[EL] An insidious foreign dark money threat: New reports about Russian money going to the NRA could prove watchdogs’ fears correct

Fri Jan 19 11:01:36 PST 2018

That it's hard to figure out how to keep foreign money out of elections --
which may or may not be correct -- is not a justification for not working
to keep foreign money out of elections.

The questions I asked almost eight years ago to the day (thank you Jeff
Hauser for recirculating the thread) are no less relevant today than they
were then -- and perhaps they are even more relevant given the revelations
of the past year.

So if foreign nationals do not have the right to make campaign
> expenditures, nor do foreign corporations, why should their money be
> allowed to play a role in American elections as shareholders in
> corporations chartered in the United States? If a British national owned a
> major stake in an American corporation, wouldn't his or her dollars be
> flowing into our elections if that corporation were allowed to spend
> unlimited dollars? If a foreign owned company -- say Dubai Ports World --
> has a subsidiary chartered in the United States, and that American
> corporation were allowed to spend freely, [wouldn't[ DPW [have the] right
> to spend unlimited amounts of money on American elections simply by
> chartering a subsidiary in the states?
>
> Or would there be some sort of balancing test to determine the extent to
> which foreign dollars could be funneled into American elections through
> corporations chartered in the United States in a way they wouldn't be
> allowed if not funneled as such? In which case where's the line?
>

>  [T]he flow of foreign capital into American elections is something that
> interests me, at the least, and presumably some others, too.
>

On Fri, Jan 19, 2018 at 10:28 AM, Sean Parnell <
sparnell at philanthropyroundtable.org> wrote:

> It may be easy, but I haven’t seen a lot of legislation that would do it.
> Focusing again on donors to charitable entities, I’d refer you to the *Independent
> Institute v. FEC* case, which would have forced a charity to reveal
> donors because its communications happened to mention the names of elected
> officials up for election at the time. And if memory serves correct,
> because it was a federal race, it would have only required disclosure of
> donations earmarked for those communications – what SB 27 would do, at
> least judging by your description, is to require disclosure of donors that
> did not earmark their gifts to the communication, but merely happened to
> have given in some arbitrary time frame. That seems problematic – I believe
> the term “junk disclosure” applies here.
>
>
>
> Sean
>
>
>
> *From:* trent.lange at caclean.org [mailto:trent.lange at caclean.org] *On
> Behalf Of *Trent Lange
> *Sent:* Friday, January 19, 2018 1:11 PM
> *To:* Eric J Segall <esegall at gsu.edu>
>
> *Cc:* Sean Parnell <sparnell at philanthropyroundtable.org>; Election Law
> Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] An insidious foreign dark money threat: New reports
> about Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> It is very easy for a bill that requires non-profits or other multipurpose
> organizations to report their relevant contributors when they make
> political expenditures to be sensitive to the concerns of the wealthy (or
> anybody else) wanting to donate to charities anonymously.
>
> SB 27, passed in California in 2014 to require non-profits to report the
> funders of their political expenditures when they spend $50,000 or more on
> California political campaigns, does exactly that.  It doesn't require
> non-profits to reveal ALL their funders -- just enough donors who gave
> $1,000 or more, on a last in, first out basis, to account for their
> political expenditures.  Furthermore, it excludes from the disclosures,
> among other appropriate things:
>
>
>
> (A) A donor who designates or restricts the donation for purposes other
> than contributions or expenditures.
> (B) A donor who prohibits the multipurpose organization’s use of its
> donation for contributions or expenditures.
>
>
>
> So all a wealthy donor to a non-profit that wants to keep their donation
> anonymous needs to do is say that it can't be used for political purposes,
> and they won't be disclosed if the non-profit makes political expenditures
> (of course, the non-profit would have to make those expenditures out of
> other funds).
>
>
>
> Now, if a wealthy donor wants to make a donation to the non-profit
> anonymously and have it be used for political purposes, SB 27 would rule
> that out, as is appropriate.
>
>
>
> - Trent
>
>
>
> On Fri, Jan 19, 2018 at 9:46 AM, Eric J Segall <esegall at gsu.edu> wrote:
>
> I’m sensitive to the concerns of the wealthy wanting to donate to
> charities anonymously. I’m much more worried about our completely broken
> democracy.
>
>
>
> Best,
>
>
>
> Eric
>
> Sent from my iPhone
>
>
> On Jan 19, 2018, at 12:43 PM, Sean Parnell <sparnell@
> philanthropyroundtable.org> wrote:
>
> Well, and brining this back to my area of work, philanthropic giving and
> charities, I and others concerned about the ability of philanthropists to
> give anonymously to charity would probably have some issues with the
> definition of “election-related activity.” For example, my pastor this past
> Sunday made what would have in some legislation I’ve seen proposed been an
> “electioneering communication” if he’d said it at a different time of year
> and it had been about the governor rather than the President. So long as
> “electioneering communication” means, in one way or another, any reference
> to a candidate in a specified time period, regardless of whether it is an
> attempt to influence an election, you’re not going to get a lot of interest
> in the vastly-expanded disclosure regime that you want.
>
>
>
> Best,
>
>
>
> Sean
>
>
>
>
>
>
>
> *From:* Rick Hasen [mailto:rhasen at law.uci.edu <rhasen at law.uci.edu>]
> *Sent:* Friday, January 19, 2018 12:28 PM
> *To:* Sean Parnell <sparnell at philanthropyroundtable.org>; Jeff Hauser <
> jeffhauser at gmail.com>
> *Cc:* Election Law Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] An insidious foreign dark money threat: New reports
> about Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> That seems like a pretty good argument for Congress to pass improved
> disclosure laws, regardless of the tax status of a particular organization,
> for any organization or person who spends or contributes BIG money (I’d
> raise thresholds dramatically) on election-related activity (we can discuss
> how that is best defined, but at least extending electioneering
> communications to digital ads seems like a good start).
>
>
>
> This way we know where the ultimate source of money is, without allowing
> the kind of shell games to go on.
>
>
>
>
>
> *From: *Sean Parnell <sparnell at philanthropyroundtable.org>
> *Date: *Friday, January 19, 2018 at 9:22 AM
> *To: *Jeff Hauser <jeffhauser at gmail.com>, Rick Hasen <rhasen at law.uci.edu>
> *Cc: *Election Law Listserv <law-election at uci.edu>
> *Subject: *RE: [EL] An insidious foreign dark money threat: New reports
> about Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> And the same goes for the public, of course, who would only see “We’re
> Totally Not The Russians LLC” listed on whatever form of disclosure is
> envisioned by Ciara and others in the “reform” community.
>
>
>
> Sean
>
>
>
>
>
> *From:* Jeff Hauser [mailto:jeffhauser at gmail.com <jeffhauser at gmail.com>]
> *Sent:* Friday, January 19, 2018 12:11 PM
> *To:* Rick Hasen <rhasen at law.uci.edu>
> *Cc:* Sean Parnell <sparnell at philanthropyroundtable.org>; Election Law
> Listserv <law-election at uci.edu>
> *Subject:* Re: [EL] An insidious foreign dark money threat: New reports
> about Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> Michael Cohen has been alleged by the Wall Street Journal to create an LLC
> to pay off an actress aleged to have an affair with Trump:
> https://www.wsj.com/articles/trump-lawyer-used-
> private-company-pseudonyms-to-pay-porn-star-stormy-daniels-
> 1516315731?utm_source=The+Point+with+Chris+Cillizza+Alerts&utm_campaign=
> d827904afa-EMAIL_CAMPAIGN_2018_01_19&utm_medium=email&
> utm_term=0_ada7c7ac0a-d827904afa-83775533
> <https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.wsj.com%2Farticles%2Ftrump-lawyer-used-private-company-pseudonyms-to-pay-porn-star-stormy-daniels-1516315731%3Futm_source%3DThe%2BPoint%2Bwith%2BChris%2BCillizza%2BAlerts%26utm_campaign%3Dd827904afa-EMAIL_CAMPAIGN_2018_01_19%26utm_medium%3Demail%26utm_term%3D0_ada7c7ac0a-d827904afa-83775533&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=PgF9%2FV6dIeZhVXoba5D63mdIIA9b5gAjiv73Ck67s4E%3D&reserved=0>
>
>
>
> If Russians created shell companies in Delaware to give money to the NRA,
> all the IRS would see is "Delaware LLC."
>
>
>
> (the NRA would presumably make inquiries about any unexpected
> contributions, and I doubt they lack information on who is giving them big
> money)
>
>
>
> On Fri, Jan 19, 2018 at 11:59 AM, Rick Hasen <rhasen at law.uci.edu> wrote:
>
> Has the NRA issued any public statements denying the receipt of money from
> Russian government sources/sources allied with Russian government which
> were used by its c4 for election-related activity?
>
>
>
>
>
> *From: *Sean Parnell <sparnell at philanthropyroundtable.org>
> *Date: *Friday, January 19, 2018 at 8:55 AM
> *To: *Rick Hasen <rhasen at law.uci.edu>, Election Law Listserv <
> law-election at uci.edu>
> *Subject: *re: An insidious foreign dark money threat: New reports about
> Russian money going to the NRA could prove watchdogs’ fears correct
>
>
>
> I wanted to clear up what some might mistakenly infer from the piece by
> Ciara Torres-Spelliscy linked to below concerning the latest speculation
> regarding foreign money, Donald Trump, and those pesky Russians (hold on a
> sec, it appears the 1980’s are calling and wish to talk to me about
> something). She writes:
>
> *For many years now, good-government groups and campaign finance experts
> have warned that illegal foreign funds could be hiding in that dark money.*
>
> *That’s because, in federal races, political spenders that go dark are
> exploiting a loophole between the campaign finance system overseen by the
> FEC, which typically insists on that all donors to campaigns identify
> themselves, and charities the Internal Revenue Service allows to collect
> funds donated anonymously.*
>
> Three things:
>
>    1. The National Rifle Association is not a “charity,” at least as
>    defined by the IRS. It’s a 501c4 “social welfare” organization (it does
>    have an associated foundation, which is a 501c3, but I don’t believe it’s
>    alleged that this entity was funding any political ads, let alone
>    Russian-funded ads).
>    2. While the NRA and other 501c organizations do not reveal donors to
>    the public, they do reveal them to the IRS (or at least are required to) on
>    Schedule B. Presumably, if there is a concern that the NRA took in millions
>    of dollars from Russian sources (whether state or “private” to the extent
>    there’s any distinction in Russia), it should be relatively easy for the
>    FBI to get the information from the IRS (I’m not sure if it requires a
>    subpoena or not in this particular instance, but law enforcement is able to
>    get confidential tax records). I’d guess that someone at the NRA handed a
>    few million dollars by a Putin pal would have realized this and handed it
>    back, if such a highly-speculative transaction occurred, but then there are
>    some imprudent people out there so who knows?
>    3. Anonymous contributions to charities are hardly a “loophole,” it is
>    in fact a practice with a long and deeply ingrained history in
>    philanthropy, praised in the Gospel of Matthew 6:1 – 6:4 and also by Seneca
>    the Younger, among others. I’ve written an overview of anonymous charitable
>    giving, published last year, if anyone is interested: http://www.
>    philanthropyroundtable.org/file_uploads/Protecting_Donor_Privacy.pdf
>    <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.philanthropyroundtable.org%2Ffile_uploads%2FProtecting_Donor_Privacy.pdf&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=MXjhoM%2BYVL5IYkkqNGLvop%2BrE7EsDV%2Fn7VrR2p10hSU%3D&reserved=0>
>
> Best,
>
> Sean Parnell
>
> Vice President of Public Policy, The Philanthropy Roundtable
>
> 1120 20th Street NW, Suite 550 South
>
> Washington, DC  20036
>
> (202) 600-7883 (direct)
>
> (571) 289-1374 (mobile)
>
> sparnell at philanthropyroundtable.org
>
>
>
>
>
>
>
>
>
>
>
>
>
> *“An insidious foreign dark money threat: New reports about Russian money
> going to the NRA could prove watchdogs’ fears correct”
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Felectionlawblog.org%2F%3Fp%3D96992&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=hQFqRIgu49Qa0K%2FphgoV9XWv%2F3wtfS%2FWUsZLYPXAWNM%3D&reserved=0>*
>
> Posted on January 19, 2018 7:16 am
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Felectionlawblog.org%2F%3Fp%3D96992&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=hQFqRIgu49Qa0K%2FphgoV9XWv%2F3wtfS%2FWUsZLYPXAWNM%3D&reserved=0>
>  by *Rick Hasen*
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Felectionlawblog.org%2F%3Fauthor%3D3&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=K9isstdElCba4jwIxtN%2BBCzohlVNQUtI%2F4WhuSzMnm4%3D&reserved=0>
>
> Ciara Torres-Spelliscy
> <https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.nydailynews.com%2Fopinion%2Finsidious-foreign-dark-money-threat-article-1.3765048&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=MkTTOodeNxftPZfAzK1VLA58uH0uqNLWbQ4z0GBm8YQ%3D&reserved=0> NYDN
> oped.
>
> Posted in campaign finance
> <https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.addtoany.com%2Fshare%23url%3Dhttp%253A%252F%252Felectionlawblog.org%252F%253Fp%253D96992%26title%3D%25E2%2580%259CAn%2520insidious%2520foreign%2520dark%2520money%2520threat%253A%2520New%2520reports%2520about%2520Russian%2520money%2520going%2520to%2520the%2520NRA%2520could%2520prove%2520watchdogs%25E2%2580%2599%2520fears%2520correct%25E2%2580%259D&data=02%7C01%7Cesegall%40gsu.edu%7Ccf3fc57b097a41223e1908d55f642627%7C515ad73d8d5e4169895c9789dc742a70%7C0%7C0%7C636519806102165829&sdata=2pZ7JqnI8lyzCacy%2Bt%2By4qeIEkpM1yoHwz4igAlqIvI%3D&reserved=0>
>
>
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> --
>
> Trent Lange
> President and Executive Director
> California Clean Money Campaign
>
> Sponsor of AB 249, the *California DISCLOSE Act*
>
> (310) 428-1556
> www.YesFairElections.org
>
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-- 
Jonathan Singer
(503) 705-2952
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