End campaign spending by foreign-influenced U.S. firms

Although the aftermath of the presidential election has dominated headlines since Election Day, California saw a development that strikes at the heart of its own self-governance. Foreign-influenced U.S. corporations spent tens of millions of dollars to help pass Proposition 22, invalidating a California law and allowing the companies to classify their workers as contractors instead of employees.

One of these corporations — Uber — is partially owned and controlled by the government of Saudi Arabia. Another corporation — Lyft — is partially owned by a Chinese conglomerate. This means that Saudi Arabian and Chinese investors played a role — at least indirectly — in determining the fate of important California policy. The time has come for state and federal leaders to pass common-sense laws to stop foreign influence in our elections via American corporations.

Ten years ago, the U.S. Supreme Court issued its disastrous ruling in Citizens United, giving corporations the right to unlimited political spending. Since then, independent groups unrelated to political parties have poured more than $7 billion into federal elections, according to the nonpartisan Center for Responsive Politics. This includes secret “dark money” that cannot be traced to its source and is often routed through so- called nonprofit organizations like the U.S. Chamber of Commerce or the NRA, which get large contributions from corporations. More than $750 million of dark money was spent in the 2020 election alone.

Foreign-influenced U.S. companies allow a pathway for foreign entities to achieve, either directly or indirectly, what they are barred from doing as governments or individuals: spend money in U.S. elections.

Setting their sights on California in 2020, Uber and Lyft joined forces with DoorDash, Instacart, Uber- owned Postmates and others to devote a staggering $203 million to support Prop. 22. This spending spree made Prop. 22 the most expensive ballot measure in California’s history.

This is part of a larger trend that Californians have witnessed. First, the rise of super PACs and a deluge of corporate and secret political spending, which have made politicians less accountable to everyday voters. Second, a political system further warped by foreign interference in the 2016 and 2020 presidential elections, as well as President Donald Trump’s unconstitutional solicitation of foreign assistance for his failed reelection.

Foreign investment in our economy is not always bad. In fact, approximately 35% of all U.S. stock is now owned by foreigners. Yet challenges arise because foreign investors’ interests can diverge from Americans’ interests.

Perhaps it’s not surprising that ExxonMobil’s CEO once remarked, “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.” If that is the case, ExxonMobil and foreign-influenced companies like it should not be permitted to spend political dollars to sway U.S. elections.

The good news is that a popular solution exists that is gaining momentum: a ban on election-related spending by foreigninfluenced U.S. corporations. For example, if a single foreign entity (government, company or person) owns more than 1% of a U.S. company, that company would be prohibited from spending money in elections. Often, investors who own at least 1% of a major corporation are among the largest shareholders, with at least tens of millions of dollars of stock. The prohibition would also apply if a group of foreign entities owns at least 5% of a U.S. company. Most of America’s largest publicly traded corporations exceed the 5% threshold, although many smaller companies do not.

California should follow the lead of federal, state and local lawmakers to enact foreign ownership thresholds. Reps. Jamie Raskin, D-Md., and Abigail Spanberger, D-Va., filed federal legislation that would accomplish this.

Similar legislation is pending in several states, such as New York and Maryland.

And a commissioner on the Federal Election Commission, Ellen L. Weintraub, has led a sustained quest to update regulations to include this policy solution.

Californians — especially those in marginalized communities — know that their preferred candidates or policies cannot be accurately reflected when elections are heavily influenced by runaway corporate spending and foreign investors to whom CEOs owe a fiduciary duty.

In order to help strengthen our democracy and promote economic patriotism, it is time to prohibit political spending by foreign-influenced U.S. corporations.