher transaction fees for campaigns that fail to use the CVV.”

The group estimates that Obama’s 2008 campaign, which raised over $500 million, likely “paid at least an additional $7.25 million in fees to the banks that it could have avoided if it were to have used the CVV,” assuming the campaign paid typical rates for processing credit card transactions.

Nor is this oversight accidental. Breitbart’s Mike Flynn explains that the campaign chose to use this apparently irrational system:

Why would they do this?

The clear implication is that they will reap more money without these security procedures than they would with them.

Granted, this implication is just that – an implication. However, given that the cost of $500 million in donations is a mere $7.25 million, it is easy to envision a calculation whereby the money that is accessible because of this lack of security vastly outstrips the money that is lost from ignoring the CCV codes.

This concern over foreign donations cuts across party lines. During the 2010 elections, Democrats alleged that the US Chamber of Commerce was supported by foreign money. A report by ABC News at the time found little evidence to support the claims, but nevertheless, the issue remains a touchy one for a candidate.

Basic consistency would seem to demand that this particular instance of this charge be answered and corrected.

UPDATE: The Daily Beast has published a story highlighting even more problems with campaign financing from illegal donors. It describes problems that extend beyond mere foreign donations and into the realm of fraudulent donations, both of which are not protected against by the Obama campaign. They also add more details on Robert Roche. The relevant sections are below:

Further complicating the issue are websites like Obama.com—which is owned not by the Obama campaign but by Robert Roche, an American businessman and Obama fundraiser who lives in Shanghai. Roche’s China-based media company, Acorn International, runs infomercials on Chinese state television. Obama.com redirects to a specific donation page on BarackObama.com, the official campaign website. Unlike BarackObama.com, Obama.com’s traffic is 68 percent foreign, according to markosweb.com, a traffic analysis website. According to French-based web analytics site Mustat.com, Obama.com receives over 2,000 visitors every day.

The name Robert W. Roche appears 11 times in the White House visitors log during the Obama administration. Roche also sits on the Obama administration’s Advisory Committee for Trade Policy and Negotiations, and is a co-chair of Technology for Obama, a fundraising effort. (In an email exchange, Roche declined to discuss his website, or his support for the Obama re-election effort, referring the inquiries to the Obama campaign team. The Obama campaign, in turn, says it has no control over Roche’s website; it also says only two percent of the donations associated withObama.com come from overseas.)

But it isn’t just foreign donations that are a concern. So are fraudulent donations. In the age of digital contributions, fraudsters can deploy so-called “robo-donations,” computer programs that use false names to spew hundreds of donations a day in small increments, in order to evade reporting requirements. According to an October 2008 Washington Post article, Mary Biskup of Missouri appeared to give more than $170,000 in small donations to the 2008 Obama campaign. Yet Biskup said she never gave any money to the campaign. Some other contributor gave the donations using her name, without her knowledge. (The Obama campaign explained to the Post that it caught the donations and returned them.)

This makes it all the more surprising that the Obama campaign does not use a standard security tool, the Card Verification Value (CVV) system—the three- or four-digit number generally imprinted on the back of a credit card, whose purpose is to verify that the person executing the purchase (or, in this case, donation) physically possesses the card. The Romney campaign, by contrast, does use the CVV—as has almost every other candidate who has run for president in recent years, from Hillary Clinton in 2008 to Ron Paul this year.

 

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Comments (90)

1 2 3
  • Malrick
    Posted on October 8, 2012 at 12:15pm

    Ignorance is no excuses in the eyes of the law, unless your liberal and write them.

    Report this comment

    Malrick  
    • Detroit paperboy
      Posted on October 8, 2012 at 12:21pm

      Shocking…………yeah right.

      Report this comment

      Detroit paperboy  
    • iblvingd
      Posted on October 8, 2012 at 12:24pm

      Deception with intent is quite another story.

      Report this comment

      iblvingd  
    • turkey13
      Posted on October 8, 2012 at 12:48pm

      Did anyone expect anythind differently from the Chicago mob. Only do it the Chicago way. If Obama had gone legit, he never would have made it out of his Community Organizing job.

      Report this comment

      turkey13  
    • Gold Coin & Economic News
      Posted on October 8, 2012 at 2:29pm

      I pretty much think Obama has to cheat at this point to win the election after his pathetic debate performance last week. And I’m not sure a lot of money is going to save Obama. I think it will be a landslide, even more so when Ryan destroys Biden in their debate coming up this week:
      http://www.isthatbaloney.com/?p=538

      Report this comment

      Gold Coin & Economic News  
    • hammer31
      Posted on October 8, 2012 at 3:38pm

      This was done by the Clintons in their day and the Obamas. Why does this surprise people? Progressives love to write laws but can not be expected to follow them (Turbo Tax anyone?).

      Report this comment

      hammer31  
    • kenboo1
      Posted on October 8, 2012 at 4:03pm

      Well if they do it right, they will go broke…

      Report this comment

      kenboo1  
    • FrankTheTank
      Posted on October 8, 2012 at 4:51pm

      The CVV2 code on the credit card has nothing to do with catching foreign orders, it is on the card to assist in verifying the actual account holder is the one making the payment.

      THERE ARE A NUMBER OF SIMPLE WAYS to ensure foreign payments (donations in this case) are not placed. These concepts have been used by most CNP (Card Not Present) merchants for 10+ years. One way is to use a fraud service like MaxMind, they incorporate the origin checks listed below, plus many others to determine good transactions (established by the merchant) from bad.

      BIN Checking:
      The beginning 4 digits (6 actually) on the card are the BIN (Bank Identification Number). This number will give you the issuing bank, the issuing location (including the Country) and other information, useful to merchants, but not required to determine origin (http://www.binbase.com/search.html). It can be added seamlessly/automatically to any CNP transaction process.

      GeoIP:
      Every responsible merchant utilizes GeoIP (http://sourceforge.net/projects/geoip/) to determine the location the transaction is being placed from. Essentially this tool, again added seamlessly/automatically to the transaction processing, can identify the location, world wide, of the person making the transaction. This can be ‘spoofed’ by using proxy servers, but the project is making it more and more difficult to accomplish this.

      Report this comment

      FrankTheTank  
  • woodyee
    Posted on October 8, 2012 at 12:00pm

    Mr. Roche could quite possibly an enemy of our State, and MUST be investigated. His ties to the highest offices in the US and China do not fit the mold of the classic insider. There’s not only smoke, there’s a raging fire there!

    Report this comment

    woodyee  
    • PATTY HENRY
      Posted on October 8, 2012 at 12:11pm

      THANK YOU SCOTT and BLAZE and I’ll be watching @ NOON – do you repeat these “live sessions”
      also

      PATTY HENRY
      Posted on October 8, 2012 at 12:03pm

      WHERE IS THE OUTRAGE ON THIS? So Reportedly the CHINESE are donating $$$ to environmental groups to stop the XL pipeline – foreign intervention but the PAC (supposedly not related to Obama – yeah, right) known as OBAMA.com is collecting donations for him and SIXTY EIGHT PERCENT (68%) of the money comes from foreign FOREIGN donors.

      WE can’t let this be swept under the rug!!! Here is another quote from J.R. Acton:

      from the Federal Election Commission “Foreign Nationals Broc…hure” page: “The Federal Election Campaign Act (FECA) prohibits any foreign national from contributing, donating or spending funds in connection with any federal, state, or local election in the United States, either directly or indirectly. It is also unlawful to help foreign nationals violate that ban or to solicit, receive or accept contributions or donations from them. Persons who knowingly and willfully engage in these activities may be subject to fines and/or imprisonment.”

      We need to raise hell about this.

      This needs to be front page and not allowed to be “nothing to see here, keep moving” by the Pathetic, Liberal, MSM in the tank for that COMMIE, SOCIALIST, MARXIST pig.

      Report this comment

      PATTY HENRY  
  • woodyee
    Posted on October 8, 2012 at 11:57am

    The gaymiistration retort?

    “I’m Insulted! We’re insulted! How dare you accuse us of leaving our lines open to foreign donations? If those allegations are proved to be true, we’ll take appropriate actions to see the, um, problem is resolved. Until then, we’re leaving things as they are because, after all, we must first let donations run their course to, um, see where they’re coming from.”

    Report this comment

    woodyee  
    • Melvin Spittle
      Posted on October 8, 2012 at 2:22pm

      It is painfully obvious that the attacks on Obama’s campaign financing are racist.

      Any critique, rational or not, is racist, so therefore he wins.

      Report this comment

      Melvin Spittle  
  • KENTUCKIANAPATRIOT
    Posted on October 8, 2012 at 11:53am

    (I don’t give a flip–just needed ‘username’ up so I could click on it & hopefully retrieve the name of the DOJ “official”, from “comments” I left at the Blaze from last few days….can’t find notes this A.M. ) Oh well, writing Congressman–now THERE’S a LOL…or another futile attempt to breathe life into that which is DO A before it gets here, or “out” period) Thank goodness DOJ is a lousy–another LOL — all of the is “in-your-face-”America”–her name & the letters won’t be hard to find! Just for “news-watchers & “news-conveyors”……………

    Report this comment

    KENTUCKIANAPATRIOT  
  • razhunter100
    Posted on October 8, 2012 at 11:51am

    Your Right to Resell Your Own Stuff is in Peril
    http://www.infowars.com/your-right-to-resell-your-own-stuff-is-in-peril/

    Tucked into the U.S. Supreme Court’s agenda this fall is a little-known case that could upend your ability to resell everything from your grandmother’s antique furniture to your iPhone 4.

    At issue in Kirtsaeng v. John Wiley & Sons is the first-sale doctrine in copyright law, which allows you to buy and then sell things like electronics, books, artwork and furniture, as well as CDs and DVDs, without getting permission from the copyright holder of those products. …

    Report this comment

    razhunter100  
  • Jenasus
    Posted on October 8, 2012 at 11:47am

    Using credit cards without CVV numbers are credit cards numbers that are stolen.

    Report this comment

    Jenasus  
  • thom1
    Posted on October 8, 2012 at 11:41am

    I’m shocked! Shocked I tell you.

    Report this comment

    thom1  
  • legendarytwo
    Posted on October 8, 2012 at 11:40am

    Obama and Holder are black and use the race card to hide behind. Therefore it takes a lot longer to throw them out or expose them like fast and furious. The public must force it.

    Report this comment

    legendarytwo  
  • TSUNAMI_22
    Posted on October 8, 2012 at 11:40am

    What happened to all the more than 1.6 billion dollars that Jon Corzine stole? I’m sure none of that money went to Obama’s campaign.

    Report this comment

    TSUNAMI_22  
  • kickagrandma
    Posted on October 8, 2012 at 11:39am

    I’m so shocked by this, that I am going down the long, winding stairs to sit down in my wine cellar and drink myself into oblivion.

    Don’t have a wine cellar or long, winding stairs, but right now that seems like a good idea.

    Just when you think satan will run out of lies…. *sigh*

    Report this comment

    kickagrandma  
  • Stelex
    Posted on October 8, 2012 at 11:37am

    Obama…..bought and paid for by foreign interests. Our economy steadily declines as well as our standing in the world. Coincidence…………..I’m sure

    Report this comment

    Stelex  
  • environmentalandawake
    Posted on October 8, 2012 at 11:36am

    This form of contribution transfer would allow for those Gift Visa/Mastercards to be used as well. Which is fine except a huge contributor could go out and buy many of those cards unregistered and hand them out to Obama supporters (Occupy, ACCORN, etc.) to contribute beyond their legitimate amounts.

    Report this comment

    environmentalandawake  
  • havsumtea
    Posted on October 8, 2012 at 11:36am

    Anyone who would believe the Chicago machine would play by the rules needs their head examined!

    Report this comment

    havsumtea  
  • Detroit paperboy
    Posted on October 8, 2012 at 11:34am

    Fool me once shame on you………fool me twice shame on me………………

    Report this comment

    Detroit paperboy  
  • COFemale
    Posted on October 8, 2012 at 11:33am

    So in essence Barry isn’t following FEDERAL guidelines to protect donor’s credit cards from identify theft. Shouldn’t he be shut-down by FBI standards?

    Report this comment

    COFemale  
  • Landon410
    Posted on October 8, 2012 at 11:30am

    but what are they going to do?
    lets say they can prove a large sum of money came in illegally, what do you do? they cheat and thats it, they just cheat, if there are no real consequences, then the rule really isn’t a rule

    Report this comment

    Landon410  
    • txgrrl
      Posted on October 8, 2012 at 4:26pm

      Right. The will “discover” the illegal activity after the fact. People will just shrug their shoulders saying “well, that’s just what politicians do.” How sad.

      Report this comment

      txgrrl  
  • coyote1hell
    Posted on October 8, 2012 at 11:30am

    This Clown in our White House is the most corrupt person in Washington…Half White Liar..truth comes out a little at a time, Half White Liar..words roll of your tounge like tupentine….

    Report this comment

    coyote1hell  
  • IMCHRISTIAN
    Posted on October 8, 2012 at 11:30am

    I know several years ago he had an ad for his website in NZ Herald and who knows how many other Countries that may not be so friendly.

    Report this comment

    IMCHRISTIAN  
  • environmentalandawake
    Posted on October 8, 2012 at 11:29am

    This also would allow for those gift Visa/Mastercards to be used. Although this is somewhat speculative; a huge contributer could simply go out buy these tyoes of cards at max value and hand them out on the street to Obama supporters to contribute online.

    Report this comment

    environmentalandawake  
  • Snowleopard {gallery of cat folks}
    Posted on October 8, 2012 at 11:27am

    One more scandle coming up into the light about Team Obama; what will finally bring him down once and for all? Also, I have to believe, given the absolute corruption of the admin, this is no ‘accident’ it has been done so on purpose.

    Report this comment

    Snowleopard {gallery of cat folks}  
  • KENTUCKIANAPATRIOT
    Posted on October 8, 2012 at 11:23am

    “LACKS” !!??!!??!! lol , no, LOL !!!

    Report this comment

    KENTUCKIANAPATRIOT  
  • HKS
    Posted on October 8, 2012 at 11:22am

    Does that mean that selected people can kick back stimulus money to Obama’s fund?

    Report this comment

    HKS  
    • Diane TX
      Posted on October 8, 2012 at 12:46pm

      It would seem so. So if the USA sends money to help Egypt (Muslim Brotherhood), they could “donate” to the Obama campaign to keep him in Office.

      it makes me wonder “why” all the enemies of the USA want Obama re-elected.

      Report this comment

      Diane TX  
  • AvengerK
    Posted on October 8, 2012 at 11:20am

    By the way…I’ve donated numerous times to Romney’s campaign…his donations website has very strict controls on donors.

    Report this comment

    AvengerK  
    • izzy1127
      Posted on October 8, 2012 at 11:47am

      Yeah, I was a bit surprised when I made my first donation about the information one had to give. Good for them to help keep it legal.

      Report this comment

      izzy1127  
  • Gary_K
    Posted on October 8, 2012 at 11:19am

    barry got away with it before so why not do it again.

    Report this comment

    Gary_K  
  • AvengerK
    Posted on October 8, 2012 at 11:18am

    There were murmurs about this last week….the hits just keep on coming.

    Report this comment

    AvengerK  
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