A new report from Axios reveals that the Federal Election Commission (FEC) decided to allow foreign funding of ballot initiatives, a move some argue could give undue influence to foreigners on citizen-generated ballot campaigns. 

Axios reported, “The Federal Election Commission has ruled foreign donors can finance U.S. referendum campaigns, opening the door to foreign spending on fights over high-profile policy issues.”

The decision came on the heels of a controversial case in Montana over hard rock mining in 2018. During a citizen-generated effort to ban the process, proponents of the initiative argued that a Canadian company shouldn’t have been allowed to give money to opponents of the measure. The Canadian company was a subsidiary of Sandfire Resources, an Australian firm. 

In an email to Axios, David Brooks of Montana Trout Unlimited said that he found the ruling “surprising and scary.” 

“Are we, as U.S. citizens, really OK with letting foreign money go directly to state lawmaking via citizen initiative campaigns?” he reportedly said. 

In the 4-2 decision, the Federal Election Commission (FEC) “dismisses the allegations that Sandfire and Sandfire NL violated” U.S. law “by making prohibited foreign national donations.”

While the Commission noted that foreign funding had been given to the opposition to the hard rock mining ban, it said that the ballot measure was not an election. 

“Under these circumstances and consistent with the relevant court and agency precedents construing the foreign national prohibition, the Commission declines to further pursue this matter,” the Commission explained. 

Three Republicans alongside Democrat and FEC Chair Shana Broussard voted to dismiss the allegations, arguing that the ballot initiative did not constitute an “election” under federal law. 

While foreign nationals are banned from giving to candidates and support committees, it appears that they can now donate to ballot initiatives. The Axios report raised the issue of whether foreign nationals would be able to contribute to certain types of ballot initiatives, specifically those dealing with congressional redistricting. 

“This FEC decision reflects a big loophole in the federal ban on foreign money in U.S. elections,” said Brendan Fischer, the director of federal and FEC reforms at the Campaign Legal Center. 

Some states have chosen to prohibit foreign spending in their state-registered ballot measures, while others have declined.

Earlier this year, Maine Governor Janet Mills (D) vetoed a bill put forth by the legislature that prohibited foreign spending in elections after some were concerned about Canadian influence in state ballot measures. 

“Even more troubling is this bill’s potential impact on Maine voters,” Mills said. “Government is rarely justified in restricting the kind of information to which the citizenry should have access in the context of an election, and particularly a ballot initiative.”

Many were not happy with the governor’s decision. 

“We are disappointed that the governor has vetoed this important legislation to get foreign government money out of Maine politics,” Anna Kellar, of Maine Citizens for Clean Elections, said.

She continued,  “LD 194, which received overwhelming public and bipartisan lawmaker support at its public hearing, would close an important loophole in our laws by preventing foreign governments from spending in ballot question campaigns.”

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