The Charitable Back Door

Federal law prohibits foreign nationals from donating to political action committees (PACs). This makes sense because it prevents foreign nationals from influencing American politics. Federal law does not prohibit foreign nationals from donating to tax-exempt 501(c)(3) charities. This argument also makes sense because charities should be open to as much funding as possible.

Unfortunately, in recent years, the line between charities and PACs has become less clear as charities have run industrial-scale get-out-the-vote operations, and there is no law prohibiting foreign nationals from funding charities that register millions of voters and perform hundreds of millions of voter contacts. That doesn’t make sense because it allows foreign nationals to exert enormous influence on American politics through a “charitable” back door.

Luckily, legislation has been introduced that intends to fix that.

The Preventing Foreign Interference in American Elections Act, introduced by Rep. Bryan Steil (R-WI), aims to amend the Federal Election Campaign Act to prohibit foreign nationals from funding a wide range of election-related activities, including voter registration, ballot collection, building voter contact lists, get-out-the-vote programs, and election administration offices, even when the funding is routed through nonprofits or other non-PAC entities. This bill would close a gaping loophole that would currently allow, for example, a Russian oligarch to secretly fund targeted GOTV operations to try to unseat a pro-Ukraine senator or a cartel boss to fund community organizers in a border town to try to sway the sheriff’s election. Leaving this loophole open threatens not just election integrity, but national security as well.

The abuses of this loophole aren’t just hypothetical either. At least one foreign billionaire is already doing this on a massive scale and has been for many years.

Hansjorg Wyss

Hansjorg Wyss is a Swiss national who made his fortune in pharmaceuticals and has had his share of controversy. Despite living and working in the United States for many years, he said he never felt a desire to obtain citizenship, and even without it, Wyss has still supported political candidates. In 2016, reports revealed that, from 1998 to 2003, he made more than $40,000 in contributions to Democratic candidates and PACs. By the time anyone discovered the contributions, the statute of limitations had already expired, so nothing came of it. By 2022, the FEC itself had investigated and found Wyss had made roughly $119,000 in unlawful contributions between 1990 and 2006, but declined to act because the statute of limitations had passed.

Most of his meddling in American politics, though, has come from his private foundation, the Wyss Foundation, and his personal “dark money” group, the Berger Action Fund. Together, the two have directed hundreds of millions of dollars into left-wing political advocacy groups. Many of the groups Wyss has funded have engaged in massive GOTV and voter registration operations.

In 2023, when confronted about its funding of election-related activism, a representative of the foundation claimed that “The Wyss Foundation and Berger Action Fund prohibit their grants from being used to support or oppose political candidates or parties or to fund get-out-the-vote or voter registration activities.” The Wyss Foundation’s own tax filings and leaked emails contradict this answer.

The leaked emails show that the Wyss Foundation was planning to spend millions on a “registration surge” coordinated with soon-to-be Clinton campaign chairman John Podesta as far back as 2015, and the Wyss Foundation’s own publicly available Form 990s show that grantees of both groups engage in “get-out-the-vote or voter registration activities.” Form 990s also show that former Wyss Foundation program officer Matt Hollamby, who sent an email about the “registration surge” to Podesta, now serves as treasurer of the Voter Registration Project, the same organization that Capital Research Center discovered was used to facilitate the “registration surge” Podesta and others had planned.

It’s possible the foundation meant it would not fund this work in the future, even if it had in the past, but that doesn’t seem to be true. In 2024 alone, the year after the statement, the Wyss Foundation made contributions to several groups that run extensive get-out-the-vote and voter registration programs. The foundation granted: 

• $70,000 to the California Environmental Voters Education Fund, whose website says the top thing they do is “Building civic engagement and mobilizing climate voters.” (See Wyss Foundation 2024 Form 990, Page 71, Line 12)

• $75,000 to the Conservation Colorado Education Fund, whose mission statement says they “[work] to expand nonpartisan voter participation.” (See Wyss Foundation 2024 Form 990, Page 72, Line 5)

• $1.5 million to the Conservation Lands Foundation, which bought a GOTV ad in 2020, hosted a webinar on “Encouraging Voter Registration and Participation,” and ran the “My Future. My Vote. 2020 Voter Engagement Campaign.” In 2024, they hosted a presentation that directed their affiliates to seven resources for planning get-out-the-vote work, including “The Nonprofit Voter Engagement Playbook” by Independent Sector and the “Voter Registration Guide” by Rock the Vote. (See Wyss Foundation 2024 Form 990, Page 72, Line 7)

• $300,000 to Demos, which is essentially the brain of the nonprofit get-out-the-vote industry. Their 2024 annual report shows they were coaching government agencies on the best way to implement a Biden-era executive order, colloquially called “BidenBucks,” that turned all federal agencies into voter-registration machines. They also specifically coached an organization called Organize Tennessee on ways to improve its “voter registration and voter turnout” work. (See Wyss Foundation 2024 Form 990, Page 72, Line 9)

• $470,000 to The League of Conservation Voters Education Fund, which is probably one of the leading “get-out-the-vote or voter registration” organizations in the world and has registered “1.7 million and counting.” (See Wyss Foundation 2024 Form 990, Page 73, Line 11)

• $500,000 to MomsRising Education Fund, which bought multiple get-out-the-vote ads in November 2024 and was running large-scale get-out-the-vote events in states like Pennsylvania and North Carolina. (See Wyss Foundation 2024 Form 990, Page 73, Line 18)

The idea that the Wyss Foundation funded all these organizations without underwriting any “get-out-the-vote or voter registration activities” is laughable. Even if the Wyss Foundation is attaching strings to grants, nominally preventing them from being used for GOTV work, money is still fungible, and many of the groups it has funded are built to be GOTV operations. It’s akin to claiming that a donation to a library didn’t pay for a single book because “For computers” was written on the check.

What more don’t we know about?

Hansjorg Wyss is likely just the tip of the iceberg. Foreign powers with vested interests in controlling American politics would be crazy not to be abusing the same loophole that Wyss has used. Charitable donations, unlike PAC contributions, can be completely anonymous unless the donor chooses to disclose their involvement or uses a private foundation. The Wyss Foundation’s grantmaking is concerning, but the possibility of a dozen more Wyss Foundations hiding in the shadows is even more concerning. 

Meanwhile, America’s campaign finance laws offer virtually no remedy for the situation. IRS enforcement against the nonprofit voter registration industry’s many oversteps has been essentially nonexistent for over a decade, and the FEC has repeatedly declined to act as well, claiming it’s a problem for the IRS. As a result, the “charitable” vote machine has been allowed to thrive amid benevolent neglect and inter-agency limbo, already attracting one foreign donor we know of. 

The Preventing Foreign Interference in American Elections Act is a common-sense solution to a problem we may not yet even know the full scale of.

Source: https://capitalresearch.org/article/the-charitable-back-door/