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Hawaii is the latest state to try to limit foreign influence in local and state elections, focusing on non-American investors who hold large stakes in U.S. companies.
State Sen. Chris Lee, the bill’s sponsor, said the bill is “basically a mechanism to prevent foreign influence from infiltrating elections in Hawaii.”
“There’s a lot of overseas activity going on here in Hawaii, in the middle of the Pacific Ocean,” Lee told USA Today. “So we definitely have an interest in making sure that whatever happens outside of our borders doesn’t influence what happens here and ultimately makes the decisions.”
The Center for American Progress revealed that if the law goes into effect, most U.S. companies in the S&P 500, including Apple, Amazon, and Google, will be subject to foreign influence bans on a 1% to 5% threshold. did.
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The Federal Election Campaign Act (FECA) prohibits political spending by foreign nationals at the federal, state, and local levels. Several states, including New York, Minnesota, and Massachusetts, and cities, including Seattle and San Jose, have enacted similar measures to protect their election processes from foreign interference, in hopes of going beyond FECA’s protections. Or considering it.
Lee said he sees Seattle in particular as a success story and an inspiration for the bill. Dubbed the Clean Campaign Act, the city of Seattle is seeking to block foreign capital in 2020 local elections after Amazon donated $1.5 million to the city’s Chamber of Commerce’s Politicians’ Action Committee in an unsuccessful attempt to sway city council races. banned political contributions from corporations exceeding 5%.
According to Reuters, as of 2020, at least 9% of Amazon’s shares were held by foreign investors.
“What’s interesting in Seattle is that from the time the law was enacted to the next election, there was a pretty significant change in the amount of corporate spending in elections,” Lee said. “It was local Seattle residents who were donating to campaigns and managing their own elections, rather than millions of dollars that could be provided by other large interest groups.”
What does this bill do??
The bill would eliminate the legal technique that allows donations. FECA already prohibits foreign nationals other than legal residents from donating to candidates, but foreign companies with U.S.-based subsidiaries can donate as long as they are U.S. citizens or permanent residents. Can be done.
“Loopholes in current law allow foreign companies to invest in American-based companies, making the United States vulnerable to foreign influence,” said Michael Sozan, a senior fellow at the Center for American Progress. “Then those companies will be able to spend unlimited amounts of money on elections from the Treasury, often in secret.”
If approved, the law would go into effect in January 2026 and prohibit non-U.S. organizations and companies from donating to election campaigns in Hawaii.
What does “foreign influence” mean?
- A single foreign shareholder owns or controls 1% or more of the company’s shares.
- Where multiple foreign shareholders jointly own or control 5% or more of the company’s shares.
- When a foreign corporation participates directly or indirectly in the company’s decision-making process regarding political activities in the United States.
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The bill follows the U.S. Supreme Court’s landmark Citizens United v. FEC decision, which ruled that corporations and labor unions can spend unlimited amounts of money on political activities as long as they operate independently of political candidates and political parties. This is in line with broader efforts to challenge the ruling.
“I think we’ve set a precedent here that if there’s something we can do to ensure that our elections are fully influenced and run by local people, then we should do it.” Mr. Lee said. .
Jeremy Yurow is a political reporting fellow at the USA TODAY Network based in Hawaii. He can be reached at JYurow@gannett.com or X @JeremyYurow.
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