Other countries have always tried to shape our elections
The indictment of Lev Parnas, Igor Fruman, David Correia and Andrey Kukushkin for allegedly breaking campaign finance laws – including running a scheme to funnel foreign money into American elections – was extraordinary, given the accused’s ties to the president’s lawyer Rudy Giuliani and to President Donald Trump himself. But in another sense, their actions weren’t at all novel: They were merely the latest exploitation of a political system that has always been susceptible to foreign interference.
Though America was birthed by breaking free from a foreign power, historically it’s done little to prevent outside meddling in its democracy. In fact, the United States went more than 150 years before passing meaningful legislation to regulate foreign influence in its domestic politics. Even then, it happened only because of the influence-seeking actions of one of the most reprehensible men in history: Adolf Hitler. In the 1930s, the Nazis launched a propaganda effort in America, “a classic disinformation campaign full of the ‘fake news’ and other distortions a new generation of Americans would again encounter in the 2016 presidential election,”according to historian Bradley Hart. Hitler’s propagandists labeled President Franklin Roosevelt a warmonger, discredited newspapers that backed the Allies and secretly supported Nazi sympathizers, with the aim of keeping America on the sidelines of World War II. The campaign failed and ultimately led to the passage of the Foreign Agents Registration Act (FARA) in 1938.
At first, FARA was narrowly defined, requiring those spreading propaganda on behalf of a foreign power to register their activities with the government and disclose their clients, activities and contacts. Even after 80 years and multiple amendments, it remains purely a disclosure statute. Critically, the act has never prohibited the dissemination of propaganda. When the intelligence community concluded that a Russian television network, RT, was “the Kremlin’s principal international propaganda outlet” and part of Moscow’s effort to interfere in the 2016 election, it wasn’t barred from the airwaves – it was required to register under FARA.
The original FARA statute did not prohibit foreign powers from pouring money into the American political system, a loophole that lobbyists exploited in their work to secure sugar quotas on behalf of foreign governments in the 1960s. At that time, U.S. sugar imports were regulated by a system that granted certain countries the opportunity to provide a specific amount of the commodity to the United States. With U.S.-Cuba relations under increasing strain, President Dwight Eisenhower cut off sugar imports from the nation, which had been one of the largest exporters, and other Caribbean sugar producers spent lavishly on lobbyists to gain Cuba’s quota. Congressional hearings chaired by Sen. William Fulbright revealed that foreign governments had used these lobbyists to make campaign contributions to key elected officials. The ensuing outrage spurred amendments that, in 1966, explicitly barred agents from making campaign contributions on behalf of foreign powers. For the first time, America had a law to prevent foreign money from entering its politics.
But a critical opening remained: Foreign nationals could still directly contribute to political campaigns. Richard Nixon’s 1972 reelection campaign took full advantage, receiving large foreign donations (including $100,000 in cash from a Mexican businessman) that were exposed during the Watergate hearings. The subsequent outcry led to further amendments to the Federal Election Campaign Act that would prohibit foreign citizens from “directly or indirectly”contributing money “or other thing of value” in connection with any election. This explicit prohibition did not end foreign influence, of course: In 1997, The Washington Post reported that a Justice Department investigation found evidence that China had sought to funnel money into the 1996 election, using the Chinese Embassy in Washington to orchestrate contributions to the Democratic National Committee and others. This led the Federal Election Commission to fine the DNC, the Clinton-Gore campaign and nearly two dozen other entities for their involvement.
Despite these amendments, FARA still leaves plenty of room for paid agents of foreign powers to direct money into election coffers. These agents sometimes make campaign contributions to members of Congress on the same day they meet with them to discuss their clients. This is perfectly legal, since FARA filings, where agents report these interactions, state that any contributions are “from your own funds and on your own behalf.”
The Supreme Court’s decision in Citizens United opened the floodgates for foreign money to flow into U.S. elections by making it immensely easier to hide the true source of contributions. Before that 2010 ruling, campaign donations could be traced to individuals, whose nationality was easily determined. After Citizens United, corporations and unions could contribute directly to federal campaigns. Sometimes, it’s relatively easy to see if a corporation is foreign-owned. In 2016, for example, the Intercept used public records to report that a Chinese-owned corporation made $1.3 million in contributions to a PAC connected to Jeb Bush’s presidential campaign. Other times, though, parties make contributions through shell corporations whose ownership is deliberately hidden: Parnas, Fruman, Correia and Kukushkin allegedly created a company called Global Energy Producers (which “had no existing business,” according to the indictment) for this purpose.
Citizens United also created another avenue for foreign money to pervade domestic politics: American subsidiaries of foreign corporations. U.S. citizens who work for foreign firms were already permitted to make donations, and a foreign business’s U.S. subsidiary could form a political action committee, but that PAC could draw only from the contributions of U.S. workers. Citizens United allowed subsidiaries to use money from their own treasuries in at least three new ways: for “independent expenditures” (ads that explicitly call for supporting or opposing a candidate),”electioneering communications” (ads that mention candidates without urging support or opposition) and donations to super PACs.
THE CALL — Sunday, October 20, 2019