American Int'l Club of Rome TownHall Ep. 5 with Zainab Smith — Communications Specialist of the Federal Election Commission (FEC): Overseas Fundraising and US Election Finance
May 15, 2020
On Thursday, May 14, 2020, Zainab Smith — Communications Specialist of the Federal Election Commission (FEC) — joined President of the American International Club of Rome Marcel Kaminstein to discuss election finance and fundraising with consideration to the function of the FEC and the upcoming election as it pertains to civic involvement of U.S. citizens.
American International Club of Rome is a group of U.S. Expats interested in bipartisan topics related to campaign fundraising and supporting the participation of U.S. citizens and groups in campaign fundraising from overseas.
The Federal Election Commission, or FEC, is a governmental agency established in 1974 by a congressional amendment of the Federal Election Campaign Act (1971) for the purpose of monitoring and regulating campaign funding and financing with the intention of addressing and avoiding corruption in federal campaigns — including presidential, vice presidential and other federal offices such as the house of representatives.
The Federal Election Commission civilly enforces campaign finance laws, writes finance regulation and monitors compliance with the FECA.
The FEC aims to offer transparency with their public reports, including advisory opinions, that investigate and assess how well election finances and fundraising meets federal regulations. The four main efforts made to achieve this are 1) administering public funding, 2) facilitating disclosure, 3) clarifying the law, and 4) enforcing the law.
The FEC includes information about how foreign nationals and citizens abroad can be involved in campaigns in the United States.
Regulations regarding Foreign Nationals and U.S. Citizens abroad
Smith explains that the FEC usually only has regulation over federal elections and campaigns. However, in the event that foreign nationals — represented by non-U.S. citizens or legal residents, foreign governments, parties, businesses and/or organizations — are discovered to have contributed to an election or campaign, regardless of it being local or federal, the FEC may become involved.
As is mentioned in the previous section, the FEC has received inquiries about the permissions for the capacity at which foreign nationals are able to be involved in federal campaigns and elections. Smith cited an instance of inquiry from an Independent Party candidate running for US House of Reps seat in 2007, who wanted to “use campaign funds or personal funds to purchase information from Canadians about Canada’s multi-party system and how third party and independent candidates win elections in Canada,” hire Canadian citizens as campaign staff members, and accept volunteer services from Canadian citizens. In accordance with the Federal Election Campaign Act, the FEC explained that this candidate was authorized to accept volunteer services under the conditions that the Canadian volunteers (as foreign nationals) are not contributing services for compensation, nor donating money or anything of value. The FEC also concluded that “the performance of such campaign-related activities by Canadian citizens, without compensation, constitutes volunteer activity and, as such, is exempt from the definition of “contribution” and that the candidates authorized committee could obtain the desired information from Canadians in accordance with the Act.
Moreover, Smith expressed that the rights of U.S. citizens to participate and contribute to federal elections and campaigns are maintained — even if they’re living abroad. Smith cites an advisory opinion from the FEC in response to a U.S. citizen living in Canada in 2016. U.S. citizens are allowed to solicit contributions and donations from other U.S. citizens living abroad, but are required to ascertain appropriate verification of their citizenship first. This rule extends to anyone a U.S. citizen abroad might wish to solicit who has “moved to the U.S. and have lived here for over five years”. The FEC stated in the aforementioned advisory opinion, “(having) actual knowledge that these individuals were foreign nationals at some point in the past, you may not solicit them for contributions or donations unless you are able to determine through a reasonable inquiry that they are no longer foreign nationals”.
Regulations on volunteering and financing volunteers
Smith explained that volunteers on federal campaigns are permitted to attend campaign events, solicit funds from U.S. citizens, give speeches at political events, and attend committee meetings as long as they are not part of decision-making processes, citing an inquiry of a Guatemalan foreign national about how involved they are permitted to be as a volunteer.
Generally, volunteers are also allowed to offer “personal services” or skills, such as the use of their home to organize a voter drive or provide speeches as experts on an issue — as long as they are not compensated. If and when compensated, these individuals are no longer to be considered volunteers and their compensation should be appropriately documented.
Regulations on corporations and labor organization funding in elections and super PACs
Smith explained that corporations and labor organizations are not allowed to contribute directly in federal elections or campaigns. Corporations and labor organizations are, however, permitted to sponsor employee run PACs paying for their administrative and fundraising costs. More recently corporations and labor organizations have been allotted a permissible exception (citing the first amendment’s protection of free speech) that allows them to spend their money in advertising that expresses their advocacy. Corporations can create federal election advertisements and make contributions to super PACs that make such advertisements.
Additional Regulations on Contributions
Furthermore, federal government contractors and foreign nationals (as previously mentioned) are completely prohibited from making contributions to federal campaigns and elections. Contribution actions, such as cash contributions over $100 and making contributions on behalf of another individual, are also strictly prohibited.
Q/A from Discussion
-How can an American Overseas donate to a SuperPAC/PAC and are their identities masked through businesses?~Marcel Kaminstein, President, American Club Rome
Smith responded that the law states that all political committees -- including Super PACs -- have to itemize the name, address, occupation and employer of any contributor who contributes over a certain amount because it’s within public interest to know who’s made such large contributions. The supreme court's ruling in Citizens United found that these independent expenditure only groups still have to follow disclosure regiments. The nature of this issue is an ongoing concern of the Commission, and Smith generally acknowledged that there are on-going lawsuits for those who make contributions but hide behind corporate entities and contributing to PACs. There have also been allegations that the folks are foreign nationals who make these contributions, which is completely against the law.
-How has the lack of quorum affected the daily activity of the FEC? ~Kevin Burk, Democrative Political Operative PA
The Commission quorum, consisting currently of three of the required six members, is necessary to vote on significant legal matters. Therefore, although the Commission has a candidate in mind completing the quorum, they are unable to vote on significant legal matters such as undertaking new lawsuits, or issuing new regulations or policy. However, the Commission is still able to litigate on-going court cases, process and respond to complaints, and investigate previously authorized matters. Briefly stated, the lack of quorum has not affected the daily activities of the FEC.
- What is the process of getting someone approved to the Commission? ~Marcel Kaminstein, President, American Club Rome
The United States president appoints the Commissioners who are then confirmed by the senate. The FEC has gone several years without a full quorum due to presidents not appointing them -- for one reason or another. There are typically two commissioners appointed at once, although that is not the current case seeing as only one is in the process of consideration for appointment and confirmation.
-Have you seen an uptick in foreign government intrusion in our election cycle in the last year or five to ten years? ~Marcel Kaminstein, President, American Club Rome
The Commissions jurisdiction is limited to regulating and monitoring the financing of federal elections, Smith stated, and would be concerned exclusively with, for example, the ads that tell people to vote for or against any U.S. candidate which are purchased on websites like Facebook and by whom the ads are purchased. The Commission does not confirm or deny whether an investigation is actively taking place because that has to remain completely confidential until it has met its resolution, although there have been a couple of cases that were resolved and found that foreign nationals have been contributors. Smith named Ellen Weintraub as a Commissioner who is particularly focused on this issue and is researching at the FEC website for further information on investigations related to the unlawful involvement of foreign nationals.
- What would the FEC have to say about citizens who criticize PACs as extensions of corporate funding beyond the extent of their permitted sponsorship, be that inadvertent or intentional? ~ LaTaè Johnson, freelance journalist
Smith explained that FEC doesn’t take a position on what people say about PACs. The law allows for corporations to sponsor PACs. If a citizen believes that a federal campaign may be in violations of that law — wherein a PAC is accepting corporate funding or participating in the the abuse of the corporation sponsorship program — they can file a public complaint with FEC so that they can investigate the issue.
- How many US citizens (especially young adults) are engaging with the abundance of information that the FEC provides? How might that be measured (especially so that FEC might learn who needs to know more about them and what they do and how to address their criticism of campaign financing with existing mechanisms)? ~ LaTaè Johnson, freelance journalist
The FEC doesn’t measure who is or isn’t engaging with their information, nor the ages. That is outside of their jurisdiction, Smith explains. They do not ask for that information, it’s not provided voluntarily, nor is the Commission able to publish it. All of the information that they record is meant for public disclosure and would not include this information about citizen engagement. However, there are organizations that track, collect and provide this type of information. When the Commission does use mechanisms to keep track of their website, like google analytics, the information is used internally as a self-assessment only, to analyze if the way that they convey information is helpful based on website “hits”.
Toll-free line (for General Inquiries):
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Visit FEC, or view the following documents, for additional information:
*American Int'l Club of Rome was founded in 1953 by Henry Luce the founder of Time magazine, the husband of the U.S. Ambassador to Italy Clare Boothe Luce whom felt there was a need for an organization that would provide opportunities for meeting regularly with other Americans. The club has transformed into an internationally focused non profit organization based in Rome with the goals of promoting American culture in Italy. Today the tradition of Honorary President and Vice Presidents continues with each US Ambassador to Italy, The Holy See and the US UN mission.