Wait… Can Foreign Companies Now Spend On US Political Elections?


Newsweek asks this very question:

…Does the high court want this decision to apply to foreign corporations as well as domestic ones, he ponders? The truth is, the court didn’t make a decision one way or the other.

Foley best explains the potential issues by talking about the electronic, video, and communication giant, Sony. The corporation is headquartered in Japan, but a large number of its shareholders reside in the United States. In fact, people can even buy and trade Sony’s stock on the New York Stock Exchange. The issue is whether this corporation, with strong ties to a foreign country and the United States, should be permitted to independently contribute money to presidential and congressional campaigns.

The court sought to expand First Amendment protection for corporations, but did it really mean to promote the free flow of ideas from Russian or Chinese corporations, Foley asks? Justice John Paul Stevens focused on the same concerns in his dissenting opinion. The majority’s position “would appear to afford the same protection to multinational corporations controlled by foreigners as to individual Americans,” he writes.

In the summary of the majority opinion, I noted this passage:

…it would be overbroad even if the Court were to recognize a compelling governmental interest in limiting foreign influence over the Nation’s political process.

That sounds like the Court has left this open to a challenge and looks like they might support allowing foreign companies to spend freely in elections in the United States. I guess this would be the corporate globalization of the U.S. electoral system. The Center for Public Integrity looks at this closer and shows what kind of foreign influence we are looking at:

One prominent examples is CITGO Petroleum Company — once the American-born Cities Services Company, but purchased in 1990 by the Venezuelan government-owned Petróleos de Venezuela S.A. The Citizens United ruling could conceivably allow Venezuelan President Hugo Chavez, who has sharply criticized both of the past two U.S. presidents, to spend government funds to defeat an American political candidate, just by having CITGO buy TV ads bashing his target.

And it’s not just Chavez. The Saudi government owns Houston’s Saudi Refining Company and half of Motiva Enterprises. Lenovo, which bought IBM’s PC assets in 2004, is partially owned by the Chinese government’s Chinese Academy of Sciences. And Singapore’s APL Limited operates several U.S. port operations. A weakening of the limit on corporate giving could mean China, Saudi Arabia, Singapore, and any other country that owns companies that operate in the U.S. could also have significant sway in American electioneering.

I really can’t see Americans being too happy about this.

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  • naksuthin

    So if China wanted to opposed the election of US politician, Senator Jones, who proposes taxing companies who ship US factories to China…
    Could China
    1. Start a new corporation here in the US…
    2. Hire US citizens to head up the corporation
    3. Then Funnel hundreds of millions of dollars of money through this American run corporation to defeat Senator Jones??

    Seems to me you have an ironclad rule that says NO foreign government may contribute directly or INDIRECTLY to US political campaigns.

    That was the old rule.

    The new rule has too many weak links.
    I’m certain that countries like Israel will find a legal way to funneling millions of dollars to a pro Israel US candidates if given the chance.

    Without a prohibition on ALL FOREIGN contributions DIRECTLY OR INDIRECTLY…the door is open to some creative lawyer to find a loophole in the new rule.

  • djkelly

    As long as we have strong disclosure requirements I’m not too worried about corporations abusing campaign finance.

    Afterall, their customers are most likely going to come from across the spectrum of political ideals. Openly endorsing one candidate over another risks alienating a large chunk of their customer base.

    The example of Hugo Chavez dumping a lot of money into our elections via Citgo is extremely unlikely considering there are already anti-Citgo campaigns. The company has spent quite a bit on advertising to promote their local owners and operators to counteract that so I can’t see them taking a stand that will alienate even more of it’s customer base.

    Corporations are trying to make money. Political campaigning would be extremely risky advertising which is why these ads were rare before they were banned.

    • ConservativeForHillary

      We dont …

  • Harry Kneese

    I note Mr. Blumenthal uses “spin” words like “bashes” ignoring the possibility that a corp. might “promote” a cause. He also
    uses “funds to defeat”…why not “funds to support”? Democrats are usually negative and promote “fear tactics”

    And I really don’t see how any US law could prevent anybody in any foreign country running an ad in THEIR country saying “Go Glen Beck” and then mailing it to USA addresses.

    I easily come down on ‘FREEDOM OF SPEECH’….period.

  • Obama distorted and misrepresented what happened. Likewise this article fails to cover the pertinent facts:

    What the Supreme Court said is that you cannot prevent a corporation from speaking simply because it is a corporation. Therefore, they struck down part of 2 United States Code Section 441b. But a separate section of the law, 2 USC 441e, prohibits “foreign nationals” from contributing. This section of the law wasn’t even at issue, let alone overruled. Foreign nationals are prohibited from contributing because they are foreign nationals, not because they are corporations. “A foreign national” is defined to include any “partnership, association, corporation, organization, or other combination of persons organized under the laws of, or having its principal place of business in, a foreign country.”

    Now, this does leave open the possibility of a foreign owned company incorporating and locating in the United States, and then spending money here on politics. But the definition of foreign national also includes non-resident aliens. And the FEC’s regulations [11 CFR 110.20(i)] provide that:

    A foreign national shall not direct, dictate, control, or directly or indirectly participate in the decision making process of any person, such as a corporation, labor organization, political committee, or poltiical organization with regard to such person’s Federal or non-Federal election-related activities, such as decisions concerning the making of contributions, donations, expenditures, or disbursements in connection with elections for any Federal, State, or local office or decisions concerning the administration of a political committee.

    That is an extremely broad prohibition on any involvement in decisions on political activity

  • Do any other countries allow foreign based companies to contribute to their elections?

    This will make the Foreign lobbying database very important.