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How Foreign Money Can Find Its Way Into Political Campaigns

First Posted: 07/18/11 12:55 PM ET Updated: 09/17/11 06:12 AM ET

WASHINGTON -- Every election cycle brings new concerns about foreign interests influencing U.S. elections and secretly funneling money to U.S. political campaigns.

Yet foreign governments and corporations are openly spending tens of millions of dollars a year buying influence in Washington by hiring well-connected lobbyists, according to research by the Sunlight Foundation and others who have examined the filings those lobbyists have to make to the Justice Department.

And some of that money may well be wending its way into politicians' election coffers through the generous campaign contributions those lobbyists routinely make to buy access and reward friends.

"There's pretty clear evidence that foreign money is being used, at least indirectly, to finance U.S. elections," says Benjamin J. Freeman, a post-doctoral fellow at the Project on Government Oversight, a nonprofit advocacy group that focuses on investigating waste, fraud and abuse in the federal government.

As part of the research for his book about foreign lobbying, "The Foreign Policy Auction," slated for publication in late 2011 or early 2012, Freeman says he has documented "dozens of instances where lobbyists meet with representatives to advocate for foreign clients, and then give the exact same representative a campaign contribution that very same day."

"These folks can't give directly, so what you're finding is these firms want to represent the interest of their clients the best they can," explains Jon Pevehouse, a political science professor at the University of Wisconsin who is in the process of creating a foreign lobbying database for his research.

Pevehouse estimates that foreign interests spent about $200 million on lobbying in 2008, the most recent year for which he has data. He has not yet calculated how much the lobbyists hired by those interests then turned around and gave to political campaigns.

But at the very least, campaign finance experts say, foreign interests are doing what a lot of other groups in Washington are doing: buying influence.

"Our influence system works with lobbyists using campaign contributions as a means of obtaining access and influence for their clients -- and the lobbying system in this country is available to anyone," says Fred Werthheimer, who runs Democracy 21, a group that promotes and defends campaign finance laws. "What foreign interests have learned is if they want to try to obtain influence in Washington, they ought to do it the same way that corporations do it."

"Generally speaking, what they are trying to do when they hire these lobbyists who make these contributions is get the access," says Bill Allison, editorial director of the pro-transparency Sunlight Foundation.

But foreign lobbying is distinct from domestic lobbying because of the possible divergence with U.S. interests. "If you're cynical," says Pevehouse, "then you think this stuff is dangerous, because it's really distracting Congress from what it should be doing in foreign affairs."

And while federal candidates are allowed to accept campaign donations from American citizens -- even lobbyists -- as long as there is no explicit quid pro quo, when it comes to foreign nationals, it's a different story entirely.

Federal election law forbids political candidates from knowingly soliciting, accepting or receiving donations from foreign nationals or foreign entities under any circumstances. A candidate need not have direct knowledge that the source is foreign to be in violation of the law. It suffices for the candidate to be "aware of facts that would lead a reasonable person to inquire whether the source of the funds solicited, accepted or received is a foreign national" and have "failed to conduct a reasonable inquiry."

But Pevehouse says nobody seems to be raising questions at all. "On all of this stuff, I think there's a lack of enforcement," he says. "You would think the attorney general and the Department of Justice would take an interest." (A spokesperson for the Department of Justice declined to comment.)

The federal government's Foreign Agent Registration Act (FARA) -- initially a response to Nazi propaganda -- imposes surprisingly rigorous disclosure requirements for anyone in the employ of foreign powers. As a result, foreign lobbyists must identify specifically which federal officials they meet with, and why and when -- and to whom they give money and when.

"They actually have to report who they're lobbying and you can actually see those contributions going to who they're directly lobbying," says Allison. That allows watchdogs to connect the dots in ways they can't with the less-detailed reports required of domestic lobbyists.

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