The end of campaign finance reform

The former head of the FEC, Bradley Smith, wrote yesterday in the Washington Post about the unbelievable job that Obama has done in fundraising, breaking all records. And it is more than just getting money from all these millions of small donors.

Obama has indeed attracted record numbers of small contributors, many giving just a few dollars over the Internet. By the end of October, however, the Obama campaign will almost certainly have raised more money in contributions of $200 or more than any previous presidential candidate has raised in total contributions of any size. Here's another key comparison: A greater percentage of Obama's funds have come from donors contributing more than $200 than the percentage of funds President Bush raised from such donors in his 2000 and 2004 campaigns. Don't think $200 is a "large" contribution? Well, Obama is also likely to raise twice as much money in contributions of $1,000 or more than any previous candidate in history. In short, if every small contribution, however defined, were taken away from the Obama campaign, he would still have raised more money in large contributions than any candidate before -- by a very substantial margin. Yet Obama isn't worried about any corrupting effects of all this cash, and neither are his supporters, who continue to open their wallets.

Of course, Democrats who used to worry so much about the corrupting influence of money in politics are notably silent now that it is their guy raking in the dough. And forget about all those arguments about the inequities of having one candidate rake in so much more money than another candidate. You don't hear those arguments any more now that it is the Democratic candidate with the fundraising advantage.

John McCain can whine all he wants about how Obama broke his promise about taking public money, but no one cares. People don't vote based on perceptions of corruption or inequality in fundraising. And Democrats are suddenly uninterested in questions about fundraising violations whether it's possible foreign donors or all the stories we've seen of people who were able to donate money to the Obama campaign under phony names.

Perhaps this election has had the effect of blowing away John McCain's major achievement, campaign finance reform.

This suggests that partisanship, rather than principle, is what drives most support for campaign finance reform. When one side is being outspent, its partisans naturally want to limit the fundraising of the other side. But if we really are concerned about "fairness," the best approach is probably to remove restrictions on fundraising altogether, rather than limit the speech of those who are raising money successfully.

Campaign finance laws never affect all candidates equally. For example, the one area where McCain has an advantage this cycle is the fundraising success of the RNC versus the DNC. But because of the byzantine campaign finance rules (for which he bears considerable responsibility), the Arizona senator cannot take full advantage of that edge. Due to the rules, the RNC can only use a portion of those funds to campaign for its presidential nominee. This is illogical and, this year, increases the inequality in campaign spending.

We should consider it a healthy thing when Americans support their political beliefs with their dollars. What we see in this election is that contributions don't really cause "corruption" and that we don't really want the government deciding who has spoken too much and who has not spoken enough. If Obama's fundraising shows us the emptiness of the arguments for campaign finance "reform," he will have done us a great service, in spite of himself.

Of course, those laws are still in effect for this election. And there does seem to be something fishy going on in how the Obama campaign, as Scott Johnson reports, seems to have turned off the verification safeguards on accepting credit card donations.

The campaign's records reveal big contributors with names like "Doodad Pro" (employer: "Loving," profession: "You") and "Good Will" (same employer and profession). Both donated via credit card. Other reports have suggested that some donations come from overseas - raising the question of whether Obama is accepting donations from foreigners, another violation of federal law.

All of which prompted an enterprising citizen to test the controls put in place to enforce compliance with federal campaign law by the Obama and McCain campaigns. Last Thursday, he decided to conduct an experiment.

He went to the Obama campaign Web site and made a donation under the name "John Galt" (the hero of Ayn Rand's novel "Atlas Shrugged"). He provided the equally fictitious address "1957 Ayn Rand Lane, Galts Gulch, CO 99999."

He checked the box next to $15 and entered his actual credit-card number and expiration date. He was then taken to the next page and notified that his donation had been processed.

He then tried the same experiment on the McCain site, which rejected the transaction. He returned to the Obama site and made three more donations using the names Osama bin Laden, Saddam Hussein and Bill Ayers, all with different addresses but the same credit card. The transactions all went through. By Saturday, he'd reported that the transactions had all posted to his credit-card account.

Others repeated "John Galt's" experiment last week, giving to Obama under such fictitious names as Della Ware, Joe Plumber, Idiot Savant, Ima BadDonation (with a Canadian bank card) and Fake Donor.

What accounts for the Obama campaign's acceptance of these fraudulent donations? Most merchants selling goods and services use the basic Address Verification System that screens credit-card charges for matching names and addresses. (It can also screen cards issued by foreign banks.) The McCain campaign uses AVS and provides a searchable database of all donors, including those who fall below the $200 threshold. The Obama campaign apparently has chosen not to use the AVS system to screen donations.

The only people who will care about the Obama campaign's turning off all the automated safeguards on credit-card donations are those who already are opposing Obama. So expect to read some story after the election about the Obama campaign having to return a bunch of phony donations, but no one will care or ask why the Obama campaign turned off those automated card check provisions in the first place.