AHF’s Complaint Over ‘No on Measure B’ Campaign Funds Is Tossed

Apr 27, 2015 3:47 PM PST

WASHINGTON — MindGeek and two company executives, including former managing director Fabian Thylmann, won’t be investigated for violating election campaign laws, according to the Federal Election Commission, which was deadlocked on whether to dismiss allegations that a foreign national corporation unlawfully contributed funds to oppose Measure B.

In the case before the FEC, the AIDS Healthcare Foundation filed a complaint with regulators charging that $327,000 in donations made by two MindGeek divisions violated the Federal Election Campaign Act, which prohibits foreign nationals from donating to U.S. campaigns. 

But prior to considering this matter, the FEC had never addressed whether the current statutory language banning contributions by foreign nationals applies to ballot initiatives.

MindGeek’s donations were part of nearly $700,000 in funds earmarked to fund the No on Government Waste, No on Measure B campaign to help topple the 2012 Los Angeles County ballot initiative over mandatory condoms on porn shoots.

MindGeek’s U.S. division, along with its Froytal Services Ltd., made donations of $252,000 and $75,000 respectively to help defeat Measure B.

Measure B was voted in to law, but the ordinance has yet to be enforced.

In the case, MindGeek argued that the Federal Election Campaign Act does not prohibit the foreign national donations at issue in this case because the money was directed at a ballot measure election, not a candidate election.

But the FEC noted in its deadlocked decision that the Supreme Court has long held that foreign nationals may be excluded from activities that are part of democratic self-government in the U.S.

"When Americans go to the polls to vote on Election Day (or mark our mail-in ballots), the choices we make- whether as to candidates or referenda- are part of the same expression of democratic self-governance,” FEC Commissioner Ellen Weintraub said in her statements of reason in the case. “Whether exercising our rights to self-government through representative democracy (choosing a candidate for office) or direct democracy (adopting a law via ballot measure), these are choices in which only Americans have a say.

“Imagine, for example, a foreign billionaire who was dissatisfied with U.S: immigration policy and decided to try to change it more to his own liking, one statewide ballot measure at a time,” she said in her statement. “The ballot measure is the mechanism designed to most directly express the will of the American people regarding the laws that govern us. I think most Americans would be disturbed by the notion that a wealthy foreigner could freely spend to rewrite our laws.”

But, in the end, the FEC voted into a 3-3 deadlock, with three Democrats voting for a probe of MindGeek and three Republicans voting against one.

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