Critics of Citizens United also said it would let foreign money into U.S. elections. Has that happened?
The alarm about foreign money was first raised when Citizens United used the "identity of the speaker" holding to allow corporations to spend money in federal elections. "If taken seriously," Justice John Paul Stevens said in his dissent, "our colleagues' assumption that the identity of a speaker has no relevance to the Government's ability to regulate political speech would ... appear to afford the same protection to multinational corporations controlled by foreigners as to individual Americans."26
The FEC ruled at least as early as 1989 that the American subsidiary of a foreign corporation could not form a PAC because it would be financed by the foreign corporation and foreign nationals would participate in making PAC decisions. Whether the bar against foreign participation in American elections still held after Citizens United was soon tested in a case that made its way to the Supreme Court.27
In 2010, two Canadian citizens who were living in the United States cited Citizens United to challenge the constitutionality of the law prohibiting them from making contributions to candidates for the U.S. Congress. A three-j udge panel of the federal district court for the District of Columbia unanimously dismissed the suit, and the Supreme Court summarily affirmed the court's decision on appeal. Foreign nationals still cannot give or spend money in our elections.28
What foreign corporations and foreign nationals can do is put their money into American elections through dark-money groups. They can contribute to the officially nonpolitical tax-exempt groups—501(c)(4) social welfare organizations and 501(c)(6) business associations—that make independent expenditures on behalf of candidates. There is no reason to think there is a lot of foreign money in our elections, but under current FEC and IRS regulations there is no way to know for sure. And as long as there is no way to know for sure, there will always be doubts.29
Holes in the law also raise doubts. It is not clear, for example, that the ban against foreign participation in candidate elections holds true for ballot-measure elections. This hole was exposed when two European companies spent $327,000 to defeat a Los Angeles County ballot measure in 2012. The measure's supporters complained to the FEC, and three years later the notoriously slow-moving agency voted to investigate.30
Although the FEC counsel believed foreign nationals had made the decision to spend foreign money in that election, he advised against pursuing the matter. While the FECA clearly bans foreign money from candidate elections, he explained, it does not clearly do so for ballot-measure elections. The Democratic commissioners still voted to investigate the matter, but the Republican commissioners voted against it. What this means for the future of foreign money in state referendums and initiatives is anyone's guess.