Enacts the democracy preservation act

• Democratic35

◆ The sponsor's argument

Why Michael Gianaris says this is needed

New York state welcomes immigrants, visitors, and investors from around the world. However, its elections should be decided by the people of New York and not by foreign investors or the business entities over which they exert influence. Under current federal law, foreign governments, foreign corporations, foreign political parties, and foreign nationals other than lawful permanent residents are prohibited from spending money in U.S. elections. In 2012, the Supreme Court decision in Bluman v. Federal Election Commission upheld this restriction. New York state law also prohibits a foreign national, government, instrumentality or agent from itself registering as an independent expenditure committee for the purpose of making independent expenditures in any state or local Election. However, neither federal nor state law adequately protects against the influence of corporate political spending by U.S-registered corporations with significant foreign ownership. In 2010, the Supreme Court decision in Citizens United v. Federal Election Commission gave corporations free rein in campaign spending, which they have taken advantage of in the days since the decision. Today, America's largest corporations spend hundreds of millions of dollars directly from their corporate treasuries to influence elections. But the Supreme Court's Citizens United decision applies to corporations that are "associations of citizens." Multinational corporations increasingly do not meet that definition. Foreign investors own increasing shares of U.S. corporate stock, growing from only 4 percent in 1986 to approximately 40 percent in 2020. Where part of the shareholders' equity is attributable to foreign inves- tors, spending corporate treasury funds on New York elections means spending the equity of foreign entities on New York elections. Further- more, foreign investors can hold substantial influence even with only a minority of shares. The U.S. Securities and Exchange Commission, major capital investors, corporate managers, and corporate governance experts broadly agree that ownership or control of one percent or more of shares can confer substantial influence on corporate decision-making. Political spending by foreign-influenced business entities can weaken, interfere with, or disrupt New York's democratic self-government and the faith that the electorate has in its elected officials. To protect the integrity of New York's democratic self-government, it is necessary to prevent foreign-influenced business entities from influencing New York elections through political spending. Measures similar to this bill have been enacted on a municipal level across the country. Seattle, Washington, passed an ordinance in January 2020 to ban foreign-influenced corporations from spending in their local elections. In January of 2024, San Jose, California, approved a ban on foreign corporate spending in city elections. At least twelve other states and Congress have introduced or passed similar legislation on foreign-influenced corporations. This bill will protect democratic self-government from the undue influ- ence of foreign-influenced corporations by effectively prohibiting them from spending in elections across New York State.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.