Senate Democrats Press FEC on Foreign-Money Rules

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By Kenneth P. Doyle

Senate Democrats are pressing the Federal Election Commission to strengthen campaign finance disclosure rules to prevent foreign money from influencing U.S. elections.

A recent letter from Sen. Amy Klobuchar (D-Minn.) and 16 other senators calls on the FEC to begin a new rulemaking based on a proposal rejected earlier this year on a deadlocked, party-line vote of six FEC commissioners.

The letter cited recent Senate hearings focused on foreign influence in U.S. campaigns. The hearings by a Senate Judiciary subcommittee focused mainly on allegations of Russian interference in the 2016 presidential campaign, but lawmakers also looked ahead to possible future threats due to lack of transparency in campaign funding.

While existing law prohibits any foreign contributions or spending to influence U.S. elections, “there are current loopholes that could be exploited by foreign interests to influence our elections,” the senators’ letter said.

Most provisions of U.S. campaign finance law were written prior to the 2010 Supreme Court ruling in Citizens United v. FEC and did not anticipate federal campaign spending by corporations, which was allowed by the Citizens United decision.

Republicans Resist New Rules

Because of the failure to follow up after the Supreme Court ruling, “current law and regulations do not provide adequate transparency to prevent foreign donations to campaigns,” the senators’ letter said.

In addition to Klobuchar, the senators signing the letter were Democrats Michael Bennet (Colo.), Richard Blumenthal (Conn.), Sherrod Brown (Ohio), Catherine Cortez Masto (Nev.), Dick Durbin (Ill.), Dianne Feinstein (Calif.), Al Franken (Minn.), Kirsten Gillibrand (N.Y.), Patrick Leahy (Vt.), Jeff Merkley (Ore.), Bill Nelson (Fla.), Jack Reed (R.I.), Tom Udall (N.M.), Chris Van Hollen (Md.), and Sheldon Whitehouse (R.I.), as well as Sen. Angus King (I-Maine).

Republicans in Congress have resisted calls to strengthen campaign finance rules in the wake of Citizens United, arguing that current rules are adequate to prevent foreign influence and other threats. Republicans have accused Democrats of using the specter of foreign money to try to curb campaign money from U.S. corporations—money that tends to favor Republicans.

FEC Deadlocked

The FEC deadlock on a new foreign-money rulemaking occurred last January after Democratic FEC Commissioner Ellen Weintraub proposed considering a possible ban of campaign money from corporations, based on their level of ownership or control by foreign citizens or foreign governments. Weintraub received support in the effort from the two other commissioners holding Democratic seats—Chairman Steven Walther and Commissioner Ann Ravel, who has since left the commission.

The three FEC Republicans, Vice Chair Caroline Hunter and Commissioners Lee Goodman and Matthew Petersen, have opposed new FEC rules in this area, arguing that it is up to Congress to determine if new laws are needed to deal with the possible threat of foreign money. In January, the three FEC Republicans supported a counterproposal by Goodman. The plan was based on requiring a certification that corporate spending or contributions to influence U.S. elections comes from money earned in the U.S., and corporate campaign spending decisions are controlled by individuals who are U.S. citizens.

Following the deadlock over a new rulemaking, the commissioners unanimously agreed to a plan to expedite enforcement matters related to foreign money. It remains unclear how much progress has been made on such cases.

The FEC had 15 enforcement cases involving allegations of foreign-money contributions pending at the beginning of 2017, Walther, the commission’s chairman, said in an open commission meeting May 25. He provided no details about the enforcement matters, which are supposed to be handled in strict secrecy by the FEC until they are resolved. Walther expressed frustration that the agency isn’t moving faster in its handling of complaints regarding foreign money.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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