'Election' Articles

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

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

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

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?

Pop

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


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