As another election cycle has come to end, the conversations surrounding election reform have begun again. On January 4, 2021, Maryland Representative John Sarbanes introduced a new campaign finance bill titled For the People Act of 2021.^[1] From a high level, this proposed law addresses three topics: voting, campaign finance, and ethics. One underlying objective of the proposed law is to identify and prevent foreign influence in U.S. elections.

Although federal campaign finance law already prohibits contributions from foreign nationals, the proposed law seeks to strengthen this ban and curb other avenues of foreign influence in U.S. elections. Notably, some of these proposed changes could significantly impact the investigation, reporting, and disclosure responsibilities of politically active individuals and organizations. Among others, the following proposed revisions may be the most impactful.

Adding requirements to identify and report certain foreign contact. Outside of some narrow exceptions, the proposed law widely defines reportable foreign contact to include any “direct or indirect contact” with someone that is known, or reasonably believed to be a “covered foreign national” about an offered or proposed contribution, donation, expenditure, solicitation, or “coordination or collaboration with, an offer or provision of information or services to or from, and persistent and repeated contact with, a covered foreign national in connection with an election.” The proposed law would:

• Require political committees to notify the FBI and Federal Election Commission of reportable foreign contact within one week of occurrence.
• Require candidates, immediate family members of candidates, and officials, employees, or agents of political committees, to notify the committee treasurer of reportable foreign contact.
• Require political committees to include foreign contact information in their campaign finance filings.
• Require political committees to develop a reportable foreign contacts compliance policy.

Violations of these requirements carry criminal penalties of up to $500,000 and/or five years in prison, per violation. Concealing or destroying information related to reportable foreign contact also carry criminal penalties of up to $1,000,000 and/or five years in prison.

Extending the foreign contribution ban to foreign involvement. The proposed law seeks to close “loopholes allowing spending by foreign nationals” in U.S. elections. This includes:

• Amending the foreign contribution ban to expressly include spending related to state and local ballot initiative and referendum elections, federal judicial nominations, and certain advertising activity on websites, broadcast/cable/satellite networks, and “internet activity that promotes, supports, attacks, or opposes the election of” a federal, state or local candidate or express advocacy.
• Banning foreign national donations to inaugural committees.
• Banning foreign involvement “in the decision-making process” of any election-related activity “including any decision concerning the making of contributions, donations, expenditures, or disbursements in connection with an election for any Federal, State, or local office or any decision concerning the administration of a political committee.”
• Requiring corporations, labor unions, LLCs and partnerships to precede spending related to federal candidates with a certification that foreign nationals were not involved in its decision-making process.
• Requiring separate segregated funds to make certifications regarding the involvement of foreign nationals.
• Prohibiting the “owner, officer, attorney, or incorporation agent of” an entity to “conceal an activity of a foreign national.” This prohibition carries criminal penalties.

Increasing the responsibility of advertising platforms. The proposed law requires that any “radio broadcast station, provider of cable or satellite television, or online platform” displaying electioneering communications or political ads to make reasonable efforts to ensure those communications are not directly or indirectly purchased by foreign nationals.

Modifying lobbyist disclosure. The proposed law would require lobbyists to affirmatively disclose at the time of any covered lobbying contact (a) that they are a registered lobbyist and (b) whether their client is a foreign entity or if certain disclosable foreign entities have a “direct interest” in their lobbying activity.

Politically-active individuals and organizations should follow the development of this sweeping proposed law. If it becomes effective, it may impact you or your organization’s obligation to be aware of, investigate, and report foreign involvement in election related spending. Developing and revising your internal policies to reflect amended laws or anticipate proposed laws, could be beneficial to maintain continued campaign compliance especially if your organization is globally minded.

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[1] https://www.congress.gov/bill/117th-congress/house-bill/1/text. [back]