Eleanor Finch
Foreign interference in US elections has been a concern since the country's founding, with federal law prohibiting foreign nationals and governments from contributing money directly to US political campaigns. This includes both federal and state elections, with the Federal Election Commission (FEC) enforcing these laws. However, in recent years, the FEC has been criticised for its failure to enforce these laws effectively, allowing foreign money to influence US elections. This has raised concerns about the integrity of US elections and the potential for foreign interference. Despite the FEC's commitment to prioritizing cases involving foreign election spending, the influence of foreign-influenced companies and dark money in US politics remains a significant issue.
| Characteristics | Values |
|---|---|
| Are foreign companies allowed to contribute to US political campaigns? | No, foreign companies are prohibited from contributing to US political campaigns. |
| Who enforces this? | The Federal Election Commission (FEC) enforces federal campaign finance laws. |
| What are the consequences of violating these laws? | The FEC enforces this statute by imposing civil fines on people who violate the law. Criminal liability is also possible, with cases referred to the Department of Justice (DOJ) for criminal prosecution. |
| What is considered a foreign national? | A foreign national is any person who is not a US citizen and does not have a green card (lawfully admitted for permanent residence). |
| Are there any loopholes or workarounds? | Yes, there have been instances of foreign money being funnelled through US companies or Social Welfare Organizations (SWOs), which are exempt from disclosing their donors. |
| What are the concerns regarding foreign influence? | Foreign influence in US elections raises concerns about interference, intrigue, and influence in government decision-making. |
| How prevalent is foreign ownership in US companies? | Foreign investors held 40% of US stock in 2019, according to the Tax Policy Center. |
| How are states and localities responding? | Some states and localities have adopted their own bans on foreign political spending, with varying thresholds and definitions of "foreign influence." |
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What You'll Learn
- Foreign nationals and governments cannot contribute to US campaigns
- Foreign money can be spent on elections if it is first invested in a US business
- Foreign-influenced companies have poured millions into political contributions
- Foreign nationals cannot direct, dictate, or control any person or organisation with regard to election-related activities
- Foreign money in US elections: FEC's failure to enforce laws banning it
Foreign nationals and governments cannot contribute to US campaigns
Foreign nationals and foreign governments are prohibited from contributing to US political campaigns. This is enforced by the Federal Election Campaign Act, which makes it illegal for foreign nationals to contribute to any American election, be it federal, state, or local.
A foreign national is defined as any individual who is not a US citizen and does not have a green card (indicating permanent residence in the US). Foreign nationals are prohibited from making direct or indirect contributions, including donations, expenditures, and disbursements, in connection with any federal, state, or local election. This includes contributions to political party committees, organizations, and candidates themselves.
While Social Welfare Organizations (SWOs) are exempt from disclosing their donors, foreign nationals cannot donate to a SWO and earmark the money for a specific candidate. This is because it violates the law and is hard to trace due to the lenient disclosure laws applicable to SWOs.
The Federal Election Commission (FEC) enforces this statute by imposing civil fines, but criminal liability is also possible. If a person willingly accepts foreign contributions, the FEC can refer the case to the Department of Justice (DOJ) for criminal prosecution.
Despite these laws, there have been concerns about the FEC's commitment to enforcing them. In one instance, the FEC closed a case involving a US company, American Ethane Co., which used funds from Russian oligarchs to support federal candidates in 2018. The FEC's Republican Commissioners characterized the foreign money as an "investment" in an American company rather than as foreign interference in US elections.
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Foreign money can be spent on elections if it is first invested in a US business
Federal law prohibits foreign nations from "directly or indirectly" injecting money into US elections. This includes contributions, donations, expenditures, and disbursements made to political party committees and organizations. A foreign national is defined as any person who is not a US citizen and does not have a green card.
However, there have been concerns raised about the Federal Election Commission's (FEC) commitment to protecting US elections from foreign interference. In one instance, the FEC dismissed a case where a US company, American Ethane Co., used money from Russian oligarchs to support federal candidates and political action committees (PACs) during the 2018 election cycle. The FEC characterized the foreign money as an "investment" in an American company rather than as foreign money used to influence elections. This has led to concerns that foreign money can be spent on elections if it is first "invested" in a US business, creating a loophole for foreign election interference.
To address these concerns, the Ways and Means Committee has advanced legislation to protect election integrity and prohibit foreign money from influencing US politics. The committee's investigation uncovered loopholes that allow foreign nationals to inject money into the American political system through tax-exempt organizations. The approved bills aim to shut down workarounds, increase transparency, and prohibit tax-exempt entities from funding state and local election organizations.
While the FEC has a responsibility to enforce laws banning foreign money in elections, the characterization of foreign money as "investments" and the existence of loopholes in the tax code highlight the challenges in preventing foreign influence in US elections.
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Foreign-influenced companies have poured millions into political contributions
Foreign companies are prohibited from contributing to US political campaigns. A federal law, the Federal Election Campaign Act, makes it illegal for foreign nationals to contribute to any American election, be it federal, state, or local. Foreign nationals are also prohibited from donating to an inaugural committee. Here, a foreign national is defined as any person who is not a US citizen and does not have a green card.
Despite these laws, foreign-influenced companies have poured millions into political contributions. These companies are defined as corporations with more than 5% aggregate foreign ownership or individual foreign ownership of more than 1%. Between the 2018 and 2022 election cycles, foreign-influenced companies contributed more than $44.6 million in Colorado and over $25.9 million in New York. In 2022, foreign-connected company PACs spent nearly $20 million on federal elections.
In recent years, concerns about foreign influence in US elections have grown, and several states have proposed laws to restrict foreign-influenced companies from engaging in political spending in state or local elections. For instance, in 2023, Minnesota passed the Democracy for the People Act, prohibiting foreign-influenced corporate spending in state elections. Colorado has considered similar changes, and New York has passed legislation barring corporations with over 5% aggregate foreign ownership or 1% individual foreign ownership from contributing to state-level political committees.
However, it is challenging to track all the money that foreign-influenced companies pour into politics. This is because a lot of the money goes to 501(c) nonprofits and trade associations, which are not required to disclose their funders or members. Additionally, these organizations can donate to super PACs, which must disclose their donors but not the original source of the money. This creates a layer of anonymity that makes it difficult to trace the money back to its foreign source.
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Foreign nationals cannot direct, dictate, or control any person or organisation with regard to election-related activities
Foreign nationals are prohibited from contributing to US political campaigns. This includes both direct and indirect contributions, such as donations or expenditures, to any federal, state, or local election. A foreign national is defined as any individual who is not a US citizen and does not have a green card.
In addition, foreign nationals are not allowed to direct, dictate, or control any person or organisation in their election-related activities. This means that foreign nationals cannot participate in the decision-making process of any person or organisation with regard to their federal or non-federal election activities. For example, a foreign national cannot influence a corporation, labour organisation, political committee, or political organisation in their decisions concerning contributions, donations, expenditures, or disbursements in connection with any election.
The Federal Election Campaign Act (FECA) prohibits foreign nationals from contributing, donating, or spending funds in connection with any federal, state, or local election in the US. This includes both direct and indirect contributions. FECA also makes it illegal for American candidates to receive, solicit, or accept foreign contributions. The Federal Election Commission (FEC) enforces this statute by imposing civil fines on those who violate the law, and criminal liability is also a possibility.
It is important to note that there are some exceptions to these rules. For example, foreign nationals with green cards are considered US persons and are legally eligible to contribute money and/or services to US political campaigns. Additionally, some foreign nationals without green cards may provide voluntary non-monetary contributions of services to a political campaign as long as they are not compensated.
Overall, the restrictions on foreign nationals aim to minimise foreign intervention in US elections and ensure that campaign contributions and decisions are made by US citizens or permanent residents.
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Foreign money in US elections: FEC's failure to enforce laws banning it
Federal law prohibits foreign contributions, donations, expenditures, and disbursements in connection with any federal, state, or local election. Foreign nationals are also prohibited from participating in the decision-making process of any person or organization with regard to election-related activities.
The Federal Election Commission (FEC) is the regulatory agency charged with administering and enforcing federal campaign finance laws. However, the FEC has repeatedly failed to enforce the laws banning foreign money in US elections. For example, in 2018, the FEC deadlocked and closed a matter where a US company, American Ethane Co., used money from Russian oligarchs to support federal candidates and PACs during the 2018 election cycle.
The FEC's failure to enforce the law has resulted in a lack of transparency and accountability in the political system. Voters are unable to know who is spending money in elections, undermining their ability to cast an informed vote. This has allowed wealthy special interests to flood elections with vast amounts of secret spending, also known as "dark money."
The FEC's non-enforcement of campaign finance rules has serious consequences. It has helped foster a culture of impunity, where some candidates and donors appear to believe they are above the law. The FEC's inaction has also resulted in a proliferation of "super PACs," which are not required to disclose their donors, further reducing transparency in the political system.
To reduce political corruption and increase transparency, real enforcement of campaign finance laws is necessary. The FEC must prioritize investigating and prosecuting violations of the ban on foreign election spending to protect the integrity of US elections.
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Frequently asked questions
No, foreign companies are prohibited from contributing to US political campaigns. However, US-registered corporations that are subsidiaries of foreign companies or have foreign ownership can contribute to US political campaigns.
Foreign companies can contribute to US political campaigns by providing funding to US-registered corporations that are allowed to participate in political spending. This allows foreign money to influence US elections.
Foreign companies are prohibited from directly contributing to US political campaigns. Foreign nationals and governments are also barred from contributing money directly or indirectly to US political campaigns. These restrictions extend to federal, state, and local elections.
