Saturday, September 1, 2012

Accepting Bitcoin for Political Campaign Donations

The idea of accepting bitcoin for political donations is intriguing, but can bitcoin comply with all of the rules and regulations for campaign finance?

Mark Warden is an elected State Representative in New Hampshire, serving his first term in the State House, on the Criminal Justice & Public Policy Committee.  Mark recently received the "Legislator of the Year" award from the New Hampshire Liberty Alliance.

Rep. Warden is a supporter of alternative currencies, and he wanted to accept them for his campaign.  He began accepting bitcoin donations in July 2012, and quickly received over 100 bitcoins (worth approximately $1000).  Unfortunately, these donations were all given anonymously, and campaign finance laws specifically prohibit anonymous donations.

The campaign reached out to to see if BitPay could offer a service that would collect the bitcoin donations and also be in compliance with campaign finance laws.

Using the BitPay service, the campaign was able to create "Buy Now" buttons for their website donation page in specific dollar amounts.  When the button is clicked, the BitPay service collects the donor's name, email address and telephone number, and above certain dollar amounts it triggers the need to collect additional information required by law.  The real-time exchange rates are recorded and logged for each transaction.  In the event that the information provided by the donor is false or misleading, or cannot be verified, the campaign has a procedure in place to return the funds or donate them to a local non-political charity.

According to Josh Harvey, a bitcoin advisor for the campaign:
"[Rep. Warden's] campaign's treasurer recently met with the New Hampshire Deputy Secretary of State regarding the Bitcoin contributions. After examining the information, the Deputy Secretary of State said that he did not see anything wrong with the contributions, nor the way they were handled, and that he would take no action. 
The stipulations fleshed out in the vetting process were that:
1. Donations be accompanied by the donor's name and address, and
2. Contributions are acceptable only from US citizens and permanent residents. 
According to Warden's campaign manager, Bitcoin contributions are considered in-kind donations and are assigned a market value when received. Those values are reported on campaign finance reports."
Representative Warden is leading the way for political candidates to accept bitcoin donations, and is doing so in compliance with campaign finance laws.

In North Dakota, Congressional Candidate Eric Olson is also accepting bitcoin donations on his website.  Olson is running on the Libertarian Party ticket and is on the ballot for the general election in November.