Judges Hint Maine Foreign Election Spending Law Chills Speech

Maine’s voter-approved law barring foreign governments and companies they influence from spending on state elections appears to violate the First Amendment, a panel of First Circuit judges suggested Wednesday.

The law, which applies to companies that are more than 5% owned by a foreign government, was passed after a subsidiary of Canadian hydropower company Hydro-Québec spent $22.4 million to influence Maine ballot questions about a controversial clean energy project.

“Your briefs do a lot of effort to try to convince us its possible that at 5% there will be this foreign speech problem. Not likely, not often, just possible,” Judge Seth Aframe told the attorney representing the state during oral arguments at the US Court of Appeals for the First Circuit. Prioritizing the threat of possible foreign government interference over protecting American First Amendment interests “strikes me as a problem,” he said.

Aframe said he was troubled by the fact that the law may dissuade a CEO from exercising their First Amendment rights because they’re unsure about the precise makeup of their company’s ownership on any particular day, which can be a “moving target.” The criminal penalties associated with the law could cause a “chilling problem,” removing “otherwise good speech from the system.”

Maine assistant attorney general Jonathan Bolton said the 5% threshold is “narrowly tailored” because it addresses the precise activity the law was meant to address. The law was “approved by an overwhelming percentage of Maine voters at the ballot box based on their well-founded concerns about foreign government influence in recent elections,” Bolton said.

Foreign Influence

The law arose in response to a project called the CMP Corridor, a transmission line under construction that would supply Canadian power to Massachusetts residents. The energy seller’s subsidiary, H.Q. Energy Services (US) Inc., poured money into defeating two referenda to halt the transmission line’s construction. Voters rejected the initiative in 2023.

“Can the government silence US citizens, US Companies like CMP, from speaking simply because a foreign public pension fund owns 5% of the company? The answer to that is no,” said Joshua Dunlap, a partner at Pierce Atwood LLP who represents Central Maine Power Company. CMP is a power company jointly involved in the CMP Corridor with HQUS.

The lower court took CMP’s side in February 2024, temporarily preventing Maine from enforcing the law.

Aframe and Judge Lara Montecalvo also took issue with the vagueness around the definitions of foreign government and foreign corporation.

Corporations “have not expressed any concern that they won’t be able to figure this out,” Bolton said.

“Hamas has a lot of money. Is it a foreign government?” Aframe asked.

“It’s really hard to answer that right here,” Bolton responded.

Dunlap said it’s important to look at the issue of “control” including indications like voting rights and the ability to appoint board members. “It’s not mere influence, and certainly not speculation of the possibility of influence.”

The case is Cent. Maine Power Co. v Maine Comm’n on Gov’t Ethics and Election Prac., 1st Cir., No. 24-1265, oral argument 10/9/24.