Remler.PUB (1) - Stetson University

FOREIGNTHREATS,LOCALSOLUTIONS:ASSESSINGST.PETERSBURG,FLORIDA’S“DEFENDOURDEMOCRACY”ORDINANCEASPOTENTIALMODELLEGISLATIONTOCURBFOREIGNINFLUENCEINU.S.ELECTIONS

BrianRemler*

“If takenseriously,ourcolleagues’assumption...wouldappear toaffordthesameprotectiontomultinationalcorporationscontrolledbyforeignersastoindividualAmericans....”

—Justice JohnPaulStevens,dissenting inCitizensUnitedv.FederalElectionCommission1

“Ourholdingmeans,ofcourse,thatforeigncorporationsarelikewisebarred frommakingcontributionsandexpenditures.... [W]ehavenooccasiontoanalyzethecircumstancesunderwhichacorporationmay be considered a foreign corporation for purposes of FirstAmendmentanalysis.”

—JudgeBrettKavanaugh,Blumanv.FederalElectionCommission2

I.INTRODUCTION

InOctober2017,St.Petersburg,FloridamadehistorybybecomingthefirstAmericancitytopasslegislation(“theOrdinance”)regulatingcampaign financing in its local elections by independent expenditure

* ©2020,BrianRemler.All rights reserved.ExecutiveEditor,StetsonLawReview, 2019–2020.CandidateforJurisDoctor,StetsonUniversityCollegeofLaw,2020.B.A.,TheUniversityofNorthCarolinaatChapelHill,2012.ThankyoutomyWritingAdvisor,ProfessorLanceLong,andmyNotes&CommentsEditor,RachelKing,fortheirfeedbackthroughoutthewritingofthisArticle.ManythanksaswelltoArticles&SymposiaEditor,SeanMullen,andtoalltheEditorsandAssociatesofStetsonLawReview,fortheirworkinpreparingthisArticleforpublication. 1. 558U.S.310,424(2010). 2. 800F.Supp.2d281,292n.4(2011),aff’d,565U.S.1104(2012).

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committees and foreign corporations.3 At the timeof theOrdinance’spassage,thecitywasembroiledinthemostexpensivemayoralraceinitshistory,with$1.9millionofthetotal$3millionraisedbetweenthetoptwocandidatesattributedtoindependentexpenditurecommittees,or“SuperPACs.”4TheOrdinanceitselftookoverayeartopassfromitsintroduction date and was the source of heated legal debate.5 As itmovedthroughthe legislativeprocess, theCityofSt.Petersburg(“theCity”) gained the attention and intervention of nationally recognizedlegalscholarsandpolicymakers,includingProfessorLaurenceTribeofHarvardLawandEllenWeintrauboftheFederalElectionCommission(“FEC”).6ManypredicttheOrdinancewillserveasatest-casethatwilleventuallyheadtotheSupremeCourt,forcingtheCourttoruleonthevalidity of the D.C. Circuit’s ruling in SpeechNow.org v. Fed. ElectionComm’n,7whichopenedthedoortouncheckedSuperPACspending.8

Ratherthanwadeintothedebatesurroundingtheconstitutionalityof the Ordinance’s limits on contributions to Super PACs9—whichultimately hinges on the validity of the D.C. Circuit’s decision inSpeechNow—this Comment instead examines the constitutionalquestions raised by the Ordinance’s foreign spending provisions andpredictsargumentsthatwillbemadeuponjudicialreview.TheSupremeCourt appears to have affirmed that the existing statutory ban onpolitical contributions by foreign nationals10 extends to “foreigncorporations.”11However,neitherCongress,theFEC,northecourtshaveprovidedanyguidanceonhowtodefinesuchanentity.12TheOrdinance

3. CharlieFrago,St.PetersburgCouncilActs toLimitBigMoney inCityElections,TAMPABAYTIMES, Oct. 6, 2017, http://www.tampabay.com/news/localgovernment/council-will-look-at-limiting-big-money-in-st-pete-elections/2339908. 4. Mitch Perry, Rick Kriseman ‘Disappointed’ by $3M Price Tag for St. Pete Mayor’s Race,FLORIDA POLITICS (Oct. 26, 2017), http://floridapolitics.com/archives/247904-rick-kriseman-disappointed-3m-price-tag-st-pete-mayors-race; see also Frago, supra note 3 (“[T]he currentmayoralracebetween incumbentRickKrisemanandformerMayorRickBakerwasofferedasaprimeexhibitofwhythecityneededtoreignincampaignspending.”). 5. Frago, supranote 3 (noting that “[f]ormuch of the debate, [Ordinance supporter John]Bonifazandthecity’stoplitigator,JosephPatner,tradedblisteringlegalarguments”). 6. Id.(notingthat“[n]ationalconstitutionalscholarssuchasHarvardUniversity’sLaurenceTribe...senttestimonyinsupport”).ThelettersandmemorandafromTribe&Weintraub,amongothers,areavailableathttps://freespeechforpeople.org/st-petersburg-campaign/. 7. 599F.3d686,698(D.C.Cir.2010). 8. Frago,supranote3. 9. Seeinfrapt.IV. 10. 52U.S.C.§30121(2018);seeinfrapt.II.A&note90. 11. Blumanv.Fed.ElectionComm’n,800F.Supp.2d281,292n.4(D.D.C.2011),aff’d,565U.S.1104(2012). 12. Seeinfrapt.III.B.

2020] ForeignThreats,LocalSolutions 645

seekstoprovideclarityinthisrealm,layingoutvariousthresholdsfordefiningcorporationswithdifferentdegreesofforeignownershipandaccordingly restricting their abilities to contribute to local politicalcampaigns.13

Asitturnsout,thetimingoftheOrdinance’spassagecouldnothavebeen more opportune, as the problem of foreign spending in U.S.electionsattractedsignificantmediaattentioninthewakeofthe2016presidential election.14 Within the larger discussion of the role thatsocial media advertisements played in influencing the election’soutcome,some legislatorshavesought toresolveanyambiguityas towhether such ads fallwithin existing campaign finance regulations.15Further, Special Counsel Robert Mueller’s investigation placedsubstantial focus on illegal foreign political spending, evidenced byindictmentsallegingviolationsofboththeBipartisanCampaignReformAct’s (“BCRA”) ban on spending by foreignnationals and the ForeignAgentRegistrationAct.16Withthe2020electionapproaching,thetimeisripeforlegislators—atalllevels—toactinordertopromoteclarity,andaidenforcement,ofexistingcampaignfinanceregulationsrelatedtoforeignpoliticalspending.

This Comment assesses the Ordinance as potential modellegislationthatotherstatesandlocalentitiescanenacttoprotecttheirelections from foreign influence, focusing primarily on whether theOrdinance’s foreign spending provisions are likely to surviveconstitutional scrutiny. Part II starts by exploring the history ofcampaign finance law in the U.S. generally and expounding on thecurrentlegalframeworkunderlyingfederalelectionregulation,payingmost attention to regulations regarding foreign spending. Part III 13. Seeinfrapt.IV. 14. See,e.g.,BobBauer,WhyRussianMoneyEndsUpinU.S.Elections,N.Y.TIMES,Aug.6,2018,https://www.nytimes.com/2018/08/06/opinion/russian-interference-campaign-finance-elections.html (“In 2016... one of the larger political organizations active in the presidentialelection...wasorganizedandrunbyaforeigngovernment.”). 15. SarahPosner,WhatFacebookCanTellUsAboutRussianSabotageofOurElection,WASH.POST,Sept.27,2017,https://www.washingtonpost.com/blogs/plum-line/wp/2017/09/27/what-facebook-can-tell-us-about-russian-sabotage-of-our-election/?utm_term=.0d8e7c0d0f47(“[Democratic co-chair of the Senate Intelligence Committee Mark] Warner... is working onlegislation that would subject ads on Facebook to the same campaign finance disclosurerequirementsimposedontelevisionandradioads.”). 16. See,e.g.,Indictment¶¶25–26,48–49,UnitedStatesv.InternetResearchAgencyLLC,https://www.justice.gov/file/1035477/download (D.D.C. Feb. 16, 2018) (describing theFEC’s banonpoliticalspendingbyforeignnationalsandtheInternetResearchAgency’sfraudulentpaymentsforsocialmediaadvertisements).Whiletheindictmentdoesnotexplicitlychargetheorganizationandassociatedindividualswithviolationsoftheabovestatutes,itreferencestheseviolationswithinthelargerchargeofConspiracytoDefraudtheUnitedStates.Id.


surveys the current campaign finance landscape and the growingproblem of unchecked and unknown political spending. Part IVexamines theOrdinance’soperativepartsandhow they interactwithone another. Finally, Part V explores the constitutional issues theOrdinance’sforeignspendingprovisionsraiseandpredictsargumentsthatwillbemadeif—or,morelikely,when—theOrdinanceissubjectedtojudicialreview.

II.HISTORYOFUNITEDSTATESCAMPAIGNFINANCELAW&LEGALFRAMEWORK

This Part begins by examining the early emergent history ofcampaign finance law in the United States, from the early twentiethcentury to the passage of the Bipartisan Campaign Reform Act17(“BCRA”)in2002.ItgoesontobrieflyexaminethelandmarkdecisionsofCitizensUnited18andSpeechNow,19andtheimpactstheyhavehadonthe campaign finance landscape. It concludes with an in-depthexaminationofBlumanv.FederalElectionComm’n20—aseminalcaseonthe constitutionality of restricting political speech by foreignnationals—andthequestionsthecaseexplicitlyleftopen.

A.Fromthe1907TillmanActtothe2002BCRA&ItsJudicialConstruction

ThetwentiethcenturysawCongresstakethefirstmajoractionstoregulate campaign finance. In 1907, the Tillman Act was signed intolaw.21Thislegislationwasthefirsttodistinguishbetweenspendingbyindividualsandcorporateentities, and itprohibitedcorporationsandbanksfrommakinganyfinancialcontributionsconnectedtoelections.22

17. BipartisanCampaignReformActof2002,Pub.L.No.107-155,116Stat.81. 18. CitizensUnitedv.Fed.ElectionComm’n,558U.S.310(2010). 19. SpeechNow.orgv.Fed.ElectionComm’n,599F.3d686(D.C.Cir.2010). 20. 800F.Supp.2d281(D.D.C.2011),aff’d,565U.S.1104(2012). 21. AdamWinkler,TheCorporationinElectionLaw,32LOY.L.A.L.REV.1243,1243(1998).ThelegislationwasspurredbyPresidentTeddyRoosevelt’sStateoftheUnionAddressesin1905and1906, in which he called for a complete ban on campaign contributions by corporations: “Letindividualscontributeastheydesire;butletusprohibitineffectivefashionallcorporationsfrommaking contributions for any political purpose directly or indirectly.” P. Gordon Stafford, TheFederal Corrupt Practices Act, A Brief History with Comment, 16 BUS. LAW 702, 702–03 (1961)(quoting41Cong.Rec.22(Dec.4,1906)). 22. Roy B. Birnbaum, The Constitutionality of the Federal Corrupt Practices Act After FirstNationalBankofBostonv.Bellotti, 28AM.U.L.REV. 149,150 (1979).Birnbaumnotes that this


Thenextcampaignfinancelegislation,theFederalCorruptPracticesAct(“FCPA”),was enactednearly twenty years later in 1925.23While theheartofthestatute’slanguagewasnearlyidenticaltotheTillmanAct,24the FCPA nonetheless made a few significant modifications. Itsubstituted the broad term “contribution” for “money contribution,”imposedpenaltiesonrecipientsofprohibitedcontributionsinadditiontocontributors,andbroughtadditionalpartieswithinthelegislation’sscope.25TheFCPAthussubtlybutsignificantlyexpanded thereachoffederalcampaignfinanceregulation.

Thenextmajor actions came in the1940s, asCongressbegan toextendtheexistingrestrictionsoncorporateinstitutionstoencompasslabor unions. In 1943, the passage of the War Labor Disputes Act(“WLDA”) included a provision amending the FCPA to include laborunions.26 Following theWLDA’s expiration,Congresspassed theTaft-Hartley Act in its place, bringing expenditures within the scope ofregulationandextendingprohibitionstocoverprimaryelectionsforthefirsttime.27

The1960sbroughtthefirstsignificantcampaignfinancelegislationrelatedtoforeignnationals.In1966,CongresspassedPub.L.No.89-486,which prohibited foreign government agents and entities fromcontributing to political candidates.28 Spurred by the Committee onForeign Relations’ “aware[ness] of persistent efforts by numerousagentsofforeignprincipalstoinfluencetheconductofU.S.foreignanddomesticpolicies,”29thelegislationmadeanumberofamendmentsto

legislationwaspassedatatimewhenthecountryfacedsimilarchallengestotoday:“TheTillmanActwasenactedinaneraofindustrialexpansionandtheconcentrationofwealthinthehandsofafew.” Id. (emphasis added). The statute itself made it “unlawful for any national bank, or anycorporation...tomakeamoneycontributioninconnectionwithanyelectiontoanypoliticaloffice.”TillmanActof1907,Pub.L.No.59-36,ch.420,34Stat.864,864. 23. PhilipE.Garber,Taft-Hartley:Section304—ALegislativeHistory,7INDUST.&LAB.REL.F.59,62(1970). 24. The legislationmaintained theprohibitiononbanksandcorporations from “mak[ing]acontributioninconnectionwithanyelectiontoanypoliticaloffice.”Id.at61. 25. Birnbaum,supranote22,at150. 26. Stafford,supranote21,at704.Interestingly,atthispoint,neithercorporations,banks,norunions were prohibited from making contributions in primary elections, as “[t]he act had noapplicabilitytoprimaries.”Id.at705. 27. Garber,supranote23,at63. 28. Blumanv.Fed.ElectionComm’n,800F.Supp.2d281,283(D.D.C.2011),aff’d,565U.S.1104(2012)(describingtheevolutionofcampaignfinancerestrictionsonforeignnationals). 29. S.REP.NO.143,at2(1965)[hereinafterSenateCommitteeReport].


the Foreign Agents Registration Act of 1938.30 Besides prohibitingcampaignfinancingbyagentsofforeignprincipals,31thecomprehensivelegislation also sought to broaden the scope of activities that wouldtriggerdisclosure.32

The passage of the Federal Election Campaign Act (“FECA”) in1971—and, more impactfully, its subsequent 1974 amendments—began the development of our country’s modern campaign financeregulatory regime.33 This legislationput inplace contribution limits34and expenditure limits, imposed record-keeping requirements onPoliticalActionCommittees(“PACs”),andcreatedtheFederalElectionCommission to enforce its provisions.35 Most importantly for thepurposes of this Comment, FECA expanded the existing ban oncontributionsbyagentsofforeigngovernmentstoencompassallforeignnationals.36

FECA’s constitutionality was challenged in the landmark case ofBuckley v. Valeo.37 The SupremeCourt noted that political expressionwas inherentlyprotectedby theFirstAmendment, and it accordinglyappliedstrictscrutinytotheFECAprovisionsatissue,mostnotablythelimitationsplacedoncontributionsandexpenditures.38Ultimately,themajority simultaneously upheld FECA’s contribution limits whilestriking down the Act’s limitations on expenditures, noting a crucialdistinctionbetweenthetwo.WhilecontributionscouldbepermissiblyregulatedbecausesuchregulationservedtheGovernment’scompellinginterestinpreventingcorruptionortheappearancethereof,theCourt

30. Pub.L.No.75-583,ch.327,52Stat.631,631.ThisAct,officiallytitled“AnActtoRequiretheRegistrationofCertainPersonsEmployedbyAgenciestoDisseminatePropagandaintheUnitedStatesandForOtherPurposes,”providedthefirststatutorydefinitionofa“foreignprincipal”andrequireddisclosure,intheformofa“registrationstatement,”ofcertainemploymentcontracts.Id. 31. Senate Committee Report, supra note 29, at 2. The definition of “agents of foreignprincipals”was intended to “cover[]personswhoareeitherdirectlyor indirectlysubject to thedirection or control of a foreign principal.” Id. at 6. The Act also slightly modified the abovedefinitionofforeignprincipalbyexcludingcertaindomesticindividuals.Id. 32. Seeid.at5(notingthat“thepresentact’sdisclosureprovisionshavethroughtheyearsbeentoonarrowlyenforcedwiththeemphasisplacedonsubversiveorpotentiallysubversiveagents”). 33. Buckleyv.Valeo,424U.S.1,6(1976). 34. TheActlimitedcontributionsperelectionto$1,000fromindividualsorgroupsand$5,000for Political Action Committees, and it also imposed an aggregate limitation of $25,000 perindividualdonor.Id.at7,13–14n.12. 35. Id.at7. 36. Blumanv.Fed.ElectionComm’n,800F.Supp.2d281,283(D.D.C.2011),aff’d,565U.S.1104(2012).Interestingly,thisbanonlyappliedtocontributionstoindividualcandidates;contributionsbyforeignnationalstopoliticalpartieswerestillpermitted.Id. 37. 424U.S.1,15(1976). 38. Id.at16.


heldthatindependentexpenditures“d[id]notpresentlyappeartoposedangersofrealorapparentcorruptioncomparabletothoseidentifiedwithlargecampaigncontributions.”39Accordingly,FECA’sindependentexpenditure limits did not survive strict scrutiny and were heldunconstitutional.40

Two years after Buckley, the Supreme Court affirmed that thespeechprotectionsoutlinedinthedecisionappliedtocorporations.41InFirst National Bank of Boston v. Bellotti, the Court struck down aMassachusetts law prohibiting corporate expenditures andcontributions tocampaigns involvingreferendathatdidnot implicatethecorporation’sbusinessinterests.42TheCourtframedthequestionatissue as whether the statute “abridge[d] expression that the FirstAmendmentwasmeanttoprotect,”anditaccordinglyappliedastrictscrutiny standard to determine whether the statute was narrowlytailored to further a compelling state interest.43 Finding the statuteunconstitutional,44 the Court “announced a novel doctrine thatcorporatespeechisnotunprotectedbythe[F]irst[A]mendment”45:

We... find no support... for the proposition that speech thatotherwisewouldbewithin theprotectionof theFirstAmendmentlosesthatprotectionsimplybecauseitssourceisacorporationthatcannotprove...amaterialeffectonitsbusinessorproperty.46

Thus, by the end of the 1970s, the foundations of our modernelectorallandscapewerestartingtotakeshape.Contributionlimitswerein place and permitted, but expenditures—whether by individuals orcorporations—were considered speech and thus could not beregulated.47 Foreign nationals were prohibited from contributing to

39. Id.at46. 40. Id.at51. 41. FirstNat’lBankofBostonv.Bellotti,435U.S.765,776(1978). 42. Birnbaum,supranote22,at152. 43. Bellotti,435U.S.at776,786. 44. Id.at794. 45. CarlE.Schneider,FreeSpeechandCorporateFreedom:ACommentonFirstNationalBankofBostonv.Bellotti,59S.CAL.L.REV.1227,1227(1986).Schneidernotesthat“thecasehasreceivedless attention than it deserves. As the Court’s leading consideration of the speech rights ofcorporations,itisalandmarkinfirstamendmentlaw.”Id.at1228. 46. Bellotti,435U.S.at784.TheCourt’sholdingwasnotunanimous,asJusticeWhitewroteadissentcriticizingtheopinion:“TheCourt...holdsthattheFirstAmendmentguaranteescorporatemanagers the right to use not only their personal funds, but also those of the corporation, tocirculate factandopinionirrelevanttothebusinessplacedintheircharge.”Id.at803(White, J.,dissenting). 47. Buckleyv.Valeo,424U.S.1,58–59(1976);Bellotti,435U.S.at776.


politicalcandidates,thoughcontributionstopoliticalpartieswerestillpermitted.48 And the nascent FEC was tasked with ensuring thateveryonefollowedtheapplicablerules.49

WhilemostcampaignfinancereformsincetheFCPAhadfocusedoncurtailing the influence of domestic organizations like corporations,banks,andlaborunions,ascandalintheClintonAdministrationandasubsequentSenateinvestigationshiftedfocusbacktoforeignelectoralinfluenceinthe1990s.50Theincidentwassparkedbymediainterestinconnections between a high-level Democratic National Committee(“DNC”)officialandtheAsianbusinesscommunity.51Thismediainteresttriggered an in-depth Senate investigation that resulted in a nearly10,000pagereport released in1998,whichscrutinizedevidence thatChina and other parties had made efforts to corrupt DNC officialsthroughcampaigndonations.52Whilethiscontroversyledsomefigurestocallforimpeachment,53itsmostlastingimpactwouldbetherenewedfocusitbroughttocampaignfinancereform.

Four years after the report’s release, Congress passed theBipartisan Campaign Reform Act (“BCRA”) (commonly known as theMcCain–FeingoldAct),bringingthefirstmajorlegislativechangestotheUnitedStates’campaign financeregimesinceFECA.54While theBCRAmadeanumberofsmallmodifications toexistingelection law, italsoadded two novel prohibitions: one dealt with the problem of “softmoney”donationstopoliticalparties,andtheotherimplicatedtheuseof treasury dollars by unions and corporations for the purpose ofcreating electioneering communications.55 Arguably the most majorchange,however—andtheonewhichappearstobeadirectresultofthe

48. Blumanv.Fed.ElectionComm’n,800F.Supp.2d281,283(D.D.C.2011),aff’d,565U.S.1104(2012). 49. Buckley,424U.S.at7. 50. See S. Comm. on Governmental Affairs, Investigation of Illegal or Improper Activities inConnectionwith1996FederalElectionCampaigns,S.REP.NO.105-167,at3,7(1998)(expandingoncontroversyandrecommendingresponses). 51. BruceD.Brown,AlienDonors:TheParticipationofNon-CitizensintheU.S.CampaignFinanceSystem,15YALEL.&POL’YREV.503,505(1997). 52. S.REP.NO.105-167,at4619–21. 53. See, e.g., Bob Barr, High Crimes and Misdemeanors: The Clinton-Gore Scandals and theQuestionofImpeachment,2TEX.REV.L.&POL.1(1997)(layingoutargumentsforimpeachmentofthen-PresidentClintonthatincludeallegationsof“illegalsolicitations”and“illegalfund-raising”).Readersmaynote thisarticlewaspublishedbeforePresidentClinton’s1998affairwithMonicaLewinsky,whicheventuallyledtohisimpeachmentandacquittalbytheHouseofRepresentatives. 54. GregoryComeau,BipartisanCampaignReformAct,40HARV.J.ONLEGIS.253,253(2003)(describing the BCRA as “themost sweeping reform of the federal campaign finance system intwenty-fiveyears”). 55. Id.


aforementionedClinton-DNCscandal—was theAct’s expansionof theexisting ban on donations to candidates by foreign nationals toencompassdonations topoliticalpartiesaswell.56Thisban, currentlycodifiedat52U.S.C.§30121(2018),isthebasisfortheSt.PetersburgOrdinance’s novel efforts to regulate foreign money in its elections,whichwillbeexploredbelow.57

TheBCRA’spassagecanbeseenasahigh-watermarkforelectionregulation. Legislators worked across the aisle to make meaningfulreform to safeguard our elections’ integrity from both domestic andforeign actors who might attempt to undermine it.58 However, thismomentwouldnotlastlong,asthewaterwassoontobedrainedin2010by two landmark decisions that would dramatically reshape ourcountry’selectorallandscape.

B.TheCitizensUnitedandSpeechNowDecisions&TheirImpacts

In2010,amajorchallengetotheBCRAcameintheformofCitizensUnitedv.Fed.ElectionComm’n.59PetitionerschallengedanumberoftheBCRA’sprovisions,includingitslimitsonindependentexpendituresbycorporations.60 The Court overruled the BCRA’s prohibitions onindependentexpendituresbycorporationsanditslimitsonthesamebyindividuals, holding that “the Government cannot restrict politicalspeechbasedonthespeaker’scorporateidentity.”61TheCourtdidnotthrowthebabyoutwiththebathwater,however,asitupheldtheAct’sdisclaimer and disclosure provisions as applied to specificcircumstances.62 While Citizens United, coupled with the slogan“CorporationsAreNotPeople,”hasbecomea rallying cryof sorts for

56. Blumanv.Fed.ElectionComm’n,800F.Supp.2d281,284(D.D.C.2011),aff’d,565U.S.1104(2012).Contributionsbyforeignnationalstogroupspursuingissueadvocacywerestillpermittedunder the new legislation. Id. (referencing Wisconsin Right to Life v. Fed. Election Comm’n asprovidingthejudicialtesttodemarcateissueadvocacyfromelectioneering). 57. Seeinfrapt.IV. 58. BipartisanCampaignReformActof2002:RollCallVoteNo.54,148CONG.REC.S2118(2002)(showingthatofthesixty“yes”votesfortheBCRA,forty-ninewerecastbyDemocratsandelevenbyRepublicans). 59. 558U.S.310,321(2010). 60. Id. 61. Id.at346;AlbertW.Alschuler,LimitingPoliticalContributionsafterMcCutcheon,CitizensUnited, and SpeechNow, 67 FLA. L. REV 389, 412 (2016) [hereinafter Alschuler, LimitingContributions](quotingCitizensUnited,558U.S.at346). 62. CitizensUnited,558U.S.at367–68.TheCourt’supholdingoftheseprovisionslikelybodeswellfortheOrdinance’sdisclosurerequirements,describedinfrapt.IV.


manycampaign-finance-reformadvocates,63themostimpactfulchangestoourcountry’selectionlandscapewereyettooccur.

The tsunami ofmoney that has recently inundated our electionsstarted with a small tremor, coming in the form of the D.C. Circuit’sdecisioninSpeechNow.orgv.Fed.ElectionComm’n.64Appellants,anon-profit advocacy group, had brought a declaratory judgment actionchallengingtheBCRA’slimitsoncontributionsbyindividualstoPACs.65SeizingontheCitizensUnitedCourt’sholdingthat“asamatteroflaw...independentexpendituresdonotcorruptorcreate theappearanceofquid pro quo corruption,” the D.C. Circuit dramatically extended thatdecisionbystrikingdownlimitsoncontributions togroupsthatmakeindependentexpenditures.66Onepracticalresultofthedecisionwasthebirth of groups ubiquitous in our modern elections: independentexpenditurecommittees,alsoknownasSuperPACs.Asaconsequence,spendinginthe2012federalelectionsnearlytripledtheamountspentfouryearsprior.67

C.Blumanv.Fed.ElectionComm’n:TheConstitutionalStatusofCampaignFinanceRestrictionsonForeignNationalsandUnresolved

Issues

Bluman v. Fed. Election Comm’n68 involved a challenge to theconstitutionalityof52U.S.C.§30121,asmodifiedthroughtheBCRA.69Plaintiffs, foreign citizens living and working in the United States astemporaryresidents,soughttocontributefundstocandidates,parties,and issue-based advocacy groups, and they also sought to distributeflyers in support of candidates.70 Thus, the challenge implicated anumber of issues: both contributions and independent expendituresrelated to parties, candidates, and issue-based groupswere at stake.PlaintiffsandtheFECarguedatlengthoverwhatlevelofscrutinythe

63. See,e.g.,OverturnCitizensUnited,THESTAMPSTAMPEDE,https://www.stampstampede.org/money-out-voters-in/overturn-citizens-united/(lastvisitedFeb.6,2020)(“WeneedtoamendtheU.S.Constitutiontodeclarethat...[c]orporationsarenotpeople.”). 64. 599F.3d686,698(D.C.Cir.2010). 65. Id.at689. 66. Id.at694(holdingthat“contributionstogroupsthatmakeonlyindependentexpendituresalsocannotcorruptorcreatetheappearanceofcorruption”). 67. Alschuler,LimitingContributions,supranote61,at418.TheramificationsoftheSpeechNowdecisionaremorefullyexploredinfrapt.III. 68. 800F.Supp.2d281,284(D.D.C.2011),aff’d,565U.S.1104(2012). 69. Id.at283. 70. Id.at282–83,85.


Courtshouldapplytotheprovisions.71However,then-JudgeKavanaughwouldleavethisquestionandothersunresolvedwhileprovidingalegalframeworktoanalyzestatutorylimitsonforeignnationals’speechinthecontextofthedemocraticprocess.

Judge Kavanaugh’s opinion put forth four main points in thisframework.First,itdistinguishedtheissueofregulatingforeignspeechfrom other campaign finance related questions by noting that theGovernmenthasadifferentinterestatstake:whenforeignspeechisatissue, the Government’s interest is not in preventing corruption, butratherit“isinpreventingforeigninfluenceoverU.S.elections.”72Second,thecourtfoundthatSupremeCourtrulingshaveuniversallyheldthat“thegovernmentmayexcludeforeigncitizensfromactivities‘intimatelyrelatedtotheprocessofdemocraticself-government.’”73Third,itnotedthatbecause foreignnationals are accordinglynot affordeda right toparticipate inelections, theUnitedStateshasacompelling interest inlimiting their influence in thedemocratic process.74 Finally, the courtconcludedthat thestatuteat issuewasnarrowlytailoredbecausethebanonforeignnationalsachievesthecompellinginterestofexcludingnon-Americans fromdemocraticparticipationand itdoesnot includelawfulpermanentresidentsinitsdefinition.75

JudgeKavanaugh’sopinionnonethelessexpresslylimitedthereachofthecourt’sholdingandleftanumberofquestionsunanswered.First,astothelimitations,thecourtnotedthatitsholdingdidnotaddressthequestion of whether Congress or other legislatures could prohibitforeignnationalsfromengagingintypesofpoliticalspeechotherthanthosecoveredbythestatuteatissue.76Thus,thequestionofwhether,say,acitycouldregulateforeignspendinginlocalballotinitiativeswasleft unresolved by the court. The court also noted that any criminalviolation of the statute would require a willful mens rea element.77Accordingly,aforeignresidentwithoutknowledgeofthelawwouldnotbecriminallyliableforprintinganddistributingflyersforanelectioningoodfaith.Finally,althoughthecourtnotedinitsreasoningthatthebanas written did not apply to lawful permanent residents, it did not

71. Id.at285–86.Argumentsmadebybothsidesonthisissueareexaminedinfrapt.IV.B. 72. Id.at288n.3. 73. Id.at287. 74. Id.at288. 75. Id. 76. Id.at292. 77. Id.


addresswhetherCongresscouldlawfullyextendittoencompassthoseindividuals.78

ForthepurposeofthisComment’sanalysisoftheOrdinance,twocrucialquestionswereleftunresolvedbythecourt.First,whatlevelofscrutinyappliestostatutesregulatingforeignspendinginelections?Thecourtassumesforargumentthatstrictscrutinyapplies,butitexpresslyavoids answering that question.79 Second,what circumstanceswouldpermit a corporation to “be considered a foreign corporation forpurposesofFirstAmendmentanalysis”?80Thesecondquestion isonethattheSt.PetersburgOrdinanceseekstotackle,whileresolutionofthefirstwillbecrucialindeterminingwhethertheOrdinance’sattempttodosoiswithintheboundsoftheConstitution.Beforeaddressingtheseissues, however, this Comment will assess another question: why islegislationliketheOrdinancenecessaryinthefirstplace?

III.CAMPAIGNFINANCETODAY:THEWAVEOFMONEYOVERTAKINGELECTIONS

While thepreviousPart examined thehistoricalbackgroundandrecent legal developments of campaign finance regulation, this Partexploresthepracticalchangesthatthosedevelopmentshavebrought.First,itdescribesthedevelopmentofSuperPACssincetheSpeechNowdecisionandshowshowspendingismovingfromthefederaltothelocallevel. It goes on to elucidate how these developments have createddifficultyindetectingcampaignspendingbyforeign-ownedorforeign-influenced corporations, a problem that the St. PetersburgOrdinanceseekstorectify.

A.TheRiseofSuperPACs:HowUndisclosedSpendingHappens&ItsImpacts

Asmentionedabove,theCitizensUnitedandSpeechNowdecisionscreatedanoticeableshiftasearlyas2012,andthistrendofincreasedspendinghascontinuedunabated.Themagnitude isstaggering:whilethe top one hundreddonors to federal candidates provided only $73

78. Id. 79. Id. at 285–86 (“[T]he debate over the level of scrutiny is ultimately not decisive herebecauseweconcludethat§441e(a)passesmusterevenunderstrictscrutiny.”). 80. Id.at292n.4.


millionin2010,ameresixyearslaterthattotalincreasedoverten-foldto$900million.81

Thistrendofincreasedoutsidespendinghasalreadytrickleddowntothestatelevel.Forexample,inGeorgia’s2017SpecialElectiontofillthe congressional seat of Tom Price, President Trump’s nominee forSecretaryofHealthandHumanServices,totalcampaignspendingintheracetopped$25million.82Further,thirty-sevenoftheforty-twogroupsthathelpedspendthosefundswerebasedoutsideofthestate.83Anotherspecialelectionthatsameyear,inthemuchlesspopulousstateofUtah,drewnearly$1millioninout-of-stateSuperPACspending.84

Thenext—andfinal—destinationsthatSuperPACmoneyismovingtowardarecountyandmunicipalelections.In2014,over$150,000wasspenttoinfluencetheoutcomeofaschoolboardraceinElizabeth,NewJersey—adistrictwithastudentpopulationnumberingamere25,000.85In another example, the top three spending groups in Philadelphia’s2015mayoralelectionwereallSuperPACs.86MunicipalitiesthroughoutOrangeCounty,California,sawindependentexpendituresnearlytriplethemoneyspentbycandidates’officialcampaigns.87However,arguablythemostegregiousexamplecamefromAustin,Texas,in2016,wherethetwomajor ride-sharingcompaniesUberandLyftpoureda staggering$9.1millionintoSuperPACsinanefforttopassalocalballotmeasureaimingtooverhaulregulationsontheirindustry.88

81. Lawrence Norden et al.,How Citizens United Changed Politics and Shaped the Tax Bill,BRENNAN CTR. FOR JUSTICE AT N.Y.U. SCH. OF LAW. (Dec. 14, 2017), https://www.brennancenter.org/blog/how-citizens-united-changed-politics-and-shaped-tax-bill. 82. LateshiaBeachum,Out-of-State Interests Spent $26.2Million onGeorgia Special Election,NBC NEWS (June 20, 2017), https://www.nbcnews.com/politics/congress/out-state-interests-spent-26-2-million-georgia-special-election-n774366. 83. Id. 84. CourtneyTanner,SuperPACsDump$853,000intoUtahSpecialElectiontoReplaceChaffetz,THESALTLAKETRIBUNE,Aug.10,2017,https://www.sltrib.com/news/politics/2017/08/10/super-pacs-dump-853000-into-utah-special-election-to-replace-chaffetz/. 85. FredrekaSchouten,FederalSuperPACsSpendBigonLocalElections,USATODAY,Feb.25,2014, https://www.usatoday.com/story/news/politics/2014/02/25/super-pacs-spending-local-races/5617121/. 86. Alex Roarty, Super PACs’ Next Target: Local Elections, THE ATLANTIC (May 18, 2015),https://www.theatlantic.com/politics/archive/2015/05/super-pacs-next-target-local-elections/435639/. 87. TomoyaShimura&JosephPimentel,PACMoneyOvertakingCityElections,with$2.4MillionSpent in Irvine, Anaheim Alone, ORANGECOUNTYREGISTER, Nov. 5, 2016, https://www.ocregister.com/2016/11/05/pac-money-overtaking-city-elections-with-24-million-spent-in-irvine-anaheim-alone/. 88. NolanHicks,Prop1CampaignCrosses$9MillionThreshold,AUSTIN-AMERICANSTATESMAN,May9,2016,http://cityhall.blog.statesman.com/2016/05/09/prop-1-campaign-crosses-9-million-threshold/.


While increased spending can be viewed as a predictableconsequence of courts exempting independent expenditures fromcampaignfinanceregulation,theremainderofthisPartexaminesalesspredictable—yetarguablymoreimpactful—resultofthedualdecisionsofCitizensUnitedandSpeechNow.

B.TheGrowingProblemofForeignSpendingandtheDifficultiesofDetectingIt

Besides opening the floodgates for virtually unlimited andundisclosed campaign spending by individuals and corporations, thenewelectionlandscapehassimultaneouslycastaveilovertheinfluencethat foreign spending is having on our elections. Justice Stevenspredictedthiseffectin2010;dissentinginCitizensUnited,heexpresseda strong concern that the ruling “would appear to afford the sameprotectiontomultinationalcorporationscontrolledbyforeignersastoindividual Americans.”89 While the Court’s affirmation of Blumandispelledthatconcernintheabstract,theCourthasyettoprovideanyguidanceonwhatconstitutesaforeigncorporation90—accordingly,anylegislativeeffortstodefineandregulateforeigncorporatespendingwillbemadeintherealmofconstitutionaluncertainty.NeitherhastheFECitselfsteppedintofillthevoid;whileCommissionerEllenWeintraubhasmademultiple attempts tobegin rulemakingon this issue—includingone as recently asMay 2018—the Commission has yet to proffer anofficialNoticeofProposedRulemakingonthesubject.91

Thislackofclarityhascreatedasituationwherewesimplydonot,and cannot, know how large a role foreignmoney and influence areplaying in our elections.92 While foreign nationals continue to bestatutorily barred from making candidate-related contributions or

89. CitizensUnited v. Fed. ElectionComm’n, 558U.S. 310, 424–25 (2010) (Stevens, J.,withGinsburg,Breyer,andSotomayor,JJ.,concurringinpartanddissentinginpart). 90. Blumanv.Fed.ElectionComm’n,800F.Supp.2d281,292n.4(D.D.C.2011),aff’d,565U.S.1104(2012)(“Ourholdingmeans,ofcourse, that foreigncorporationsare likewisebarredfrommakingcontributionsandexpendituresprohibitedby[52U.S.C.30121].Becausethiscaseconcernsindividuals,wehavenooccasion toanalyze the circumstancesunderwhicha corporationmaybeconsideredaforeigncorporationforpurposesofFirstAmendmentanalysis.”(emphasisadded)). 91. EllenL.Weintraub,RulemakingProposaltoCombatForeignInfluenceinU.S.Elections,FEC(May17,2018),https://www.fec.gov/resources/cms-content/documents/mtgdoc_18-26-a.pdf. 92. Douglas M. Spencer, Corporations as Conduits: A Cautionary Note About RegulatingHypotheticals,47STETSONL.REV.225,229–30(2018).


expenditures,93thecurrentstateofcampaignfinancelawallowsgroupstoobfuscatetheoriginalsourceofcontributionsbyfunnelingdonationsthrough“darkmoney”or“greymoney”groupsthatarenotrequiredtofully disclose their donors.94 For example, while independentexpendituresof $250ormoreare generally required tobedisclosed,501(c)organizationsareexemptedfromthisrequirement.95

While the problem of foreign-controlled corporations unlawfullyinfluencingelectionspromptedCongressionalattempts to legislateonthesubjecteveryyearfrom2013to2017,notasinglefederalentityhasyet provided guidance on what constitutes a “foreign-controlled” or“foreign-influenced” entity.96 This lackof guidancehas created a voidthattheSt.PetersburgOrdinance,introducedbelow,seekstofill.

IV.THEST.PETERSBURG“DEFENDOURDEMOCRACY”ORDINANCE

On October 5, 2017, St. Petersburg passed a historic ordinanceregulatingpoliticalspendinginitsmunicipalelections.97Thelegislation,backedbytheSt.PetersburgchapteroftheLeagueofWomenVotersandthe national advocacy group Free Speech for People, garnered mostattentionbecauseofitsprovisionsimposinglimitsoncontributionstoPACs.98 Indeed, this view of the Ordinance as a “rebuke to CitizensUnited”consumedmuchofthedebateandmediacoverage.99However,thisperceptionoversimplifiesthelegislationandthepotentialbenefitsitcanbringtocampaignfinancelaw.

BeforeintroducingtheOrdinance,itisimportanttonotethesourceoftheCity’sauthoritytoenactlegislationregulatingitslocalelections.Thepowerof localitiestoexercisesuchauthoritydirectlydependsonwhatpowerstheirparentstateconfersonthem,andstatesdiffergreatly 93. 52U.S.C.§30121(2018).Thisbanhasbeeninplacesincethe2002BipartisanCampaignReformAct,whichitselfwasformulatedinresponsetoaninvestigationbytheSenateCommitteeonGovernmentalAffairsintopotentialcorruptinginfluenceofforeigndonationstotheDemocraticPartyduringtheClintoncampaign.Bluman,800F.Supp.2dat283–84. 94. Spencer,supranote92,at235–36. 95. Id.at234. 96. DanielMurneretal.,ElectionLawViolations,55AM.CRIM.L.REV.1001,1016(2018). 97. Frago,supranote3. 98. Id.(“The6–2votebytheCityCouncilservesasarebuketoCitizensUnited....Thecouncil’svote... seeks to limithowmuchmoney individuals cangive toPACs that seek to influence cityelections.”).MuchattentioninthedebateleadinguptotheOrdinance’spassagefocusedonwhetheritwouldsurvivealegalchallenge,andmanypredictthattheOrdinancecouldleadtoatestcaseinfrontoftheSupremeCourt.Id.Indeed,JohnBonifaz,thedirectorofFreeSpeechforPeople,notedthatoneofthereasonsSt.PetersburgwasselectedwastheEleventhCircuit’ssilenceontheissuedecidedinSpeechNow.Id. 99. See,e.g.,id.


inthisregard.100Florida’sConstitutionprovidesbroadauthoritytoitsmunicipalitiesforconductingtheirgovernmentalaffairs:“Municipalitiesshallhavegovernmental,corporateandproprietarypowers toenablethemtoconductmunicipalgovernment...andmayexerciseanypowerfor municipal purposes except as provided by law.”101 Statutory lawfurther provides thatwith respect to conductingmunicipal elections,Floridamunicipalitiesarefreetoadoptprovisions,solongastheydonot“conflict[]with or exempt[] amunicipality from any provision in theFloridaElectionCodethatexpresslyappliestomunicipalities.”102Thus,FloridacitieslikeSt.Petersburgareempoweredtoadoptprovisionsthatsupplementstateelectionlaw,solongassuchsupplementaryprovisionsdonotconflictwithexistingstatelaw.

St.Petersburg’sOrdinanceeffectivelyhasthreeoperativeparts:(1)Disclosure Requirements; (2) Contribution Limits; and (3) Foreign-Spending Regulation. Although this Comment will only assess theconstitutional issuespresentedby theForeign-Spendingprovisions, itdetailsallthreeoftheseoperativepartsbelow.

A.DisclosureandDisclaimerRequirements

The Ordinance’s disclosure and disclaimer requirements arearguablyitsleastradicalprovisions,asevidencedbythelackofdebatesurrounding their passage in City Council’s chambers.103Many of thedisclosure requirements supplement pre-existing requirements inFlorida’s state election code, merely demanding that any reportsrequired to be filedwith the Secretary of State also be filedwith St.Petersburg’s city clerk.104 TheOrdinance also imposes two additionaldisclosurerequirements:(1)whetheranydonorhasacontractwiththecity,orexpectstobidonsuchacontract,thatisvalued(orexpectedto

100. BRENNANCTR.FORJUSTICE,WRITINGREFORME-1(CiaraTorres-Spelliscyed.),availableathttp://ssrn.com/abstract=1729827. 101. FLA.CONST.art.VIII,§2(b). 102. FLA.STAT.§100.3605(2019). 103. St. Petersburg City Council Meeting, at 6:12:35–6:13:10 (Oct. 5, 2017), http://www.stpete.org/boards_and_committees/recorded_city_meetings.php(CouncilmanKennedystatingtheSt.Petersburglegalteam’sopinionthatthedisclosureprovisionsoftheOrdinancedonotposeanyconstitutionalissues)[hereinafterOctoberCityCouncilMeeting]. 104. ST.PETERSBURG,FL.,CODEOFORDINANCES§§10-71,10-73,10-74(2017).Itappearsthatonereason for the Ordinance’s supplementation of existing state law was to avoid any potentialargumentsbasedonconflictpreemptionbystatelaw.SeeOctoberCityCouncilMeeting,supranote103, at 5:40:25–5:40:50 (“[W]e’ve structured this whole ordinance... to mirror the staterequirementsasmuchaspossibletopreventanyargumentthatyoucouldn’tcomplywith[both].”).


be valued) at $5,000105 ormore;106 and (2) if thedonor is a Foreign-InfluencedBusinessEntity(“FIBE”).107

TheOrdinance’sdisclaimerrequirementsaresimilarlypremisedonexistingFloridalaw,108althoughtheygofurtherthanstatelawintermsofwhattheyrequire.Foranypoliticaladvertisementsdisplayedwithinthecitylimits,thefollowingdisclaimersarerequired:(1)ifthenameofany entity is required to be disclosed by existing statute, then theadvertisementmustalsodisclosethenameofanindividualwhoisanofficer of that entity; and (2) advertisements paid for by an outsidespendinggroupmustincludethenamesofitstopthreedonors,definedas the three largest contributors who “have each contributed anaggregateamountof$5,000ormore.”109

B.ContributionLimits

WhiletheOrdinance’scontributionlimitsgeneratedmuchdebateontheirconstitutionality,theiroperationisrelativelystraightforward.TheOrdinanceeffectively imposesa limitoncontributionstoPACsof$5,000 per person per year, although it does so by preventing suchgroupsfromusinganyportionsofcontributionsthatexceedthatlimit.110TheselimitsonlyapplytothosefallingwithintheOrdinance’sdefinitionof “outside spending groups”: organizations that (1) make or solicitcandidate-related expenditures, (2) accept contributions that aredesignated for candidate-related expenditures, or (3) expressly orimpliedlymentiontheCityinasolicitationforcontributions.111Toavoidanyproblemsofnoticetopotentialdonors,treasurersofgroupscoveredby theabovedefinitionare requiredby theOrdinance toadvise theirdonorsoftheselimits.112

105. This numberwas originally set at $1,000 before being amended to this amount at thesuggestionofCouncilmanKarlNurse.SeeOctoberCityCouncilMeeting,supranote103,at5:35:00–5:36:00 (Councilman Nurse first suggesting raising the amount from $1,000 to $5,000); Id. at6:23:00–6:26:30(citycouncilvotingtoapprovetheOrdinancewiththeamendedamount). 106. ST.PETERSBURG,FL.,CODEOFORDINANCES§10-72(d). 107. Id.§10-72(e)(4).Thecontoursdefiningsuchanentityareexploredbelow,infrapt.IV.C. 108. Id. §10-75(a) (“This section requires that additional information be incorporated intodisclaimersalreadyrequiredbytheFloridaElectionCode.”). 109. Id.§10-75(b)–(d). 110. Id.§10-61(c). 111. Id.§10-61(a). 112. Id.§10-61(f).


C.ForeignSpendingProvisions

The final operative piece of the Ordinance—and the primarysubjectofthisComment—consistsofitsprovisionsregulatingcampaignfinancing by foreign corporations. The Ordinance first sets forth twocrucial definitions. First, it supplements the definition of “ForeignNational”stipulatedin52U.S.C.§30121(b)113byadding“anyentityforwhichaforeignnational...hasdirectorindirectbeneficialownershipof50percentormoreoftheequity...oftheentity.”114Accordingly,theOrdinanceseemstobringsuchentitieswithinthescopeof§30121(b)’sbanoncandidate-relatedcontributions.Second,itsetsforthdefinitionsforFIBEs,definingsuchentitiesasthose inwhich(1)asingle foreignnational has 5% or more beneficial ownership,115 (2) two or moreforeignnationals collectivelyown20%ormore,116 or (3) “[a] foreignnational participates directly or indirectly in the entity’s decision-makingprocesswithrespecttotheentity’spoliticalactivitieswithintheUnitedStates.”117

After defining these entities, the Ordinance imposes variousrequirementstoensurethatFIBEsarerestrictedfromparticipatinginlocal elections. First, theOrdinance requiresallbusiness entities thatmakeanycoveredcandidate-relatedexpenditureoracontributiontoanoutsidegroupto fileastatementcertifying that it isnotaFIBE.118Allsuchcertificationstatementsaremadeunderpenaltyofperjury.119TheOrdinancegoeson toprohibitoutsidespendinggroups fromutilizinganycontributions frombusinessentities that fail to fileacertification 113. This definition in turn incorporates 22 U.S.C. §611(b) (2018)’s definition of a “foreignprincipal,”whichencompassescorporations“organizedunderthelawsoforhavingitsprincipalplaceofbusinessinaforeigncountry.” 114. ST.PETERSBURG,FL.,CODEOFORDINANCES§10-51(l). 115. Commissioner Weintraub suggested that this number stems from the Schedule 13Drequirement in securities law for disclosure of beneficial purchases of 5% of more, stating“securitieslawconsidersthepurchaseofa5%shareofacorporationtobesignificantandworthyofdisclosure.”St.PetersburgComm.oftheWhole,CampaignFinanceWastewaterSewer,at19:10–19:30 (Oct. 27, 2016), http://www.stpete.org/boards_and_committees/recorded_city_meetings.php[hereinafterCommitteeMtg.]. 116. WeintraubmentionedinaSt.PetersburgCommitteeoftheWholemeetingthatthis20%figureisderivedfromfederalcommunicationslaw.Id.at19:30–19:45.Sheappearstohavebeenreferringto47U.S.C.§310(b)(2018),whichimplicitlydefinesa“foreigncorporation”asincluding“anycorporationofwhichmorethanone-fifthofthecapitalstockisownedofrecordorvotedbyaliensor...aforeigngovernment.”ThisdefinitionhasbeeninplacesincetheCommunicationsAct’soriginalpassage in1934.CommunicationsActof1934,Pub.L.No.73-416,§310(a)(4),48Stat.1064,1086. 117. ST.PETERSBURG,FL.,CODEOFORDINANCES§10-51(m). 118. Id.§10-62(a)–(b). 119. Id.§10-62(b)(3).


statement.120 Thus, theOrdinanceprovidesmultiple setsof “teeth” toenforceitsregulationofforeignspending:businessentitiesthemselvesare regulated through the certification requirement, and spendinggroups are regulated by the prohibition on using funds from anybusinessesthatfailtofileacertification.

V.CONSTITUTIONALISSUESRAISEDBYTHEORDINANCE

TheOrdinance’sthreeactionableprovisions,discussedabove,raiseindependent constitutional questions, and its severability clause121ensuresthatthefallofoneprovisionwillnotdoomtherest.Arguablythe most controversial provisions, in terms of bucking existingprecedent, are those dealingwith contribution limits to independentexpenditure committees.122 These provisions expressly contradict theD.C.Circuit’sholdinginSpeechNowthatsuchlimitsareunconstitutionalinlightofCitizensUnited.123Accordingly,theconstitutionalityoftheseprovisionswillturnonwhethertheEleventhCircuit—andpossiblytheSupremeCourt—agreeswiththeD.C.Circuit’s2010decision.124

In contrast, theOrdinance’sdisclaimeranddisclosureprovisionsarearguablytheleastcontroversialaspectsofthenovellegislationformultiplereasons.First, theCitizensUnitedCourtexpresslyupheld thefederal disclosure provisions in the BCRA against a number ofpetitioners’challengestothem.125Thus,similarprovisionsinthelocal 120. Id.§10-61(c). 121. Id.§10-53. 122. See id.§10-61(c) (“The followingshallnotbedesignatedaseligible foruse forcoveredcandidate-relatedexpenditures:(1)anyportionofacontribution...exceed[ing]theaggregateof$5,000.00perpersonpercalendaryear.”).Theprovisiongoesontoprohibituseofcontributionsbyentitiesfailingtocertifythattheyareforeign-influenced.Id.;seealsosuprapt.IV.C. 123. SeeSpeechNow.orgv.Fed.ElectionComm’n,599F.3d686,694(D.C.Cir.2010)(“InlightoftheCourt’sholdingasamatteroflawthatindependentexpendituresdonotcorruptorcreatetheappearance of quid pro quo corruption, contributions to groups that make only independentexpendituresalsocannotcorruptorcreatetheappearanceofcorruption.”).Indeed,theOrdinance’sdrafters were well aware of this contradiction in precedent: a key thrust of the Ordinance’ssupporters,likeProfessorTribe,wasthatSpeechNowwasincorrectlydecided.AlbertW.Alschuler,LaurenceH.Tribe,etal.,WhyLimitsonContributionstoSuperPACsShouldSurviveCitizensUnited,86FORDHAML.REV.2299,2308–14(2018)[hereinafterAlschuler,WhyLimitsShouldSurvive]. 124. ThisCommentwillnotweighinontherobustdebateastothecorrectnessoftheSpeechNowholding.Forargumentscriticizingthedecision,see,e.g.,Alschuler,WhyLimitsShouldSurvive,supranote123;Alschuler,LimitingContributions,supranote61.ForargumentsthatthedecisionwasaproperextensionoftheCitizensUnitedCourt’sholding,see,e.g., JoelM.Gora,InDefenseofSuperPACsandoftheFirstAmendment,43SETONHALLL.REV.1185(2013);LukeWachob,SpeechNow.orgv.FederalElectionCommission:ProtectingtheFirstAmendmentRightsofAmericans,INSTITUTEFORFREE SPEECH (Mar. 26, 2018), https://www.ifs.org/research/speechnow-org-v-federal-election-commission-protecting-the-first-amendment-rights-of-americans/. 125. CitizensUnitedv.Fed.ElectionComm’n,558U.S.310,366–71(2010).


legislationareunlikelytocauseunresolvableconstitutionalproblems.Further, thedisclosureprovisionsarewritten to supplementalready-existingdisclosureanddisclaimerrequirementsatthestatelevel.126Thelack of successful constitutional challenges to these state-levelrequirements bodes well for the success of the Ordinance’s similarrestrictionsatthemunicipallevel.127

The Foreign Spendingprovisions of theOrdinance, however, arenovelandwillposequestionsof first impressionforanycourt taskedwithrulingontheirvalidity.Accordingly,theconstitutionalityoftheseprovisionsposesapertinentsubjectthattheremainderofthisCommentundertakes to explore. First, it compares the Ordinance’s foreign-spending provisions to existing federal law in order to parse out thenovel issues they raise, and in doing so, it explores the sources fromwhichtheOrdinancecreatesitsclassificationsandconsequences.ThisPartgoesontopredicttheissuesandargumentsthatwillberaisediftheOrdinance’s constitutionality is litigated—arguments made by thepartiesinBlumanwillbeinstructiveinthisregard.Specifically,thisPartaddresses: (1)arguments forwhetherstrictscrutinyorrationalbasisreview should apply; and (2) arguments regarding whether theOrdinanceissufficientlynarrowlytailoredtosurvivereviewunderstrictscrutiny.

A.ComparingtheOrdinancetoFederalLaw

BecausetheonlyguidancefromtheSupremeCourtonregulatingforeign political speech relates to existing federal law, a comparativeanalysisbetweenprovisionsintheOrdinanceandthoseinotherfederallegislation will be beneficial. As shown above, while the Ordinanceincorporates the language of 52 U.S.C. §30121(b) to define “foreignnational,”itsupplementsthisdefinitionbybringinganyentitythathas

126. FLA.STAT. §§106.07, 106.0703, 106.071 (2019); ST.PETERSBURG,FL.,CODEOFORDINANCES§10-51(r). 127. One issuewith disclosure thatmay be litigated concernswhether disclosure in certaininstancesisunconstitutionalwhenitsubjectsdonorstoharassmentcomparabletothatfacedbytheNAACPinthe1950s.CiaraTorres-Spelliscy,CampaignFinance,FreeSpeech,andBoycotts,41HARV. J.L. & PUB. POL’Y 153, 156 (2018) (referencing Buckley v. Valeo, 424 U.S. 1, 69 (1976)(discussingNAACPv.AlabamainreasoningthattheabsenceofevidenceofharassmentwasrelevantinholdingFECA’sdisclosureprovisionsconstitutional)).However,anychallengetotheOrdinanceon this groundwoulddealwith theOrdinance’s application to specific facts, rendering such ananalysis outside the scope of this Comment. Moreover, the potential of the Ordinance’s slightadditionaldisclosurerequirementstocausethisdegreeofharassment,whencomparedtoexistingstatelaw,appearsminimaltononexistent.


a50%ownership interest controlledbya foreignnationalwithin thescopeofthisdefinition.128Becausethisdefinitioneffectivelyprecludesanyentityfallingwithinthisdefinitionfromcontributingtoelections,129a crucial question to address is whether this definition of foreignnationaliswithinconstitutionalbounds.AsimilarquestionarisestotheOrdinance’sdefinitionsof“Foreign-influencedbusinessentity”:aretheOrdinance’slines,drawnattheownershipof5%interestofanentitybya single foreignnational or theownershipof 20% interest by twoormoreforeignnationals,constitutional?

TheOrdinancealsodiffersfromexistingfederallawintermsofitsrequirements.52U.S.C.§30121simplymakesit“unlawful”forforeignnationalstomakecontributions“toacommitteeofapoliticalparty”or“inconnectionwitha... localelection,”andtomakeexpenditures for“electioneeringcommunication.”130Incontrast,theOrdinancerequiresanyentitymakingacoveredcontributionorexpendituretocertifythatit does not fall within the above definitions of “foreign national” or“foreign-influenced.”131 At first glance, it might appear that thisrequirement falls short of a prohibition.However, since the requiredcertificationistakenunderpenaltyofperjury,132thisprovisionshouldbereadasaneffectivebanoncontributionsorexpendituresbytheseentities.

AnotherpointofdivergencebetweenfederallawregulatingforeigncampaignspendingandtheOrdinanceisthescopeofthecontributionsandexpendituresthatareregulated.Federallawprohibitscontributions“in connection with... election[s]” or “to a committee of a politicalparty,” and it also proscribes expenditures “for an electioneeringcommunication.”133Electioneeringcommunicationsinturnonlycapturethose communicationswhich “refer[] to a clearly identified candidatefor...office”andexpresslydonotcovercommunicationsmademorethansixtydaysbeforeanelectiondate.134 Incontrast, theOrdinance’sforeign-spending provisions are triggered by “covered candidate-related expenditure[s]” or “contribution[s] to... outside-spending

128. ST.PETERSBURG,FL.,CODEOFORDINANCES§10-51(1). 129. See 52 U.S.C. §30121(a) (2018) (banning contributions from foreign nationals in localelections). 130. Id. §30121(a)(1). The law also makes it unlawful for individuals to solicit or acceptcontributionsprohibitedbythisprovision.Id.§30121(a)(2). 131. ST.PETERSBURG,FL.,CODEOFORDINANCES§10-62(a)–(b). 132. Id.§10-62(b)(3). 133. 52U.S.C.§30121(a)(1). 134. Id.§30104(f)(3).


group[s],”whicharedefinedas“independentexpenditure[s]madewithrespect to a candidate or... an expenditure for an electioneeringcommunicationmadewithrespecttoacandidate.”135Thus, itappearsthattheOrdinancecastsabroadernetthanexistingfederallaw:whilefederallawonlycoversexpenditureswithinthetime-bounddefinitionof “electioneering communication,”136 the Ordinance covers any“independent expenditure made with respect to a candidate,”137regardlessofhowfaroutfromanelectionitismade.

OneapparentcommonalitybetweentheOrdinanceandfederallawisthatneitherappeartoprohibitissue-basedadvocacybyforeigners.138Although the Ordinance’s certification requirements are triggered bycontributionsto“outside-spendinggroups,”andtheOrdinancedefines“outside-spending groups” broadly, all possible definitions of suchgroupsrelatetowhetheritaccepts,solicits,orpurportstoeitheracceptorsolicit“candidate-relatedexpenditures.”139Onecouldarguethereispotentialdiscordonthisissue.Forexample,ifagroupsolicitsdonationsforbothcandidate-relatedexpendituresandexpendituresrelatedtoaballot measure or other issue-based advocacy, then FIBEs might belocally barred from contributing to that group even though foreignnationalswouldbepermittedtocontributetoitunderexistingfederallaw.140However,sinceaFIBEwouldnotinanywaybeprohibitedfrommakingitsownexpendituresonthistypeofissue,theOrdinancedoesnotappearonitsfacetorunafoulofBluman’sguidance.

Thus,theOrdinancediffersfromexistingfederallawinafewcrucialrespects.First,insteadofmerelyregulatingconductofforeignnationals,itregulatesbusinessentitieswithcertaindegreesofforeignownership:(1) an entity owned 50% or more by a single foreign national is

135. ST. PETERSBURG, FL., CODE OF ORDINANCES §10-62(a) (stating that the section applies tobusiness entities that make covered candidate-related expenditures greater than or equal to$5,000);id.§10-51(g)(definingtheseterms). 136. See52U.S.C.§30104(f)(3). 137. ST. PETERSBURG, FL., CODE OF ORDINANCES §10-62(a) (stating that the section applies tobusiness entities that make covered candidate-related expenditures greater than or equal to$5,000);id.§10-51(g)(definingtheseterms). 138. See supra text accompanying note 134 (showing that federal prohibitions on foreigncampaignfinancingapplyonlyinrelationtopoliticalcampaignsforoffice). 139. SeeST.PETERSBURG,FL.,CODEOFORDINANCES§10-61(a)(1)–(5)(emphasisadded). 140. Thisinferenceispremisedon52U.S.C.§30121(2018)’sprohibitiononcontributionsbyforeignnationals“inconnectionwithaFederal,State,orlocalelection,”andthestatute’streatmentof“election”asapplyingtoelectionsforoffice(andthusnotencompassingballotmeasures&otherreferenda).However,thisprovisionhasasubstantial lackofclarityregardingorganizationsthatadvocateforbothissues&candidates—thisuncertaintyisanotherreasonthatadditionalfederallegislationorrulemakingonthetopicwouldbebeneficial.


considereda‘foreignnational’itself;and(2)anentityowned(a)5%ormore by a single foreign national or (b) 20% ormore by 2 ormoreforeignnationalscumulativelyisconsideredaFIBEsubjecttoadditionalrequirements. Second,while it purports tomerely subject FIBEs to areporting requirement, it effectively prohibits these entities frommakinganycontributionsorexpendituresrelatedtoelectionsforoffice.Third, while the Ordinance appears to track federal law by allowingFIBEstoparticipateinissue-basedadvocacy,theOrdinance’slanguagemay nonetheless go further than federal law by proscribingcontributions to groups that participate in both electioneering andissue-basedadvocacy.

Aspreviouslymentioned, these classificationswillpose issuesoffirstimpressiontoareviewingcourt.Athresholdquestionsuchacourtwillfaceiswhatlevelofscrutinyitshouldsubjecttheseclassificationsto,asthisquestionwasexplicitlyleftopenbythen-JudgeKavanaugh’sopinion inBluman.141Accordingly, the followingPartwill analyze theargumentsmadebybothsidesonthisquestion,anditwillpredicthowtheymightbereframedinthecontextoftheOrdinance’sclassificationsofforeigncorporations.

B.StrictScrutinyv.RationalBasis

TheBluman court not only left the question of level of scrutinyunanswered—it also acknowledged the question’s complexity anddifficultytoresolve:

Wethinkthequestionissomewhatmorecomplexthaneithersidesuggests, not only because the statute implicates both the FirstAmendmentandnationalsecurity,butalsobecauseitincludesbotha limit on contributions and a limit on expenditures, which havetraditionally been subject to different levels of First Amendmentscrutiny.142

This interplay, between the degree of First Amendment protectionsafforded to citizens vis-à-vis non-citizens and the constitutionalprerogative of the political branches to exert plenary power overalienageandnationalsecurityissues,wascentraltoargumentsmadeby 141. Blumanv.Fed.ElectionComm’n,800F.Supp.2d281,285(D.D.C.2011)(“[T]hedebateoverthe level of scrutiny is ultimately not decisive here becausewe conclude that §441e(a) passesmusterevenunderstrictscrutiny.”). 142. Id.


theFECandtheBlumanpetitioners.ThisPartexplorestheseargumentsandhowtheymightmanifestdifferentlyinthecontextoftheOrdinance.

1.FEC’sArgumentsforRationalBasisReview

ThecruxoftheFEC’sargumentinBlumanwasthatrestrictionsoncampaignfinancingbyforeignnationalsareanexerciseof the federalgovernment’spoweroveralienageandnationalsecurityissuesandarethus subject to rationalbasis review.143TheCommissionpointed toalineofcaseswheretheSupremeCourthasappliedrationalbasisreviewto statutes excluding foreign nationals from participation in otheraspectsofself-government.144However,theFECappearedtorecognizethelimitationsofthisprecedentialsupport,asitnotedthattheSupremeCourthasappliedstrictscrutinytostatutesexcludingnon-citizensfromactivitiesorbenefits that“‘ifwithheld,woulddirectlycauseeconomicdependenceorphysicalharm.’”145Afterprovidingthisframing,theFECasserts that “[t]he opportunity to make monetary contributions tocandidates...is‘hardlyaprerequisitetoexistenceinacommunity.’”146ThiswrinklemighttakeonmorerelevanceintheOrdinance’scontextofrestrictingcorporatecampaigncontributions:ifaFIBEisexcludedfromcontributingtocandidates,whileitsnon-foreign-influencedcompetitorsare permitted to engage in this practice with an expectation ofreciprocity, is the corporation being effectively excluded from acommunityorbeingsubjectedtoeconomicdependenceorharm?

The FEC thrusts another distinction to support rational basisreview, namely whether the regulation at issue primarily affectseconomicinterestsorsovereigngovernmentalfunctions—whilecourtstypically apply strict scrutiny to the former, the latter is generallysubjected to rational basis review.147 Under this view, theaforementioned exclusions of foreign nationals from positions like 143. SeeDef.’sMot.toDismissat13–18,Blumanv.Fed.ElectionComm’n,800F.Supp.2d281(2011)(10-1766)[hereinafterFECMot.toDismiss];Def.’sOppositiontoPls.’Mot.forSumm.J.andReplyinSupp.oftheComm’n’sMot.toDismissat8–20,Blumanv.Fed.ElectionComm’n,800F.Supp.2d281(2011)(10-1766)[hereinafterFECReply]. 144. FECMot.toDismiss,supranote143,at15–16(citingSugarmanv.Dougall,413U.S.634,648–49(1973)(excludingaliensfromvotingandholdingcertainpublicoffices);Foleyv.Connelie,435U.S. 291, 299–300 (1978) (upholding statute excluding non-citizens from serving as policeofficers);Ambachv.Norwick,441U.S.68,80–81(1979)(upholdingstatuteexcludingnon-citizensfromteachinginpublicschools)). 145. FECMot.toDismiss,supranote143,at16(quotingMovingPhonesPartnershipL.P.v.FCC,988F.2d1051,1056(D.C.Cir.1993)). 146. FECMot.toDismiss,supranote143,at17. 147. FECReply,supranote143,at16.


police officers and teachers148 would primarily affect sovereignfunctions,andtheFECseekstoplacepetitioners’politicalcontributionsandexpendituresinthiscategoryaswell.149However,theFECimplicitlyacknowledgesthatauthoritytorestrictforeigncontributionsrestswithCongress150—indoingso, itbegsthequestionastowhetherstateandlocalgovernmentswouldhavecomparableauthority.

2.Plaintiffs’ArgumentsforStrictScrutiny

IncontrasttotheFEC,theBlumanplaintiffshingetheirargumentonthepremisethatlawfulresidentsoftheUnitedStatesareaffordedthefull force of the First Amendment’s protections.151 Plaintiffs first andforemost directed the court’s attention to the Supreme Court’sstatement in United States v. Verdugo-Urquidez152 that the FourthAmendment’sprotectionsextendto“personswhoarepartofanationalcommunityorwhohaveotherwisedevelopedsufficientconnectionwiththis country to be considered part of that community.”153 They alsopointedtoanumberofcircuitcourtdecisions“hold[ing]thattheFirstAmendment protects aliens while they lawfully reside in the UnitedStates.”154ThisframingthusattemptstodilutetheFEC’sargumentthatforeign campaign financing implicatesnational security concerns thatwouldsubjectsuchregulationstolesserscrutiny,anditalsoignorestheagency’sdistinctionofwhethersuchrestrictionswouldserveprimarilypoliticaloreconomicconcerns.

Afterteeinguptheirargumentontheaforementionedgrounds,theBluman plaintiffs argue that the law’s effect of completely banningcontributions and expenditures should accordingly subject it to strict

148. SeeFECMot.toDismiss,supranote143,at15–16. 149. FECReply,supranote143,at8–9. 150. FECReply, supranote 143, at 31 (“Congress has the authority to prohibit even limitedforeigncontributions.”). 151. Pls.’Mot.forSumm.J.at15,Blumanv.Fed.ElectionComm’n,800F.Supp.2d281(D.D.C.2011)(10-1766)[hereinafterPls.’Mot.forSumm.J.]. 152. 494U.S.259,274–75(1990)(rejectingtheFourthAmendment’sapplicationtoaMexicannationalinvoluntarilytransportedintotheUnitedStates). 153. Pls.’Mot.forSumm.J.,supranote151,at13(quotingVerdugo-Urquidez,494U.S.at265). 154. Pls.’Mot.forSumm.J.,supranote151,at13–14(citingAmerican-ArabAnti-DiscriminationComm.v.Reno,70F.3d1045,1063–64(9thCir.1995)(“TheSupremeCourthasconsistently...accordedtoalienslivingintheUnitedStatesthoseprotectionsoftheBillofRightsthatarenot,bythetextoftheConstitution,restrictedtocitizens.”);Parchamv.INS,769F.2d1001,1004(4thCir.1985) (“[A]liens residing in this country enjoy the protection of the First Amendment.”); In reWeitzman,426F.2d439,449(8thCir.1970)(“TheSupremeCourthasstatedclearlythatresidentaliensaretobeaccordedthe[F]irst[A]mendmentguaranteesoffreespeechandfreepress.”)).


scrutiny.155 First, the plaintiffs posit that “[a] complete ban oncontributions is subject to strict scrutiny under the FirstAmendment.”156 While they acknowledge that limits on amounts ofcontributionshaveattimesfacedless-than-strictscrutiny,theypointtotheCourt’s reasoning inBuckley as support for theirproposition thatcompletebansoncontributionsmustbesubjectedtoastrictscrutinystandard.157

3.SituatingtheArgumentsintheOrdinance’sContext

The above twoParts provide a glimpse into arguments thatwilllikely be raised when, and if, the Ordinance faces a constitutionalchallenge.WhiletheCity’spotentialargumentsforrationalbasisreviewwilldependonplacingtheOrdinance’seffectsinthecontextofnationalsecurityandalienageaffairs,challengerswillarguethefullweightoftheFirstAmendmentmustbeaffordedtoforeigncorporations,similarlytolawful foreign residents. This Comment will now situate theseargumentsinthecontextoftheOrdinanceby(1)examiningthefindingsthat the St. Petersburg City Council relied upon in promulgating theOrdinance,(2)exploringwhethertherecentdecisionofTrumpv.Hawaiimight support rational basis review, and (3) elucidating distinctionsbetween the Ordinance and the law at issue in Bluman that may berelevanttoareviewingcourt.

TheOrdinance’s“FindingsRegardingForeignInfluenceandSuper-PACFunding”(“Findings”)expresstheCity’scompellingneedtolegislatein order to fill gaps left by existing law.158 The Findings first note afederal report finding “extensive foreign involvement” in the UnitedStates’2016elections.159Theystatethattheexistingbanoncampaignfinancing by foreign nationals160 demonstrates federal recognition of“the need to protect U.S. elections (including local elections) fromforeign influence,” but they assert that “[c]urrent law does not

155. Pls.’Mot.forSumm.J.,supranote151,at17–19. 156. Pls.’Mot.forSumm.J.,supranote151,at17. 157. Pls.’Mot.forSumm.J.,supranote151,at18(arguingthatBuckley’srationalethatlimitedcontributionsstillallowforindividualstoshowsymbolicsupportthroughnominalcontributions“doesnotapplytoatotalbanoncontributions,whichcompletelydeprivesanindividualof[FirstAmendmentpoliticalspeechprotections]”). 158. See “Section 2—Findings Regarding Foreign Influence and Super-PAC Funding,” St.PetersburgOrdinance(2017),http://www.defendourdemocracy.org/wp-content/uploads/2017/11/St-Pete-Final-ordinance-2017-11-09.pdf[hereinafterOrdinanceFindings]. 159. Id.§2(a). 160. 52U.S.C.§30121(b)(2018).


adequately protect against foreign nationals... from influencingelectionsthroughcorporatepoliticalspendingbyU.S.corporationswithsignificantforeignownership.”161Besidesbrieflydetailingthehistoricaland legal support for the thresholds the Ordinance uses to classifyFIBEs,162 theFindings stress that failed rulemaking efforts to addressthis problem at the federal level, combined with evidence thatcorporations reaching FIBE levels of foreign ownership are activelyparticipatinginlocalelections,render“ensur[ing]thatcorporationsthatspendmoneyincityelectionsarenotforeign-influenced”necessary“[t]oprotect the integrity of the democracy of St. Petersburg.”163 Thesedetailed findings appear to indicate the Citywas anticipating judicialreviewunder a strict scrutiny standard, evidencedby the detailwithwhich they describe the City’s compelling need for the Ordinance’sclassificationsandrestrictions.

Aside from the factual and situational context in which theOrdinancewaspassed,thetemporalcontext—namelythesixyearsthatpassedbetweentheBlumandecisionandtheOrdinance’spassing—mayaffecttheargumentsthatareultimatelyputforthonreview.Specifically,theCourt’sdecisioninTrumpv.Hawaii164mayinformargumentsastowhetherrationalbasisorstrictscrutinyshouldapplytotheOrdinance.Inthatcase,whileplaintiffsarguedthatPresidentTrump’stravelbanshouldbesubjectedtostrictscrutinyundertheEstablishmentClause,the Court distinguished typical Establishment Clause claims from thecase at bar by noting that the case also implicated national securityissues.165Indecidingtoapplyarationalbasisstandard,theCourtnotedthe following: “‘Any rule of constitutional law that would inhibit theflexibility’ of the President ‘to respond to changing world conditionsshouldbeadoptedonlywiththegreatestcaution,’andourinquiryintomattersofentryandnationalsecurityishighlyconstrained.”166

WhethertheCourt’sapplicationofrationalbasisreviewinHawaiiwill have anybearingon the standard a reviewing court subjects theOrdinancetoislessthanclear.TheCitywilllikelypointtotheHawaiiholding to support a more deferential review of the Ordinance; this 161. OrdinanceFindings,supranote158,at§2(b)–(c). 162. Thesethresholdsandtheirbasesarediscussedinfrapt.V.C. 163. OrdinanceFindings,supranote158,at§2(d),(g)–(h). 164. 138S.Ct.2392,2423(2018). 165. Id.at2418(“Unlikethetypicalsuitinvolvingreligiousdisplaysorschoolprayer,plaintiffsseektoinvalidateanationalsecuritydirective...rais[ing]anumberofdelicateissuesregardingthescopeoftheconstitutionalrightandthemannerofproof.”). 166. Id.at2419–20(internalquotationsomitted).


argumentwouldviewtheHawaiiholdingasprecedentialsupportfortheFEC’s position inBluman that restrictions on foreign political speechimplicate national security concerns and are thus subject to rationalbasisreview.167Ontheotherhand,challengersoftheOrdinancecouldhighlight a few distinctions. First, whileHawaii concerned entry andnationalsecurityofforeignaliens,i.e.foreignnationalsnotlivingintheUnitedStates,regulationsofspendingbyforeigncorporationswouldbemore analogous to regulation of lawful permanent residents. Second,withregardtoanobjectiveofachievingnationalsecurity,thereappearstobe a closernexusbetween thatobjective and restrictionsonentrythanrestrictionsoncampaignfinancing.168Finally,whilethechallengesinHawaiiandBlumanconcernedregulationofforeigners’activitybythefederal government, a challenge to the Ordinance would concernregulation by a local entity. Accordingly, arguments hinging ondeference that courts typically apply to the federal executive andlegislativebranchesintherealmofnationalsecurityarelikelytobelesspersuasive.

C.StrictScrutinyAnalysisoftheOrdinance’sClassificationsforForeignCorporations

Arguably one of themost impactful goals of the Ordinance is toclarifyBluman’sapplicationtoforeigncorporations.WhiletheSupremeCourt’ssummaryaffirmationofthecase169demonstratesthat“foreigncorporations”indeedfallwithintheboundsof52U.S.C.§30121,andarethus properly subject to regulation, the case failed to provide anyguidance on how to define such an entity.170 The Ordinance’s twoclassificationsofcorporationsaseitherForeignNationalsorFIBEs,andthe thresholds upon which it premises these classifications, willaccordinglypresentquestionsoffirstimpressiontoareviewingcourt.ThisCommentwillassumethattheclassificationswouldsurvivereviewunderarationalbasisstandard,anditaccordinglylimitsitsanalysisto

167. Seesupratextaccompanyingnote143. 168. Ontheotherhand,thefindingsnotedbytheSt.PetersburgCityCouncilregardingforeigninvolvement inU.S. electionsmightbe sufficient to situate thismeans closer to theobjectiveofnationalsecurity.Seesupratextaccompanyingnotes159–163. 169. Blumanv.Fed.ElectionComm’n,565U.S.1104,1104(2012). 170. Bluman,800F.Supp.2dat292n.4(“Ourholdingmeans,ofcourse,thatforeigncorporationsarelikewisebarred...by[52U.S.C.§30121(2018)].Becausethiscaseconcernsindividuals,wehavenooccasion toanalyze thecircumstancesunderwhicha corporationmaybeconsideredaforeigncorporationforpurposesofFirstAmendmentanalysis.”(emphasisinoriginal)).


whethertheclassificationsaresufficientlynarrowlytailoredtoachieveacompellinggovernmentalinterest.

The Ordinance provides two separate levels of classification forforeign corporations. The first level equates any corporation that isowned50%ormorebyasingleforeignnationalwithaforeignnationalitself,whilethesecondlevelprovidestwoseparatethresholdstodefineFIBEs.171Thefirst levelappearstobestraightforwardandsound.It isfundamental thatownership interestgreaterthan50%allowscontroloveracorporation.Thus,ifasingleforeignnationalcontrolstheactionsofacorporation,thecorporationcanbeproperlyviewedasanextensionof the foreign national. Accordingly, this definition seems narrowlytailored to achieve the compelling interest set forth in Bluman of“limiting the participation of non-Americans in the activities ofdemocraticself-government.”172

Further evidence that the 50% threshold would survive strictscrutiny review comes in the form of FEC Commissioner EllenWeintraub’s proposals to initiate rulemaking on this issue.CommissionerWeintraubputforthtwosuchproposalsin2011,oneinJanuaryandanotherinJune.173Whilethefirstproposedtwothresholdsofbeneficialownershiptodefineforeigncorporations,oneat20%andanotherat50%,thesecondeliminatedthe20%threshold.174Whilethiscouldbeviewedasmerelyanattemptatpoliticalcompromise,itcouldalso be read as evidence of the Commissioner’s certainty of the 50%threshold’s constitutionality (and conversely, as evidence of heruncertaintyofthesameregardingthe20%threshold).

The Ordinance’s second level of classification is lessstraightforward,asthereisnoobviousconnectionbetweena5%or20%ownership interest in a corporation and control of the corporation’sactions. As mentioned above, these numbers appear to stem fromstatutesrelatingtosecuritieslawandtelecommunicationslaw.175Thus,viewing these other requirements and definitions in their respective 171. SeeST.PETERSBURG,FL.,CODEOFORDINANCES§10-51(1)(m)(2017). 172. Bluman,800F.Supp.2dat290(emphasisinoriginal). 173. See Federal Election Comm’n, Draft Notice of Proposed Rulemaking on IndependentExpendituresandElectioneeringCommunicationsbyCorporationsandLaborOrganizations,AgendaDocumentNo.11-33,FEC(June9,2011)[hereinafterFECDoc.No.11-33],https://www.fec.gov/resources/updates/agendas/2011/mtgdoc_1133.pdf; Federal Election Comm’n, Draft Notice ofProposed Rulemaking on Independent Expenditures and Electioneering Communications byCorporationsandLaborOrganizations,AgendaDocumentNo.11-02,FEC(Jan.18,2011)[hereinafterFECDoc.No.11-02],https://www.fec.gov/resources/updates/agendas/2011/mtgdoc_1102.pdf. 174. FECDoc.No.11-33,supranote173,at79;FECDoc.No.11-02,supranote173,at87. 175. Seesupranotes115–116.


contextscanshedlightonwhethertheirapplicationstotheOrdinancewill pass constitutionalmuster.Wewill first look at the context andhistory of the 20%ownership threshold in communications law, andthenwewillturntothe5%thresholdinsecuritieslaw.

The St. Petersburg City Council’s official findings regarding theOrdinance state that the 20% ownership threshold is based intelecommunications law codified at 47 U.S.C. §310(b) (2018).176 TheTelecommunicationsActdoesnotpermitanybroadcast licenseto“begrantedtoorheldby”foreignnationals,corporationsorganizedunderforeign governments’ laws, corporate subsidiaries whose parentcorporationisownedbyforeignnationalstothetuneof25%ormore,or“anycorporationofwhichmorethanone-fifthofthecapitalstockisowned... by aliens or their representatives.”177 Although theinterpretation of this restriction has been relaxed to a case-by-casedeterminationwithinthepastdecade,itoperatedasastrict,categoricalbartoownershipfortheprecedingseventy-plusyears.178

Ultimately, the question of whether this 20% threshold will befoundtobenarrowlytailoredonreviewremainsunclear.Ononehand,the fact that a 20% ownership interest is equated with a “foreigncorporation” in this context suggests that itwouldbeconstitutionallysoundinthecontextoftheOrdinance.However,thefactthatthe20%ownership thresholdwas never struck down is not dispositive of itsconstitutionality when applied to the context of campaign financeregulation.TheregulationoftelecommunicationsisviewedwithinthecontextoftheCommerceClause,andconstitutionalscrutinyinthisareatypicallyappliesa“publicinterest”standard.179

Unlike the Ordinance’s 20% aggregate-ownership thresholdapplicabletotwoormoreforeignnationals,its5%thresholdapplicabletoasingleforeignnationalstemsfromsecuritieslaw,asnotedbytheSt.

176. OrdinanceFindings,supranote158,at§2(f)(“[A]corporationwithacollectionofforeignownerstotaling20%ownershipwouldbeunacceptablysubjecttoforeigninfluence,asillustratedby47U.S.C.310(b)’s20%maximumofforeignownershipforbroadcastlicensees.”). 177. 47U.S.C.§310(b)(2018). 178. David Oxenford,FCC AllowsMore Than 25% Foreign Ownership of Broadcast Stations—InstructionsforInvestorsAretoBeDeveloped,BROADCASTLAWBLOG(Nov.22,2013),https://www.broadcastlawblog.com/2013/11/articles/fcc-allows-more-than-25-foreign-ownership-of-broadcast-stations-instructions-for-investors-are-to-be-developed/. 179. SeeStuartN.Brotman,RevisitingtheBroadcastPublicInterestStandardinCommunicationsLawandRegulation,BROOKINGS(Mar.23,2017),https://www.brookings.edu/research/revisiting-the-broadcast-public-interest-standard-in-communications-law-and-regulation/#judhistory.


PetersburgCityCouncil’sfindings.180The13Dreportingrequirementistriggeredwheneverapersongainsownershipofmore than5%ofanentity,anditrequiressuchpersontotransmitashortstatementtotheS.E.C. detailing their newly acquired ownership.181 While theconstitutionalityofdisclosurerequirementsimposedby15U.S.C.§78mhavebeenchallengedmultipletimesandupheld,182nochallengesdealtwithwhether5%was an appropriate threshold to triggerdisclosure.Further,whilethe5%thresholdmerelytriggersreportingrequirementsinthesecuritiescontext,suchathresholdof foreignownership inthecontext of the Ordinance would effectively preclude any and allcandidate-related expenditures. Thus, while the 5% threshold ispremisedonexistinglegalrequirements,thevastlydifferentcontextsofthese requirements make this threshold’s constitutionality uncertainwhenappliedtocampaignfinanceregulation.

Despite the fact thatboth the5%and20%beneficial ownershipthresholdsarepremisedonexistingfederallaw,theymaynonethelessbevulnerabletoconstitutionalattacksasbeingover-orunder-inclusive.Plaintiffs in Bluman put forth a number of such attacks against theforeign-spendingprovisionsoftheBCRA.183Theyarguedthatthestatutewasunder-inclusivebecauseitdidnotproscribecampaignfinancingbyotherresidentswhocannotvote,suchasminorsandpermanentforeignresidents, and because it did not prohibit foreign nationals fromparticipating in issue-basedadvocacy.184Plaintiffs furtherargued thatthe statute was over-inclusive because it could deny non-citizenresidentswhohadbeengrantedtherighttovoteinsomestateandlocalelectionstheabilitytocontributetothecandidatestheywerevotingfor:“No system that permits such a bizarre result could be defended as‘narrowlytailored’oreven‘closelydrawn.’”185 180. SeeOrdinanceFindings,supranote158,at§2(e)(“Federallawandacademicliteratureoncorporate governance consider a single shareholder owning 5% ormore to be in a position toinfluencecorporategovernance.”). 181. 15 U.S.C. §78m(d) (2018); Lloyd S. Harmetz, Frequently Asked Questions About Section13(D)andSection13(G)OfTheSecuritiesExchangeActof1934,MORRISON&FOERSTERLLP(2017),https://media2.mofo.com/documents/faqs-schedule-13d-g.pdf. 182. See United States v. Guterma, 281 F.2d 742, 746 (2d Cir. 1960) (finding disclosurerequirementsnotunconstitutionallyvagueorindefinite);FullValueAdvisors,LLCv.SEC,633F.3d1101, 1110 (D.C. Cir. 2011) (finding that disclosure did not cause economic harm sufficient toconstituteataking). 183. Pls.’Mot.forSumm.J.,supranote151,at24–27. 184. Pls.’Mot.forSumm.J.,supranote151,at24–26. 185. Pls.’Mot.forSumm.J.,supranote151,at26(explainingthatsomecitieshadextendedtheright to vote in local elections to non-citizen residents—“[i]n Chicago, for example, non-citizen


WhiletheBlumancourtupheldtheprovisionsatissueagainsttheseattacks,primarilyonthegroundsoflong-standinghistoricaldistinctionsbetween aliens and citizens,186 the Ordinance’s provisions defining‘foreign corporations’ may bemore vulnerable. As shown above, thehistorical lineage for the 5% and 20% bright-line, categoricalrestrictions are much less long-standing and also less clear.187Accordingly, theOrdinance’sdefinitions couldbemore susceptible tobeingoverturned if subjected to anarrowly-tailoredanalysis. Indeed,some scholars have already written on the problems of classifyingcorporations inbinary fashions, suchas the ‘foreign-influenced’/’non-foreign-influenced’ approach takenby theOrdinance.188However, theOrdinance’s catch-all provision, defining a FIBE as one in which “[a]foreign national participates directly or indirectly in the entity’sdecision-makingprocesswithrespecttotheentity’spoliticalactivitiesin the United States,”189 may serve as its saving grace against anyarguments forunder-inclusivity. If the5%and20%thresholds fail tocaptureotherentitiesthatareforeigninfluenced,theCitymightargue,then this additional definition would effectively bring those entitieswithintheOrdinance’sscope,avoidingthetypeofanomalousresultthattheBlumanplaintiffsdrewthecourt’sattentionto.

On thewhole, itappears that if theOrdinance’s foreign-spendingprovisions are subjected to strict scrutiny, the Citywill have amoredifficulttimearguingforthe5%thresholdthanthe20%threshold.If,on

parentsareentitledtovoteinschoolboardelections”—andasaresult,theBCRA’sbanonpoliticalcontributions by foreign nationals creates the anomalous result described above for suchindividuals). 186. SeeBlumanv.Fed.ElectionComm’n,800F.Supp.2d281,290–91(2011). 187. Seesupranotes176–78,181–82,andaccompanyingtext. 188. SeeScottL.Friedman,Note,FirstAmendmentand“ForeignControlled”U.S.Corporations:WhyCongressOughttoAffirmDomesticSubsidiaries’CorporatePolitical-SpeechRights,46VAND.J.TRANSNAT’LL.613,634(2013)(arguingforadistinctionbetweenforeigncorporationsthemselvesand their domestic subsidiaries);but seeRyanRott,Fighting Foreign-Corporate Political Access:ApplyingCorporateVeil-PiercingDoctrine toDomestic-SubsidiaryContributions, 114MICH.L.REV.481,484(2015)(arguingforthesamedistinction,butpositingthatdomesticsubsidiariesshouldbeprevented fromparticipating in thedemocraticprocess).SeealsoTimBakken,ConstitutionalRightsandPoliticalPowerofCorporationsafterCitizensUnited:TheDeclineofCitizensandtheRiseofForeignCorporationsandSuperPACs,12CARDOZOPUB.L.POL’Y&ETHICSJ.119,145(2013)(notingthattheremaybecircumstances“whereaforeignindividualorcorporationmaybesoentrenchedinAmerican life and the government interest in prohibiting a political contribution so small orremote that a court might not be able to find a compelling [interest]”). Some scholars haveadvocatedinsteadforamorefact-based,case-by-caseinquirytoclassifycorporationsinvariouslegal contexts, including that of campaign finance.See, e.g.,MargaretM. Blair,Corporations andExpressiveRights:HowLinesShouldBeDrawn,65DEPAULL.REV.253,264–72(2016)(advocatingforafour-questionframeworktoassessthelegalstatusofcorporations). 189. ST.PETERSBURG,FL.,CODEOFORDINANCES§10-51(m)(3).


the other hand, a reviewing court applies rational-basis review orintermediatescrutiny, theprovisionswill likelybeupheld.Ultimately,the sheer novelty of what the Ordinance is undertaking by defining‘foreign corporations’—in the absence of anymeaningful guidance—renders anypredictive analysis inconclusive at best.While the issuesraisedinlitigationcanbeascertainedtosomedegree,asshownabove,theresolutionofthoseissuescannotberesolvedwithanycertaintyuntiltheyaredecidedbyreviewingcourts.

VI.CONCLUSION

TheCityofSt.Petersburgtookaboldstepforwardinattemptingtofilllegislativegapsleftopenbythefederalbranches.WhileBlumananditsaffirmancebytheSupremeCourtappearedtogiveagreenlighttothefederal and state governments to regulate conduct of foreigncorporations,neitherthejudicial,legislative,orexecutivebrancheshaveprovided any guidance on how legislators can constitutionally definesuch entities. Accordingly, the City’s aforementioned bold step wasforcedtobetakeninrelativeblindnessregardingtheconstitutionalityoftheOrdinance’sprovisions.

Despite(orperhapsbecauseof)thisdifficulty,itisapparenttheCitytook care to craft theOrdinancewith aneye towardexacting judicialreview.TheCity’sFindingsmakeastrongcasethattheOrdinancewasdraftedtoachievethecompellinginterestofsafeguardinglocalelectionsfrom foreign influence. Further, the thresholds theOrdinanceuses toclassifycorporationsaseitherForeignNationalsorFIBEsarebasedonclassifications that have been found constitutional in other contexts.Thus,ononehand,theOrdinance’sforeignspendingprovisionsmaybeon strong constitutional footing when and if they are subjected toscrutinybyareviewingcourt.

On theotherhand, a numberof questions cannotbepredictablyresolveduntiltheyfaceadecisionmaker.Forone,thelevelofscrutinythat will apply is far from definitive due to the convergence of freespeech issues,nationalsecurityandalienage issues,andregulationofspeechbycorporations.Caselawontheseissuesishighlydisparate,andas demonstrated above, compelling arguments can bemade for bothrationalbasisandstrictscrutinyreview.Further,whiletheclassificationthresholds are premised on existing legal standards, those standardshaveyettobelitigatedincontextoftheFirstAmendment’sprotectionofpoliticalspeech.Thus,whilethisCommenthasbeenabletoparseout


theissuesthatwillberaisedandpredictarguments,itdoesnotpurporttomakeablindpredictionastohowanyeventuallitigationwillplayout.

While the Ordinance has yet to face a legal challenge, it hasgeneratedlegislativeresponsesbothinsideandoutsideoftheStateofFlorida.Ononehand,FloridastatesenatorJeffBrandesisattemptingtoput an end to St. Petersburg’s bold experiment by legislativelypreemptingallFloridacitiesfromplacinganyrestrictionsorlimitationsonpoliticalcontributionsorexpenditures.190Asofthiswriting,thebillhaspassedthroughmultiplecommittees,andonlytimewilltellwhetheritwillultimatelybecomelaw.191Ontheotherhand,theOrdinancehasinspired similar legislation in other states and localities. In January2020, Seattle, with the support of the same non-profit that helpeddeveloptheOrdinance,successfullyadoptedlocal legislationtargetingforeign-influenced corporations.192 Meanwhile, similar legislation hasbeenintroducedatthestatelevelinMaryland193andthelocallevelinNewYorkCity.194

WhilethefutureisuncertainfortheSt.PetersburgOrdinanceandthe similar legislation it continues to inspire, one thing is clear: theproblem of foreign funds entering domestic elections is not ahypotheticalone.While it is impossible toknowtheextentof foreigninfluence being exerted through corporate political spending, recentreportsbyCongressandresearchbyacademicsdemonstratesthatsuchspendingishappening.Intheabsenceofrulemakingorlegislationonthefederallevel,theCityofSt.Petersburghasperformedaservicefortheentirenationby taking the lead. Even if someof its foreign spendingprovisionsarelimitedorstruckonreview,therestofthecountrywillhave thebenefitof judicialprecedentwhen theyeventuallydecide to

190. MaryEllenKlas,St.PeteTriedtoAbolishSuperPACs.JeffBrandesWantstoEndThat.,TAMPABAYTIMES, Feb.4,2020,https://www.tampabay.com/florida-politics/buzz/2020/02/04/st-pete-tried-to-abolish-super-pacs-jeff-brandes-wants-to-end-that/. 191. SeeCS/CS/SB1372:Elections,THEFLORIDASENATE,https://www.flsenate.gov/Session/Bill/2020/1372(lastvisitedFeb.28,2020)(trackingtheprogressofSB1372). 192. Seattle Legislation, FREE SPEECH FOR PEOPLE, https://freespeechforpeople.org/seattle-legislation/(lastvisitedFeb.28,2020)(describingtheSeattleordinanceas“build[ing]on...similarlegislationinSt.Petersburg,Florida”);OfficeoftheCityClerk,RecordNo:CB119731,SEATTLECITYCOUNCIL, http://seattle.legistar.com/LegislationDetail.aspx?ID=4294877&GUID=6920B073-DF76-413B-AA7E-5731BF990F43&Options=ID%7CText%7C&Search=119731 (last visited Feb. 28,2020)(providingalinktotheSeattleordinanceitself). 193. MarylandHouseBill34,LEGISCAN,https://legiscan.com/MD/bill/HB34/20202(lastvisitedFeb.28,2020). 194. File#:Int1074-2018,NEWYORKCITYCOUNCIL,https://legistar.council.nyc.gov/LegislationDetail.aspx?ID=3597747&GUID=04717F13-60D2-483F-B853-19CA3CF175D4&Options=Advanced&Search=(lastvisitedFeb.28,2020).


craftregulationsoftheirowntoprotecttheirlocalelectionsfromforeigninfluence.

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