[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.
____________________