by Joseph Kenny | 11/14/08

In a recent report, Republican Senate candidate Bob Schaffer charged that donations were being made to his opponent's campaign using prepaid credit cards. The point of contention concerns the nature of these cards. Most prepaid cards are untraceable, making it possible to evade federal limits on donation amounts.

Staff for Schaffer's opponent, Democrat Mark Udall, stated in an interview with press that the Schaffer campaign encouraged one of its supporters to pledge a donation to the Udall campaign using a prepaid card, registered under an assumed name.

This controversy is but one of a growing number that have surfaced throughout the campaign cycle that center around prepaid credit cards. These cards have become part of national politics because of their untraceable nature. As the example notes, people can donate to a campaign under false pretenses while also sidestepping the $4,600 posted limit on individual campaign donations established by federal law.

In a related report, the issue of prepaid credit cards has shown up in the presidential race. It has been noted elsewhere that John McCain's campaign rejects prepaid card donations via the web, while Barack Obama's is more than willing to access donations of this type. The charge coming from the Republican camp is that by allowing prepaid cards in, Obama's campaign may be vulnerable to fraud.

As with either situation, the fact remains that using prepaid credit cards to make campaign donations is not illegal-at least not yet. According to Marc Elias, an election lawyer representing Udall stated, "Whatever method they use, campaigns have to trust that donors making contributions are not lying to you."

The likelihood of legal action by the Federal Election Commission is actually quite small. There is no way to verify claims that the anonymous donor exceeded the legal donations limits.