The Seattle City Council unanimously (7-0) passed this bill on January 13, 2020. Read our press release.
The Seattle City Council has passed a bold new campaign finance reform ordinance to ban political spending by foreign-influenced corporations (corporations owned in significant part by foreign investors). As reported in the New York Times, the news that Amazon (a multinational corporation responsible to investors all over the world) spent $1.5 million in the 2019 election against city council candidates that didn’t meet the corporation’s approval has made this legislation more urgent than ever.
We are proud to partner with Fix Democracy First in this campaign, and we thank Seattle City Councilmember (now Council President) Lorena González for her leadership in sponsoring this legislation.
This ordinance builds on Free Speech For People’s work developing similar legislation in St. Petersburg, Florida (along with partners American Promise-Tampa Bay, League of Women Voters of the St. Petersburg Area, and the Leif Nissen Foundation), which passed in November 2017, as well as proposed legislation in Massachusetts.
Why Seattle is banning political spending by foreign-influenced corporations
- The 2016 election showed that foreign interference in our elections is a serious problem.
- The recent news that at least one Russian company bought political ads on Facebook shows one way that foreign interests can use corporations to influence elections. But Facebook and Twitter aren’t the only way that foreign interests can use American companies to influence U.S. elections.
- Under current law, it’s illegal for a foreign government or individual to spend money to influence state elections. The Supreme Court has upheld this law.
- But there’s a loophole in the current law: if a corporation is registered in the United States, but it has significant foreign ownership, it can still spend money, or launder the money through a “super PAC,” to spend it in state and local elections.
- This bill would help plug that loophole by making it illegal for a company that is owned 5% by multiple foreign owners, or 1% by a single foreign owner, from spending money directly or giving it to a super PAC to spend in state or local elections.
- We need limits on political spending by corporations with significant foreign ownership to help protect democratic self-government.
Letters and testimony in support
- Letter from Professor Laurence Tribe, Harvard Law School (Jan. 3, 2020)
- Letter from Professor John Coates, Harvard Law School (Jan. 3, 2020)
- Letter from Commissioner Ellen Weintraub, Chair, Federal Election Commission (Jan. 6, 2020)
- Letter from Ron Fein, Legal Director, Free Speech For People (Jan. 7, 2020)
- Letter from Michael Sozan, Senior Fellow, Center for American Progress (Dec. 20, 2019)
- Ending Foreign-Influenced Corporate Spending in U.S. Elections, Center for American Progress (Nov. 21, 2019) (full report)
- Fact sheet
- Letter from Judge Anne Levinson (ret.) on behalf of the Washington State Public Disclosure Commission (Aug. 24, 2019)
- Letter from Wayne Barnett, Executive Director, on behalf of the Seattle Ethics and Elections Commission (Nov. 15, 2019)
Quantifying Foreign Institutional Block Ownership at Publicly Traded U.S. Corporations by John C. Coates, Ron Fein, Kevin Crenny & L. Vivian Dong
Since the Supreme Court’s 2010 Citizens United decision invalidated restrictions on corporate political spending, considerable public and policymaker interest has developed in the potential for U.S. elections to be influenced by foreign interests through U.S. corporations. On the one hand, existing federal law (the Federal Election Campaign Act) already prohibits political spending in federal, state, or local elections by corporations that are incorporated outside the U.S., or which have their principal place of business abroad. On the other hand, current law still allows substantial avenues for foreign influence over corporate political spending by U.S.-incorporated and -based corporations.
Lawmakers in Congress and members of the Federal Election Commission have expressed interest in addressing this phenomenon. As of yet, federal reform proposals have failed to advance. A more likely near-term prospect for new policy measures is at the state and local level. Local governments (notably in St. Petersburg, Florida) are now contemplating measures to address this concern.
This paper focuses on ownership of significant blocks of stock as a potential mechanism for foreign influence over corporate political spending. We found that roughly one in eleven (9%) companies in the S&P 500 has one or more foreign institutions each owning five percent or more blocks of stock, nine have foreign institutions with ten percent or more blocks, five have a foreign institution with more than fifteen percent, and three have foreign institutions with more than 20% blocks. Three firms have multiple foreign institutional blockholders. This is the first recent empirical analysis of the level of foreign institutional blockholder ownership of publicly traded corporations. [/expand]
Status of Legislation
- Video of Seattle City Council GESCNA Committee Meeting (Dec. 11, 2019) (starts at 45:00)
- Video of Seattle Ethics and Elections Commission meeting (Oct. 30, 2019) (starts at 27:00)
- Video of Washington Public Disclosure Commission meeting (Aug. 20, 2019)
- Video of Seattle Ethics and Elections Commission meeting (Aug. 13, 2019)
- Letters from Councilmember Lorena González, Seattle City Council
The Select Committee on Campaign Finance Reform is also considering a second bill, CB 119730, that would limit contributions to independent expenditure committees and thus end super PACs in city elections.
In the News
- Seattle Times, “Seattle City Council bans ‘foreign-influenced’ companies from most political spending” (Jan. 13, 2020)
- The Stranger, “Clean Campaigns Act Unanimously Approved by Seattle City Council” (Jan. 13, 2020)
- San Francisco Chronicle, “Seattle reels in spending by ‘foreign-influenced’ companies” (Jan. 13, 2020)
- Crosscut, “Amazon tried to buy our elections. A new law will stop that” (Dec. 6, 2019)
- New York Times, “Amazon Tests ‘Soul of Seattle’ With Deluge of Election Cash” (Oct. 30, 2019)
- KING 5 News, “Seattle lawmaker wants to limit influence from big companies on city elections” (Oct. 30, 2019)
- Seattle Times, “Councilmember wants to stop donors like Amazon from using PACs to influence Seattle elections” (Aug. 14, 2019)
- The Stranger, “Seattle Might Try to Block Amazon from Spending in City Elections” (Aug. 14, 2019)
- Crosscut, “Seattle politics without corporate money?” (Aug. 14, 2019)
- Boston Globe, Prof. Laurence Tribe & Ron Fein, “How Massachusetts can fight foreign influence in our elections” (Sept. 26, 2017)