Following Minnesota and Seattle, the San Jose City Council passed a landmark bill on Tuesday that bans foreign corporate spending in city elections.

SAN JOSE, CA (January 9, 2024) – Today, the San Jose City Council approved 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 1 percent or more ownership by a single foreign investor or five percent or more ownership by multiple foreign investors. 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, due to the significant levels of foreign influence in their companies.

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 Minnesota in 2023 and in Seattle, Washington in 2020. Additional bills are under consideration in the California, Washington, Hawaii, and New York legislatures, as well as in the U.S. Congress. The San José legislation represents the fruition of our collaborative efforts with the South Bay Labor Council and Working Partnerships USA.

“Today, we mark a crucial victory in protecting local democracy, pushing back against corporate influence, and rebuilding trust in our government. In the 2020 San José Mayoral Race we saw the toxic consequences of Big Money in politics and today’s success is a reflection of the leadership of people that united against that and took collective action to safeguard our democracy”, said Maria Noel Fernandez, Executive Director of Working Partnerships USA.

Nationally-known experts in constitutional law, campaign finance, and corporate governance have joined Free Speech For People’s efforts to advance this model bill, 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.

“It has long been the policy of the United States to prohibit foreign influence in US elections,” said Free Speech For People’s Senior Counsel Courtney Hostetler. “San Jose’s new ordinance is a critical step for 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 vote on 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.

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

 

###