(Seattle, WA)
– Today, U.S. Senator Patty Murray (D-WA), joined 14 senators in sending a
letter to the Federal Election Commission (FEC) urging them to consider
imposing new rules that would strengthen protections against foreign influence
in our elections. Currently, federal statute prohibits direct and indirect
contributions by foreign nationals, including both foreign individuals and
corporations headquartered abroad. However, U.S.-based corporations entirely
owned or controlled by foreign companies are currently allowed to contribute to
electioneering communications. Additionally, after the Supreme Court’s decision
in Citizens United v. Federal Election Commission broke down the
long-standing legal distinction between corporations and individuals, it is now
even easier for foreign owned corporations to influence our elections.
“We
applaud the Commission’s decision to consider new rulemaking regarding
independent expenditures and electioneering communications in the wake of the
Supreme Court’s decision in Citizens United v. Federal Election
Commission, 130 S.Ct. 876 (2010). We write with a simple request: that
the Commission use this process to repair and strengthen protections against
foreign influence of American elections,” the Senators wrote in a letter to the FEC.
Last month,
Senator Murray spoke
on the floor of the United States Senate to urge her colleagues to support the
DISCLOSE Act which would have forced CEOs to take public responsibility for
election spending and prevented influence on elections by foreign corporations
and government contractors. In July, the DISCLOSE Act was blocked
by Senate Republicans when it failed on a 57-41 vote to get the 60 votes it
needed to move to the floor.
The letter to
the FEC was signed by Senators Al Franken (D-MN), Patrick Leahy (D-VT), Richard
Durbin (D-IL), Kirsten Gillibrand (D-NY), Jeff Merkley (D-OR), Robert Menendez
(D-NJ), Sherrod Brown (D-OH), Sheldon Whitehouse (D-RI), Patty Murray (D-WA),
Jeanne Shaheen (D-NH), Ron Wyden (D-OR), Byron Dorgan (D-ND), Jack Reed (D-RI),
and Frank Lautenberg (D-NJ).
Read
full text of the letter below:
The Honorable Matthew S. Petersen, Chairman
The Honorable Cynthia L. Bauerly, Vice Chair
The Honorable Caroline C. Hunter, Commissioner
The Honorable Donald F. McGahn II, Commissioner
The Honorable Steven T. Walther, Commissioner
The Honorable Ellen L. Weintraub, Commissioner
Federal Election Commission
999 E Street, NW
Washington, DC 20463
Dear Chairman Petersen, Vice Chair Bauerly, and Commissioners:
We
applaud the Commission’s decision to consider new rulemaking regarding
independent expenditures and electioneering communications in the wake of the
Supreme Court’s decision in Citizens United v. Federal Election
Commission, 130 S.Ct. 876 (2010). We write with a simple request: that the
Commission use this process to repair and strengthen protections against
foreign influence of American elections.
Federal
statute prohibits direct and indirect contributions and independent
expenditures by foreign nationals, including both foreign individuals and
corporations chartered and headquartered abroad. See 2 U.S.C. §
441e. Unfortunately, the Commission’s regulations and interpretive
guidance designed to enforce this law have grown out of date. Most
critically, they fail to account for the explosive growth of foreign investment
in the American economy, and the increasing portion of U.S.-based firms that
are controlled, if not wholly owned, by foreign corporations and
governments. In 1977, the year after the enactment of section 441e, U.S.
firms in which a foreign individual or entity owned a 10% or greater interest
added just $35 billion to the private sector Gross Domestic Product. In
2007, fully 6% of private sector GDP—or $628 billion—came from U.S. firms in
which a foreign individual or entity owned a majority interest.
Thus,
while Commission regulations prohibit the solicitation of contributions and
donations from foreign nationals, they do not prohibit the solicitation of
expenditures, independent expenditures, or disbursements from these same
individuals and entities. See 110 C.F.R. §
110.20(g). Moreover, while Commission regulations ban foreign
nationals from “directly or indirectly” participating in a company’s
decision-making on election spending, 11 C.F.R. § 110.20(j), the Commission has
interpreted this rule to allow for election spending by a U.S.-based company
wholly owned by a foreign corporation, and whose Board of Directors was
controlled by foreign nationals. See Federal Election
Commission, Advisory Opinion 2000-17 at 3 (July 28, 2000).
The
Commission has also allowed foreign nationals on such a Board of Directors to
participate in decisions regarding the company’s budget for corporate political
donations and disbursements. Federal Election Commission, Advisory Opinion
2006-15 at 5-6 (May 19, 2006). In fact, a U.S.-based company wholly-owned by a
foreign government, whose leadership is entirely comprised of foreign
nationals, would fall outside of existing regulatory definitions of a
“foreign national”—the group of entities prohibited from influencing our
elections.
As
Justice Kennedy notes in his opinion, the majority in Citizens
United did not consider or alter federal laws on foreign influence.
130 S.Ct. at 911. But because Citizens United destroyed the
long-standing legal distinction between corporations and individuals, the
decision exposed the underlying weaknesses of the regulations and Commission
guidance intended to bar foreign-controlled subsidiaries from influencing U.S.
elections. Citizens United in fact made it easier
for both American companies and foreign-controlled subsidiaries to
spend freely in our elections. Cf. 130 S.Ct. at 947-948 (Stevens,
J., dissenting) (“[The majority’s position] would appear to afford the same
protection to multinational corporations controlled by foreigners as to
individual Americans…”).
This
is a problem. And while Congress will need to act, the Commission must
immediately do its part to protect our elections from foreign influence by
rescinding weak interpretive guidance, strengthening existing regulations, and
clarifying their application post-Citizens United.
Thank
you for your attention to this urgent matter. We look forward to reading
your Notice of Proposed Rulemaking.
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