John Brautigam

Ron Fein

The Maine Legislature is considering a bill to ban political spending by corporations that are partly owned by foreign entities. Here’s why they should do that — and why the arguments raised by the bill’s corporate opponents don’t hold water.

Most people agree that foreign entities shouldn’t be able to influence our elections. It doesn’t matter whether it’s Russian military intelligence, a Canadian energy conglomerate, or a collection of European financiers. In fact, the leading court decision, written by then-Judge (now Justice) Brett Kavanaugh and later upheld by the Supreme Court, involved a Canadian who wanted to print some election flyers and pass them around New York’s Central Park. But, as Kavanaugh explained, foreign entities “do not have a constitutional right to participate in, and thus may be excluded from, activities of democratic self-government,” including “the campaign process that seeks to influence how voters will cast their ballots in the elections.”

Federal law addresses part of this issue, but leaves enormous gaps that have started to become exposed in Maine. For example, suppose a major Canadian company owns a subsidiary with a small office in Connecticut. Even if all the subsidiary’s principal officers are Canadian, it may be able to claim that its political spending decisions were actually made by some little-known American employee.

As explained by Federal Election Commissioner Ellen Weintraub, the Supreme Court’s Citizens United decision has made the problem much worse. Citizens United, which held that corporations have a constitutional right to spend money in elections, described corporations as “associations of citizens.” But it unleashed millions of dollars of political spending by multinational corporations that are substantially owned by foreign investors — and they’re not “associations of citizens.”

For example, suppose a Fortune 500 company keeps its headquarters in Texas or Florida, but one of its largest investors is a Canadian private equity firm that owns 4% of its shares. Or suppose a company doesn’t have any single big-ticket foreign holder, but one in eight shares are owned by investors abroad. That means, in some sense — a simplification, to be sure — that one-eighth of its assets ultimately “belong to” those foreign investors. They can propose shareholder resolutions, or pressure the board of directors if they feel their interests aren’t being served. And corporate executives, who have a fiduciary duty to look after investors’ interests, know this. In the words of a former ExxonMobil CEO, “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.”

The proposed Maine legislation will fill some of these gaps left by federal law. (The bill isn’t perfect, and we’ve recommended improvements that should be adopted before final passage.) The issue is larger and longer-term than the referenda regarding the proposed “New England Clean Energy Connect” transmission line. Whatever your views on that project, the people of Maine — not foreign investors, and not the corporations in which they invest — should be the ones participating in Maine’s democratic self-government.

That’s why Maine should pass legislation to ban political spending by corporations under partial foreign ownership. (The city of Seattle, Washington, enacted such legislation last year.)

Unsurprisingly, the legislation’s corporate opponents are trying to sow doubt. They claim that the bills would “silence” Americans who own stock in companies alongside foreign investors. But most Mainers understand the difference between “my money” and “the company’s money,” and the law only applies to the latter.

Furthermore, just like today, foreign business investors could continue to write op-eds in Maine newspapers, explain their companies’ positions in interviews with television, print, and digital media, and even testify before the state Legislature. (At a committee hearing on this very bill, Mme. Sophie Brochu, the president of a major Canadian corporation, testified from Montreal by Zoom.)

Opponents also claim that the legislation would sweep too broadly. A good case can be made that it doesn’t sweep broadly enough. Polling shows that 73% of Americans — including majorities of both Democrats and Republicans — support limiting political spending by companies with any foreign ownership. We recommend that any legislation approved cover companies where foreign investors own enough stock to be in a position of influence.

The final objection is that the law unconstitutionally restricts the speech of these corporations. It’s true that, in Citizens United, the Supreme Court said that corporations can spend money on elections. But just two years later, the same Court affirmed Justice Kavanaugh’s decision prohibiting one lonely Canadian from spending a few bucks at Kinko’s to copy some election flyers. So it strains logic to suggest that millions of dollars in political spending by well-heeled global corporations must get a free pass.

As the first state to pass ranked-choice voting and public funding of elections, Maine has led the nation before in the fight for democratic self-government. It’s time for Maine to lead again.

John Brautigam of Falmouth is legal counsel at Maine Citizens for Elections. Ron Fein of Newton, Massachusetts, is legal director at Free Speech For People.

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