The U.S. subsidiaries of foreign-owned companies have begun lobbying against Democratic proposals that would limit their spending on political campaigns.  President Barack Obama has called for legislation tightening election spending rules, following a Supreme Court decision last week striking down bans against corporate spending.  The court decision didn't change current restrictions against foreign companies and foreign individuals funneling campaign money through U.S. subsidiaries. But companies are allowed to spend profits from U.S. subsidiaries on election campaigns, and some firms fear Democrats may try to add further restrictions.  Democrats said they wanted to make sure the prohibitions against foreign involvement were airtight, given the new freedom that corporations have won to spend money directly on election campaigns.  U.S. subsidiaries said some of the proposals would give American-owned competitors an unfair advantage.  "Talking about restricting foreign influence in elections may sound like good politics, but when you peel back the layers, it could have a wide spectrum of unintended consequences," said Nancy McLernon, who heads the Organization for International Investment, a lobbying group that represents U.S. subsidiaries of foreign corporations. "There is no reason to distinguish a Nestle from a Hershey's," especially because both have U.S. employees, she said.  Ms. McLernon declined to name the companies that are involved in the lobbying effort. About 160 major corporations are in the group, including the domestic subsidiaries of brands such as Belgium's Anheuser Busch InBev NV, Netherlands-based Royal Dutch Shell PLC and Sony Corp. of Japan. Representatives of those companies didn't return calls seeking comment.  Democrats said foreign interests had no business telling Americans how to vote.  "If you are not truly an American company, we want you to keep your hands out of our politics," said Rep. Bill Pascrell (D., N.J.), one of several lawmakers promoting new legislation.  Mr. Pascrell's bill would ban spending by any U.S. subsidiary of a foreign company or any U.S. corporation that has foreign debt, one or more non-U.S. director or any foreign ownership, which are common practices.  The chances of any legislation becoming law could be difficult in the face of opposition among Republican leaders. Republicans said the issue involves fundamental free-speech rights and Congress shouldn't block corporations from having their say in elections.  Sen. Mitch McConnell (R., Ky.) said Thursday that the Democratic efforts were unnecessary because foreign entities "are strictly prohibited from any participation in U.S. elections." He said Mr. Obama and "surrogates in Congress" were mischaracterizing the issue.  Democratic officials have said they hope the issue will put them on the right side of populist anger that in recent months has helped Republicans win elections in Massachusetts, New Jersey and Virginia.  U.S. subsidiaries of foreign corporations have long been allowed to create political action committees to donate money directly to candidates. After the Supreme Court decision, they can now use U.S. profits to fund their own campaign advertisements, just like U.S.-based companies. Foreign individuals aren't allowed to be involved in the planning of political spending.  The Supreme Court's 5-4 ruling voided a section of the 1947 Taft-Hartley Act that prohibited corporations and unions from spending money to elect federal candidates.  Justice Anthony Kennedy's opinion for the conservative majority held that the provision violated the First Amendment's free-speech guarantee. Congress can't single out "certain disfavored speakers"—in this case, corporations—to restrict their spending on political advertisements, Justice Kennedy wrote.Justice Anthony Kennedy's opinion for the majority observed that a separate provision barred "foreign nationals" from attempting to influence U.S. elections. In the specific case before the court, "we need not reach the question" of whether such restrictions were constitutional, he wrote.  Dissenters argued that the majority's reasoning would prohibit any limits on who was paying for political advertisements. Justice John Paul Stevens wrote that the majority's assumptions "would appear to afford the same protection to multinational corporations controlled by foreigners as to individual Americans."  Write to Brody Mullins at brody.mullins@wsj.com and Jess Bravin at jess.bravin@wsj.com
Democrats are calling for legislation to tighten curbs on foreign companies in the wake of a Supreme Court decision striking down a ban on corporate political spending.