Fact-Checking the Fact-Checkers

The New York Times takes offense:

The president appeared to have mischaracterized the Supreme Court’s decision to overturn restrictions on corporate-paid political commercials by suggesting that the decision invited political advertisements by foreign companies, too.

[...]

Justice Samuel A. Alito Jr., a member of the majority in that decision, broke with the justices’ usual decorum to openly dissent. He shook his head no and mouthed the words “not true.”

The majority opinion in the case, Citizens United v. the Federal Election Commission, specifically disavowed a verdict on the question of foreign companies’ political spending.

“We need not reach the question of whether the government has a compelling interest in preventing foreign individuals or associations from influencing our nation’s political process,” Justice Anthony M. Kennedy wrote. The court held that the First Amendment protected the right of American corporations to spend money on independent political commercials for or against candidates. Some analysts or observers have warned that the principle could open the door to foreign corporations as well.

President Obama called for new legislation to prohibit foreign companies from taking advantage of the ruling to spend money to influence American elections. But he is too late; Congress passed the Foreign Agents Registration Act in 1996, which prohibits independent political commercials by foreign nationals or foreign companies.

You can watch the exchange here:

While The Times' David D. Kirkpatrick, who wrote this brief, believes that he's doing a fact-check here, that he really caught President Obama, he didn't. Last week's Supreme Court decision in the Citizens United case does exactly what the President says it does. To say otherwise is to mince words to the point of removing them of meaning.

It is true that the Supreme Court claimed not to be addressing the question of whether foreign money would be allowed in American elections. Yet at the same time, the Court opened up the door to unlimited corporate spending in American elections in a way that would almost undoubtedly lead to a flow of foreign capital into our politics.

Publicly traded corporations based in this country have foreign shareholders just as they have American ones. It is hard to envision a feasible rule going forward -- whether one devised by Congress or one envisioned by this Court -- that could create a genuine firewall to ensure that money originating from foreign shareholders would not seep into American elections. This is true not only for natural persons (actual people) who are citizens of other countries but also for foreign corporations and even sovereign wealth funds owned by foreign governments that own shares of nominally American corporations allowed under Citizens United to spend freely in American elections. Unless the Court were to rule that no American corporation with any foreign ownership was subject to the new rule in Citizens United -- a holding that would remove from the scope of Citizens United virtually any and all publicly traded corporations (presumably all of which have at least a single foreign shareholder) -- it is unclear exactly how Congress or state legislatures would be able to stem the flow of foreign capital into American elections. A subsequent decision that limits are permitted on entirely foreign-owned subsidiaries incorporated in the United States would not go nearly far enough.

So in the fact-check of The Times' fact-check, I give the paper a thumbs down, and firmly believe that the President was correct in stating that foreign money -- including money stemming from foreign corporations -- appear to have been permitted at least to some extent under the recent Supreme Court opinion.

[UPDATE by Jonathan]: And just to add, if you watch the video, it's pretty clear that Justice Alito begins taking offense not at mention of foreign corporations, as The Times asserts, but rather when the President spoke about the decision's strengthening of the position of special interests.

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