The Supreme Court’s clearly political decision on campaign finance, Citizens Union v. FEC, has not only pierced the veil of the Supreme Court’s air of impartiality and prestige as the nation’s ‘High Court’, it has also harmfully thrown into disarray a long-standing simple rule of American politics – namely, that foreigners or foreign interests should play no role in the outcome U.S. elections. In this surprise ruling that caught the legal establishment off guard in what had been considered decided law under the McCain-Feingold Act, it was also telling that it was also along strictly partisan lines, leading many analyst to suspect – given the GOPs fundraising foibles in the last election, as well current low public polling by the GOP – that there was more than meets the eye in the decision. Nevertheless, regardless of political shenanigans, the Court’s rulings are considered the ‘Law of the Land.’ Republicans have been near unanimous in their praise, or unusually silent indicating tacit support, for this bizarre decision.
At the moment, foreign corporations may not spend any money in U.S. elections under a provision of federal election law. However, President Barack Obama, in rare public rebuke of the High Court, and other critics say the court’s decision to let corporations spend their money to directly influence elections opened the floodgates to foreign involvement. In last week’s State of the Union address to Congress and the nation, Obama asserted the court had allowed special interests, “including foreign corporations, to spend without limit on our elections.” He added, “With its ruling today, the Supreme Court has given a green light to a new stampede of special interest money in our politics,” said President Obama in a statement. “It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans…”
Under scoring this point, Justice John Paul Stevens said in his dissenting opinion that the reasoning underlying the ruling “would appear to afford the same protection to multinational corporations controlled by foreigners as to individual American” citizens. Stevens also accused the majority of judicial activism and attacked the use of corporate personhood in the case: “The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court’s disposition of this case.”Further still, and specifically in relation to Economic Foreign Policy, the more complicated question is how, under the new ruling, to treat U.S. subsidiaries of foreign companies or American corporations that are controlled by foreign investors, or the Political Action Committees (PACs) of foreign corporations and foreign investors such as sovereign wealth funds.
Before the court ruling, the issue was very clear: corporations, including some with foreign ties, could form PACs, funded with voluntary and limited contributions from their executives and employees. But they could not spend money from their general treasuries to advocate for or against candidates for federal offices. For the purposes of determining who could play, U.S. citizens and some legal immigrants could, and everyone else could not.
“The court has suddenly made the prohibition on foreign nationals a much more complicated affair to enforce,” said Tara Malloy, associate counsel at the Campaign Legal Center, which wanted the corporate ban upheld. “Now you may have a multinational corporation, and it’s unclear who is funding what, or even what groups in what countries have what interests.”
Floyd Abrams, the Constitutional lawyer who argued the case in favor of striking down the ban on corporate campaign spending, said existing rules that apply to PACs to limit foreign influence could have the same effect on corporate spending generally. “That said, if it’s an American company, it would presumptively be governed by American law,” Abrams added.
Fred Wertheimer, a longtime advocate of limiting money in politics, said the existing Federal Election Commission (FEC) rules are inadequate and that the FEC itself is ineffective in enforcing them. Meanwhile, the FEC is currently reviewing the court ruling and will take no action until they complete an analysis of the impact of the decision.
In crafting their response to the decision, lawmakers have focused on the possibility that investment funds controlled by foreign governments, known as sovereign wealth funds, could end up playing a role in U.S. elections. Rep. Chris Van Hollen (D-MD), said the bill he is drafting with Sen. Chuck Schumer ( D-NY), a ranking Senate Finance Committee player, aims to prevent foreign governments from trying to influence elections through investments by their sovereign wealth funds. “That’s the potential,” Van Hollen said. “If that potential is there, we have to do what we can to shut it down.”
But less clear, in a world where states compete for foreign investment and giant U.S. firms are happy to attract international money, is whether election law’s distinction between domestic and foreign corporate money makes sense. For example, would money tied to Japan’s Toyota Motor Corp., which builds cars and trucks in four states and has parts suppliers in many more, be inherently any worse than contributions from Ford Motor Co., the American car maker that also has operations around the world?
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In the context of the Economic Foreign Policy of nations – particularly our global trading partners and competitors, these are crucial considerations that may bear direct impact on our balance of payment with other nations. So while the clearly political decision by the conservative wing of the Supreme Court will aid the cash-strapped, unpopular Republicans in the 2010 Mid-term and the 2012 Presidential election, it has done so at great peril to our national sovereignty.
Source: HuffPo, Excerpts from AP – By MARK SHERMAN, Saturday, January 30, 2010
