T he Federal Election Commission, the federal agency charged with overseeing US elections and yet paralyzed by partisanship, will host a first-of-its-kind public forum Thursday on the threat posed by foreign-influenced corporations that spend on American elections. The meeting comes less than one month after the kingdom of Saudi Arabia announced it would make a $3.5 billion investment in Uber, the US-based ride-hailing service and ubiquitous election spender. Now, as the specter of foreign influence comes to haunt even our local elections, the government entity with the most to do — at a time when its power is declining — has put the issue squarely before the public-policymaking consciousness.
America’s Founders were rightly worried about foreign powers influencing our democracy. The Constitution bans anyone who holds “any office of profit or trust” from accepting any foreign “present, emolument, office, or title . . . without the consent of the Congress.” Current federal law — upheld by the Supreme Court as recently as 2012 — prohibits foreign governments, foreign-based companies, and people who are not US citizens or permanent residents from contributing or spending money in connection with any federal, state, or local election. But there’s a loophole: These foreign entities can invest money through US-based corporations that, per the Citizens United ruling, can then spend as much of that money as they want on American elections.
This possibility is well past hypothetical: On June 1, Uber disclosed an unprecedented $3.5 billion investment from the Saudi Arabian government. Aside from its stock ownership, which totals more than 5 percent, the kingdom bought itself a seat on the company’s board of directors. That’s disturbing for many reasons that have already attracted national discussion, such as Saudi Arabia’s atrocious human rights record. But what many people don’t realize is that the investment opens up an “Uber loophole” for the kingdom, through its share of the ownership and control of Uber, to spend unlimited amounts of money on American elections. Last month, Uber teamed up with fellow ride-hailing service Lyft to unload $9 million on an election in Austin, Texas. The tech giants fought, unsuccessfully, to overturn a local law requiring drivers to submit to fingerprint-based criminal background checks. Nine million dollars can go a long way in a local election — it crushed Austin’s previous record for election spending seven-fold.
Austin wasn’t Uber’s first fight, and it won’t be its last. The company recently spent roughly $600,000 on a voter referendum in Seattle, nearly $700,000 in California, $300,000 in Washington, D.C., $200,000 in Maryland, and $70,000 in Oregon. It’s engaged fleets of lobbyists — 250 by one count, nearly one-third more than Walmart — in 45 of the nation’s 50 state houses, and it has invested heavily on multiple fronts in major US cities, from New York City to Los Angeles, Chicago to Atlanta.
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Uber isn’t the only company to flood local elections with corporate cash. Facing a multimillion dollar lawsuit over a refinery fire that caused more than 15,000 people to seek medical treatment for respiratory problems, Chevron spent more than $3 million to back sympathetic city council and mayoral candidates in Richmond, Calif., in 2014.
We’ve known about this possibility ever since Citizens United. In 2010, a bipartisan group in Congress tried to update federal law to limit foreign-influenced corporations from spending money in elections, but the bill died in the Senate. Now FEC Commissioner Ellen Weintraub is trying to persuade her colleagues to close the Uber loophole. As she wrote recently, “It defies logic to allow groups of foreigners, or foreigners in combination with American citizens, to fund political spending through corporations.”
Thursday’s forum is a milestone for addressing the problem, but the FEC, deadlocked into irrelevance by partisan interests, is in no position to lead the fight. Instead, local governments can raise the flag by passing laws that prohibit foreign-influenced corporations from spending money on their elections. Record-breaking engagement from average Americans would provide the issue with a ready-made base of support. For if the past is any guide, corporations like Uber will continue to try to steer American elections, regardless of who’s sharing the wheel.
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Laurence H. Tribe is university professor and professor of constitutional law at Harvard Law School. Scott Greytak is counsel at Free Speech for People.