May 23, 2018

Senators Introduce Bipartisan Bill to Crack Down on Illegal Election Spending by Foreign Nationals Using Shell Companies

Washington, DC – Today, Senators Sheldon Whitehouse (D-RI), Charles Grassley (R-IA), Richard Blumenthal (D-CT), Lindsey Graham (R-SC), and Dick Durbin (D-IL) introduced the Shell Company Abuse Act to impose tough criminal penalties on those who use or help set up shell companies to hide foreign nationals’ political activities in the U.S. 

“Shell companies are a perfect tool for a foreign agent looking to stir trouble in our elections.  Not only do they offer total anonymity, they are quick and easy to set up.  That needs to change,” said Whitehouse.  “This legislation sends the message that helping a foreign meddler use a shell company to interfere in our democracy means paying a big price.”

“Our democratic process of selecting our country’s leaders is uniquely American, and it should stay that way.  When foreign entities conceal their identity to influence U.S. elections, we ought to know about it so we can stop it.  This bill strengthens existing law to prevent foreign interference in our elections by stepping up penalties on those who conceal illegal political activity by foreign entities,” said Grassley.

“Shell companies can act like an invisibility cloak for foreign adversaries seeking to interfere in our democracy without fear of consequence,” said Blumenthal.  “This bipartisan bill makes clear that anyone who uses shell companies to obfuscate illegal election meddling will be forced to face severe penalties.” 

“Americans would and should be appalled to learn of a loophole in law that allows foreign nationals to influence American election simply by setting up a shell company here,” said Durbin. “There is bipartisan support to close that loophole and I hope this Congress will pass it now.”

Current campaign finance laws prohibit foreign nationals from making campaign contributions or engaging in most political activity.  However, little stands in the way of a foreign citizen or government from creating a shell company to funnel money into U.S. elections undetected.

The Shell Company Abuse Act helps to close this loophole by making it a felony for an owner, officer, attorney, or incorporation agent of a corporation, company, or business entity to establish or use a corporation, company, or business entity to conceal illegal political activity by a foreign national.

During his testimony before the Senate Judiciary and Commerce Committees last month, Facebook CEO Mark Zuckerberg confirmed that shell companies are able to obscure foreign meddling.  Whitehouse posed to Zuckerberg that if a foreign meddler were purchasing Facebook campaign or issue ads through an American shell corporation, nobody would know that they were actually a foreign owner.  “That’s correct,” Zuckerberg replied.

Text of the bill is available here.

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Meaghan McCabe, (202) 224-2921
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