This article is a student op-ed piece from Professor Kim Wehle’s spring 2020 course “Advanced Constitutional Law: Democracy at Risk.” The Legislation and Policy Brief allowed the students to publish their writing on the blog if they wished. The blog pieces were edited by the Legislation and Policy Brief for grammatical and technical errors only, and they appear as they were written by the authors in April of 2020.
Student Author: Abigail Gampher
Two pillars of democratic integrity are the maintenance of the will of the people and the elimination of foreign corruption in the electoral process. At the crux of these two pillars rests the prevalence of foreign corporate involvement in United States elections because Citizens United v. FEC determined that corporations hold First Amendment free speech rights. But that case did not separately analyze the role and “rights” of foreign corporations to spend unlimited amounts of money on U.S. campaigns and elections. Consequently, the question remains whether states may limit corporate First Amendment rights of domestic subsidiaries of foreign corporations that fail to meet the foreign nationals prohibition.
Recently, the Seattle City Council addressed the deficiencies of Citizens United v. FEC by attempting to balance the First Amendment rights of corporations with the role of foreign powers in the United States’ electoral process.
It is important to note what legal gaps the new Seattle law attempts to fill.
Historically, individuals of foreign national status lacked the same First Amendment rights as citizens in the context of electoral involvement. In Bluman v. FEC, the Supreme Court held that Congress could limit the ability of individuals of foreign national status to express their First Amendment rights to contribute campaign funds as a mechanism for participating in the democratic structure because they are not considered part of the “political community.”
Congress also implemented the Federal Electoral Campaign Act (“FECA”), in which it mandated compliance with campaign finance regulations. These provisions included the foreign nationals prohibition to combat corruption within the electoral process from foreign incentives and foreign power. This prohibition implements criminal and/or civil sanctions against both recipients and donors who “knowingly and willingly” exchange campaign contributions if the donor is not a citizen of the United States. This prohibition applies to local, state, and federal elections.
In Citizens United v. FEC, the Supreme Court failed to anticipate the conflict between its later decision in Bluman v. FEC and the FECA’s prohibition on campaign contributions by foreign nationals when it maintained that corporations possess First Amendment rights representative of their employees and shareholders. And importantly, a domestic subsidiary of a foreign corporation does not become a foreign national so long as its principal place of business remains in the United States. Therefore, as a matter of First Amendment law, domestic subsidiaries of foreign corporations may still impact the American electoral process through campaign contributions—provided those funds are not directed or do not come from a foreign actor.
The Seattle City Council attempted to rectify the conflict between these two legal frameworks by banning electoral involvement for corporations exceeding a set threshold. First, the law banned campaign contributions from a corporation exceeding five percent foreign ownership by multiple entities. Second, the law banned campaign contributions from a corporation exceeding one percent foreign ownership by a single entity. Regardless of the corporate structure, the law requires each corporation to verify compliance with both Citizens United v. FEC and the foreign national prohibition.
Although the law would likely preclude Amazon’s involvement in local elections because Amazon exceeds nine percent foreign investment, the law also has important implications for criminal liability and corporate First Amendment rights because it applies to all entities and individuals, which will be discussed in turn.