House panel warns of foreign election interference through nonprofits, ActBlue

During a House Administration Committee hearing on Wednesday, members of Congress and witnesses warned of foreign interference in elections, from foreign nationals donating to 501(c) organizations to using straw donors through ActBlue.

Chairman Bryan Steil, R-Wis., warned during the committee hearing, "American Confidence in Elections: Prohibiting Foreign Interference," of multiple ways that foreign nationals and other countries may interfere in U.S. elections.

"Federal law generally prohibits noncitizens or foreign businesses from directly giving money to candidates, campaigns, Super PACs or running ads in support of or against candidates," Steil said. "However, it is currently legal for foreign nationals to indirectly funnel money through 501(c) organizations. These organizations can then channel that money to Super PACs or another 501(c) to directly help a candidate or influence a policy."

Steil also referenced issues with foreign nationals donating to campaigns through ActBlue.

"We have shown there are vulnerabilities in our campaign finance system that would allow a foreign actor to use of a U.S. citizen as a straw donor in order to contribute. This method would be very challenging to detect but may involve the use of gift cards in the name of a unwitting straw donor to avoid detection when facilitating these transactions. Bad actors may also illegally exploit multiple unwitting identities to break large donations into smaller amounts, allowing them to circumvent individual contribution limits," he said.

Steil noted that both the Financial Crimes Enforcement Network and the Treasury Department have not provided requested information regarding illicit election funding efforts and fraudulent donations.

He added that cyber attacks on election infrastructure is also a concern, as it occurred "during the most recent presidential election when President-Elect Trump’s campaign was allegedly hacked by Iranian nationals."

Caitlin Sutherland, executive director of Americans for Public Trust, warned of the various election activities that foreign nationals can participate in.

"It is currently legal for foreign nationals to pay for 'get-out-the-vote' operations, voter registration, issue advocacy, voter education, ballot harvesting, door knocking – like how the UK’s Labour Party actively recruited British nationals to knock on doors to support Kamala Harris – and state and local ballot issue campaigns. Congress should act to close all these foreign influence loopholes," Sutherland said.

Matthew O'Neill, former managing director for the Secret Service's Global Cyber Investigative Operations, noted in his testimony that the U.S. has been slow in protecting itself from foreign interference.

"Foreign dollars interfering in U.S. elections pose a profound threat to national security and the integrity of democratic processes," O'Neill said. "Tackling this issue requires employing the same tools used to combat money laundering and terror financing, such as robust information-sharing systems and closing systemic gaps. By strengthening these mechanisms, we can address not only election interference but also a broad spectrum of financial and cyber threats."

"The U.S.’s failure to address critical gaps in information sharing and to incentivize collaboration among financial institutions, technology providers, and law enforcement has allowed bad actors to exploit these weaknesses," he later added. "This inability to modernize not only diminishes the U.S.’s global standing but also directly harms its citizens by enabling the expansion of illicit activities, including money laundering, fraud, and election interference. Without decisive action, the United States risks falling further behind in its ability to protect its financial system, its democratic institutions, and its citizens from these threats."