In a new memo to her five fellow commissioners, Weintraub writes that the Supreme Court’s 2010 Citizens United decision created “new avenues for corporate political activity would make our democracy vulnerable to foreign individuals, corporations, and governments that seek to manipulate our elections.” Weintraub will ask the full FEC at its meeting on Thursday to begin the process of writing new regulations to deal with Citizens United and foreign money.
Weintraub cites recent reporting by The Intercept on a $1.3 million donation by a U.S. corporation owned by Chinese citizens to a Super PAC backing Jeb Bush as evidence that this is not a “hypothetical” issue. “A person would have to be wearing some very rose-colored glasses,” Weintraub writes, “to think there are not foreign operatives interested in exploiting any vulnerability to influence our elections.”
Her fellow commissioner Ann Ravel called on the FEC to take action in August, in the wake of The Intercept‘s story.
The Citizens United decision opened up a peculiar loophole for foreign money. Federal law prohibits “foreign nationals” — a legal term encompassing foreign individuals, corporations and governments — from putting money into the U.S. political process. But federal law also states that any company legally incorporated in the U.S., no matter its ultimate ownership, is a U.S. national.
This was not a significant concern prior to the Citizens United decision, because corporations had been largely barred from spending money on federal elections. By lifting that ban on corporate political donations, Citizens United changed the equation and made it possible for a corporation that is 100 percent owned by foreigners to participate in U.S. politics.
Barack Obama warned in his State of the Union address immediately after the Citizens United ruling that foreign owned corporations would now be able to “spend without limit in our elections.” Justice Samuel Alito, part of the Citizens United majority, was in the audience and shook his head at Obama’s claim, mouthing “not true.”
The Intercept obtained a memo from Charles Spies, one of the Republican Party’s top campaign finance lawyers, written for a client and showing exactly how to do it.
Weintraub is asking the FEC to direct its counsel to begin the process of creating new regulations to close the Citizens United loophole and prevent corporations with significant foreign ownership from participating in U.S. elections.
“Our courts have said that foreign money may be barred from our elections,” Weintraub writes in her conclusion. “Congress has said that foreign money must be barred from our elections. The American public has the right to expect the Federal Election Commission to ensure that foreign money is barred from our elections.”
Ravel’s proposal, also on the agenda for this Thursday’s FEC meeting, would not go as far as Weintraub’s. Rather than calling for the commission to create entirely new regulations, Ravel is asking the commission to rescind previous advisory opinions that outlined how foreign-owned corporations could legally spend small amounts of their own money to set up a company Political Action Committee that would then receive donations from U.S. citizens. Spies relied on those opinions in his memo to create an avenue for foreign-owned corporations to make unlimited donations to Super PACs from their own treasuries.
There is cause for skepticism that the FEC will take action on either proposal. The commission has six members and by law no more than three can be from the same political party. In the past this had led to frequent 3-3 deadlocks, with the Republican commissioners consistently voting against investigations or new regulation of campaign donations. Weintraub and Ravel are the commission’s two Democrats; Steven T. Walther, an independent, often votes with them.
Federal Election Commission Commissioner Ellen Weintraub testifies during a hearing before the Elections Subcommittee of House Committee on House Administration November 3, 2011 on Capitol Hill in Washington, DC.
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