FEC Issues Record-Breaking Fine in CLC Foreign National Contribution Complaint

Image
Wheatland Tube Company building
Zekelman Industries. [Public Domain]

The Federal Election Commission (FEC) recently settled a complaint against Canadian billionaire Barry Zekelman and his associated steel companies, after finding reason to believe that Zekelman illegally funneled $1.75 million to America First Action (AFA), a super PAC aligned with former President Donald Trump, and initiating an investigation.

As a condition of the settlement agreement, recently finalized by the Commission, Zekelman agreed to pay a civil penalty of $975,000, the third-largest fine in the FEC’s history and the largest ever for a violation of the foreign national contribution ban.

Campaign Legal Center (CLC) filed the complaint with the FEC in May 2019, following reporting by The New York Times that detailed Zekelman’s efforts to curry favor with the Trump administration to advance his company’s business interests.

The complaint alleged that Zekelman violated the foreign national contribution ban – the provision of federal law that prohibits any foreign national from directly or indirectly making contributions in connection with a federal election.

Wheatland Tube, an American-based subsidiary of Zekelman Industries, contributed $1.75 million to AFA between April and October 2018. Following the initial $1 million contribution in April, Zekelman was invited to the Trump International Hotel in the District of Columbia.

He used the opportunity to lobby then-President Trump to support limiting steel imports and curbing regulations that cap the number of hours truck drivers can be on the road, policies that would alleviate key challenges facing his company.

Federal regulations prohibit foreign nationals from “directing, dictating, controlling, or directly or indirectly participating in the decision-making process” related to any federal election activities.

As The New York Times reported in 2019 and as acknowledged in Zekelman’s responses to CLC’s complaint, the Canadian billionaire directly participated in internal discussions about his company’s contributions to the Trump-aligned super PAC.

That the $975,000 civil penalty is the third largest ever issued by the Commission demonstrates the severity of the violation.

In recent years, the FEC has signaled the urgency of the issue, with the Commissioners unanimously voting in 2016 to direct the Office of General Counsel (OGC) “to prioritize cases involving allegations of foreign influence.”

In 2019, the Commission issued $940,000 in fines in connection with another CLC complaint involving prohibited foreign national contributions to Right to Rise, a super PAC supporting Jeb Bush’s 2016 presidential campaign.

The ban on foreign national contributions protects against the outsized influence of foreign corporations and other wealthy special interests that drown out the voices of U.S. voters.

As the only government agency solely responsible for overseeing the integrity of campaigns for federal office, the FEC is obligated to enforce campaign finance laws. Unfortunately, dysfunction has marred the Commission over the last decade, resulting in rampant abuse of the law and an explosion of secret spending.

By imposing this serious penalty, this time the FEC has done its job of protecting the First Amendment rights of American voters to participate freely in our elections without foreign influence.

Sophia is a Researcher/Investigator on CLC's Campaign Finance/Ethics team.
What Is the FEC and What Does the FEC Do?