Wealthy special interests use campaign money to influence voters and exert control over political decision-making at all levels of government. In 2023, voters in Maine scored a big win for local self-governance when they passed Question 2 with the largest margin of approval for any initiative in the 115-year history of state ballot referenda.
What was the cause that united over 86% of the Maine electorate? They voted to shield local democracy from the influx of foreign money that had flooded past state elections, prohibiting campaign expenditures by corporations owned or influenced by foreign governments.
Just a few weeks after the initiative passed, however, four different sets of plaintiffs filed four different lawsuits in federal district court to challenge this new law. Campaign Legal Center is representing Protect Maine Elections, the ballot measure committee that was founded to help draft and enact Question 2, in defending the law.
Even in the field of campaign finance law, where any significant reform is almost always greeted by litigation, this was an aggressive offensive — with all four lawsuits being filed within days of one other and all plaintiffs requesting an immediate order blocking the initiative from taking effect.
The four cases have since been consolidated, and on February 23, the U.S. District Court for the District of Maine heard oral argument on the challengers’ four motions for a preliminary order enjoining the law. After over three hours of argument, the court stated that it anticipated releasing its decision by the end of February, when the law is slated to go into effect.
The intensity of the legal effort to overturn the will of Maine voters is perhaps unsurprising given that several of those challenging Question 2 are foreign government-owned utility companies with a history of heavy campaign spending in Maine.
The specter of foreign influence on local democracy is not hypothetical in Maine. Loopholes in federal and state law have allowed foreign-owned domestic corporations to spend tens of millions of dollars in past elections, and particularly in ballot referenda.
The Federal Election Campaign Act (FECA) has long prohibited foreign nationals — including foreign corporations organized or operating abroad — from making contributions and expenditures in both federal and state elections, but this law falls short in two important respects.
First, it has been found not to apply to state ballot initiative elections, only candidate elections. Second, FECA does not tackle the question of foreign-owned domestic corporations, and only covers entities incorporated abroad.
These shortfalls in federal law have allowed a massive influx of foreign money into state elections like Maine’s.
For instance, in 2020, HydroQuebec, a Quebec government-owned public utility, poured more than $20 million into an effort to defeat Question 1, a Maine ballot measure aimed at blocking a transmission line to route HydroQuebec power through Maine to customers in Massachusetts.
Central Maine Power (CMP), a plaintiff in these cases, contributed another $7.5 million to oppose the measure. CMP is owned in substantial part by Iberdrola, a Spain-based company, and a Qatar government sovereign fund. Question 1 ultimately attracted more than $89 million in expenditures, more than any other referendum in Maine’s history.
Then in 2023, ENMAX, a corporation owned by the Canadian City of Calgary and another plaintiff in these lawsuits, contributed over $15 million to defeat Maine Question 3, a measure that would have created an electric utility governed by an elected board to acquire and operate Maine’s utilities.
Ultimately, over 84% of all spending on the Question 3 campaign was by entities owned or influenced by foreign governments.
Maine is hardly alone in its experience. Ten other states — from California to Maryland — and several municipalities have also enacted laws like Maine’s to prevent foreign nationals from spending to influence their citizen-initiated ballot measure processes.
These states have taken action in reliance on a recent Supreme Court decision, Bluman v. FEC, that summarily affirmed a lower court’s approval of the federal foreign money ban. In so holding, the Court affirmed 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.”
As CLC and Protect Maine Elections have argued, this interest is equally compelling with respect to efforts by states to prevent foreign nationals, including foreign-owned entities, from spending money in state elections, and in particular ballot measures, where voters participate in direct democracy to enact their own laws.
Just as voters across the country have the right to a government that is responsive to the needs of the people and not the demands of wealthy, foreign-owned special interests, voters in Maine have a right to engage in meaningful self-governance free of the influence of expenditures funded or controlled by foreign governments.