Judge blocks Minnesota law that banned campaign contributions from ‘foreign investors’

A law regarding campaign contributions for Minnesota candidates that was set to take effect on Jan. 1 can’t be enforced, a federal judge ruled Wednesday.

U.S. District Court Judge Eric Tostrud granted a preliminary injunction that the Minnesota Chamber of Commerce had requested, stopping a law that aimed to limit foreign influence in local elections.

The law, which was crafted by lawmakers earlier this year, would’ve made it illegal for candidates to accept money from any foreign officials. That included corporations with a foreign ownership share of as little as 1%.

But the Chamber of Commerce, which represents more than 6,000 Minnesota businesses, argued that the law would violate the First Amendment by preventing some organizations from exercising their free speech rights in connection with elections.

The Minnesota Campaign Finance Board raised several ways that foreign shareholders could either control or influence a corporation’s political spending, even as a minority shareholder. However, in his decision, Tostrud wrote that “explaining how foreign minority shareholders COULD exercise influence over corporations is not enough to justify (the statute’s) ban on corporations’ political speech.”

He added that the board “fails to offer evidence that minority foreign shareholders have even once exercised influence or control over a corporation’s election expenditures in Minnesota or elsewhere.”

While the battle over the measure isn’t over yet, Tostrud said he granted the injunction “because the Chamber is likely to prevail” based on its argument.

Doug Loon, the Chamber of Commerce’s president and CEO, posted on X, “This is an important decision by the court in preventing this flawed law from becoming a reality. This law is an unconstitutional impingement on the free speech rights of the Minnesota business community. With this injunction in place, businesses can continue to exercise their ability — as ‘people’ in the eyes of the law — to participate in the democratic process without the fear of being prosecuted.”

Free Speech for People, a national nonprofit that supported the provision in question, called the injunction “disappointing” but added that it still “expect(s) the court to uphold the constitutionality of the foreign-influenced corporation provision” after trial.