Foreign porn lobby shapes Calif. rules; feds say it’s OK

Some conservative and liberal campaign-finance activists warn that foreign money could swamp U.S. elections after federal regulators declined to investigate a Luxembourg-based porn distributor’s role in influencing a Los Angeles-area ballot initiative.

The case stems from a complaint lodged with the six-member Federal Election Commission by a Californiabased AIDS advocacy group, which pushed a successful 2012 ballot initiative requiring actors in adult movies to use condoms during filming.

The AIDS Healthcare Foundation said $327,000 — or nearly half the money spent to oppose the 2012 initiative — came from two companies tied to Manwin Licensing International, which runs adult websites and has operations around the globe. The foundation argued that the Manwin-related contributions violated the federal law that bans foreign donations in federal, state or local elections.

The Federal Election Commission’s top lawyers and its three Republican commissioners disagreed, contending that the federal ban applies only to candidate elections, not ballot initiatives.

Lee Goodman, one of the Republican commissioners, said California law bans foreign donations to ballot measures and the issue should be decided by state officials, not the FEC.

“The people of California are certainly capable of protecting the integrity of their state and local initiative process as they see fit,” he wrote this month.

The three Democrats on the panel voted to pursue an investigation. The deadlock, however, put an end to the case.

“It’s exclusively the purview of the Federal Election Commission to regulate” foreign money, said Ann Ravel, a Democrat who is the FEC’s chairwoman. She said the agency’s inaction could encourage others to “take the risk” that the commission will take no action in cases involving foreign donations.

Several election lawyers agree with the Republican commissioners. The federal “law doesn’t explicitly cover ballot initiatives,” said Kenneth Gross, a leading campaign-finance attorney and a former FEC official.