Federal Election Commission Main Page
March 4, 1985
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1985-3
Mr. Rod Diridon, Supervisor
Fourth District, Santa Clara County
P.O. Box 621
Santa Clara, CA 95052
Dear Mr. Diridon:
This responds to your letter of January 10, 1985, and other
letters you submitted with it, in which you request an advisory
opinion concerning application of the Federal Election Campaign
Act of 1971, as amended ("the Act"), and Commission regulations
to your proposed acceptance of a contribution from UTDC, Inc.
(USA), a wholly-owned subsidiary of UTDC-Canada.
You indicate that you are the Supervisor for the Fourth
District of Santa Clara County, California, which is an elected
office under California law. Your earlier letter to the
California Fair Political Practices Commission indicates that on
February 27, 1984, your campaign committee received a
contribution of $1,000 from UTDC, Inc. (USA), which is a
subsidiary of UTDC-Canada. Your letter explains that UTDC, Inc.
(USA), is a Delaware corporation with headquarters in Detroit,
Michigan, and with a Board of Directors which is "wholly or
substantially comprised of U.S. citizens." You further stated
that this corporation is a "separate profit center from UTDC-Canada
and its financial involvement within the United States is
substantial." In your letter of January 10, 1985, you ask
whether it will be permissible for you to receive similar
contributions in the future.
As a preliminary matter, the Commission notes that
California law does not prohibit corporate contributions to
candidates for state and local office, and that the prohibition
against corporate contributions in 2 U.S.C. SS 441b does not apply
in your case.
Under the Act and Commission regulations, foreign nationals
are prohibited from making contributions, directly or through any
other person, in connection with any election to any political
office. 2 U.S.C. SS 441e; 11 CFR 110.4(a). Unlike most of the
other provisions of the Act, SS 441e applies to any election for
any political office, including state and local offices as well
as Federal offices. The term "foreign national" is defined by
2 U.S.C. SS 441e(b)(1) to mean a "foreign national" as this term is
defined specifically by 22 U.S.C. SS 611(b). Section 611(b)
defines a "foreign principal" as including:
(1) a government of a foreign country and a foreign
political party;
(2) a person outside of the United States, unless it is
established that such person is an individual and a
citizen of and domiciled within the United States, or
that such person is not an individual and is organized
under or created by the laws of the United States or of
any State or other place subject to the jurisdiction of
the United States and has its principal place of
business in the United States, and
(3) a partnership, association, corporation, organization,
or other combination of persons organized under the
laws of or having its principal place of business in a
foreign country.
Under 22 U.S.C. SS 611(b), a corporation organized under the
law of any state within the United States whose principal place
of business is within the United States is not a foreign
principal and, accordingly would not be a "foreign national"
under 2 U.S.C. SS 441e. Advisory Opinions 1983-31, 1982-10, and
1981-36; also see opinions cited therein. The Commission
concludes, therefore, that UTDC, Inc. (USA), a discrete corporate
entity organized under the law of Delaware with its principal
place of business in the United States, is not a foreign
national, and therefore not subject to the prohibition of
2 U.S.C. SS 441e.
Since, however, SS 441e prohibits contributions by a foreign
national through any other person, and since the parent Canadian
corporation is both a person, 2 U.S.C. SS 431(11), and a foreign
national by application of 22 U.S.C. SS 611(b)(3), it follows that
a contribution by UTDC, Inc. (USA), may only be made or accepted
under certain conditions. Specifically, the parent Canadian
corporation may not directly or indirectly provide the funds for
such a political contribution. See Advisory Opinion 1981-36.
Nor may that corporation or any other person who is a foreign
national under 2 U.S.C. SS 441e have any decision-making role or
control with respect to the making of any political contribution
by UTDC, Inc. (USA). See Advisory Opinion 1983-31.
The Commission expresses no opinion regarding application of
any other Federal statute or any state statute to the proposed
transaction, since any issues thereunder are not within the
Commission's jurisdiction.
This response constitutes an advisory opinion concerning
application of the Act, or regulations prescribed by the
Commission, to the specific transaction or activity set forth in
your request. See 2 U.S.C. SS 437f.