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Maine Lawmakers Again Seek To Limit Foreign Influence In Anti-Power Line Referendum

The Daniel-Johnson Dam in Quebec, Canada.

Central Maine Power's controversial transmission project is again the target of another referendum that could scuttle the project, and the issue of foreign influence in the campaign has also surfaced once again.

A new slate of bills in the Maine Legislature could sideline Hydro-Quebec, a major financial beneficiary of the power line that's already spent an estimated $10 million promoting its purported benefits to Maine residents.

Some lawmakers say a company whose sole shareholder is the government of Quebec has no business attempting to influence the ballot initiative. But Hydro-Quebec and other project supporters say silencing the company is unfair and potentially unconstitutional.

As the potential source of electricity for the transmission corridor known as the New England Clean Energy Connect, Hydro-Quebec has spared little expense touting a project that represents the largest sales contract in its history, according to one of its recent annual reports.

The government-owned company stands to net more than $12 billion, and last year it spent nearly $7 million opposing a ballot initiative that was ultimately halted by Maine's law court.

It's since hired Forbes Tates Partners, one of the top Washington, D.C. lobbying firms, to assist with campaign messaging to fend off another anti-corridor referendum expected to take place in November.

Republican state Sen. Rick Bennett of Oxford told lawmakers during a public hearing Monday that all of this influencing activity should not be permitted by a corporation that is effectively under the control of a foreign government.

"Foreign governments seeking to influence U.S. policy should not be allowed to circumvent diplomatic channels by spending money to directly influence policymakers," Bennett says.

In this case, Bennett says, the policymakers are not just elected officials but also Maine voters, who are allowed under the state constitution to create laws via ballot initiative.

The problem for corridor opponents is that while it's illegal under state and federal law for foreign companies or governments to spend money to influence the outcome of candidate campaigns, those same laws are largely silent on foreign spending on ballot campaigns.

The loophole was first reported by Maine Public Radio two years ago, prompting state lawmakers to back a bill that would close it.

That proposal died when the pandemic forced the Legislature to adjourn early, but Bennett is sponsoring one of three bills reviving an issue that's pit some lawmakers in both parties against Hydro-Quebec and the Maine State Chamber of Commerce, a backer of the corridor project.

"Our democracy is rotting and nothing speaks to the rottenness more than our own state chamber of commerce, purportedly existing to help our own local businesses, using their political capital thus earned to shill for foreign governments," Bennett says.

"This shouldn't even be a close call," says Pete Didisheim, advocacy director of the Natural Resources Council of Maine, a group that fiercely opposes the corridor project.

Didisheim says Hydro-Quebec's influence campaign could open the door for other governments to do the same.

"If campaign activities such as these were done by a company owned by the state of Massachusetts, I believe Maine voters and lawmakers would be furious. They would want to close any loophole that was allowing that to happen," he said. "We should be no less furious with Hydro-Quebec."

But Hydro-Quebec president Sophie Brochu told lawmakers on the Veterans and Legal Affairs committee that the bill would leave the company defenseless against an anti-corridor campaign partially backed by natural gas companies.

"It's just like if we were a duck. You have the power to cut our wings, to place us on the lake and to say hunting season is open," Brochu said. 

Several lawmakers noted that Canada recently passed a law barring foreign companies and governments from influencing its elections, including referendums.

Brochu said referendums in Canada are different because they can only be initiated by the government.

Republican state Rep. Patrick Corey of Windham told Brochu he didn't see the distinction between a referendum initiated by Maine citizens and those by its government.

"I just wanted to be very sort of clear that they're both just as consequential for Maine's people as a law … that's made in the halls of the legislature," he said.

Nevertheless, Gerald Petruccelli, an attorney representing the Maine State Chamber of Commerce, say there is a legal distinction between foreign influence in ballot campaigns versus those in candidate campaigns.

And he says that distinction makes bills that would bar companies with a certain percentage of foreign ownership unconstitutional.

"Issue advocacy is intrinsically different from all other kinds of speech from commercial speech, entertainment speech, even candidate speech because it is about issues of policy that are robustly to be debated in our society," Petruccelli said.

Petruccelli and others also argued that the bills targeting Hydro-Quebec could also impact Maine companies financed by foreign enterprise, including several wood products operations with Chinese and South African backers.

Versant Power, the state's second largest utility, said it too could be affected if any of the foreign-influence bills became law.

That's because Versant is owned by ENMAX, a Canadian company headquartered in Calgary, Alberta.

"In seeking to target this one company, the potential impact on others is unknown and unknowable," said Benjamin Dudley, director for Mainers for Clean Energy Jobs, a pro-corridor group linked to Central Maine Power and the state chamber. 

In addition to silencing Hydro-Quebec, Dudley suggested the bill could also muzzle Calpine, the Texas-owned generator opposing the corridor that's ownership includes the Canada Pension Plan Investment Board, which the Canadian Parliament incorporated in 1997.

"Has anyone assessed the degree to which publicly traded companies doing business in Maine have substantial shares held by foreign government pension funds, for example?" said Dudley in an apparent reference to Calpine.

The politics of the anti-corridor referendum campaign loomed over the public hearing.

Sen. Rick Bennett noted in his testimony that backers of the project, including the state chamber of commerce, are trying to defend Hydro-Quebec's political speech while also trying to kill the ballot initiative in court.

"Now here they are … while muzzling the people of Maine, demanding a bullhorn, funded by foreign corporations and foreign governments, in our elections," he said.

Several states including Alaska and Colorado have passed laws limiting foreign influence in ballot campaigns.

Lawmakers on the Veterans and Legal Affairs Committee will meet again later this week to consider whether Maine should join them.

Journalist Steve Mistler is Maine Public’s chief politics and government correspondent. He is based at the State House.