Former Exxon CEO Lee Raymond:  “I’m not a U.S. company and I don’t make decisions based on what’s good for the U.S.” Californians can change this. Pass AB83!

Updated 3/20/23

In 2010, the Supreme Court decided in the corrupt case Citizens United that corporations were actually “an association of citizens,” opening our elections up both to dark money and the influence of the foreign investors who now hold over 40% of all shares in US corporations.

We take the word “citizen” very seriously here in Ventura County. At Swap Meet Justice’s monthly citizenship fair, we know that applicants wait years, and sometime decades, before they can get the help they need to become citizens and to receive the privilege of voting. Foreign investors jump the line and abuse our voting process to increase their profits.

AB83 – Political Reform Act of 1974: contributions and expenditures by foreign-influenced business entities could help level the playing ground by preventing these entities from messing with our elections. (Lot of resources, fact sheets, etc. here)

Deeper Dive

“George Washington used his farewell address at the end of his presidency to warn his fellow Americans that one of the greatest dangers to democracy involved the “insidious wiles” of foreign powers and the many ways that foreign powers could improperly influence the U.S. political system. Washington urged Americans “to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government.”

The Political Reform Act of 1974 already prevents a foreign government or foreign principal from making a variety of contributions to support or oppose state or local ballot measures, or elections for a state or local office. AB83 expands the definitions to include similar action for foreign-influenced business entities.

As an example, you may have wondered how Uber and Lyft were able to spent over $224 million on Prop. 22 – the astroturf campaign to overturn legislation granting benefits to gig workers. Well, Saudi Arabia and Russia invested $13 billion in Uber and Lyft. Uber’s principal individual shareholders comprise Yasir Al-Rumayyan (3.73%), the Governor of the Public Investment Fund, the sovereign wealth fund of the Kingdom of Saudi Arabia, and Dara Khosrowshahi, the founder and CEO of Uber. 

To qualify as a‘ foreign influence corporation(FIC) company under AB83, it would have to meet one of the following specifications:

• 1% of shares are owned by a single foreign investor
• 5% of shares are owned by multiple foreign investors
• A foreign entity participates in decision-making with respect to state or local political spending.

What foreign investors have done with their power to influence U.S. elections.

• Amazon spent $1.5 million to influence the results of Seattle’s November 2019 city council races, donating through the local chamber of commerce’s PAC.123 This huge political expenditure caused one council member to announce her support for a city ordinance to ban political spending in Seattle elections by foreign- influenced corporations such as Amazon, and she predicted that the city council will pass it in the future.
• In 2018, dialysis company DaVita spent more than $66 million to successfully defeat a California ballot initiative that would have capped the amount of money that dialysis providers could earn on certain patients.
• In 2016, Pinnacle West Capital Corp. spent approximately $38 million to successfully defeat an Arizona clean energy ballot measure that would have required electric cars to rely more heavily on renewable resources for their electric supply.
• In 2016, Duke Energy expended almost $6 million in a successful effort to stop
  a Florida initiative that would have expanded residential access to rooftop solar power; the campaign waged by Duke Energy and allied companies was criticized as “deceptive” by at least one Florida newspaper.
• Chevron, a corporation with significant foreign ownership, spent $3 million in 2014 to influence the mayoral and city council races in Richmond, California. Much of Chevron’s money went into PACs that aired television ads aimed at defeating candidates who were critical of a local refinery owned by Chevron, which was sued twice by Richmond after refinery explosions sickened local residents.
• Between 1988 and 2014, Chevron spent a staggering sum of more than $68 million to influence state elections, where political spending can have greater impacts than in higher-dollar federal elections.

Foreign investments in US companies have increased dramatically in recent years.

• In 1982, foreign investors owned about 5% of all US corporate equity (public and private).
• By 2019, foreign ownership jumped to an astonishing 40%.
• Since 2010, neither Congress nor the Federal Election Commission have taken action to resolve the issue of foreign-influenced corporations exerting influence in our elections.
• Norges Bank, the central bank and sovereign wealth fund of Norway, has a stake in more than 1,900 US companies (which comprises one third of all its corporate investments) and on average holds 1.4% of publicly traded US companies including Microsoft, Facebook, and Netflix.
• Recently, when Elon Musk acquired Twitter and made it private, Prince Alwaleed bin Talal bin Abdulaziz of Saudi Arabia agreed to convert their shares of Twitter, worth nearly $2 billion, and became Twitter’s second largest shareholder after Musk. The Saudi Prince now owns approximately 4% of Twitter. Twitter has demonstrated a history of political activity by donating over $2.4M to campaigns since 2012.
• The amount of dark money being pumped into U.S. elections is staggering.
  • Since 2006, groups that do not disclose their donors have spent at least $1 billion in dark money just to influence federal elections.
  • In that same time period, an additional $1 billion has been spent by groups that only partially disclose their donors, bringing the total federal spending by groups that do not fully disclose their funders to at least $2 billion.
  • That does not even include the more than $2.1 billion that outside groups have spent in state elections since 2005.
  • The 2018 election cycle—which did not involve a presidential election, where vastly more money is spent to influence the result—outside groups that did not fully disclose their donors reported more than $539 million in spending. This set a new record for a nonpresidential election year.
  • During that same election cycle, political committees that are required to disclose their direct donors reported receiving more than $176 million from shell corporations and other groups that do not further disclose their donors. Shell companies often can be organized as an LLC with little more than an opaque, nondescriptive name—that gives no clue as to its true owners—and a post office box address, which hides whether the owner is a foreign entity.
  • In 2006, before Citizens United, groups that did not fully disclose their donors comprised less than 2 percent of out- side spending, excluding party committees. In sharp contrast, since Citizens United in 2010, this percentage has ballooned to more than 50 percent of outside spending, excluding party committees.

GOP members of the Federal Election Commission

“In the policy areas of tax, defense, and commerce—just to name a few—there are many ways that foreign interests predict- ably diverge from American interests. For example, foreign investors generally would not support a U.S. policy that would erect barriers to foreign investment in American real estate or equity markets or require foreign investors to disclose more information about themselves and their holdings in order to invest in these markets. Interests could also diverge around a U.S. policy that mandated that certain products be made in the United States or that trading partners must meet minimum standards regarding labor and environmental practices.”

Resource

• (cdn.americanprogress.org) Ending Foreign-Influenced Corporate Spending in U.S. Elections
• (MOVI) About AB 83