A chilling new report outlines how Russia, China and other authoritarian regimes have used weaknesses in campaign finance and financial reporting laws to launch attacks on the political processes in the United States and elsewhere.
The report, released last week by the Alliance for Securing Democracy at the German Marshall Fund, found that authoritarian regimes spent more than $300 million in the past decade on dozens of interference campaigns.
Among the foreign powers' methods of attack: government-funded disinformation; funneling money to campaigns through straw donors, nonprofits and shell companies; and providing in-kind donations to U.S. and other Western politicians.
Most of these incidents occurred in the past four years, researchers found.
The report comes as security experts focus on protecting the 2020 presidential race from a reprise of the efforts to hack election systems in 2016. And it includes numerous recommendations for U.S. policy makers, including passage of several pieces of legislation that were introduced in response to cybersecurity concerns raised four years ago.
While the focus has been on cybersecurity, these experts say Russia and China have also been exploiting financial loopholes that allow foreign money to seep into the American political system.
Examples of what the authors call "malign finance" include:
- Providing in-kind contributions to influence candidates and office holders. The most prominent effort involving the United States was President Trump's request for negative information from Ukraine on Democratic presidential candidate Joe Biden and his family — the cause of Trump's impeachment. But U.S. law is not clear on whether getting dirt on a political opponent is a "thing of value" that constitutes a reportable contribution. What's needed, they argue, is a broader interpretation in U.S. campaign finance law — or a revision to the law — to clarify that a "thing of value" includes political information. The report calls closing this loophole "the single most urgent reform" that the authors recommend.
- Requiring campaigns to report contacts with foreign agents. The SHIELD Act, introduced and passed last year in the Democratic-controlled House on a party-line vote, would institute such requirements. The bill has not advanced in the GOP-controlled Senate.
- Outlaw secret shell companies and restrict U.S. subsidiaries of foreign companies. This is a key way that foreign money gets introduced into U.S. campaigns, the report states.
- Disclose foreign donors to nonprofits. Foreign powers hide donations by giving the money to a nonprofit that in turn provides it to a candidate or office holder while not having to disclose the source of the funds. Numerous legislative efforts to require disclosure of so-called dark money contributions have failed.
Other proposals include requiring disclosure of the source of funding for online political ads and requiring disclosure of foreign funding sources to U.S. media companies.
The authors say they hope exposing financial loopholes that allow foreign governments to interfere in our politics "will jumpstart a policy reform initiative to build resilience against this threat."
"There is no time to lose," they conclude. "Just like airplanes in the summer of 2001 and cyberattacks in the summer of 2016, the system is currently blinking red about incoming rubles and yuan."
In terms of money flowing through the campaign-finance system, political action committees (PACs) are three times more active than candidates running for reelection or office. That is concentrated political power that leaves many congressional candidates running for reelection or office dependent on PAC support.
