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Lee Fang on How Citizens United Opened Floodgates for Foreign Corporate Money in U.S. Elections

Web ExclusiveAugust 05, 2016
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Part 2 of our conversation with Lee Fang of The Intercept. His new series, “Foreign Influence,” reveals how a company owned by Chinese nationals donated $1.3 million to Jeb Bush’s super PAC after receiving advice from a prominent Republican lawyer.

Watch Part 1 || First Evidence Surfaces of Foreign Money Pouring into U.S. Elections After Citizens United

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StoryAug 04, 2016First Evidence Surfaces of Foreign Money Pouring into U.S. Elections After Citizens United
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now!,, The War and Peace Report. I’m Amy Goodman, as we continue with Part 2 of our conversation with Lee Fang of The Intercept. His new series, “Foreign Influence,” reveals how a company owned by Chinese nationals donated $1.3 million to Jeb Bush’s super PAC after receiving advice from a prominent Republican lawyer. This marks the first time direct evidence has emerged showing a foreign company has indeed donated money to a federal campaign since the Supreme Court’s 2010 Citizens United ruling.

“Foreign Influence” is a wide-ranging four-part series. Part 1 is titled “The Citizens United Playbook: How a Top GOP Lawyer Guided a Chinese-Owned Company into U.S. Presidential Politics.” Part 2, “Power Couple: Meet the Chinese Husband-and-Wife Team Whose Company Spent $1.3 Million Trying to Make Jeb Bush President.” Part 3, “Cracks in the Dam: Three Paths Citizens United Created for Foreign Money to Pour into U.S. Elections.” And Part 4, “A 'Desperate' Seller: Gary Locke, While Obama’s Ambassador to China, Got a Chinese Tycoon to Buy His House.”

Lee Fang co-wrote the series and joins us now here in our studio. It’s great to have you with us, Lee. What surprised you most by your investigation?

LEE FANG: Frankly, I’m surprised that some other news outlet didn’t beat us to this, because the way we found the story was simply taking the largest corporate contributors to presidential super PACs and investigating their ownership. For the American Pacific International Capital Company, there was a clear paper trail for the ownership, documents in both the United States and Singapore showing the ownership structure and providing clear evidence of how this company worked, so that we could report the story. This is all stuff you could find on Google. So—and this was not a random company; this was one of the largest corporate contributors during this presidential cycle. So I’m surprised, with so many reporters interested now in money in politics, that we found this, and we found this so late, and another news outlet didn’t beat us to the punch.

AMY GOODMAN: So, explain. Jeb Bush has this super PAC. It’s called?

LEE FANG: Right to Rise.

AMY GOODMAN: And explain who the couple is, what the corporation is, that made the contribution. And why are they interested in Jeb Bush?

LEE FANG: Well, Gordon Tang and his wife, Serena Chen, have cultivated a number of political relationships. As we mentioned earlier on the show, they brought on Gary Locke, one of the most famous Chinese-American politicians in U.S. history. They brought on Neil Bush to their company. As their brother-in-law, Wilson Chen, explained to me in an interview, they admired the Bush family. George H.W. Bush, of course, was the chief diplomat in Beijing in the '70s. There's a long history.

AMY GOODMAN: He was U.S. ambassador to China?

LEE FANG: Right. Well, chief diplomat, because of the weird relationship back in the '70s. But—and so, there's been a very long relationship, simply put, between the Bushes and China. And they admired this. And I think for a lot of political observers, at least in early 2015, Jeb Bush seemed like the front-runner, so he seemed like a good bet for the family.

AMY GOODMAN: What has Jeb Bush’s super PAC said to you?

LEE FANG: They have not responded to our request for comment.

AMY GOODMAN: And how unusual is this? I mean, you’re saying this is the first time that a foreign company has been tracked giving money to a super PAC. Talk about—what are the laws in this country?

LEE FANG: Well, you know, Citizens United opened the floodgates for corporate influence. Corporations can give unlimited amounts. But oftentimes, when a corporation does not want publicity for these donations, there are many ways to conceal the donation. What’s special about our story is that APIC, the company at hand here, gave in a disclosed way to a disclosed super PAC. But there are many ways they could have concealed this donation, and there are many methods that other foreign corporations could be giving and could have given in previous election cycles post-Citizens United and never been noticed. So, of course, they could have given to a 501(c)(4) or 501(c)(6) dark money group that does not have to disclose its donors. They could have set up an LLC in Delaware with, you know, some other name and channeled the money through there. We would have never figured it out. They could have used a number of shell companies or other dark money groups to conceal the donation and to obscure the ownership structure. Fortunately for us, they didn’t.

AMY GOODMAN: I want to read from your series. You write, “The story of APIC captures the bizarre reality of the U.S. political system: George H.W. Bush and George W. Bush between them appointed three of the five members of the Supreme Court’s Citizens United majority; this majority opened up a loophole allowing foreign money to flow into U.S. elections; and this loophole was used to grab foreign money in an attempt to make a third Bush president.” Lee Fang?

LEE FANG: That’s just kind of the amazing part of this. I mean, Citizens United was just such an incredible decision. It unraveled so many different campaign finance laws and previous rulings, opening the floodgates to this type of money, but potentially many other donations. I mean, there’s been over $600 million given through dark money groups in the last two elections. How much of that was foreign money? We might never know, because not only did Citizens United open the floodgates, it didn’t create a new structure for oversight, so we still have the old campaign finance oversight structure, the Federal Elections Commission, that is completely broken. The FEC has three Republican commissioners, three Democratic commissioners, and they have historically been complete—completely at logjams. So, whenever there’s an effort to investigate any violation of campaign finance law, really, but including potential foreign money, the three Democratic commissioners vote one way, the three Republican commissioners vote the other way, and there’s a complete deadlock. So, you know, there really haven’t been any major FEC investigations into this problem. And it’s come down to the media.

AMY GOODMAN: And because Citizens United is invoked so much and rarely explained, let’s go back to basics. Explain how Citizens United changed the political landscape and the electoral system in this country.

LEE FANG: Citizens United essentially argued that corporations have free speech rights. And exercising those free speech rights, they are able to spend money in the election. And technically speaking, the ruling allowed corporations and unions to make unlimited independent expenditures. Those are the campaign efforts that overtly try to elect a candidate. That means get-out-the-vote efforts, campaign ads that say vote for or against a certain candidate. Now, supposedly, in this ruling, they said that these have to be truly independent efforts; they can’t be coordinated with a campaign. But in practice, they have been. We have dozens of examples of super PACs coordinating—and super PACs are the entities that can solicit the unlimited corporate or union money or individual money—coordinating with candidates with a variety of tactics. And again, even when there are potential violations of that coordination law, we see the FEC deadlocked time and time again, and no enforcement.

AMY GOODMAN: And where did Hillary Clinton fit into Citizens United?

LEE FANG: Well, Hillary—there is kind of like a strange back story. Citizens United was a Republican group that wanted to air a movie about Hillary Clinton, thinking that she would be the Democratic nominee in 2008. And—

AMY GOODMAN: It was an attack film.

LEE FANG: An attack film, a kind of gotcha, dirt-digging film by a group of Republican operatives that produced it. But they wanted to air the movie right before the election in 2008. The FEC stopped it, saying that because the group that produced the movie, Citizens United, was a corporation, this was an illegal expenditure. In the course of oral arguments during the Supreme Court case, the case actually expanded to envelop, you know, a hundred years of campaign finance law, not just removing restrictions on a movie, but removing restrictions on all corporate expenditures.

AMY GOODMAN: I want to turn to where the two presidential candidates stand on campaign finance reform. During a Democratic presidential debate earlier this year, Clinton addressed the issue.

HILLARY CLINTON: You’ve heard a lot about Washington and about Wall Street. Now, Senator Sanders and I both want to get secret, unaccountable money out of politics. And let’s remember—let’s remember, Citizens United, one of the worst Supreme Court decisions in our country’s history, was actually a case about a right-wing attack on me and my campaign. A right-wing organization took aim at me and ended up damaging our entire democracy. So, yes, you’re not going to find anybody more committed to aggressive campaign finance reform than me.

AMY GOODMAN: In fact, Hillary Clinton says she’ll support a constitutional amendment to overturn Citizens United. Meanwhile, last fall, Donald Trump was asked whether campaign finance reform is needed. He was speaking to Bloomberg’s Stephanie Ruhle.

DONALD TRUMP: Absolutely. It is such a disaster out there. It’s a horror show going on with campaign finance.

STEPHANIE RUHLE: What’s it look like?

DONALD TRUMP: This whole thing with these PACs, these PACs are the biggest disgusting joke you’ve ever seen. And first of all, the PACs are all controlling the candidates. And when they say the candidate doesn’t speak to the PAC, and they’re not allowed to legally, I guarantee you, these candidates, I would say every single one of them is speaking to their PAC. And they’re not allowed to legally. Our campaign laws are a disaster. Our financing for campaigns are—now, mine is very simple: I pay my own money. OK? I pay my own money. But it’s a disgrace.

AMY GOODMAN: So there you have Donald Trump and Hillary Clinton. Lee Fang, what is Donald Trump calling for?

LEE FANG: Well, Donald Trump has criticized super PACs. He’s mocked the big billionaire donors in both parties. But he hasn’t called for any concrete steps to fix the problem. And just last month, after securing the Republican nomination by bashing super PACs, a number of Republican operatives have set up pro-Donald Trump super PACs, and, at least as far as I’ve seen, he’s dialed back his criticism of big money in politics.

AMY GOODMAN: So, you have these pieces, “A 'Desperate' Seller,” about the former Washington governor, Gary Locke, who was also Obama’s commerce secretary and U.S. ambassador to China, and the revelation of this financial transaction between Locke and a prominent citizen of the country where he was ambassador. You have “Cracks in the Dam: Three Paths Citizens United Created for Foreign Money to Pour into U.S. Elections.” What is the tradition in this country of dealing with foreign money in our elections?

LEE FANG: Well, look, we’ve got a long history of that. You can go back to the 1930s. Our very first lobbying law was enacted because of Nazi influence in the U.S. Nazi agents set up newspapers and created propaganda efforts to keep the U.S. out of World War II and to support isolationism, for obvious reasons. And because of exposés in Congress and in the media of what was going on, the Congress enacted the very first lobbying registration law, the Foreign Agents Registration Act, which is still one of the most detailed lobby registration act laws on the books. And that came from not domestic influence, but foreign influence. And we’ve seen multiple investigations from Congress over the years looking at other forms of foreign influence.

Now, when Obama talked about how Citizens United would open the floodgates for foreign influence in his State of the Union address in 2010, he was widely mocked by members of the media and by prominent members of the Republican Party. What’s interesting here is that we obtained this memo that shows that while prominent Republicans have kind of dismissed or mocked President Obama’s claim that Citizens United would open the floodgates for foreign money, privately, the top Republican campaign lawyer in the country has created a roadmap for this very issue, for foreign money to come into the election. So, it’s clearly an issue. And, you know, it’s something that some Republicans have acknowledged will be a problem. John McCain has talked about this in the past. But we haven’t seen any congressional investigations. And again, we haven’t seen the FEC really lift a finger.

AMY GOODMAN: And how much has Gordon Tang and his wife, Huaidan or Serena Chen, been investigated in this country? And where do they get their wealth from?

LEE FANG: Well, that’s a good question, in terms of the wealth. One of their fundraising vehicles is actually a publicly traded company in Singapore, so they’ve used that to raise funds for investment properties.

In terms of reporting on this couple, there’s a little bit of news in terms of them buying very prominent buildings in Portland and San Francisco. They own a number of hotels and condo buildings in San Francisco. But that’s mostly the kind of real estate trade press. Their political influence hasn’t received any coverage.

AMY GOODMAN: And though we talked about this in the first part of this interview, Gordon Tang’s company, APIC, American—

LEE FANG: Pacific International Capital.

AMY GOODMAN: —Pacific International Capital, it still exists today.

LEE FANG: Yes, yes.

AMY GOODMAN: And are they making more contributions?

LEE FANG: Well, in addition to the big super PAC donation, they actually have a pretty long history of traditional, legal individual contributions from their American employees. So their American employees have given to candidates running for office in Portland, all throughout Oregon, the mayor of San Francisco. They actually helped pay for two different junkets flying the mayor of San Francisco to China for real estate investing—

AMY GOODMAN: This is Mayor?

LEE FANG: Ed Lee, excuse me. And they’ve hired lobbyists in San Francisco to help work the system, as they’ve continued to grow their business portfolio. And according to Wilson Chen, the brother-in-law of Gordon Tang, they hope to continue doing so.

AMY GOODMAN: Well, I want to thank you very much for being with us, Lee Fang, investigative journalist at The Intercept covering the intersection of money and politics. We will link to your recent series that just came out, “Foreign Influence.” This is Democracy Now!,, The War and Peace Report_. To see Part 1money of our conversation, go to Thanks for joining us.

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First Evidence Surfaces of Foreign Money Pouring into U.S. Elections After Citizens United

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