The Boston Globe reported Monday that Democratic Senate candidate Elizabeth Warren raised $12.1 million for her campaign in the 3rd quarter ending September 30, 2012. That brings the total raised to $36 million. Yet more than 40% of these funds–an estimated $16 million–have come online via two websites that do not have industry-standard protections and are vulnerable to fraud and illegal foreign national donations.
Today’s report, which will be available for full public scrutiny by Tuesday morning, includes $8.4 million raised between August 18 and September 30 after her most recent Federal Election Commission filing–an August 17, 2012 pre-primary report that showed she had raised $3.7 million between July 1 and August 17, and $28 million from the start of her campaign.
Warren made her reputation as an anti-fraud advocate for consumers.
Of the $28 million Democrat Elizabeth Warren raised for her Massachusetts Senate campaign at the time she had filed the August 17 pre-primary report (covering contributions to August 17, 2012), 42% (approximately $13 million) came from “unitemized” individual contributions donated on two online websites that lack industry standard security protections to prevent illegal donations from foreign nationals. When the Warren campaign’s third quarter reports are finally available, we’ll see if that percentage remains.
It is likely that her most recent $8.4 million of donations includes approximately the same percentage of unitemized small donations. If that pattern holds, then slightly more than $3 million of her previously unreported donations came from unsecure online websites, bringing the total amount that her campaign has raised through websites that are vulnerable to fraud to approximately $16 million.
According to FEC regulations, political campaigns are not required to list the name, address, and occupation of individual donors who contribute less than $200 in an election cycle. Campaigns are only required to report the total amount received from these small donors as “unitemized” individual contributions.
The $13 million Warren has reported as “unitemized donations” in her FEC filings up until August 17 constitute an unprecedented 42% of her total contributions. It dwarves the “unitemized donation” percentage of most other Senate campaigns in the 2012 election cycle.
Warren’s 42% of “unitemized” donations is more than double the 15% of her opponent Scott Brown. It is also more than double the percentage of donations of Republican or Democratic candidates in five other 2012 Senate campaigns examined by Breitbart News (Nevada, Missouri, Montana, Arizona, and Nebraska) this cycle, and the range was a low of 1% (Bob Kerrey, the Democratic candidate in Nebraska) to a high of 15% (Claire McCaskill, the Democratic candidate in Missouri).
According to the New York Times, “In 2008, of donations to House candidates, only 8 percent were less than $200; small donations accounted for 14 percent to Senate candidates.”
The Warren campaign’s prolific fundraising among small donors has been accompanied by disregard for industry security standards designed to prevent fraud and illegal foreign donations. While Ms. Warren is not alone among political candidates in her failure to install basic online security provisions, the scale of her small donor fundraising success suggests that she may have created an online fundraising machine that is particularly vulnerable to fraud and illegal foreign donations.
Warren’s 42% puts her in the same category as, and even slightly ahead of, President Obama, who has raised 38% of the $431 million he’s raised from unitemized donations, according to Open Secrets. But, like President Obama, whose lack of online security was highlighted in the Government Accountability Institute’s America the Vulnerable report, Warren seems to have similar vulnerabilities.
As that report found:
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…
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.
The Warren campaign seems to have the same donation vulnerabilities as the Obama campaign. Though a small percentage of the $13 million in donations may have come from other than online sources the vast majority came from donors who contributed online at one of two sites:
ElizabethWarren.com, the official website of the Warren campaign, accounted for an estimated $9 million of this $13 million.
ActBlue, a prolific “conduit” website for donations to Democratic candidates and organizations that provides legal “passthrough” services to an estimated 750 clients, accounted for an estimated $3.7 million of this $13 million.
Neither of these websites have the standard credit card industry CVV and AVS code protections designed to prohibit donations from foreign nationals (which is illegal) or “multiple giving” robo-fraud.
Breitbart News has learned that more than $6.2 million in donations to Democratic nominee Elizabeth Warren’s campaign for the Massachusetts Senate seat came through the Act Blue conduit website. $2.5 million of this amount was itemized and reported in Warren’s FEC filings. $3.7 million came from small donors and was unitemized.
Incumbent Senator Scott Brown does not use a similar conduit website to raise money for his campaign.
ActBlue reports that it has funneled $6,290,125 from 162,470 donors to the Elizabeth Warren campaign in the year and one month between the time Ms. Warren announced her candidacy in September, 2011 and the first week in October, 2012. The average donation is $38.72, which is well below the $200 threshold that is required for the candidate to publicly disclose the name, address, and occupation of the donor in its regular reports to the Federal Election Commission.
According to FEC reports, the names and addresses of only 9,556 of these 162,470 have been included in FEC documents filed by the Warren campaign. These 9,556 named donors contributed $2.5 million of the $6.2 million raised by ActBlue for the Warren campaign. Their average donation was $267.98.
This leaves a total of 152,914 donors who contributed $3.7 million to the Warren campaign through the non-secure ActBlue website unknown and unnamed. Their average donation was $24.79.
In July, 2012, ActBlue reported that the $240,000 it raised for the Warren campaign placed her in the top five of funding passed through among their 750 clients.
The ACT Blue website has virtually no protections to prohibit the acceptance of donations from non-US citizens.
According to its website:
ActBlue is an online toolset that makes it easy for donors to connect with the candidates and causes they support… At ActBlue, our mission is to democratize power by putting powerful fundraising tools in the hands of grassroots donors across the United States…
ActBlue only accepts donations from individuals, and we direct the money as they specify. We disclose every donation made through ActBlue to the relevant bodies, working to keep the lines of accountability between donors and recipients open.
Both the ActBlue website and the Elizabeth Warren campaign website are among the political websites that lack the basic CVV security code protections to limit fraud and the receipt of foreign donations. The Scott Brown campaign website does have the CVV security code protection.
The ACT Blue website, which acts as a funnel to dozens of Democratic candidates in addition to Ms. Warren, appears to be one of the online websites that lacks this basic security protection.
Visitors to the Act Blue website can browse through an array of Democratic candidates to whom they can contribute. When the Elizabeth Warren contribution page is selected, the drop down box allows contributions from residents of any country. When Canada is selected, another drop down box allows the donor to select a specific province instead of a state.
While American expatriates who live in foreign countries but retain their US citizenship may legally contribute to the campaigns of candidates for office in American federal elections, it is illegal for non-US citizens who reside in foreign countries to contribute to the campaigns of American candidates. It is also illegal for the campaigns of candidates for American federal offices to accept donations from non-US citizens or solicit donations from non US Citizens.
The ACT Blue donation page includes this language at the bottom of the page where donors submit their credit card information:
1. I am a United States citizen or a permanent resident alien.
2. This contribution is made from my own funds, and funds are not being provided to me by another person or entity for the purpose of making this contribution.
3. I am making this contribution with my own personal credit card and not with a corporate or business credit card or a card issued to another person.
4. I am not a federal contractor.
5. I am at least eighteen years old.
Despite this language, foreign nationals who ignore these contribution rules could easily donate to Elizabeth Warren through the Act Blue website without any detection.
ActBlue was founded in 2004 by Harvard graduate Benjamin Rahn and MIT graduate Matt DeBergalis. It is headquartered in Cambridge, Massachusetts, home of Harvard University.
Executive Director Erin Hill, a Wellesley graduate, is a veteran of Democratic political operations in Massachusetts and Washington, D.C. As her Twitter account shows, she’s a big fan of Elizabeth Warren.
Phone calls placed to ACTBlue by Breitbart News requesting comment were not returned.
While illegal foreign national donors who go to the official Elizabeth Warren campaign website may not have such an easy time selecting their foreign residence in the drop down box, the Warren site offers a drop down code (AA) which seems to serve a “catch all” purpose which they could use.
Donors to the Warren campaign are required to select either their state of residence (the 50 plus DC) or one of eleven other location codes, only five of which are US territories or commonwealth. According the the ISP 3166 two letter country code standards, here are those eleven non state or DC codes:
AA- User assigned
AE- United Arab Emirates (a sovereign independent nation)
AP – not used
AS – American Samoa (US territory)
FM – Micronesia (a sovereign independent nation)
GU – Guam (US territory)
MH – Marshall Islands (a sovereign independent nation)
MP – Northern Marianas Islands (US commonwealth)
PR – Puerto Rico (US commonwealth)
PW – Palau ( a sovereign independent nation)
VI – Virgin Islands (US territory)
The only way to determine how many of these donors are foreign nationals is to conduct an audit of the ActBlue and Elizabeth Warren financial records for small donors.
The race between Elizabeth Warren and Scott Brown remains neck and neck. A poll released by Rasmussen Reports on Wednesday showed Warren with a 2 point lead over Brown, 49% to 47%, which is within the poll’s 5 point margin of error.