Posted on April 26, 2022 (April 26, 2022) Challenging Foreign Influence Share: The Democracy Preservation Act would be the first statewide ban on foreign-influenced corporate spending in elections ALBANY, NY – A coalition of more than 25 democracy reform advocacy organizations sent a letter to the New York State Assembly today, urging Assemblymembers to pass the Democracy Preservation Act (A.7458a) to end foreign-influenced corporate spending in state elections and protect the promise of American self-governance. The legislation, introduced by Assemblywoman Latrice Walker and Senator Michael Gianaris, would bar corporations with partial foreign ownership from contributing to candidates, parties, or committees (including super PACs) or from engaging in their own direct election spending. The State Senate passed the bill in January 2022 with bipartisan support. Signers of the letter, led by the nonpartisan legal advocacy organization Free Speech For People, include the Center for American Progress, Blue Haven Initiative, Stand Up America, Common Cause New York, Dutchess County Progressive Action Alliance, Empire State Indivisible, End Citizens United/Let America Vote Action Fund, Fix Democracy First, and the New York Public Interest Research Group. Across the country, companies with partial foreign ownership, like Amazon, have used their money to influence the outcome of elections and political agendas in their favor. The Supreme Court’s 2010 decision in Citizens United created a loophole for foreign interests to acquire stakes in U.S. corporations and then use that leverage to influence or control the corporation’s political activity, including campaign contributions, contributions to super PACs, and independent expenditures. “An investor who owns 1% of stock in a major corporation (typically, hundreds of millions of dollars) is likely one of the company’s top 10 investors, and can get the CEO on the phone within 24 hours,” the letter states. “Furthermore, executives focus on the interests of the major investors of their companies. As the CEO of ExxonMobil once said, ‘I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.’” Multinational corporations affected by the Democracy Preservation Act are those owned 1% by one foreign investor, or 5% by multiple foreign investors. These thresholds reflect levels of ownership that are widely agreed (including by entities such as the Business Roundtable) to be high enough to influence corporate governance. These parameters would cover an estimated 98 percent of the S&P 500 corporations. “The Citizens United decision wreaked havoc on our democracy – including giving unprecedented ability for foreign-owned corporations to influence our elections,” said Assemblywoman Latrice Walker in a statement following the bill’s passage in the State Senate in January. “We must give New Yorkers the democracy they deserve.” The Democracy Preservation Act cites inspiration from similar legislation passed in Seattle in 2020, and recently advanced in San Jose, California. Free Speech For People, a national non-profit public interest organization founded on the day of the Supreme Court’s Citizens United ruling, helped draft the Democracy Preservation Act and has been working across the country to advance this model legislation. Seattle passed an ordinance banning foreign-influenced corporate spending in January 2020, after Amazon spent $1.5 million to influence local elections there. Further, in March 2022, the San Jose City Council voted to advance this model bill. Congressman Jamie Raskin of Maryland introduced in December 2021 the Get Foreign Money Out of U.S. Elections Act, a federal companion bill to the Democracy Preservation Act. The bill has 25 co-sponsors.Senator Elizabeth Warren and Congresswoman Pramila Jayapal included the legislation in a broad anti-corruption package they introduced in December 2020. Leading constitutional law and campaign finance experts have endorsed this legislation, including Harvard Law Professors Laurence Tribe and John Coates and Commissioner Ellen Weintraub of the Federal Election Commission. “Corporate executives know where their bread is buttered. This bill addresses the threat to New York’s democratic self-government posed by corporate political spending by partly foreign-owned corporations,” says Free Speech For People Legal Director Ron Fein. “The Democracy Preservation Act is a bold reform in the fight to put democracy back in the hands of the people where it belongs,” says Alexandra Flores-Quilty, Campaign Director at Free Speech For People. Read the full letter here.