First Amendment Rights of Alien Corporations

Speaker Pelosi is giving some credence to the report that the Chamber of Commerce is funding independent expenditures with foreign corporate money. The Chamber of Commerce, a purely lobbying and political operation, has set up a network of foreign offices which while controlled by foreign boards, direct money directly into the pot of money which is used to purchase electioneering ads. In the wake of the Citizens United v. FEC 130 S. Ct. 876 (2010), we must acknowledge that there is nothing currently illegal about this arrangement.

There are genuine questions of great importance when we then ask ourselves whether foreign money should be able to be used to further a political agenda. Are our national interests vulnerable to outside influence through corporate laundering of foreign donations? The prohibition of foreign funds being used to further political goals would require some sort of separation between funds. Is a firewall between funds provided by foreigners and those provided by residents onerous enough for Justice Kennedy to decide that it creates a practical prior restraint on speech?

It should be answered to the first question that much of the CIA's covert operations budget have gone towards influencing national, regional, and even local elections in foreign countries. Electioneering is a potent tool for a foreign power to exercise in order to achieve policy goals. The possibility that foreign agents might be funding political speech to further their interests via the elected American Government is chilling. Citizens United declared that corporations, which are merely associations of people, cannot be banned from political speech. Is the same true for foreign corporations?

A basic answer is that the government can curtail fundamental rights only if the law "furthers a compelling state interest and is narrowly tailored to achieve that interest." This requirement is called "strict scrutiny" and is the highest bar for government action to clear. I believe that freedom from foreign agents would be a compelling state interest, so if there can be a statute which prevents foreign donations from entering the production budget of an "electioneering communication" that meets the "narrowly tailored" aspect of strict scrutiny, we might be able to sidestep the question of whether Alien corporations have First Amendment rights. I suspect that there is no effective way to criminalize or in any way prohibit the commingling of foreign and domestic moneys in a corporation's general fund that would be materially less of a hassle than following the law which Citizens United struck down. Therefore it presumably meets Kennedy's standard for being a practical prior restraint. Once the money goes into the general fund, it is fair game for political speech. The court just held that any withdrawal from this fund must be free from restrictions to engage in speech.

If Congress acts to prevent foreign money from dictating the terms of the political speech which is "indespensible to decisionmaking in a democracy" First National Bank of Boston v. Belotti435 U.S. 765 (1978), it must deny the right of political speech to alien corporations. Would the Supreme Court allow it? The answer, like all good things in law, will come soon if Congress acts.

On the one hand is the string of 9th Circuit rulings which say that an alien living within the borders of the United States has First Amendment assembly rights, which presumably are comorbid with speech rights. Quoting from Arab-American Anti-Discriination Committee v. Reno 70 F.3d 1045, 1063-1064.

"The Supreme Court has consistently distinguished between aliens in the United States and those seeking to enter from outside the country, and has accorded to aliens living inside the United States those protections of the Bill of rights that are not, by the text of the Constitution, restricted to citizens."

It would appear that the key factor for the grant of First Amendment rights is location. One might reasonably suppose that aliens within our embassies or in other zones under American control might enjoy the same basic rights. Applying this rule requires us to determine whether the corporation is inside the United States.

American companies can be said to reside in the United States because they are incorporated in American states, have business addresses within our borders, and pay taxes. However, a corporation may maintain foreign offices staffed and directed by foreigners. These corporations may solicit donations from companies in their respective countries, including those run by the governments of those countries. There is nothing to bar a government from paying directly into the fund. If a corporation resides in the United States, can Congress restrict the flow of money from foreign sources which result in political speech?

This is why the President used the State of the Union to highlight the Citizens United decision. It seems that the only way to protect the American political process from outside influence is to put up a shield against foreign money at some point. The least arduous and most narrowly tailored way to do it may be to overturn Citizens United. Any other regulation would prove much more onerous to corporations than a simple ban on corporate funding for electioneering. Otherwise, corporations would have to prove that commingled foreign funds did not contribute to an independent expenditure, to reuse Kennedy's words, in order "to avoid threats of criminal liability and the heavy costs of defending against FEC enforcement." This would certainly spur many corporations to seek an FEC opinion about their procedure, setting up the same prior restraint problem which Citizens sought to overcome.