Latest Developments:
- The Supreme Court of Washington State issued its decision on Washington v. Grocery Manufacturers Association, which reinstates an extraordinary $18 million fine. In the trial court, the GMA was found to have violated the state’s campaign finance laws by effectively “laundering” campaign contributions, hiding the true source of funds it used to oppose an initiative. The trial court imposed a $6 million fine and found that the violation was “intentional,” which warranted a treble fine of $18 million. The Court of Appeals overturned the trebling of damages but declined to consider an excessive fines claim. The Supreme Court held that the trial court, and not the Court of Appeals, had applied the correct legal standard as to the treble damages provision-it was only necessary for the violator to have intended to do the act that was illegal, not for the violator to have subjectively been aware of its illegality. Thus, the Supreme Court reversed the Court of Appeals’ decision limiting the treble fines but remanded the case to that court for it to decide the excessive fine issue.
- COVID-19 Update: Many Regulatory Agencies have modified their practices in response to the COVID-19 emergency. Some agencies have postponed hearings and are closed to the public, but available by telephone or internet. Each week we will add the latest information. For more information, contact our Political Reporting Unit. Among the more notable developments this week:
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- Members of the Georgia Legislature are prohibited from raising “campaign contributions while the General Assembly’s 2020 session remains suspended due to the coronavirus outbreak.” According to the Rome News-Tribune, the “Georgia Government Transparency and Campaign Finance Commission voted 3-2 to keep intact the prohibition against campaign fundraising that applies while the legislature is in session – even though lawmakers have been sent home indefinitely to wait out the COVID-19 pandemic.”
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- The Florida Commission on Ethics rejected a plea , in the form of a request for an advisory opinion, to relax the state’s gift ban on free advertising to permit cable television and internet providers to run public service announcements featuring public officials. Orlando Weekly reports that the Commission Chair “warned the carve-out could set a dangerous precedent.”
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- The California Fair Political Practices Commission reminded everyone that it hasn’t changed any deadlines. The Commission asks that filers use “best efforts” to comply with reporting by existing deadlines and communicate any issues that “inhibit the filing of a lobbying report or statement” with the Secretary of State’s office. However, at the commission meeting this week, the Chair advised that if people are late with reports for a reason related to the COVID-19 pandemic, “Enforcement will not be prosecuting those cases.”
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- The Austin, Texas City Clerk has announced that the deadline for filing first quarter lobbyist reports, which had been extended to May 1, is now further extended to May 30.
- The Washington State Attorney General filed a complaint against Facebook (again) alleging that it “repeatedly and openly violated (the state’s) campaign finance disclosure laws.” The Seattle Times reports that although Facebook announced that it would stop selling political advertising in Washington State after the last lawsuit, it sold “at least 171 ads to Washington state political committees, which have paid the company at least $525,000 since November 2018.”
- The Governor of Virginia signed SB 217, which requires that contributions of $1,000 or more to a statewide candidate or legislative candidate that are received between January 1 and the start of the legislative session must be reported by January 15.
- The Missouri Ethics Commission is back in business after the Governor appointed a new commissioner to the Commission. The St. Louis Post-Dispatch reports that after “three weeks in limbo, the commission that regulates Missouri’s campaign finance laws will be able to meet again following a rushed effort to appoint a new member.” The Commission had dropped to only three members of a six-person panel.
Reminders:
The California Fair Political Practices Commission’s Law and Policy Committee, along with staff, will meet on April 20 to discuss proposed regulations and other possible actions to require disclosure of political activity by limited liability companies. The regulatory process is continuing at full speed, notwithstanding that the California legislature and most government agencies, including the FPPC, are hibernating.
In Case You Missed It:
- “Essential” Lobbying: Politico reports on the phenomenon of “choosing winners and losers,” at the urging of lobbyists who convince federal, state, or local authorities that various businesses, from laundromats to cannabis dispensaries, are “essential” businesses that should remain open during the pandemic.
- Political Consultants Sue over Exclusion: According to Bloomberg, the American Association of Political Consultants sued the Trump administration after theSmall Business Administration, issued “rules prohibiting businesses ‘primarily engaged in political or lobbying activities” from receiving coronavirus relief loans.’”
- Does Transparency aid Phishing?: Cyberscoop explains that all of the public information available on the Federal Election Commission’s website is a “bounty” for those who launch phishing scams. The article warns that in addition to transparency, “security is also important to the integrity of the process.”
- Donor Disclosure Legislation: Ballotpedia offers a look at states with pending legislation regarding disclosure of information about donors to nonprofits, including those with political activity. Specifically, Utah and West Virginia have enacted prohibitions on disclosure of donor information this year, thus ensuring donor privacy.
- Alabama Supreme Court Overturns Some Ethics Charges: Yahoo News reports that the court reviewed ethics charges against the former Alabama Speaker and overturned some charges. Remaining charges include one stemming from side work as consultant, “rejecting defense claims that those contracts were unrelated to his position as House speaker… Justices noted that when contacting a company for one client, Hubbard ‘identified himself as a state legislator and as Speaker of the House of Representatives.’”
- More Online Transparency: Tech Crunch reports that Reddit updated its political advertising policy, which among other things, includes “a new subreddit, r/RedditPoliticalAds, that will include information about advertisers, targeting, impressions and spending by each campaign.” Politico notes that the “move follows in the footsteps of digital titans Facebook, Google and Twitter, who over the past two years have made more information about their political advertisers public amid scrutiny from lawmakers over foreign actors using their platforms to meddle in past U.S. elections.”
- Defamation Lawsuit for Political Ads: Amid increasing and high-profile pressure on social media companies to police the truthfulness of political ads, the traditional press still faces the risk of liability for defamatory statements in political ads they publish. According to the Hill, the Trump campaign has sued an NBC-affiliated television station in Wisconsin for a Super PAC ad that it broadcast, alleging the ad mischaracterizes the President’s statements. Reviewing proposed ads for potential defamation litigation risk is an important part of a comprehensive legal compliance program.