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Foreign Government-Owned Companies May Soon Be Barred From Ballot Campaign Spending In Maine

Brian Bechard
Maine Public

The Maine Legislature is on the verge of enacting a bill that would bar companies owned by foreign governments from spending money on ballot campaigns. The bill was inspired by the considerable amount of money that Hydro-Quebec has put into the upcoming referendum over Central Maine Power's controversial transmission line project, but its immediate effects could be diminished because of a possible delay in implementation.

The proposal aims to close a loophole in Maine election law that has allowed Hydro-Quebec to spend $10 million trying to advance what the company has called its largest sales contract to date, supplying the power for CMP's New England Clean Energy Connect.

As first reported by Maine Public two years ago – efforts to close that loophole have been backed by opponents of the project, who have tried to frame Hydro-Quebec's advertising campaign as foreign influence in a domestic election.

"Over the last 17 months something rotten has happened in Maine," says Oxford Republican state Sen. Rick Bennett, the bill's lead sponsor.

State Sen. Rick Bennett, a Republican from Oxford, is the bill's lead sponsor and a critic of the corridor project.

"A foreign corporation, owned 100% by a foreign government, funneled a record-smashing amount - well over 10 million dollars - into a political action committee to influence the outcome of elections here in Maine," Bennett says. "This affront to our freedom occurred in plain sight and it needs to stop."

Bennett was speaking from the Senate floor prior to a 23-11 bipartisan vote to advance the bill, which would effectively prohibit entities with foreign government ownership of 10% or more from electioneering on future ballot measures.

He noted that Canada recently passed a law that bars entities with any foreign ownership from participating in its referendum campaigns.

However, opponents of the Maine bill echo claims by Hydro-Quebec and CMP that it stifles political speech.

And Democratic Sen. Mark Lawrence of Eliot says that could lead to campaigns in which one company is permitted to electioneer while another is not.

"To give you a bizarre example, if there was a referendum on something dealing with oil, or something dealing with gas, you could have a U.S. corporation - whichever you think of Exxon, whoever - speak, but Citgo could not because it is a foreign corporation and has government ownership," Lawrence says.

But Democratic Sen. Louis Luchini of Ellsworth says that drafters of federal law long ago recognized that what's best for foreign governments isn't always best for U.S. citizens.

"And that's why federal since the late sixties, early seventies has prohibited foreign nationals from contributing to candidate elections for all of us - federal, state and local levels," Luchini says.

But Federal law is silent on ballot campaign electioneering by foreign nationals because not all U.S. citizens can initiate laws like they can in Maine and 20 other states.

A few states have tailored their own laws to address the referendum loophole, and Maine is one of several that are considering taking action now.

But if its approved, the bill could have a limited effect on the corridor referendum because it's no longer positioned to pass as an emergency measure, and may not go into effect until mid-September or possibly October.

Pete Didisheim with the Natural Resources Council of Maine, a corridor opponent, says a new law sidelining Hydro-Quebec would still be important if it takes effect during the closing weeks of the campaign when most voters are paying attention.

"We'd prefer that if it was signed into law that Hydro-Quebec would stop spending on that day. That would be the right thing to do," Didisheim says.

Hydro-Quebec, however, is not providing any assurances that it will.

A spokeswoman for the company declined to comment when asked if it would halt its political activity during the 90 days that the foreign influence bill could be ratified and becoming an actual law.

Last year Hydro-Quebec spurned a request by more than two dozen state lawmakers to halt its campaign spending.

And during a March public hearing, Hydro-Quebec President Sophie Brochu described the bill's effect on the company as putting a wingless duck on a lake during hunting season.

"That's the power, that's the law, that you have in front of us. Just being shot at with no ability to answer," Brochu says.

On Tuesday, Sen. Rick Bennett, the bill's sponsor, chided Brochu for comparing a multi-billion Canadian crown corporation to a wounded duck in the crosshairs of corridor opponents and Maine voters.

"I'd argue that a much more appropriate analogy would be an ostrich with its head in the sand, oblivious to reality," Bennett says.

The fate of the bill remains uncertain. Gov. Janet Mills has not yet said whether she'll sign or veto it.

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