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.

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February 2nd, 2010 at 10:37am Brian

Entry Filed under: Election, International, Juris

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