The Federal Election Commission has unveiled one of the most significant enforcement actions in its history, citing a 2016 investigative series by The Intercept.
The series, “Foreign Influence,” detailed how Right to Rise USA, a Super PAC supporting the 2016 presidential candidacy of Jeb Bush, received $1.3 million in campaign donations from American Pacific International Capital, a California corporation controlled by two Chinese citizens.
The FEC fined APIC $550,000 and Right to Rise USA $390,000. The total of $940,000 is the third-largest financial penalty the FEC has ever issued.
It is illegal for foreign nationals to contribute money in connection with U.S. elections. However, APIC and Right to Rise USA attempted to use an odd loophole created by the Supreme Court’s 2010 Citizens United decision to funnel overseas cash into American politics.
The details of the enforcement action were released today in a letter to the Campaign Legal Center, a campaign finance watchdog that filed a complaint based on The Intercept’s investigation.
“This case was so egregious that, once it was revealed, even the dysfunctional FEC was forced to act,” said Robert Weissman, president of consumer rights group Public Citizen, in a statement to The Intercept.
The letter revealing the fine includes conciliation agreements that lay out the facts of the case, which correspond to The Intercept’s original reporting.
Barack Obama warned during his 2010 State of the Union address that the Citizens United ruling would “open the floodgates for special interests, including foreign corporations, to spend without limit in our elections.” APIC was attempting to do exactly this.
Before Citizens United, only individual American citizens could contribute limited amounts of money to support U.S. political activities. Post-Citizens United and related decisions, American companies can donate directly from their corporate treasuries to Super PACs in unlimited amounts.
However, any company incorporated in the U.S. counts as an “American” corporation under current law — even if it is wholly owned by foreigners.