Former FEC Chair Bob Lenhard Discusses Campaign Finance Law, Foreign Intervention in U.S. Elections

September 6, 2017   •  By Joe Albanese   •    •  ,
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Last Thursday, the McCourt School of Public Policy at Georgetown University hosted a discussion with Robert Lenhard, a former FEC commissioner and a partner at the law firm Covington & Burling LLP, where he focuses on election and political law. A Democrat, Lenhard was appointed to the FEC by President George W. Bush in 2006. The discussion was moderated by Angela Campbell, a professor at Georgetown Law and Co-Director of the Institute for Public Representation.

The event centered on the issue of foreign intervention in American elections, but touched on a number of other issues as well. It provided a valuable opportunity to hear Lenhard’s personal views on campaign finance law and its developments, and for those unfamiliar with the topic to receive a helpful primer on the issue.

Lenhard began by laying out the three major sections of political law: elections and campaign finance law, lobbying regulations, and rules regarding gifts. Those areas regulate conduct by U.S. citizens as well as “foreign nationals” – namely, individuals who are not citizens or green card holders, as well as foreign governments or foreign-owned entities (such as corporations). He also provided background on the major laws that regulate foreign involvement in politics, especially the Federal Election Campaign Act (FECA). FECA prohibits foreign nationals from direct or indirect influence over U.S. federal and state elections through the spending of money, such as contributions to candidates, PACs, or parties. This prohibition even applies to U.S. permanent residents and categories such as student visa holders, and covers “in-kind” contributions where a “thing of value” is provided that would otherwise need to be purchased (although foreign nationals are still able to volunteer for campaigns).

Within the authority of FECA, there exists two distinct enforcement components. The Department of Justice handles criminal enforcement (for example, special counsel Robert Mueller’s investigation into Russian interference in the 2016 election was initiated by DOJ officials) while the FEC handles civil enforcement. Although the FEC – one of the few federal agencies to have an even number of members by design – has a public reputation for being “dysfunctional,” Lenhard characterized FECA enforcement as aggressive in nature, with five- and six-figure fines from the Commission being commonplace.

Lenhard also explained foreign lobbying regulations under the Foreign Agents Registration Act (FARA), which was passed in 1938 in response to Nazi Germany’s attempts to influence public opinion in the U.S. The law requires registration, reporting, and public disclosure of activities and spending by foreign agents, which can include U.S. citizens working on behalf of foreign governments. Although violating the law is a felony, Lenhard noted that, in the past decade or so, there has been an emphasis on voluntary compliance. In practice, this means a foreign agent is usually informed when he or she is caught violating FARA requirements, and is given the opportunity to complete required registrations or disclosures after the fact.

The discussion eventually turned towards Citizens United, and whether that Supreme Court decision allowed for new avenues for foreign intervention in U.S. elections. Some theorize that, although it is still illegal for foreigners to spend money on elections, it is now possible for foreigners to use LLCs to contribute to super PACs in order to hide their spending. Proponents of this theory further argue that so-called “dark money” (Lenhard emphasized that he does not like the term) would supposedly let foreigners contribute to nonprofit corporations that can in turn spend money on political ads.

Lenhard generally pushed back against these theories. He described the former scenario of LLC-to-super PAC foreign spending as “a risk,” but noted there is “little evidence of it occurring.” But to the extent the level of risk is contingent upon the actor that hypothetically wishes to intervene in elections, he is more concerned with intervention from, say, the Chinese government than from a rich person in Israel, for example. Lenhard suggested that concerns about foreign spending through “dark money” can be addressed simply by requiring corporate actors to sign documents swearing that their resources did not come from foreign nationals – it would be illegal to lie on such a statement, and those found to have done so would face charges.

Beyond the FEC and the DOJ, the current system of countering foreign meddling also relies on non-statutory enforcement – namely, monitoring by Intelligence Community agencies like the NSA or CIA. It is those bodies that are best able to detect if foreign governments move large amounts of money towards political spending through intermediaries; the FEC and DOJ cannot.

In response, Lenhard advocated for some sort of reform to fill certain holes in this enforcement process, such as the fact that bodies like the NSA are more concerned with activities by governments than individuals or firms. (Different firms are treated differently, however. State-owned enterprises are treated as extensions of governments, while “American” companies like General Motors or AB InBev, both of which are foreign-owned, can participate in politics through independent expenditures or setting up PACs – if the spending is done by U.S. subsidiaries dedicating U.S.-raised resources with only U.S. citizens involved.)

On the topic of Russia’s 2016 intervention, Lenhard highlighted two major facets: the Mueller investigation looking into potentially inappropriate contacts with Russian sources from President Trump’s inner circle, and future efforts to protect U.S. electoral integrity in general. He bemoaned the fact that the two issues are often conflated, which makes cooperation more difficult on the latter issue. Normally, protecting electoral integrity would be a topic of broad consensus, Lenhard believes, but some Trump backers are wary that discussion of that issue simply provides a way for Democrats to attack the president indirectly. As a result, Lenhard expressed skepticism of efforts to enlist the FEC into the effort to investigate Russian interference, which has been pushed by Trump critics, as it would represent a deviation from the historical mission of the Commission. The perception of the FEC’s activities as transcending partisan politics is also crucial to its public legitimacy, he said.

That led into one of the last discussions of the event: how to address the FEC’s purported “dysfunction.” While Lenhard believes that the bipartisan structure of the FEC is an essential institutional protection, and that the agency is still capable of enforcing the law, he had some suggestions for fixing the toxic culture within the Commission. He argued that the FEC’s structure encourages conflict, leading to infighting, persistent grievances, and lack of trust among members – this personal animosity, more so than partisanship or policy disagreement, is what drives perceptions of dysfunction.

To remedy the situation, Lenhard’s first prescription was to “clean house” and appoint six new members (especially since all current commissioners are serving on expired terms) to remove personal baggage, even at the cost of some loss of institutional memory. He predicted that the two parties will eventually come up with a compromise to appoint six new commissioners. His second prescription was that someone in the GOP besides Senate Majority Leader Mitch McConnell should pick the Republican commissioners; Lenhard argued that McConnell’s influence was responsible for bloc voting and a lack of diversity of thought on the Republican side of the Commission (he was less critical of the Democratic side).

Overall, the discussion was a fascinating opportunity to receive both a broad overview of laws relating to foreign intervention in politics, and a detailed inside look at how the system functions in practice.

Joe Albanese

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