FEC Urges Congress To Close Foreign Money Loophole

The Federal Election Commission (FEC) is urging Congress to close a loophole in federal law that allows foreign corporations to finance ballot measures, as reported by Jimmy Cloutier for Open Secrets.

The Federal Election Campaign Act does not apply to political spending on ballot measures, referenda, or even recall elections where a candidate is not seeking office.

While the Federal Election Campaign Act currently prohibits foreign nationals and corporations from making political donations and independent expenditures in connection with an election for federal, state, or local office, the ban does not apply to political spending on ballot measures, referenda, or even recall elections where a candidate is not seeking office, Cloutier added.

Open Secrets is an independent media group tracking U.S. and foreign money that goes into political campaigns.

This month, the FEC approved more than a dozen legislative recommendations to federal lawmakers, including proposals to close the loophole and make it illegal to help foreign nationals circumvent the restrictions.

In 2021, the FEC dismissed a complaint alleging that the Australian mining company Sandfire Resources violated federal campaign finance law when it spent nearly $288,000 to defeat a Montana ballot measure that would have made it easier for regulators to deny mining permits.

The commission concluded that foreign campaign contributions in connection with ballot questions fell “outside the purview” of federal law.

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