How A Foreign Pornographer Tried To Win A U.S. Election
The strange tale of an overseas porn tycoon and an LA ballot initiative.
There are so many weird money in politics stories, that it can be difficult to keep track of them all. But this one’s a doozy: there’s a foreign pornographer who got away with spending hundreds of thousands in a local election in Los Angeles (at least so far….)
As you may recall, right after Citizens United was issued by the Supreme Court, President Obama said in his first State of the Union address with many of the members of the Court sitting right in front of him,
With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests –- including foreign corporations –- to spend without limit in our elections. (Applause.) I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities. (Applause.) They should be decided by the American people.
Memorably, Justice Samuel Alito was caught on camera mouthing “not true.” And ever since, there’s been a lingering question as to whether foreign corporate money will get into U.S. elections.
Now as a matter of statutory law, foreigners are not allowed to spend in an American election. That includes federal, state and local elections. A foreigner can’t even pay for a race for dog catcher.
Here’s the law: According to 52 USC § 30121 (formerly 2 USC § 441e(a)),
It shall be unlawful for— (1) a foreign national, directly or indirectly, to make— (A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election; (B) a contribution or donation to a committee of a political party; or (C) an expenditure, independent expenditure, or disbursement for an electioneering communication (within the meaning of section 434(f)(3) of this title); (2) a person to solicit, accept, or receive a contribution or donation described in subparagraph (A) or (B) of paragraph (1) from a foreign national.
Note that nothing in the statute refers to candidates. It merely bars foreign nationals spending in an American “election.”
Meanwhile, back in 2012, two years after the Citizens United ruling, there was a ballot measure in Los Angeles County. Known as the “Safer Sex in the Adult Film Industry Act,” the initiative would require that actors in pornography wear condoms. The measure passed with 57 percent of the vote.
The measure was hard fought, with health care advocates on one side and the porn industry on the other. Spending against the initiative included $327,000 from two companies tied to Manwin Licensing International. Manwin Licensing International is a foreign corporation located in Luxembourg that runs adult webpages around the world. Its then-CEO was Fabian Thylmann, a German national. (Described by New York magazine in 2011 as “likely the biggest porn tycoon of the planet,” today Thylmann is out of the business.)
About a week before the vote, a supporter of the measure complained to the FEC about a foreign national making contributions in a U.S. election. It took a while, but in March 2015 the FEC deadlocked 3-3 on whether to pursue the case. That effectively ended the matter.
But this September, current FEC Chair Ann Ravel revived the issue by filing a memorandum urging the FEC to clarify that ballot measures are covered by 52 USC § 30121, and foreign contributions are prohibited.The commission again deadlocked, which means there will be no clarification from the FEC on whether foreign money is barred from ballot measure campaigns.
However, the FEC ruling is not the end of the condom legal saga. In July, the California Fair Political Practices Commission announced it is now investigating Manwin’s spending in the LA election.
But the more troubling matter is (1) why are the FEC’s Republican Commissioners’ reading the federal law which covers any American “election” so narrowly as to invite foreign money into U.S. ballot measure fights? And (2) more disturbingly, if a Luxembourg pornography company can get away with spending hundreds of thousands of dollars in an LA election, what’s to stop other foreigners and foreign companies from spending in the 2016 race?