The San Jose City Council voted to pass the landmark bill on Tuesday that will effectively ban foreign corporate spending in city elections.

SAN JOSE, CA (March 22, 2022) – The San Jose City Council voted today in favor of a landmark campaign finance law that will combat the influence of foreign corporate spending in city elections.

The legislation will prohibit corporations from spending money in San Jose’s elections if they are foreign-influenced, defined as more than 1 percent ownership by a single foreign national or more than five percent ownership by multiple foreign nationals. The parameters of the ordinance will prevent nearly every member of the S&P 500 from making political expenditures in city elections, including Silicon Valley giants Apple, Alphabet (Google), and Meta.

In accordance with standard San Jose city practice, the City Council voted on a policy memorandum that directs city staff to draft final ordinance language. A vote for a policy memorandum is a strong indicator for likely passage on final ordinance language when presented to the Council in the weeks ahead.

The policy grows from model legislation developed by Free Speech For People, a national nonpartisan non-profit organization that works to renew our democracy and to limit the influence of money in our elections. Free Speech For People helped to pass similar legislation in Seattle, Washington in 2020. Additional bills are under consideration in the California and New York State Assemblies, as well as the U.S. House of Representatives.

Nationally-known experts in constitutional law, campaign finance, and corporate governance have joined Free Speech For People’s efforts, including Professor Laurence Tribe of Harvard Law School and Professor Adam Winkler of the University of California Law School, experts in constitutional law; Professor John C. Coates IV of Harvard Law School (also a former General Counsel and Director of the Division of Corporate Finance at the U.S. Securities Exchange Commission) and Professor Brian Quinn of Boston College School of Law, experts in corporate law and governance; and Federal Election Commissioner Ellen Weintraub, expert in election law.

“A corporation spending money in U.S. elections doesn’t qualify as an ‘association of citizens’ if it has major foreign investors,” said Free Speech For People Legal Director Ron Fein. “San Jose has taken a major step towards protecting its democratic self-government.”

“I applaud the San Jose City Council for considering issues so critical to the health of our democracy, and…for sparking an admirable effort to guard our political systems from the dangers posed by foreign corporate spending,” said Professor Tribe in a letter to the City Council. “If foreign investors do not have a constitutional right to spend money to influence federal, state, or local elections, then they do not have a constitutional right to use the corporate form to do indirectly what they could not do directly.”

“The San Jose City Council’s passage of this model bill marks a major victory for our democracy,” said John Bonifaz, President of Free Speech For People. “Across the country, legislators are working to advance this critical reform to address the threat of foreign corporate money in our elections and to defend our democracy. We congratulate San Jose for leading the way in addressing this threat and in protecting its elections.”

The Supreme Court’s January 2010 decision in Citizens United v. FEC sanctioned political spending by corporate entities as political speech protected by the First Amendment on the claim that corporations are “associations of citizens.” As many major corporations are owned in substantial part by foreign shareholders, they can now circumvent federal law which explicitly prohibits foreign nationals from making any political expenditures in U.S. elections.

According to a 2019 national poll of 2,633 voters by the Center for American Progress, 73 percent of Americans—including majorities of both Democrats and Republicans—would support banning corporate political spending by corporations with any foreign ownership.

For more information about the legislation, including letters of support and analysis from Free Speech For People and Professor Tribe, click here.