Cape News

On Tuesday, House Democrats voted against the No Foreign Election Interference Act (H.R. 8314), a bill designed to prohibit tax-exempt organizations from accepting foreign donations and subsequently contributing to Super Political Action Committees (Super PACs). The legislation had previously garnered near-unanimous support in the Ways and Means Committee.

During the debate, Ways and Means Chairman Jason Smith (MO-08) expressed concerns about foreign money influencing U.S. elections. "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," Smith stated.

Smith highlighted an example involving a Swiss national who donated over $100 million through his tax-exempt organization to Sixteen Thirty Fund, which then distributed $63 million to Super PACs. According to The New York Times, Sixteen Thirty Fund is described as a "leading vehicle" for dark money on the left.

Federal law currently prohibits direct donations from foreign nationals to U.S. campaigns but does not prevent them from channeling funds through tax-exempt organizations that can donate to Super PACs. One notable case involves billionaire Hansjörg Wyss, a Swiss national who has donated through his Wyss Foundation and Berger Action Fund.

The No Foreign Election Interference Act aims to close this loophole by prohibiting tax-exempt entities from making contributions to Super PACs for eight years after receiving donations from foreign nationals. Violations would result in fines totaling 200 percent of the donation amount for the first two offenses and automatic revocation of tax-exempt status for a third offense.