Posts Tagged ‘McCain-Feingold’
A Less Than Superior Effort from our U.S. Supreme Court
There is increased lobbying in Washington D.C. consisting of about 160 U.S.-based subsidiaries of foreign-owned or controlled corporations. These foreign-controlled interests want to prevent Congress from enacting limits on their spending for U.S. political campaigns. This is driven entirely by the U.S. Supreme Court’s recent decision on Citizens United v. Federal Elections Commission (FEC). In this close decision, a 5-4 majority of the Supreme Court overturned a 103 year old law that barred corporations from using their financial profits to spend on federal elections. As a result of this decision, American corporations, including those owned in whole or in part by foreign companies and foreign governments, are no longer restricted from spending money to influence the outcome of federal elections. This ruling also struck down a portion of the McCain-Feingold Bipartisan Campaign Finance Act prohibiting corporations and unions from running ‘issue ads’ in the final days of a campaign.
Already, several congressmen are preparing legislation aimed at blunting the court’s ruling generally and the influence of foreigners specifically. Current Federal Election Commission (FEC) rules are inadequate protection for the free election process, and the FEC’s enforcement is ineffective. New legislation would include specific rules for lobbyist’s to disclose their affiliations. This includes domestic corporations which are owned or controlled by foreign principals. Specifically, the definition of a foreign principal would be expanded to include corporations that:
-are subsidiaries of foreign companies,
-have one or more foreign members on their board of directors,
-are owned in part by foreign principals,
-or have debt or other obligations held against them by foreign principals.
In crafting the new legislation, lawmakers have focused on the possibility that investment funds controlled by foreign governments, known as sovereign wealth funds, could end up influencing the outcome of U.S. elections. Take for example, CITGO Petroleum Company, purchased in 1990 by the Venezuelan government-owned Petróleos de Venezuela S.A. from the American-owned, Cities Services Company. The Supreme Court’s ruling conceivably allows someone like Venezuelan President Hugo Chavez to spend his government’s money on defeating an American political candidate by funneling money to CITGO to buy U.S. TV commercials.
Arguments that the Citizens United ruling will not increase foreign influence have been raised. The four dissenting Supreme Court Justices disagreed. The dissenting opinion, authored by Justice Stevens, specifically states that the majority opinion opens the door to foreign influence, as did the lawyer for Citizens United.
Others argue that the Citizens United decision will make no difference since U.S. subsidiaries of foreign companies already spend millions here. The law that was struck down restricted corporate advertising from naming candidates for office, in the 60 days before a general election and the 30 days before a primary election. Now corporations can spend freely during the most critical periods of any election and their message to vote for or against a named candidate. This allows unchecked and undue influence by foreign special interests on the outcome of U.S. elections.
Should we rely on existing law to protect against foreign influence in our elections? Although the Federal Election Commission (FEC) restricts foreign nationals from spending or directing spending on U.S. elections, it does not prohibit corporations in which foreign nationals are shareholders or officers from making such expenditures. Prior to this Supreme Court ruling, this issue did not exist at the federal election level because corporations were limited in what they could spend, regardless of whose money or special interest was being peddled.
Over the last century, it was legal to treat corporate contributors differently from individual contributors to election campaigns. The Supreme Court’s decision changes this legal principle. As Justice Stevens wrote in dissent, “Congress has placed special limitations on campaign spending by corporations ever since the passage of the Tillman Act in 1907… The Court today rejects a century of history [and conventional wisdom] when it treats the distinction between corporate and individual campaign spending as an invidious novelty born of [more recent Court decisions].”
The American people have a compelling interest in preventing foreign interests from influencing our domestic political process. In this period of financial vulnerability, with most U.S. debt controlled by foreign governments, we should not begin to allow greater foreign corporate influence on our election process. An immediate, unified Congressional response is required to protect America’s sovereignty and our citizens’ exclusive right to determine who shall represent us. The ‘access door’ to Capitol Hill is now open wider and the lobbyist queue is growing.
George Vitta, President of Asset Strategies Portfolio Services, Auburn Hills, MI.
For more information, visit our web site www.assetstrategie.com
Asset Strategies Portfolio Services, Inc.
2635 Lapeer Rd, Auburn Hills, Michigan 48326 | Phone: (248) 373-9900
