The United States is worried about Chinese monetary donations to Australian politicians and candidates.
The outgoing US ambassador to Australia John Berry said America was surprised by the extent of involvement of the Chinese government in Australian politics.
"We can not conceive of a case where a foreign donation from any government, friend or foe would be considered legitimate in terms of that democracy," Mr Berry told The Australian newspaper.
His warning comes after Labor senator Sam Dastyari's resignation from the opposition frontbench following revelations he asked a Chinese businessman to pay a bill when he exceeded his parliamentary entitlement for travel.
It sparked accusations he'd been compromised, as reports emerged he had taken a pro-China stance on the South China Sea dispute, at odds with his party's position on the matter.
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Mr Berry pointed out that foreign donations were outlawed in the US.
