For the People Act of 2021 (H.R. 1; 117th Congress)/Division B/Title IV/Subtitle A

by John Sarbanes

SEC. 4001. FINDINGS RELATING TO ILLICIT MONEY UNDERMINING OUR DEMOCRACY.

Congress finds the following:

(1) Criminals, terrorists, and corrupt government officials frequently abuse anonymously held Limited Liability Companies (LLCs), also known as “shell companies,” to hide, move, and launder the dirty money derived from illicit activities such as trafficking, bribery, exploitation, and embezzlement. Ownership and control of the finances that run through shell companies are obscured to regulators and law enforcement because little information is required and collected when establishing these entities.

(2) The public release of the “Panama Papers” in 2016 and the “Paradise Papers” in 2017 revealed that these shell companies often purchase and sell United States real estate. United States anti-money laundering laws do not apply to cash transactions involving real estate effectively concealing the beneficiaries and transactions from regulators and law enforcement.

(3) Since the Supreme Court’s decisions in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), millions of dollars have flowed into super PACs through LLCs whose funders are anonymous or intentionally obscured. Criminal investigations have uncovered LLCs that were used to hide illegal campaign contributions from foreign criminal fugitives, to advance international influence-buying schemes, and to conceal contributions from donors who were already under investigation for bribery and racketeering. Voters have no way to know the true sources of the money being routed through these LLCs to influence elections, including whether any of the funds come from foreign or other illicit sources.

(4) Congress should curb the use of anonymous shell companies for illicit purposes by requiring United States companies to disclose their beneficial owners, strengthening anti-money laundering and counter-terrorism finance laws.

(5) Congress should examine the money laundering and terrorist financing risks in the real estate market, including the role of anonymous parties, and review legislation to address any vulnerabilities identified in this sector.

(6) Congress should examine the methods by which corruption flourishes and the means to detect and deter the financial misconduct that fuels this driver of global instability. Congress should monitor government efforts to enforce United States anti-corruption laws and regulations.

SEC. 4002. FEDERAL CAMPAIGN REPORTING OF FOREIGN CONTACTS.

(a) Initial Notice.—

(1) IN GENERAL.—Section 304 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30104) is amended by adding at the end the following new subsection:

“(j) Disclosure Of Reportable Foreign Contacts.—

“(1) COMMITTEE OBLIGATION TO NOTIFY.—Not later than 1 week after a reportable foreign contact, each political committee shall notify the Federal Bureau of Investigation and the Commission of the reportable foreign contact and provide a summary of the circumstances with respect to such reportable foreign contact. The Federal Bureau of Investigation, not later than 1 week after receiving a notification from a political committee under this paragraph, shall submit to the political committee, the Permanent Select Committee on Intelligence of the House of Representatives, and the Select Committee on Intelligence of the Senate written or electronic confirmation of receipt of the notification.

“(2) INDIVIDUAL OBLIGATION TO NOTIFY.—Not later than 3 days after a reportable foreign contact—

“(A) each candidate and each immediate family member of a candidate shall notify the treasurer or other designated official of the principal campaign committee of such candidate of the reportable foreign contact and provide a summary of the circumstances with respect to such reportable foreign contact; and

“(B) each official, employee, or agent of a political committee shall notify the treasurer or other designated official of the committee of the reportable foreign contact and provide a summary of the circumstances with respect to such reportable foreign contact.

“(3) REPORTABLE FOREIGN CONTACT.—In this subsection:

“(A) IN GENERAL.—The term ‘reportable foreign contact’ means any direct or indirect contact or communication that—

“(i) is between—

“(I) a candidate, an immediate family member of the candidate, a political committee, or any official, employee, or agent of such committee; and

“(II) an individual that the person described in subclause (I) knows, has reason to know, or reasonably believes is a covered foreign national; and

“(ii) the person described in clause (i)(I) knows, has reason to know, or reasonably believes involves—

“(I) an offer or other proposal for a contribution, donation, expenditure, disbursement, or solicitation described in section 319; or

“(II) coordination or collaboration with, an offer or provision of information or services to or from, or persistent and repeated contact with, a covered foreign national in connection with an election.

“(B) EXCEPTIONS.—

“(i) CONTACTS IN OFFICIAL CAPACITY AS ELECTED OFFICIAL.—The term ‘reportable foreign contact’ shall not include any contact or communication with a covered foreign national by an elected official or an employee of an elected official solely in an official capacity as such an official or employee.

“(ii) CONTACTS FOR PURPOSES OF ENABLING OBSERVATION OF ELECTIONS BY INTERNATIONAL OBSERVERS.—The term ‘reportable foreign contact’ shall not include any contact or communication with a covered foreign national by any person which is made for purposes of enabling the observation of elections in the United States by a foreign national or the observation of elections outside of the United States by a candidate, political committee, or any official, employee, or agent of such committee.

“(iii) EXCEPTIONS NOT APPLICABLE IF CONTACTS OR COMMUNICATIONS INVOLVE PROHIBITED DISBURSEMENTS.—A contact or communication by an elected official or an employee of an elected official shall not be considered to be made solely in an official capacity for purposes of clause (i), and a contact or communication shall not be considered to be made for purposes of enabling the observation of elections for purposes of clause (ii), if the contact or communication involves a contribution, donation, expenditure, disbursement, or solicitation described in section 319.

“(C) COVERED FOREIGN NATIONAL DEFINED.—

“(i) IN GENERAL.—In this paragraph, the term ‘covered foreign national’ means—

“(I) a foreign principal (as defined in section 1(b) of the Foreign Agents Registration Act of 1938 (22 U.S.C. 611(b))) that is a government of a foreign country or a foreign political party;

“(II) any person who acts as an agent, representative, employee, or servant, or any person who acts in any other capacity at the order, request, or under the direction or control, of a foreign principal described in subclause (I) or of a person any of whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in major part by a foreign principal described in subclause (I); or

“(III) any person included in the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control of the Department of the Treasury pursuant to authorities relating to the imposition of sanctions relating to the conduct of a foreign principal described in subclause (I).

“(ii) CLARIFICATION REGARDING APPLICATION TO CITIZENS OF THE UNITED STATES.—In the case of a citizen of the United States, subclause (II) of clause (i) applies only to the extent that the person involved acts within the scope of that person’s status as the agent of a foreign principal described in subclause (I) of clause (i).

“(4) IMMEDIATE FAMILY MEMBER.—In this subsection, the term ‘immediate family member’ means, with respect to a candidate, a parent, parent-in-law, spouse, adult child, or sibling.”.

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply with respect to reportable foreign contacts which occur on or after the date of the enactment of this Act.

(b) Information Included On Report.—

(1) IN GENERAL.—Section 304(b) of such Act (52 U.S.C. 30104(b)) is amended—

(A) by striking “and” at the end of paragraph (7);

(B) by striking the period at the end of paragraph (8) and inserting “; and”; and

(C) by adding at the end the following new paragraph:

“(9) for any reportable foreign contact (as defined in subsection (j)(3))—

“(A) the date, time, and location of the contact;

“(B) the date and time of when a designated official of the committee was notified of the contact;

“(C) the identity of individuals involved; and

“(D) a description of the contact, including the nature of any contribution, donation, expenditure, disbursement, or solicitation involved and the nature of any activity described in subsection (j)(3)(A)(ii)(II) involved.”.

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply with respect to reports filed on or after the expiration of the 60-day period which begins on the date of the enactment of this Act.

SEC. 4003. FEDERAL CAMPAIGN FOREIGN CONTACT REPORTING COMPLIANCE SYSTEM.

(a) In General.—Section 302 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30102) is amended by adding at the end the following new subsection:

“(j) Reportable Foreign Contacts Compliance Policy.—

“(1) REPORTING.—Each political committee shall establish a policy that requires all officials, employees, and agents of such committee (and, in the case of an authorized committee, the candidate and each immediate family member of the candidate) to notify the treasurer or other appropriate designated official of the committee of any reportable foreign contact (as defined in section 304(j)) not later than 3 days after such contact was made.

“(2) RETENTION AND PRESERVATION OF RECORDS.—Each political committee shall establish a policy that provides for the retention and preservation of records and information related to reportable foreign contacts (as so defined) for a period of not less than 3 years.

“(3) CERTIFICATION.—

“(A) IN GENERAL.—Upon filing its statement of organization under section 303(a), and with each report filed under section 304(a), the treasurer of each political committee (other than an authorized committee) shall certify that—

“(i) the committee has in place policies that meet the requirements of paragraphs (1) and (2);

“(ii) the committee has designated an official to monitor compliance with such policies; and

“(iii) not later than 1 week after the beginning of any formal or informal affiliation with the committee, all officials, employees, and agents of such committee will—

“(I) receive notice of such policies;

“(II) be informed of the prohibitions under section 319; and

“(III) sign a certification affirming their understanding of such policies and prohibitions.

“(B) AUTHORIZED COMMITTEES.—With respect to an authorized committee, the candidate shall make the certification required under subparagraph (A).”.

(b) Effective Date.—

(1) IN GENERAL.—The amendment made by subsection (a) shall apply with respect to political committees which file a statement of organization under section 303(a) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30103(a)) on or after the date of the enactment of this Act.

(2) TRANSITION RULE FOR EXISTING COMMITTEES.—Not later than 30 days after the date of the enactment of this Act, each political committee under the Federal Election Campaign Act of 1971 shall file a certification with the Federal Election Commission that the committee is in compliance with the requirements of section 302(j) of such Act (as added by subsection (a)).

SEC. 4004. CRIMINAL PENALTIES.

Section 309(d)(1) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30109(d)(1)) is amended by adding at the end the following new subparagraphs:

“(E) Any person who knowingly and willfully commits a violation of subsection (j) or (b)(9) of section 304 or section 302(j) shall be fined not more than $500,000, imprisoned not more than 5 years, or both.

“(F) Any person who knowingly and willfully conceals or destroys any materials relating to a reportable foreign contact (as defined in section 304(j)) shall be fined not more than $1,000,000, imprisoned not more than 5 years, or both.”.

SEC. 4005. REPORT TO CONGRESSIONAL INTELLIGENCE COMMITTEES.

(a) In General.—Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Director of the Federal Bureau of Investigation shall submit to the congressional intelligence committees a report relating to notifications received by the Federal Bureau of Investigation under section 304(j)(1) of the Federal Election Campaign Act of 1971 (as added by section 4002(a) of this Act).

(b) Elements.—Each report under subsection (a) shall include, at a minimum, the following with respect to notifications described in subsection (a):

(1) The number of such notifications received from political committees during the year covered by the report.

(2) A description of protocols and procedures developed by the Federal Bureau of Investigation relating to receipt and maintenance of records relating to such notifications.

(3) With respect to such notifications received during the year covered by the report, a description of any subsequent actions taken by the Director resulting from the receipt of such notifications.

(c) Congressional Intelligence Committees Defined.—In this section, the term “congressional intelligence committees” has the meaning given that term in section 3 of the National Security Act of 1947 (50 U.S.C. 3003).

SEC. 4006. RULE OF CONSTRUCTION.

Nothing in this subtitle or the amendments made by this subtitle shall be construed—

(1) to impede legitimate journalistic activities; or

(2) to impose any additional limitation on the right to express political views or to participate in public discourse of any individual who—

(A) resides in the United States;

(B) is not a citizen of the United States or a national of the United States, as defined in section 101(a)(22) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(22)); and

(C) is not lawfully admitted for permanent residence, as defined by section 101(a)(20) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(20)).