Defending Citizens United
Jim Manley, a lawyer with the Goldwater Institute, a conservative think tank that has filed a lawsuit to overturn a Massachusetts law that bars corporations from giving directly to state candidates, said the bills ask businesses to give up too much.
"The problem is what that says to corporations is if you allow foreigners to buy stock in your company, you’re giving up the corporations First Amendment rights," Manley said. "If I own a company with my friend who’s a foreign national, I shouldn't be prohibited and the corporation shouldn't be totally banned from speech just because a foreign national has a vote on how the corporation spends its money."
Both Manley and Dickerson of the Center for Competitive Politics suspect the real intent of the proposals is to undermine the Citizens United decision. "How much of this is an attempt to prevent indirectly what we can't do directly, which is prevent businesses from speaking? I understand there are people who don't like Citizens United, but it's the law," Dickerson said.
Supporters of the bills deny that charge. Weintraub opposes the Citizens United decision, but she argues that state efforts to limit foreign influence honor the logic behind it.
“This is just trying to put meat on the bones. What does it mean to be an association of citizens and when are corporations not an association of citizens?" she said. "When is foreign ownership too much?"
Democratic state Sen. Ted Kennedy Jr., who sponsored the bill in Connecticut, said that a disclosure requirement might be a middle ground between supporters and opponents of spending restrictions. "Citizens deserve to know who is making these contributions," he said.
Another potential pitfall of the legislation, according to critics, is that it would be difficult for corporations to certify a level of foreign ownership. Stocks are routinely traded, they argue, and large investment houses make purchases on behalf of thousands of people.
Dickerson said the FEC policies already in place for wholly owned subsidiaries of foreign companies target what is most important: that PAC money comes from American operations and that Americans make the decisions about how it is spent.
"There is a tendency in the legislative and political process to underappreciate both how interconnected American businesses are with the larger global economy and the difficulty of parsing these things out at that level of detail," Dickerson said.
But Coates said companies already know if 5 percent or more of their stock is foreign-owned because under federal law they must report any purchase of that size, as well as the nationality of the buyer, to the Securities and Exchange Commission. Furthermore, he said, publicly traded companies already collect that kind of information on stockholders for their annual shareholder meetings.State Sen. Andy Billig, the Washington Democrat who is pushing legislation there, said the claim that some companies don't know who their owners are only strengthening his case. If they can't figure it out, he said, "then they should not be allowed to participate in campaigns."
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