FEC Says Foreign Donors Can Now Throw Money at U.S. Ballot Initiatives

In a move that can only signal good things to come, the Federal Election Commission has apparently ruled that it’s totally cool for foreign donors to financially contribute to U.S. ballot initiatives. The news, which was initially reported by Axios, could mean that America’s domestic policy is now basically up for sale (or more up for sale than it already was).

Ballot measures help to push specific legislative initiatives—and can be a great source of effective reforms designed to protect consumers. For example, last year saw plenty of tech-related initiatives in states across the country—including ones involving the right-to-repair movement, data privacy, and the gig economy. Many actually ended up getting passed.

However, the FEC’s decision would appear to open the floodgates for foreign operators who, for one reason or another, want to strangle one of those agendas—or promote their own—at the state level of U.S. politics. Specifically, the decision means that foreign-based entities are free to finance ballot committees—the organizations responsible for pushing or attacking particular legislative initiatives. This has already largely been happening—though the legality of it has been fuzzy, until now.

The commission’s decision sprang from a recent dispute over a 2018 ballot initiative in Montana. The initiative, I-186, sought to cut back on the state’s hard rock mining industry as a way to avoid “polluting the state’s waters.” However, an Australian mining company with properties in Montana, Sandfire Resources (the subsidiary of gargantuan Canadian mining giant Sandfire Resources America), sought to thwart the ecologically-mindful initiative by helping fund a local campaign against the ballot measure. The measure was ultimately rejected by voters.

Afterward, Sandfire was accused of breaking the Federal Election Campaign Act of 1971, the federal law that prohibits foreign entities from financially contributing to U.S. elections. The company had made financial contributions to both the Montana Mining Association and Stop 1-186 to Protect Mining and Jobs, the local effort to stop the ballot from passing. This past July, however, the FEC ruled in Sandfire’s favor, arguing that the law only applies to elections and that ballot initiatives do not count as “elections.”

Until now, this question of foreign funding for state referendums had been something of a legally gray area—but critics say the commission’s decision has now created an official loophole for foreign influence in the American political system. Good job, FEC.

Under the new ruling, foreign entities are allowed not only to fight domestic ballot initiatives but can back their own. Axios reports that, in Maine, a Canadian-owned power company is currently financing a ballot committee that is calling for new transmission lines throughout the state.

When reached for comment, an FEC spokesperson declined to comment on the recent decision. The FEC’s ruling only applies to federal law, so states can still pass their own regulations outlawing this kind of foreign influence.

Of course, it’s not as if the U.S. political system was some virgin institution prior to this. America runs on money and political decisions are often interwoven with the financial interests of large companies and wealthy individuals. That said, this definitely isn’t going to help make that less of a problem.