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