Summary
Recently, the Sixth Circuit Court of Appeals upheld an Ohio law that bans political contributions made by lawful permanent residents. The court found that Ohio's interest in safeguarding its elections from foreign interference outweighed the administrative burden of compliance. That burden means federal political action committees (PACs) that accept lawful contributions from permanent residents will no longer be able to participate in Ohio elections.
To ease the burden, the Ohio Secretary of State has issued new guidance on how PACs and political contributing entities (PCEs) can comply with the new law.
The Upshot
- Federal campaign finance laws exclude "lawful permanent residents" from the definition of "foreign national," but the new Ohio law does not.
- Foreign nationals are prohibited from indirectly contributing to ballot issue committees.
- PACs and PCEs are prohibited from making contributions, expenditures, and independent expenditures in Ohio elections, if they receive contributions from noncitizens.
- PACs and PCEs can comply by opening new bank accounts, expending all current funds, and starting fresh, or refunding contributions from green card holders.
The Bottom Line
Any entity participating in Ohio elections through contributions, expenditures, or independent expenditures should stop until it can verify that none of its funds come from foreign nationals, including green card holders.
Ohio, like the Federal Election Campaign Act (FECA), used to define "foreign national" as an inpidual who is not a citizen of the United States and who has not been lawfully admitted to the U.S. for permanent residence. In other words, Ohio permitted political contributions from green card holders.
In June of last year, that changed. The Ohio Legislature sought to safeguard its elections from foreign interference, passing a law that broadened the definition of "foreign national" to include green card holders. The new law had been enjoined for many months in legal battles, but the Sixth Circuit Court of Appeals affirmed the validity of the law in mid-September.
The Ohio Secretary of State has now released guidance specifying three ways PACs can comply with the law.
- PACs can open a separate bank account, create a new filing entity, designate a treasurer, and ensure that only contributions from U.S. citizens go into the new account. The PAC would then properly report contributions and expenditures in Ohio elections from the new account.
- Alternatively, PACs currently giving in Ohio can expend all green card holder entangled funds in non-Ohio elections or for charitable causes. Once all funds are spent down, the PAC can ensure that new contributions come only from U.S. citizens.
- Finally, a PAC can refund all contributions made by noncitizens, thus ensuring that all funds expended and contributed to Ohio elections are from U.S. citizens.
The incongruity between federal campaign finance laws and state campaign finance laws means that federal PACs that want to engage in Ohio elections will need to balance the benefits of receiving contributions from lawful permanent residents against the increased administrative burden of managing a separate Ohio PAC.
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