Latest Developments:
- The United States District Court for the District of Montana overturned IRS Revenue Procedure 2018-38, which applied beginning with the 2018 tax year and ended the requirement that certain nonprofit organizations disclose donors of $5,000 or more to the Internal Revenue Service. In Bullock v. IRS, the court found that the IRS began collecting the information on donors of $5,000 or more to 501(c)(4) organizations following adoption of a regulation in 1970. The regulation took effect after a notice was published and the public had a period in which to comment on the matter. The court found that the 2018 revenue procedure was a legislative rule that failed to follow the Administrative Procedure Act, which requires a notice and period for public comment before the rule can be implemented. Bloomberg reports that the court ruling “upends a change the IRS made last year that permitted so-called Section 501(c)4 groups, known as “social-welfare” organizations, to keep their donor lists private.”
Reminder:
The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)
In Case You Missed It:
- FARA Lobbyists using Zombies: The Campaign Legal Center issued a new report on the use of so-called Zombie Campaign Funds, which are leftover congressional campaign funds that former members retain after leaving Congress. The report raises concerns about former members who are now registered under the Foreign Agents Registration Act (FARA) and lobby for foreign governments. These FARA lobbyists are using their zombie accounts to curry favor with current members of congress. Following the release of the report, Roll Call detailed some of the specific instances of concern and potential fixes.
- Pay-to-Play at work in New York State: New York State has no restrictions on contributions by state contractors. The New York Times reports that, as a result, a company that received a $23 million MTA contract and had never donated to the Governor, became one of Governor Cuomo’s “largest contributors” in his campaign for a third term. The Times reports that the Governor has received more than $3 million from MTA contractors and industry groups since taking office in 2011.
- Contributions as Insurance: California’s newly elected Insurance Commissioner pledged not to take contributions from the insurance industry. Following a San Diego Union-Tribune report that the Commissioner accepted contributions from insurance executives, the Union-Tribune subsequently revealed that he met with those executives about complaints pending in the Commissioner’s office and intervened on their behalf. Cal Matters notes that these events echo a similar pattern of a former Commissioner ousted as a result of scandalous dealings concerning money squeezed from insurance companies.
- Tennessee Drops Speaker over Ethics: The Tennessee House of Representatives selected a new Speaker in the wake of questions about the incumbent’s ethics. The Tennessean reports that, among other things, (now former) Speaker Glen Casada faces questions over spending from his PAC and campaign accounts that contain over $500,000. The newspaper reports that state officials are about to open an inquiry into Casada’s campaign spending and outlined four areas of potential problems.
- How Fast Does the Revolving Door Spin?: Public Citizen issued a report calling for reform, stating that, at the federal level, the “revolving door continues to spin at an alarming speed.” The report includes a state-by-state analysis of revolving door provisions, naming Iowa and North Dakota as the states with the broadest prohibition on lobbying after serving in state government. Meanwhile, the Associated Press reports on what it’s like in Nebraska, one of seven states with no revolving-door restrictions.