[Congressional Record Volume 170, Number 144 (Tuesday, September 17, 2024)]
[House]
[Pages H5270-H5272]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  NO FOREIGN ELECTION INTERFERENCE ACT

  Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 8314) to amend the Internal Revenue Code of 1986 to 
impose penalties with respect to contributions to political committees 
from certain tax exempt organizations that receive contributions from 
foreign nationals, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 8314

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``No Foreign Election 
     Interference Act''.

     SEC. 2. PENALTIES WITH RESPECT TO CONTRIBUTIONS TO POLITICAL 
                   COMMITTEES FROM CERTAIN TAX EXEMPT 
                   ORGANIZATIONS THAT ACCEPT CONTRIBUTIONS FROM 
                   FOREIGN NATIONALS.

       (a) In General.--Part I of subchapter B of chapter 68 of 
     the Internal Revenue Code of 1986 is amended by adding at the 
     end the following new section:

     ``SEC. 6720D. CONTRIBUTIONS TO POLITICAL COMMITTEES FROM 
                   CERTAIN TAX EXEMPT ORGANIZATIONS THAT ACCEPT 
                   CONTRIBUTIONS FROM FOREIGN NATIONALS.

       ``(a) In General.--Any specified tax exempt organization 
     that makes any disqualified political committee contribution 
     shall pay a penalty equal to twice the amount of such 
     contribution.
       ``(b) Disqualified Political Committee Contribution.--For 
     purposes of this section--
       ``(1) In general.--The term `disqualified political 
     committee contribution' means, with respect to any 
     organization described in section 501(c), any contribution 
     made by such organization to a political committee (as 
     defined in section 301 of the Federal Election Campaign Act 
     of 1971 (52 U.S.C. 30101)) if such organization received, 
     during any testing period, any contribution or gift (within 
     the meaning of section 6033(b)(5)) from a foreign national 
     (as defined in section 319(b) of the Federal Election 
     Campaign Act of 1971 (52 U.S.C. 30121(b))).
       ``(2) Testing period.--The term `testing period' means, 
     with respect to any contribution by an organization described 
     in section 501(c), the 8-year period ending on the date of 
     such contribution, except that such period shall not include 
     any period before the date of the enactment of this section.
       ``(c) Specified Tax Exempt Organization.--For purposes of 
     this section--
       ``(1) In general.--The term `specified tax exempt 
     organization' means, with respect to any taxable year, any 
     organization described in section 501(c) and exempt from tax 
     under section 501(a) if--
       ``(A) the gross receipts of such organization for such 
     taxable year equal or exceed $200,000, or
       ``(B) the assets of such organization (determined as of the 
     close of such taxable year) equal or exceed $500,000.
       ``(2) Coordination with revocation of tax exempt status by 
     reason of making disqualified political committee 
     contributions.--An organization which is not exempt from tax 
     under section 501(a) solely by reason of section 501(s) shall 
     be treated for purposes of paragraph (1) of this subsection 
     as exempt from tax under section 501(a) with respect to the 
     application of this section to the first 3 disqualified 
     political committee contributions of such organization.''.
       (b) Revocation of Exempt Status Upon Third Disqualified 
     Political Committee Contribution.--Section 501 of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new subsection:
       ``(s) Revocation of Exempt Status of Certain Organizations 
     That Accept Contributions From Foreign Nationals and Make 
     Contributions to Political Committees.--Any organization 
     described in subsection (c) which makes more than 2 
     disqualified political committee contributions (as defined in 
     section 6720D(b)) shall not be exempt from taxation under 
     subsection (a) for any taxable year ending on or after the 
     date of the third such contribution.''.
       (c) Clerical Amendment.--The table of sections for part I 
     of subchapter B of chapter 68 of such Code is amended by 
     adding at the end the following new item:

``Sec. 6720D. Contributions to political committees from certain tax 
              exempt organizations that accept contributions from 
              foreign nationals.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to contributions made on or after 
     January 1, 2025, by organizations described in section 501(c) 
     of the Internal Revenue Code of 1986.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Smith) and the gentlewoman from California (Ms. Sanchez) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. SMITH of Missouri. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days in which to revise and extend their 
remarks and submit extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.
  Mr. SMITH of Missouri. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, as the world's leading democracy, America is an example 
for other nations to follow. Unfortunately, we are also a target for 
foreign actors seeking to influence and undermine our elections.
  Over the last year, as 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.
  Under current law, foreign nationals are prohibited from making 
contributions directly to election campaigns, but there is nothing that 
prohibits overseas cash flowing from foreign nationals, including from 
adversaries of the United States such as China, through tax-exempt 
organizations and then into the hands of super-PACs.
  The committee's investigation discovered a particularly disturbing 
example: A foreign national from Switzerland has given over $100 
million through his tax-exempt organization to the Sixteen Thirty Fund, 
a 501(c)(4), which subsequently distributed $63 million to super-PACs 
to try to persuade the American voter. According to The New York Times, 
the Sixteen Thirty Fund is a leading vehicle for dark money on the 
left.
  The American people shouldn't be subjected to TV and digital ads 
financed by the Chinese Communist Party or other nations seeking to 
influence the vote or undermine our elections. I think we can all agree 
that our election should be free of foreign interference.
  For my colleagues on the left who spent years talking about foreign 
election interference, this should be a no-brainer. If they care about 
our electoral process and making sure it is open and fair, then we need 
to make sure foreign money can't drown out the voices of American 
voters.
  The legislation before us today, sponsored by Representative 
Malliotakis, the No Foreign Election Interference Act, was approved in 
May by the Ways and Means Committee 39-1. Her bill closes this loophole 
in the tax code by restricting tax-exempt organizations from donating 
to super-PACs after receiving foreign gifts or contributions, and it 
revokes the tax-exempt status for organizations that repeatedly violate 
this law.

[[Page H5271]]

  This bill is not aimed at program service revenue or member dues but 
clearly focuses on contributions and gifts made to tax-exempt 
organizations that then make donations to super-PACs.
  When it comes to our elections, the American people, not wealthy 
foreign donors, should decide the future direction of our country.
  Mr. Speaker, I commend Representative Malliotakis for her leadership 
on this issue, and I encourage all of my colleagues to vote ``yes'' on 
this bill so that we can maintain the integrity of our election system.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SANCHEZ. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in opposition to H.R. 8314, the No Foreign 
Election Interference Act.
  While the title and the intent of the bill sound reasonable, in its 
current form, the bill ultimately fails in its goal to defend 
democracy. Instead, this bill would unfairly hurt American workers and 
the unions that represent them.
  This bill has many unintended and harmful consequences. Although the 
intent and the spirit of the bill are good, in the current form, it 
falls very short of its intention.
  It imposes penalties on organizations that make contributions to 
political committees and receive contributions or gifts from foreign 
nationals during an 8-year lookback period. However, it does not define 
a contribution or gift for this purpose or contain any reasonable cause 
exception. The penalty equals twice the amount of the contribution made 
to the political committee. If a tax-exempt organization makes more 
than two political contributions described in this bill, the 
organization loses its exempt status as of the third contribution.
  I am particularly concerned about the severe penalties the bill would 
impose on organizations that have international members and make 
political contributions. This bill is opposed by unions, including the 
AFL-CIO, which represents 60 affiliate unions and 12.5 million workers.

                              {time}  1630

  Labor unions are obligated to represent all workers in a bargaining 
unit, but they have no role in who is hired.
  An employer may hire a citizen, a permanent resident who holds a 
legal green card, or an immigrant holding a temporary visa.
  Accordingly, if union dues are considered a contribution or gift and 
the dues are received from a foreign national, that is, a noncitizen, 
this would restrict the union's right to give to a political committee.
  It is imperative that they be able to advocate on behalf of workers 
and fully engage in the political process. Since this bill only applies 
to nonprofits, for-profit corporations don't face this same danger.
  Finally, the bill is also redundant because foreign nationals are 
already prohibited from donating to political candidates in any 
Federal, State, or local election under the Federal Election Campaign 
Act of 1971.
  If Republicans were serious about removing dark money from politics, 
the bill under consideration today would be the DISCLOSE Act.
  Mr. Speaker, I urge my colleagues to vote ``no'' on this antiworker 
bill, and I reserve the balance of my time.
  Mr. SMITH of Missouri. Wow, Mr. Speaker. This is about as swampy as 
you can get in Washington. This bill passed out of the House Ways and 
Means Committee 39-1, including the gentlewoman from California who 
voted ``yes.''
  The only difference between when it passed out of the committee to 
where we are today is that some outside interest groups, who apparently 
control the voting cards and the opinions of a lot of people, said this 
is a bad bill, so now we are a ``no.'' That is very, very unfortunate.
  I yield such time as she may consume to the gentlewoman from New York 
(Ms. Malliotakis).
  Ms. MALLIOTAKIS. Mr. Speaker, I thank Chairman Smith for advocating 
for this bill, working to bring it to the floor, and making sure that 
we do not have foreign election interference.
  Mr. Speaker, my legislation, H.R. 8314, the No Foreign Election 
Interference Act, closes a loophole in our tax code that foreign 
citizens and potentially foreign adversaries have used to influence and 
derail the will of the United States people.
  Under current law, foreign nationals are prohibited from donating to 
political committees, as my colleague on the other side pointed out.
  However, what my colleague on the other side of the aisle failed to 
mention is that there are no restrictions on foreign nationals flowing 
money through tax-exempt organizations and then moving that money into 
super-PAC issue advocacy organizations that get involved in American 
elections with the intention to influence our elections. This is a 
major loophole.
  Public reporting suggests that foreign nationals who are barred from 
directly contributing to candidate campaigns by the FEC are exploiting 
tax-exempt organizations as a pass-through, something that as current 
law stands is permissible.
  For example, a Swiss billionaire has used a network of nonprofits to 
steer tens of millions of dollars to influence our elections and 
undermine our democracy.
  According to The New York Times, the same individual between 2016 and 
2020 donated significant sums of money to the Sixteen Thirty Fund, 
which subsequently sent over $60 million to super-PACs that supported 
exclusively Democrats. Perhaps that is why we all of a sudden see this 
opposition to this legislation after it passed committee almost 
unanimously.
  We should all be uncomfortable with any noncitizen having so much 
sway over our electoral decisions and public discourse. Our elections 
are our elections. They do not belong to individuals who cannot even 
cast a ballot in the United States.
  This bill would prohibit any tax-exempt organization that receives 
foreign national contributions from subsequently making contributions 
to political committees, such as super-PACs, for 8 years. Failure to 
comply would result in significant fines and eventually revocation of 
tax-exempt status.
  Let me be abundantly clear: To address the concern brought up by my 
colleague on the other side of the aisle, this legislation does not 
include any dues-paying trade organizations or labor unions. The sole 
intent of this bill is to keep foreign mega-donor money out of our 
elections.
  Again, I thank Chairman Jason Smith of Ways and Means for working 
with me on this legislation, and I hope that my colleagues will support 
this legislation today and that it will pass with bipartisan support as 
it did out of the committee.
  Ms. SANCHEZ. Mr. Speaker, I have no further speakers, I am prepared 
to close, and I yield myself the balance of my time
  Mr. Speaker, as I stated earlier, the intent of this bill is noble 
and even reasonable, but as it is written, it is fundamentally flawed.
  While it is true that the bill passed out of committee on a nearly 
unanimous vote, and in that iteration, I did vote for it. Upon further 
scrutiny of the bill, we noticed that there were some very troubling 
aspects of this bill, which make it not fulfill the solution to the 
problem that it is seeking to do.
  If my colleagues on the other side of the aisle were correct in 
saying that it doesn't unfairly target unions, they could tighten up 
the definition of what contributions are in this bill, or they could 
amend it to specifically exclude labor unions from the provisions of 
this bill that are so punitive.
  My question to my colleagues on the other side of the aisle is I can 
understand wanting to remove foreign influence from our elections, but 
why do they want to silence the voices of working families in the 
United States, because that is what this bill does.
  I support removing dark money from politics, but this bill is not the 
right bill, and it is certainly not the right approach.

  Its significant penalties on tax-exempt organizations unfairly target 
workers and the unions that represent them, and there is nothing swampy 
about wanting to defend those workers.
  This bill does not fail to meaningfully reduce foreign election 
interference, so I must urge my colleagues to vote ``no'' in opposition 
of this bill, and I yield back the balance of my time.
  Mr. SMITH of Missouri. Mr. Speaker, I yield myself the balance of my 
time.

[[Page H5272]]

  Mr. Speaker, I think it is noteworthy to know that whenever we did 
the markup on this bill in committee, the other side did not present 
one amendment to protect what they are suggesting now that they should 
have done in amendment. Guess what? They voted 39-1 for this bill.
  Those penalties that the gentlewoman from California was pointing out 
that she didn't like, that hasn't changed. That was in the bill, and 
they passed it. She voted for it.
  This bill is about making sure American elections are decided by 
American voters, not foreign nationals who want to tip the scales in 
favor of their preferred candidate or policy.
  The 2020 elections were the most expensive elections in history with 
election spending totaling more than $14 billion, an amount surely to 
be surpassed in 2024.
  The American people deserve to know that the commercials and ads that 
are being pumped through their TVs and phones are free from foreign 
influence.
  Representative Malliotakis' bill will close a loophole that allows 
wealthy foreigners to exercise outsized influence in our U.S. elections 
through donations to tax-exempt organizations who then flood our 
airwaves through super-PAC spending, emboldened with foreign dollars--
not American dollars, foreign dollars.
  I urge my colleagues to stand with American voters who shouldn't have 
their voices silenced by billionaires from overseas. I ask and 
encourage this body to support this legislation.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Missouri (Mr. Smith) that the House suspend the rules 
and pass the bill, H.R. 8314, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Ms. SANCHEZ. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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