Former FEC Chairman: ‘Citizens United’ Could Open Door for Foreign Corporations

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Friday, January 22, 2010 at 4:56 pm

UPDATE: Bradley Smith posted a comprehensive explanation of his views here, and criticized this post for not making it clear “that contributions by foreign corporations are already prohibited by other sections of the law.” Indeed, Smith made that point to me, and I should have made it more clear.

The relevant section of Smith’s own post:

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.

Here’s my original post:

Mike Lillis speculated earlier on whether the far-reaching implications of Citizens United v. the Federal Election Commission could open the door for foreign companies to intervene in American elections. Former FEC Chairman Bradley Smith tells me that, indeed, the decision seems to let foreign corporations spend whatever they like, as long as they find a loophole that protect them from the ban on election spending by foreign citizens.

“To the extent that there may be some foreign corporations that don’t fall under the category of foreign nationals, that might be something Congress can deal with,” said Smith. “I think the court would probably uphold the constitutionality of that. I can’t say for certain that they would.”

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Comments

13 Comments

Swami_Binkinanda
Comment posted January 22, 2010 @ 7:07 pm

Hugo Chavez thanks you!


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Trackback posted January 22, 2010 @ 9:08 pm

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This post was mentioned on Twitter by TWI_news: Former FEC Chairman: ‘Citizens United’ Could Open Door for Foreign Corporations http://bit.ly/6szFXO...


The Death of an American Democracy « Yet Another Stupid Blog
Pingback posted January 22, 2010 @ 10:16 pm

[...] as well as foreign companies who have subsidiaries or even warehouses within the United States will have the ability to spend billions of dollars buying ads during campaigns, influencing the [...]


Tab Dump: Corporate Personhood Edition « of Heart and Mind
Pingback posted January 23, 2010 @ 3:49 pm

[...] decision can open the door for foreign corporate involvement in US Politics. Think: Manchurian [...]


Pug
Comment posted January 24, 2010 @ 8:34 am

Toyota may be a foreign corporation based in Tokyo, but Toyota USA is a good old American corportation. As such, they should enjoy all the free speech rights of an “indiviual”.

The same would be true for Shell, based in London and The Hague, and most especially for Citgo, based in Caracas, Venezuela. Hugo's corporation.

There are also dozens of American corporations that are subsidiaries of Chinese companies, Saudi companies and others.


Has the Court Freed Foreign Corporations to Participate in U.S. Elections? - Brad_Smith’s blog - RedState
Pingback posted January 24, 2010 @ 5:08 pm

[...] is the unlikely, worst case scenario I was referring to in this little piece, which I found very disappointing for the author’s failure to catch my major point, that [...]


Brad Smith
Comment posted January 24, 2010 @ 5:25 pm

I apparently failed to get my main point through in this interview, which is that Citizens United does *not* open the gates for foreign corporations to spend freely in U.S. elections. Please see here http://www.campaignfreedom.org/blog/detail/debu… before quoting this .

Bradley Smith


Brad Smith
Comment posted January 24, 2010 @ 10:25 pm

I apparently failed to get my main point through in this interview, which is that Citizens United does *not* open the gates for foreign corporations to spend freely in U.S. elections. Please see here http://www.campaignfreedom.org/blog/detail/debu… before quoting this .

Bradley Smith


Fixing campaign finance rules after Citizens United v. FEC « stone soup
Pingback posted January 25, 2010 @ 2:22 am

[...] Americans controlling American elections, not foreigners that might have ulterior motives. But now it’s feared that the decision could create a loophole, allowing foreign nationals to influence U.S. elections [...]


The Death of an American Democracy » The Edge of Shadow
Pingback posted June 26, 2010 @ 6:48 pm

[...] as well as foreign companies who have subsidiaries or even warehouses within the United States will have the ability to spend billions of dollars buying ads during campaigns, influencing the [...]


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Comment posted September 29, 2010 @ 2:34 pm

There are also dozens of American corporations that are subsidiaries of Chinese companies, Saudi companies and others.


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Comment posted December 13, 2010 @ 4:44 am

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Richard Dreyfuss
Comment posted March 27, 2011 @ 1:55 am

Does the difference in technology have any bearing on access to advertising, and can the channels of communication be allowed to profit from money to pay for TV ads? Newspapers are privately owned, networks are licensed. Can politics be profitable for a television network like automobiles or perfume, and does not that blur the licensee’s obligation to report the news as news and not as product?
If news can be profitable, then can television networks or channels sell traffic congestion news for a extra surcharge and make profit from it?


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