Academic journal article Vanderbilt Journal of Transnational Law

First Amendment and "Foreign-Controlled" U.S. Corporations: Why Congress Ought to Affirm Domestic Subsidiaries' Corporate Political-Speech Rights

Academic journal article Vanderbilt Journal of Transnational Law

First Amendment and "Foreign-Controlled" U.S. Corporations: Why Congress Ought to Affirm Domestic Subsidiaries' Corporate Political-Speech Rights

Article excerpt

ABSTRACT

Political spending in the modern-day, prolonged election cycle continues to exceed historic proportions. With money equated to speech, whether the First Amendment entitles certain contributors to engage in this political activity remains an open question. Unlike France and Israel, which prohibit corporate contributions, and Canada and the United Kingdom, which turn to public funding for campaign finance, the United States has pushed candidates to rely on political party contributions, personal wealth, and the generosity of individuals, political action committees, and corporations. Concerns about corporate and foreign influence on politics have been especially salient during this lengthy economic downturn, as shown by the prominence of the nationwide Occupy Wall Street protests. Those who trumpet restrictions on so-called "foreign" corporate political influence are concerned with infringements on U.S. sovereign independence and citizens' political self-determination. This Note responds to the uproar against corporate and foreign influence in the wake of Citizens United v. Federal Election Commission, arguing the debate in Congress and, thus, the law, ought to distinguish between domestic subsidiaries of foreign corporations and foreign corporations themselves. Under the current legal regime, no distinction between U.S. corporations and domestic subsidiaries exists; despite proposed legislation to the contrary, it should remain this way.

TABLE OF CONTENTS

 I.   INTRODUCTION
II.   BACKGROUND
      A. Campaign-Finance Options
      B. Domestic Subsidiaries and Foreign-
         Controlled Corporations Under the Law
         1. Domestic Subsidiaries and Their
            Influence
         2. Framework of Permissible Foreign
            Influence
         3. Legislation Regulating Foreign-Linked
            Corporate Political Contributions
         4. Domestic Subsidiaries, as Discussed
            in Citizens United
      C. Lower Court Decisions Since Citizens United
III.  CORPORATE POLITICAL-SPEECH REGULATIONS AND
      JURISPRUDENCE FROM BUCKLEY TO CITIZEN
      UNITED
      A. Beginning with Buckley
      B. After Bellotti: Supreme Court Upholds
         Corporate Political-Speech Regulations
      C. Shift to Deregulation
IV.   RATIONALES FOR TREATING U.S. SUBSIDIARIES
      THE SAME AS OTHER U.S. CORPORATIONS
      A. Speech Is Valuable in and of Itself
      B. Freedom-of-the-Press Jurisprudence
         Supports Domestic Subsidiaries'
         Corporate Political Speech
      C. Treaty Obligations Dictate that Domestic
         Subsidiaries Deserve Equal Treatment
      D. Policy Considerations Favor Including
         Domestic Subsidiaries Within the Realm
         of Permissible Corporate Political Speech
         Actors
         1. Satisfying Demands of the Regulatory
            State
         2. Lack of Electoral Vote Should Not Result
            in Taxation Without Representation
         3. Interest in Attracting Foreign
            Investment
         4. Interests of U.S.-Citizen Employees
 V.   LEGISLATIVE PROPOSALS TO ELIMINATE
      "FOREIGN INFLUENCE"
VI.   CONCLUSION

I. INTRODUCTION

"High Court Allows Foreign Campaign Finance" (1) and other deceptive headlines contributed to popular misunderstanding (2) of the Citizens United v. Federal Election Commission ruling. (3) Somehow, journalists, law professors, think tanks, (4) members of Congress, (5) and even the President (6) confused the majority opinion. (7) In the opinion's wake, legislators have stoked fear of foreign corporate influence and have made U.S. corporations with foreign links the target of legislative proposals. The Citizens United Court, however, was not tasked with addressing--and indeed did not address--foreign political influence. At issue was the Bipartisan Campaign Reform Act of 2002 (BCRA) prohibition on corporate sponsorship of electioneering communications, (8) and the 5-4 decision held that corporations and unions may make unlimited independent expenditures from their general treasury funds on political advertisements. …

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