Foreign nationals, electoral spending, and the First Amendment.

• Author: Massaro, Toni M.

"[I]t is inherent in the nature of the political process that voters must be free to obtain information from diverse sources in order to determine how to cast their votes."

--Justice Anthony Kennedy, Citizens United v. FEC, 130 S. Ct. 876, 899 (2010).

In January 2010, the United States Supreme Court ruled in Citizens United v. FEC that corporations and unions may use their general treasury funds to purchase advertising that explicitly calls for the defeat or election of federal or state candidates. (1) The decision opened the door to unlimited express advocacy advertisements by corporations and unions, provided that the ads are "independent expenditures"--that is, not coordinated with a campaign or candidate. (2) Before the decision, corporations and unions could fund express advocacy advertisements only through use of separate, segregated funds, called Political Action Committees (PACs), created with voluntary contributions. (3)

The Court also eased restrictions on so-called "electioneering communications" by corporations and unions--that is, broadcast advertisements that clearly mention a federal candidate and that air within sixty days of a general election or thirty days of a primary election. (4) Although such advertisements were allowed before Citizens United, they could only be funded by PACs, and had to comply with other federal restrictions. (5)

The decision unleashed a torrent of commentary--some of it scathing (6)--and immediately led to calls for new legislation and even a constitutional amendment. (7) The debate over the decision is hardly over, and its practical implications likely cannot be fully or accurately assessed until several election cycles have passed.

One of the ideas raised by critics of Citizens United is that Congress might further limit the ability of foreign corporations to make campaign expenditures. (8) Existing laws already limit foreign speakers (both individual and corporate) from making campaign contributions to candidates for state or federal office, or contributions to American political parties, (9) though the laws exempt permanent resident aliens and American subsidiaries of foreign corporations. Existing laws also prohibit foreign nationals--which include individuals who are not lawful permanent residents, foreign governments, corporations, residents, and political parties "organized under the laws of or having [their] principal place of business in a foreign country" (10)--from funding the operation of a PAC. (11) Post-Citizens United, because the law exempts American subsidiaries of foreign corporations from these restrictions, these subsidiaries need not use a PAC to expend funds on a domestic election.

Extending the existing restrictions on foreign national electoral spending, some argue, is a way to cabin the influence of many large corporations over elections, given the degree to which many of them have extensive foreign connections. (12) For example, Congress may seek to expand the definition of a "foreign corporation" to include corporations that are more than twenty-percent foreign-owned. (13) Alternatively, Congress may seek to regulate corporations that are incorporated in the United States, but that might be described as subject to substantial foreign influence. (14)

Would such restrictions be constitutional?

The majority in Citizens United expressly declined to rule on whether existing legislation based on a corporate speaker's foreign status is constitutional, (15) though Justice Stevens warned in his dissent that the opinion weakened the support for such speaker-based distinctions. (16) If Justice Stevens is correct that Citizens United casts doubt on the constitutionality of this existing legislation, then expansions of restrictions on campaign spending by foreign nationals almost certainly would be unconstitutional.

This Article analyzes whether foreign speakers can be restricted from making political campaign contributions or expenditures in ways that nonforeign speakers cannot. It outlines the strong constitutional arguments against this assumption, (17) arguments that were fortified not only by Citizens United, but also by McDonald v. City of Chicago, (18) the Court's most recent Second Amendment decision. The logic of both decisions, coupled with basic First Amendment methodology in political speech cases, suggests that campaign spending restrictions based on the citizenship status of the political speaker cannot survive the exacting scrutiny that the Court now imposes on such legislation.

The constitutional case against such restrictions is not, however, a conclusive one, and the Court likely would uphold such legislation despite the many sound arguments against them. A majority of the Court almost certainly would be loath to reach an outcome that significantly limits congressional power to ward off "foreign influence" over American elections, given how unpopular such a ruling would be in so many corridors, and given past and recent evidence of the Court's willingness to subordinate traditional First Amendment methods and values to national security interests. (19) It likely can, and will, find a way to uphold congressionally imposed restrictions on campaign expenditures and contributions.

Yet to rule in favor of such restrictions, the Court will have to ignore the internal logic of Citizens United, the structural implications of McDonald, and the Court's soaring rhetoric about the sophistication of American voters and the value of robust political expression fueled by unlimited private expenditures. Whether, and how, the Court navigates these newly fortified, self-constructed shoals will be interesting to observe.

Even if the Court does uphold restrictions on foreign national electoral spending, this will not prevent foreign speakers from influencing the American electorate. The rapid development of global technologies for communication, including electoral communications, affords extraterritorial foreign nationals multiple ways of reaching American voters that vault the legal barriers. Efforts to territorialize electioneering rights are already practically infeasible.

Legislative energy thus might be better spent on demanding greater transparency and content accuracy in campaign communications, rather than on speaker-based restrictions on spending. These efforts too may be of limited effectiveness, however, given constitutional protection of anonymous political speech, the uncertain effects of disclosure on voter behavior, and the many ways in which even constitutional restrictions can be circumvented.

Whatever campaign reform efforts Congress may adopt, they should be premised on facts about how the modern world of electioneering actually works. Likewise, judicial analysis of the measures should rest on plausible, not romantic, notions about how voters, candidates, and officials actually think and act.

The issue of whether foreign nationals can be limited in electoral spending forces to the foreground our darker notions about speaker autonomy, voter perspicuity, and official integrity. The First Amendment is, and ever has been, a balance between sunny confidence in the "marketplace of ideas" and grim skepticism about marketplace failures. This is no less true in the realm of political speech simply because it is "core value" speech; on the contrary, in no other arena does it matter so much whether theoretical commitments match the world to which they apply, or whether judicial methods for effecting the constitutional balance are effective in preserving First Amendment values. The Court may see this most clearly when its gaze turns away from the impact that domestic corporate electoral spending has on electoral integrity and turns to the impact that global electoral spending in American elections has on electoral integrity. In both contexts, it does--or should--matter whether facts and theory line up in ways that respect or undermine constitutional values.

1. ELECTORAL EXPRESSION RIGHTS OF DOMESTIC CORPORATIONS

   In 1976, the Court in Buckley v. Valeo held that campaign contributions to political candidates could be limited to prevent corruption or the appearance of corruption, but that expenditures on their behalf could not be so limited, because no evidence supports the assumption that independent expenditures raise comparable risks of candidate corruption. (20) Spending limits, the Court insisted, triggered strict scrutiny, (21) and equalizing the strength of voices by setting a cap on campaign expenditures was not a compelling reason for such limits. (22)

   In 1978, the Court extended this reasoning to corporations, and struck down spending limits imposed on corporations in ballot measure elections. (23) The opinion was narrowly drawn, and suggested in a footnote that limits on independent expenditures by corporations to influence candidate elections might be justified by an anticorruption rationale. (24)

   The Court later returned to the question of corporate independent expenditures in Austin v. Michigan Chamber of Commerce, and upheld spending limits imposed on for-profit corporations in candidate elections. (25) The Court did so, however, on an "antidistortion" rationale, rather than an anticorruption justification. Specifically, it noted that "the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas" were a sound basis for regulations of corporate independent expenditures. (26) This antidistortion argument stood in obvious tension with the Court's earlier rejection of an equality-based justification for spending limits in Buckley.

   In Citizens United, the Court struck down major provisions of the Federal Election Campaign Act (FECA) of 1971 (27) and the Bipartisan Campaign Reform Act (BCRA) of 2002 (28) on First Amendment grounds. Citizens United, a...