Scoop: FEC lets foreigners finance U.S. ballot fights

The Federal Election Commission has ruled foreign donors can finance U.S. referendum campaigns, opening the door to foreign spending on fights over high-profile policy issues, Axios has learned.

Why it matters: Foreign nationals are barred from donating to U.S. political candidates or committees. But the FEC's decision — allowing them to support ballot committees — provides another avenue for foreigners to directly influence U.S. voters and domestic policy.

A major question stemming from the decision is whether foreign nationals are now permitted to spend money to influence the actual mechanisms of the U.S. democratic process. That would include congressional redistricting, which is frequently subject to ballot referenda. The FEC's ruling did not address that question, meaning it will likely be litigated in future fights at the commission.

Driving the news: In a 4-2 vote in July, the FEC ruled ballot initiatives are not "elections" under existing federal law, and therefore the foreign donation prohibition doesn't apply.

Two sources familiar with the decision told Axios that FEC chair Shana Broussard, a Democrat, voted with the panel's three Republicans to dismiss the underlying complaint.

Commissioners are appointed by the President and confirmed by the Senate.

By law, no more than three Commissioners can represent the same political party, and at least four votes are required for any official Commission action. This structure was created to encourage nonpartisan decisions.

Commissioners serve in staggered six-year terms; two seats are subject to appointment every two years. The Chair of the Commission changes every year, with no member serving more than once per term.

The Commission meets in closed sessions to discuss matters that, by law, must remain confidential, and in public to formulate policy and vote on legal and administrative matters.

1/2 On the @FEC decision regarding foreign nationals and ballot initiatives:

I voted to protect our nation's ballot initiatives from foreign influence, but my view did not prevail.

Ballot initiatives can reach deeply into the laws of a state or locality and directly rewrite…

2/2 …both statutes and constitutions. They are vulnerable to manipulation and are deserving of no less protection from foreign influence than are our candidate elections.

My full statement will be made public tomorrow with the rest of the @FEC's file on this matter.

• STATEMENT OF REASONS OF VICE CHAIR ALLEN DICKERSON AND COMMISSIONERS SEAN J. COOKSEY AND JAMES E. “TREY” TRAINOR III
• STATEMENT OF REASONS OF CHAIR SHANA M. BROUSSARD
• SUPPLEMENTAL STATEMENT OF REASONS OF CHAIR SHANA M. BROUSSARD
• STATEMENT OF REASONS OF COMMISSIONER ELLEN L. WEINTRAUB

Sen. Kirsten Gillibrand (D-N.Y.) is introducing legislation barring foreign nationals from financing U.S. referendum campaigns, after Axios revealed federal regulators recently okayed the practice.

Sen. Marco Rubio (R-Fla.) also said Wednesday he plans to introduce legislation to close the loophole.