FEC commissioner hopes to crack down on foreign money and ‘scam PACs’

International Currency
Safeguarding U.S. elections from foreign money is on the docket for today’s meeting of the Federal Election Commission. (Photo credit: epSos.de/Wikimedia Commons)

FEC Commissioner Ellen Weintraub will propose at today’s meeting that the commission address two topics needing urgent attention: Foreign money being spent on U.S. elections through secretive corporations, and “scam PACs.”

At the last meeting of the FEC, the three Republican commissioners blocked a proposal by Weintraub, a Democrat, for rulemaking on foreign national spending in U.S. elections, saying that the proposal was too vague. Although foreign nationals are banned from spending on U.S. elections, the lack of transparency required of U.S. corporations — combined with the end of the ban on corporate spending on elections after Citizens United — makes it reasonably easy for a foreign national to spend on U.S. elections. Reporting by The Intercept earlier this year showed that APIC, a corporation owned by Chinese citizens, had donated $1.3 million to the pro-Jeb Bush super PAC Right to Rise.

Weintraub’s new proposal would seek to clarify what constitutes “ownership” of a corporation, because the question of whether a foreign national is using a corporation to influence U.S. elections hinges on whether they have control over that corporation’s funds, as was the case with APIC. According to Weintraub’s memo, the rulemaking will deal with topics like the percentage of foreign ownership and the involvement of foreign governments.

The other proposal we’ll see at the meeting, by Weintraub and Commissioner Ann Ravel, a fellow Democrat, will focus on so-called “scam PACs.” These are political committees that mislead donors by claiming that the money raised will support a particular candidate, but instead is mostly spent on operating expenses (including salaries), often using firms owned by the PAC’s leadership. BuzzFeed’s Andrew Kaczysnki recently reported on Liberty Action PAC, a group which raised $800,000 but neither donated to Trump nor spent anything on ads supporting him. Instead, it spent $450,000 paying an unnamed “media consultant.”

Reining in scam PACs has been made more difficult by the decision in Pursuing America’s Greatness v. FEC. According to the commissioners’ memo, the case “casts doubt on the Commission regulation forbidding non-candidate committees from using candidates’ names” in their names — meaning scam PACs can more easily claim to represent a candidate and confuse donors into thinking they’re directly supporting their candidate of choice.

The new rulemaking would include consideration of whether the FEC can require disclaimers to be of a certain minimum size and to be placed at the top of a web page, and whether the disclaimer should be written in “plain English.”

A particularly interesting part of their proposal is the possibility that the FEC could make use of its new beta.fec.gov site to help hold PACs accountable to donors. The commissioners’ memo suggests that PACs’ online solicitations could link to a “contributor landing page,” which would “present the PAC’s finances in a standardized, easy-to-understand manner” — essentially helping donors assess whether a PAC spends their money well or not.

It’s unlikely that this gets past the same FEC deadlock that killed Weintraub’s last proposal. But we’ll be watching the meeting for these proposals — and the Republican commissioners’ response.