Overview
States and local governments continue the march toward adopting bans on political engagement by foreign nationals, including foreign corporations. As of September, at least 20 states have enacted bans on foreign spending in ballot measure campaigns, with at least nine of those having been enacted in 2025 alone.
A more recent trend is an effort to define "foreign influenced" companies broadly enough to capture large swaths of U.S.-headquartered companies by restricting political activity based on a company's low level of foreign ownership — as low as 1% or 5% — or receipt of revenue from foreign sources, as low as $50,000 or $100,000 in the prior four years.
For example, laws enacted in Kansas, Kentucky and Indiana impose certification obligations on U.S. companies contributing to political campaigns if they receive revenue from foreign sources over the past four years over a certain threshold — $100,000 in Kansas and Kentucky and $50,000 in Indiana.
On July 11, the U.S. Court of Appeals for the First Circuit in Central Maine Power Co. v. Commission on Governmental Ethics and Election Practices struck down one such law, claiming that it appears to be an end run around the U.S. Supreme Court's 2010 decision in Citizens United v. Federal Election Commission in that the ban applies to almost any domestic company.[1]
The Citizens United decision allows companies to spend in unlimited amounts, as long as it is independent of candidates and parties.
These efforts to restrict U.S. companies from engaging in political activity creates meaningful risk for U.S. companies. Any U.S. company that engages in elections — including by contributing to ballot measure elections or making political contributions — should be mindful of these purported foreign national bans and must layer an additional analysis when assessing legality of such engagement.
Interplay With Federal Law
Since Watergate, modern federal campaign finance law has prohibited foreign nationals, companies and people alike, from directly or indirectly making contributions or providing anything of value in connection with a federal, state or local election.
That this federal law applies also to state or local elections is indicative of the national interest in limiting foreign influence over all elections within the U.S.
Following the Supreme Court's rulings in the early 2010s allowing unlimited independent expenditures by corporations, and the Federal Election Commission's 2021 interpretation in response to matter under review, or MUR, 7523 that the federal foreign national ban does not apply to ballot initiative elections, states have sought to close this gap in their own elections.[2]
To date, around 20 states have banned foreign nationals from making contributions in connection with ballot initiative or referenda elections.[3] And nine of them did so in the first half of 2025: Arkansas, Indiana, Kansas, Kentucky, Louisiana, Missouri, Montana, Tennessee and Wyoming.
A more recent wave of state laws seeks to go beyond the federal law's definition of foreign national to capture more nuanced notions of foreign influence, as discussed more below.
Under federal law, foreign national means companies that are headquartered abroad and individuals who are not U.S. citizens or permanent residents residing in the United States.[4] A U.S. subsidiary of a foreign corporation may engage in elections as long as the funds used are generated domestically and no foreign national is involved in the decision-making.[5]
Now, states are seeking to broaden various bans on political speech to capture a new concept of foreign-influenced entities. The novel approach gaining traction is to capture companies with small thresholds of foreign ownership, companies that receive revenue from foreign sources, or both.
Political Activity Bans Based on Foreign Ownership
The laws based on ownership tend to adopt either or both of these prongs regarding ownership:
- A single foreign investor holds or controls 1% or more of the corporation's total equity or voting shares; or
- Two or more foreign investors collectively hold or control 5% or more of the corporation's total equity or voting shares.
In 2018, Alaska adopted a law with a 5% threshold, which is still in effect and has never been subject to a legal challenge.[6] In 2020, the city of Seattle became the first jurisdiction in the U.S. to adopt an ordinance prohibiting political spending by foreign-influenced corporations in local elections at the 1%-5% thresholds described above, which also has not been subject to a challenge.[7]
In 2023, Minnesota enacted a law that applied to companies with only 1% of foreign ownership, enforcement of which was permanently enjoined by the U.S. District Court for the District of Minnesota's Feb. 7 decision in Minnesota Chamber of Commerce v. Choi on First Amendment grounds.[8]
In San Jose, California, the City Council approved an ordinance in 2024 that would apply to companies meeting the 1%-5% threshold.[9] The San Jose ban is also in effect and has not been challenged.
The legislative drumbeat continues as lawmakers in other states, such as Massachusetts and New York, introduced similar bills in 2025.
The Massachusetts proposal is still pending before the legislature and would prohibit corporations meeting the 1%-5% foreign ownership threshold from spending in connection with independent expenditures, electioneering communications, ballot initiatives, referenda and constitutional amendment campaigns.[10]
The proposed New York legislation sets the bar higher — only prohibiting contributions by foreign-owned business entities where a foreign national holds, owns or controls 50% or more of the corporation.[11]
In Central Maine Power the First Circuit rejected the 5% threshold approach in its review of a Maine law.[12] In 2023, 86% of voters in Maine approved a ballot measure that prohibits entities with 5% or more ownership by a foreign government from spending or contributing in referendum and candidate elections.[13]
Multiple suits were brought challenging the law, broadly alleging that the law violates the First Amendment. A unanimous First Circuit ruled that the focus on companies with a 5% foreign government ownership is so broadly defined and would capture so many U.S. companies that the law "starts to look like an end-run around Citizens United."[14]
Also, the court added, it was a law designed to restrict political speech by the two plaintiffs that had been significant spenders in recent ballot initiatives directed at their business. The First Circuit ruled that the law is likely unconstitutional and upheld a preliminary injunction enjoining enforcement of the law.
The case returns to the U.S. District Court for the District of Maine for consideration on the full merits. It is unlikely to survive as written, but the question of severance was left for the District of Maine to decide in the first instance.[15]
Political Activity Bans Based on Receipt of Foreign Revenue
This year, three states opted for a broader approach in capturing companies that receive revenue from abroad, which would tend to capture almost any U.S. company with negligible foreign business.
Kansas
Effective July 1, Kansas enacted a law prohibiting individuals from accepting any contribution or expenditure from a foreign national made toward any activity promoting or opposing a constitutional amendment to the Kansas state constitution.[16]
Organizations and individuals engaging in advocacy for or against a constitutional amendment must certify that they have not received more than $100,000 in contributions or expenditures from foreign nationals in the preceding four years.
By limiting the receipt of funds to contributions or expenditures, it effectively limits the receipt to funds that are intended for the purpose of influencing an election, as opposed to any revenue generated by the company's regular business operations.
Anyone who receives contributions to support or oppose a constitutional amendment campaign must file annual reports disclosing the identity of donors who gave over $50, certify that they have not accepted funds from foreign nationals, and require donors to certify the same.
Although the law was challenged in the U.S. District Court for the District of Kansas in Kansans for Constitutional Freedom v. Kobach, the judge denied the plaintiff's preliminary injunction request, allowing the law to take effect on July 1.[17]
The court found that the Kansas state government has a genuine interest in limiting foreign influence in democratic self-government. An appeal has not yet been filed.
Kentucky and Tennessee
Both Kentucky and Tennessee enacted and implemented similar laws this year prohibiting foreign nationals from directly or indirectly making contributions or expenditures related to a ballot measure. Tennessee's law took effect May 27, and Kentucky's law took effect June 23.[18]
The laws require the political committee's treasurer to obtain a donor affirmation that the donor is not a foreign national and has not knowingly or willfully accepted funds aggregating more than $100,000 from foreign nationals within the preceding four-year period.
Neither law requires that the receipt of foreign funds be connected in any way to the political activity, nor is there an exception if the U.S. company has sufficient U.S.-generated revenue to pay for the political activity without reliance on the foreign funds.
An individual making an independent expenditure must similarly certify that the person has not knowingly or willingly accepted funds aggregating more than $100,000 from foreign nationals in the preceding four-year period.
Neither the Kentucky nor Tennessee laws have been challenged in court.
Missouri
In July, Missouri Gov. Mike Kehoe signed into law S.B. 152, which prohibits political committees from knowingly or willfully receiving, soliciting, or accepting contributions from a foreign national to influence a ballot measure and requires committees to affirm as much.
If a committee receives a contribution of more than $2,000 from a corporation, the treasurer must obtain a donor affirmation that the donor is not a foreign national and has not accepted funds over $10,000 from one or more prohibited sources.
Missouri's law is tailored to more closely match federal law, in that it allows U.S. subsidiaries of foreign-owned corporations to engage in political spending as long as the funds are generated by the entity's U.S. operations and decisions regarding the spending are not made by foreign individuals, other than setting overall budget amounts.
The law also adds new enforcement mechanisms that are not available in the state's other campaign finance laws.
What This Means for Corporate Compliance Programs
It will be important to continue to monitor this effort to bring many U.S. companies within the ambit of foreign national bans on activity.
We expect that states and municipalities will continue to pass laws, through referendum or legislatively, to continue to restrict foreign national engagement in local elections; and that in doing so with ever broadening definitions, are likely to affect many U.S. companies as well.
If your company makes political contributions, contributes to ballot initiative campaigns, or makes or contributes to making independent expenditures, these laws may apply and, in many instances, the definition of a foreign-influenced company could well include a U.S.-headquartered company based on a small percentage of ownership or foreign revenue sources.
Prior to making any such contributions or expenditures, companies should ensure that the due diligence process includes consideration of these laws, which are a relatively new development and may not have been incorporated into long-standing procedures. Here are some steps for all companies that are electorally active to consider.
- Ensure that a legal and compliance review is required prior to any corporate funds being used to engage in a ballot initiative, super PAC contribution, candidate or political party contribution and that senior executives are aware of the policy;
- Ensure that legal and compliance personnel are aware of the nuances of these foreign-influenced laws — based on the name alone, a U.S.-headquartered company may not focus on these laws;
- Ensure that foreign nationals are not involved in decision-making related to making political contributions or expenditures in federal, state or local elections; and
- Obtain the necessary information to be able to assess whether the company is subject to a foreign influence law, which may include consideration of foreign revenue, flow of funds from foreign companies in the corporate family, and the corporate structure and source of the proposed contribution or expenditure.
[1] Cent. Me. Power Co. v. Me. Comm'n on Governmental Ethics & Election Pracs, No. 24-1265, slip op. at 35 (1st Cir. July 11, 2025).
[2] See FEC MUR 7523.
[3] Arkansas, California, Colorado, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota (enjoined), Missouri, Montana, Nebraska, North Dakota, Ohio, Tennessee, Washington, and Wyoming.
[4] See 52 U.S.C. § 30121(b); 22 U.S.C. § 611(b).
[5] See 52 U.S.C. § 30121(a); 11 C.F.R. § 110.20.
[6] Alaska Stat. § 15.13.068.
[7] Seattle Ord. 126035.
[8] Minn. Chamber of Com. v. Choi, No. 0:23-cv-02015 (D. Minn. Feb. 7, 2025) (permanently enjoining Minn. Stat. § 211B.5).
[9] San Jose Ord. 12.06.270.
[10] Massachusetts House Bill 875.
[11] New York Assembly Bill 1258.
[12] Me. Stat. tit. 21-a, § 1064; Cent. Me. Power Co. v. Me. Comm'n on Governmental Ethics & Election Pracs., No. 24-1265, slip op. at 35 (1st Cir. July 11, 2025).
[13] The Act defined "foreign government-influenced entities" as those in which a foreign government owns, directly or indirectly, 5% or more of the company or participates in the election-related activities. It defined a "foreign government-owned entity" as those in which a foreign government owns or controls 50% or more of the company.
[14] Cent. Me. Power Co. v. Me., slip op. at 35.
[15] Id. at 45.
[16] Kan. Stat. Ann. § 25-4180.
[17] Kansans for Constitutional Freedom v. Kobach, No. 25-2265-DDC-GEB (D. Kan. June 30, 2025).
[18] Ky. Rev. Stat. § 121.015; Tenn. Code Ann. § 2-10-501.
