- Legislation in the Michigan House would ban ballot proposals from being funded by foreign sources
- Outside of pledges from the committees and their donors, state officials wouldn’t be able to check for compliance
- The bill would also ban officials from disclosing the names of other dark money donors during investigations
LANSING — A Republican bill moving through the state House is seeking to clamp down on alleged foreign influence in Michigan ballot proposals by banning foreign sources from giving to the efforts — without giving state officials any way to tell if the law is being followed.
The legislation would amend Michigan’s campaign finance law to require ballot questions committees to submit an “affirmation” that the committee hasn’t knowingly received donations from foreign nationals, and require the committees to get similar assurances from dark money sources that they’ve not been funded by foreign sources, either.
If the donation is from a foreign-owned company in the U.S., funds could only be donated if raised in the US and contributed by US-based employees.
Rep. Rachelle Smit, the Martin Republican who’s sponsoring the legislation, said in committee testimony that the possibility of foreign funding behind Michigan ballot proposals is a “critical loophole that exposes state and local initiatives and referenda to otherwise illegal contributions.
Ballot proposal campaigns are among the largest sources of so-called “dark money” in Michigan elections. Multiple successful ballot proposals in recent years have been significantly backed by dark money, in the form of contributions from nonprofits that don’t have to disclose their own donors.
Ballot question committees have fewer restrictions than candidates’ campaigns or other types of political action committees; they can accept unlimited amounts of funding from nearly any source, including corporations and nonprofits.
But the bill wouldn’t require groups donating to ballot committees to divulge the names of their donors, making it less clear how state authorities could determine whether the law is being followed and forcing them to rely on pledges from the fundraisers.
“Is it going to be 100% fraud-proof if you love having these illegal funds coming in here?” Smit said in an interview with Bridge Michigan. “Probably not, but this would certainly tighten up the loopholes that are out there.”
Donor disclosure block?
There’s not currently any evidence any recent ballot proposals that have gone before Michigan voters in recent years have received foreign funding — chiefly because a lack of disclosure makes it often impossible to learn the origins of their support.
But in her testimony, Smit alleged “foreign-tied spending will continue in states until this is closed.”
Michigan state law bans foreign contributions to independent expenditure committees, known as super PACs, and federal laws prohibit foreign funding for state candidate campaigns, leaving ballot committees open to foreign donations, Smit said.
In the committee, Rep. Mai Xiong, a Warren Democrat, asked Smit how the ballot committee would affect the flow of dark money into ballot proposals. Smit claimed “there’ll be some investigations into that” if the legislation passes.
What’s less clear is how campaign finance officials could seek out or punish violations of the act.
As a matter of policy, the Michigan Department of State — which oversees the state’s campaign finance system — does not investigate violations of the law unless a formal complaint is filed.
And the legislation would outright ban the Department of Attorney General and other investigators from disclosing the name of other dark money donors when investigating alleged foreign contributions, effectively codifying the means of masking donors into law.
“I’ll have to take a look into that piece of it,” Smit said when asked about the provision.
Neil Thanedar, the executive director of Michigan Campaign Finance Network, a nonpartisan nonprofit, told Bridge in a statement “the provision sticks out as potentially related to years-long efforts … to block donor disclosure.”
Thanedar said his organization largely supports efforts to restrict foreign funding in state elections, however.
Liberal group targeted
The legislation is the latest effort by House Republicans to clamp down on what they have characterized as creeping foreign influence in Michigan.
Earlier this year lawmakers passed legislation meant to block foreign ownership of farmland and strategically-located property in the state. Reporting from Bridge Michigan has illustrated how, using modern corporate structuring, the true ownership behind major swaths of land can easily be concealed.
Two conservative-leaning groups, Americans for Public Trust and Honest Elections Project Action, are proponents of the legislation and pushed for similar laws in other states. Representatives from the two groups testified before the House’s Election Integrity Committee in early November and noted ten other states have passed similar legislation.
The groups have cited the use of the Sixteen Thirty Fund as an example of alleged foreign influence. It’s a liberal dark money group that funded a litany of different projects, and since 2017 has spent about $34.9 million funding 11 different Michigan fundraising committees, according to a Bridge Michigan analysis of state campaign finance records.
It included nearly $12 million to a ballot committee for Voters Not Politicians, the group that established Michigan’s Independent Citizens Redistricting Commission through a 2018 ballot initiative, and more than $6 million to Reproductive Freedom For All, which backed the 2022 ballot proposal to enshrine abortion in the state constitution.
Hansjorg Wyss, a Swiss-born billionaire and Wyoming resident, has given millions to the Sixteen Thirty Fund, and the groups have cited him as evidence It’s not clear whether Wyss is a foreign national — in 2021 The New York Times reported that Wyss hasn’t disclosed his citizenship status. Americans for Public Trust executive director Caitlin Sutherland alleged in the committee he was not a citizen.
Two of the Michigan committees that received donations from the Sixteen Thirty Fund are independent expenditure committees, which are banned under state law from receiving contributions directly from foreign nationals.
The Sixteen Thirty Fund works as a sort of clearinghouse to fund liberal initiatives, and it’s not clear that Wyss’ contributions helped bankroll Michigan ballot proposals directly. But under the legislation, any account that’s received foreign contributions within the last four years would be barred from contributing.
Smit, who chairs the House’s Election Integrity Committee, told Bridge she hopes to have the legislation voted out of committee and onto the floor of the GOP-led Michigan House for a vote. It would also have to pass the Democrat-controlled Michigan Senate and be signed by Gov. Gretchen Whitmer to become law.
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