[House Report 118-696]
[From the U.S. Government Publishing Office]


118th Congress   }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                     {       118-696

======================================================================



 
          SECURE HANDLING OF INTERNET ELECTRONIC DONATIONS ACT

                                _______
                                

 September 20, 2024.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Steil, from the Committee on House Administration, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 9488]

    The Committee on House Administration, to whom was referred 
the bill (H.R. 9488) to amend the Federal Election Campaign Act 
of 1971 to require the disclosure of the card verification 
value as a condition of the acceptance of online contributions 
made through the use of credit or debit cards in elections for 
Federal office and to prohibit the acceptance of contributions 
made through the use of gift cards and prepaid credit cards in 
such elections, and for other purposes, having considered the 
same, reports favorably thereon with amendments and recommends 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Committee Action.................................................     9
Committee Consideration..........................................    10
Committee Votes..................................................    10
Statement of Constitutional Authority............................    10
Committee Oversight Findings.....................................    10
Statement of Budget Authority and Related Items..................    10
Congressional Budget Office Estimate.............................    10
Performance Goals and Objectives.................................    11
Duplication of Federal Programs..................................    11
Advisory on Earmarks.............................................    11
Federal Mandates Statement.......................................    11
Advisory Committee Statement.....................................    11
Applicability to Legislative Branch..............................    11
Section-by-Section Analysis......................................    11
Changes Made to Existing Law.....................................    12

    The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Secure Handling of Internet Electronic 
Donations Act'' or the ``SHIELD Act''.

SEC. 2. REQUIRING DISCLOSURE OF CARD VERIFICATION VALUE AS CONDITION OF 
                    ACCEPTANCE OF ONLINE CONTRIBUTIONS MADE USING 
                    CREDIT OR DEBIT CARDS IN FEDERAL ELECTIONS.

  (a) Requirement.--Section 302 of the Federal Election Campaign Act of 
1971 (52 U.S.C. 30102) is amended by adding at the end the following:
  ``(j)(1) No political committee shall accept any Internet credit or 
debit card contribution unless--
          ``(A) the individual or entity making such contribution is 
        required, at the time such individual makes such contribution, 
        to disclose the card verification value of such credit or debit 
        card; and
          ``(B)(i) the billing address associated with such credit or 
        debit card is located in the United States; or
          ``(ii) in the case of a contribution made by an individual 
        living outside of the United States who, at the time the 
        individual makes the contribution, is a United States national 
        or an individual who is lawfully admitted for permanent 
        residence, as defined by section 101(a)(20) of the Immigration 
        and Nationality Act (8 U.S.C. 1101(a)(20)), the individual 
        provides the committee with--
                  ``(I) the United States mailing address the 
                individual uses for voter registration purposes;
                  ``(II) a copy of the individual's United States 
                passport;
                  ``(III) a copy of the individual's permanent resident 
                card; or
                  ``(IV) a copy of a comparable acceptable 
                identification document, or the unique identifying 
                number from such a document, for the individual.
  ``(2) Notwithstanding subsection (b) or (c), in the case of an 
Internet credit or debit card contribution--
          ``(A) no later than 10 days after receiving the contribution, 
        the person who receives the contribution shall forward to the 
        treasurer such contribution, the name and address of the person 
        making the contribution, and the date of receipt; and
          ``(B) the treasurer of a political committee shall keep an 
        account of the name and address of any person making any such 
        contribution, together with the date and amount of such 
        contribution by any person.
  ``(3) If the treasurer of a political committee shows that best 
efforts have been used to comply with the requirements of this 
subsection, the committee shall be considered in compliance with this 
subsection.
  ``(4) In this subsection, the term `Internet credit or debit card 
contribution' means a contribution that--
          ``(A) is made using a credit or debit card; and
          ``(B) is received through an Internet website.''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
to contributions the receipt of which a political committee is required 
to include in a report filed under section 304 of the Federal Election 
Campaign Act of 1971 (52 U.S.C. 30104) on or after the date of the 
enactment of this Act.

SEC. 3. PROHIBITING ACCEPTANCE OF CONTRIBUTIONS MADE USING GIFT CARDS 
                    IN FEDERAL ELECTIONS.

  (a) Prohibition.--Section 302 of the Federal Election Campaign Act of 
1971 (52 U.S.C. 30102), as amended by section 2(a), is amended by 
adding at the end the following:
  ``(k)(1) No political committee shall accept a contribution made 
through the use of a general-use prepaid card, gift certificate, or 
store gift card, as such terms are defined, respectively, under section 
915(a) of the Electronic Fund Transfer Act (15 U.S.C. 1693l-1(a)).
  ``(2) If the treasurer of a political committee shows that best 
efforts have been used to comply with the requirements of this 
subsection, the committee shall be considered in compliance with this 
subsection.''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
with respect to contributions the receipt of which a political 
committee is required to include in a report filed under section 304 of 
the Federal Election Campaign Act of 1971 (52 U.S.C. 30104) on or after 
the date of the enactment of this Act.

SEC. 4. PROHIBITING AIDING OR ABETTING MAKING OF CONTRIBUTION IN THE 
                    NAME OF ANOTHER.

  Section 320 of the Federal Election Campaign Act of 1971 (52 U.S.C. 
30122) is amended by adding at the end the following new sentence: ``No 
person shall knowingly direct, help, or assist any person in making a 
contribution in the name of another person.''.

SEC. 5. REGULATIONS.

  (a) Deadline.--Not later than 10 days after the date of the enactment 
of this Act, the Federal Election Commission shall promulgate 
regulations to carry out the amendments made by this Act.
  (b) Consultation With Credit Card Payment Networks.--In promulgating 
regulations under subsection (a) to carry out the amendments made by 
sections 2 and 3, the Commission shall consult with representatives of 
payment card networks, as defined under section 921(c) of the 
Electronic Fund Transfer Act (15 U.S.C. 1693o-2(c)).

    Amend the title so as to read:
    A bill to amend the Federal Election Campaign Act of 1971 
to require the disclosure of the card verification value as a 
condition of the acceptance of online contributions made 
through the use of credit or debit cards in elections for 
Federal office and to prohibit the acceptance of contributions 
made through the use of gift cards in such elections, and for 
other purposes.

                          Purpose and Summary

    H.R. 9488, the Secure Handling of Internet Electronic 
Donations Act or the ``SHIELD Act,'' introduced by 
Representative Bryan Steil (WI-01) and co-sponsored by 
Representatives Stephanie Bice (OK-05), Laurel Lee (FL-15), and 
Anthony D'Esposito (NY-04) amends the Federal Election Campaign 
Act of 1971 (``FECA'') to prohibit political committees from 
processing an online contribution if a contributor does not 
provide the card verification value (``CVV'') and billing 
address associated with the card and from accepting 
contributions from prepaid cards. It also adopts a longstanding 
Federal Election Commission (``FEC'') recommendation to 
prohibit any person from knowingly aiding or abetting any other 
person that makes a contribution in the name of another person.

                  Background and Need for Legislation


                               BACKGROUND

    Online contributions play an increasing role in federal 
elections. However, there are vulnerabilities in the current 
system, particularly around ensuring the legitimacy of 
contributions made online using credit or debit cards. These 
issues include potential foreign interference, fraud, and 
difficulty verifying the identity of contributors.
    Congress created the Federal Election Commission (``FEC'') 
in 1974\1\ and gave it the authority to enforce all civil 
violations of federal campaign finance law.\2\ The agency is a 
bipartisan commission of six commissioners who serve single, 
non-renewable six-year terms, though many commissioners ``hold 
over'' until a new commissioner is appointed.\3\ No more than 
three commissioners may be affiliated with the same political 
party.\4\ Commissioners are appointed by the president, 
traditionally upon the recommendation of Senate leadership, and 
are subject to confirmation by the United States Senate.\5\ For 
the FEC to act, a majority vote of the commissioners is always 
required.\6\ Unlike traditional executive branch agencies, the 
FEC almost entirely enforces campaign finance law by 
investigating sworn complaints filed by third parties rather 
than by the FEC acting on its own.\7\
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    \1\Federal Election Campaign Act Amendments of 1974, 52 U.S.C. 
Sec. 30106 (1974).
    \2\Id. Sec. Sec. 30106(b)(1), 30107(e).
    \3\Id. Sec. 30106(a)(2)(A)-(B) (allowing Commissioners to serve 
holdover terms in the event a replacement is not confirmed before their 
term expires).
    \4\Id. Sec. 30106(a)(2)(A).
    \5\Id. Sec. 30106(a)(1).
    \6\Id. Sec. 30106(c).
    \7\Id. Sec. 30109(a).
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    The FEC is tasked with enforcing FECA and the Bipartisan 
Campaign Reform Act of 2002 (``BCRA''). Under FECA, foreign 
nationals\8\ are prohibited from, directly or indirectly, 
making a contribution or donation of money or other thing of 
value, or making an express or implied promise to make a 
contribution or donation, in connection with a Federal, State, 
or local election.\9\ Foreign nationals are also prohibited 
from contributing or donating to political party committees\10\ 
and from making expenditures, including independent 
expenditures, or disbursements for electioneering 
communications.\11\
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    \8\Id. Sec. 30121(b) (``Foreign national is defined as ``(1) a 
foreign principal, as such term is defined by section 611(b) of title 
22, except that the term ``foreign national'' shall not include any 
individual who is a citizen of the United States; or (2) an individual 
who is not a citizen of the United States or a national of the United 
States (as defined in section 1101(a)(22) of title 8) and who is not 
lawfully admitted for permanent residence, as defined by section 
1101(a)(20) of title 8'').
    \9\Id. Sec. 30121(a)(1)(A) (``foreign national campaign finance 
prohibition'').
    \10\Id. Sec. 30121(a)(1)(B).
    \11\Id. Sec. 30121(a)(1)(C).
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            VERIFICATION CHALLENGES IN ONLINE CONTRIBUTIONS

    One of the key challenges that political committees face 
when receiving online contributions is verifying the identity 
of donors. It is feasible that contributions made through 
credit and debit cards could be processed without verifying 
whether the individual making the contribution is a U.S. 
citizen or lawful permanent resident, as required by law.\12\ 
If the contribution is directed through an intermediary or 
conduit like ActBlue or WinRed,\13\ FECA imposes a reporting 
requirement to the FEC of both the receipt of the initial 
contribution as well as the disbursement to the intended 
recipient.\14\ As a result, if a person contributes through 
WinRed or ActBlue to give to a candidate, the contribution for 
$200 or less is publicly reported whereas a donation to the 
candidate directly is not.\15\ While political committees are 
required to collect the name, address, and employer information 
of each individual contributor who gives more than $200 to the 
campaign,\16\ the current legal framework does not mandate the 
collection of additional identifiers, such as the card 
verification value (CVV) used in most e-commerce transactions 
to ensure that the person making the payment is the authorized 
cardholder.\17\ Despite FECA stipulating that contributions in 
the name of another person are illegal\18\, this loophole has 
allowed individuals to bypass identification requirements and 
potentially make contributions on behalf of others. The FEC has 
noted that ``best efforts'' must be made by political 
committees to collect accurate donor information,\19\ but 
without stronger verification requirements, these efforts are 
often inadequate to prevent fraud.
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    \12\See generally 52 U.S.C. Sec. 30121.
    \13\ActBlue and WinRed are both registered as political committees 
with the Federal Election Commission, classify as section 527 political 
organizations under the Internal Revenue Code, but also play the role 
of a processor that processes online contributions before sending them 
to the candidate, political action committee, or other group. ActBlue 
is utilized by Democratic candidates and groups while WinRed is 
utilized by Republican candidates and groups.
    \14\Id. Sec. 30116(a)(8).
    \15\Id.
    \16\Id. Sec. 30104(b)(3)(A).
    \17\See id. Sec. 30116(a)(8).
    \18\Id. Sec. 30122.
    \19\Id. Sec. 30102(i).
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    On October 31, 2023, the Committee on House Administration 
(``the Committee'') sent a letter to ActBlue inquiring into 
whether it was properly adhering to federal campaign finance 
laws and effectively preventing foreign and illegal 
contributions.\20\ In response, ActBlue explained it does not 
require a CVV on all transactions.\21\ Following this 
admission, the Committee began an investigation into ActBlue 
amid increased concerns that ActBlue was violating or skirting 
federal campaign finance laws and putting its donors at 
risk.\22\ On August 5, 2024, Chairman Bryan Steil sent a letter 
to the FEC requesting it initiate an emergency rulemaking to 
require political committees to verify the CVV and address 
associated with the billing address and to prohibit them from 
accepting contributions made through prepaid cards.\23\ In 
addition to the Committee's action, several state officials 
from Virginia,\24\ Wyoming,\25\ and Texas\26\ are also 
conducting similar investigations into ActBlue. As a result, 
Attorney General Paxton of Texas confirmed that ActBlue changed 
its requirements to require a CVV when an initial contribution 
is processed.\27\
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    \20\Letter from Chairman Bryan Steil to ActBlue, U.S. Committee on 
House Administration (October 31, 2023), https://cha.house.gov/_cache/
files/f/2/f28462dc-15dd-490c-a7f0-bc20772db975/
4922D896A967959D5BC6530F6615E9B9.actblue-letter-final-78-.pdf.
    \21\Letter from ActBlue to Chairman Bryan Steil, U.S. Committee on 
House Administration (November 27, 2023), https://cha.house.gov/_cache/
files/4/5/453a1689-6471-4632-8874-2ea5018820 a7/
FEE0032E48BFF011537DA5927F7E9298.response-to-house-admin-committee-11-
27-23.pdf.
    \22\Committee on House Administration. (August 5, 2024). Chairman 
Steil Launches Expanded Investigation into Online Political Donations 
Through ActBlue [Press Release]. Chairman Steil Launches Expanded 
Investigation into Online Political Donations Through ActBlue--Press 
Releases--United States Committee on House Administration.
    \23\Letter from Chairman Bryan Steil to Federal Election 
Commission, U.S. House Committee on House Administration (August 5, 
2024), https://cha.house.gov/_cache/files/2/9/29c4763d-abe8-49dd-b5ef-
e870925ef7a7/AD4186C84F88B81763B784FFFAAA5938.fec-rulemaking-request-
letter .pdf.
    \24\Andrew Stanton, Republican AG Targets Democratic PAC Over Donor 
Information, Newsweek (August 2, 2024), https://www.newsweek.com/
actblue-democrat-pac-money-laundering-virginia-attorney-general-
1933976.
    \25\Secretary Gray Announces Investigation into ActBlue, The 
Cheyenne Post (August 1, 2024), https://www.thecheyennepost.com/news/
secretary-gray-announces-investigation-into-actblue/artic le_bc2e16da-
4ead-11ef-bf40-97c094f2f520.html.
    \26\Attorney General of Texas. (August 8, 2024). Attorney General 
Ken Paxton's Ongoing Investigation Into ActBlue Yields Cooperation On 
Donor Credit Card Identification [Press Release]. https://
www.texasattorneygeneral.gov/news/releases/attorney-general-ken-
paxtons-ongoing-invest igation-actblue-yields-cooperation-donor-credit-
card.
    \27\Attorney General Ken Paxton's Ongoing Investigation Into 
ActBlue Yields Cooperation On Donor Credit Card Identification, Ken 
Paxton, Attorney General of Texas (August 8, 2024), https://
www.texasattorneygeneral.gov/news/releases/attorney-general-ken-
paxtons-ongoing-invest igation-actblue-yields-cooperation-donor-credit-
card.
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    The absence of stringent online verification protocols has 
also raised concerns about the ability of foreign nationals to 
circumvent these rules through anonymous online contributions, 
particularly by using prepaid cards, which are difficult to 
trace. These concerns have been validated by the Committee's 
ongoing investigation into ActBlue. Despite voluntary attempts 
by some PACs to address these issues, the lack of rigorous 
online verification mechanisms continues to leave the door open 
for potential foreign interference.

 PROHIBITING AIDING AND ABETTING MAKING OF CONTRIBUTION IN THE NAME OF 
                                ANOTHER

    As discussed above, the prohibition on making contributions 
in the name of another has long been a central feature of U.S. 
campaign finance law. This provision ensures transparency in 
the source of political contributions, safeguarding elections 
from the corrupting influence of undisclosed or improper 
funding. However, while FECA prohibits the act of making a 
contribution in the name of another,\28\ the knowing aiding and 
abetting of such actions became a significant legal and 
regulatory gray area. As such, in 1989 the FEC added a 
provision to its regulation providing that no person shall 
``[k]nowingly help or assist any person in making a 
contribution in the name of another.''\29\ While this specific 
provision did not explicitly mention ``aiding and abetting,'' 
it was interpreted by the FEC to encompass actions that 
facilitated or assisted in illegal contribution schemes, 
including the orchestration of straw donations.
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    \28\52 U.S.C. Sec. 30122.
    \29\11 C.F.R. Sec. 110.4(b)(1)(iii) (1989); see also Affiliated 
Committees, Transfers, Prohibited Contributions, Annual Contribution 
Limitations and Earmarked Contributions, 54 Fed. Reg. 34,098, 34,104-05 
(Aug. 17, 1989).
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    After 26 years, this regulatory landscape was challenged in 
a 2015 lawsuit filed by the FEC against Jeremy Johnson, a Utah 
businessman and John Swallow, Utah's Chief Deputy Attorney 
General at the time.\30\ In Federal Election Commission (FEC) 
v. Jeremy Johnson and John Swallow,\31\ the FEC's enforcement 
of the prohibition on knowingly aiding and abetting 
contributions in the name of another came under scrutiny. The 
FEC's complaint in the case alleged that Johnson had funneled 
hundreds of thousands of dollars in contributions to various 
campaigns through straw donors. These contributions were 
orchestrated by John Swallow in an attempt to mask the true 
source of the funds and evade contribution limits.
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    \30\Federal Election Commission: Court Cases, FEC v. Jeremy Johnson 
and John Swallow. https://www.fec.gov/legal-resources/court-cases/fec-
v-jeremy-johnson-and-john-swallow/.
    \31\FEC v. Jeremy Johnson & John Swallow, No. 2:15-CV-00439 (D. 
Utah filed June 22, 2015).
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    In this case, Johnson argued that while FECA prohibits 
making contributions in the name of another, it did not 
explicitly cover knowingly aiding and abetting such violations. 
The federal district court ultimately ruled in Johnson's favor, 
holding that the FEC lacked the statutory authority to impose 
penalties for merely assisting or facilitating the unlawful 
contributions.\32\ This decision invalidated the FEC's 
regulation targeting individuals who knowingly aid or abet the 
making of contributions in another person's name, creating a 
loophole that allowed those indirectly involved in the scheme 
to avoid accountability.
---------------------------------------------------------------------------
    \32\Id.
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    Following the legal setback in FEC v. Johnson and Swallow, 
the FEC recognized the need for legislative reform to close the 
loophole. In its 2023 Legislative Recommendations submitted to 
the U.S. Congress, the FEC urged Congress to amend FECA to 
explicitly include a prohibition on knowingly aiding or 
abetting the making of contributions in the name of 
another.\33\
---------------------------------------------------------------------------
    \33\Federal Election Commission Legislative Recommendations 2023, 
FEC (Dec. 14, 2023), available at https://www.fec.gov/resources/cms-
content/documents/legrec2023.pdf.
---------------------------------------------------------------------------
    The FEC highlighted that this regulatory gap allows 
individuals who orchestrate illegal contributions through straw 
donors or other means to evade consequences. The Commission 
argued that without a statutory provision explicitly covering 
aiding and abetting, enforcement efforts are undermined, and 
the integrity of the campaign finance system is compromised. 
The recommendation from the FEC also emphasized that aiding and 
abetting laws exist in many other areas of criminal law, and 
extending this principle to campaign finance would bring FECA 
in line with broader legal standards. The proposal sought to 
ensure that those who engage in schemes to circumvent 
contribution limits or disclosure requirements would be fully 
liable under the law, even if they did not directly make the 
contributions themselves.

                          NEED FOR LEGISLATION

    Representative Steil's H.R. 9488, the SHIELD Act, would 
address the vulnerabilities outlined above by requiring 
political committees to collect and verify card verification 
values (CVV) and the billing address associated on the card 
when accepting online contributions via credit or debit cards. 
It would also prohibit the use of prepaid cards when an 
individual makes a political contribution. These measures will 
promote greater transparency and security in the online 
donation process. Lastly, this legislation would amend FECA to 
include a prohibition on knowingly directing, helping or 
assisting the making of a contribution in the name of another--
a high priority legislative recommendation from the FEC.\34\
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    \34\Id.
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    Since its enactment in 1972, FECA has prohibited 
contributions in the name of another. Specifically, the statute 
prohibits making a contribution in the name of another person 
or knowingly permitting another to use one's name to effect 
such a contribution.\35\ These prohibitions promote the 
important and long-recognized governmental interest in fighting 
corruption and its appearance by ensuring accurate disclosure 
of the true sources and amounts of campaign contributions and 
preventing circumvention of FECA's contribution limits and 
source prohibitions. This section of FECA is one of its most 
frequently violated provisions.\36\
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    \35\52 U.S.C. Sec. 30122.
    \36\See FECA Sec. 320, codified at 52 U.S.C. Sec. 30122; U.S. 
Department of Justice, Federal Prosecution of Election Offenses, 141 
(8th ed. Dec. 2017).
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    The current legal framework, though robust in many ways, 
falls short in addressing the specific challenges posed by 
online donations. The lack of mandatory verification of key 
details, such as the card verification value (CVV) for credit 
and debit card transactions, creates a significant gap in 
ensuring the legitimacy of online contributions. The entire 
purpose of a CVV is to provide an extra layer of security for 
card users.\37\ By implementing requirements for CVV 
verification and other identity-checking mechanisms, Congress 
could greatly reduce the risk of fraudulent and foreign 
contributions. Such measures would also help political 
committees comply with existing laws prohibiting contributions 
in the name of another.
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    \37\Sarah Li Cain, What is the CVV number?, Associated Press (June 
23, 2024), https://apnews.com/buyline-personal-finance/article/what-is-
the-cvv-number.
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    The use of prepaid cards for online political contributions 
is a critical issue that current law fails to adequately 
address. These cards, which can be purchased anonymously and 
used without any traceable identification, have become a 
favorite tool of bad actors seeking to make illegal or 
fraudulent contributions. Legislative action is needed to 
explicitly prohibit the use of prepaid cards in federal 
elections, thus closing this significant loophole in campaign 
finance regulations--the SHIELD Act accomplishes this goal. 
This provision is not designed to prohibit individuals that 
receive government-administered general-use prepaid cards from 
contributing to candidates by utilizing those cards.\38\ Some 
individuals receive social security benefits through a 
government-issued direct express prepaid debit card and should 
be able to continue to utilize these cards to contribute.\39\
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    \38\See e.g. government-issued prepaid cards under 15 U.S.C. 
Sec. 1693o-2(a)(7).
    \39\Frequently Asked Questions, What is the Direct Express card and 
how do I sign up?, Social Security Administration (Dec. 16, 2022), 
https://faq.ssa.gov/en-US/Topic/article/KA-02429.
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    Both of the above provisions in the SHIELD Act also provide 
a ``best efforts'' defense for political committees that 
attempt to comply with these new provisions. In the event the 
committee is audited by the FEC, the treasurer of the political 
committee can explain the correct processes and procedures were 
in place to prohibit individuals from contributing without a 
CVV or from using a prepaid card, but systems outside of their 
control such as a security failure led to a violation of the 
law. In those circumstances, political committees will be held 
harmless for failing to comply with these provisions.
    Lastly, it is well known that individuals who aim to 
violate FECA's limits on the sources and amounts of 
contributions often attempt to avoid detection by directing 
their illegal contributions through straw donors. After a court 
held the FEC acted outside of its authority by promulgating a 
regulation providing that ``[k]nowingly help or assist any 
person in making a contribution in the name of another,'' the 
FEC has lacked the authority to pursue these individuals. The 
SHIELD Act adopts a top bipartisan FEC legislation 
recommendation that puts the FEC's previous regulation into 
law. Importantly, the provision only covers individuals that 
``knowingly'' aid or abet a person making a contribution in the 
name of another. In only extreme cases would a financial 
services provider or payment processor be reached under the 
language. The point of the language is to prohibit individuals 
from knowingly aiding the main defendant behind the straw donor 
scheme by supplying names or helping give funds to ignorant 
donors to contribute. As the contribution in the name of 
another claim is one of the most violated campaign finance 
provisions, the FEC needs this tool to properly pursue all 
individuals that knowingly help to further the scheme. The 
SHIELD Act would incorporate the language of the stricken 
regulation into FECA, modified to include ``direct'' along with 
``help or assist.''

                            Committee Action


                       INTRODUCTION AND REFERRAL

    On September 6, 2024, Representative Bryan Steil (WI-01) 
joined by Representatives Stephanie Bice (OK-05), Laurel Lee 
(FL-15), and Anthony D'Esposito (NY-04), introduced H.R. 9488, 
the SHIELD Act. The bill was referred to the U.S. House of 
Representatives Committee on House Administration.

                                HEARINGS

    For the purposes of clause 3(c)(6)(A) of House rule XIII, 
in the 118th Congress, the Committee on House Administration 
held three full committee hearings to develop H.R. 8399.
          1. On May 11, 2023, the Committee held a full 
        committee hearing titled, ``American Confidence in 
        Elections: Protecting Political Speech.'' The hearing 
        took place almost a decade to the day since the 
        Internal Revenue Service scandal involving then Acting 
        Director of Exempt Organizations Lois Lerner 
        apologizing for inappropriately targeting conservative 
        organizations' applications for tax-exempt status.\40\ 
        It focused on the importance of enhancing protections 
        for political speech and donor privacy to protect 
        individuals and groups from retribution, harassment, or 
        intimidation based on their beliefs. Witnesses 
        included: Ms. Harmeet K. Dhillon, Managing Partner, 
        Dhillon Law Group Inc., Ms. Audrey Perry Martin, 
        Partner, The Gober Group, Mr. Justin Riemer, Principal, 
        Riemer Law, LLC, Mr. Bradley A. Smith, Chairman and 
        Founder, Institute for Free Speech, and Mr. Stephen 
        Spaulding, Vice President for Policy & External 
        Affairs, Common Cause.\41\
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    \40\Matt Nese, It's Been 10 Years Since the IRS's Tea Party 
Scandal. Will Congress Finally Act?, Reason Foundation (May 10, 2023), 
https://reason.com/2023/05/10/its-been-10-years-since-the-irss-tea-
party-scandal-will-congress-finally-act/.
    \41\American Confidence in Elections: Protecting Political Speech: 
Hearing Before the H. Comm. On Admin., 118th Cong. (2023).
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          2. On September 20, 2023, the Committee held a full 
        committee hearing titled, ``Oversight of the Federal 
        Elections Commission.'' The hearing represented the 
        first traditional oversight hearing of the Federal 
        Election Commission in more than a decade.\42\ The 
        Committee heard testimony from all six commissioners 
        and the agency's inspector general. The first panel of 
        witnesses included the Honorable Dara Lindenbaum, 
        Chairwoman, the Honorable Sean Cooksey, Vice Chairman, 
        the Honorable Shana Broussard, Commissioner, the 
        Honorable Allen Dickerson, Commissioner, the Honorable 
        Ellen Weintraub, Commissioner, and the Honorable James 
        Trainor, Commissioner. The second panel featured Mr. 
        Christopher Skinner, Inspector General.\43\
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    \42\See Federal Election Commission: Reviewing Policies, Processes 
and Procedures: Hearing Before the Subcomm. on Elections of the H. 
Comm. on Admin., 112th Cong. (2011) (showing the last traditional 
oversight hearing of the Federal Election Commission before the 
Committee on House Administration occurred on November 3, 2011).
    \43\Oversight of the Federal Election Commission: Hearing Before 
the H. Comm. on Admin., 118th Cong. (2023).
---------------------------------------------------------------------------
          3. On May 16, 2024, the Committee held a full 
        committee hearing titled, ``American Confidence in 
        Elections: Preventing Noncitizen Voting and Other 
        Foreign Interference.'' The hearing highlighted the 
        dangers associated with noncitizen voting, how States 
        do not have the tools nor resources to clean their 
        voter rolls, and what steps Congress can take to 
        rectify these problems. It also touched on the 
        loopholes in the federal campaign finance system that 
        allow foreign nationals to spend money in U.S. 
        elections and how Congress can close those loopholes. 
        Witnesses included the Honorable Cord Byrd, Florida 
        Secretary of State, the Honorable Hans A. von 
        Spakovsky, Manager, Election Law Reform Initiative and 
        Senior Legal Fellow, the Heritage Foundation, the 
        Honorable J. Christian Adams, President and Chief 
        Executive Officer of the Public Interest Legal 
        Foundation, Caitlin Sutherland, Executive Director of 
        Americans for Public Trust, and Michael Waldman, 
        President and Chief Executive Officer of the Brennan 
        Center for Justice.\44\
---------------------------------------------------------------------------
    \44\American Confidence in Elections: Preventing Noncitizen Voting 
and Other Foreign Interference: Hearing Before the H. Comm. On Admin., 
118th Cong. (2024).
---------------------------------------------------------------------------

                        Committee Consideration

    On September 11, 2024, the Committee on House 
Administration met in open session and ordered H.R. 9488, the 
SHIELD Act, as amended, reported favorably to the House of 
Representatives, by voice vote, with a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of House Rule XIII, the 
following vote occurred during the Committee's consideration of 
H.R. 9488:
          1. Vote on an amendment in the nature of a substitute 
        to H.R. 8399 offered by Mr. Steil, passed by voice 
        vote.
          2. Vote to report H.R. 8399 favorably, as amended, to 
        the House of Representatives passed by voice vote.

                 Statement of Constitutional Authority

    Congress has the power to enact this legislation pursuant 
to Article I, Section 8, Clause 18 of the U.S. Constitution, 
which grants Congress the authority to ``make all Laws which 
shall be necessary and proper for carrying into Execution the 
foregoing Powers, and all other Powers vested by this 
Constitution in the Government of the United States, or in any 
Department or Officer thereof.''\45\
---------------------------------------------------------------------------
    \45\U.S. Const., Art. I, Sec. 8, cl. 18.
---------------------------------------------------------------------------

                      Committee Oversight Findings

    The findings and recommendations of the Committee are 
incorporated into the descriptive portions of this report.

            Statement of Budget Authority and Related Items

    The Committee believes that there will be no additional 
costs attributable to H.R. 9488.

                  Congressional Budget Office Estimate

    A cost estimate by the Congressional Budget Office was not 
available at the time of the filing of this report. The 
Chairman will submit the estimate to the Congressional Record 
once it is available.

                    Performance Goals and Objectives

    The performance goals and objectives of H.R. 9488, the 
SHIELD Act, is to ensure the security and transparency of 
online contributions to federal elections by implementing the 
requirement of CVV, prohibiting the use of prepaid cards to 
make contributions in federal races, and prohibiting the 
knowing aiding or abetting of a person making a contribution in 
the name of another.

                    Duplication of Federal Programs

    H.R. 9488 does not establish or reauthorize any federal 
programs known to be duplicative of other federal programs.

                          Advisory on Earmarks

    H.R. 9488 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits.

                       Federal Mandates Statement

    An estimate of federal mandates was not made available at 
the time of the filing of this report.

                      Advisory Committee Statement

    H.R. 9488 does not establish or authorize any new advisory 
committees.

                  Applicability to Legislative Branch

    The legislation does not relate to the terms and conditions 
of employment or access to public services or accommodations 
within the legislative branch.

                      Section-by-Section Analysis


Section 1

    This section provides the short title of the bill, ``Secure 
Handling of Internet Electronic Donations Act'' or the ``SHIELD 
Act.''

Section 2

    Requires political committees to collect the card 
verification value and billing address from a contributor 
making a contribution as a condition of acceptance for online 
credit or debit card contributions in federal elections. The 
section also supplies a ``best efforts'' defense for political 
committees in complying with this provision.

Section 3

    Prohibits political committees from accepting contributions 
made using prepaid in federal elections. The section also 
supplies a ``best efforts'' defense for political committees in 
complying with this provision.

Section 4

    Prohibits any person from knowingly aiding or abetting 
another person that makes a contribution in the name of another 
person.

Section 5

    Requires the Federal Election Commission to promulgate 
regulations to implement the bill's provisions within 10 days 
of the legislation's passage. The Commission is also tasked 
with consulting with representatives of payment card networks 
in promulgating these regulations.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                 FEDERAL ELECTION CAMPAIGN ACT OF 1971



           *       *       *       *       *       *       *
TITLE III--DISCLOSURE OF FEDERAL CAMPAIGN FUNDS

           *       *       *       *       *       *       *


                  organization of political committees

  Sec. 302. (a) Every political committee shall have a 
treasurer. No contribution or expenditure shall be accepted or 
made by or on behalf of a political committee during any period 
in which the office of treasurer is vacant. No expenditures 
shall be made for or on behalf of a political committee without 
the authorization of the treasurer or his or her designated 
agent.
  (b)(1) Every person who receives a contribution for an 
authorized political committee shall, no later than 10 days 
after receiving such contribution, forward to the treasurer 
such contribution, and if the amount of the contribution is in 
excess of $50 the name and address of the person making the 
contribution and the date of receipt.
  (2) Every person who receives a contribution for a political 
committee which is not an authorized committee shall--
          (A) if the amount of the contribution is $50 or less, 
        forward to the treasurer such contribution no later 
        than 30 days after receiving the contribution; and
          (B) if the amount of the contribution is in excess of 
        $50, forward to the treasurer such contribution, the 
        name and address of the person making the contribution, 
        and the date of receipt of the contribution, no later 
        than 10 days after receiving the contribution.
  (3) All funds of a political committee shall be segregated 
from, and may not be commingled with, the personal funds of any 
individual.
  (c) The treasurer of a political committee shall keep an 
account of--
          (1) all contributions received by or on behalf of 
        such political committee;
          (2) the name and address of any person who makes any 
        contribution in excess of $50, together with the date 
        and amount of such contribution by any person;
          (3) the identification of any person who makes a 
        contribution or contributions aggregating more than 
        $200 during a calendar year, together with the date and 
        amount of any such contribution;
          (4) the identification of any political committee 
        which makes a contribution, together with the date and 
        amount of any such contribution; and
          (5) the name and address of every person to whom any 
        disbursement is made, the date, amount, and purpose of 
        the disbursement, and the name of the candidate and the 
        office sought by the candidate, if any, for whom the 
        disbursement was made, including a receipt, invoice, or 
        canceled check for each disbursement in excess of $200.
  (d) The treasurer shall preserve all records required to be 
kept by this section and copies of all reports required to be 
filed by this title for 3 years after the report is filed. For 
any report filed in electronic format under section 304(a)(11), 
the treasurer shall retain a machine-readable copy of the 
report as the copy preserved under the preceding sentence.
  (e)(1) Each candidate for Federal office (other than the 
nominee for the office of Vice President) shall designate in 
writing a political committee in accordance with paragraph (3) 
to serve as the principal campaign committee of such candidate. 
Such designation shall be made no later than 15 days after 
becoming a candidate. A candidate may designate additional 
political committees in accordance with paragraph (3) to serve 
as authorized committees of such candidate. Such designation 
shall be in writing and filed with the principal campaign 
committee of such candidate in accordance with subsection 
(f)(1).
  (2) Any candidate described in paragraph (1) who receives a 
contribution, or any loan for use in connection with the 
campaign of such candidate for election, or makes a 
disbursement in connection with such campaign, shall be 
considered, for purposes of this Act, as having received the 
contribution or loan, or as having made the disbursement, as 
the case may be, as an agent of the authorized committee or 
committees of such candidate.
  (3)(A) No political committee which supports or has supported 
more than one candidate may be designated as an authorized 
committee, except that--
          (i) the candidate for the office of President 
        nominated by a political party may designate the 
        national committee of such political party as a 
        principal campaign committee, but only if that national 
        committee maintains separate books of account with 
        respect to its function as a principal campaign 
        committee; and
          (ii) candidates may designate a political committee 
        established solely for the purpose of joint fundraising 
        by such candidates as an authorized committee.
  (B) As used in this section, the term ``support'' does not 
include a contribution by any authorized committee in amounts 
of $2,000 or less to an authorized committee of any other 
candidate.
  (4) The name of each authorized committee shall include the 
name of the candidate who authorized such committee under 
paragraph (1). In the case of any political committee which is 
not an authorized committee, such political committee shall not 
include the name of any candidate in its name.
  (5) The name of any separate segregated fund established 
pursuant to section 316(b) shall include the name of its 
connected organization.
  (f)(1) Notwithstanding any other provision of this Act, each 
designation, statement, or report of receipts or disbursements 
made by an authorized committee of a candidate shall be filed 
with the candidate's principal campaign committee.
  (2) Each principal campaign committee shall receive all 
designations, statements, and reports required to be filed with 
it under paragraph (1) and shall compile and file such 
designations, statements, and reports in accordance with this 
Act.
  (g) Filing With the Commission.--All designations, 
statements, and reports required to be filed under this Act 
shall be filed with the Commission.
  (h)(1) Each political committee shall designate one or more 
State banks, federally chartered depository institutions, or 
depository institutions the deposits or accounts of which are 
insured by the Federal Deposit Insurance Corporation, the 
Federal Savings and Loan Insurance Corporation, or the National 
Credit Union Administration, as its campaign depository or 
depositories. Each political committee shall maintain at least 
one checking account and such other accounts as the committee 
determines at a depository designated by such committee. All 
receipts received by such committee shall be deposited in such 
accounts. No disbursements may be made (other than petty cash 
disbursements under paragraph (2)) by such committee except by 
check drawn on such accounts in accordance with this section.
  (2) A political committee may maintain a petty cash fund for 
disbursements not in excess of $100 to any person in connection 
with a single purchase or transaction. A record of all petty 
cash disbursements shall be maintained in accordance with 
subsection (c)(5).
  (i) When the treasurer of a political committee shows that 
best efforts have been used to obtain, maintain, and submit the 
information required by this Act for the political committee, 
any report or any records of such committee shall be considered 
in compliance with this Act or chapter 95 or chapter 96 of the 
Internal Revenue Code of 1954.
  (j)(1) No political committee shall accept any Internet 
credit or debit card contribution unless--
          (A) the individual or entity making such contribution 
        is required, at the time such individual makes such 
        contribution, to disclose the card verification value 
        of such credit or debit card; and
          (B)(i) the billing address associated with such 
        credit or debit card is located in the United States; 
        or
          (ii) in the case of a contribution made by an 
        individual living outside of the United States who, at 
        the time the individual makes the contribution, is a 
        United States national or an individual who is lawfully 
        admitted for permanent residence, as defined by section 
        101(a)(20) of the Immigration and Nationality Act (8 
        U.S.C. 1101(a)(20)), the individual provides the 
        committee with--
                  (I) the United States mailing address the 
                individual uses for voter registration 
                purposes;
                  (II) a copy of the individual's United States 
                passport;
                  (III) a copy of the individual's permanent 
                resident card; or
                  (IV) a copy of a comparable acceptable 
                identification document, or the unique 
                identifying number from such a document, for 
                the individual.
  (2) Notwithstanding subsection (b) or (c), in the case of an 
Internet credit or debit card contribution--
          (A) no later than 10 days after receiving the 
        contribution, the person who receives the contribution 
        shall forward to the treasurer such contribution, the 
        name and address of the person making the contribution, 
        and the date of receipt; and
          (B) the treasurer of a political committee shall keep 
        an account of the name and address of any person making 
        any such contribution, together with the date and 
        amount of such contribution by any person.
  (3) If the treasurer of a political committee shows that best 
efforts have been used to comply with the requirements of this 
subsection, the committee shall be considered in compliance 
with this subsection.
  (4) In this subsection, the term ``Internet credit or debit 
card contribution'' means a contribution that--
          (A) is made using a credit or debit card; and
          (B) is received through an Internet website.
  (k)(1) No political committee shall accept a contribution 
made through the use of a general-use prepaid card, gift 
certificate, or store gift card, as such terms are defined, 
respectively, under section 915(a) of the Electronic Fund 
Transfer Act (15 U.S.C. 1693l-1(a)).
  (2) If the treasurer of a political committee shows that best 
efforts have been used to comply with the requirements of this 
subsection, the committee shall be considered in compliance 
with this subsection.

           *       *       *       *       *       *       *


            prohibition of contributions in name of another

  Sec. 320. No person shall make a contribution in the name of 
another person or knowingly permit his name to be used to 
effect such a contribution, and no person shall knowingly 
accept a contribution made by one person in the name of another 
person. No person shall knowingly direct, help, or assist any 
person in making a contribution in the name of another person.

           *       *       *       *       *       *       *


                                  [all]