States are passing a flurry of anti-China bills that critics warn could chill free speech, create an administrative albatross for ordinary citizens, and invite politically motivated civil penalties. Though framed as efforts to curb Chinese influence, civil liberties advocates contend that the bills bear the hallmarks of modern-day McCarthyism — propelled by newly created dark-money organizations.

“There’s often a fair debate to be had over China’s influence,” said James Czerniawski, head of emerging technology policy at Consumer Choice Center. “But my bigger concern is that states are greenlighting a second Red Scare.”

Nebraska, Louisiana, Arkansas, and Texas have now passed sweeping state-level foreign influence registries. Nebraska’s bill, called the Foreign Adversary and Terrorist Agent Registration Act, creates a state registry for agents working on behalf of entities in “adversary” countries, a list which includes China, Cuba, Iran, North Korea, Russia, and Venezuela.

A pair of nonprofits with opaque funding streams, State Shield and State Armor, are helping fuel the legislative frenzy. Both of the dark-money organizations are newly arrived players, founded in 2024 and 2023 respectively.

The two organizations have been showing up to statehouses across the country testifying in favor of state-level foreign agent registries that go far beyond the Foreign Agents Registration Act, or FARA.

The new law in Nebraska contains none of the exemptions seen in FARA, the federal law that regulates influence peddling, known for famously uneven enforcement.

Instead, the state-level legislation has expansive requirements. Businesses, universities, and humanitarian organizations must register as foreign agents if they conduct “activities that involve advocacy on behalf of a foreign principal,” meaning an organization or company that is at least 20 percent owned by a foreign entity.

“A Nebraska university that set up a public talk at the ‘request’ of a Cuban dissident could seemingly have to register,” said Nick Robinson, a senior legal adviser at the International Center for Non-for-Profit Law. “So could a Nebraskan farmer who was just selling their crop to a company with 25 percent Chinese ownership as the Nebraska law covers purely economic transactions.”

Many employees of large household companies would be required to register under the rule. U.S.-based workers of firms owned or partially owned by Chinese companies — for instance, Smithfield, General Electric, Epic Games, Motorola, Lenovo, and Waldorf Astoria — will likely have to register.

Facing a $50,000 penalty and, for noncitizens, deportation, the law could have a chilling effect for citizens across states that have passed such laws.

Democratic Nebraska state Sen. John Cavanaugh posed the question bluntly during a floor debate on the bill: “What’s the appropriate amount of intrusion into our citizens’ privacy to crack down on China?”

Dark Money

Just who is funding State Shield and State Armor, both based in Austin, Texas, is unknown.

Michael Lucci, the founder........

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