Dems on FEC Target Corporations in Attempt to ‘Blunt’ First Amendment

Critics say proposals could disenfranchise many Americans from the political process

FEC commissioners
FEC commissioners / AP
April 13, 2016

Democrats on the Federal Election Commission are pushing proposals critics say would disenfranchise many Americans from the political process.

FEC Commissioner Ellen Weintraub, a Democrat, has put forth a proposal that she says targets foreign national influence through corporations.

Weintraub’s rule would require every entity accepting political contributions from corporations to verify that the corporations are associations of United States citizens. Additionally, she asked for a rulemaking document that would require those making independent expenditures and electioneering communications to certify that any individual or corporate resources used are not owned or controlled by foreign nationals.

Days after submitting the proposal, Weintraub penned an op-ed for the New York Times explaining her attempt to "blunt the impact" of Citizens United.

Weintraub wrote that many American corporations have shareholders who are foreigners or government contractors.

"The American people deserve assurances from American corporations that they are not using the money of foreign shareholders to influence our elections," she said.

Hans von Spakovsky, a senior legal fellow at the Heritage Foundation who previously served alongside Weintraub as a commissioner on the FEC, said Weintraub’s proposal is a fear mongering "publicity stunt."

"Her rulemaking petition is a publicity stunt intended to raise the fears of voters with the false idea that ‘foreigners’ are influencing our elections," von Spakovsky said. "Federal law already prohibits foreign nationals from contributing directly or indirectly to American elections, or making even an independent expenditure of any kind, 52 USC 30121.  The FEC has an extensive regulation on this, 11 CFR 110.20, that it has enforced without any problems."

Von Spakovsky says many Americans would be disenfranchised from the political process over the "ridiculous concept" that any corporate entities who have even a single foreign shareholder would not be able to make independent expenditures, effectively silencing them in the political realm.

"When it comes to corporations, that regulation concentrates on making sure that no foreigner controls the decision making on independent expenditures by the corporation, and that no foreign funds or assets are used," he said. "Yet Weintraub wants to disenfranchise large numbers of Americans and corporate entities based on the ridiculous concept that if they have a single shareholder who is a foreigner, no matter how small his ownership share is, and no matter that he has absolutely no control or say over the corporation or its decision making, that this would disenfranchise the corporation from being able to speak in the political realm by making independent expenditures."

Allen Dickerson, the legal director of the Center for Competitive Politics, also expressed concern over Weintraub’s desire to "blunt" a First Amendment ruling.

"There are reasons to question the propriety of a federal officer attempting to ‘blunt’ a First Amendment ruling against her agency, and I am unaware of another federal entity whose commissioners routinely take to the pages of major newspapers to decry binding Supreme Court precedent," Dickerson wrote in the Huffington Post. "But no matter how attractive you find her proposed ‘zero-tolerance standard,’ under which any corporation with even a single foreign shareholder could be barred from any political activity, her proposal relies on a number of fatal legal errors."

Dickerson said Weintraub is essentially threatening public companies with enforcement actions to "force any corporation of significant size into complete silence."

Unions are noticeably absent from Weintraub’s language to combat the influence of "foreigners," which some have called a "selective fear of foreign influence."

"Weintraub’s argument applies just as forcefully, if not more so, to unions," wrote Stephen Klein of the Pillar or Law Institute. "Unions’ political speech is at least as representative of their members—I would argue much more—than corporations’ of their stockholders. There is plenty of evidence to show illegal immigrants are members of American unions and that their dues are used to pay for political speech."

When the Washington Free Beacon questioned Commissioner Weintraub on the proposal and mentioned what critics have said about it, she called the inquiry "preposterous."

"What you describe is a preposterous reading of the proposal I have put forward for discussion at the Federal Election Commission," Weintraub said. "My proposal would make it more difficult for foreign money to flow into our elections through corporations. This should be a non-controversial goal. If my colleagues on the Commission would like to attack the problem from additional angles, I look forward to considering their ideas."

The Free Beacon followed up by asking why there is no language within the proposals dealing with unions.

"My proposal focused on foreign money flowing through corporations, as I believe it is the most significant problem in this area," She replied. "Again, if my colleagues would like to expand the focus to include other concerns, I invite them to do so."

Democratic Commissioner Steve Walther put forth a separate proposal that would prohibit domestic subsidiaries from "making contributions or expenditures in federal, state, and local elections and from establishing and operating" Separate Segregated Funds.

A domestic subsidiary, in part, is described as a company with at least 20 percent of its shares owned or controlled by foreign nationals. These include entities such as an employee PAC.

The proposal would prohibit U.S. citizens who work for a company such as American Honda Motor Inc. from setting up a PAC so that employees can combine their individual resources together to contribute to candidates.

In the case of a company that already has a PAC, such as Toyota Motor North America, the proposal could force them to shut down, making it more difficult for American workers to make their voices heard in the political process.

Despite the Democratic commissioners taking on "foreign" corporate influence, they have taken numerous trips funded by foreign organizations and governments.

According to the Office of Government Ethics, from 2012 to 2014 six commissioners took trips that were funded by outside organizations. Weintraub and Commissioner Ann Ravel, a fellow Democrat, were found to be the top spenders.

During the two-year period, Weintraub took nine trips worth $25,000—the most of any person on the commission and many of which were to foreign countries.

FEC Democrats also voted with Republicans to dismiss a case against President Obama involving foreign money.

Published under: FEC