Excerpt: "Before the 2010 Supreme Court decision known as Citizens United,
all money spent in federal elections urging the election or defeat of a
candidate had to originate from identifiable human beings."
People protest during oral arguments in the case of McCutcheon v. Federal
Election Commission at the US Supreme Court in Washington, D.C. (photo:
Olivier Douliery/Abaca Press/MCT)
Three Paths Citizens United Created for Foreign Money to Pour Into US
Elections
By Jon Schwarz and Lee Fang, The Intercept
04 August 16
Three Paths Citizens United Created for Foreign Money to Pour Into U.S.
Elections
Before the 2010 Supreme Court decision known as Citizens United, all money
spent in federal elections urging the election or defeat of a candidate had
to originate from identifiable human beings.
There were also strict limits on the amount any one human being could
contribute to any particular campaign. And there were public disclosure
requirements for donations over $200.
Corporations and unions were forbidden from involvement beyond organizing
individuals' contributions, via regular (i.e., non-Super) political action
committees.
For example, Microsoft long ago established a PAC. But it could only solicit
donations from individuals connected with Microsoft - e.g., executives and
stockholders - and these individuals could only contribute to the PAC in
amounts limited by law. The PAC doled out the money it collected from these
individuals, but it couldn't use any of the tens of billions of dollars in
cash in Microsoft's corporate treasury to make political contributions or
expenditures.
Then Citizens United struck down the prohibition on corporations spending
their own money on "independent expenditures." Corporations had free-speech
rights, the court decided, and money was tantamount to speech, so
corporations had the right to spend unlimited money espousing their
political views. Several months later, a lower court decision clarified that
a new kind of political action committee - one that only made "independent
expenditures" - could collect and spend unlimited amounts of money to that
end.
This was the birth of Super PACs.
The sole, weak legal restrictions that remain revolve around the definition
of "independent expenditures." Technically, they are not to be used for
spending that is coordinated directly with campaigns - although that
restriction, in 2016, has been blatantly violated.
Karl Sandstrom, a former FEC commissioner, explained the situation this way
several years ago: "Prior to Citizens United, all federal election money
could be traced back to an individual who expended it or contributed to a
political committee. Once you enable artificial entities to contribute,
money is no longer traceable back to identifiable individuals."
One foreseeable effect of this was that the question of whether a campaign
contributor was foreign or not went from a yes-or-no question to something
altogether hazier, where even experts in campaign finance law can't say for
certain whether the government has grounds to sanction the donor.
This would matter less if the Federal Election Commission, the body charged
with overseeing campaign finance law, were a well-resourced, ferocious
watchdog, developing rules for such things and enforcing them. But it's
exactly the opposite, with inaction built into its structure by Congress:
There are six commissioners, but no more than three can be members of the
same party. These days, with the Republican commissioners adamantly opposed
to enforcing even existing laws, crucial votes often tie 3-3. The commission
has a difficult time just deciding to open inquiries into potential
violations; it conducted 36 investigations in 2005, but only four in 2013.
One recent Republican commissioner - Don McGahn, now the chief lawyer for
Donald Trump's presidential campaign - even proposed that the FEC's
investigative staff should be forbidden from using Google without approval
from a majority of commissioners. FEC employees have some of the lowest
morale in comparable government agencies.
All in all, Citizens United opened three major potential paths for foreign
money to flow into the U.S. political process:
The Intercept has discovered that American Pacific International Capital, a
company incorporated in California but owned and controlled by Gordon Tang
and Huaidan Chen, a married couple who are Chinese nationals, made donations
totaling $1.3 million to the Jeb Bush Super PAC Right to Rise USA.
APIC is actually an example of a corporation whose ownership was
comparatively easy to uncover. It is a real company that does actual
business in the U.S., and Tang and Chen also control a publicly traded
Singapore corporation whose filings disclose that APIC belongs to them.
By contrast, the 2016 election has seen a surge of contributions to Super
PACs by so-called ghost corporations, which appear to exist solely to make
those donations and whose ownership is unknown. Whether any of these
corporations are ultimately owned by foreign nationals is likewise unknown.
Don't expect the FEC to find out where the money came from: It recently
deadlocked on a vote simply to open an investigation into several
million-dollar donations by corporate entities four years ago to Restore Our
Future, a Super PAC supporting Mitt Romney. (The treasurer of Restore Our
Future was Charlie Spies, a prominent D.C. lawyer who went on to become
treasurer of Right to Rise USA - and who, in 2015, authored a memo creating
a legal roadmap for foreign nationals wishing to take advantage of Citizens
United to invest in U.S. politicians.)
Almost all large publicly traded U.S. companies have some degree of foreign
ownership. The most recent Treasury Department survey estimated that about
$6 trillion in U.S. stock, or around one-quarter of the total market value
of public U.S. corporations, is ultimately owned by foreign nationals.
The money in these corporations' treasuries therefore belongs in part to
foreign nationals. And because their money can't plausibly be sequestered
from U.S. money, any donations by such corporations are technically
partially of foreign origin and should theoretically be illegal. To pick one
example of many, the publicly traded Florida electricity company NextEra
Energy gave $1 million to Right to Rise USA in 2015.
Americans may find this form of foreign influence less alarming than others,
since foreign ownership of public U.S. companies is generally (though not
always) held by many separate individuals who don't coordinate with one
another and have little influence over the companies' behavior. But there's
no way to know, given that the FEC has not investigated this subject since
the Citizens United decision. One of the Democratic commissioners, Ellen
Weintraub, sponsored a recent forum at the FEC about foreign money and has
suggested a possible ceiling of 20 percent foreign ownership for any
corporation that wants to spend its money on electioneering.
Nonprofit corporations are organized under Section 501(c) of the Internal
Revenue Code. They have always been able to accept unlimited donations from
individuals or corporations, but before Citizens United, could engage in
little federal political activity.
Now, thanks to the combination of Citizens United and a 2007 Supreme Court
decision, "social welfare" organizations operating under Section 501(c)(4)
of the Internal Revenue Code and trade associations operating under Section
501(c)(6) may - within certain lax, seldom-enforced limits - make
independent political expenditures just like Super PACs.
The 501(c)(4) and 501(c)(6) organizations are, in fact, much more attractive
than Super PACs to anyone hoping to influence elections anonymously,
because, unlike Super PACs, they are not required to publicly disclose their
donors. This is why contributions to politically active nonprofits are often
referred to as "dark money."
This additional layer of obfuscation makes it even less likely that money
originating with foreign nationals would be noticed. For instance, if APIC
had donated to Right to Rise Policy Solutions, a 501(c)(4) that was
affiliated with the Right to Rise USA Super PAC, it's unlikely The Intercept
would have ever discovered its involvement in the election or ultimate
ownership.
A (c)(4) like Right to Rise Policy Solutions does have to privately disclose
its donors to the Internal Revenue Service on its tax return, but the IRS is
perhaps even more hobbled than the FEC and would be extremely unlikely to
notice or investigate possible foreign national involvement.
Want an example? Consider, for instance, that the American Petroleum
Institute is partially financed by the U.S. subsidiary of Aramco, the
state-owned Saudi oil company. In the 2010 midterm elections, API was one of
the funders behind attack ads that helped the Republican Party take back the
House of Representatives from the Democrats and stop most of Obama's plans
in their tracks.
Similarly, the American Chemistry Council, partially funded by U.S.
subsidiaries of Saudi, Japanese, and Belgian corporations, also spent
hundreds of thousands of dollars that year to elect its favored politicians.
The U.S. Chamber of Commerce, the largest undisclosed outside spending group
in federal elections, which has already spent over $16 million on
congressional elections this year, has acknowledged that it receives foreign
money. (API and Aramco declined in 2012 to comment on their midterm
activities. The Chamber of Commerce issued a statement stating it has an
internal system in place to prevent the foreign money it raises from
financing political activity.)
In theory, 501(c)(4)s and 501(c)(6)s have to keep any foreign money
segregated and only spend funds from American donors on U.S. elections. In
reality, the public has no idea whether or how they do this, since they are
not required to disclose it. And since money is fungible, any foreign
donations they use for operating expenses leave more domestic contributions
to spend on attack ads.
Error! Hyperlink reference not valid. Error! Hyperlink reference not valid.
People protest during oral arguments in the case of McCutcheon v. Federal
Election Commission at the US Supreme Court in Washington, D.C. (photo:
Olivier Douliery/Abaca Press/MCT)
https://theintercept.com/2016/08/03/citizens-united-foreign-money-us-electio
ns/https://theintercept.com/2016/08/03/citizens-united-foreign-money-us-elec
tions/
Three Paths Citizens United Created for Foreign Money to Pour Into US
Elections
By Jon Schwarz and Lee Fang, The Intercept
04 August 16
Three Paths Citizens United Created for Foreign Money to Pour Into U.S.
Elections
efore the 2010 Supreme Court decision known as Citizens United, all money
spent in federal elections urging the election or defeat of a candidate had
to originate from identifiable human beings.
There were also strict limits on the amount any one human being could
contribute to any particular campaign. And there were public disclosure
requirements for donations over $200.
Corporations and unions were forbidden from involvement beyond organizing
individuals' contributions, via regular (i.e., non-Super) political action
committees.
For example, Microsoft long ago established a PAC. But it could only solicit
donations from individuals connected with Microsoft - e.g., executives and
stockholders - and these individuals could only contribute to the PAC in
amounts limited by law. The PAC doled out the money it collected from these
individuals, but it couldn't use any of the tens of billions of dollars in
cash in Microsoft's corporate treasury to make political contributions or
expenditures.
Then Citizens United struck down the prohibition on corporations spending
their own money on "independent expenditures." Corporations had free-speech
rights, the court decided, and money was tantamount to speech, so
corporations had the right to spend unlimited money espousing their
political views. Several months later, a lower court decision clarified that
a new kind of political action committee - one that only made "independent
expenditures" - could collect and spend unlimited amounts of money to that
end.
This was the birth of Super PACs.
The sole, weak legal restrictions that remain revolve around the definition
of "independent expenditures." Technically, they are not to be used for
spending that is coordinated directly with campaigns - although that
restriction, in 2016, has been blatantly violated.
Karl Sandstrom, a former FEC commissioner, explained the situation this way
several years ago: "Prior to Citizens United, all federal election money
could be traced back to an individual who expended it or contributed to a
political committee. Once you enable artificial entities to contribute,
money is no longer traceable back to identifiable individuals."
One foreseeable effect of this was that the question of whether a campaign
contributor was foreign or not went from a yes-or-no question to something
altogether hazier, where even experts in campaign finance law can't say for
certain whether the government has grounds to sanction the donor.
This would matter less if the Federal Election Commission, the body charged
with overseeing campaign finance law, were a well-resourced, ferocious
watchdog, developing rules for such things and enforcing them. But it's
exactly the opposite, with inaction built into its structure by Congress:
There are six commissioners, but no more than three can be members of the
same party. These days, with the Republican commissioners adamantly opposed
to enforcing even existing laws, crucial votes often tie 3-3. The commission
has a difficult time just deciding to open inquiries into potential
violations; it conducted 36 investigations in 2005, but only four in 2013.
One recent Republican commissioner - Don McGahn, now the chief lawyer for
Donald Trump's presidential campaign - even proposed that the FEC's
investigative staff should be forbidden from using Google without approval
from a majority of commissioners. FEC employees have some of the lowest
morale in comparable government agencies.
All in all, Citizens United opened three major potential paths for foreign
money to flow into the U.S. political process:
The Intercept has discovered that American Pacific International Capital, a
company incorporated in California but owned and controlled by Gordon Tang
and Huaidan Chen, a married couple who are Chinese nationals, made donations
totaling $1.3 million to the Jeb Bush Super PAC Right to Rise USA.
APIC is actually an example of a corporation whose ownership was
comparatively easy to uncover. It is a real company that does actual
business in the U.S., and Tang and Chen also control a publicly traded
Singapore corporation whose filings disclose that APIC belongs to them.
By contrast, the 2016 election has seen a surge of contributions to Super
PACs by so-called ghost corporations, which appear to exist solely to make
those donations and whose ownership is unknown. Whether any of these
corporations are ultimately owned by foreign nationals is likewise unknown.
Don't expect the FEC to find out where the money came from: It recently
deadlocked on a vote simply to open an investigation into several
million-dollar donations by corporate entities four years ago to Restore Our
Future, a Super PAC supporting Mitt Romney. (The treasurer of Restore Our
Future was Charlie Spies, a prominent D.C. lawyer who went on to become
treasurer of Right to Rise USA - and who, in 2015, authored a memo creating
a legal roadmap for foreign nationals wishing to take advantage of Citizens
United to invest in U.S. politicians.)
Almost all large publicly traded U.S. companies have some degree of foreign
ownership. The most recent Treasury Department survey estimated that about
$6 trillion in U.S. stock, or around one-quarter of the total market value
of public U.S. corporations, is ultimately owned by foreign nationals.
The money in these corporations' treasuries therefore belongs in part to
foreign nationals. And because their money can't plausibly be sequestered
from U.S. money, any donations by such corporations are technically
partially of foreign origin and should theoretically be illegal. To pick one
example of many, the publicly traded Florida electricity company NextEra
Energy gave $1 million to Right to Rise USA in 2015.
Americans may find this form of foreign influence less alarming than others,
since foreign ownership of public U.S. companies is generally (though not
always) held by many separate individuals who don't coordinate with one
another and have little influence over the companies' behavior. But there's
no way to know, given that the FEC has not investigated this subject since
the Citizens United decision. One of the Democratic commissioners, Ellen
Weintraub, sponsored a recent forum at the FEC about foreign money and has
suggested a possible ceiling of 20 percent foreign ownership for any
corporation that wants to spend its money on electioneering.
Nonprofit corporations are organized under Section 501(c) of the Internal
Revenue Code. They have always been able to accept unlimited donations from
individuals or corporations, but before Citizens United, could engage in
little federal political activity.
Now, thanks to the combination of Citizens United and a 2007 Supreme Court
decision, "social welfare" organizations operating under Section 501(c)(4)
of the Internal Revenue Code and trade associations operating under Section
501(c)(6) may - within certain lax, seldom-enforced limits - make
independent political expenditures just like Super PACs.
The 501(c)(4) and 501(c)(6) organizations are, in fact, much more attractive
than Super PACs to anyone hoping to influence elections anonymously,
because, unlike Super PACs, they are not required to publicly disclose their
donors. This is why contributions to politically active nonprofits are often
referred to as "dark money."
This additional layer of obfuscation makes it even less likely that money
originating with foreign nationals would be noticed. For instance, if APIC
had donated to Right to Rise Policy Solutions, a 501(c)(4) that was
affiliated with the Right to Rise USA Super PAC, it's unlikely The Intercept
would have ever discovered its involvement in the election or ultimate
ownership.
A (c)(4) like Right to Rise Policy Solutions does have to privately disclose
its donors to the Internal Revenue Service on its tax return, but the IRS is
perhaps even more hobbled than the FEC and would be extremely unlikely to
notice or investigate possible foreign national involvement.
Want an example? Consider, for instance, that the American Petroleum
Institute is partially financed by the U.S. subsidiary of Aramco, the
state-owned Saudi oil company. In the 2010 midterm elections, API was one of
the funders behind attack ads that helped the Republican Party take back the
House of Representatives from the Democrats and stop most of Obama's plans
in their tracks.
Similarly, the American Chemistry Council, partially funded by U.S.
subsidiaries of Saudi, Japanese, and Belgian corporations, also spent
hundreds of thousands of dollars that year to elect its favored politicians.
The U.S. Chamber of Commerce, the largest undisclosed outside spending group
in federal elections, which has already spent over $16 million on
congressional elections this year, has acknowledged that it receives foreign
money. (API and Aramco declined in 2012 to comment on their midterm
activities. The Chamber of Commerce issued a statement stating it has an
internal system in place to prevent the foreign money it raises from
financing political activity.)
In theory, 501(c)(4)s and 501(c)(6)s have to keep any foreign money
segregated and only spend funds from American donors on U.S. elections. In
reality, the public has no idea whether or how they do this, since they are
not required to disclose it. And since money is fungible, any foreign
donations they use for operating expenses leave more domestic contributions
to spend on attack ads.
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http://e-max.it/posizionamento-siti-web/socialize
