The NO FOREIGN MONEY IN CALIFORNIA ELECTIONS CAMPAIGN

FACT SHEET

Federal law and judicial decisions interpreting that law continue to make clear that foreign money is not permitted in U.S. elections either “directly or indirectly” contributed.

This bill will prevent U.S. based corporations with appreciable levels of foreign ownership from spending money from their corporate treasuries to influence California elections if the corporation meets one of the following criteria:

• A single foreign shareholder owns or controls 1 percent or more of the corporation’s equity
• Multiple foreign shareholders own or control—in the aggregate—5 percent or more of the corporation’s equity.

(Corporate governance experts, regulators and the Assembly Elections Analysis agree that the thresholds stipulated in this bill capture the level of ownership necessary to influence corporate decisions. Former chairman of the U.S. House Committee on Financial Services, Rep. Jeb Hensarling (R-TX) stated, and the Business Roundtable and the SEC concur, that 1 percent is a threshold at which a single shareholder can influence corporate decisions.)

Foreign investors are increasing their ownership shares of US corporations. 

In 1982 only 5% of shares in US corporations were owned by foreign investors. By 2015 the number was 20% and by 2024 the total number of shares held by foreign investors in US corporations was a staggering 42%.

When Justice Kennedy, writing for the 5-4 Citizens United majority, which included Justices and Alito and Thomas, declared that US corporations could contribute unlimited amounts from their corporate treasuries because they were “associations of citizens”  he was obviously wrong.  

The Supreme Court made a mistake.  California must correct the Court’s grievous error.

The United States’ largest corporations are spending hundreds of millions of dollars directly from their corporate treasuries to influence elections and much of that money is “indirectly” contributed by foreign investors. In California those large multinational corporations, mandated by law to maximize profits, are spending hundreds of millions of dollars on ballot measures to mislead California voters, whom they view as markets, and not as communities.

Foreign interests can easily diverge from U.S. interests, for example, in the areas of tax, trade, investment, and labor law. Corporate directors and managers view themselves as accountable to their shareholders, including foreign shareholders. As the former CEO of U.S.-based Exxon Mobil Corp, Lee Raymond, starkly stated, “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.”

As former FEC Chair Ellen Weintraub, who first noticed the loophole the Citizens United v. FEC decision created for foreign money in our elections wrote: “It defies logic to allow groups of foreigners, or foreigners in combination with American citizens, to fund political spending through corporations."

It does indeed defy logic to allow this loophole to remain open when it could be closed with corrective model legislation developed by The Center For American Progress and Free Speech For People.  MOVI are the California sponsors of the legislation.

On May 5, 2023, Minnesota Governor Tim Walz, signed this same model legislation into law within the Democracy For The People Act, becoming the first state in the US to enact this model legislation.  A single Trump appointed judge issued a permanent injunction voiding the law in March 2025 without oral arguments.

The model legislation has been in effect in Seattle, WA since January 2020 and in San Jose, California since January 2024.  Neither municipal ordinance has been challenged.

AB 83, The Get Foreign Money Out Of California Elections Act passed out of its two policy committees in 2023 but failed to get a floor vote..  

In 2026, California legislators can choose to protect its citizens from what George Washington called in his Farewell Address “the insidious wiles of foreign influence… [which] prove [to be] one of the most baneful foes of [a] republican government.”

The California Legislature agreed with our founding president in 2021 when it unanimously passed AB 319 to prohibit foreign governments, foreign businesses, and foreign individuals from contributing to California elections – but the Citizens United loophole remains open.

California must close it and re-establish compliance with federal law (52 U.S. Code § 30121).