A ruling by the Federal Elections Commission has cleared the way for foreign donations to campaigns around U.S. ballot initiatives. 


What You Need To Know

  • The Federal Elections Commission ruled that votes on ballot initiatives and referendums don’t meet its legal definition of an “election,” and therefore foreign nationals may donate to committees advocating for or against the issues

  • In the ruling, the FEC says the Supreme Court “has long recognized” that the Federal Election Campaign Act of 1971 "regulates only candidate elections, not referenda or other issue-based ballot measures"

  • The decision could potentially open the door for foreign influence on a number of domestic issues, including approving congressional redistricting

  • Two bills supported by congressional Democrats but opposed by Republicans would ban foreign nationals from donating to ballot initiatives campaigns: the For the People Act and the Freedom to Vote Act

Federal law prohibits foreign nationals from contributing to candidates’ campaigns or committees supporting candidates. But in a July decision, the FEC ruled that votes on ballot initiatives and referendums don’t meet its legal definition of an “election,” and therefore foreign nationals may donate to committees advocating for or against the issues.

Axios was the first to report on the ruling Tuesday. According to Axios, the FEC voted 4-2 to dismiss a complaint alleging illegal foreign interference, with Chairwoman Shana Broussard, a Democrat, siding with the panel’s three Republican members. 

In the ruling, the FEC says the Supreme Court “has long recognized” that the Federal Election Campaign Act of 1971 "regulates only candidate elections, not referenda or other issue-based ballot measures.”

“Consistent with the Act and court precedents, the Commission has observed that spending relating only to ballot initiatives is generally outside the purview of the Act because such spending is not ‘in connection with’ elections,” the ruling says.

The decision could potentially open the door for foreign influence on a number of domestic issues, including approving congressional redistricting. 

The ruling only applies to federal law and does not block states from passing their own bans on foreign donations for ballot issues, which seven states already do.

The FEC ruling was in response to a 2018 complaint alleging that a Canadian subsidiary of Australian firm Sandfire Resources illegally donated to two groups that were campaigning against a referendum that would have created new restrictions on hard-rock mining in Montana.  The proposal was defeated.

The FEC also considered the question about whether it was legal for foreign nationals to donate to ballot measure campaigns in 2015. An HIV-AIDS advocacy group filed a compliant alleging $327,000 in donations from foreign entities were made in an unsuccessful bid to defeat a 2012 California ballot initiative requiring adult film actors to wear condoms while filming. The commission was deadlocked, leaving the matter unsettled — and, critics of the decision argued, creating a loophole that allowed foreign money to flow into the U.S. democratic process. 

“This new decision affirmatively establishes the loophole, by FEC,” Aaron McKean, legal counsel for state and local reform at the Campaign Legal Center, a government watchdog group, told Spectrum News. “This is a loophole of its own creation.

“There is no statute that stops the FEC from protecting state and local ballot measures from foreign money,” McKean argued. “In fact, the law, as it's written now, gives the FEC the tools to protect state and local ballot measures from this kind of foreign interference.”

The FEC did not immediately respond to a request for further comment on its ruling Tuesday.

Two bills supported by congressional Democrats but opposed by Republicans would ban foreign nationals from donating to ballot initiatives campaigns: the For the People Act and the Freedom to Vote Act. 

“Foreign donors shouldn't be influencing our elections, no matter whether it's at the federal, state, or local level,” Rep. Katie Porter, D-Calif., tweeted Tuesday. “In my first term, I successfully amended #HR1, the #ForThePeopleAct, to outlaw these contributions, and I've introduced legislation this year to do the same thing.”

The Maine Legislature passed a bill this year to ban corporations and other entities that are at least 10% owned by foreign governments from donating to citizen-initiated ballot measures. Democratic Gov. Janet Mills vetoed the legislation, saying it could have prevented Maine companies in which foreign governments have ownership stakes from campaigning on referendums that impact them and their employees. 

Maine residents are voting Tuesday on a ballot measure that, if approved, would halt a project running a 145-mile hydropower transmission corridor from Canada through western Maine and into the New England power grid. The Canadian-owned power company, Hydro Quebec, is reportedly financing a campaign to defeat the measure.

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