Secret and Foreign Spending in U.S. Elections: Why America Needs the DISCLOSE Act

by Liz Kennedy and Alex Tausanovitch – It has been nearly a decade since Congress took any significant action to address the problems in the U.S. campaign finance system. During the ensuing years, loopholes within the system expanded to a point where hidden spending by big donors is now an ordinary part of American politics and spending by foreign citizens—and even foreign governments—is a latent threat to U.S. elections. Absent congressional oversight, foreign entities, wealthy citizens, and big corporations can amass improper influence with U.S. elected officials. A foreign government could, for example, instruct an agent to acquire a significant share in an American corporation or set up a limited liability corporation (LLC). Next, the agent funnels a large payment through that entity to a tax-exempt organization. The tax-exempt organization then uses that money to support or oppose U.S. candidates1—and the American public never knows the source of the funds. This activity is...

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