Omar Bennett
Foreign interference in elections has long been a concern in the United States. Federal law prohibits foreign nationals from contributing to federal, state, or local elections, either directly or indirectly. Only US citizens or green card holders are permitted to donate to political campaigns. However, there have been instances of foreign money influencing US elections, with the FEC facing criticism for its failure to enforce laws banning this.
Characteristics and Values
| Characteristics | Values |
|---|---|
| Who can contribute to political campaigns? | Only US citizens or green card holders can contribute to political campaigns. |
| Who cannot contribute to political campaigns? | Foreign nationals, foreign governments, federal government contractors, corporations, labor organizations, national banks, and charitable organizations are prohibited from contributing. |
| Are there limits on contributions? | Yes, contribution limits exist for traditional PACs and candidates' campaigns, but there are no limits on Super PAC donations. |
| What are the consequences for violating the rules? | The FEC can impose civil fines, refer cases to the DOJ for criminal prosecution, and require campaigns to return funds from ineligible donors. |
| How is eligibility determined? | Donors must provide their name, address, and occupation, which allows the FEC to verify their US citizenship or legal residency status. |
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What You'll Learn
Foreign nationals can't donate to US campaigns
In the context of US elections, a foreign national is any person who is not a US citizen and does not have a green card. Federal law prohibits contributions, donations, expenditures, and disbursements solicited, directed, received, or made directly or indirectly by or from foreign nationals in connection with any federal, state, or local election. This includes advances of personal funds, contributions or donations made to political party committees and organizations, and state or local party committees for the purchase or construction of an office building. Foreign nationals are also prohibited from directly or indirectly donating to an inaugural committee.
The Federal Election Commission (FEC) enforces this statute by imposing civil fines on those who violate the law. However, criminal liability is also possible. If a person knowingly and willingly accepts foreign contributions, the FEC can refer the case to the Department of Justice (DOJ) for criminal prosecution. The DOJ can also initiate prosecution without a referral from the FEC.
One notable loophole in the law is that federal legislation exempts Social Welfare Organizations (SWOs) from disclosing their donors, provided that at least half of the SWO's activities are non-political. Consequently, an SWO could accept donations from foreign nationals and then donate to a political Super PAC.
In summary, it is essential to understand that foreign nationals are prohibited by federal law from contributing to US election campaigns, whether directly or indirectly. The FEC is responsible for enforcing this statute, and violations can result in civil fines or criminal prosecution. However, loopholes exist that allow foreign nationals to indirectly influence US politics through donations to certain organizations.
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Corporations, labor organizations, and national banks can't contribute
Corporations, labour organizations, and national banks are prohibited from contributing to political campaigns. This includes any incorporated organization, such as a nonstock corporation, a trade association, an incorporated membership organization, and an incorporated cooperative. Charities, which are considered incorporated organizations, are also prohibited from making contributions in connection with federal elections. They face additional restrictions on political activity under the provisions of the Internal Revenue Code.
National banks are specifically prohibited by the Federal Election Campaign Act of 1971 from making any contributions or expenditures in connection with any election to a political office. This includes federal, state, and local elections, as well as political conventions and caucuses. The Act also prohibits national banks from providing any services or anything of value to a candidate, campaign committee, or political party in connection with an election.
While corporations and national banks are prohibited from contributing directly to political campaigns, they can establish political action committees (PACs) and make contributions through those committees. These PACs can accept contributions from individuals, corporations, and other organizations, and then use those funds to support candidates and influence elections.
It is important to note that while corporations and national banks are restricted from contributing directly to political campaigns, they can still influence politics through other means, such as lobbying, advertising, and supporting ballot initiatives. These activities may not be considered direct contributions to a political campaign but can still have a significant impact on the political process.
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Charities face restrictions on political activity
Charities and churches are prohibited from engaging in any political campaign activity. This ban was created by Congress more than 50 years ago and has been strengthened over the years. The most recent change was in 1987, when Congress amended the language to include statements opposing candidates. This prohibition applies to all candidates for federal, state, and local elections.
The Internal Revenue Code states that all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of or in opposition to any candidate for elective public office. This includes contributions to political campaign funds and public statements of position made on behalf of the organization. Violating this prohibition can result in the loss of tax-exempt status and the imposition of excise taxes.
Incorporated charitable organizations are prohibited from making contributions in connection with federal elections. Charities face additional restrictions on political activity under the Internal Revenue Code. For example, campaigns may not accept or solicit contributions from federal government contractors or foreign nationals.
Nonprofits are permitted to engage in advocacy and lobbying, which are treated separately under the law. Lobbying is defined as communicating with decision-makers about existing legislation and urging a vote for or against. Charitable nonprofits can engage in a limited amount of lobbying, but if they expend more than an "insubstantial" amount of energy, finances, or other resources towards lobbying activities, they may be subject to IRS penalties.
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Super PACs can accept unlimited contributions
In the United States, Super PACs (Political Action Committees) can accept unlimited contributions from individuals, corporations, unions, and other organizations. This is a result of the 2010 Citizens United v. FEC Supreme Court ruling, which overturned the ban on corporations or unions making "independent expenditures" to influence elections.
Prior to Citizens United, outside groups were routinely fined for accepting contributions exceeding federal limits. However, the Court's decision in Citizens United changed this by allowing unlimited contributions to Super PACs as long as the spending was not coordinated with specific candidates. This has resulted in a significant increase in political spending from outside groups, with Super PACs becoming a major source of funding in US elections.
While Super PACs are required to disclose their donors, they can receive donations from "'dark money' groups, making the original source of the funds unclear. Additionally, there are restrictions on who can donate to Super PACs; foreign nationals, foreign corporations, some government contractors, and US national banks are prohibited from contributing.
The emergence of Super PACs has shifted political influence towards wealthy donors and corporations, and it has become common for candidates to work in tandem with Super PACs, despite legal prohibitions against direct coordination. This has led to concerns about the potential for corruption and the need for stronger regulations to prevent undue influence in US politics.
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Campaigns must return ineligible donations
Political campaigns in the US are governed by a set of regulations that dictate who can and cannot contribute to them and how the funds can be spent. Campaigns are required to return ineligible donations, and there are several scenarios in which this may occur.
Firstly, federal law prohibits campaigns from accepting contributions from certain sources, including foreign nationals, federal government contractors, and corporations, labour organizations, or national banks. If a campaign receives donations from these prohibited sources, they must return them. This is to prevent foreign influence in US elections and to maintain the integrity of the political process.
Secondly, there are limits on the amount of money any individual can donate to a single candidate. For the 2023-2024 federal election cycle, the Federal Election Campaign Act caps contributions at $3,300 per election, with the primary and general elections counted as separate elections. If a donor exceeds this limit, the campaign must refund the excess amount within 60 days.
Thirdly, campaigns may also choose to return contributions for moral, ethical, or legal reasons. For example, if a donor is involved in a scandal or controversy, the campaign may distance itself by returning or donating the contribution to avoid negative associations. Additionally, if a candidate does not make it past the primary election, they must refund general election contributions within 60 days, unless they have permission from donors to redirect the funds elsewhere.
It is important to note that Super PACs, which are a result of the Citizens United v. FEC Supreme Court ruling, do not face the same contribution limits as traditional PACs. However, they are still subject to certain regulations, and while not legally obligated, Super PACs often return funds after winding down costs.
In summary, campaigns must return ineligible donations to comply with federal law, maintain transparency, and uphold the integrity of the political process. The return of ineligible donations is a crucial aspect of campaign finance regulation and helps ensure that campaigns are funded by legitimate and permissible sources.
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Frequently asked questions
Only US citizens or green card holders are allowed to donate to federal, state, or local elections. Federal law prohibits foreign nations from "directly or indirectly" injecting money into US elections.
The FEC examines donation records and requires campaigns to verify their legitimacy. The FEC has, in the past, required that funds be returned to donors who are ineligible to give. Criminal charges have also been brought against donors and fundraisers who have tried to allow foreign individuals to contribute.
Yes, federal law exempts Social Welfare Organizations (SWOs) from disclosing their donors, as long as half of the SWO's activities are non-political. As a result, the SWO could accept donations from foreign nationals and governments and then donate to a political Super PAC.
