A proposal to begin writing new regulations to staunch the flow of money from foreign-owned corporations into U.S. elections is the latest victim of the Federal Election Commission’s chronic deadlock when it comes to anything remotely like a reform measure.
The FEC has six members, and by law no more than three may be from the same political party. The three Republican commissioners have often voted as a block to prevent any additional restrictions on money in politics.
At Thursday’s meeting, the GOP commissioners’ opposition was so categorical they declined even to support beginning the process of writing new FEC regulations to prevent corporations that are wholly-owned by foreign governments from putting unlimited money into the U.S. political process. (They did allow that they might consider such a proposal in the future.)
The main proposal on foreign money discussed at the meeting came from one of the FEC’s Democratic members, Ellen Weintraub, and was intended to address a peculiar loophole created by the 2010 Supreme Court’s Citizens United decision.
U.S. law strictly prohibits “foreign nationals” — a term which includes foreign individuals, corporations and governments — from putting money into the U.S. political process. However, the law also states that any company incorporated in the U.S. is a U.S. national, regardless of its ultimate ownership.
President Obama predicted in his 2010 State of the Union address that — because Citizens United lifted previous bans against corporate involvement in federal elections — it would therefore make it possible for “foreign corporations” to “spend without limit in our elections.”
As evidence that this loophole is in fact being utilized, Weintraub’s proposal cited recent reporting by The Intercept about a California corporation called American Pacific International Capital, or APIC. APIC is owned and controlled by Chinese citizens, and donated $1.3 million to Right to Rise USA, the main Super PAC supporting Jeb Bush’s recent presidential run.
During yesterday’s meeting, Lee Goodman, one of the Republican commissioners, claimed that “both before Citizens United and after Citizens United this commission and the Department of Justice have been fully capable of preventing foreign national involvement.”
The FEC and Justice Department did not investigate APIC’s donations before The Intercept’s reporting.
The three Republican FEC commissioners offered their own proposal, that the FEC issue a statement clarifying that the ban on foreign money in U.S. elections applies to independent expenditures direct from corporate treasuries. The proposal would prevent political committees from facing legal consequences regarding foreign money as long as they obtain a statement from corporate donors that no foreign nationals were involved in the decision to make the contribution.
As evidence that this would be sufficient, FEC commissioner Caroline Hunter noted that her husband manages a political action committee and a friend of her runs the domestic subsidiary of a large foreign corporation, and stated that both of them “follow the rules.”
The Republican proposal was also stymied by a 3-3 deadlock.
Craig Holman, government affairs lobbyist for the public interest organization Public Citizen, argues that the FEC’s current frequent stalemates are due to a 2008 realization by Sen. Mitch McConnell, R.-Ky., that “he could bring the enforcement of campaign finance laws largely to a halt by selecting Republican FEC commissioners hostile to campaign finance laws.” Since that year the number of 3-3 votes has increased enormously.
Thursday’s proceedings, say Holman, suggests that “the Republican commissioners continue to fulfill McConnell’s design: to immobilize the Federal Election Commission.”