Insight into Seattle’s Campaign Finance Reform


Later today, The Seattle City Council will vote on legislation prohibiting political contributions from companies with either 5% or more foreign ownership or 1% ownership by a single foreigner. The legislation alleges such companies are prone to foreign influence, which bars them from participation in elections. Council members believe the initiative confronts corruption. Council member and bill supporter Lisa Herbold stated, “This legislation is about addressing quid pro quo corruption and the threat of it. We shouldn’t kid ourselves that it’s going to quote get big money out of politics.” Now, this bill’s effect on campaign funding is not the focus of this article. The concern is a general notion of election restrictions based on foreign investment. Such restrictions offer negligible protection against foreign malevolence at the expense of economic well-being.

There are several ways a foreign entity can insert itself in U.S. elections without any investment in domestic companies. The most obvious and direct methods involve exploiting legislative loopholes. For example, researchers from the Center for American Progress say foreign nationals, “can circumvent the restrictions by routing financial support through anonymous bank accounts, shell corporations, front companies, and other opaque transaction vehicles…. it is easy to set up a company without disclosing its purpose or the identity of its true owners. Foreign adversaries can then use these companies to execute anonymous financial transactions.” As a matter of fact, the aforementioned Seattle bill has no bearing on corporations themselves spending money on elections.

A more subtle tactic at the disposal of foreign entities is ideological influence. If both politicians and the voting population hold sentiments that align with a foreign entity, then the election results would be more likely to reflect that foreign entity’s impact. There is already a leftist stronghold in academia that tends to foster resentment against the United States. Over the years there have been a number of influential celebrities and intellectuals who have espoused positive views of Venezuela despite the overwhelming evidence of poverty and despotism. While relying on messengers to convince the masses and powers at be isn’t the most quick and decisive strategy, it can prove effective in firmly establishing beliefs that may present themselves in voting patterns.

In regards to campaign financing, foreigners who invest in a U.S. company have the same primary incentive as domestic investors: financial gain. Foreigners are not subject to the principles of economics any different than Americans are. The desire to improve one’s well-being is a trait of human nature that is consistent throughout the entirety of the human species. Wealth building through investment is simply one of the employed means to do so. Therefore, both foreign and domestic investors have interests in the same policies that benefit their companies.

If companies with foreign investors are hamstrung in their ability to seek profitable policies, the investors will be limited in the financial gain they receive from the company. Limiting this financial gain can prevent relations with foreign countries from developing. When a U.S. company provides value overseas, foreigners have a greater incentive to engage in domestic business deals. Hampering the value of U.S. companies abroad dissuades beneficial transactions from occurring. Also, preventing companies with foreign investment from expressing their political point of view could result in policies that chase away foreign investment. The absence of foreign investment would make it noticeably more difficult for a newer business to compete with established firms.

Limiting political contribution from companies based on foreign investment will not offer sufficient protection from foreign interference but will more likely harm the economic viability of the companies. Though there are still avenues for U.S. companies with foreign investment to participate in elections, expanding the aforementioned campaign finance reform can restrict their ability to do so and lead to unfavorable circumstances. While this is not an exhaustive assessment of campaign finance reform, it brings up a dynamic that warrants more attention in the discussion.

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