[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6893 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 6893

 To prohibit the disbursement of funds to entities owned or controlled 
    by individuals with executive or managerial authority over the 
      operations of political committees, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 22, 2023

  Ms. Porter introduced the following bill; which was referred to the 
                   Committee on House Administration

_______________________________________________________________________

                                 A BILL


 
 To prohibit the disbursement of funds to entities owned or controlled 
    by individuals with executive or managerial authority over the 
      operations of political committees, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Stopping Corrupt 
Actors from Making Political Action Committees Act'' or the ``SCAM PAC 
Act''.
    (b) Findings.--Congress finds the following:
            (1) In its 2022 legislative recommendations to Congress, 
        the Federal Election Commission unanimously identified the 
        ``fraudulent fundraising and spending activities of certain 
        political committees that are often referred to as `scam 
        PACs''' as a priority for Congress to ``address, define, and 
        prohibit.'' As the Federal regulator empowered to enforce 
        campaign finance laws, the Federal Election Commission 
        possesses the requisite technical expertise on political 
        committees to help Congress effectively regulate scam PACs.
            (2) Congress affirms the Federal Election Commission's 
        description of scam PACs as unauthorized committees that 
        mislead contributors by ``[soliciting] contributions with the 
        promise of supporting candidates, but then disclose minimal or 
        no candidate support activities while engaging in significant 
        and continuous fundraising. This fundraising predominantly 
        funds personal compensation for the committees' organizers. In 
        many cases, all funds raised by this subset of political 
        committees are provided to fundraising vendors, direct mail 
        vendors, and consultants in which the political committees' 
        officers appear to have financial interests.''.
            (3) Scam PACs are political parasites that degrade the 
        integrity of our elections and harm American democracy. Fraud 
        in elections erodes public confidence in American institutions, 
        and reports of scam PACs abusing donations for self-enrichment 
        schemes can have a chilling effect on donors' and voters' 
        willingness to politically participate. Candidates also suffer 
        harm when cash they need to run their campaigns is diverted 
        away from them.
            (4) This Act targets scam PACs' fraud and self-dealing. The 
        Supreme Court has acknowledged ``it goes without saying that 
        there is a `substantial governmental interest[] in protecting 
        the public from fraud.''' (Americans for Prosperity Found. v. 
        Bonta, 141 S. Ct. 2373, 2386 (2021)). In the context of 
        elections, ``the State's interest in preserving the integrity 
        of the electoral process is undoubtedly important. . . . The 
        State's interest is particularly strong with respect to efforts 
        to root out fraud, which not only may produce fraudulent 
        outcomes, but has a systemic effect as well,'' (John Doe No. 1 
        v. Reed, 561 U.S. 186, 197 (2010)).
            (5) The Supreme Court has repeatedly upheld that giving and 
        spending money in elections is protected speech. When scam PAC 
        operators misuse donations, they are suppressing their donors' 
        speech. By making few to no political contributions with the 
        dollars raised off false promises to further their donors' 
        political views, scam PACs are stealing money, and theft is not 
        protected speech.
            (6) In the interest of safeguarding constitutionally 
        protected speech, this Act does not prescribe sweeping 
        regulations regarding how all political committees may spend 
        money in elections. This Act's prohibitions are narrowly 
        tailored to only apply to a subset of nonconnected committees 
        that do not have a majority of their disbursements spent on 
        legitimate expenditures, sparing the vast majority of 
        committees from being subjected to any additional requirements. 
        For the committees that fail to have a majority of their 
        disbursements spent on legitimate expenditures, their only 
        penalty under this Act is being prevented from disbursing funds 
        to any entity that has a financial interest or familial 
        connection to the committees' operators. This restriction is 
        exceedingly reasonable and simple to comply with to promote the 
        governmental interest of preventing self-dealing.
            (7) While current PAC reporting requirements provide the 
        public with information that can be useful for identifying scam 
        PACs, the mere public availability of this disclosed 
        information has done little to protect donors from scams, deter 
        scam PACs' operations, or curb the proliferation of fraudulent 
        committees. Most grassroots donors who are looking to express 
        their opinions by making a political contribution are unable to 
        easily interpret this disclosed information even if they know 
        to look for it and know where to find it. Disclosures in the 
        absence of meaningful fundraising and spending standards are 
        insufficient to hold scam PACs accountable.
            (8) Given the finite timelines of campaign cycles, 
        prophylactic measures to combat fraud in elections are 
        necessary alternatives to strict reliance on enforcement 
        actions against fraud after an election is already over when 
        the harm is very difficult to remedy.

SEC. 2. PROHIBITION ON DISBURSEMENT OF FUNDS TO ENTITIES OWNED OR 
              CONTROLLED BY INDIVIDUALS WITH AUTHORITY OVER OPERATIONS 
              OF POLITICAL COMMITTEES.

    (a) In General.--Section 302 of the Federal Election Campaign Act 
of 1971 (52 U.S.C. 30102) is amended by adding at the end the following 
new subsection:
    ``(j)(1) Except as provided in paragraphs (3) and (4), during a 
reporting period covered by a report filed by a political committee 
under section 304, the committee may not make disbursements to an 
entity owned or controlled in whole or in part by an individual, or by 
a family member of an individual--
            ``(A) who is authorized to carry out executive or 
        managerial authority over the operation of the committee;
            ``(B) who is authorized to solicit or disburse funds for or 
        on behalf of the committee; or
            ``(C) who is an employee of the committee (whether paid or 
        unpaid) and who provides the committee with professional 
        services (other than accounting or legal services) relating to 
        the committee's campaign or fundraising strategy.
    ``(2) A political committee may not employ or allow to volunteer on 
behalf of the committee an individual who owns or controls an entity 
that has accepted disbursements made from any political committee in 
violation of paragraph (1).
    ``(3) Paragraph (1) does not apply with respect to disbursements 
made by a political committee during the reporting period covered by a 
report filed by the committee under section 304 if a majority of the 
funds disbursed by the committee during the period were for 
contributions to an authorized committee of a candidate or a committee 
of a political party or for making independent expenditures.
    ``(4) Paragraph (1) does not apply with respect to the following:
            ``(A) An authorized committee of a candidate.
            ``(B) A committee of a political party.
            ``(C) A separate segregated fund of a corporation or labor 
        organization under section 316(b)(2)(C).
    ``(5) In this subsection, the term `family member' means, with 
respect to an individual, any of the following:
            ``(A) A spouse, and parents thereof.
            ``(B) Sons and daughters, and spouses thereof.
            ``(C) Parents, and spouses thereof.
            ``(D) Brothers and sisters, and spouses thereof.
            ``(E) Grandparents and grandchildren, and spouses thereof.
            ``(F) Aunts and uncles, and spouses thereof.
            ``(G) Cousins, and spouses thereof.
            ``(H) A domestic partner, and parents thereof, including 
        domestic partners of any individual described in subparagraphs 
        (A) through (G).''.
    (b) Regulations.--Not later than 90 days after the date of the 
enactment of this Act, the Federal Election Commission shall promulgate 
such regulations as may be necessary to carry out the amendment made by 
this Act.
    (c) Effective Date.--The amendment made by this Act shall apply 
with respect to disbursements made on or after the date that is 90 days 
after the date of enactment of this Act, without regard to whether or 
not the Commission has promulgated regulations under subsection (b).
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