On Tuesday, House Democrats voted on behalf of foreign actors funneling money into U.S. elections by opposing the No Foreign Election Interference Act (H.R. 8314). The legislation – which previously was approved by the Ways and Means Committee with near unanimous support – prohibits tax-exempt (TE) organizations from accepting donations from foreign sources and then donating to Super Political Action Committees (Super PACs). Every Democrat from the Ways and Means Committee who voted to oppose this commonsense policy to protect the integrity of U.S. elections previously voted in favor of the legislation in the Committee.

During debate on the legislation, Ways and Means Chairman Jason Smith (MO-08) said: 

“Over the last year, the Ways and Means Committee has been investigating concerns about the dangerous influence of foreign money in our elections. It has become clear that loopholes exist in our tax code that foreign donors are able to take advantage of, so they can influence the American electoral process…The Committee’s investigation discovered a particularly disturbing example: a foreign national from Switzerland has given over a hundred million dollars through his tax-exempt organization to Sixteen Thirty Fund, a 501(c)(4), which subsequently distributed $63 million to Super PACs to try and persuade the American voter. According to The New York Times, the Sixteen Thirty Fund is a ‘leading vehicle’ for dark money on the left.” 

Click here to read Chairman Smith’s full opening statement from debate on the No Foreign Election Interference Act in the House of Representatives.

Background

While federal law currently prohibits foreign nationals from donating money to U.S. campaigns, there are no laws that bar foreign nationals from influencing national elections by directing funds to TE organizations that can then donate the money to Super PACs. 

The most prominent and recent example of a foreign national donating money to TE organizations is billionaire Hansjörg Wyss – the Swiss national that was the focus of a Ways and Means Committee hearing on December 13, 2023, on the “Growth of the Tax-Exempt Sector and the Impact on the American Political Landscape.” Wyss has a 501(c)(3) organization—the Wyss Foundation—and a 501(c)(4) organization—the Berger Action Fund.

The No Foreign Election Interference Act

• Prohibits TE entities from making any gift or contribution to a Super PAC for eight years from the date a TE entity received a contribution or gift from a foreign national.
  • This prevents foreign money from flowing into tax-exempt organizations and subsequently into political committees, including Super PACs. 
• The first two disqualified contributions would be punished by a fine totaling 200 percent of the donation amount. A third contribution would result in the automatic revocation of TE status for the organization making the donation to a Super PAC.
• The bill only applies to foreign gifts and contributions to TE organizations rather than membership dues or program service revenue. 

Read the one-pager on the No Foreign Election Interference Act here.