Democracy Decoded: Episode 5 Transcript

Of, By and For the People

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Simone Leeper: 

Why does American democracy look the way it does today, and how can we make it more responsive to the people it was formed to serve? I'm Simone Leeper and this is Democracy Decoded, a podcast where we examine our government and discuss innovative ideas that could lead to a stronger, more transparent, accountable and inclusive democracy. 

A key component of our government, indeed of our democracy, is that it should be of, by and for the people. It's important for us to be able to govern ourselves free from outside influence and free from interference by bad actors with their own agendas. But in recent years, attempts by foreign governments, companies and individuals to influence American elections have proliferated, not only through digital political ads, as we heard about in the last episode, but also through illegal secret spending, and even through entirely legal campaign spending. 

This week, we'll uncover foreign interference in our elections. We're taking a look at one of the holes in our campaign finance laws that allowed a foreign government to funnel enormous sums of money into a ballot measure election in Maine — completely legally. To help us learn more, we have Aaron McKean, legal counsel for state and local reform at Campaign Legal Center as our guide. We're also joined by Richard Bennett, a Republican state senator from Maine and Kyle Bailey, Campaign Manager for Protect Maine Elections and a former state representative. All of them pretty much had the same reaction when they first found out about what was going on in Maine. First, Aaron McKean. 

 

Aaron McKean: 

I came across this story when I was doing research, and it sort of blew my mind because I was looking at it like, "Wow, there's  literally a foreign government spending money in a small state ballot measure." 

 

Simone Leeper: 

Then, Senator Bennett and Kyle Bailey weighed in. 

 

Richard Bennett: 

I was dumbfounded. I was shocked that such spending is legal in Maine. 

 

Kyle Bailey: 

What really was concerning to me was the fact that essentially the Canadian government could spend tens of millions of dollars in our elections, in American elections. 

 

Simone Leeper: 

The idea blew my mind as well. How is it possible for a foreign government to be spending money in a U.S. state election completely legally? I asked Aaron to explain the backstory. 

 

Aaron McKean: 

So Hydro-Québec is a utility company that is owned by the Quebec government in Canada. And this company has interests that go beyond just Quebec. They have interests in Maine and they have interests in other states where they have power projects. The background here is that in Maine, Hydro-Québec had a specific project that was worth more than a billion dollars, and this project here was going to be a transmission line that ends up cutting through a large swath of Western Maine. And so folks there were obviously concerned about this happening. 

 

Richard Bennett: 

The impacts were going to be great in Maine. It was going to deliver the power from Hydro-Québec to Massachusetts through the undeveloped North Maine Woods, one of the largest unfragmented boreal forests in the Northeast. It's a unique and treasured resource we have, and Mainers weren't going to get much in return. 

 

Kyle Bailey: 

I think, like a lot of Mainers, I had some concerns about that Maine wasn't getting a good deal, that there was a lot more that we could get in terms of jobs and support for the communities that we're going to be clear cut for this transmission line. 

 

Aaron McKean: 

This is a complicated issue because the interests are real diverse. You have Hydro-Québec, who's obviously interested in this billion-dollar project, and then various folks in Maine want to see this go through because their interests align with having a really popular project that brings a lot of money to the state. But at the same time, you have folks who notice that, well, this transmission line is going to come through my backyard. That means someone might lose a chunk of their land and obviously that's pretty important to folks. Regardless of where you're from, you care about someone putting a power line through your backyard. 

 

Richard Bennett: 

Maine citizens took this into their own hands and we, I should say, because I was part of it, we gathered 80,000 signatures to put this on the ballot to give Mainers a choice of self-determination. Mainers voted 60-40 in favor of stopping the corridor. 

 

Kyle Bailey: 

The gist of this is that Hydro-Québec, a subsidiary of the government of Quebec, spent, that we know of, over $24 million on a ballot measure campaign in Maine to influence the outcome of this question of whether Mainers want to have this corridor running through our backyard or not. 

 

Aaron McKean: 

Just to go into detail a little bit about how this works with the Canadian government, Hydro-Québec itself is a municipal public utility. They're basically a crown corporation that is effectively like a branch of the government of Quebec, and so their money is coming straight from this government entity in Quebec. And they're the ones making the decisions, they're the ones doing the lobbying and they're the ones doing the campaign spending directly in this Maine ballot measure. 

And the crazy thing about this is that it's totally legal under Maine law. There's nothing stopping Hydro-Québec from doing this in Maine. The thing that really took it over the top was they created their own ballot committee. They registered with the Maine Ethics Commission. They funded this entire opposition to this ballot measure. Maine is wonderful, but Maine is not a large state. It's not like a lot of money typically being poured into their elections. Here you had a situation where you had a large foreign government corporation pouring all the resources it can into this measure, and it really drowns out Maine voices when it comes to actually voting in this particular election. 

 

Simone Leeper: 

This was all sounding bad enough to me, but then it got even worse. 

 

Kyle Bailey: 

The Canadian government’s response to that referendum was, “So what? We don't care. We're still going to fight this.” 

 

Richard Bennett: 

Since the election, Hydro-Québec has joined a lawsuit saying that this law shouldn't take effect, that it violated their rights. This is a foreign government corporation wholly owned by the province of Quebec asserting rights in Maine, saying that the will of Quebec is going to prevail over the will of Mainers on this issue that relates to the use of our unspoiled wilderness. 

 

Simone Leeper: 

It was hard to wrap my head around all this. Not only was a foreign government able to freely spend money in our elections, but they then had the gall to join a lawsuit to try to force their own agenda on the citizens of Maine. I thought we had some sort of laws in place to prevent this kind of foreign interference, right? 

 

Aaron McKean: 

So at the federal level, there is a law that prohibits foreign nationals, including foreign governments and foreign corporations and individuals from spending in U.S. elections. The FEC has interpreted that law to apply only to candidate elections and not to state and local ballot measure elections, and that effectively leaves it up to the states and localities to enact their own laws to stop this kind of activity. 

 

Richard Bennett: 

Those states who are paying attention have made it illegal for foreign government entities to involve themselves in their referendums, but some haven't yet, and Maine is one of those that hadn't really thought about it. And then further, the FEC recently ruled that ballot initiatives are not elections under federal law and thus they are not protected from foreign government interference unless the state explicitly prohibits it. 

 

Simone Leeper: 

This seems like a rather large glaring hole in our campaign finance system. What's being done about this in Maine? 

 

Kyle Bailey: 

We attempted to pass a law last year in the legislature, and it passed with bipartisan support of Republicans and Democrats to close this loophole and stop foreign governments from playing our elections. Unfortunately, our governor vetoed that. And so that pushed a number of us who care a lot about this and the integrity of our elections to bring this initiative to Maine people and collect signatures to put the question on the ballot, to close this loophole once and for all 

 

Richard Bennett: 

Our system is so polarized today that we need to find those issues on which all people can agree. And if there's one thing we should be able to agree on as Americans is that our elections are for people, they're not for foreign governments, they're not for foreign corporations. U.S. elections are for American voters. 

 

Simone Leeper: 

It's good to know that there's an initiative underway in Maine to address this issue, but this whole incident really makes me wonder what the implications are for the rest of the country. 

 

Richard Bennett: 

I think that now that Hydro-Québec has exploited this loophole in Maine law and gotten away with it, foreign government owned entities, corporations and other entities across the world will be emboldened to not only spend money in Maine referendum elections, but potentially to fund efforts to directly initiate legislation in Maine to benefit a foreign agenda. Maine is just a small example of what can happen in a much more pernicious and enormous way in the rest of our country if we don't close this loophole. 

 

Kyle Bailey: 

I think our democracy see itself is on the line. The idea that a foreign government, whether it's Canada or China or Russia, could intervene in our elections and attempt to persuade or push out disinformation to voters and attempt to manipulate the outcomes, that is deeply concerning to me because that potentially threatens our economic security, and it certainly threatens our national security. That could really undermine America, our standing in the world, our economy and our future. 

 

Simone Leeper: 

It really does seem to me that this is an issue that should be addressed on a national level. Aaron McKean thought so too. 

 

Aaron McKean: 

We have different laws in different areas and we end up with people having kind of a different version of democracy, a different version of democracy in different places where foreign nationals are able to spend to impact elections in Maine or to impact elections in Montana, but then they're not in California. And it's good that we have this law in place in California, but is really problematic that it's a patchwork. It's really problematic that a company can come in somewhere else and kind of tilt elections one way or the other just by their ability to throw around hundreds of thousands of dollars. If Congress were to pass a law that would clarify that this kind of foreign spending in state and local elections is prohibited, we would be better able to protect these state and local elections from the kind of foreign spending that we've seen in Maine. 

This kind of foreign spending makes it harder for ordinary Americans to participate in the democratic process and feel like they actually do have a voice. States and localities can take action to stop this kind of foreign spending and really make sure that we lift up the voices of Americans in their own elections. In 2021, we've seen at least six or seven other states introduce bills that would address this kind of spending in their own elections. Short of congressional action, states and localities can take action to stop this kind of foreign spending and really make sure that we lift up the voices of Americans in their own elections. 

 

Simone Leeper: 

It sounds like we really have our work cut out for us when it comes to foreign spending in our elections, and this is definitely a case where we need to see changes on a national level. However, there are other areas in our campaign finance system where the best way to bring about change has been at the state and local level. On our sixth and final episode of this season, we'll take a look at some innovative new programs that have allowed people-powered campaigns to compete against their corporate backed counterparts and win. 

Special thanks to Aaron McKean, Senator Richard Bennett and Kyle Bailey for appearing in this episode. You can find additional background information on the topics discussed in the show notes, along with the full transcript of the show. This podcast was produced and written by Casey Atkins and Brendan Quinn, with additional script writing by Bryan Dewan. It was edited by Parker Podcasting and narrated by me, Simone Leeper. 

Democracy Decoded is a production of Campaign Legal Center, a nonpartisan, nonprofit organization, which advances democracy through law at the federal, state and local levels, fighting for every American's right to responsive government and a fair opportunity to participate in and affect the democratic process. You can visit us on the web at campaignlegalcenter.org.