Rick Hasen has twice posted in the last several days a sharp criticism of the President’s fifth anniversary statement about Citizens United. He objects to the assertion that Citizens United opened up the avenue for unlimited foreign corporate spending in the United States. Rick says this is false, citing in support of that position PolitFact’s prior rating of that statement as “mostly false,” which that fact-checking enterprise arrived at after originally rating the statement as “barely true.” And a review of PolitiFact’s analysis reveals that a statement merits criticism as “mostly false” if it is an ”overstatement.”

Readers will probably think very little is at stake in tracing the chain of reasoning from false to mostly false to barely true, or somewhat true, or whatever, and trying to sort out what fine differences distinguish one of these ratings from the others. But because Rick stakes out a strong position—that the statement is simply “false” —he should have a high degree of confidence that it is a black-and-white matter subject to no disagreement.

It is striking how Rick’s analysis departs from much of what is typical of campaign finance reform argument. The standard critique of money-in-politics reminds time and again not to seize on technicalities but to assess the influence of money as it achieves it effects subtly and insidiously. We are counseled to appreciate how things “really work,” and to grasp the various avenues of circumvention—i.e. getting around rules— that invite money to become dominant in our political process. Corruption should not be construed too tightly: it is to be understood more broadly than merely a bribe. ”Undue influence” should be our concern, we are told, and if we do not find money purchasing official action, we should focus on whether it buys access or even goodwill, which is bad enough.

So what then of the statement that Citizens United invites foreign corporate influence? Rick is correct that the law seems to prohibit foreign corporations from spending to influence elections. And he rightly refers to the Supreme Court’s refusal just two years ago to invalidate that prohibition on constitutional grounds. So be believes that this is ally enough to dispense with the concern over foreign corporate political influence after Citizens United and to discredit the Presidential statement’s argument to the contrary.

In fact, however, by the usual reform analysis, this is far too generous a reading of the law and its protections. Foreign corporations may not just own, but control and manage, US corporations that now under Citizens United can make independent expenditures to influence American elections. It is difficult to imagine that those US corporations will pursue political objectives inconsistent with the preference of their foreign owners. So we have at a minimum an appearance problem, which has been a longstanding concern of the reform movement.

But perhaps the problem goes deeper. By the law Rick cites, a foreign-owned US corporation is supposed to operate without any involvement by foreign nationals in its campaign finance decision-making—including the foreign nationals who presumably make up the management structure. These foreign nationals may not “direct, dictate, control, or directly or indirectly participate” in the decision-making process by which a US subsidiary might make independent expenditures. What constitutes direct or indirect “participation?” Should a foreign national CEO be considered to have participated in this decision-making if she receives a report of this state-side political activity? If she nods her head—and in reform circles we have heard much about “winks and nods”—may subordinates take from this acquiescence if not express approval, presenting the question of a violation of the law? No one who practices in this field believes that these provisions are enforceable. And indeed there is no evidence that they have ever been enforced.

These questions are not raised at all if corporations cannot make independent expenditures. The Supreme Court decided, however, the Constitution forbids any such prohibition. It issued this ruling at a time in American economic history when the foreign ownership of US companies is widespread and the total assets under effective foreign corporate control runs into the trillions of dollars. It is difficult to argue then that foreign corporate owners don’t have valuable interests in the United States that would be affected by political decisions and, potentially, protected by political action that can now be advanced with independent expenditures.

Rick answers that Congress can dispose of these problems by legislative action, forbidding foreign owned US subsidiaries from spending for political purposes. He concludes that the problem then is legislative, not traceable to Supreme Court decision-making. But Congress, beginning in 1907, had already acted across the board to prohibit corporate contributions and expenditures, but the Supreme Court in 2010 whittled the ban down to allow for independent spending. It is also far from clear that Congress can get around the problem of foreign national influence by reenacting the prohibition and directing it solely at US subsidiaries. That measure might pass constitutional muster, but it might not, and it might not because of … Citizens United.

So when it is said that Citizens United made possible foreign corporate political influence in the United States, it is not so obvious as Rick makes it out to be that the statement is false—or even mostly false, or just barely true, or an “overstatement.” By the standards of reform argument, we should instead have reason to be worried about this as another instance in which the Court has expanded the opportunities for “undue influence” —in this instance, by the foreign owners of US corporations. What the Court has created is a “loophole” for the acquisition of this influence that did not exist prior to Citizens United, and the closing of this avenue of circumvention is dependent on the FEC’s rigorous enforcement of a vague rule.

Who can remember the last time that reform advocates were not riled up by a state of affairs like this?


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