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					t r u t h o u t | Will the Citizens United Ruling Let Hugo Chavez and King Abdullah Buy US Elections?               1/31/10 9:53 AM




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                                 Will the Citizens United Ruling Let
                                 Hugo Chavez and King Abdullah Buy
                                 US Elections?
                                 Friday 22 January 2010
                                 by: Aaron Mehta and Josh Israel | Center for Public Integrity




                                 Supreme Court ruling may open door to foreign state-
                                 owned corporate political spending.

                                 While political observers have dissected much of yesterday’s 5-4
                                 Supreme Court ruling in the Citizens United v. Federal Election
                                 Commission, one potentially huge (and probably unintended)
                                 consequence has gotten little notice: the impact the decision could
                                 have on foreign government spending on federal campaigns.

                                 The ruling essentially gives corporations the same rights as
                                 individuals in their ability to spend freely on political advertising,
                                 even if those advertisements explicitly advocate the election or
                                 defeat of a federal candidate. This means that candidates who
                                 support, say, increased restrictions on tobacco products could find
                                 themselves up against the corporate treasury of say, a major
                                 American tobacco company. And even the fear of $10 million in
                                 attack ads blanketing the airways come re-election time may give
                                 sitting legislators pause before taking on moneyed industries.

                                 But it’s one thing for U.S. firms to have their say. What about
                                 foreign companies that operate U.S. subsidiaries? Many of these,
                                 like American businesses, are owned by ordinary shareholders —
                                 but a host of others are owned, in whole or in part, by the foreign
                                 governments themselves.

                                 One prominent examples is CITGO Petroleum Company — once
                                 the American-born Cities Services Company, but purchased in
                                 1990 by the Venezuelan government-owned Petróleos de
                                 Venezuela S.A. The Citizens United ruling could conceivably allow
                                 Venezuelan President Hugo Chavez, who has sharply criticized
                                 both of the past two U.S. presidents, to spend government funds
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t r u t h o u t | Will the Citizens United Ruling Let Hugo Chavez and King Abdullah Buy US Elections?               1/31/10 9:53 AM



                                 both of the past two U.S. presidents, to spend government funds
                                 to defeat an American political candidate, just by having CITGO
                                 buy TV ads bashing his target.

                                 And it’s not just Chavez. The Saudi government owns Houston’s
                                 Saudi Refining Company and half of Motiva Enterprises. Lenovo,
                                 which bought IBM’s PC assets in 2004, is partially owned by the
                                 Chinese government’s Chinese Academy of Sciences. And
                                 Singapore’s APL Limited operates several U.S. port operations. A
                                 weakening of the limit on corporate giving could mean China,
                                 Saudi Arabia, Singapore, and any other country that owns
                                 companies that operate in the U.S. could also have significant
                                 sway in American electioneering.

                                 Federal election law has long prohibited any foreign national from
                                 directly or indirectly making “an independent expenditure, or
                                 disbursement for an electioneering communication.” And the
                                 Supreme Court’s ruling does not explicitly address the issue of
                                 foreign corporations. However, in his dissent in Citizens United,
                                 Justice John Paul Stevens cautioned that the decision “would
                                 appear to afford the same protection to multinational corporations
                                 controlled by foreigners as to individual Americans.”

                                 Some legal observers fear the ruling would open up the floodgates
                                 for any corporation operating in the United States, no matter who
                                 owns them. J. Gerald Hebert, executive director and director of
                                 litigation at the non-partisan Campaign Legal Center, told the
                                 Center for Public Integrity that the existing prohibition on foreign
                                 involvement does not refer to foreign controlled domestic
                                 corporations. “With the corporate campaign expenditure ban now
                                 being declared unconstitutional, domestic corporations controlled
                                 by foreign governments or other foreign entities are free to spend
                                 money to elect or defeat federal candidates,” he believes.

                                 Other observers are not so sure. Stephen Spaulding, a law fellow at
                                 Common Cause, believes that in the absence of any explicit
                                 Supreme Court comment on this area, the issue of foreign-owned
                                 corporations spending on federal campaigns is “still an open door
                                 question.” He adds, “it may very well be a new path in campaign
                                 finance litigation.”

                                 The Federal Election Commission did not immediately respond to
                                 a request for comment. Even if the Supreme Court, the FEC, or
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t r u t h o u t | Will the Citizens United Ruling Let Hugo Chavez and King Abdullah Buy US Elections?               1/31/10 9:53 AM



                                 a request for comment. Even if the Supreme Court, the FEC, or
                                 Congress decide that the right of corporations to engage in
                                 electioneering does not apply to foreign-owned corporations, with
                                 significant foreign investment in even American-based companies,
                                 it could prove quite difficult to determine who may spend and who
                                 may not.

                                 Marianne Lavelle contributed to this story.

                                 All republished content that appears on Truthout has been obtained by
                                 permission or license.



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