Legislative Options After Citizens United v. FEC: Constitutional and Legal Issues
There does not appear to be any bright-line rule as to what percentage of foreign ownership suffices for categorizing a corporation as “foreign” for statutory purposes. Rather, courts would consider any percentages along with the other provisions of the statute when examining the relationship between any challenged restrictions and the alleged government interests. Federal laws that distinguish on the basis of alienage and do not affect fundamental rights, discussed below, will generally be upheld so long as they are not “‘wholly irrational’ means of effectuating a legitimate government interest.”73 In one of the few cases directly on point, Moving Phones Partnership, L.P. v. Federal Communications Commission, the U.S. Court of Appeals for the District of Columbia Circuit upheld Section 310(b) of the Communications Act and its implementing regulations against an equal protection challenge brought by several partnerships whose applications for authorization to construct and operate cellular systems were denied because they were more than 20% foreign-owned.74 The plaintiffs conceded that concerns about national security constituted a legitimate reason for discriminating against aliens in broadcasting, and the court found that limiting foreign ownership to no more than 20% was not a “wholly irrational” means of effectuating that interest. 75
Preventing foreign influence on U.S. elections has apparently never been recognized as a legitimate state interest in the same way that national security was recognized in Moving Phones and other cases. However, it seems plausible that a court would treat it as such given that determining who can participate in the political process is arguably an inherent aspect of sovereignty;76 there are other restrictions on non-citizens’ involvement in the political process (i.e., lobbying and contributions);77 and certain provisions of the Constitution have been read as indicating the Framers’ concerns about foreign involvement in U.S. politics. 78
corporation, labor organization, or any other person, or by any group of such persons, shall be considered to have been made by a single political committee.”); 11 C.F.R. § 114.5(g)(1) (“A corporation or a separate segregated fund established by a corporation is prohibited from soliciting contributions to such fund from any person other than its stockholders and their families and its executive or administrative personnel and their families. A corporation may solicit the executive or administrative personnel of its subsidiaries, branches, divisions, and affiliates and their families.”).
73 Moving Phones Partnership, L.P. v. Federal Communications Commission, 998 F.2d 1051 (D.D.C. 1993). See also Campos v. FCC, 650 F.2d 890 (7th Cir. 1981) (upholding a federal law prohibiting lawful permanent residents from obtaining radio operator licenses); Noe v. FCC, 260 F.2 739 (D.D.C. 1958) (rejecting a claim that a Jesuit educational institution is under alien control and therefore ineligible to operate a television station because the institution was chartered by the state; holds its own property in trust for educational purposes; does not receive monetary support from the Society of Jesus; and is directed by American citizens); In Re Request by Data Transmission Co., 52 F.C.C.2d 439 (1975) (noting that “Congress wanted to guard against actual alien control rather than the mere possibility of alien control”). State and local laws are subject to a different standard of review and outside the scope of this report.
998 F.2d at 1056.
76 See, e.g., Zephyr Teachout, Extraterritorial Electioneering and the Globalization of American Elections, 27 BERKELEY J. INT’L L. 162, 185-87 (2009) (discussing sovereignty interests in restricting foreign participation in elections); Lori Fisler Damrosch, Politics across Borders: Nonintervention and Noninforcible Influence over Domestic Affairs, 83 AM. J. INT’L L. 1, 33-49 (1989) (discussing “state system values” in limitations on foreign participation in elections).
2 U.S.C. § 441(e) (prohibiting campaign contributions); 22 U.S.C. §§ 611-621 (limitations on foreign lobbying). See supra note 71.
Congressional Research Service