In a first of its kind case, federal prosecutors say a Mexican businessman funnelled 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 in order 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.
The speech came just a week after the Supreme Court issued its Citizens United ruling, which dramatically shook up the campaign-finance landscape. In his address, Obama warned of "foreign entities" taking advantage of the open floodgates, trying to bankroll American elections.
Justice Samuel Alito very clearly mouthed the words "not true" after the president's comment -- and hasn't attended a State of the Union address since. PolitiFact took Alito's side at the time, calling Obama's concerns "mostly false."
Given this new report from John Hudson, it might be time for a second opinion (thanks to my colleague Tricia McKinney for the heads-up).
To be sure, direct contributions to U.S. candidates from foreign nationals have been illegal for many years, but in this case, Azano Matsura is accused of bypassing the law and funneling donations through a super PAC, made possible by the Supreme Court's 2010 ruling.
It is the first case of its kind.
Why would a Mexican businessman want to influence U.S. elections in the first place?
In this case, Azano Matsura was reportedly interested in a San Diego development deal, but felt he didn't have the political clout necessary to influence the discussion. So, according to prosecutors, he directed $500,000 through a U.S.-based shell company, into a PAC, and into the campaign coffers of three Democrats and one Republican from the area.
To date, there's nothing to suggest any of the politicians who received donations were aware of the scheme or did anything untoward. (One of them, however, was former San Diego Mayor Bob Filner, who had an entirely different kind of problem.)
That said, Hudson's Foreign Policy report said one of the beneficiaries was U.S. Rep. Juan Vargas (D-Calif.), who said he was "shocked" by the allegations and has offered to return any money from those involved in the scheme. The fact that a member of Congress was involved at all raises the national viability of the case.
And so long as Citizen United remains the law of the land, there's no reason to think we won't see similar controversies in the future.