WASHINGTON -- In a first of its kind case, federal prosecutors say a Mexican businessman funneled more than $500,000 into U.S. political races through Super PACs and various shell companies. The alleged financial scheme is the first known instance of a foreign national exploiting the Supreme Court's Citizens United decision to influence U.S. elections. If proven, the campaign finance scandal could reshape the public debate over the high court's landmark decision.
Until now, allegations surrounding Jose Susumo Azano Matsura, the owner of multiple construction companies in Mexico, have not spread beyond local news outlets in San Diego, where he's accused of bankrolling a handful of southern California candidates. But the scandal is beginning to attract national interest as it ensnares a U.S. congressman, a Washington, D.C.-based campaign firm and the legacy of one of the most important Supreme Court decisions in a generation.
Under longstanding federal law, foreign nationals are prohibited from donating to political campaigns at the state, local and federal level. On Jan. 21, the U.S. Attorney's Office accused Ravneet Singh, proprietor of the Washington campaign firm ElectionMall, and Ernesto Encinas, a former San Diego police detective, of using Azano's money to support three Democratic politicians and the city's Republican district attorney. Azano wanted to turn the San Diego bayfront into a West Coast version of Miami's bustling waterfront, but lacked the political clout to do so, according to prosecutors. To buy support for the project, he's accused of doling out illegal contributions to politicians
What's unique about the allegations is that Azano's money was funneled through a "Super PAC," a political fundraising vehicle born out of the Supreme Court's Citizens United decision in 2010. The ruling paved the way for Super PACs to spend unlimited sums of money for candidates with only limited reporting requirements. Although Super PACs have been linked to other campaign finance abuses, a foreign national has never been accused of using one to hide his idenity. "We are not aware of another example of a similar case," Peter Carr, a public relations officer at the Justice Department, told FP. "Super PACs are a new vehicle for political spending."
For some critics of the Supreme Court's Citizens United decision, the San Diego case validates warnings about foreign contributions previously dismissed by supporters of the landmark court case.
The controversy dates back to 2010, when President Barack Obama used his State of the Union address to lament that Citizens United would "open the floodgates" for foreigners and special interest groups to "spend without limit in our elections."
