Lawmakers Move to Bar Foreign-Owned Corporations From Spending on US Elections

Democratic lawmakers on Thursday introduced bills to the U.S. Senate and House seeking to ban corporations that are at least 5% foreign-owned from federal elections spending, drawing praise from advocacy groups.

Sen. Sheldon Whitehouse (D-R.I.) introduced the Get Foreign Money Out of U.S. Elections Act to the Senate and Rep. Jamie Raskin (D-Md.) reintroduced the same bill to the House, with each version gaining co-sponsorship by progressive lawmakers such as Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.).

The legislation would, if enacted, dramatically curtail the power of Citizens United v. Federal Election Commission, a 2010 U.S. Supreme Court ruling that legalized unlimited corporate spending on elections, as the vast majority of major corporations have at least 5% foreign ownership.

"Autocrats and oligarchs across the globe have continually tried to control the outcome of U.S. elections, diluting the voices of citizens and undermining American democracy," Raskin said in a statement. "Our legislation closes a glaring loophole opened up by the Supreme Court's disastrous Citizens United decision which allows U.S. companies primarily owned by foreign entities to funnel money into our elections."

The bill would ban firms with either 5% of foreign ownership in aggregate or 1% ownership by a single foreign entity from electoral spending. The Center for American Progress (CAP) argued for those ownership thresholds in a 2019 report, which found that 98% of S&P 500 firms it analyzed had at least 5% foreign ownership.

Foreign ownership of U.S. corporations comes in many forms. Shell USA is a subsidiary of the oil major headquartered in London, but in other cases foreign investment or ownership is less obvious. Saudi Arabia's sovereign wealth fund has stakes in several U.S. companies including Uber. As of 2020, about 40% of U.S. corporate stock was owned by foreigners, according to CAP.

The Whitehouse and Raskin law would only apply to federal elections, but certain states and cities have started to take similar action. Minnesota passed effectively the same bill—using the 5% and 1% thresholds—last year, in what a state official called the "Mount Rushmore" of electoral reform bills. The cities of Seattle and San Jose have passed similar bills.

Such legislation appears to have strong public support: 82% of likely voters agree that "there should be new limits on U.S. corporations spending money in our elections if the corporations have any foreign ownership," according to a Data for Progress poll released Wednesday.

A number of advocacy groups—including CAP, Common Cause, Free Speech for People, Citizens for Responsibility and Ethics in Washington, and End Citizens United/Let America Vote Action Fund—expressed support for the new bill.

Ben Olinsky, a senior vice president at CAP, called it "commonsense legislation" that closes "a dangerous loophole opened by Citizens United and prohibit[s] political spending by foreign-influenced U.S. corporations" in a statement.

Alexandra Flores-Quilty, campaign director at Free Speech for People, said in a statement that the bill "puts our democracy back into the hands of the people where it belongs."