Legislation banning foreign influence through dark money passes House committee

• By Sarah Nicell/Pennsylvania Legislative Correspondents Association

A House committee is moving a bill that aimed at stopping foreign influence in Pennsylvania politics.

The State Government Committee approved the legislation on Monday, and supporters hope it will soon hit the House floor for a full vote.

Pennsylvania has some of the loosest campaign finance laws in the country, shown in comparisons to other states by the National Conference of State Legislatures. People and committees can spend unlimited amounts of money in political contributions.

While corporations cannot spend directly on campaigns in Pennsylvania, corporate treasuries can funnel money into Super PACs, which do not have to disclose their donors. Invisible donations influencing politics are known as “dark money.”

After the 2010 U.S. Supreme Court ruling Citizens United v. Federal Election Commission, corporations could also contribute unlimited funds through what are called independent expenditures, made without officially coordinating with the targeted candidate.

And while foreign nationals cannot make U.S. political contributions, individuals or groups abroad can influence spending on American elections by purchasing stock in U.S.-based companies, making them multinational corporations.

The bill categorizes foreign-influenced corporations as companies with an individual foreign investor holding at least 1% stock, or with several foreign investors holding an aggregate of at least 5% of the total equity.

It targets only dark money, not multinational corporations making contributions through independent expenditures, allowed by Citizens United.

March On Harrisburg executive director Rabbi Michael Pollack said the win would be the biggest for campaign finance reformers since the 1960s. Pollack is the executive director of March On Harrisburg, a government reform group focused on Pennsylvania anti-corruption legislation.

The bill was sponsored by 13 Democrats and passed through committee with three votes from the minority party. Pollack said if everyone keeps their promises, the bill should easily pass the Democratic-controlled House when it returns to the floor.

Pollack’s group has been working with lawmakers to get campaign finance legislation through the legislature. He acknowledges that pushing through the Republican-led Senate will be a challenge.

“As soon as this passes through the House, the people of Pennsylvania, March On Harrisburg, all of our friends and allies, we’re going to shift to the Senate,” Pollack said, “and we are going to make the Senate do that which they would rather not do.”

The Senate Republican Caucus declined to comment until the legislation passes the House.

Rep. Joe Webster (D-Montgomery), the bill’s prime sponsor, touted it before the committee vote.

“No one and nothing should influence the outcome of Pennsylvania’s elections except Pennsylvania voters,” he said.

Some members of the committee were unconvinced by the bill’s language, including Rep. Brad Roae (R-Crawford/Erie).

“It’s not the real strongest thing they’re trying to accomplish,” he said. “I think it’s a well-intended bill, and I think, again, it’s not really ready for prime time.”

Multinational enterprises make up fewer than 1% of firms and 10% of establishments, according to Census data collected from 1997 to 2017. But they account for a disproportionately high share of American economic activity, with 40% of sales and 22% of total employment. Not-for-profit organizations, including unions, are excluded from the ban.

Pollack said he hopes that this legislation will give a voice back to the people.

“When somebody is able to speak with a megaphone powered by billions of dollars of money,” he said, “their words, their communications, drown out the words of everybody else.”