A Few Words About Anonymous $50 Contributions

This "anonymous donations" dust-up is an unnecessarily big to-do that's missing the big picture. Why should we be concerned about small anonymous or "untraceable" donations? The reason we require some degree of openness in donor lists is so that we can be sure that politicians or the parties cannot be beholden to special interests. We want to prevent corruption. We want to know if a politician is receiving tens of thousands of dollars from an industry that her committee affects. We want to know if a political party is getting millions from certain corporations or labor unions. We want to know if foreign governments are trying to buy favorable policy. We want to have an open door on the potential influence-peddling that privately-financed elections can foment. But a donation of $50 is not going to buy influence anywhere. And even more obviously, an ANONYMOUS donation of $50 is not going to buy any influence. What corruption comes from allowing $25 donations from unknown sources in a billion-dollar election? None.

So what is the real concern? That people are putting up repetitive small-dollar donations under fake names to get around certain restrictions, doing so to a large-enough degree that it would buy influence, and then telling the Obama campaign that the 75 people known as "DFDSSD" are really them? I assume that is not seriously being alleged. Or is it that foreigners are donating to a campaign? Well, American citizens living abroad ARE allowed to donate to a campaign. Also, there's no way of verifying whether someone is a citizen or not -- even of the person had a passport, the State Department (rightfully) doesn't share this information. And why should they? We want to prevent the influence of foreign money. (Like the Clinton-Gore China and Buddhist monk fundraising issues). If the campaign is not soliciting the contribution and has no idea that foreign money is being received, what are we worried about?

Why are we concerned that a $25 gift-card donation is "untraceable"? You know what else is untraceable? Cash. And you can make $50 cash donations anonymously, or $100 cash donations non-anonymously (but, again, without any way to verify an address). Why do we allow cash donations in small amounts? Because, again, it is so incredibly unlikley that someone would make enough $50 donations anonymously (but tell the campaign that it was him) to be able to buy access. So gift card away.

The spirit of the rules is that we don't want people secretly influencing policy. These anonymous small donations don't violate the spirit of the rule. And since address verification is not required, it doesn't violate the letter of the rules either. So what's really the concern? "Karl Marx" donated $10? Who cares?

Mind you, it raises an eyebrow that (supposedly) the Obama campaign would accept a higher percentage taken out of each donation by the credit-card processor in exchange for no address verification. But the law allows this, and if the economics are right for the campaign (they can raise more money by having less donations excluded), as long as there's no chance of undue influence, the problem seems inconsequential.

I think what we have here is exactly what the campaign-finance reformers wanted (at least those that still wanted a privately-financed election). Millions of people are giving hundreds of millions of dollars. The donations are so diffuse that it's impossible for any person or group to unduly influence the candidate. If anything, we've finally got a candidate that is "beholden" to the public in general, not any particular people, companies, or industries. And if we wanted campaigns to vet every single donation, even those less than $1, it would tremendously raise the costs of campaigning, requiring even more fundraising and just compound the problem.

Disabling the address verification clearly brings Obama more money. But what is the concern? What effect will it have on Obama? Without some reasonable allegations about that, this is just a lot of noise.

Finally, a note on privacy of donors. People should be allowed to financially support a candidate to some extent without having their name (let alone their address and employer) posted on the Web for everyone to snoop around. Personally, I think the threshold level should be much higher than it is -- maybe $10,000 or so for Presidential general elections post-convention(whether it's an individual or a bundler). With the vast sums at issue, I just don't see much influence coming from amounts less than that (yes, I realize that people are limited to a quarter of this, but I think that's too low, too). Right now, the law allows you to remain private at under $200. People are entitled to this privacy if they donate less than this. And maybe some people circumvent the rules to donate more but to retain their privacy (as opposed to more sinister reasons), both from the campaigns and the public in general. The McCain campaign publicly discloses the names of all donors, regardless of size. If I was a small donor to the McCain campaign, I'd be pretty pissed off if my name was made public without my knoweldge.