Perriello proposes prohibition on foreign corporate donations.

Rep. Tom Perriello is introducing a bill to make a brilliant modification to campaign finance law. It’s a bit breathtaking in its simplicity and utility. With the recent Supreme Court ruling (which is simultaneously legally correct and practically stupid), corporations can make unlimited contributions to candidates for political office. This will be, as anybody can see, a disaster. Note, though, that the restriction on contributions from non-citizens remains: you cannot give to a campaign if you’re Canadian, Mexican, or Iraqi. Americans only. There’s a clear conflict here. There’s nothing keeping somebody from establishing an American corporation but having a foreign national own the stock. That would allow foreigners to fund campaigns, which I suspect we can all agree is wrong.

Perriello to the rescue. He’s introducing a simple bill—and I do mean simple; it’s 10 lines long—that would prohibit corporations with foreign shareholders from contributing to campaigns.

I’ve only mulled over this for a few hours, but there’s really nothing to dislike about this. It fixes a significant loophole in the law in a simple, elegant way.

While I’m on the topic, here’s the good news about allowing corporations to donate to campaigns: it’ll force repatriation of some of these good-for-nothing faux-American companies who have moved their corporate headquarters into a mailbox in Bermuda. Stanley Tools was all set to move, but the outcry was great enough to keep them…but it doesn’t matter, I’ll never buy anything from them. Remember Tyco? They weaseled out of $400M/year in taxes by having their business in a country that they didn’t go to, where they had no offices, and required no services. If anti-American companies like these can’t get any skin in the game without paying U.S. taxes, maybe they’ll rethink this strategy.

That’s the worst silver lining I’ve ever ginned up.

Published by Waldo Jaquith

Waldo Jaquith (JAKE-with) is an open government technologist who lives near Char­lottes­­ville, VA, USA. more »

10 replies on “Perriello proposes prohibition on foreign corporate donations.”

  1. Wouldn’t “corporations with foreign shareholders” be essentially all publicly traded companies of any size? Also, I thought the decision didn’t actually allow corporations to contribute to campaigns (though it might hint that a later decision could allow that). It allows them to spend money on their own to promote or attack candidates. Does Perriello’s bill address that?

  2. Actually, this proposal is a solution in search of a problem. Nothing in Citizens United affects the existing bar on foreign donations, by individuals OR corporations. It’s handled in regulations. Citizens United does nothing to displace those regulations, and anyone who says it does (think: President Barry) is either incompetent or lying.

  3. James, while the Citizen decision may technically affect only third party expenditures, the majority decision by Kennedy, and even moreso the concurrences by Scalia and Roberts imply far greater reach to the decision, including the possibility of overturning Buckley v Valeo. This is not a solution in search of a problem. It is a solution that preempts legitimate disasters.

  4. Actually, this proposal is a solution in search of a problem. Nothing in Citizens United affects the existing bar on foreign donations, by individuals OR corporations.

    And I don’t think anybody’s claimed otherwise. The problem is, as I wrote, that corporations that are controlled by foreign nations could contribute to campaigns, not that the SCOTUS ruling directly spoke to contributions from foreigners. But allowing such contributions is a clear, accidental result of this ruling, and I suspect we can all agree that’s not something that we want.

  5. It doesn’t quite cover it, Michael, but you’re right—it gets tantalizingly close, which I didn’t realize. The relevant bit, I think, is this:

    A foreign national shall not direct, dictate, control, or directly or indirectly participate in the decision-making process of any person, such as a corporation, labor organization, political committee, or political organization with regard to such person’s Federal or non-Federal election-related activities, such as decisions concerning the making of contributions, donations, expenditures, or disbursements in connection with elections for any Federal, State, or local office or decisions concerning the administration of a political committee.

    I think that intelligent minds can disagree about whether this, when coupled with the SCOTUS decision, prohibits contributions from corporations with foreign shareholders. (Which, as KCinDC points out, which have the effect of prohibiting contributions from any publicly-traded corporation, which its certainly fine by me and, obviously, by Rep. Perriello.) I think a reasonable person would interpret this statute to mean that the scenario that I outlined of a corporation wholly owned by a foreigner is implausible, unless he could present an argument that he turned over the daily management of that corporation to somebody else (a blind trust, of sorts), and he didn’t have any input as to whether money was given or how much. Given the shenanigans that we’ve seen from banks in the past couple of years, maybe that’s not as implausible as it seems at first blush.

    But it gets less clear as we get further removed from that simplistic example. A shareholder gets to vote on board members. If a content for a seat is between one board member who wants to give money to campaigns, and another who doesn’t, then shouldn’t that corporation thereafter be prohibited from contributing to a campaign, give that foreign shareholders have “indirectly participate[d] in the decision-making process of an…corporation…with regard to…decisions concerning the making of contributions , donations, expenditures, or disbursements in connection with elections”? As you can imagine, we’ll see lots of lawsuits over whether the intent or the effect of that is as I suggest.

    Perriello’s proposal cements, in no uncertain terms, that companies with foreign shareholders cannot serve two masters.

  6. Very interesting, Up—thanks for that link.

    I think we’re going to see a lot of restrictions like this be discovered or modified slightly that will prevent corporations from giving to campaigns, but without requiring restricting any first amendment rights. And that’s a result that I’d be very happy to see.

  7. There are rumors of a corporation running for congress in Maryland.
    If true, it could be an entertaining exploration of how the law recognizes corporations…

    I am sure a corporation will find actually getting elected and sworn in problematic, but it’s an interesting experiment.

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