Democrats target foreign-owned company money in U.S. elections
A new Raskin-Whitehouse bill would set ownership tests to block some U.S. companies with foreign ties from political spending.
By Theo Nakamura · Staff Writer
· 3 min read
Democratic lawmakers are trying to tighten campaign finance rules for companies with foreign ownership, a move that could affect how corporate money flows into U.S. elections. For investors, the proposal is a reminder that political spending rules can become a governance issue for public and private companies with global shareholders.
Rep. Jamie Raskin of Maryland and Sen. Sheldon Whitehouse of Rhode Island introduced the Get Foreign Money out of U.S. Elections Act on Wednesday. According to the lawmakers, the bill would use foreign ownership thresholds to decide when a business should be barred from donating to campaigns, ballot measures and referendums.
The proposal is aimed at what Democrats describe as gaps left after the Supreme Court’s 2010 Citizens United decision. That ruling allowed corporations and outside groups to spend unlimited amounts on U.S. elections, though foreign nationals are already barred from contributing directly.
Raskin said in a statement that the Citizens United ruling has allowed wealthy foreign interests to influence American elections and institutions. He said the bill would help ensure elections are decided by Americans rather than foreign oligarchs.
How the ownership test would work
The bill would extend current restrictions to certain entities incorporated or operating in the United States if they have enough foreign ownership or control.
One threshold would apply to businesses outside the U.S. If foreign nationals own 50% of voting shares, total equity or membership units, the entity would be prohibited from making political contributions.
A separate threshold would apply to businesses located inside the U.S. Under the proposal, a company could be barred from political contributions if a single foreign national outside the U.S. owns or controls 1% of voting shares, total equity or membership units, among other conditions described in the legislation.
Voting shares are stock that gives an owner a say in corporate decisions. Equity means ownership value in a business. Membership units are a similar ownership stake used by some limited liability companies.
The bill had more than 65 Democratic cosponsors in the House and 11 in the Senate when introduced, according to CNBC. Its odds appear limited in the current Congress because Republicans control both chambers.
Campaign finance fight expands
The measure arrives after decades of rising foreign equity ownership in U.S. companies, according to CNBC, and shortly after another Supreme Court ruling in June. In that decision, the court struck down limits on how much political parties can spend in coordination with candidates.
Raskin and Whitehouse backed a nearly identical version of the bill in the 118th Congress. That earlier measure did not receive a vote in either chamber.
Whitehouse said in a statement that Citizens United lets foreign actors use “dark money” channels tied to unlimited corporate spending. Dark money refers to political spending where the original source of funds is not fully disclosed to the public.
The new proposal also follows House passage earlier this month of a bipartisan bill from Rep. Brian Fitzpatrick, Republican of Pennsylvania, and Rep. Jared Golden, Democrat of Maine. That measure seeks to block foreign contributions from entering local ballot initiatives, referendums and recall elections. The Senate has not voted on it.
After the House passed that bill, Fitzpatrick said in a statement that no foreign government, foreign national or foreign interest should help decide the laws Americans live under.
This story draws on original reporting from CNBC.
