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Elections are made of people

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The Federal Election Commission, as you may recall, recently ruled that foreign firms can donate to state-level referendum campaigns. Because, apparently, “ballot initiatives” aren’t “elections.”

Over at The Monkey Cage, Dov H. Levin discusses the likely consequences – if there’s no legislative fix – of the ruling. He argues, and I’m persuaded, that the ruling won’t have any material implications for 2016-style election interference, but it’s still not great.

Most foreign corporations avoid getting involved in any way in the domestic politics of their host countries. Nevertheless, some corporations are willing and have plenty of motives for trying to influence various nations’ politics, overtly or covertly. For example, in 1971, Gulf Oil secretly donated $3 million to South Korean presidential candidate Park Chung Hee, which Park’s campaign used to buy votes.

If donations needn’t be secret, unscrupulous foreign firms have fewer limits on their attempts to influence potential markets or improve their products’ competitiveness. In fact, companies are already doing so: The ruling came in response to a foreign mining company’s donation to block a ballot initiative that would have added regulations on water pollution in mining. Or an unethical European tech firm could try to kneecap its competitors by subsidizing a California referendum that would undermine Silicon Valley companies’ business models or R&D efforts. Some members of Congress say they’re planning to undo the FEC ruling by passing a law against such donations. They may wish to emphasize their desire to prevent foreign firms from unduly influencing American decisions.

It looks like there will be bipartisan support for fixing the loophole. But, even if it’s closed, the state of campaign-finance laws and Supreme Court rulings creates plenty of ways for foreign actors to funnel money into U.S. politics.

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