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United States of Anywhere: How Foreign Nations Are Able to Buy Our Elections

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Potential foreign intervention in the American political process has been a huge story lately thanks to the specter of Russian interference in the 2016 presidential election and President Trump’s cabinet’s connections to Mother Russia. Disturbing as the prospect is of a foreign power using cyber attacks to help put a candidate in the White House, a moment of reflection is necessary. Other countries have been funneling money into our elections for years, and yet the media and both major parties have hardly batted an eye.

Two days after the Supreme Court announced its landmark 2010 ruling in Citizens United v. FEC, Sidney Blumenthal sent then-Senator Hillary Clinton a disturbing email.

“Any foreign nation or leader with a front company becomes a ‘person’ under US law,” the subject line read. Blumenthal was referring to one potential consequence of granting corporations and unions the same First Amendment protections guaranteed to regular citizens by the 1976 Buckley v. Valeo decision, which held that spending money is a protected form of speech.

“This is unbelievable,” Clinton lamented in her response. “Or maybe totally so given the forces at work.”

Blumenthal then offered up that perhaps there was a silver lining to the dilemma. “Getting a legislative fix might be a good initiative for SOTU [State of the Union],” he suggested. “Let the Republicans try to oppose it…”

“Not sure there is a legislative fix.” Clinton conceded. “Haven’t read the opinion yet. May require constitutional amendment.”

Six years later, these concerns have proven prescient. Foreign nations are active participants in our elections.

Although they are prohibited from participating in corporate political expenditures, and though they cannot contribute to political action committees (PACs), these are hardly real limitations. To get around these obstacles foreign countries can set up a front company with a subsidiary, nonprofit or otherwise, here in the United States. Thanks to the Supreme Court, that subsidiary would then be guaranteed most of the same free speech rights as American citizens.

In other words, it can then engage in largely unhindered political advocacy; it can set up or donate to PACs and super PACs, which are able to essentially act as “shadow campaigns.” These independent expenditure groups can spend unlimited amounts of money on both issue and express advocacy, hire lobbyists, conduct opposition research, phone bank, etc. The main difference between the two is that PACs are forbidden from accepting donations from corporations and unions but can donate up to $5000 directly to candidates. Super PACs, however, can accept such contributions but cannot donate directly to candidates.

There has been some debate over whether such subsidiaries should be allowed to donate to these groups. However, as an expert from the FEC pointed out, the entire conflict centers around whether the funds are domestically or foreign-derived, and either way, the money generally tends to be good.

That is not to say there are no checks on foreign influence—but at best they are incidental, and not aimed specifically at curbing this potential corruption of our democracy.

Both PACs and super PACs must disclose their donors, but naturally, there are two workarounds. A foreign state-owned corporation can set up as its U.S. subsidiary, a 501(c)(4) non-profit, also known as a “dark money” group for its lack of a donor disclosure requirement. These can legally accept donations from foreign nationals, engage in issue advocacy—today is nearly indistinguishable from express advocacy thanks to an unclear definition of what “social welfare” means—and can set up affiliated PACs and super PACs.

The other option for foreign governments wishing to act behind a veil of secrecy is through lobbying.

On the surface, retaining registered lobbyists or lobby firms still means being subject to disclosure requirements. PACs must file quarterly contribution reports with the House of Representatives and the Senate, while super PACs are required file quarterly reports detailing their client relationships, income from those clients, lobbying activities, and the issues that they’re lobbying.

However, thanks to what is known as the Daschle Loophole, named for former U.S. Senate Majority Leader Tom Daschle, those requirements are almost meaningless as many lobbyists and lobby firms do not bother registering as such. That is because the statutory definition of who counts as a “lobbyist” under the Lobbying Disclosure Act of 1995 allows them some flexibility. As Politico explained in an article from March of this year, policy advisers are exempted from registering “if they avoid contact with lawmakers or spend less than 20 percent of their time lobbying.”

Whatever path they choose,  foreign nations can pump unlimited, unchecked money into our politics.

Take Israel for example.

This past March, at the height of the primaries, America’s leading presidential candidates, with the notable exception of the Jewish Senator Bernie Sanders, gathered for the American Israel Public Affairs Committee (AIPAC) annual conference. Among the speakers were Vice President of the United States Joe Biden, and of course, then-Democratic front-runner Hillary Clinton, who gave a keynote speech.

I would vigorously oppose any attempt by outside parties to impose a solution including by the U.N. Security Council” she said, discussing Israeli settlements.

During the 2016 election cycle, pro-Israel direct lobbying efforts totaled $4,189,000, and that is just what we know of. Pro-Israel PACs and individuals donated $15,516,892 to candidates running for federal office, including $10,998,775 on incumbents. Virtually every presidential candidate received some money from the pro-Israel lobby, with Clinton topping the list.

Israel is not alone in exerting influence over candidates for American public office. Other countries, some less friendly to us, are also involved.

In 2015, Saudi Arabia decided to go on a lobbying firm “hiring spree” as Lee Fang of The Intercept called it, seemingly in response to heightened global scrutiny over then-recent human rights violations. Those firms included heavy hitters like Edelman and the Podesta Group. Then in March, it retained other notable firms DLA Piper and Pillsbury Winthrop Shaw. To date, it has a veritable army of lobbyists on its payroll.

As Fang noted:

Saudi Arabia’s political operation already includes former Sen. Norm Coleman, R-Minn., who chairs one of the largest Republican Super PACs in the country, as well as the public relations firm MSLGROUP/Qorvis, and Saudi Aramco, the state-owned oil company that funds several influential American political groups, including the American Petroleum Institute. Aramco’s U.S. subsidiary, Saudi Refining, is a registered agent of the Saudi government. The government also finances a number of think tanks and universities, and has made contributions to prominent American nonprofits, including the Clinton Foundation.

All told, OpenSecrets, a nonpartisan data bank which records election spending, has documented a total of $17,121,601 spent by foreign-connected PACs in the 2016 election cycle—$6,245,224 on Democrats and $10,876,377 on Republicans. And again, this is just what we’re aware of.

This situation is exceedingly problematic.

Congressmen and women today, spend half of their time fundraising. This reality is unsurprising given the findings of a comprehensive study of policy outcomes over four decades from 2014 by professors from Princeton and Northwestern. Essentially, what they found was that policy is largely driven by economic elites rather than popular will. It just so happens that now, those elites include not only powerful domestic interests, but foreign interests as well.

For all of the talk about how serious the situation with President Trump and Russia may be—and it could indeed be serious—American politics have been broken for years. Perhaps now we’ll be able to do something about it.

 

Edited by Lydia McMullen-Laird