Whatever merit there is to granting corporations the Constitutional right of free speech, as the Citizens United case does, there is no merit to granting that right to foreign corporations. Or to U.S. subsidiaries of foreign corporations. Or to U.S. corporations owned by foreigners or — for goodness’ sake — by foreign governments.
Fixing this anomaly would take a Constitutional amendment at this point. The Supreme Court is unlikely to reverse its 5-4 decision: the Justices most likely to leave are dissenters.
I’m not saying States and the Federal Government should be obligated to restrict speech of foreign-influenced entities. But governments should be able to say those corporations can’t contribute to campaigns or spend money to influence American elections.
Tax law provides plenty of precedent for denying or granting rights to corporations based on ownership. For instance, a controlled foreign corporation is one in which U.S. shareholders own more than 50 percent, by vote or value. Code section 957(a).
So we could have a rule that says if foreigners own half or more of a U.S corporation, it is not a person under the Constitution. Well, 50 percent is not enough, maybe. We could adopt a look-through rule where any foreign ownership means no right to free speech.
A model to adapt appears in the Subchapter S rules, which say any corporate shareholder or nonresident alien shareholder prevents an S election:
“. . . the term “small business corporation” means a domestic corporation . . . which does not— . . .
(B) have as a shareholder a person . . . who is not an individual,
(C) have a nonresident alien as a shareholder. . . “
We would need to modify that model to exclude resident aliens (who are not citizens eligible to vote) and, in line with Subchapter S, to allow grantor trusts and, temporarily, certain estates of U.S. citizens to be shareholders for a while. In other words, instead of looking through to make sure owners are individuals who are fully taxable, we would look through to make sure owners are citizens eligible to vote.
It’s doable. If any foreign shareholder tainted a corporation, the whole S&P 500 could be regulated. Maybe the easy approach (if amending the Constitution could be called easy) would be to take away the right of free speech from all corporations. Then let legislative bodies draw the lines.