Omar Bennett
Foreign interference in elections has been a concern since the founding of the United States. Federal law prohibits foreign nationals from contributing money directly or indirectly to US political campaigns, whether federal, state, or local. However, there are loopholes that allow foreign money to influence US elections. For example, foreign nationals can donate to Social Welfare Organizations (SWOs), which can then donate to political Super PACs without disclosing the original source of the funds. Additionally, foreign-owned companies can make political contributions as long as they are made with funds generated by their US operations and no foreign national participates in the decision to contribute. This has raised concerns about the integrity of US elections and the potential for foreign interference.
| Characteristics | Values |
|---|---|
| Can political campaigns accept money from non-citizens? | No |
| Who is considered a non-citizen? | Any person that is not a U.S. citizen and does not have a green card |
| Are there any loopholes? | Yes, Social Welfare Organizations (SWOs) are exempt from disclosing donors, so they can accept foreign money and donate to a Super PAC. |
| What happens if a campaign accepts money from non-citizens? | The FEC can impose civil fines or refer the case to the Department of Justice for criminal prosecution |
| What about U.S. companies with foreign money? | Commissioners have allowed foreign money to be used in elections if it is first "invested" in a U.S. company |
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What You'll Learn
Foreign money in US elections
Federal law prohibits foreign nationals from contributing money directly or indirectly to US political campaigns. This includes soliciting, directing, receiving, or making contributions, donations, expenditures, or disbursements in connection with any federal, state, or local election. A foreign national is defined as a foreign government or political party, or an organisation or person that is not a US citizen or a green card holder.
Despite these laws, there have been instances of foreign money influencing US elections. In the 2018 election cycle, for example, the FEC investigated a case where a US company, American Ethane Co., used money from Russian oligarchs to support federal candidates and PACs. The investigation found that American Ethane was 88% owned by three Russian nationals and had no domestically generated income, yet it still made political contributions. The FEC's Republican Commissioners dismissed the allegations, characterising the foreign money as an "investment" in an American company rather than an attempt to influence the election.
Another loophole exists in the form of Social Welfare Organisations (SWOs), which are exempt from disclosing their donors as long as at least half of their activities are non-political. Foreign nationals can donate to SWOs, which can then donate to political Super PACs. While the Super PAC must disclose the SWO as a donor, the SWO's foreign donors remain anonymous, making it difficult to trace the source of the "dark money".
The Federal Election Commission (FEC) enforces the law by imposing civil fines on those who violate it, but criminal liability is also possible. The FEC can refer cases of knowing and wilful acceptance of foreign contributions to the Department of Justice (DOJ) for criminal prosecution.
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FEC's stance on foreign contributions
Federal law prohibits foreign nationals from directly or indirectly contributing or donating money in connection with any federal, state, or local elections. This includes expenditures, independent expenditures, and disbursements for electioneering communications. Foreign nationals are also prohibited from participating in decisions involving election-related activities.
The Federal Election Commission (FEC) enforces the Federal Election Campaign Act of 1971 (FECA), which limits the amount of money individuals and political organizations can give to a candidate running for federal office. The FEC has previously investigated instances of foreign money influencing US elections, such as the case of American Ethane Co., a US company that used money from Russian oligarchs to support federal candidates and political action committees (PACs) during the 2018 election cycle.
Despite this, there have been concerns about the FEC's commitment to protecting US elections from foreign interference. In one instance, the FEC's Republican Commissioners characterized foreign money invested in an American company as an "investment" rather than as foreign money used to influence elections. This reasoning suggested that foreign money could be spent on elections if it was first invested in a US company, a conclusion that was criticized as legally unsound and troubling.
To ensure compliance with FEC regulations, political committees should take steps to verify that the contributions they receive are not from foreign nationals. For example, the Commission advised committees to ensure that public political advertisements and solicitations do not target foreign audiences. Additionally, an individual who is not a US citizen but has a "green card" indicating lawful permanent residence in the US is eligible to make contributions.
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Federal law on foreign national donations
Federal law prohibits foreign nationals from contributing, donating, or participating in the decision-making process of any person or organization with regard to federal, state, or local election-related activities. This includes decisions concerning contributions, donations, expenditures, or disbursements. Foreign nationals are prohibited from directly or indirectly donating to an inaugural committee, and it is illegal to knowingly accept such donations.
The Federal Election Commission (FEC) enforces these laws, but there have been concerns about its effectiveness. In one instance, the FEC closed a matter where a U.S. company, American Ethane Co., used money from Russian oligarchs to support federal candidates during the 2018 election cycle. The investigation found that the company was 88% owned by three Russian nationals and had no domestically generated income, but the FEC's commissioners characterized the foreign money as an "investment" in an American company rather than a violation of the foreign contribution ban.
Additionally, foreign nationals are defined as individuals who are not citizens of the United States and are not lawfully admitted for permanent residence. However, an individual with a "green card" indicating lawful admission for permanent residence in the U.S. is eligible to make contributions.
To summarize, federal law prohibits foreign nationals from directly or indirectly contributing or donating to any federal, state, or local elections in the United States, and this includes participation in decision-making processes related to election activities. The FEC is responsible for enforcing these laws, but there have been concerns about its effectiveness in preventing foreign interference in U.S. elections.
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Definition of a foreign national
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. Foreign nationals are prohibited from participating in decisions involving election-related activities.
A foreign national is any person (including an organization) who is not a national of a specific country. For example, in the United States and its territories, a foreign national is someone who is neither a citizen nor a national of the United States. The same definition applies in Canada. The law of Canada divides people into three major groups: citizens, permanent residents, and foreign nationals. Under Section 2 of the Immigration and Refugee Protection Act of Canada (IRPA), "foreign national means a person who is not a Canadian citizen or a permanent resident, and includes a stateless person."
The term "foreign national" is not defined in the Immigration and Nationality Act (INA), which instead uses the term "alien" to cover many classes of people who do not qualify as nationals of the United States. However, the term "foreign national" is used in US election laws to describe a person who is prohibited from contributing to federal campaigns.
An individual who is not a citizen of the United States is eligible to make a contribution if they have a "green card" indicating that they are lawfully admitted for permanent residence in the United States. The Commission advised committees to take minimally intrusive steps to ensure that the contributions they received did not come from foreign nationals.
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Penalties for violating the law
Federal law prohibits foreign nationals from contributing to, donating to, or participating in the decision-making process of any person or organisation with regard to federal, state, or local elections. This includes decisions concerning the making of contributions, expenditures, or disbursements. Foreign nationals are also prohibited from donating to an inaugural committee, and it is illegal to knowingly accept such donations.
Federal law also prohibits campaigns from accepting contributions from certain types of organisations and individuals, including corporations, federal government contractors, and foreign nationals. Candidates can spend their own personal funds on their campaigns without limits, but they must report the amount they spend to the Federal Election Commission (FEC).
Violating these laws can result in civil and criminal penalties for both political committees and corporations contributing to political candidates. Fines may be imposed on the political committee itself, its treasurer, chairperson, and other committee leaders. If violations are found to be intentional or part of a longstanding pattern of abuse, committee leaders may face criminal penalties.
In one case, the FEC investigated a US company, American Ethane Co., which used money from Russian oligarchs to support federal candidates and PACs during the 2018 election cycle. The investigation found that American Ethane was 88% owned by three Russian nationals and had no domestically generated income, yet it still contributed to political campaigns. This investigation ultimately deadlocked, with Republican Commissioners dismissing the allegations and characterising the foreign money as an "investment" in an American company rather than a violation of the foreign contribution ban.
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Frequently asked questions
No, federal law prohibits non-US citizens from contributing money directly or indirectly to US political campaigns. However, there is a loophole where Social Welfare Organisations (SWOs) are exempt from disclosing their donors, so foreign nationals can donate to an SWO, which can then donate to a political Super PAC.
A foreign national is any person that is not a US citizen and does not have a green card. A foreign principal, as defined in 22 U.S.C. § 611(b), is a foreign government or political party, or an organisation based in a foreign country.
The Federal Election Commission (FEC) enforces the statute by imposing civil fines on those who violate the law. Criminal liability is also possible, with cases referred to the Department of Justice (DOJ) for criminal prosecution.
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