Maine’s two largest power companies and groups representing Maine media outlets filed separate federal lawsuits Tuesday challenging a state law passed by voters in November to ban foreign governments and affiliated organizations from spending money on state and local referendum campaigns.

One of the lawsuits, filed by the Maine Association of Broadcasters and Maine Press Association, takes issue with a part of the new law requiring news outlets to establish “due diligence policies” to ensure that they do not run ads that are paid for by foreign government-influenced entities.

“The Act imposes a censorship mandate on Maine’s news outlets,” Sigmund Schutz, an attorney for the MAB and MPA, said in a statement. “It is content-based regulation of political speech and is therefore subject to the highest level of constitutional scrutiny under the First Amendment.

“If news outlets are forced to investigate political advertisers and take down their ads, what other content and messaging will they be forced to investigate and remove next? Paid political advertising is entitled to First Amendment protections just like other editorial content.”

Schutz also provides legal representation to the Portland Press Herald, which is a member of the MPA.

The citizen initiative to ban spending by foreign government-influenced entities was largely aimed at Maine’s two largest utilities, Central Maine Power and Versant Power. Both filed lawsuits Tuesday to overturn the referendum.

Avangrid, the parent company of Central Maine Power Co., is a subsidiary of the Spanish energy giant Iberdrola. The Qatari government has a 3.7% stake in Avangrid and an 8.7% share in Iberdrola. Avangrid was part of a group that spent more than $42 million to defeat a 2021 referendum that sought to block a controversial transmission corridor through western Maine.

Versant is owned by Enmax, which is owned by and headquartered in the city of Calgary in Alberta, Canada.

All three lawsuits name Attorney General Aaron Frey and the Maine Commission on Governmental Ethics and Election Practices as defendants. The commission is responsible for assessing penalties for violations of the new law.

A spokesperson for the Maine Office of the Attorney General did not respond to a request for comment Tuesday.

“The Ethics Commission is studying the complaints and conferring with our counsel in the attorney general’s office,” Jonathan Wayne, the commission’s executive director, said in an email.

Supporters of Question 2 issued a statement Tuesday calling the lawsuits “as outrageous as they are offensive.”

“The board members of CMP, Versant, the Maine Association of Broadcasters and the Maine Press Association ought to be ashamed of themselves,” said Sen. Rick Bennett, R-Oxford, chair of the group Protect Maine Elections. “These people, many of whom are friends and former colleagues, are enabling foreign governments, and entities that they own, control and influence, to threaten the integrity of our elections.

“Maine voters delivered the clearest of messages on Election Day, telling the monied interests and the political class that we are taking our government back. It’s time for these organizations and their governing boards to heed the will of their customers and stakeholders – the people of Maine.”

The new law was approved by voters in November as Question 2, a referendum that resulted from a citizen initiative and petition drive. It closes what advocates called a loophole in state campaign finance law that allows foreign governments to spend money to influence state and local referendum campaigns. The measure is largely a response to foreign government spending in the referendum campaign two years ago over the future of a planned electricity corridor in western Maine.

It prohibits any entity or business with at least 5% ownership by a foreign government or government-influenced entity from spending money on state or local elections.

Voters approved the question 86% to 14%. The law is slated to take effect Jan. 5.

BURDENS ON FREE SPEECH CITED

In their lawsuit, the media associations argue that the requirement placed on them violates the First and 14th amendments and “substantially burdens core political speech and the freedom of the press.” It says the new law doesn’t explain what is meant by its requirement for “due diligence policies, procedures and controls” or how they should comply with putting those in place.

“Are news outlets required to hire accountants and detectives and attorneys to conduct a global investigation to determine who owns and influences every prospective political advertiser?” the suit asks. “How extensive must their investigation be? What steps must be taken? The Act does not say.”

Figuring out if prospective advertisers are foreign owned or influenced would require an enormous amount of work and also could have a financial impact on media outlets, the suit said.

“Erring on the side of caution by giving it an expansive reading and setting up elaborate mechanisms for screening prospective advertisers for foreign government influence is not a realistic option given the financial pressure the news business is under,” the suit said. “Instead, to avoid legal risk, some of the nearly 200 members of the Media Plaintiffs may have to stop running political ads altogether.”

It said the provisions in the new law also were introduced in the Maine Legislature and passed this year but vetoed by Gov. Janet Mills, who wrote in her veto letter that the Act “runs afoul of the First Amendment and is counter to the longstanding tradition and cornerstone of a free press in America.”

Courtney Spencer, president of the Maine Press Association, said the law’s lack of clarity imposes a burden on media outlets.

“The ambiguity and vagueness of the language in Section 7 of the legislation makes it almost impossible to be able to identify both what constitutes public comments and also what steps are considered adequate to identify foreign owned/influenced entities,” said Spencer, who also is vice president of advertising at the Maine Trust for Local News, which owns the Press Herald.

UTILITIES RAISE PUBLIC ENGAGEMENT

Central Maine Power, in its lawsuit, asks the court to overturn the referendum, claiming it violates its First Amendment rights to free speech.

“As the repeated target of proposed legislation and referenda hostile to its interests, CMP has frequently engaged in lawful and constitutionally protected public engagement and advocacy regarding important matters of public policy under consideration by the governor, Legislature, and the people of Maine,” CMP states in its lawsuit.

“As a result of its political speech and advocacy, CMP has prevailed in defeating such legislation, including a recent referendum which, if enacted, would have required the Maine state government to expropriate CMP’s assets and extinguish the company’s existence. The initiative now seeks to criminalize CMP’s ability to speak publicly on such matters and other matters of concern to the company, its employees, its customers and the public at large.”

Versant Power and its parent company, Enmax, also filed a lawsuit challenging the constitutionality of the referendum.

Their lawsuit mirrors the CMP complaint, arguing that Question 2 will restrict the company’s right to free speech and engagement in the state’s political affairs. Versant states that the new law will compel it to declare in any future public communications that could influence public policy “the following conspicuous description: Sponsored by Versant/Enmax, a foreign government-influenced entity.”

“Versant and Enmax must broadcast this message notwithstanding that no foreign government has ever influenced any political spending of either Versant or ENMAS, nor has the power to do so in the future,” the companies state in their lawsuit.

“The Act’s ban on Versant’s core political speech violates Versant’s rights, as well as those of every other “foreign government-influenced entity” that also is a United States corporation, to engage in core political speech under the First and 14th amendments to the United States Constitution,” the suit states.

 

Staff Writer Dennis Hoey contributed to this report.

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