A debate has erupted over political donations from foreign sources in ballot initiatives.(Photo: solvod, Getty Images/iStockphoto)
WASHINGTON — Some conservative and liberal campaign-finance activists are warning that foreign money could swamp U.S. elections after federal regulators declined to investigate a Luxembourg-based porn distributor's role in influencing a Los Angeles-area ballot initiative.
The case stems from a complaint lodged with the six-member Federal Election Commission by a California-based AIDS advocacy group, which pushed a successful 2012 ballot initiative requiring actors in adult movies to use condoms during filming.
The AIDS Healthcare Foundation argued that $327,000 — or nearly half the money spent to oppose the 2012 initiative — came from two companies tied to Manwin Licensing International, which runs adult websites and has operations around the globe. The foundation argued that the Manwin-related contributions violated the federal law that bans foreign donations in federal, state or local elections.
The Federal Election Commission's top lawyers and its three Republican commissioners disagree, contending that the federal ban applies only to candidate elections, not ballot initiatives.
Lee Goodman, one of the Republican commissioners, said the issue should be decided by state officials. "The people of California are certainly capable of protecting the integrity of their state and local initiative process as they see fit," he wrote this month.
The three Democrats on the panel voted to pursue an investigation. The deadlock, however, put an end to the case.
"It's exclusively the purview of the Federal Election Commission to regulate" foreign money, said Ann Ravel, a Democrat who is the FEC's chairwoman. She said the agency's inaction could encourage others to "take the risk" that the commission will take no action in future cases involving foreign donations.
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U.S. citizens "do not want to see money from foreign sources interfering with fundamentally local decisions," she said.
Several election lawyers agree with the Republican commissioners. "The law doesn't explicitly cover ballot initiatives," said Kenneth Gross, a leading campaign-finance attorney in Washington and a former FEC official.
But the notion that foreign nationals could influence local elections has set off alarms among some campaign-finance advocacy groups.
"It seems to me that this sends a blank check to any foreign interest," said John Pudner, a conservative political consultant from Alabama. Pudner gained attention in 2014 for helping a little-known professor Dave Brat toss out then-House Majority Leader Eric Cantor in the Virginia GOP primary. (Brat won the general election.)
Pudner now runs Take Back Our Republic, a group working to encourage conservatives to reduce the influence of big donors in elections. On Monday afternoon, he planned to host a forum on the threat of foreign political money.
"It's hard to imagine that people won't take advantage of this," said Michael Weinstein, president of the AIDS advocacy group that backed the local initiative. "What if the Saudis don't like the way we are drilling for oil and decide to pursue an initiative restricting oil pipelines?"
The issue could surface again soon. Weinstein's group now is circulating petitions to put the condom issue before all California voters in 2016.
Diane Duke, who runs the adult film industry's Free Speech Coalition and ran the political effort to oppose the 2012 condom measure, did not respond to interview requests.
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