Democrats prepare legislation to counter ruling on campaign spending

Sensing a clear political opportunity, congressional Democrats are rushing to craft legislation to counter a Supreme Court ruling that they fear could lead to a flood of foreign spending on US political campaigns.

Lost in the heat of the debate is that hundreds of foreign corporations are already heavily involved in U.S. elections. U.S.-based subsidiaries of overseas firms have contributed more than $20 million to federal campaigns since 2007 and have spent millions more lobbying Congress on issues such as energy and free trade, according to federal disclosure reports. Donations linked to foreign firms have increased from $7.7 million in 2000 to nearly $17 million in 2008, according to the Center for Responsive Politics. Such activity is legal because the firms are incorporated in the United States and can take part in federal and state politics, like any wholly domestic company. The only caveat is that foreign personnel and money cannot be used in the efforts.

"I think a lot of people don't know that these companies have long been involved in state and local and federal elections," said Trevor Potter, a former Federal Election Commission member who served as an adviser to Sen. John McCain (R-AZ). "It also makes a great political issue."

Democrats and campaign-finance reform activists argue that the Supreme Court dramatically expanded the potential for abuse with its Jan. 20 ruling, which would allow the domestic arm of a foreign company to fund direct attacks on political candidates from its U.S. bank accounts. In addition, these critics argue, the beleaguered FEC is hardly in a position to police the flow of money between such firms and their foreign parents. Critics also fear that the ruling paves the way for court decisions that allow greater foreign involvement, including direct contributions to U.S. candidates. Supreme Court Justice John Paul Stevens made similar arguments in his lengthy dissent to the 5 to 4 ruling.