Swiss billionaire Hansjörg Wyss has a strong interest in American politics. He’s put $475 million earned from making medical devices into left-wing groups, with $72 million given in 2021 alone, according to a report by conservative watchdog Americans for Public Trust.
According to a biography by his sister, Wyss aims not to twist laws for his business, but to “[re]interpret the American Constitution in the light of progressive politics.”
Though foreigners can’t directly donate to politics, Wyss has given generously to progressive political groups. The New York Times reported in 2021 that these include the “Center for American Progress and Priorities USA,” plus groups that did voter registration, boosted Democratic turnout, ran biased news outlets, and aimed to block Trump’s actions. Since 2016, he’s given $245 million to Arabella Advisors, which controls a network of progressive nonprofits. Arabella raised $1.6 billion in 2021 and was called “The Massive Progressive Dark-Money Group You’ve Never Heard Of” by The Atlantic.
Critics say Wyss’ giving reveals a big gap in political finance. It lets wealthy foreigners essentially wash their donations, and it is used more by Democrats than Republicans. This could explain why House Republicans, on Aug. 14, launched an inquiry into whether tax-exempt groups follow rules against foreign funds influencing US elections. The House Ways and Means Committee wrote an open letter (read below) on this, focusing on one foreign donor, Hansjörg Wyss.
Marneé Banks, spokesperson for the key players in Wyss’ political donations, told RCI that “The Wyss Foundation and Berger Action Fund prohibit their grants from being used to support or oppose political candidates or parties or to fund get-out-the-vote or voter registration activities.” She said, “Both organizations comply with the rules and laws governing their activities, and they support increasing transparency in our campaign finance system.”
Nearly all experts agree that the House investigation will face difficulties. The unclear nature of 501(c)4 independent political spenders makes it hard to track which donations fund what.
“There’s no way for us right now to even check up on, let alone stop, wealthy foreign interests, say from China or Russia, from cutting a check to an American foundation that disappears into its coffers and winds up in the hands of a political nonprofit,” says Hayden Ludwig, Policy Research Director at the Restoration of America. “And if it’s 501I4 [the IRS tax designation for organizations that can engage in activity supporting political candidates and electoral issues], that money can absolutely be used for independent expenditures, running political ads, hammering Republicans, and electing Democrats.”
Accepting foreign funds became a major concern in 1996 when those linked to Chinese intelligence unlawfully channeled money to the Democratic National Committee. A central figure in the scandal, Chinese businessman Ng Lap Seng, told ABC News in 1997, “My philosophy is that I should not break the law, but I wouldn’t mind bending it.”
The political scene changed in 2010 with the Citizens United vs. FEC Supreme Court decision. By claiming campaign finance laws violated free speech, the court stopped the government from limiting independent political spending by corporations and associations.
While foreigners couldn’t directly fund campaigns, Citizens United let Wyss and foreign billionaires donate unlimited money to non-coordinated advocacy groups. In the thirteen years since the decision, numerous 501(c)4 independent spenders have emerged, with Arabella Advisors being the most successful.
Eric Kessler, a former Clinton White House appointee and member of the Clinton Global Initiative, founded Arabella. This initiative faced fundraising controversies. Under Kessler’s leadership, Arabella achieved significant success in attracting wealthy liberal donors, making numerous left-leaning organizations reliant on its support. In 2020, the Arabella network will spend $1.2 billion. “I am really struggling to think of any other group, especially recently, that could rival it,” noted Robert Maguire from Citizens for Responsibility and Ethics in Washington.
Arabella Advisors’ structure intentionally appears complex and unclear. It’s composed of a few sizable and influential funds: the New Venture Fund, Sixteen Thirty Fund, North Fund, Hopewell Fund, and Windward Fund. These groups then establish various “pop-up” organizations with generic names like “Floridians for a Fair Shake” and “Arizonans For Responsible Government.” These aim to promote specific causes and candidates.
“They’re little more than websites designed to look like fully independent, grassroots advocacy groups; yet they can be unplugged the minute a campaign wraps up,” said Ludwig in a recent report on Arabella’s operations. “These pop-up groups don’t file IRS disclosures, nor do they reveal their staff, boards, or budget. They often solicit donations from unsuspecting liberals, some of whom might be bothered to realize they’re in fact supporting the biggest ‘dark money’ monster in politics and not a grassroots group.”
Since 2006, Arabella has formed about 500 of these groups. Even political reporters sometimes mistake them for grassroots entities, not realizing they’re controlled by well-funded D.C. activists. Some of these pop-ups even aired political ads that cleverly resembled local news content. Many of these groups also claim to be nonpartisan 501(c)(3) organizations, eligible for tax deductions.
However, many “nonpartisan” Arabella-funded groups bend the rules to pursue specific partisan objectives. For example, the Arabella network granted $25 million to the Center for Tech and Civic Life (CTCL), which was criticized for its role in the 2020 election. While CTCL aimed to enhance election infrastructure by collaborating with local government election offices, it was directed by experts with ties to Democrats and progressive causes. The grants CTCL distributed during the 2020 election were directed through coordination with Democratic politicians and heavily favored boosting turnout in Democratic areas in swing states.
Arabella operates in a way that makes donor funds highly flexible. Since they pass through two or three entities before being used, it’s challenging to trace the allocation of foreign donations, like those from Wyss.
Considering Arabella’s significant political spending, there’s no doubt it wields political sway and maintains close ties to the Biden administration. This year, it came out that Eric Kessler from Arabella was the sole non-government participant in an email exchange discussing U.S. food system changes and the meat industry’s pricing issues with Secretary of Agriculture Tom Vilsack and USDA employees. This raised concerns about the group’s direct influence on the Biden administration’s agenda.
Given Arabella’s connection to foreign megadonors and its alignment with the White House, Ludwig notes that Democrats don’t seem worried about foreign money’s impact, despite previously criticizing Trump’s alleged Russian ties.
This contrasts starkly with how similar right-leaning organizations operate. While monitoring the money’s flow is complex, comparable conservative nonprofits like One Nation and the American Action Network explicitly reject foreign donations.
American Action Network Communications Director Courtney Parella emphasizes this point, stating, “Unlike the left, which relies on massive foreign gifts to bankroll their toxic agenda that’s costing American families more daily, we do not accept foreign contributions.” Caitlin Sutherland, Executive Director of Americans for Public Trust, adds that the issue mostly concerns the left due to their contradictions in opposing dark money while still accepting foreign funding.
Despite the wide latitude granted by Citizens United for political spending, the legality of these setups remains dubious. A couple of years ago, Americans for Public Trust submitted a complaint to the FEC about Wyss and Arabella. Sutherland explains, “Foreign nationals can’t give to Super PACs, but we’ve noticed a pattern where they donate to a nonprofit, and then that nonprofit channels the money to a Super PAC. We’ve termed this the foreign influence loophole.” Their FEC complaint argued that this money flow should be investigated.
The FEC board, by law, can’t have more than three members from the same party. Eventually, Americans for Public Trust’s FEC complaint was dismissed last year in a 3-3 tie among commissioners. Marc Elias, the Democratic Party’s skilled lawyer in election challenges, represented Wyss in the FEC case. Elias also managed the DNC’s involvement in funding the debunked Steele Dossier, which alleged that former President Trump and his aides were compromised by Russian interests.
The FEC’s report by its general counsel found insufficient evidence in the record to confirm Wyss’ indirect political contributions for electoral purposes. However, the report did acknowledge several worries raised by Americans for Public Trust. Specifically, it verified that the Sixteen Thirty Fund, a vital component of Arabella Advisors network and channel for Wyss’ funds, spent most of its budget on electoral politics. In 2020, it spent $400 million, including a staggering $128 million for America Votes, a progressive group focused on winning elections in crucial states.
“As per this record, considering STF’s [Sixteen Thirty Fund’s] admitted spending, grants to politically active recipients, and payments, it seems likely that by 2020, STF aimed at influencing a federal election,” states the report. The report goes further to suggest that both Sixteen Thirty and its subsidiary, The Hub Project, likely violated the law by not registering as political committees.
If they had registered as Super PACs, they would have faced more transparency requirements. This registration would also have highlighted the ban on foreign donations, an issue previously addressed by the FEC. The FEC previously fined a Jeb Bush Super PAC $940,000 for accepting contributions from a Chinese corporation in 2019. Yet, since no enforcement action was taken by the FEC, the general counsel’s findings weren’t binding. The Sixteen Thirty Fund remains unregistered as a political committee.
Sixteen Thirty Fund didn’t respond to comment requests. It seems both Sixteen Thirty and Arabella might not be done dealing with the FEC. On August 15, Americans for Public Trust lodged a new complaint with the Internal Revenue Service, alleging that Arabella’s connection with Sixteen Thirty and its subsidiaries breaches the law. To secure nonprofit status, Sixteen Thirty and the four other Arabella funds initially claimed Arabella would offer temporary administrative aid to these groups. Seventeen years later, these groups have paid Arabella millions in management fees and remain under its control.
Ultimately, Congress might hold the key to addressing foreign funds in elections. The FEC’s role lies in interpreting existing laws on dark money, which are unclear. Recently, House Republicans introduced the “American Confidence in Elections (ACE) Act,” seeking to prohibit foreigners from channeling nonprofit funds to Super PACs and other electoral spending avenues.
Previously, Democrats emphasized concerns about foreign election interference and dark money, but Republicans are shifting the focus with the ACE Act, highlighting foreign donations to Democrat-aligned and progressive nonprofits, according to Axios. Furthermore, Senator Marco Rubio reintroduced the Protecting Ballot Measures from Foreign Influence Act, making it illegal for foreign nationals to contribute, either directly or indirectly, to state or local initiatives and referendums.
During a speech to Oakland County Republicans in Michigan, Trump claimed that the US does not have ‘real elections’ and called for the use of paper ballots.
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