In December 2023, four separate lawsuits were filed in a federal court in Maine seeking to overturn Question 2, Maine’s newly enacted initiative that bars entities owned or influenced by foreign governments from spending to influence state elections. The plaintiffs in these actions include several foreign government-owned utility companies based in Maine with a history of heavy campaign spending in state ballot referenda.
Maine voters overwhelmingly approved Question 2 in November 2023 with over 86% voting in support, the largest margin of approval in the 115-year history of state ballot questions.
The initiative represented the culmination of a multi-year effort of both Maine legislators and citizens to correct loopholes in federal and state law that had allowed foreign-owned domestic corporations to spend tens of millions of dollars in state candidate and ballot initiative elections, undermining Maine’s commitment to local democratic self-governance.
The foreign money initiative comprises three main components to counter this influx of foreign money into Maine governance. The heart of the law is its ban on electoral spending by corporations in which a foreign government has an ownership share of more than 5%. Then, to prevent circumvention of this foreign money ban, the law also directs media entities to establish internal “due diligence policies” designed to ensure that they do not broadcast prohibited foreign government-sponsored election ads. Finally, the initiative also contains a transparency measure, requiring foreign government-influenced entities to include brief disclaimers identifying themselves on any public communications made for the purpose of lobbying state or local officials.
The plaintiffs in these four cases challenge all these provisions, arguing that they infringe on their exercise of First Amendment rights and are preempted by federal campaign finance law. But as Protect Maine Elections explained in its filings with the district court, the U.S. Supreme Court has already approved the federal foreign money ban, affirming that citizens have “a compelling interest for purposes of First Amendment analysis in limiting the participation of foreign citizens in activities of American democratic self-government, and in thereby preventing foreign influence over the U.S. political process.”
This interest is equally compelling with respect to efforts by states to prevent foreign nationals from spending money in state and local elections, and in particular ballot referenda, where voters participate in direct democracy to enact their own laws. Ten other states — from California to Maryland — have also enacted laws like Maine’s to prohibit foreign nationals from spending to influence their citizen-initiated ballot measure processes.
The Supreme Court and lower courts have also made clear that the interest in preventing foreign influence extends to spending by “foreign corporations.” In fact, these precedents may allow laws restricting election spending by corporations with any foreign investors — but Maine takes a much more targeted approach. The initiative uses a 5% ownership threshold, relying on a well-recognized benchmark for corporate control already incorporated into existing federal securities law, and focusing on only the small fraction of domestic corporations that are controlled by foreign governments.
The disclaimer requirement is also key to shining a light on attempts by foreign governments to influence state and local policy. As Protect Maine Elections pointed out, this disclaimer requirement functions as a state counterpart to longstanding federal disclosure requirements, for instance in the Foreign Alien Registration Act, that also seek to ensure that citizens are aware of lobbying by foreign interests and are apprised the identity of their lobbyists and policies they are advocating.
What’s At Stake?
When foreign entities are able to spend to influence our elections, it becomes harder for ordinary Americans to participate in the democratic process and feel like they have a voice in our government.
By enacting Question 2, Mainers joined a wave of over a dozen other states and localities from coast to coast that have similar sought to shield their state elections from foreign influence and to vindicate their citizens’ interest in local self-governance.
