The Pacific Legal Foundation recently posted a criticism of bold new Seattle law, part of a larger package known as the Clean Campaigns Act, that bans political spending by foreign-influenced corporations. Unfortunately, the Pacific Legal Foundation has blatantly misrepresented the law.
In Seattle, the Pacific Legal Foundation may be best known for its unsuccessful (so far) lawsuit seeking to strike down the city’s innovative Democracy Voucher Program. Nationally, the $65 million dollar organization is probably best known for suing environmental agencies to challenge environmental protections, or for filing what is believed to be the first “strategic lawsuit against public participation” case, suing individuals and organizations that protested against a nuclear power plant apparently owned by one of its funders. (Of course, its work is much broader. For example, Philip Morris has described the Pacific Legal Foundation as a “strategic key ally” in its efforts to undermine anti-smoking efforts.)
Unfortunately, the Pacific Legal Foundation does not appear to be practicing a rigorous commitment to truth. Its critique of Seattle’s law is blatantly inaccurate. The Foundation’s blog post states:
“Foreign influence” means that someone who owns at least one percent of the business isn’t a U.S. permanent resident or has an immediate family member who isn’t a U.S. citizen or permanent resident. … And the bill strays into paranoid delusion by deeming a business to be under the thrall of “foreign influence” if a single owner has a grandparent from another country. … The law will mostly muzzle businesses owned by visa-holding immigrants and their descendants …
In short, in three different ways, the Pacific Legal Foundation suggests that the law would be triggered by an investor who has a family member who is not a citizen or permanent resident.
That is completely fictional. The ordinance (CB 119731) bans political spending by corporations that have significant foreign ownership, defined as 1% ownership by a single foreign owner, or 5% ownership by multiple foreign owners, or participation of a foreign owner in the corporation’s decision-making regarding political activity. (While the numerical thresholds may appear low, the expert testimony presented to the City Council explains why they are justified both as a matter of constitutional law and corporate governance.) The law defines a foreign owner as “(1) a foreign investor; or (2) a corporation wherein a foreign investor holds, owns, controls, or otherwise has directly or indirectly acquired beneficial ownership of equity or voting shares in an amount that is equal to or greater than 50 percent of the total equity or outstanding voting shares.” A foreign investor, in turn, is defined as a stockholder that is one of the following: a government of a foreign country; a foreign political party; a foreign partnership, association, corporation, or other organization; or “an individual who is not a citizen of the United States or a national of the United States and who is not lawfully admitted for permanent residence.”
The phrase “family member” does not appear anywhere in the ordinance. An investor who is a citizen or permanent resident, but who has relatives who are not, is not affected in the slightest. The Pacific Legal Foundation appears to have invented this claim from whole cloth.
The Foundation has also completely misrepresented the campaign and efforts to pass the law. It describes the law as an “anti-immigrant” bill that “pander[s] to anti-immigrant fervor.”
Nothing could be further from the truth. The very first sentence of the bill states: “The City of Seattle welcomes immigrants, visitors, and investors from around the world.” But it then proceeds to note, “However, its elections should be decided by the people of Seattle and not by foreign investors or the business entities over which they exert influence.”
It’s important to note that the visa-holding (non-permanent-resident) immigrant investors of which the Pacific Legal Foundation speaks are already prohibited by federal law, upheld by the Supreme Court and specifically upheld by the Court of Appeals for the Ninth Circuit as applied to municipal elections, from spending their own money in Seattle’s elections. This law simply extends that prohibition to political spending by the corporations over which they can exert influence.
No one remotely familiar with the testimony submitted in support of the bill, both in writing and at two different public hearings, would suggest that “anti-immigrant fervor” formed any part of the arguments presented. (Indeed, the bill’s first council hearing in December 2019 followed immediately after the committee’s appointment of members to the city’s Immigrant and Refugee Commission, at which several new appointees spoke movingly of their immigrant experiences.) Again, the Pacific Legal Foundation appears to have invented this claim from whole cloth.
There may be some projection going on here. The Pacific Legal Foundation played an important role in an unsuccessful lawsuit seeking to block California’s public colleges and universities from charging their in-state tuition rate to graduates of state high schools who were undocumented immigrants. The Foundation complained at the time that the state was “giving Brownie points for being an illegal immigrant.” In any event, there is nothing in the record that remotely supports the Foundation’s suggestion that either Seattle City Councilmember (now Council President) Lorena González, who sponsored the legislation, or any of its supporters, were “pandering to anti-immigrant fervor” by enacting a law that only addresses corporate political spending.
The Pacific Legal Foundation is, of course, free to disagree with the law on the merits. (And it was free, though it chose not to exercise the option, to testify against it at either of the two public hearings while it was being considered.) However, attorneys have a duty of candor, and the Foundation should not issue false statements. We call upon the Pacific Legal Foundation to correct these blatant misstatements about the Seattle Clean Campaigns Act.