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Why “Made in America” May Not Mean What You Think

Election regulators need to grapple with the multinational nature of corporations that do business in the US once and for all.

Budweiser has decided to rename its beer “America” through the 2016 election. For reasons that are unclear and bordering on baffling, Donald Trump quickly took credit for the name change. This may be a sad attempt to boost Bud’s lagging sales. But what this adventure in patriotic branding masks is that Budweiser is not an American company.

That’s right. Anheuser-Busch, maker of quintessentially American Budweiser beer, has been owned by Belgian and Brazilian conglomerate InBev since 2008. So no matter what Budweiser chooses to call its beer, they are supposedly blocked from spending on US elections under longstanding law barring “foreigners” from contributing money.

But that hasn’t stopped Budweiser, through its trade association, the Organization for International Investment, from lobbying against the DISCLOSE ACT, which would have brought greater transparency to what is known as “dark money,” which allows non-profits to receive unlimited undisclosed donations and spend them on elections.

Why was the Organization for International Investment, which represents the US operations of foreign companies, against the DISCLOSE Act? Because it would have clearly defined what types of companies were “foreign” for the purpose of the election spending ban. The DISCLOSE Act was defeated. And so now American law is as clear as mud about which foreign corporations can be legally fenced out of elections.

By contrast, foreign individuals (human beings) are clearly not allowed to spend money in any American elections. As I discussed here, a foreign pornographer ran afoul of this prohibition in a 2012 Los Angeles contest. The FEC could have, but didn’t, punish the pornographer. But California election regulators did, levying a fine of more than $60,000.

Shortly after Citizens United, a Canadian named Benjamin Bluman, who lived in the US on a temporary work visa, challenged the ban on foreign citizens spending in American elections. His argument was basically that if Citizens United allows corporations to spend in US elections, there is no principled reason why he should also be banned.

A lower court rebuffed Bluman, writing:

Plaintiffs … acknowledge that they do not have the right to vote in US elections, but they contend that the right to speak about elections is different from the right to participate in elections. But in this case, that is not a clear dichotomy. When an expressive act is directly targeted at influencing the outcome of an election, it is both speech and participation in democratic self-government. Spending money to contribute to a candidate or party or to expressly advocate for or against the election of a political candidate is participating in the process of democratic self-government.

The court reasoned that just as Bluman is not allowed to vote in an American election as a Canadian citizen, it is similarly appropriate to ban his money. The Supreme Court summarily affirmed the ruling but gave no reasoning that might guide the lower courts.

The FEC, Congress and the Courts really need to think about whether the logic of Bluman should apply to foreign-owned companies like Budweiser.

More companies than you might suspect have foreign ownership through tax-dodging international mergers. As I explore in my new book Corporate Citizen?, election regulators need to grapple with the multinational nature of corporations that do business in the US once and for all.

Consider another venerable American brand, Burger King. It was an unambiguously American company until two years ago, when, in an attempt to lower its taxes, it merged with Canada’s Tim Hortons to form Restaurant Brands International.

Burger King could re-name the Whopper “The George Washington,” or start serving “freedom fries,” the fact remains that the company is now headquartered in Ontario.

So should Burger King be able to spend in US elections under Bluman? Arguably not. The same logic of Bluman that we don’t want foreigners influencing American elections should still apply. After all, if Burger King doesn’t want to pay American taxes, perhaps they should not be able to spend in American elections. The FEC could help by clarifying exactly who is in or out of the ban on foreigners so that foreign-owned companies don’t try to change the outcome of American elections at the bidding of a foreign interest.

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