Secret, Foreign Money Floods Into Obama Campaign
Monday, September 29, 2008 9:23 PM
By: Kenneth R. Timmerman
More than half of the whopping $426.9 million Barack Obama has raised has come from small donors whose names the Obama campaign won't disclose.
And questions have arisen about millions more in foreign donations the Obama campaign has received that apparently have not been vetted as legitimate.
Obama has raised nearly twice that of John McCain's campaign, according to new campaign finance report.
But because of Obama’s high expenses during the hotly contested Democratic primary season and an early decision to forgo public campaign money and the spending limits it imposes, all that cash has not translated into a financial advantage �?at least, not yet.
The Obama campaign and the Democratic National Committee began September with $95 million in cash, according to reports filed with the Federal Election Commission (FEC).
The McCain camp and the Republican National Committee had $94 million, because of an influx of $84 million in public money.
But Obama easily could outpace McCain by $50 million to $100 million or more in new donations before Election Day, thanks to a legion of small contributors whose names and addresses have been kept secret.
Unlike the McCain campaign, which has made its complete donor database available online, the Obama campaign has not identified donors for nearly half the amount he has raised, according to the Center for Responsive Politics (CRP).
Federal law does not require the campaigns to identify donors who give less than $200 during the election cycle. However, it does require that campaigns calculate running totals for each donor and report them once they go beyond the $200 mark.
Surprisingly, the great majority of Obama donors never break the $200 threshold.
“Contributions that come under $200 aggregated per person are not listed,�?said Bob Biersack, a spokesman for the FEC. “They don’t appear anywhere, so there’s no way of knowing who they are.�?BR>
The FEC breakdown of the Obama campaign has identified a staggering $222.7 million as coming from contributions of $200 or less. Only $39.6 million of that amount comes from donors the Obama campaign has identified.
It is the largest pool of unidentified money that has ever flooded into the U.S. election system, before or after the McCain-Feingold campaign finance reforms of 2002.
Biersack would not comment on whether the FEC was investigating the huge amount of cash that has come into Obama’s coffers with no public reporting.
But Massie Ritsch, a spokesman for CRP, a campaign-finance watchdog group, dismissed the scale of the unreported money.
“We feel comfortable that it isn’t the $20 donations that are corrupting a campaign,�?he told Newsmax.
But those small donations have added up to more than $200 million, all of it from unknown and unreported donors.
Ritsch acknowledges that there is skepticism about all the unreported money, especially in the Obama campaign coffers.
“We and seven other watchdog groups asked both campaigns for more information on small donors,�?he said. “The Obama campaign never responded,�?whereas the McCain campaign “makes all its donor information, including the small donors, available online.�?BR>
The rise of the Internet as a campaign funding tool raises new questions about the adequacy of FEC requirements on disclosure. In pre-Internet fundraising, almost all political donations, even small ones, were made by bank check, leaving a paper trail and limiting the amount of fraud.
But credit cards used to make donations on the Internet have allowed for far more abuse.
“While FEC practice is to do a post-election review of all presidential campaigns, given their sluggish metabolism, results can take three or four years,�?said Ken Boehm, the chairman of the conservative National Legal and Policy Center.
Already, the FEC has noted unusual patterns in Obama campaign donations among donors who have been disclosed because they have gone beyond the $200 minimum.
FEC and Mr. Doodad Pro
When FEC auditors have questions about contributions, they send letters to the campaign’s finance committee requesting additional information, such as the complete address or employment status of the donor.
Many of the FEC letters that Newsmax reviewed instructed the Obama campaign to “redesignate�?contributions in excess of the finance limits.
Under campaign finance laws, an individual can donate $2,300 to a candidate for federal office in both the primary and general election, for a total of $4,600. If a donor has topped the limit in the primary, the campaign can “redesignate�?the contribution to the general election on its books.
In a letter dated June 25, 2008, the FEC asked the Obama campaign to verify a series of $25 donations from a contributor identified as “Will, Good�?from Austin, Texas.
Mr. Good Will listed his employer as “Loving�?and his profession as “You.�?BR>
A Newsmax analysis of the 1.4 million individual contributions in the latest master file for the Obama campaign discovered 1,000 separate entries for Mr. Good Will, most of them for $25.
In total, Mr. Good Will gave $17,375.
Following this and subsequent FEC requests, campaign records show that 330 contributions from Mr. Good Will were credited back to a credit card. But the most recent report, filed on Sept. 20, showed a net cumulative balance of $8,950 �?still well over the $4,600 limit.
There can be no doubt that the Obama campaign noticed these contributions, since Obama’s Sept. 20 report specified that Good Will’s cumulative contributions since the beginning of the campaign were $9,375.
In an e-mailed response to a query from Newsmax, Obama campaign spokesman Ben LaBolt pledged that the campaign would return the donations. But given the slowness with which the campaign has responded to earlier FEC queries, there’s no guarantee that the money will be returned before the Nov. 4 election.
Similarly, a donor identified as “Pro, Doodad,�?from “Nando, NY,�?gave $19,500 in 786 separate donations, most of them for $25. For most of these donations, Mr. Doodad Pro listed his employer as “Loving�?and his profession as “You,�?just as Good Will had done.
But in some of them, he didn’t even go this far, apparently picking letters at random to fill in the blanks on the credit card donation form. In these cases, he said he was employed by “VCX�?and that his profession was “VCVC.�?BR>
Following FEC requests, the Obama campaign began refunding money to Doodad Pro in February 2008. In all, about $8,425 was charged back to a credit card. But that still left a net total of $11,165 as of Sept. 20, way over the individual limit of $4,600.
Here again, LaBolt pledged that the contributions would be returned but gave no date.
In February, after just 93 donations, Doodad Pro had already gone over the $2,300 limit for the primary. He was over the $4,600 limit for the general election one month later.
In response to FEC complaints, the Obama campaign began refunding money to Doodad Pro even before he reached these limits. But his credit card was the gift that kept on giving. His most recent un-refunded contributions were on July 7, when he made 14 separate donations, apparently by credit card, of $25 each.
Just as with Mr. Good Will, there can be no doubt that the Obama campaign noticed the contributions, since its Sept. 20 report specified that Doodad’s cumulative contributions since the beginning of the campaign were $10,965.
Foreign Donations
And then there are the overseas donations �?at least, the ones that we know about.
The FEC has compiled a separate database of potentially questionable overseas donations that contains more than 11,500 contributions totaling $33.8 million. More than 520 listed their “state�?as “IR,�?often an abbreviation for Iran. Another 63 listed it as “UK,�?the United Kingdom.
More than 1,400 of the overseas entries clearly were U.S. diplomats or military personnel, who gave an APO address overseas. Their total contributions came to just $201,680.
But others came from places as far afield as Abu Dhabi, Addis Ababa, Beijing, Fallujah, Florence, Italy, and a wide selection of towns and cities in France.
Until recently, the Obama Web site allowed a contributor to select the country where he resided from the entire membership of the United Nations, including such friendly places as North Korea and the Islamic Republic of Iran.
Unlike McCain’s or Sen. Hillary Clinton’s online donation pages, the Obama site did not ask for proof of citizenship until just recently. Clinton’s presidential campaign required U.S. citizens living abroad to actually fax a copy of their passport before a donation would be accepted.
With such lax vetting of foreign contributions, the Obama campaign may have indirectly contributed to questionable fundraising by foreigners.
In July and August, the head of the Nigeria’s stock market held a series of pro-Obama fundraisers in Lagos, Nigeria’s largest city. The events attracted local Nigerian business owners.
At one event, a table for eight at one fundraising dinner went for $16,800. Nigerian press reports claimed sponsors raked in an estimated $900,000.
The sponsors said the fundraisers were held to help Nigerians attend the Democratic convention in Denver. But the Nigerian press expressed skepticism of that claim, and the Nigerian public anti-fraud commission is now investigating the matter.
Concerns about foreign fundraising have been raised by other anecdotal accounts of illegal activities.
In June, Libyan leader Moammar Gadhafi gave a public speech praising Obama, claiming foreign nationals were donating to his campaign.
“All the people in the Arab and Islamic world and in Africa applauded this man,�?the Libyan leader said. “They welcomed him and prayed for him and for his success, and they may have even been involved in legitimate contribution campaigns to enable him to win the American presidency..."
Though Gadhafi asserted that fundraising from Arab and African nations were “legitimate,�?the fact is that U.S. federal law bans any foreigner from donating to a U.S. election campaign.
The rise of the Internet and use of credit cards have made it easier for foreign nationals to donate to American campaigns, especially if they claim their donation is less than $200.
Campaign spokesman LaBolt cited several measures that the campaign has adopted to “root out fraud,�?including a requirement that anyone attending an Obama fundraising event overseas present a valid U.S. passport, and a new requirement that overseas contributors must provide a passport number when donating online.
One new measure that might not appear obvious at first could be frustrating to foreigners wanting to buy campaign paraphernalia such as T-shirts or bumper stickers through the online store.
In response to an investigation conducted by blogger Pamela Geller, who runs the blog Atlas Shrugs, the Obama campaign has locked down the store.
Geller first revealed on July 31 that donors from the Gaza strip had contributed $33,000 to the Obama campaign through bulk purchases of T-shirts they had shipped to Gaza.
The online campaign store allows buyers to complete their purchases by making an additional donation to the Obama campaign.
A pair of Palestinian brothers named Hosam and Monir Edwan contributed more than $31,300 to the Obama campaign in October and November 2007, FEC records show.
Their largesse attracted the attention of the FEC almost immediately. In an April 15, 2008, report that examined the Obama campaign’s year-end figures for 2007, the FEC asked that some of these contributions be reassigned.
The Obama camp complied sluggishly, prompting a more detailed admonishment form the FEC on July 30.
The Edwan brothers listed their address as “GA,�?as in Georgia, although they entered “Gaza�?or “Rafah Refugee camp�?as their city of residence on most of the online contribution forms.
According to the Obama campaign, they wrongly identified themselves as U.S. citizens, via a voluntary check-off box at the time the donations were made.
Many of the Edwan brothers�?contributions have been purged from the FEC database, but they still can be found in archived versions available for CRP and other watchdog groups.
The latest Obama campaign filing shows that $891.11 still has not been refunded to the Edwan brothers, despite repeated FEC warnings and campaign claims that all the money was refunded in December.
A Newsmax review of the Obama campaign finance filings found that the FEC had asked for the redesignation or refund of 53,828 donations, totaling just under $30 million.
But none involves the donors who never appear in the Obama campaign reports, which the CRP estimates at nearly half the $426.8 million the Obama campaign has raised to date.
Many of the small donors participated in online “matching�?programs, which allows them to hook up with other Obama supporters and eventually share e-mail addresses and blogs.
The Obama Web site described the matching contribution program as similar to a public radio fundraising drive.
“Our goal is to bring 50,000 new donors into our movement by Friday at midnight,�?campaign manager David Plouffe e-mailed supporters on Sept. 15. “And if you make your first online donation today, your gift will go twice as far. A previous donor has promised to match every dollar you donate.�?BR>
FEC spokesman Biersack said he was unfamiliar with the matching donation drive. But he said that if donations from another donor were going to be reassigned to a new donor, as the campaign suggested, “the two people must agree�?to do so.
This type of matching drive probably would be legal as long as the matching donor had not exceeded the $2,300 per-election limit, he said.
Obama campaign spokesman LaBolt said, “We have more than 2.5 million donors overall, hundreds of thousands of which have participated in this program.�?BR>
Until now, the names of those donors and where they live have remained anonymous �?and the federal watchdog agency in charge of ensuring that the presidential campaigns play by the same rules has no tools to find out.
© 2008 Newsmax. All rights reserved.
Obama’s Harvard Years: Questions Swirl
Tuesday, September 23, 2008 6:11 PM
By: Kenneth R. Timmerman
How exactly did Barack Obama pay for his Harvard Law School education?
The way the Obama campaign has answered the question was simply hard work and student loans.
But new questions have been raised about Obama’s student loans and Obama’s ties to a radical Muslim activist who reportedly was raising money for Obama’s Harvard studies during the years 1988 to 1991.
The allegations first surfaced in late March, when former Manhattan Borough president Percy Sutton told a New York cable channel that a former business partner who was “raising money�?for Obama had approached him in 1988 to help Obama get into Harvard Law School.
In the interview, Sutton says he first heard of Obama about twenty years ago from Khalid Al-Mansour, a Black Muslim and Black Nationalist who was a “mentor�?to the founders of the Black Panther party at the time the party was founded in the early 1960s.
Sutton described al-Mansour as advisor to “one of the world’s richest men,�?Saudi prince Alwaleed bin Talal.
Prince Alwaleed catapulted to fame in the United States after the September 11 attacks, when New York mayor Rudy Guiliani refused his $10 million check to help rebuild Manhattan, because the Saudi prince hinted publicly that America’s pro-Israel policies were to blame for the attacks.
Sutton knew Al-Mansour well, since the two men had been business partners and served on several corporate boards together.
As Sutton remembered, Al-Mansour was raising money for Obama’s education and seeking recommendations for him to attend Harvard Law School.
“I was introduced to (Obama) by a friend who was raising money for him,�?Sutton told NY1 city hall reporter Dominic Carter. “The friend’s name is Dr. Khalid al-Mansour, from Texas.�?BR>
Obama spokesman Ben LaBolt told Newsmax that Sutton’s account was “bogus�?and a “fabrication that has been retracted�?by a spokesman for the Sutton family.
He referred Newsmax to a pro-Obama blog published on Politico.com by reporter Ben Smith.
In a September 3 blog entry, Smith wrote that “a spokesman for Sutton’s family, Kevin Wardally�?said that Sutton had been mistaken when he made those comments about Obama and Khalid Al-Mansour.
Smith suggested the retraction “put the [Obama/Al-Mansour] story to rest for good.�?BR>
Wardally told Smith that the “information Mr. Percy Sutton imported [sic] on March 25 in a NY1 News interview regarding his connection to Barack Obama is inaccurate. As best as our family and the Chairman’s closest friends can tell, Mr. Sutton, now 86 years of age, misspoke in describing certain details and events in that television interview.�?BR>
Asked which parts of Percy Sutton’s statements were a “fabrication,�?LaBolt said “all of it. Al Mansour doesn’t know Obama. And Sutton’s spokesman retracted the story. The letter [to Harvard, which Percy Sutton says he wrote on behalf of Obama], the ‘payments for loans�?�?all of it, not true,�?he added.
Newsmax contacted the Sutton family and they categorically denied Wardally’s claims to Smith and the Politico.com. So there was no retraction of Sutton’s original interview, during which he revealed that Khalid Al-Mansour was “raising money�?for Obama and had asked Sutton to write a letter of recommendation for Obama to help him get accepted at Harvard Law School.
Sutton’s personal assistant told Newsmax that neither Mr. Sutton or his family had ever heard of Kevin Wardally.
”Who is this person?�?asked Sutton’s assistant, Karen Malone.
When told that he portrayed himself as a “spokesman�?for the family, Malone told Newsmax, “Well, he’s not.�?BR>
According to a 2006 New York magazine profile, Wardally is part of a “New New Guard�?in Harlem politics that has been challenging the “lions�?of the old guard, Charles Rangel and Percy Sutton. That makes him an unlikely candidate to speak on behalf of Sutton.
Sutton maintains an office at the Manhattan headquarters of the firm he founded, Inner City Broadcasting Corporation. ICBC owns New York radio stations WBLS and WLIB.
Sutton’s son Pierre (“Pepe�? runs ICBC along with his daughter, Keisha Sutton-James. Malone told Newsmax that she had consulted with Sutton’s family members at the station and confirmed that no one knew Kevin Wardally or had authorized him to speak on behalf of the family.
For someone claiming to be a “spokesman�?for the Sutton family, who was authorized to call Percy Sutton a liar, Wardally even got Percy Sutton’s age wrong.
Sutton is not 86, as Wardally said, but close to 88. He was born on Nov. 24, 1920.
Wardally responded to a several Newsmax phone messages and emails with a terse one-line comment, maintaining his statement that Percy Sutton “misspoke�?in the television interview.
“I believe the statement speaks for itself and the Sutton Family and I have nothing further to say on the topic,�?he wrote in an email.
Asked to explain why it was that no one at Inner City Broadcasting Corp. knew of him or accepted him as a family spokesman, Wardally responded later that he had been retained by a nephew of the elder Sutton, who “is in our office almost every week.�?BR>
Wardally works for Bill Lynch Associations, a Harlem political consulting firm. The nephew, Chuck Sutton, no longer works with the elder Sutton at Inner City Broadcasting, but for a high-tech start-up called Synematics.
“Percy Sutton doesn’t go out idly on television saying things he doesn’t mean,�?a well-connected black entrepreneur who knows Sutton told Newsmax.
Ben LaBolt’s claim that “Al Mansour doesn’t know Obama�?was contradicted by Al Mansour himself in an extended interview with Newsmax.
Comparing the revelation of his ties to Obama to the controversy surrounding Rev. Jeremiah Wright, Al Mansour said that he was determined to keep a low profile to avoid embarrassing Obama.
“In respect to Mr. Obama, I have told him, because so many people are running after him�?I was determined that I was never going to be in that situation,�?he told Newsmax.
Al Mansour said he was deliberately avoiding any contact with the candidate. “I’m not involved in any way in celebrity sweepstakes,�?he said. “I wish him well, anything I can do if he lets me know, I’ll let him know what I think I can do or can’t. But I don’t collect autographs. I wish him the best, and hope he can win the election.�?BR>
He repeatedly declined to comment on the Percy Sutton allegations, either to confirm or to deny them.
“Any statement that I make would only further the activity which is not in the interest of Barack, not in the interest of Percy, not in the interest of anyone,�?Al Mansour said.
Unanswered Questions
Sen. Obama has refused to instruct Harvard Law School to release any information about his time there as a student, or about his student loans.
Newsmax contacted the Dean of Students, the Director of Student Financial Services, the Registrar, and the Bursar of Harvard Law School. None would provide any specific information on Barack Obama’s time at Harvard, except for his dates of attendance (1988-1991) or his year of graduation, 1991.
A spokesman for the law school, Michael Armini, said it was Harvard policy not to divulge information on alumni without their approval.
“There are lots of reporters nosing around the library,�?he acknowledged. So far, none had turned up any new information.
Law professors Lawrence Tribe and Charles Ogletree have both said publicly that they were “impressed�?by Obama when he was a student.
Sources close to the Sutton family told Newsmax that Percy Sutton wrote a letter of recommendation for Obama to Ogletree at Khalid Al-Mansour’s request, but Ogletree declined to answer Newsmax questions about this.
Harvard Law School spokesman Michael Armini said that Harvard was “very generous�?with financial aid, but only on the basis on need.
The Obama campaign told Newsmax that Obama self-financed his three years at Harvard Law School with loans, and did not receive any scholarship from Harvard Law school.
LaBolt denied that Obama received any financial assistance from Harvard or from outside parties. “No - he paid his way through by taking out loans,�?he said in an email to Newsmax.
At the time, Harvard cost around $25,000 a year, or $75,000 for the three years that Obama attended. And as president of the Harvard Law Review, he received no stipend from the school, Harvard spokesman Mike Armini said.
“That is considered a volunteer position,�?Armini said. “There is no salary or grant associated with it.�?BR>
So if the figures cited by the Obama campaign for the Senator’s student loans are accurate, that means that Obama came up with more than $32,000 over three years from sources other than loans to pay for tuition, room and board.
Where did he find the money? Did it come from friends of Khalid Al Mansour? And why would a radical Muslim activist with ties to the Saudi royal family be raising money for Barack Obama?
That’s the question the Obama campaign still won’t answer.
Michelle Obama Speaks Out
Speaking at a campaign event in Haverford, Pa, in April of this year, Michelle Obama claimed that her husband had “just paid off his loan debt�?for his Harvard Law School education.
In an appearance in Zanesville, Ohio, in February she bemoaned the fact that many American families were strapped with student loan payments for years after graduation.
“The only reason we’re not in that position is that Barack wrote two best-selling books,�?she said. The first of those best-sellers netted the couple $1.2 million in royalties in 2005.
In response to Newsmax questions about the Obama’s college loans, a campaign spokesman cited a report in The Chicago Sun claiming that Obama borrowed $42,753 to pay for Harvard Law School, and “tens of thousands�?more to pay for undergraduate studies at Columbia.
The same report said that Michelle Obama borrowed $40,762 to pay for her years at Harvard Law School.
But a Newsmax review of Senator Obama’s financial disclosures found no trace of any outstanding college loans, going back to 2000.
As a United States Senate candidate, Barack Obama was required to file a financial disclosure form in 2004 detailing his assets, income, consulting contracts, and liabilities.
Obama listed “zero�?under liabilities in 2004 and in all subsequent U.S. Senate financial disclosure forms.
Under the Senate ethics rules, he is required to disclose any loan, including credit card debt, of $10,000 or more. The only exception to the reporting requirement is mortgage debt on a principal residence.
The Senate reports also directly contradict Michelle Obama’s claim that the couple had “only just�?paid off their student loans after receiving book royalties paid out in 2005 and 2006 �?well after her husband had been ensconced in the Senate.
Apparently, Michelle Obama misspoke, according to the version provided by the Obama campaign.
Campaign spokesman Ben LaBolt now tells Newsmax that the loans Sen. Obama took out to pay for Harvard Law School “were repaid in full while he was a candidate for the U.S. Senate [in 2004], and under the rules, the modest outstanding balance he repaid was not reportable as a liability on his personal financial disclosure reports.�?BR>
The Senator repaid the loans on “the expectation of a significant increase in family income�?as a result of the paperback edition of his 1995 book, Dreams of My Father, LaBolt said.
Obama acknowledges that sales of the hard cover edition of the book were “underwhelming.�?But in the spring of 2004,when Obama won the Democrat U.S. Senate primary in Illinois, Rachel Klayman, an editor at Crown Publishers in New York, read an article about Obama and became interested in his memoir, only to discover that Crown now owned the rights.
She asked Obama to write a new forward, and Crown then decided to re-issue Dreams as a paperback in July 2004, just as Obama made his historic speech to the Democrat National Convention.
The paperback eventually sold over one million copies, which under the standard industry royalty for trade paperbacks of 7.5%, earned him $1.2 million. However, Obama didn’t report income from the book until 2005, so it’s unclear how he was able to repay his student loans in 2004.
Responding to attacks from the Hillary Clinton campaign during the primaries, Obama released seven years of tax returns on March 25 of this year.
The returns, dating back to 2000, indicate that the couple paid no interest on their student loans. The interest from such loans would have been deductible on their joint income tax returns.
For 2000 through 2004, taxpayers declared student loan interest as a deduction on line 24 of federal form 1040. After 2004, the deduction can be taken on Line 33.
But the Obamas never declared a dime of interest in student loans on their return, most likely because they simply earned too much money to be able to take the deduction under the IRS rules.
Obama spokesman Ben LaBolt had no answer as to why the Obamas�?failed to declare the loans, stating the obvious that “because interest on the loans was not deducted, it would not appear on the Obamas�?personal return.�?BR>
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