No Foreign Election Interference Act
Floor Speech
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Mr. SMITH of Missouri. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 8314) to amend the Internal Revenue Code of 1986 to impose penalties with respect to contributions to political committees from certain tax exempt organizations that receive contributions from foreign nationals, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 8314
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``No Foreign Election Interference Act''. SEC. 2. PENALTIES WITH RESPECT TO CONTRIBUTIONS TO POLITICAL COMMITTEES FROM CERTAIN TAX EXEMPT ORGANIZATIONS THAT ACCEPT CONTRIBUTIONS FROM FOREIGN NATIONALS.
(a) In General.--Part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: ``SEC. 6720D. CONTRIBUTIONS TO POLITICAL COMMITTEES FROM CERTAIN TAX EXEMPT ORGANIZATIONS THAT ACCEPT CONTRIBUTIONS FROM FOREIGN NATIONALS.
``(a) In General.--Any specified tax exempt organization that makes any disqualified political committee contribution shall pay a penalty equal to twice the amount of such contribution.
``(b) Disqualified Political Committee Contribution.--For purposes of this section--
``(1) In general.--The term `disqualified political committee contribution' means, with respect to any organization described in section 501(c), any contribution made by such organization to a political committee (as defined in section 301 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30101)) if such organization received, during any testing period, any contribution or gift (within the meaning of section 6033(b)(5)) from a foreign national (as defined in section 319(b) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30121(b))).
``(2) Testing period.--The term `testing period' means, with respect to any contribution by an organization described in section 501(c), the 8-year period ending on the date of such contribution, except that such period shall not include any period before the date of the enactment of this section.
``(c) Specified Tax Exempt Organization.--For purposes of this section--
``(1) In general.--The term `specified tax exempt organization' means, with respect to any taxable year, any organization described in section 501(c) and exempt from tax under section 501(a) if--
``(A) the gross receipts of such organization for such taxable year equal or exceed $200,000, or
``(B) the assets of such organization (determined as of the close of such taxable year) equal or exceed $500,000.
``(2) Coordination with revocation of tax exempt status by reason of making disqualified political committee contributions.--An organization which is not exempt from tax under section 501(a) solely by reason of section 501(s) shall be treated for purposes of paragraph (1) of this subsection as exempt from tax under section 501(a) with respect to the application of this section to the first 3 disqualified political committee contributions of such organization.''.
(b) Revocation of Exempt Status Upon Third Disqualified Political Committee Contribution.--Section 501 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
``(s) Revocation of Exempt Status of Certain Organizations That Accept Contributions From Foreign Nationals and Make Contributions to Political Committees.--Any organization described in subsection (c) which makes more than 2 disqualified political committee contributions (as defined in section 6720D(b)) shall not be exempt from taxation under subsection (a) for any taxable year ending on or after the date of the third such contribution.''.
(c) Clerical Amendment.--The table of sections for part I of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item: ``Sec. 6720D. Contributions to political committees from certain tax exempt organizations that accept contributions from foreign nationals.''.
(d) Effective Date.--The amendments made by this section shall apply with respect to contributions made on or after January 1, 2025, by organizations described in section 501(c) of the Internal Revenue Code of 1986.
Mr. Speaker, as the world's leading democracy, America is an example for other nations to follow. Unfortunately, we are also a target for foreign actors seeking to influence and undermine our elections.
Over the last year, as the Ways and Means Committee has been investigating concerns about the dangerous influence of foreign money in our elections, it has become clear that loopholes exist in our tax code that foreign donors are able to take advantage of so they can influence the American electoral process.
Under current law, foreign nationals are prohibited from making contributions directly to election campaigns, but there is nothing that prohibits overseas cash flowing from foreign nationals, including from adversaries of the United States such as China, through tax-exempt organizations and then into the hands of super-PACs.
The committee's investigation discovered a particularly disturbing example: A foreign national from Switzerland has given over $100 million through his tax-exempt organization to the Sixteen Thirty Fund, a 501(c)(4), which subsequently distributed $63 million to super-PACs to try to persuade the American voter. According to The New York Times, the Sixteen Thirty Fund is a leading vehicle for dark money on the left.
The American people shouldn't be subjected to TV and digital ads financed by the Chinese Communist Party or other nations seeking to influence the vote or undermine our elections. I think we can all agree that our election should be free of foreign interference.
For my colleagues on the left who spent years talking about foreign election interference, this should be a no-brainer. If they care about our electoral process and making sure it is open and fair, then we need to make sure foreign money can't drown out the voices of American voters.
The legislation before us today, sponsored by Representative Malliotakis, the No Foreign Election Interference Act, was approved in May by the Ways and Means Committee 39-1. Her bill closes this loophole in the tax code by restricting tax-exempt organizations from donating to super-PACs after receiving foreign gifts or contributions, and it revokes the tax-exempt status for organizations that repeatedly violate this law.
This bill is not aimed at program service revenue or member dues but clearly focuses on contributions and gifts made to tax-exempt organizations that then make donations to super-PACs.
When it comes to our elections, the American people, not wealthy foreign donors, should decide the future direction of our country.
Mr. Speaker, I commend Representative Malliotakis for her leadership on this issue, and I encourage all of my colleagues to vote ``yes'' on this bill so that we can maintain the integrity of our election system.
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Mr. SMITH of Missouri. Wow, Mr. Speaker. This is about as swampy as you can get in Washington. This bill passed out of the House Ways and Means Committee 39-1, including the gentlewoman from California who voted ``yes.''
The only difference between when it passed out of the committee to where we are today is that some outside interest groups, who apparently control the voting cards and the opinions of a lot of people, said this is a bad bill, so now we are a ``no.'' That is very, very unfortunate.
I yield such time as she may consume to the gentlewoman from New York (Ms. Malliotakis).
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Mr. SMITH of Missouri.
Mr. Speaker, I think it is noteworthy to know that whenever we did the markup on this bill in committee, the other side did not present one amendment to protect what they are suggesting now that they should have done in amendment. Guess what? They voted 39-1 for this bill.
Those penalties that the gentlewoman from California was pointing out that she didn't like, that hasn't changed. That was in the bill, and they passed it. She voted for it.
This bill is about making sure American elections are decided by American voters, not foreign nationals who want to tip the scales in favor of their preferred candidate or policy.
The 2020 elections were the most expensive elections in history with election spending totaling more than $14 billion, an amount surely to be surpassed in 2024.
The American people deserve to know that the commercials and ads that are being pumped through their TVs and phones are free from foreign influence.
Representative Malliotakis' bill will close a loophole that allows wealthy foreigners to exercise outsized influence in our U.S. elections through donations to tax-exempt organizations who then flood our airwaves through super-PAC spending, emboldened with foreign dollars-- not American dollars, foreign dollars.
I urge my colleagues to stand with American voters who shouldn't have their voices silenced by billionaires from overseas. I ask and encourage this body to support this legislation.
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