Section 401 (e) of the 1940 Nationality Act provides that a U.S. citizen, whether by birth or naturalization, "shall lose his [U.S.] nationality by...voting in a political election in a foreign state."
This law was tested many times. In 1958, for instance, an American citizen named Perez voted in a Mexican election. The case went to the Supreme Court, where the majority opinion held that Perez must lose his American nationality. The court said Congress could provide for expatriation as a reasonable way of preventing embarrassment to the United States in its foreign relations.
But then something very odd happened.
In 1967 an American Jew, Beys Afroyim received an exemption that set a precedent exclusively for American Jews. Afroyim, born in Poland in 1895, emigrated to America in 1912, and became a naturalized U.S. citizen in 1926. In 1950, aged 55, he emigrated to Israel and became an Israeli citizen. In 1951 Afroyim voted in an Israeli Knesset election and in five political elections that followed. So, by all standards he lost his American citizenship -- right? Wrong.
After living in Israel for a decade, Afroyim wished to return to New York. In 1960, he asked the U.S. Consulate in Haifa for an American passport. The Department of State refused the application, invoking section 401 (e) of the Nationality Act -- the same ruling that had stripped the American citizen named Perez of his U.S. citizenship.
Attorneys acting for Afroyim took his case to a Washington, DC District Court, which upheld the law. Then his attorneys appealed to the Court of Appeals. This court also upheld the law. The attorneys for Afroyim then moved the case on to the Supreme Court. Here, with Supreme Court Justice Abe Fortas, Lyndon Johnson's former attorney and one of the most powerful Jewish Americans, casting the swing vote, the court voted five to four in favor of Afroyim. The court held that the U.S. government had no right to "rob" Afroyim of his American citizenship!
The court, reversing its previous judgment as regards the Mexican American, ruled that Afroyim had not shown "intent" to lose citizenship by voting in Israeli elections. Huh?
While Washington claims it has a "good neighbor" policy with Mexico, the U.S. does not permit Mexicans to hold dual nationality. The US makes them become either U.S. or Mexican -- you can't be both. But the U.S., in its special relationship with Israel, has become very sympathetic to allowing Israeli-Americans to retain two nationalities and allowing U.S. citizens not only to hold public office in Israel, but to hold US government positions as well! No other country holds this special exception to our laws of citizenship.