After being featured Tuesday on The Daily Showwith Jon Stewart, Breitbart News contributor and Government Accountability Institute President Peter Schweizer once again found himself the focus of national media in a 60 Minutes Sunday report highlighting his work uncovering congressional insider trading and championing the Stop Trading On Congressional Knowledge (STOCK) Act to ban it.
In 2011, 60 Minutes’ veteran reporter Steve Kroft ran an investigative report based on Schweizer’s New York Times bestselling book,Throw Them All Out.
“A year ago he began working on a book about soft corruption in Washington with a team of eight student researchers who reviewed financial disclosure records,” said Kroft in the original 2011 CBS 60 Minutes report. “The results became a jumping off point for our own story, and we have independently verified the material we used.”
Kroft won the Joan Shorenstein Barone Award for excellence in Washington-based journalism for the report. Kroft thanked Schweizer at the awards ceremony and made a rare joint interview appearance with Schweizer on MSNBC.
After the release of Schweizer’s book and the award-winning 60 Minutes segment it sparked—as well as at least 26 articles by Breitbart News published on the subject—President Obama included the issue in his 2012 States of the Union Address. Eventually, Congress passed the bill in an overwhelming bipartisan vote of 417-2 in the House and 96-3 in the Senate.
Two weeks ago, however, Congress gutted the bill by killing a key provision that would have put already publicly available financial disclosure records of federal officials in an online format to increase transparency.
Sunday night, Steve Kroft took to the airwaves to hit back.
“Our 2011 report shamed Congress into passing the STOCK Act,” said Kroft. “But earlier this month, Congress quietly repealed parts of the law.”
Kroft’s 60 Minutes Sunday update featuring Peter Schweizer may have telegraphed to members of Congress a warning of sorts: neither he nor Schweizer are finished reporting on or exposing instances of insider trading and self-enrichment by members of Congress or their staffs.
A U.S. Secret Service agent stands post as President Barack Obama, projected on a screen as big as his ego, delivers remarks during the Human Rights Campaign dinner, at the Walter E. Washington Convention Center in Washington, D.C, Oct. 10, 2009. (Photo credit: Wikipedia)
The 108-page GAI report found nearly half of Congress, both political parties and presidential candidates, and third-party fundraising groups that funnel money to political parties and candidates were vulnerable to fraudulent and foreign donations. This is a bipartisan problem potentially impacting all levels of government, as those whose organizations were found to have been vulnerable include President Barack Obama, Mitt Romney, Sen. Marco Rubio (R-FL), the Democratic National Committee (DNC), the Republican National Committee (RNC), and third-party groups like ActBlue, which funnels money to progressive politicians.
And the report found that the website Obama.com, which is not owned by President Barack Obama’s campaign but redirects to the campaign’s official donation page, may make the Obama campaign the most susceptible to illicit foreign donations. Obama.com is connected to an Obama campaign bundler, Robert Roche, who is from Chicago but now lives and co-founded a corporation in China. Roche has direct ties to China’s state-owned banking industry.
Peter Schweizer, president of GAI, told Breitbart News the ease with which foreigners could donate to American candidates puts America’s sovereignty in peril.
“Foreign donations mean that we no longer make our election decisions anymore,” Schweizer told Breitbart News.
Schweizer said he had initially thought “we would find some bloggers overseas with motivation to support a presidential candidate encouraging people to make donations,” but he was “very surprised” by the study’s findings, including how easy it was for foreigners to use “robo-donation” programs that allow foreigners to potentially make thousands of small-dollar, fraudulent and automated donations to candidates.
Schweizer said he “never thought” the GAI would find mysterious redirect sites like Obama.com and was “surprised how little security is required to receive online donations.”
“We are basically trusting political consultants and fundraisers to do the right thing when no one is looking,” Schweizer said.
The report found nearly half of Congress was vulnerable to fraudulent and foreign directions. Of the 446 House and Senate members who have an online donation page, 47.3% do not require the Card Verification Value (CVV), which is the three or four-digit security code on the back of credit cards, for internet donations. Those in Congress who are vulnerable to foreign donations can be seen at www.CampaignFundingRisks.com.
“Candidates appear content with lax security, negligently inviting foreign or fraudulent cash into their campaign,” the report notes.
And the Obama campaign seems to be the most content with the “lax security.”
The FEC requires campaigns to make their “best efforts” to collect identifying information on all contributors who donate more than $50.30 and even more specific information, such as the donor’s occupation and employer, for donations over $200.
As the report notes, donations less than $50, though, fall under the “Pass-the-Hat” rule, which means campaigns can report all such donations under a lump sum and do not have to make their “best efforts” to collecting information on these small-dollar donors.
Because foreigners can exploit the “Pass-the-Hat” rule, the report found that “any campaign not using these industry-standard security tools is increasing its costs and unnecessarily increasing the risk of at least two types of potential fraud”:
The Fraudulent High Dollar Donor(s): –the fraudulent high dollar donor is politically motivated and is seeking to avoid detection by making numerous donations below the $200 dollar threshold, over which their donation must be identified; they may seek to exceed campaign donation limits.
The Unintentional Fraudster –a foreign national who is unaware of U.S. election laws but sympathetic to the campaign. Such an individual can easily end up on a campaign donation page. Given that a number of campaigns list the U.S. donation laws in an inconspicuous place on the “donate” page, it is easy to see how illegal donations can be made with no malicious intent.
And the Obama campaign is most vulnerable to both types of fraudsters.
For example, the study found “the Obama campaign regularly and aggressively posts solicitations for donations and campaign memorabilia on Facebook,” and “the campaign does not make clear in these postings that only U.S. citizens or permanent residents are allowed to contribute.” Fundraising solicitations from the Obama campaign have gone out to foreigners, asking them to contribute in amounts of less than $200. Similar solicitations have been posted in Arabic, Taiwanese, and Chinese on Facebook and on Middle Eastern and Asian websites.
Even though the Obama campaign is touted for its technological sophistication and sites run by top Obama technology advisers use the “CVV” feature, the Obama campaign itself does not use the “CVV” feature on its donation pages — even though it does use the feature on the merchandise pages where it sells campaign merchandise.
This means someone who donates $2,500 to the campaign online has to go through less security than someone who goes online to buy an Obama campaign mug.
“This creates a security risk that is compounded by the considerable foreign interest in President Obama’s political history, personal story, and views,” the report notes.
And according to the study, BarackObama.com, the campaign’s main website, receives approximately 43% of its traffic from foreign IP addresses.
In addition, popular websites touting Obama’s campaign and linking to its donation page have been found in places like China, Azerbaijan, Vietnam, the Netherlands, Italy, Japan, Norway, Egypt, Hong Kong, and South Korea.
The report notes that not using the CVV feature “is quite possibly costing the campaign millions of dollars in additional fees,” but the campaign is still not using it. Perhaps this is so because the Obama campaign has benefited from donations slipping through the cracks in the past.
In 2008, the report discovered that an individual using the name “Doodad Pro” made at least 791 contributions totaling $19,065 to the Obama campaign while others named “Good Will,” “Test Person” from “Some Place, UT,” “gjtjtjtjtjtjr, AP,” and “QWERTTYYU” also contributed to the campaign.
The most interesting — or suspicious — site is Obama.com, which the campaign strangely does not own. According to the report, nearly 68% of internet traffic to Obama.com comes from foreign locations. And the website is connected to Robert Roche, who lives in China and co-founded a Chinese company called Acorn International. Roche, the report found, made 19 visits to the White House since 2009, including being seated at the head table during a State dinner with Chinese president Hu Jintao in 2011.
Unlike the Obama campaign, the Romney campaign website uses the “CVV” feature but it is not without vulnerabilities.
For instance, Romney’s campaign also has Facebook and Twitter accounts in Arabic that give off the impression they are associated with the Romney campaign. These accounts link to the Romney campaign’s page and are presumably for a foreign audience.
In addition, the report found some of Romney’s top bundlers, like Akin Gump’s Tom Loeffler, have lobbied for foreign governments like Saudi Arabia.
Since 1980, Philippine President Ferdinand Marcos, the Chinese government, powerful Indonesian families, foreign criminal gangs, and the Turkish government have tried to influence American officials through campaign donations.
Turkish government officials, the report notes, once bragged about sending hundreds of thousands of dollars in “un-itemized contributions” to then Speaker of the House Dennis Hastert’s campaign between 1996 and 2000 and the government of Pakistan has shuttled campaign donations through intermediaries to presidential candidates and members of Congress who sat on the Foreign Affairs Committee, such as Congressman Dan Burton.
With the internet, foreigners can now attempt to influence American officials anonymously and conveniently — with the click of a mouse.
According to the study, influential members of Congress had websites that made them vulnerable to illicit foreign donations. For instance, Rep. Ilena Ros-Lehtinen, Chairman of the House International Affairs Committee, had a campaign website that prior to May 1, 2012 did not require the CVV to contribute to her campaign. Though there was no evidence of illicit campaign contributions, her website was vulnerable to them.
The study also found that during Sen. Marco Rubio’s 2010 senate run, Rubio’s campaign did not require the CVV from his online contributors and foreign websites, including many in South America, often featured videos that urged viewers to “donate” to Rubio’s campaign. One potential reason for Rubio’s popularity abroad on websites was the idea of “ethnic solidarity” among Hispanics willing to support a rising star of the same heritage.
The report also noted foreigners can also donate to third-party organizations on both sides of the aisle that funnel money to political candidates.
The GAI study acknowledged “by design, social media’s expansive and viral nature disseminates information, ideas, and causes,” and as a result, “social media is difficult to control, and indeed should not be controlled.”
“Campaigns need to be aware that the age of social media is an age where donation requests go viral, reaching the furthest corners of the world,” the report notes. “Failure to employ industry standard security and transparent accountability is almost an invitation to foreign money to inject itself into federal campaigns.”
The United States has laws against foreign campaign donations to protect its sovereignty and, in January 2012, the U.S. Supreme Court unanimously upheld these laws banning foreign contributions were constitutional.
The GAI report recommends election officials:
Integrate safeguards to limit the solicitation of money from foreigners by requiring donors with foreign IP addresses to provide proof of U.S. citizenship before they can proceed to the donate page
Immediately require campaigns to use industry-standard anti-fraud security technologies including, but not limited to, the Card Verification Value (CVV) and a rigorous Address Verification System (AVS)
Immediately require all campaigns to retain and disclose identifying information on all online campaign contributions, including those falling under the $200 nondisclosure threshold currently allowed under federal law
Address the threat of “Robo-Donations”: The absence of industry-standard anti-fraud credit card security features render campaigns more vulnerable to so-called “robo-donations.” Robo-donations are large numbers of small, automated donations made through the Internet to evade FEC reporting requirements.
Schweizer, president of GAI, put a particular emphasis on the “robo-donations” that “can literally make a thousand small contributions under different names to fall below the disclosure thresholds.”
These “robo-donations” essentially allow foreigners to threaten America’s sovereignty and potentially undermine its elections, which is why Schweizer said it is “absolutely essential” to mandate more disclosure and credit card security for campaign donations.
“Amazon.com uses more credit card security for online book purchases than many federal candidates accepting $2,000 campaign donations via credit card,” Schweizer said. “To protect the integrity of U.S. elections, that must change.”
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