Foreign Campaign Contribution Ban Remains in Federal Elections

August 10, 2011

On Monday, a three-judge panel of the United States District Court for the District of Columbia cleared up perceived ambiguity in Citizens United v. FEC relating to the constitutionality of restrictions on the political activities of foreign individuals and entities, ruling to uphold the ban on contributions and expenditures on direct advocacy by foreign nationals in federal elections. Under the District Court ruling, foreign corporations remain likewise prohibited from making such contributions and expenditures.

The Bipartisan Campaign Reform Act of 2002 (McCain-Feingold Act) prohibits foreign nationals – defined as those who are neither U.S. citizens nor lawful residents – from making contributions to federal candidates or political parties, and from making expenditures on federal elections. 2 U.S.C. § 441e(a). As interpreted by the courts, this latter prohibition specifically covers express advocacy of the election or defeat of a political candidate: either “express campaign speech” or its “functional equivalent.” See FEC v. Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) (controlling opinion of Roberts, C.J.) (holding that a communication is the “functional equivalent” of express advocacy where it “is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate”).

In Citizens United v. FEC, 130 S. Ct. 876, 911 (2010), the Supreme Court decision striking down the prohibition against electioneering communications by corporations, the court specifically declined to address “the question whether the Government has a compelling interest in preventing foreign individuals or associations from influencing our Nation’s political process.”

Bluman v. FEC, No. 10-1766 (D.D.C. Aug. 8, 2011), addresses just that question. Writing for the three-judge panel, Circuit Court Judge Brett Kavanaugh concluded that the most thorough examination of the government’s ability to regulate foreign contributions comes in a dissenting opinion in Citizens United penned by Justice John Paul Stevens, who affirmed the government’s power in this area. The District Court found “the force of Justice Stevens’s statement to be a telling and accurate indicator of where the Supreme Court’s jurisprudence stands on the question of foreign contributions and expenditures.” Bluman, slip op. at 12-13. Thus, the statutory ban on campaign contributions and expenditures by foreign nationals “passes muster even under strict scrutiny.” Bluman, slip op. at 6.

The court’s ruling covers not only contributions and express advocacy by foreign nationals but also such activities by foreign corporations. Accordingly, the ban on such activities by foreign corporations remains in place. However, the District Court made clear that it did not reach the question of “the circumstances under which a corporation may be considered a foreign corporation for purposes of First Amendment analysis.” Id., slip op. at 17 n.4 (emphasis original).

Additionally, as interpreted by the court, the statutory provision restricting express advocacy “does not bar foreign nationals from issue advocacy – that is, speech that does not expressly advocate the election or defeat of a specific candidate.” Id., slip op. at 4 (citing Wisconsin Right to Life, 551 U.S. at 456 (controlling opinion of Roberts, C.J.) (holding that issue advocacy includes those communications that do not constitute “express campaign speech” or its “functional equivalent”)).

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If you would like to discuss this matter further, please contact Bob Rizzi at (202) 383-5322, Jonathan Singer at (202) 383-5238, or your primary contact at O’Melveny & Myers LLP.