A Chinese-owned company’s $1.3 million in contributions to pro-Jeb Bush super PAC Right to Rise — which resulted in a record fine by the Federal Election Commission (FEC) for illegal foreign interference — wasn’t the only money the company funneled into U.S. elections.
The $940,000 fine levied by the FEC is the largest financial penalty since the Supreme Court’s 2010 Citizens United opinion and its third-largest of all time. The FEC investigated the transactions after a 2016 investigative series by The Intercept and a complaint by the Campaign Legal Center.
The contributions came from the U.S.-based American Pacific International Capital (APIC), but Neil Bush, the brother of Jeb and George W. Bush, solicited the funds from Chinese nationals who own the company. Bush is a member of APIC’s board and serves as chairman for APIC’s sister company in Singapore.
A memo from campaign finance lawyer Charlie Spies warned Right to Rise that although U.S.-based subsidiaries of foreign companies can contribute to super PACs, foreign nationals are barred from participating in the transaction. In addition to federal law’s prohibition on foreign nationals making contributions in U.S. elections, they are also not allowed to “direct, dictate, control, or directly or indirectly participate in the decision-making process” related to election-related activities.
The initial payment to Right to Rise may have been APIC’s first foray in federal politics, but it was not its last. In addition to donations to the pro-Bush group, APIC gave to various state-level candidates and federal political committees supporting Democrats during the 2016 election cycle.
While the contribution to Right to Rise was much more substantial, a later contribution to another super PAC during the 2016 election cycle suggests APIC wasn’t acting as a typical GOP megadonor.
In 2015, APIC directed $7,500 to the AAPI Victory Fund, a liberal hybrid super PAC meant to mobilize Asian American voters. Although a small donation compared to their contributions to Right to Rise, that money made APIC the fifth-largest donor to AAPI Victory Fund for the 2016 election cycle. The group shelled out nearly $166,000 in independent expenditures opposing Donald Trump and supporting Hillary Clinton in 2016.
Also during the 2016 cycle, the company gave $1,000 to America’s Opportunity Fund, a small liberal hybrid PAC that spent $12,389 to support Clinton.
APIC also gave at least $17,000 to state-level candidates — mostly Democratic candidates in the company’s home state of Oregon. The company gave $9,500 to Oregon Governor John Kitzhaber, who resigned in 2015 over unrelated ethics scandals in which he and his fiancée profited from positions of power.
The FEC’s censure of Right to Rise details the high standard of evidence it takes for the agency to verify a corporate contribution as foreign. The FEC had clear evidence — first laid out in a report from The Intercept in 2016 — that Chinese nationals in control of APIC facilitated the contribution.
According to Brendan Fischer, director of federal reform at Campaign Legal Center, it is possible that APIC’s other contributions are illegal. However, it took “smoking gun” evidence for the FEC to connect APIC’s Right to Rise contribution to a foreign national.
“The available evidence suggests that Gordon Tang, a Chinese national and the president of APIC, was deeply involved in all of APIC’s operations, including its political contributions,” Fischer said. “If Tang participated in APIC’s decisions to make those other contributions, those other contributions may also have violated the law.”
It’s even less clear whether the other recipients of APIC’s contributions could be subject to a violation, Fischer said, because they might not have known whether a foreign national was directing the contributions.
Citizens United v. FEC opened the floodgates for contributions from foreign-owned corporations. One of the first major instances occurred in 2012 when pro-Mitt Romney super PAC Restore Our Future took $1 million from OdysseyRe, an American subsidiary of Canadian insurance firm Fairfax Financial Holdings Limited.
Members of the FEC have long been divided along partisan lines over rules dictating contributions from U.S.-based subsidiaries of foreign-owned companies. In 2016, current FEC Chair Ellen Weintraub proposed creating a strict threshold for the share of foreign ownership a company could have to participate in funding U.S. elections, while former Democratic commissioner Ann Ravel proposed banning subsidiaries from contributing altogether.
Ultimately, the commission couldn’t come to an agreement on the subject.
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