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Lobbying Firm Advising Corporate Clients How to Take Advantage of Campaign Finance Ruling

A month after the Citizens United ruling

A month after the Citizens United ruling, corporations are considering how to take advantage of their newfound ability to advocate directly for federal candidates, as indicated in a memo drafted by K&L Gates, a top Washington lobbying firm.

The memo, originally revealed in Talking Points Memo, explains how corporations can avoid “public scrutiny” and potentially damaging disclosures by funneling the money through lobbying groups or “trade associations.” K&L Gates is a massive law firm with revenues of over $1 billion per year, and their many international clients could have an interest in how the ruling affects their ability to influence American elections.

According to the memo, US subsidiaries of foreign companies are now allowed to make political expenditures as long as, “the foreign parent does not finance US political activities and no foreign national participates in any decision to make expenditures.”

Last week, Sen. Charles Schumer (D-New York) and Rep. Chris Van Hollen (D-Maryland) responded with legislation to close this loophole before the midterm elections in November, and to enact tougher disclosure requirements on corporations that fund direct advocacy as well as prevent government contractors from engaging in such activities.

According to an article in The Hill, Schumer said, “we think this represents Congress’ best remedy.”

Prominent Republicans, including Sen. John McCain (R-Arizona) – whose eponymous campaign finance reform law, the McCain-Feingold Act, was substantially dismantled by the ruling – have not yet come out in support of the legislation.

The legislation would also prevent companies that have not paid back bailout money from making direct advocacy expenditures.

According to The Hill, Van Hollen said, “If you’re AIG or a big Wall Street firm or other firms that received [Troubled Asset Relief Program] monies, until you pay back those TARP monies to the taxpayer, you cannot be using your corporate funds to try and defeat or elect a candidate. That’s just wrong, and we want to make sure that that doesn’t happen.”

House Democrats originally pressed for a constitutional amendment that would allow Congress to regulate how corporations spend money on elections, but are now pushing for a quick-fix solution that could gain bipartisan support. Previous campaign finance reforms have brought together prominent lawmakers from both parties, including Senator McCain and Sen. Russ Feingold (D-Wisconsin).

Devised as a series of answers to “those most-often asked questions” and written by K&L lawyers Tim Peckinpaugh and Stephen Roberts, the memo also noted, “the most likely proposal to gain bipartisan support is a collection of tougher restrictions on ‘foreign national’ political participation through their US subsidiaries.”

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