Minnesota Bill would limit political spending by foreign-influenced US companies

Dear Chairman Freiberg, Vice Chairman Greenman and Ranking Member Torkelson,

I am writing in strong support of HF 117, as amended by the committee, which is a bill tabled by Rep. Zack Stephenson (D) that would halt political spending by foreign-influenced US corporations. This pro-democracy bill is supported by committee members Mike Freiberg (D), Emma Greenman (D), and Kristin Bahner (D), as well as several non-committee members. If enacted, this citizen-driven legislation would halt election-related spending by foreign corporations — including foreign investors who own sizable stakes in US corporations — protecting Minnesota’s right to self-government.

I’m a Senior Fellow at the Center for American Progress. Based in Washington, DC, CAP is an independent, impartial policy organization dedicated to improving the lives of all Americans through bold, progressive policies. My democratic reform work at CAP included research into preventing political spending by foreign-influenced US corporations. My publications include a report and factsheets analyzing this policy, the report being republished in the Harvard Law School Forum on Corporate Governance.1 These publications can be useful when lawmakers review pending legislation.

After reviewing this legislation, I conclude that it would provide an important tool to protect Minnesota’s elections and electoral initiatives from foreign influence and would reduce the oversized role that corporate funds play in the outcomes of these campaigns. This bold bill would strengthen the right of Minnesota residents to determine their state’s political and economic future and help keep legislators accountable to voters rather than to foreign-influenced corporations. This legislation is especially timely given that foreign investors now own approximately 40 percent of US corporate equity, compared to just 4 percent of US equity in 1986.2

This popular legislation follows Seattle, Washington, which passed similar legislation in 2020 to protect its elections after a spate of corporate political spending by at least one foreign-influenced US company.3 San Jose, California passed similar legislation in 2022, subject to conditions.4 In addition, the New York State Senate last year passed parallel bipartisan voting legislation.5 Several similar bills have been introduced at the federal level by members of Congress, including Sen. Elizabeth Warren (D-MA) and Rep. Jamie Raskin (D-MD).6


In the misguided decision of the US Supreme Court in Citizens United vs. Federal Electoral Commissionthe court gave American corporations the ability to spend money on elections based on the premise that corporations are “associations of citizens.”7 However, many of the largest America-based companies are owned to a significant degree by foreign companies. This creates a loophole in the Supreme Court’s decision, as recognized in a dissenting opinion from former Justice John Paul Stevens: Foreign companies can invest in US companies, which then spend large amounts of money from their corporate coffers to support the results of elections and ballot initiatives to influence .8th

This law would close that gaping hole. At first glance, the statutory ownership thresholds for determining when a company is “foreign influenced”—1 percent for a single foreign shareholder and 5 percent for all foreign ownership—may seem relatively low. However, as pointed out in CAP’s aforementioned report, the foreign ownership thresholds used in Rep. Stephenson’s legislation are solidly enshrined in corporate governance and related laws, are constitutional, and have been supported by conservative lawmakers, corporate CEOs, and longtime commissioners of the Federal Elections Commission, under many others.9 In addition, the US Securities and Exchange Commission has recognized the significant power that shareholders can exercise at the 1 percent and 5 percent ownership levels set forth in this Act. This bill is not intended to discourage foreign investment in US companies, but rather provides guard rails for when foreign-influenced companies can spend political dollars to influence Minnesota’s self-government system through elections and ballot measures.

Furthermore, as discussed at length in the CAP report, although the overwhelming majority of US companies are not foreign-owned, the largest America-based companies have a significant proportion of foreign owners. For my report, I analyzed data on foreign ownership of 111 US-based public companies in the S&P 500 stock index.10 The results include the following:

  • When applying the 1 percent threshold for foreign individual shareholders, 74 percent of the companies examined exceeded the threshold.
  • When applying the 5 percent threshold for total foreign shareholders, 98 percent of the companies examined exceeded the threshold.

These 111 politically-invested companies voluntarily disclosed $443 million spent from their corporate coffers in federal and state elections in 2015, 2016, and 2017.

As noted in my report, among the smaller public companies, only 28 percent of the companies randomly selected exceeded the 5 percent total foreign ownership threshold. From this analysis, it is clear that smaller listed companies are less likely than their larger counterparts to have as much foreign ownership and therefore would be less likely to be affected by the HF 117 ownership thresholds. This legislation would therefore help amplify the voices of small, locally owned businesses in Minnesota.


At a time of increasing foreign interference in US elections, Minnesota should be commended for positioning itself at the forefront of the nationwide legislative effort to take proactive, sensible steps to halt political spending by foreign-influenced American companies. HF 117 would go a long way in reassuring the people of Minnesota that their elected leaders are taking steps to protect the state’s democratic right to self-government and create a political system that more fairly represents the priorities of ordinary people.

I call for this law to be passed. Please let me know if I can be of any further assistance.


Michael L Sozan


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