The sweeping anti-corruption, democracy reform bill passed by Democrats in the House last week included measures to prevent foreign money from influencing future elections, but every single House Republican voted against the bill.
Christian Science Monitor reported on Monday that the Democrats’ bill, H.R.1, was meant to address “an urgent need to close loopholes that could allow foreign money to surreptitiously influence American voters, citing in particular a Kremlin-linked company that bought divisive Facebook ads and a Trump administration tax rule change last summer that could allow illegal foreign donors to evade detection.”
In order to do that, the bill would increase transparency around donors and digital ad spending, as well as require “disclosure of gifts from foreign agents to officeholders.”
Also included is a provision to restructure the Federal Election Commission (FEC) in an effort to break partisan deadlock, which has stymied the enforcement of campaign finance laws already on the books.
Though foreign contributions are illegal, there are numerous ways such money could make its way into campaigns without being detected.
One is via “dark money” groups, specifically 501(c)4s. Such nonprofit groups are permitted to accept unlimited amounts of money and are not required to make donor information public, according to CSM.
These groups “can spend up to half of their funds advocating for or against political candidates, with the rest available for other activities, including advocating for certain issues in which they can also mention candidates by name who support or oppose those issues.”
Dark money groups were previously required to disclose their donors to the IRS, but that changed last summer. In July, Treasury Secretary Steven Mnuchin changed the rules, citing “privacy violations and the fact that donor information was not necessary for tax administration (because donations to such groups are not tax-deductible)” as reasons there is no need for the disclosures.
Brendan Fischer, director of federal reform at the Campaign Legal Center (CLC) in Washington, D.C., said the move could be seen as a “green light” by foreign actors, as there is now less chance of getting caught.
Josh Kirschenbaum, an illicit finance expert at the Alliance for Securing Democracy, said there is no way to fully ensure that foreign money will not influence U.S. elections, but that does not mean rules should not be put into place to hinder as many foreign donations as possible.