Debunking the Citizens United Horror Stories: Episode 1: Foreign Corporations

Critics of the Jan. 21 U.S. Supreme Court decision in Citizens United v. FEC are trotting out their horror stories with increasing shrillness. In the next few days, we will be making a series of posts with the straight dope.

Today’s episode one discusses the biggest horror story of them all: Citizens United will allow foreign corporations — from China! From North Korea! to pour millions into our elections. Democratic Senatorial Campaign Committee Chairman Bob Menendez said so this morning on ABC, and the President himself has made the claim, “even foreign corporations may now get into the act.” 

Really? No, not really. 

Sen. Menedez said that Citizens United allows foreign corporations to spend in American elections because “a corporation is a corporation is a corporation.” Nonsense. 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. 

So what is left? Well, conceivably a group of foreigners could form a U.S. corporation, then hire some permanent legal resident aliens (“green card” holders) to make decisions about spending its money. That doesn’t seem to likely to be a successful strategy (and remember, wealthy aliens who live in the U.S. as lawful permanent residents are already able to make personal expenditures, and even direct contributions to candidates), but suppose it is — suppose a few corporations slip through the cracks?

If this were really a worry, it could be addressed legislatively simply by broadening the definition of foreign national to include corporations with majority foreign ownership. Such a law might also be challenged on Equal Protection or Due Process grounds (aliens located in the United States do have certain rights) but if such a challenge were successful, it would be that case, not Citizens United, that opens the door to foreign money, and that case has yet to be filed, let alone decided.*

So, does Citizens United open the door to foreign contributions? No, not really.

*This is the unlikely, worst case scenario I was referring to in this article, which I found very disappointing for the author’s decision to ignore my major point, that contributions by foreign corporations are already prohibited by other sections of the law.

Comments

  1. I cannot find words despicable enough in all of English language to describe what you are doing. You are selling this country out! Nothing prevents, under this law, a company incoroporated in California but owned by a Chinese government company, to influence our elections. The Chinese guys sitting in Beijing will not ‘actively participate’ in the influence. They can easily do wink wink nod nod to their lackey in California. And they will find enough lackeys. Just like you seem to be lackeys for some big corporations. You say it is farfetched? Do you know how much money & brainpower these foreign governments are spending to undermine us? Do you know of the cyber war? Do you know about the PR war? It is SO sad to see that our greatest enemies are some of our own citizens. As I said, despicalbe doesnt even begin to describe what you’re doing. We mortals may be helpless – but you will face your judgement at the perly gates.
    We the people shed sweat & blood to get 1 vote for 1 person. You are undoing 2 centuries of progress.