The crux of H.R. 8988 is its extension of the foreign money ban to domestic business entities that are controlled, influenced, or owned by foreign nationals. The legislation defines such entities in detail, establishing new criteria for what qualifies as foreign-owned or -controlled. For instance, any business where foreign nationals hold 50% or more ownership, or even 1% in certain situations where they exert decision-making power, would be subject to the same restrictions as foreign individuals.
The bill is tailored to tackle both direct and indirect influence in the U.S. electoral process. It states that any business entity must determine beneficial ownership in line with state laws or under federal securities laws if applicable. Once the ownership is assessed, these entities have to certify their compliance. CEOs, or the highest-ranking official if there is no CEO, must file a certification with the Federal Election Commission within seven days of making any political contributions or expenditures. This certification must confirm that the business is not foreign-owned or -controlled.
Furthermore, H.R. 8988 mandates that this certification be provided to each political committee receiving the contributions or expenditures. To prevent circumvention, a new provision makes it unlawful for any recipient to use funds from a business entity without proper certification ensuring compliance with the new rules.
The bill also explicitly extends the foreign money ban to state and local ballot measures, and underscores that disbursements made to Super PACs must be compliant with these new stipulations. By doing so, it fortifies the barriers against indirect foreign influence.
In an added layer of scrutiny, any separate segregated fund established by a corporation—a common structure for corporate political action committees (PACs)—must now certify annually that its decision-makers are U.S. citizens or legal permanent residents, and that no foreign nationals participate in or influence the fund’s decisions. This also means corporate boards with foreign nationals must ensure these members abstain from any decisions affecting the PAC’s activities.
The goals of this bill are clear and focused: to shield the U.S. electoral process from foreign interference, whether direct or through domestic proxies. It is a proactive response to concerns about the complexities of foreign influence and the potentially insidious ways it can permeate democratic processes. Given the prevalence of global business and international stakeholders in major U.S. corporations, this bill signifies a substantial tightening of election laws.
As for the next steps, the bill has been referred to the House Committee on House Administration. It will likely undergo further scrutiny and possible amendments before it can progress to a vote in the House. If it passes in the House, it will proceed to the Senate for consideration. Should it be approved by both chambers, it will require the President’s signature to become law.
The funding for implementing these new regulations will likely come from existing federal resources allocated to the Federal Election Commission and other relevant enforcement bodies. However, the long-term cost implications will depend on the breadth and depth of the regulatory enforcement required.
This bill has far-reaching consequences for various stakeholders. Corporate America, especially companies with significant foreign investment, will need to review their ownership structures and compliance mechanisms meticulously. On the flip side, the legislation aims to reassure the public and bolster trust in the electoral process by ensuring that all political contributions and expenditures are free from foreign influence or control.
Overall, the “Get Foreign Money Out of U.S. Elections Act” aligns with broader national debates on election security and integrity. It seeks to mitigate risks and enhance transparency in campaign financing, addressing growing concerns about the potential for foreign meddling in American democracy.
