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California Bill Banning Foreign-Influenced Business Entity Contributions Advances Despite Dubious Constitutionality
Monday, March 27, 2023

Last December, I wrote about  AB 83 (Lee & Kalra), which would enact the "Get Foreign Money Out of California Elections Act".    The California Political Reform Act already forbids a foreign government or foreign principal from making any contribution, expenditure, or independent expenditure in connection with the qualification or support of, or opposition to, a state or local ballot measure or an election for a state or local office.   Cal. Gov't Code § 85320.  This bill would, among other things, extend this prohibition to foreign-influenced business entities.   The bill would also impose a filing requirement disavowing foreign-influenced entity status if a business entity makes a political contribution.  See California Bill Would Require CEOs to Disavow "Foreign Influence".  

On March 15, the bill was passed out of the Assembly Elections Committee on a 5-2 vote, despite a bill analysis questioning the constitutionality of the bill:

Nonetheless, in light of the fact that this bill could restrict the ability of business entities to make contributions and expenditures in elections based on relatively low levels of foreign ownership, including in situations where the foreign shareholders had no involvement in influencing or attempting to influence the business entity’s political decisions, it is unclear whether a court would uphold this bill against a challenge that its provisions violate the First Amendment to the US Constitution.

Readers may recall that I questioned the constitutionality of AB 83 last December:  Has The Legislature Forgotten Citizens United And The First Amendment?

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