Friday, October 05, 2012

Foreign Firm Gives $1 Million to Romney Super-PAC

Michael Beckel, Center for Public Integrity

This story first appeared on the Center for Public Integrity's website.
A million-dollar donation by a foreign-owned corporation to a Republican super-PAC has raised legal concerns and opened up the controversial Citizens United Supreme Court decision to new criticism.
Restore Our Future, the super-PAC supporting Republican Mitt Romney's run for president, received a $1 million donation in mid-August from reinsurance company OdysseyRe of Connecticut, a "wholly-owned subsidiary" of Canadian insurance and investment management giant Fairfax Financial Holdings Limited.
Fairfax Financial's founder is Indian-born V. Prem Watsa. Watsa serves as CEO and chairman and owns or controls 45 percent of the company's shares. He is also the chairman of the board of OdysseyRe, the American subsidiary.
The law says that any foreign national is prohibited from "directly or indirectly" contributing money to influence US elections. That means no campaign donations, no donations to super-PACs, and no funding of political advertisements.

But campaign finance law is not as clear for US subsidiaries of foreign companies as it is for individuals.
Most of the regulations on political spending by subsidiaries of foreign companies were written before corporations were legally allowed to fund political advertisements or donate to super-PACs. And Republican members of the Federal Election Commission have thwarted the implementation of new rules regarding the practice.
Sen. Sheldon Whitehouse (D-R.I.) is among those concerned about foreign-controlled corporations "exploiting loopholes in existing law" to influence US elections. He calls the practice a "direct threat to our democracy."

"You can bet that wholly owned subsidiaries of foreign commercial entities have an agenda when they spend millions to sway the outcome of an election," Whitehouse told the Center for Public Integrity in a statement. "And you can bet that agenda is not promoting the interests of middle-class American voters."
OdysseyRe's donation "raises some legal red flags," says Paul S. Ryan, an attorney at the Campaign Legal Center.
The law lays out clear rules for political action committees associated with US subsidiaries of foreign companies, Ryan says, but it is hazier on spending allowed in the wake of Citizens United.
"I would be very wary if I was a corporation based in the US, owned wholly by foreign nationals, of contributing to a federal political committee or making independent expenditures," he said.
He faults the FEC for failing to "provide clarity and guidance in this controversial and important area of the law."
Ellen Weintraub, the Democrat who currently serves as the FEC's vice chair, agrees with Ryan that the commission's leadership in this area has been lacking.
"We should make some decisions about what we think the appropriate role of these organizations is in this brave new world of corporate money in politics," she said.
"By not addressing [these issues] in a rulemaking, we're leaving uncertainty out there," Weintraub continued. "And when there's uncertainty, there's always a risk that folks may try to use that uncertainty to their own advantage."
Officials with OdysseyRe and Fairfax Financial maintain that no US laws were broken.
Paul Rivett, Fairfax Financial's vice president of operations, said that OdysseyRe's Canadian parent company had "no role" in the decision to donate to Restore Our Future. Peter Lovell, general counsel of OdysseyRe, likewise said the firm's contribution was executed by a subcommittee of the company's board of directors comprised only of US nationals.
"Neither our Canadian parent nor any other foreign nationals were part of the decision-making process to contribute to the super-PAC," Lovell said...........................

No comments: