Citizens United: Does it apply to foreign corporations?

A friend of mine brought up an interesting point in an interesting way.   Basically, he inquired as to whether Citizens United will permit foreign corporations to spend their money to run political commercials, and then admitted he felt ill at the thought.  I agree.

Luckily, and somewhat hopefully, I believe the answer is as follows:

First, there is currently federal law that was untouched by the Citizens United decision that is very broad and specifically covers this issue.  Section 441e(a) of title 2 of the United States Code states that: “It shall be unlawful for . . . a foreign national, directly or indirectly, to make — (A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election; (B) a contribution or donation to a committee of a political party; or (C) an expenditure, independent expenditure, or disbursement for an electioneering communication [the political ads at issue in the Citizen United case].”  2 U.S.C. § 441(e) (emphasis added).  Further, this section defines “foreign national” as, among other things, “a foreign principal . . . , except that the term ‘foreign national’ shall not include any individual who is a citizen of the United States.”   2 U.S.C. § 441(e).  After flipping to title 22, we learn that “foreign principal” includes foreign individuals, governments, foreign political parties, and partnerships, associations, corporations, organizations, or other combination of persons organized under the laws of or having its principal place of business in a foreign country.  22 U.S.C. § 661.

Thus, these laws state that a corporations that are not organized in, and with a principal place of business in, the United States cannot, directly or indirectly, run ads for or against a politician.  Then, why did Obama mention this issue during his State of the Union?  Maybe it was his fear that foreign corporations would use their subsidiaries in the United States to run such ads.  Tenuous at best.

Further, the Supreme Court in Citizens United addressed this issue.  In writing for the majority, Justice Kennedy stated that:  “[w]e need not reach the question whether the Government has a compelling interest in preventing foreign individuals or associations from influencing our Nation’s political process.”  Based on the tenor of this opinion, it appears that the Supreme Court would not have any issue with finding that the Government has a compelling interest in limiting foreign influence over our political process.  That is the standard necessary for the government to circumvent free speech.

Fear not from foreign corporations, our government has it covered.

Add Comment February 2nd, 2010 at 10:37am Brian

Is Citizens United v. FCC really that bad?

In another political decision, Citizens United vs. Federal Communications Commission, the Supreme Court made some sense of certain portion of McCain-Feingold — by striking down certain portions of it.
Please do not be confused by this ruling — especially if you listen to the left.  It is not a a “major victory” for Big Oil, Wall Street banks and health insurance companies as President Obama may lead you to believe.
This Supreme Court decision is the last word on an action Citizens United, a conservative non-profit company, which tried to run a film critical of then-primary-candidate Hillary Clinton.  Basically, the Supreme Court struck down the law prohibiting corporations and labor unions from funding certain kind of political communication, thus, corporations and unions can now directly run political advertisements out of their general treasuries.
Justice Anthony Kennedy wrote for the decision, and was joined in the majority with Chief Justice John Roberts, Justice Samuel Alito, Justice Antonin Scalia and Justice Clarence Thomas.
Bottom line:  The First Amendment applies to corporations.  Corporations are owned by individuals.  At its purest, a corporation is a pooling of peoples’ money with the advantage of limited liability (and the disadvantage of double taxation).  As such, the majority of these individuals can dictate where the money goes — including, to run ads favoring a candidate that group of individuals supports.  Does this mean that Big Oil, Wall Street banks and health insurance companies will immediately start emptying their bank accounts to run ads about Republican candidates?  That seems doubtful.  Regardless, they still cannot under the law make contributions directly to candidates and

In another polarizing Supreme Court decision, in the  Citizens United vs. Federal Communications Commission, the court made some sense of a particular portion of McCain-Feingold — by striking it down as unconstitutional.

Please do not be confused by this ruling — especially if you listen to the left.  It is not a a “major victory” for Big Oil, Wall Street banks and health insurance companies as President Obama may lead you to believe.  This Supreme Court decision is just another last word on the issue of whether a corporation or union can run certain political ads endorsing or dismissing a particular candidates.  The underlying action was commenced by Citizens United, a conservative non-profit, which tried to run a film critical of then-primary-candidate Hillary Clinton.  Basically, the Supreme Court struck down the law prohibiting corporations and labor unions from funding certain political communication.  Justice Anthony Kennedy wrote for the decision, and was joined in the majority with Chief Justice John Roberts, Justice Samuel Alito, Justice Antonin Scalia and Justice Clarence Thomas.

Bottom line:  The First Amendment applies to “speech,” whether by an individual or by a corporation.  How could it not?  At its purest, a corporation is a pooling of individuals’ money with the advantage of limited liability (and the disadvantage of double taxation).  Imagine a world where speech could be regulated (a.k.a. censored) if the speech came from a corporation.  Last I checked, books and magazines are published by corporations; and well as television and film.

Does this mean that Big Oil, Wall Street banks and health insurance companies will immediately start emptying their bank accounts to run ads about Republican candidates?  That seems doubtful.  The actual provision rendered unconstitutional is only for corporations/unions that run ads, it does not strike the law that prohibits corporations to make contributions directly to candidates.  Fear not leftists, unions can now run such ads and you still have your media and your PACs to dominate the airwaves.

Add Comment January 28th, 2010 at 05:27pm Brian

Save the Cap — Save the NFL!

[January 26, 2010. New York.] This past weekend’s NFC Championship game involved a team from Minnesota and a team from New Orleans.  Yet, there was an estimated 57.9 million people watching.  (And that happened with Joe Buck in the booth!)  This is the highest number in a non-Super Bowl game since “The Catch” in 1982 — and the highest number of any non-Super Bowl television show since the last episode of Seinfeld.  Truly amazing, considering the game was sloppy (frustrating to most football fans),  and included bad calls and more calls for an NCAA overtime rule.

Hopefully, Roger Goodell and DeMaurice Smith do not see these numbers.   The current collective bargaining agreement between the NFL (represented by Goodell) and its players (represented by Smith) will expire at the end of the 2010 season.  (That is next season.)

As for some background, the NFL has a salary cap.  Hence, we have a Super Bowl between Minnesota and New Orleans, and not between the Yankees and the Phillies.   The cap is set to expire this year.   Besides pushing communism out of the NFL, this will be a huge shock to the NFL system.   Brady will make more than Oprah.   Kickers will buy houses.  Quarterbacks will actually buy cars to their linemen; not just say they will.  And Goodell will not allow this.  A lockout will ensue.  What would those 50+ million people do?

Add Comment January 26th, 2010 at 03:24pm Brian

Nobel Peace Prize: Gore, Palmeiro, and now Obama.

To start, I want congratulate President Obama for his victory in winning the 2009 Nobel Peace Prize.   He joins Mikhail  Gorbachev (1990) and Nelson Mandela (1993) as notable leaders who won this prestigious award.  He also joins Al Gore (2007) and Rafael Palmeiro (1999) as Americans that cleary do not deserve such an award.  Now, for the record, I am making no accusation towards any of these individuals with respect to the use of performance-enhancing drugs.  However, their lack of achievement in the area (peace or defense) in which they won their awards really takes the awards themselves into the irrational.

Al Gore.  No comment.  We can save that for another day.  Rafael Palmeiro.  I can keep this brief.  Back in 1999,  Palmeiro won a Rawlings Gold Glove award for his play at first base while being a member of the Texas Rangers.  As for background, each year, a “Gold Glove” is given out to one player in each league at each of the nine baseball positions.  To his credit, Palmeiro only made only one error during the 1999 Major League Baseball season (and errors are bad things).  Ordinarily that would be an incredible accomplishment for a first baseman (who is the guy that all the infielders throw to).  However, he only played in 28 games at first base that season (and there are 162 games in a season).  The other games he played (135 of them) were as the designated hitter (a designated hitter is what is says, a player, who only hits, and does not field).  The Rawlings Gold Glove is awarded to those players who exhibit “defensive excellence.”  How that was exhibited by a player that played defense in less than 20% of his team’s games (as opposed to the normal 80-95%) is a question that will remain forever unanswered. 

Now we are presented with another award that does not appear warranted.  As legend tells us, after Alfred Nobel died in 1896, his will spoke to us and offered an annual Nobel Peace Prize “to the person who shall have done the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses.”  I hope one day President Obama meets this standard.  To claim he already has is dishonest.

It should be noted that this peace prize is awarded by a committee of only five people, all of which are elected by the Norwegian Parliament.  In its press release on October 9, 2009, this committee awarded President Obama the prize for his “extraordinary efforts to strengthen international diplomacy and cooperation between peoples.”  When did that happen?  The press release specifically stated that the committee “attached special importance to [President] Obama’s vision of and work for a world without nuclear weapons.”  What work?  And how did the word “vision” get in there?  I believe the standard above specifically states “have done” — visions are irrelevant.  To the committee’s credit, they did try to show how the vision actually did something (”[t]he vision of a world free from nuclear arms has powerfully stimulated disarmament and arms control negotiations”), but, seriously, can anyone argue that this rises to the level of the Nobel standard above?

Nonetheless, I again congratulate President Obama for winning this award.  (Mr. Palmeiro gets no such respect from me as that was Tino Martinez’s award in 1999.)  President Obama has obviously “done” something to win this peace prize.  In my opinion, that was impressing five Norwegians with him vision.  Imagine if he actually does something to lead us to a world without nuclear weapons.  What would he win then — a Gold Glove?

Add Comment December 14th, 2009 at 09:46pm Brian

World Cup 2010: Group of Death?

[New York. December 10, 2009.]  After the groups were chosen for the 2010 World Cup, immediately, soccer (a.k.a. non-US football) fans and commentators  commenced the “Group of Death” argument.  As in prior years, the debate ended fast, with little controversy.  Few have chosen to disagree with the football brass on this issue.  (Note the usage of the term “football”; I do not know of any soccer brass.)  They have all dubbed Group G the Group of Death (such group includes  Brazil, North Korea, Cote d’Ivoire and Portugal).  Since this is the World’s game and means more to most than politics, we shall examine.


First, the basics.  World Cup football begins with eight Groups.  Each Group has four teams.  An elaborate selection process is used to determine which teams are placed into each Group.  This process seeks to offer the Groups parity, but, like everything else in sport, true parity cannot be achieved.  Each Group member plays the other three teams once (three points for a win and one for a draw).  The top two teams in each Group by points move on to the “knockout” round (essentially a quarterfinal).   At the December 4, 2009 selection “event,” Charlize Theron told us that the 2010 World Cup groups would be made up as follows:

Group A:  South Africa (86) / Mexico (15) / Uruguay(19) / France (7)
Group B:  Argetina(8) / Nigeria(22) / South Korea(52) / Greece(12)
Group C:  England(9) / United States(14) / Algeria(28) / Slovenia(33)
Group D:  Germany(6) / Australia(21) / Serbia(20) / Ghana(37)
Group E:  Netherlands(3) / Denmark(26) / Japan(43) / Cameroon(11)
Group F:  Italy(4) / Paraguay(30) / New Zealand(77) / Slovakia(34)
Group G:  Brazil(2) / North Korea(84) / Cote d’Ivoire(16) / Portugal(5)
Group H:  Spain(1) / Switzerland(18) / Honduras(38) / Chile(17)

What are  the numbers in the parentheticals?  They are the FIFA/Coca-Cola World Rankings, which I will use to analyze the Groups.   For those that do not follow soccer, FIFA is the International Federation of Association Football, is the international organization that governs various tournaments, including the World Cup.  Of course, it is known by its French acronym, FIFA.

FIFA, along with its good friends Coke [NYSE:KO], issue internation team rankings, and the last such rankings were released on November 20, 2009.  Spain is number 1 in the world, Brazil is number 2, and so on.

The analysis I will use involves three components to determine which, if any, of the Groups is the “Group of Death” (in the soccer world, this is the most difficult group to get out of — reminder, only two of the four teams in each group advance).  Each component will rank the eight Groups from most difficult (1 point) to easiest (8 point); then, a weighted-average of each Group’s three components will give a final tally.  Of course, at TRP, we love our math.

Component 1 (25%):  The sum of each team’s FIFA rankings for each Group.  For example, Group A, with France (FIFA Ranking 7), Mexico (15), Uruguay (19) and South Africa (86), has a total of 127.  This is the second highest of all eight groups — so Group A will get a ‘7′ for this component.

Component 2 (50%):  The same calculation as Component 1, but using only the top three teams in each Group.  For example, Group B, with Argentina (8), Greece (12), Nigeria (22) and South Korea (52), has a total of 42.  In my opinion, this is the most relevant component, so it is given double the weight of the two others.

Component 3 (25%): Since the third-place team in each Group does not advance, the FIFA ranking of that team will be used.  For this component, “third-place” means the third highest ranked team in the Group.  For example, Slovakia, in Group F, has the highest ranking of all third-place teams — so Group F will get a ‘8′ for this component.

Based on this analysis, the Groups are ranked as follows:

Group F (8.000) (easiest)
Group C (6.000)
Group D (5.125)
Group B (4.875)
Group A (4.500)
Group E (3.500)
Group G (2.250)
Group H (1.750) (most difficult)

There you have it. Are you confused? Let me try to make this clearer through another example, using the potentially strongest group:  Group H has the least total FIFA ranking of all eight Groups with a 74 (so they get a ‘1′ for Component 1); it has the second lowest total FIFA ranking for its top three teams with a 36 (a ‘2′ for Component 2); and it has the second lowest seeded third placed team with the Swiss 178 (a ‘2′ for Component 3). Now, do the math: 1 x 25% + 2 x 50% + 2 x 25% = 1.75.

Although Group G has been presented to the world as the obvious Group of Death (thanks to Brazil, Portugal and Cote d’Ivoire — three top 16 teams), the analysis above results in a Group H of Death.  Clearly, the reason is that Group G’s North Korea is 84 in the world, whereas, Group H’s weakest team, Honduras, is 38.  I have no doubt that Spain (number 1 in the world) would much rather be in Group H, than in Group G.  However, in Group G, the would get the guaranteed win against North Korea, whereas, Honduras is no guarantee.  With that said, I think we can take the following from the above analysis:

  • Groups G and H can share “Group of Death” status;
  • Groups A, B, D and E are actually evenly matched; and
  • Groups C and F are very weak at the bottom.

If you back U.S., English or Italian soccer, get ready for the knock-out round or for some tears.

1 comment December 10th, 2009 at 10:27pm Brian

Citibank Bailout: “Six-Figure-Taxpayer/Citi Field”

[New York. November 26, 2008.] The New York Mets and Citigroup Inc. [NYSE:C] are still claiming that the $400 million naming rights package will be honored, yet, Citi has watched its stock price drop from its 52-week high of about $35 to almost $3 per share. Of course, this forced the government’s hand to take more taxpayer money to save another private corporation.

Two years ago, when the naming agreement was entered into, Citi was trading at over $50 per share. At that time, I would not have complained about the naming rights agreement — the largest of its kind — which provides that Citi would pay $20 million a year for 20 years (with options for another 40 years) for the right to name the new stadium “Citi Field.” Now, this deal just looks like a joke in light of Citi’s near failure and subsequent bailout. Some suggest that the stadium should be called “Citi/Taxpayer Field.” I disagree. The way I see it, “Six-Figure-Taxpayer/Citi Field” is more like it. The more words to emphasis who is really for this naming right, the more the word “Citi” disappears in just another useless advertisement.

Let’s do some simple math: As of this afternoon, Citi’s stock closed at $7.05 and there are approximately 5.5 billion shares outstanding. Thus, Citi has a market capitalization of less than $40 billion (Finance 101: market cap = stock price x shares outstanding). I will not even go near Citi’s income statement — it just hurts too much. Now, if you compare that market cap with the government’s interest, you see (with some logic bends) who is really paying for the naming rights of the ballpark in Queens. I do not care where you get your bailout information from, no one disputes that it trumps the $40 billion. If you are curious, the government is directly investing $20 billion and backing over $300 billion in loans and securities.

Considering that those taxpayers making in excess of $100,000 annually pay the majority of this government’s taxes (and will be paying more of it based on the result of the 2008 Election), I think they should get some love.

My vote: “Six-Figure-Taxpayer/Citi Field.” With this name, Citi will probably attract a total of 10 new customers — down from the 50 customers they would have added with Citi Field. Wait, did they really agree to pay $20 million per year? Those 50 customers better all print the name Walton on their bank application.

As an aside, I am not sure if any of you New Yorkers noticed but no other major New York sports team has “sold out” their stadium’s yet — the Yankees play at Yankee Stadium, the Rangers and Knicks play at Madison Square Garden, the Giants and Jets play at Giants Stadium and the Islanders play at the Nassau Veterans Memorial Coliseum. Of course, when one finally does sell out, it goes to a failing bank. It was easier when only minor league teams like the Brooklyn Cyclones, the Staten Island Yankees and the Long Island Ducks played in corporate sponsored stadiums — KeySpan Park, Richmond County Bank Ballpark and Citibank Park (sound familiar?).

Add Comment November 26th, 2008 at 11:55pm Brian

Did the 2008 Election Deflate the Stock Market?

[New York. November 23, 2008.] At the start of this past Friday’s trading day (Friday the 21st), there had been 12 trading days since the 2008 Election. During that time, the Dow Jone Industrial Average (DJIA) had dropped to its 5-year low. On November 4, 2008 (Election Day), the DJIA closed at 9,625.28. On Thursday November 20, 2008, it closed at 7,552.29 (down 21.5% in 12 sessions) and was settling near the 7500 level on Friday the 21st before the last minute 500+ point run to end the week.

In short, in the 12 sessions that followed the Obama-Biden victory, the DJIA has sounded as follows — Down 500, Down 400, Up 250, Down 75, Down 200, Down 400, Up 550, Down 350, Down 200, Up 150, Down 450 and Down 450. This was indeed an ugly stretch and it is far too easy to blame this run on the results of the election. However, even a Republic should admit it is too early to do so.

Although it feels like ages ago, when the DJIA left the 5-digit world in early October 2008 and dropped to about 8,000 in late October, there was press blaming all kinds of stimulus (or lack of stimulus) for that move. However, leading up to the 2008 Election, the DJIA fought back to pull within less than 400 points of 10k. Now, unfortunately, we are back in the low 8,000’s (following a few days under 8,000). Do we have enough to get back over 9,500? 10,000? 14,000?


On the other side of the world and during a similar period, it should be noted that since the start of the NBA season, the San Antonio Spurs have played 12 games. In those games, the Spurs has six wins and six loses — an ugly stretch for an organization that is accustomed to winning at a 70% rate in the Popovich era. What do the Spurs have to do with the market? Very little. However, there are two paths that this market can take and it is not all that different from the Spurs. After a odd summer, in which Manu Ginobili was injured and had surgery, the Spurs prepared for a start to the season without him. They started the year with no traction and then lost Tony Parker to an injury. Now, Tim Duncan is the only one of the big-3 left and needs to step up and keep this team afloat while Popovich waits for the injuries to heal. Fans in San Antonio just hope all the injuries heal as planned (or quicker than planned) and Tim Duncan can keep his squad above .500 (a.k.a. 8,000) so Manu and Tony can return and carry them into the playoffs (a.k.a. 10,000).

By January, it should be more apparent whether the playoffs are in the Spurs’ sights. Luckily, when it comes to the markets, you do not need to win a championship to be successful. At this point, most would be ecstatic with an annual visit to the Conference Finals.

Add Comment November 23rd, 2008 at 01:04pm Brian

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