What Happens When Our Enemies Use Our Campaign Finance Laws Against Us?

Source: House of Cards

In a 1986 New York Times article, techno-thriller author Tom Clancy said, “I’ve made up stuff that’s turned out to be real, that’s the spooky part.” That he wrote a novel that concluded with a plane being flow into the US Capitol building during a joint session of Congress makes his comment something else. Certainly beyond spooky. In another piece of fiction, writers of the show The Lone Gunmen, a short-lived spinoff of the X-Files, had a terrorist attempt to fly a plane into the World Trade Center; fiction is indeed strange. I believe it is this sense of near-reality the reason why the Netflix show House of Cards is so popular. Now, if you haven’t watched the show, here’s a SPOILER ALERT:

My favorite among all of the show’s story lines was Season 2’s campaign finance plot, where billionaire Raymond Tusk and Chinese businessman Xander Feng routed campaign money to American political parties through a Native-American casino. The idea of foreign influence playing a role in national politics seems more like something the CIA would have done in South America during the Cold War, but given today’s weak campaign finance laws, how hard would it be for foreign money to be funneled into the national political system? Actually, not that hard.

In 1966, the Foreign Agents Registration Act (FARA) of 1938 was amended to curtail the potential influence of domestic agents to foreign principals, requiring that these agents register with the government, as well as prohibiting campaign contributions made through these agents by foreign entities. A 1974 incorporation of this provision into the Federal Election Campaign Act brought this issue under the jurisdiction of the Federal Election Commission. According to the FARA Registration Unit, which operates under the Department of Justice, and administers and enforces the Act, there are currently 400 active registrants representing 531 foreign principals, including principals based in Russia and China.

As it currently stands, the law leaves a great part of its enforcement to the hands of political committees: according to statute, “[c]ontributions that present genuine questions as to whether they were made by… foreign nationals…“ may be deposited into an account, or returned. “If any such contribution is deposited, the treasurer shall make his or her best efforts to determine the legality of the contribution.” Methods of making such determination include a written or oral request for evidence, including a statement explaining the contribution’s legality, or a statement written by the treasurer “memorializing an oral communication explaining why the contribution is legal.” The absence of this “evidence” requires that treasurers return the funds.

According to the Sunlight Foundation, a nonpartisan nonprofit organization that seeks greater government accountability and stronger finance laws, while FARA may prohibit foreign contributions, it doesn’t do much to prevent foreign influence in our politics. In one example, Sunlight exposed flaws in FARA after reports that the European Center for a Modern Ukraine (ECMU) hired a number of groups to lobby on behalf of Ukraine in the US. Because the ECMU is not a political party, “its lobbyists have the option of registering and disclosing their activities to Congress instead — revealing far less information about their activities.” This loophole, brought about after the passage of the Lobbying Disclosure Act of 1995, a much lenient disclosure law than FARA, allows foreign agents not representing foreign governments or parties to register with Congress rather than the DOJ. The Foundation reports that, in 2013, countries like the UAE, Germany, Canada, and Saudi Arabia were among the top spenders in US lobbying firms; China ranked 21. Sunlight’s Foreign Influence Explorer, the Google Maps of foreign money’s influence in the US, is open to all.

These are relatively benign examples, yet most Americans would agree that the current order has taken foreign influence over our democracy too far. Still, considering the factors that allow even these benign examples to be, my question is, what happens when the influence of a hostile power meets the post-Citizens United policy gridlock? Secretary of Defense Leon Panetta has already said that political parties’ “inability to come together, to work together and present a unified front…seriously damages not only our national defense, but damages our economy as well.” How long until a hostile foreign power devotes its resources to exploiting these weaknesses and prevents us from addressing our core national security threats?

One enabling factor could be the use of anonymous shell corporations as an intermediary for malign actors. Such companies are already used by criminal organizations to carry out their illegal activities and launder their proceeds, and the threat posed by them has already been highlighted by the Financial Crimes Enforcement Network, or FinCEN, which is tasked with regulating our financial institutions to prevent money laundering. Because a number of states have no requirements in terms of reporting the members or managers of Limited Liability Corporations, their state laws lend themselves to the creation of illegitimate LLCs.

Could a major power use the current regulatory climate to influence the policymaking process? As Sun Tzu would say, to win such a victory, to subdue the enemy without fighting, is the supreme art of war.


Originally published at frankrcastillo.tumblr.com on January 24, 2015.

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