WASHINGTON — A Canadian steel industry billionaire illegally helped steer $1.75 million in donations to a pro-Trump super PAC and has agreed to pay one of the largest fines ever levied by the Federal Election Commission to settle the case, the commission said on Friday.

The $975,000 fine will be paid by entities controlled by Barry Zekelman, a steel industry executive from Ontario who had lobbied the Trump administration to use its power to tighten import restrictions on Mr. Zekelman’s competitors from around the world.

The action came as the election commission continues a multiyear crackdown on foreign influence in American politics.

Mr. Zekelman’s donations in 2018 to the America First Action super PAC helped him secure an invitation to a private dinner with President Donald J. Trump at the Trump International Hotel in Washington, where Mr. Zekelman personally pushed Mr. Trump about the steel tariffs and other matters.

The $1.75 million in donations came from a Pennsylvania-based subsidiary of Mr. Zekelman’s company named Wheatland Tube.

But The New York Times first reported in 2019 that Mr. Zekelman played a role in directing one of his executives who is a U.S. citizen to send in the contributions — some of the largest made by any donor to the super PAC — even though federal law prohibits foreigners from participating in decision making related to campaign donations, as well as from directly writing campaign checks.

The $975,000 fine is the third largest in the history of the Federal Election Commission, and the largest ever imposed in a case associated with an illegal foreign contribution.

“It is a strong message to anybody out there who is confused about this,” said Ellen L. Weintraub, a member of the commission, which voted to confirm the settlement. “You cannot have foreign nationals involved in any way in political contributions in this country.”

Mr. Zekelman, in a settlement deal that his lawyer signed in late March but that was finalized on Friday, also agreed to ask America First Action, which helped support Mr. Trump’s 2020 election efforts, to return the donated money, or to redirect it to the U.S. Treasury.

“Here you have a foreign business executive trying to buy influence through spending on American elections,” said Adav Noti, a vice president at the Campaign Legal Center, which filed the F.E.C. complaint in 2019, based on the article in The Times. “That has been a concern for American democracy for as long as our country has existed. It is a nightmare scenario for America elections.”

Thomas Spulak, the lawyer for Mr. Zekelman who signed the settlement, declined to comment. A spokeswoman for America First Action did not respond to a request for comment.

Mr. Zekelman, in sworn testimony to the Federal Election Commission, acknowledged that he “discussed Wheatland Tube’s potential contributions to American First” with one of his executives.

But he also claimed that he did not know that federal campaign finance rules prohibited him from participating in the discussions. The company also asserted that the donations were funded by Wheatland Tube’s corporate accounts, not Mr. Zekelman directly, although he and his family financially control the company.

As a result, the settlement agreement says that the commission “did not find that the violation was knowing or willful.” But the agency still said it had assembled sufficient evidence to conclude that Mr. Zekelman and his company had violated federal law.

“The key issue is not whether a U.S. citizen or national had final decision-making authority,” the settlement agreement said, “but whether any foreign national directed, dictated, controlled, or directly or indirectly participated in a decision-making process in connection with election-related spending.”

Mr. Zekelman ended up at the Trump hotel in Washington with Mr. Trump after the initial $1 million in donations were made by Wheatland Tube.

Mr. Zekelman used the small gathering, in a private room at the hotel, to press Mr. Trump for more than six minutes to use his executive power to curb imports of foreign steel to the United States from Asia, a move that would help his sales. He also asked Mr. Trump, pressing him for another three minutes during the dinner, to re-evaluate highway safety rules that he said were making it hard for truckers in the United States to move his steel tubes.

The exchange became public because other guests at the dinner included Lev Parnas and Igor Fruman, who later worked with the president’s personal lawyer Rudolph W. Giuliani, and who released a recording of the dinner during Mr. Trump’s first impeachment deliberations in 2020.

“Say someone is half an hour from home on their long-haul truck — they literally have to pull over on the side of the road and stop,” Mr. Zekelman said at the 2018 dinner, according to the recording. “They can’t go home.”

Mr. Parnas and Mr. Fruman were ultimately charged in a separate election fraud scheme. The $325,000 they donated to America First Action has already been transferred by the super PAC to the Treasury.

The Federal Election Commission in 2016 voted unanimously “to prioritize cases involving allegations of foreign influence,” and it followed up in a report to Congress in 2018. The issue had become one of increasing concern after unlimited donations were allowed via super PACs, and corporate contributions became legal, making it easier for foreigners to circumvent rules and make major donations.

The commission in 2019 imposed $940,000 in fines associated with donations to a super PAC supporting Jeb Bush’s 2016 presidential campaign after concluding that $1.3 million in contributions in 2015 made in the name of a California company, American Pacific International Capital, actually was provided in part from two Chinese citizens.

Ms. Weintraub said she would be disappointed if America First Action returns the donations to Mr. Zekelman’s company, as opposed to transferring them to the Treasury, as he will get more back than he will have paid as a fine. This provision in the settlement was negotiated by agency staff and lawyers for Mr. Zekelman, she said, adding that she raised objections to it.

“He gets the high-level access, he gets to lobby for policies he wants,” she said. “And then at the end of day he may get the money refunded.”

[Read More…]