(Meredith McGehee is policy director of the Campaign Legal Center and heads McGehee Strategies, a public-interest consulting business. The opinions expressed here are her own.)
By Meredith McGehee
Jan 21 (Reuters) - The Chinese government hacked into U.S. defense systems. What makes Americans think that the Chinese - or the Russians, the Iranians or other foreign interests - are not also hacking into U.S. elections?
They may well be doing it on a large scale. But Americans have no way to know. We have certainly made it easy for them, especially after the U.S. Supreme Court's "Citizens United" ruling, handed down five years ago.
U.S. law prohibits foreign nationals from making a contribution or donation in connection with any federal, state or local election. The prohibition includes contributions to candidates and political action committees, as well as foreign financing of a 501(c)(4) group's "independent expenditures" - the campaign activities that explicitly support or oppose a candidate -- or any of its "electioneering communications" (TV ads appearing close to an election and mentioning a candidate).
But it is easy to violate these regulations without detection. Step 1: Funnel money into an account with an innocuous sounding name, such as XYZ Partners. Step 2: XYZ Partners writes a check to the general account of a 501(c)(4) "dark money" group (let's call it Freedom Isn't Free) that pushes an agenda in line with the interests of the foreign national - perhaps to support generous trade rules or lax human-rights standards. Step 3: Freedom Isn't Free runs television ads that urge viewers to vote for a candidate who supports job creation and economic growth through free trade.
The dangerous loophole is that the dark-money organization, claiming it is a "social welfare" organization under tax law, is not required to publicly disclose its donors - even though they are engaging in activities aimed at influencing elections.
These are the rules that apply to the dark-money groups that spent about $170 million on political advertising in 2014, according to the Wesleyan Media Group. How much the dark-money groups spent on other election-related activities - mailers, phone banks, voter mobilization - remains unknown and unknowable.
When our hypothetical Freedom Isn't Free files its disclosure form with the Internal Revenue Service, perhaps as long as a year after the election, the tax agency will only see a donor list that includes the name XYZ Partners. Given no reason to be suspicious of XYZ Partners - and also facing backlash for its previous actions on (c)(4) groups - the IRS launches no investigation. With no public disclosure, there are no nosy reporters to investigate the true identity of XYZ Partners.
It's that easy for foreign money to seep - or pour - in to influence the outcome of U.S. elections.
This sort of scenario is not just hypothetical. Last year, federal prosecutors accused a Mexican national of funneling more than $500,000 through shell companies and Super PACs to influence U.S. elections. Because Super PACs are required to disclose their donors, dark-money groups are an attractive alternative to hide the foreign origin of funds.
Some organizations that spend heavily on U.S. elections, such as the U.S. Chamber of Commerce, acknowledge that they receive money from foreign donors. They claim, however, that they segregate the donations from funds used for political purposes.
But this is unlikely. First, all money is fungible. So using the foreign money to pay the chamber's "nonpolitical" expenses just frees up more money to be spent on elections. Putting that aside, without public disclosure, there is no way to verify the group actually segregates the foreign funds. If the chamber has foreign donors, it is likely that foreign money representing foreign interests is also seeking to influence U.S. voters through other organizations.
The Supreme Court's "McCutcheon v. Federal Election Commission" decision in 2014 emphasized the importance of disclosure, noting that modern technology can facilitate public access to donor information:
" isclosure of contributions minimizes the potential for abuse of the campaign finance system. ... With modern technology, disclosure now offers a particularly effective means of arming the voting public with information."
The reality is, however, that disclosure requirements for outside spending remain woefully inadequate. They do not protect against the use of foreign funds to influence U.S. elections, though the Supreme Court has repeatedly emphasized the importance of election-related disclosure. Americans need updated laws and modern technology to obtain timely information about who is trying to influence elections.
If there is agreement that any foreign effort to hack the U.S. election process is unacceptable, why does the law make it so easy for it to happen? Congress and the Federal Election Commission should recognize the real danger posed by foreign money and require disclosure of donors to dark-money groups working to influence election outcomes.
The head of the National Security Agency recently told the House Intelligence Committee that the United States is vulnerable to a potentially catastrophic cyberattack because multiple foreign governments have already hacked our critical infrastructure grid.
If manipulating U.S. elections is markedly easier than hacking the grid, some foreign government may, at the very least, be seriously considering the idea. U.S. election results should reflect the voice of the American people - not manipulation by foreign interests.
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