Campaign finance rules for ballot measures differ from those for candidate elections. “Referenda are held on issues, not candidates for public office,” wrote the U.S. Supreme Court in 1978 (First National Bank of Boston v. Bellotti). The court has held that spending on ballot measure campaigns is similar to issue advocacy in the lawmaking process. Following the U.S. Supreme Court, the IRS considers the financing of ballot measure campaigns as a type of lobbying. Donors advocate to voters—who function as legislators—about legislation that will be decided on at an election, according to this framework.
In 1981, the U.S. Supreme Court decided Citizens Against Rent Control v. City of Berkeley, which further defined campaign finance for ballot measures as distinct from that for candidate elections. The court’s opinion held that limiting contributions to ballot measure committees violated the First Amendment. Limits on candidate committees, per Buckley v. Valeo, were to prevent quid pro quo corruption or the appearance of quid pro quo corruption. Measures are not subject to quid pro quo corruption because there are no candidates to bribe, according to the ruling. Richard Hasen, a professor of law at UCLA, said the ruling “precludes state and local jurisdictions from limiting financial contributions to committees formed to support or oppose ballot measures.”
The Federal Election Commission (FEC), citing the Supreme Court, has also stated that ballot measures are not subject to regulation under the Federal Election Campaign Act (FECA). In McIntyre v. Ohio Elections Commission (1995), the Supreme Court determined that FECA “regulates only candidate elections, not referenda or other issue-based ballot measures.” FECA defines elections as “the process by which individuals, whether opposed or unopposed, seek nomination for election, or election.” That definition does not include ballot measures.
The FEC has issued multiple orders concerning the financing of ballot measure campaigns, including those addressing foreign spending and guidelines for candidates raising funds for ballot measures.
Foreign Spending
The U.S. Supreme Court and FEC have held that foreigners can contribute to ballot measure campaigns, at least under existing federal law. In Bluman v. FEC (2011), the Supreme Court affirmed a lower court’s findings, which held that FECA prohibits foreign contributions to political candidates and that this prohibition is constitutional. Judge Brett Kavanaugh, writing the opinion, noted, “[the law] does not bar foreign nationals from issue advocacy—that is, speech that does not expressly advocate the election or defeat of a specific candidate.”
The FEC has held that foreign nationals can make contributions to ballot measure campaigns. The most recent order on foreign contributions was in 2021. In MUR 7523, the FEC held that the federal ban on foreign political contributions concerns candidate elections, not ballot measure campaigns. Therefore, the FEC affirmed that foreign individuals, corporations, and governments could contribute to ballot measure campaigns. The opinion originated with Montana I-186, which regarded mining permits. In 2018, voters rejected I-186. Opponents received funding from Sandfire, a Canadian subsidiary of an Australian mining company.
States have enacted their own laws governing foreign contributions to ballot measure campaigns. Eight prohibit foreign nationals or governments from contributing to ballot measure committees.
However, the definition of foreign national varies between the states. In California, for example, the definition does not include lawful non-citizen permanent residents. In Ohio, a bill has been introduced to prohibit foreign nationals from making contributions or expenditures to support or oppose ballot measures. The definition of foreign nationals would include lawful permanent residents. State Sen. Theresa Gavarone (R-2), the bill’s co-sponsor, said a 2023 ballot initiative donor, the Sixteen Thirty Fund, received funding from Georg Wyss, a Swiss national based in the U.S. In Maine, the ban, which voters passed in 2023, prohibits foreign governments and foreign government-owned entities from making contributions to ballot measure campaigns but does not mention other foreign persons.
During the 118th U.S. Congress, legislation has been introduced addressing foreign spending and ballot measures. In the House, Rep. Brian Fitzpatrick (R-1) of Pennsylvania introduced House Resolution 4484 (HR 4484), the Keeping Foreign Money out of Ballot Measures Act. In the Senate, Sen. Bill Hagerty (R-TN) introduced Senate Bill 4145 (SB 3145), the Preventing Foreign Interference in American Elections Act.
Candidates and Ballot Measures
On May 1, 2024, the FEC issued AO 2024-05, which stated that federal officeholders and candidates are allowed to solicit unlimited funds for ballot measure committees without regard to campaign finance limitations and source restrictions in FECA.
Nevadans for Reproductive Freedom, which is the campaign behind a ballot initiative to provide a state constitutional right to abortion, requested an opinion on the matter. As FECA does not define elections to include ballot measures, federal candidates can raise funds for ballot measure campaigns and associated nonprofits, as long as funds aren’t earmarked for federal elections.
The opinion has the effect of permitting federal candidates, including Joe Biden (D) and Donald Trump (R), to raise unlimited funds for ballot measures.
The National Republican Senatorial Committee criticized the opinion, stating, “[the order] permit[s] federal candidates and officeholders to solicit unlimited foreign national funds for ballot measure committees that benefit the candidates’ elections.” Chris LaCivita, a senior advisor for Trump, also responded, saying, “We will engage in all opportunities available, including new ones to defeat the corruption and failure of the Democrat machine.” According to the New York Times, spokespersons for the DNC and Biden declined to comment.
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