Boston, MA — Moving to protect free political speech in Maine, the Institute for Free Speech has filed an amicus brief in Central Maine Power Company, et al. v. Maine Commission on Governmental Ethics and Election Practices, et al. The brief urges the U.S. Court of Appeals for the First Circuit to affirm the district court’s preliminary injunction against Maine’s so-called “foreign money” speech prohibition.

The challenged law bans political spending by entities deemed “foreign government-influenced,” which Maine defines to include American companies with minimal foreign government ownership or participation.

Specifically, the law defines a company as “foreign government-influenced” if a foreign government directly or indirectly owns as little as 5% of the company’s shares or if a foreign government-owned entity “directly or indirectly participates in the decision-making process” related to political spending, regardless of ownership level.

The brief mounts multiple arguments against the law. Crucially, the Institute argues that the law’s definition of “foreign influence” is misleading and overly broad. As the brief states: “The Act treats any American corporation with a small minority foreign-government equity holder as being the foreign government. Then, it labels political spending by the American corporation as prohibited foreign money.”

The brief emphasizes that the Maine law contradicts Supreme Court precedent set in Citizens United v. FEC, citing the Court’s statement that a political speech ban that “is not limited to corporations or associations that were created in foreign countries or funded predominately by foreign shareholders . . . would be overbroad.” The brief argues that Maine’s 5% threshold falls far short of this “predominately” standard.

The Institute also demonstrates the difficulty in applying and administering the law. The brief uses the complex ownership structure of BlackRock as an example to illustrate the challenges of determining indirect beneficial ownership level, noting “It likely would take an expert witness to do the math to determine the [foreign entity’s] total ‘indirect ownership’ of [a company] when these cross ownerships are considered.”

The brief also flags Maine’s justification for the law—preventing the appearance of foreign influence—as constitutionally insufficient. “The Supreme Court has recognized that the ‘appearance of influence’ cannot justify First Amendment violations,” the brief notes, citing Citizens United‘s holding that this rationale is “at odds with standard First Amendment analyses because it is unbounded and susceptible to no limiting principle.”

“Maine cannot trample First Amendment rights merely by smearing American corporations with a false ‘foreign-government influenced’ label,” explains the brief.

The Institute for Free Speech urges the First Circuit to affirm the district court’s decision, arguing that “Maine passed the Act because of speech by specific American corporations that Maine did not like. Maine cannot use the Act as a ruse to ban political speech that it dislikes.”

To read the amicus brief in Central Maine Power Company, et al. v. Maine Commission on Governmental Ethics and Election Practices, et al., click here.

About the Institute for Free Speech

The Institute for Free Speech promotes and defends the political speech rights to freely speak, assemble, publish, and petition the government guaranteed by the First Amendment.