[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.
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\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\
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\33\Federal Election Commission Legislative Recommendations 2023,
FEC (Dec. 14, 2023), available at https://www.fec.gov/resources/cms-
content/documents/legrec2023.pdf.
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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).
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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\
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\44\American Confidence in Elections: Preventing Noncitizen Voting
and Other Foreign Interference: Hearing Before the H. Comm. On Admin.,
118th Cong. (2024).
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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\
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\45\U.S. Const., Art. I, Sec. 8, cl. 18.
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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.
* * * * * * *
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