Legally Foreign

How sovereign wealth funds found the one door American election law left open

In November 2020, California voters decided a labor question worth billions of dollars. Proposition 22 asked whether gig economy drivers for companies like Uber, Lyft, and DoorDash should be classified as employees or independent contractors — a distinction that would have fundamentally changed how those companies operated in the country's most populous state. The campaign to pass the measure raised more than $205 million, the largest sum ever assembled for a California ballot initiative. Uber alone contributed $59.5 million. The yes side outspent opponents by more than ten to one, and won.

What the campaign's financial disclosures noted plainly, and what the news coverage mostly glossed over: Uber, at that moment, was roughly 5 percent owned by Saudi Arabia's Public Investment Fund. The Saudi government — which had injected $3.5 billion into the company in 2016 and secured a board seat for its managing director in the process — held a meaningful stake in a company that had just spent tens of millions of dollars to shape the legal status of a quarter-million American workers.

Foreign governments cannot spend money in American elections. The Federal Election Campaign Act makes that explicit. But Uber is not a foreign government. It is a Delaware-incorporated, San Francisco-headquartered American company that happens to be substantially owned by one.

That distinction — legally airtight, democratically corrosive — is the mechanism this piece is about.

The Gap Citizens United Left Open

American campaign finance law has long treated foreign political spending as a categorical prohibition. Foreign nationals, foreign corporations, and foreign governments are barred from making contributions or independent expenditures in federal, state, or local elections. The ban is sweeping in its intent and reasonably clear in its text.

What the law did not anticipate was Citizens United.

The Supreme Court's 2010 ruling in Citizens United v. Federal Election Commission established that corporations have First Amendment rights to make unlimited independent expenditures in elections. The majority opinion specifically noted that its ruling applied to domestic corporations — and existing law still banned foreign nationals from spending. What the court did not address was the question of what happens when those two legal facts exist simultaneously in the same corporate structure.

The answer, as it turns out, is a gap large enough to route billions through.

Under existing federal law, a corporation organized under U.S. law with its principal place of business in the United States is not itself a "foreign national" — regardless of who owns it. This means a U.S.-registered company that is majority-owned by, say, a sovereign wealth fund from the Persian Gulf is still legally American for campaign finance purposes. It may spend from its corporate treasury to influence elections. It may fund super PACs. It may finance dark money nonprofits. None of these activities violate the foreign spending ban as currently written, because the company doing the spending was incorporated in the United States.

The Center for American Progress examined the implications of this structure and found something remarkable: approximately 98 percent of S&P 500 corporations would likely exceed a 5 percent aggregate foreign ownership threshold — the level at which most proposed reform legislation would classify a company as "foreign-influenced." In other words, if the law actually prohibited foreign-influenced corporations from election spending, it would affect nearly every major company in America. Foreign ownership of U.S. corporate stock has grown from roughly 5 percent in 1982 to approximately 40 percent by 2020.

That trajectory is not accidental. It is the result of global capital markets doing what global capital markets do — seeking returns across borders. Sovereign wealth funds, the investment vehicles through which foreign governments manage national surpluses, have been aggressive participants in this globalization of corporate ownership.

The Architects of Capital, and Their Portfolios

Sovereign wealth funds are not passive index investors. They are instruments of state strategy, deployed to earn returns, build relationships, diversify national revenue bases, and extend geopolitical influence. The Gulf states have been the most visible practitioners of this model.

Saudi Arabia's Public Investment Fund, which manages approximately $913 billion in assets and serves as the financial engine of the kingdom's Vision 2030 economic program, has systematically accumulated stakes in American companies across sectors. In the first quarter of 2020 alone, it took positions worth hundreds of millions of dollars in Boeing, Citigroup, Facebook, Marriott International, Disney, Cisco Systems, and Bank of America. Its publicly disclosed U.S. equity portfolio peaked at $25.6 billion in early 2025 before a strategic consolidation. As of late 2025, its core U.S. holdings were concentrated in Uber Technologies, Electronic Arts, Lucid Group, and others.

The Qatar Investment Authority and Abu Dhabi's Mubadala and Abu Dhabi Investment Authority maintain similarly expansive American footprints. China's sovereign wealth fund, the China Investment Corporation, has for years held stakes in U.S. financial and technology firms. Norway's Government Pension Fund Global, the world's largest sovereign wealth fund by assets, is legally required to hold about 1.5 percent of all publicly listed equity globally — meaning it has a stake in virtually every large American corporation.

These funds are state-owned. Their investment decisions are made in consultation with, and often directed by, governments. When they acquire significant ownership positions in American corporations — particularly positions that include board representation or participation in governance — the line between a portfolio investment and a structural relationship begins to blur.

None of this is hidden. Sovereign wealth funds are required to disclose equity holdings above certain thresholds to the SEC. The Uber-PIF relationship was disclosed from the beginning. What is not disclosed, because no mechanism exists to require it, is the chain of influence that flows from a government ownership stake through a board seat to a corporate spending decision in an American election.

What a Documented Case Looks Like

The most fully documented example of this pathway in action involves not a sovereign wealth fund but a company financed by Russian oligarchs — and it illustrates precisely why the corporate intermediary structure is so difficult to prosecute.

American Ethane was a Texas-based liquefied natural gas company founded in Louisiana. In 2018, its CEO — an American named John Houghtaling — made a series of contributions to Republican candidates in Louisiana, including then-congressman Mike Johnson. The total was modest: tens of thousands of dollars. What made it illegal was the company's ownership structure. Eighty-eight percent of American Ethane was held by three Russian nationals, including Konstantin Nikolaev, an oligarch with documented ties to Vladimir Putin. The funds American Ethane used to make those contributions were ultimately derived from offshore entities controlled by Russian investors, including Roman Abramovich.

The FEC investigated the matter for four years. Its own general counsel concluded that American Ethane had made more than $66,000 in contributions using money derived from foreign nationals — a clear violation of federal law. And yet, in the final vote, three Republican commissioners blocked a finding that would have imposed meaningful penalties. The agency fined the company $9,500.

In a formal dissent, Democratic commissioners Ellen Weintraub and Shana Broussard described the outcome as a "slap on the wrist that failed to account for a violation of one of the most fundamental provisions entrusted to this Commission to enforce." Their letter added, with evident frustration: "The foreign-influence problem has not gone away in the meantime, to put it mildly."

The Enforcement Agency That Cannot Enforce

The American Ethane outcome was not an anomaly. It was a product of a structural dysfunction that has made the FEC arguably the least effective federal regulator in Washington.

The commission is composed of six members, three from each party, and requires four votes to take any enforcement action. The result is almost mechanical: any matter with partisan implications deadlocks. From 1975 to 2007, the agency deadlocked on an average of about 5 percent of requests per year. Between 2008 and 2019, that figure climbed to 24 percent. Campaign finance lawyers have described the current environment as one in which there is "virtually no enforcement" of the law.

The FEC lost its quorum entirely in April 2025, leaving it unable to enforce even basic reporting requirements. A series of subsequent resignations reduced the commission to just two sitting members — both Democrats — with four seats vacant. Trump nominated two Republican commissioners in February 2026, but the Senate had not confirmed them as the 2026 midterms got underway, leaving the agency unable to act on complaints, issue civil penalties, or authorize new investigations. The Brennan Center for Justice, which has tracked the commission's decline for more than a decade, noted the loss of quorum came at a moment when campaign spending ahead of the midterms was accelerating rapidly.

The architecture is worth pausing on. Foreign governments are legally prohibited from spending in American elections. The agency designed to enforce that prohibition is functionally paralyzed. And a Supreme Court ruling has created a legal pathway through which foreign-owned corporations can spend unlimited amounts on elections without triggering the prohibition in the first place. Each of these facts is explicable on its own. Together, they constitute a system in which the law says one thing and reality does something quite different.

The Bills That Haven't Passed

The response to this gap has not been silence. It has been a series of legislative proposals that have failed to advance in Congress, paired with a gradual state-level patchwork of reform.

In July 2024, Senator Sheldon Whitehouse of Rhode Island and Congressman Jamie Raskin of Maryland reintroduced the Get Foreign Money Out of U.S. Elections Act. The bill would prohibit American-registered corporations from spending in federal elections if a single foreign shareholder owns 1 percent or more of the company's equity, or if multiple foreign shareholders collectively own 5 percent or more. Raskin described the legislation as closing "a glaring loophole opened up by the Supreme Court's disastrous Citizens United decision." The bill attracted co-sponsors including Bernie Sanders and Alexandria Ocasio-Cortez. It did not pass.

Minnesota enacted state-level foreign-influenced corporate spending restrictions in 2023. Seattle passed a local version in 2020, directly after Amazon — at least 9 percent of whose stock was foreign-owned at the time — donated $1.5 million to the city's Chamber of Commerce political action committee in a city council race. San Jose followed. Hawaii advanced similar legislation. The result is a fragmented, jurisdiction-by-jurisdiction response to a federal problem — one that applies different rules in different states while Congress continues to debate whether the rules should exist at all.

A 2024 survey found that 82 percent of likely voters agreed there should be limits on corporate campaign spending by companies with foreign ownership. That level of public support, across party lines, has not translated into federal action.

The Structural Question

The debate around foreign money in elections tends to be framed as a security problem — foreign adversaries trying to hack American democracy. That framing is accurate as far as it goes. Russia's disinformation campaigns, Iran's social media operations, and documented cases of illegal foreign contributions are real threats that intelligence agencies take seriously.

But it misses a category of influence that is neither covert nor illegal. Sovereign wealth funds from allied and adversarial nations alike hold substantial stakes in the corporations that spend the most on American politics. Those stakes were accumulated through normal market activity, disclosed to regulators in routine SEC filings, and constructed with no particular electoral intent. The electoral consequence — foreign governments holding structural positions in politically active American corporations — emerged as a byproduct of two simultaneous and unremarkable trends: the globalization of capital markets and the post-Citizens United expansion of corporate political spending.

No law was broken to create this situation. That may be precisely what makes it durable.

The foreign national ban remains in place. The FEC remains without the quorum to act. Sovereign wealth funds continue to hold positions in companies that continue to spend on American elections. And the corporate structure that links all of these facts together remains, under current law, entirely American.