Indian-born V. Prem Watsa is Fairfax's founder, its CEO and chairman of its board. He owns or controls 45 percent of the company’s shares. He chairs the U.S. subsidiary as well. The law is straightforward regarding foreign nationals. They may not indirectly or directly contribute money to influence U.S. elections. Period.
But there is less clarity when it comes to foreign corporations. Previously, corporations couldn't contribute money for political advertisements or PACs. Made no difference if they were domestically or foreign-owned. But that changed with the U.S. Supreme Court's ruling in Citizens United. The question now is whether the language prohibiting foreign nationals like Watsa from making contributions also applies to foreign corporations and, more specifically, foreign-owned U.S. subsidiaries.
Fairfax says it broke no laws and that the decision to contribute to Restore Our Future was made by a sub-committee of the board whose members are all U.S. citizens.
Real convenient. And rather implausible that this decision—a $1 million political contribution—was not vetted behind the scenes by others at the company.
Sen. Sheldon Whitehouse, D-R.I., is among those concerned about foreign-controlled corporations "exploiting loopholes in existing law" to influence U.S. elections. He calls the practice a “direct threat to our democracy.”Ryan faults the Federal Election Commission for not making matters clearer regarding in this regard. If there's fuzziness about how a law is being interpreted, then it will be exploited.
“You can bet that wholly owned subsidiaries of foreign commercial entities have an agenda when they spend millions to sway the outcome of an election,” Whitehouse told the Center for Public Integrity in a statement. “And you can bet that agenda is not promoting the interests of middle-class American voters.”
OdysseyRe’s donation “raises some legal red flags,” says Paul S. Ryan, an attorney at the Campaign Legal Center.
Peter Lovell, general counsel of OdysseyRe, says the company decided to back Romney because it likes his tax policy. Two of the board members are well-heeled Republicans who have contributed tens of thousands of dollars to GOP candidates, including directly to Romney's campaign fund.
OdysseyRe's contribution, Beckel reports, is one-seventh of the money Restore Our Future collected in August. Since its founding in 2010, the Super PAC has raised nearly $91 million.