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Maine Voters and Foreign Companies Squared Off Over Energy Corridor. Voters Won.

The project faced staunch opposition from groups concerned with the impact the corridor could have on wildlife.

Hydro-Quebec workers walk next to their barracks at the construction of Romaine-4 dam in the Côte-Nord province of Quebec, Canada, on October 5, 2018.

A Maine ballot referendum to halt the construction of a $1 billion cross-border corridor of high-impact electric transmission lines from Canada attracted more than $89 million in funds through ballot campaigns, more than any other referendum in Maine’s history, OpenSecrets’ analysis of campaign finance disclosures showed.

Supporters of the corridor poured more than $63 million fighting the ballot measure, dwarfing around $26.1 million raised by ballot committees opposing the corridor and supporting the measure’s passage.

Maine voters ultimately passed the ballot measure to halt the corridor’s construction on Nov. 2.

Maine Question 1, the ballot measure that has now halted the construction of the cross-border corridor, attracted more spending than any referendum in Maine’s history.

While the majority of Mainers who turned out to the polls voted to stop construction, construction on the corridor reportedly continued the day after vote and the project is unlikely to see spending halt anytime soon since it’s likely money will be spent in upcoming legal battles as well as overcoming other hurdles.

The ballot measure’s passage marks the latest spar in a fight over the potential environmental and economic impact of the project, as well as the potential for undue foreign influence due to the companies involved in the project.

The 145-mile long transmission corridor, dubbed the New England Clean Energy Connect, would be owned by Central Maine Power Co. and used by Hydro-Québec to transmit electricity from hydroelectric plants in Quebec to electric utilities in the U.S.

The government-owned company stands to make more than $12 billion from the project. The Quebec government’s Premier François Legault says he is still “confident” the project will still be completed despite the vote.

The project has been years in the making, facing staunch opposition from both environmental groups concerned with the impact the corridor could have on wildlife and fossil-fuel interests that could lose regional power market share if the corridor is built.

Groups funded by U.S. companies with stake in the construction of the corridor contributed heavily to the record-breaking cost of the ballot referendum.

Topping the list of donors supporting the ballot initiative is Florida-based energy company NextEra Energy Resources LLC, OpenSecrets data shows.

While NextEra is the world’s largest operator of wind and solar projects, more than half of the company’s energy-generating capacity comes from nuclear reactors or plants that run on natural gas and other fossil fuels.

The company’s New England power plant and nuclear facility might face increased competition from the influx of power from the corridor.

NextEra is the top donor to Mainers for Local Power, the main funder of a Say No to CMP Corridor, a ballot committee run by Say No to NECEC, the nonprofit behind the upcoming ballot initiative.

Other top contributors opposing the construction are Calpine and Vistra, which each operate multiple natural gas plants in New England.

Top donors pouring $63 million into opposing the referendum included NECEC Transmission LLC, NECEC’s U.S. parent company, the U.S. affiliate of Hydro Quebec and CMP’s Clean Energy Matters.

Foreign Agents Registration Act records reveal more details of spending by the subsidiary of the Canadian company that would benefit from the measure passing, OpenSecrets analysis found.

The U.S. affiliate of Canadian public utility company Hydro-Quebec, HQ Energy Services, built an army of foreign agents in the leadup to the Nov. 2 referendum. Those foreign agents reported more than $2.5 million in payments as part of the influence operation since 2020.

The FARA records note that the disclosures were made out of an abundance of caution.

April 2020 registration records for Blaze Partners detail their activities retroactively dating back to December 2019 with the goal of “a positive outcome on this ballot question when it comes to vote in November 2020.” When the 2020 vote did not take place, the contract was extended and services continued. Services included work “strategies to educate and inform Maine voters,” digital advertising, social media and “​​general campaign efforts,” according to FARA records.

HQ Energy Services also enlisted foreign agents from Forbes Tate Partners in 2020. Forbes Tates’ FARA registration records from July 2020 show the high-powered lobbying firm was hired for “research, surveys, polling, and message development” and ended up conducting a range of public opinion surveys of voters in 2020 elections as well as providing other services related to voter targeting, ad tracking and social media.

HQ Energy Services signed a contract extension increasing their spending and detailing a new plan of action on Nov. 2, 2020, just days after opponents of the corridor received permission to start collecting signatures for a 2021 referendum, FARA records reviewed by OpenSecrets and first reported by Foreign Lobby Report show.

In August, the U.S. affiliate of the Canadian public utility company extended its signed contract through November with Forbes Tate worth up to $2.4 million to provide “digital advertising, voter outreach, and related research services” in Maine ahead of the election.

As Election Day and the referendum neared, HQ Energy Services’ spending on foreign agents accelerated. More than $1.67 million went to advertising, text messaging and other related services from May 28 through Aug. 31, FARA records filed Sept. 30 show.

In December, former Sen. Al D’Amato’s (R-N.Y.) firm, Park Strategies signed a $17,500-per-month contract to represent Hydro-Quebec’s interests as a subcontractor to Forbes Tate related to another project in New York.

The initial contract directs foreign agents at the firm to help entice “grassroots/grasstops advocates, stakeholders, and organizations to share messaging through earned/social media and advocacy activities” from November 2021 through January 2022 in support of the Champlain Hudson Power Express project in New York.

The project involves construction of a 340-mile underground and underwater transmission line to carry 1,250 Mw of hydroelectric power from Canada to the U.S.

The firm is also expected to draft pen op-eds, brief reporters and organize virtual editorial board meetings.

The U.S. affiliate of the Canadian company’s spending on the ballot referendum has not been without controversy.

In January 2020, Hydro-Quebec admitted to violating state ethics laws by spending $100,000 to influence Maine voters without filing the necessary disclosures with the state’s ethics commission and was fined $35,000.

The Canadian company’s role has also sparked debate about whether companies with foreign government ownership should be allowed to spend on ballot referendums. Some opponents of the corridor’s construction have argued the company, whose sole shareholder is the government of Quebec, should be barred from spending on a ballot measure because of the risk of foreign interference.

“Foreign governments seeking to influence U.S. policy should not be allowed to circumvent diplomatic channels by spending money to directly influence policymakers,” Republican state Sen. Rick Bennett of Oxford, Maine told lawmakers during a public hearing in March, noting that in this case the policymakers are Maine voters, who are able to create laws with ballot measures.

Maine voters could also make a decision on that next year after the state’s governor vetoed a bill to bar foreign funding of ballot initiatives in June.

Maine is not alone in grappling with the issue of foreign money financing ballot initiatives.

This week, the Federal Election Commission ruled foreign donors can finance U.S. ballot measure committees under federal campaign finance law, first reported by Axios.

Since the Federal Election Campaign Act (FECA) regulates “only candidate elections, not referenda or other issue-based ballot measures” and referenda are held on issues, the FEC found that ballot initiatives are closer to issue advocacy, citing the Supreme Court’s 2012 ruling in Bluman v. FEC that the foreign national prohibition is “closely tied to candidate advocacy and does not ban foreign nationals from engaging in issue advocacy.”

This means foreign companies can directly spend to influence voters and policy at the state level even while they cannot legally spend to influence candidates for public office — an idea that has already attracted criticism from lawmakers on both sides of the aisle.

Rep. Mike Gallagher (R-Wis.) condemned the decision for “further opening the floodgates to foreign money,” predicting that other countries like China may see the order as an invitation to start spending on ballot initiatives as part of their already robust influence operations.

Rep. Mike Quigley (D-Ill.) called the foreign funding of ballot initiatives “a significant flaw in current federal election finance law, which could lead to hostile nations further influencing our democratic process if left unaddressed,” adding, “Congress must immediately take corrective action to explicitly ban foreign influence in campaigns, ballot initiatives, and elections of any kind.”

Democratic FEC commissioner Ellen Weintraub told the Washington Post, “This should not be viewed as open season for foreigners to try to influence ballot initiatives that affect our voting process,” arguing that the scope of the rules should be clarified by federal statute.

A federal law could expand the types of elections covered by FECA’s foreign money to include ballot referenda.

A bill proposed by Sen. Kirsten Gillibrand (D-N.Y.) on Wednesday, the Stop Foreign Interference in Ballot Measures Act, would do just that. A House bill with the same name and text was also introduced by Rep. Katie Porter (D-Calif.) in March. Following Gillibrand’s proposal, Sen. Marco Rubio (R-Fla.) told Axios of plans to introduce similar legislation.

The FEC’s decision does not preclude states and local governments from implementing their own rules outlawing foreign funding of ballot committees.

At least seven states have already passed laws prohibiting foreign nationals from funding ballot initiatives, and Maine is one of several other states considering new legislation that would prohibit foreign nationals from financing ballot initiatives.

A federal law, however, could put a stop to foreign spending on state or local ballot initiatives whether or not the state or municipality has laws against it.

U.S. affiliates of foreign companies already spend millions of dollars on ballot measures across the country, and even on American elections to elect federal candidates for public office.

Foreign-connected PACs, the PACs affiliated with foreign-owned companies, doled out more than $24 million on U.S. elections during the 2020 cycle with around $10.7 million going to Democrats and $13.4 million to Republicans.

Recent FEC opinions and court cases have underscored the distinction between foreign companies and the U.S. affiliates of foreign companies spending on elections.

In April, the FEC failed to find reason to believe a $500,000 donation to former President Donald Trump’s inaugural committee from CITGO, a Venezuelan-owned oil company, violated the ban on political contributions from foreign nationals. In a statement of reasons, the FEC’s Republican commissioners argued that no violation occurred and that a Delaware-incorporated affiliate of the Venezuelan-owned oil company had “separate corporate personhood” from its foreign parent company.

The Supreme Court’s June 2020 decision in USAID v. Open Society further emphasized that “foreign organizations operating abroad have no First Amendment rights.” While the case itself did not directly involve campaign finance issues, the sweeping statement could have far-reaching implications and campaign finance considerations were strongly present during oral arguments in the case.

Supreme Court Justice Brett Kavanaugh, who wrote the Court’s opinion, noted during oral arguments that if the Supreme Court ruling against the federal government’s ability to limit free speech of foreign corporations in other contexts may “unleash foreign affiliates of U.S. corporations to pump money into” elections.

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