Seattle City Council bans ‘foreign-influenced’ companies from most political spending

The Seattle City Council voted Monday to ban most political spending by “foreign-influenced corporations,” in a move that could hinder attempts by multinational tech titans to influence the city’s elections.

The legislation’s architect, Council President M. Lorena González, has said she believes the ban will apply to Amazon, despite the company being based here, because it will cover businesses substantively owned by foreign investors.

The measure will close a loophole because foreign individuals and foreign-based entities already are barred from making contributions in United States elections, González said Monday.

“We have an epidemic of big money in our elections, and this step helps to address the appearance and risk of corruption,” she said in a statement.

St. Petersburg in Florida passed a similar measure in 2017, but Seattle is the largest city to act, according to the council, and could draw a court challenge. Monday’s vote was 7-0, with González and Councilmember Teresa Mosqueda on leave.

“While this bill will likely have legal challenges,” Mayor Jenny Durkan supports the legislation and “agrees that we need to continue to take steps to ensure transparency in our elections,” spokeswoman Kamaria Hightower said.

González‘s measure mentions foreign involvement in the 2016 U.S. presidential race as a cause for concern. The council hasn’t accused Amazon or any other company of spending in Seattle elections to advance foreign interests.

“We shouldn’t actually wait for a problem to happen to address it,” said Fix Democracy First Executive Director Cindy Black, who lobbied for the bill.

Seattle’s proposal took shape over the summer and gained steam when Amazon threw its immense weight behind certain council candidates in November’s district elections, writing a $1 million check to a political action committee (PAC) run by the Seattle Metropolitan Chamber of Commerce.

The council is taking more time with another González proposal, which would cap all contributions to independent-spending PACs, like the chamber’s Civic Alliance for a Sound Economy.

Despite Amazon’s spending, five of seven candidates who were backed by the business PAC lost their races, so the council is now stacked with their opponents.

The Seattle-based tech and retail giant became more involved in local politics in 2018, objecting to a per-employee tax on high-grossing companies that would have raised money to address homelessness and that now may be revived.

The city’s new ban applies to corporations with a single non-United States investor holding at least 1% ownership, two or more holding at least 5% ownership or a non-U.S. investor participating in decision making related to U.S. political activities.

The legislation says such businesses can no longer contribute money to Seattle candidates directly and can no longer spend through PACs or independently on political races.

“When you have 1% ownership, you can get the CEO on the phone,” said Black, whose organization began working the legislation before the council races heated up.

Seattle’s ban says businesses that want to spend on Seattle candidates must certify that they aren’t foreign-influenced corporations. It doesn’t prohibit such corporations from spending on ball0t measure campaigns.

In last year’s Seattle elections, at least seven major contributors to PACs had a foreign owner with a stake of more than 1%, Councilmember Lisa Herbold said Monday.

“It’s disconcerting to see the Seattle City Council pick and choose who gets a voice in local elections, and when,” said Markham McIntyre, chief of staff at the chamber. “We fully support more transparency in local elections, but changes need to be legal and free of political motivation.”

An Amazon spokesman didn’t provide comment.

Federal Election Commissioner Ellen Weintraub encouraged the council to move ahead with the idea, as did Harvard Law School scholar Laurence Tribe. The Seattle Ethics and Election Commission and Washington State Public Disclosure Commission shared support.

St. Petersburg’s legislation hasn’t been challenged.

Private attorneys asked by the Washington State Democratic Central Committee to analyze the ban warned in a memo this month that the ban “burdens core First Amendment speech” and would be “unlikely to survive.”

Amazon is a client of the firm where the attorneys work. The Washington Democrats haven’t taken a position on the legislation.

Also Monday, the council passed a requirement that commercial advertisers maintain public records on political ads related to legislative decisions, in addition to ads related to elections.