Obama shrugged

Last week we explored the fundraising practices of Barack Obama’s online credit card donations in “Who is John Galt?” and “What did Della Ware?” New York Times reporter Michael Luo took a look at the story for the Times’s campaign blog in “Obama’s online site accepts more fakes,” but missed the heart of the story.

Over the weekend, National Journal posted Neil Munro’s “FEC rules leave loopholes for online donation data.” Munro compared the two campagns’ acceptance of online donations and reports that Obama legal chief Bob Bauer essentially admitted that the Obama campaign does not compare credit card numbers to detect multiple sub-$200 donations under different names.

Thus the fact that the Obama campaign is running a credit card operation that facilitates donations under fictitious names assumes special importance. Munro does not take the story as far as our readers took it, nor raise the question why the Obama campaign has not implemented the basic Address Verification System that protects against credit card fraud.

Matthew Mosk purported to address the subject in a long piece for the Washinton Post yesterday. Mosk read our “John Galt” post and wrote to ask us about it last week. Although his article misses the issue, we therefore know that Mosk must understand what the issue raised by Obama’s fundraising practices is. Mosk writes:

While the potentially fraudulent or excessive contributions represent about 1 percent of Obama’s staggering haul, the security challenge is one of several major campaign-finance-related questions raised by the Democrat’s fundraising juggernaut.

Concerns about anonymous donations seeping into the campaign began to surface last month, mainly on conservative blogs. Some bloggers described their own attempts to display the flaws in Obama’s fundraising program, donating under such obviously phony names as Osama bin Laden and Saddam Hussein, and reported that the credit card transactions were permitted.

Obama officials said it should be obvious that it is as much in their campaign’s interest as it is in the public’s interest for fake contributions to be turned back, and said they have taken pains to establish a barrier to prevent them. Over the course of the campaign, they said, a number of additional safeguards have been added to bulk up the security of their system.

In a paper outlining those safeguards, provided to The Washington Post, the campaign said it runs twice-daily sweeps of new donations, looking for irregularities. Flagged contributions are manually reviewed by a team of lawyers, then cleared or refunded. Reports of misused credit cards lead to immediate refunds.

Mosk does not provide the rationale for the “1 percent” number that he provides. How was it calculated? Did Mosk even ask? Among other things, Mosk never mentions the basic AVS mechanism that would automatically prevent such fraud. He appears not to have asked the Obama campaign why they don’t use it. He omits to mention that the McCain campaign does use it while the Obama campaign does not. He does not report on the experiment conducted by our enterprising reader (and many others) comparing the two campaigns’ credit card security for online donations. It is almost as though Mosk means to be obtuse.

Over the weekend the New York Post invited us to write a column on the issue. Today the Post runs my column under the heading “Dubious donations.” Thanks to the Post’s Bob McManus, Mark Cunningham and Eve Kessler for their interest in, and care with, the column.

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