City looks to limit foreign influence on local elections

Corporations with foreign ownership would be barred from making campaign contributions

With millions of dollars pumped into local elections each cycle, San Jose is looking to limit contributions from companies with foreign influences.

On Tuesday afternoon, the San Jose City Council voted 9-1 — with Council member Dev Davis dissenting and Council member Maya Esparza absent — to bring back a proposed law that would require corporations to certify they aren't influenced by foreign interests before making contributions to campaigns or independent expenditure committees.

San Jose's push to limit foreign influence in its own local elections follows similar decisions in Seattle and St. Petersburg, Florida. In 2020, the Seattle City Council enacted its restrictions after Amazon spent $1million on a council candidate through a political action committee associated with the Seattle Metropolitan Chamber of Commerce.

The Pacific Northwest tech giant has a foreign ownership percentage that exceeds the city's threshold for being allowed to contribute to local campaigns.

“In my mind, election integrity and where the money flows from and how it flows into the city elections and such, that to me is at the very core of our democracy,” Council member Sergio Jimenez said.

Michael Sozan, a senior fellow at the think tank Center for American Progress, called the proposed law an “important tool” in protecting San Jose's elections. According to his research, foreign investors in 2019 owned 40% of U.S. corporation's equity, compared with 4% in 1986.

“This is a common-sense recommended ordinance that would strengthen the right of San Jose's residents to determine the political and economic future of their city, it would build public trust and it would help ensure lawmakers are accountable to voters instead of foreign-influenced corporations,” he told the council Tuesday.

City officials also are expected to follow what's already laid out in the California Political Reform Act and characterize a company as foreign-influenced if a certain percentage of the ownership interests is held by foreign entities.

San Jose is now the largest city in the country to consider such a measure, but similar initiatives are being proposed in the California and New York

state assemblies.

Assembly Bill 1819, which was introduced by Assembly member Alex Lee, DMilpitas, earlier this year, follows similar guidelines as the proposed law in San Jose and would cover both state and local races.

Davis ultimately cast the sole vote against the proposal Tuesday, stating her concerns that the council was “picking and choosing which foreign influence we want to allow in our elections and in our campaigns.”

The District 6 councilwoman and mayoral candidate was referring to a recent proposal that would allow noncitizens — including those here illegally and green card holders — to vote in local elections.

The city's Charter Review Commission is currently weighing whether to put the initiative on a future ballot.

“We have real issues like homelessness, trash on our streets, lack of enough police officers, especially in traffic enforcement, as many know I have a real problem with,” she said. “I just think we should not be passing questionable and questionably constitutional issues like frankly the gun ordinance or this proposed action.”

San Jose already is facing two lawsuits over the constitutionality of requiring gun-owning residents to purchase insurance for their weapons and pay a fee that would help cover the cost of gun violence in the city.

Mayor Sam Liccardo worries the proposed campaign finance reforms could bring a slew of new First Amendment lawsuits against the city.

“My concern is that we're passing a law that would essentially create a blanket preclusion, and that's a great opportunity for some litigant to come after us and run us around with a lot of litigation,” he said.