Congress Urged to Curb Political Spending by Foreign-Owned Firms

Congress should impose curbs on political spending by companies that have substantial numbers of foreign stockholders or foreign nationals controlling corporate decision-making, Federal Election Commission member Ellen Weintraub told a House panel Thursday.

Congress has the “power to take strong action to keep America’s elections in the hands of Americans,” Weintraub told the Judiciary Constitution, Civil Rights and Civil Liberties Subcommittee. The Supreme Court “has affirmed that stringent restrictions on foreign national political spending survive strict scrutiny and are constitutional.”

(Photo by Paul Morigi/Getty Images for PEN America)

Ellen Weintraub

But Bradley Smith, a former Republican FEC commissioner warned the lawmakers that restrictions on political spending by “foreign-influenced” corporations could also restrict unions with international ties.

More than two dozen member unions of the AFL-CIO have “international” in their names, said Smith, a law professor at Capital University in Columbus, Ohio. These unions, as well as corporations with foreign stockholders that do business in the United States, have a First Amendment right to participate in the American political process, he said.

Unions spend millions of dollars in campaigns, almost exclusively to support Democrats, while corporations generally lend political support to Republicans.

Seattle Curbs

Republicans at the FEC last year blocked a proposed regulation by Weintraub to restrict election-related spending by companies with more than a minimal amount of foreign ownership or control. She said this was needed to enforce a longstanding ban on foreign campaign money in U.S. elections.

A similar proposal was included in an early version of a House-passed campaign finance bill (H.R. 1) but was dropped from the bill before it was approved on a party-line vote in March. Senate Majority Leader Mitch McConnell (R-Ky.) has vowed not to take up the bill in the Senate.

Similar measures have gained some traction in states and localities concerned about foreign influence in elections. Most recently, the Seattle city council adopted an ordinance banning spending to influence local elections by any company with a single foreign stockholder owning at least 1% of the company’s equity; multiple owners holding at least 5% of equity; or a foreign owner that directly participates in decisions regarding political activities in the United States. The measure was viewed as a reaction to attempts at political influence in city elections by Amazon.com Inc. and other locally based companies with foreign stockholders.

Seattle Bans ‘Foreign-Influenced’ Corporate Campaign Cash

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bgov.com

To contact the editors responsible for this story: Bennett Roth at broth@bgov.com; Kyle Trygstad at ktrygstad@bgov.com