Latest Developments:
- The Treasury Inspector General for Tax Services analyzed the requirement that certain nonprofits register with the IRS within 60 days of formation. The Inspector’s report is critical of the Internal Revenue Service’s failure to take “sufficient actions to identify noncompliant I.R.C. Section 501(c)(4) organizations despite having various sources of information that would allow it to do so.” According to the Los Angeles Times, nearly 10,000 “politically active tax-exempt organizations” have failed to file the required notice, IRS Form 8976. According to the Inspector General’s report, “IRS management agreed to use available information to enforce compliance and update notices and procedures.”
- The Maine Legislature enacted S.B. 18 (Chapter 534), which became law this week without the Governor’s signature. The bill establishes a blackout period for campaign contributions from lobbyists and lobbyist employers during the legislative session. The ban does not apply to special elections. Outside of the legislative session, lobbyists may only contribute to candidates for which the lobbyist is eligible to vote. The bill takes effect 90 days after the legislative session ends; adjournment is expected April 15, 2020.
- Elections Canada announced new contribution limits for 2020. The revised limits generally permit Canadian individuals to give up to Can$1,625 per year to candidates and parties. In addition, Elections Ontario announced that its contribution limit has also increased to Can$1,625 per year. Separately, Elections British Columbia announced that the limit for an individual’s contributions to candidates has increased to Can$1,253.15 per year for 2020.
- The Seattle City Council unanimously approved an ordinance to ban foreign money in local campaigns. Council Bill 119731 bans campaign contributions from, and independent expenditures made by, “foreign-influenced corporations.” Foreign-influenced corporations include corporations with (1) a single foreign shareholder who has a 1% interest; (2) more than one foreign shareholders who collectively have a 5% interest; or (3) a foreign owner (more than 50% ownership) who participates in the decision-making process of the corporation’s political activities. The measure requires other corporations to certify to the City Clerk within 7 days of making a contribution that they are not foreign-influenced. The measure takes effect 30 days after the Mayor approves it. The Council also approved Council Bill 119732, which requires commercial advertisers to retain certain information about political advertisements.
- The New York State Campaign Finance Reform Commission’s report, issued December 1, 2019, began to take effect this month. Provisions for public financing and lower contribution limits, however, will not take effect until the day after the next gubernatorial election on November 9, 2022, and will apply to the 2026 election cycle, according to an analysis by City & State New York. The provisions that did take effect on January 1, 2020, generally pertain to procedures for candidates to appear on the ballot.
- The United States Court of Appeals for the District of Columbia heard oral arguments in the case of Campaign Legal Center v. FEC, D.C. Cir., No. 18-5239 this week. According to Bloomberg Government, the issue involves “the use of shell companies to hide donations in a case that could affect super PAC disclosure in the 2020 election.” The article notes that “several donors (are) accused of violating campaign finance laws by funneling millions of dollars to super PACs that supported Mitt Romney and Barack Obama in the 2012 presidential race. Obscure corporations were listed as the donors in reports filed with the FEC.”
- The United States Supreme Court turned down review of a challenge to the Security and Exchange Commission’s pay-to-play regulation. That action leaves in place the decision in New York State Republican Party v. SEC, in which the U.S. Court of Appeals for the District of Columbia upheld the SEC’s rule barring investment advisors (placement agents) from making certain candidate campaign contributions.
Reminders:
Essential Ethics 2020: With the 2020 elections just around the corner, join Nielsen Merksamer on Friday, February 7 at the Sutter Club in Sacramento, California, from 10:00 to 11:30 AM for a complimentary briefing on the key issues you need to know this election year in California. Sign up here. Contact Jay Carson (jcarson@nmgovlaw.com) with any questions.
The American Bar Association presents: Campaign Finance Enforcement Trends: The Use of Public Resources and other Hot Topics. Join Jason Kaune, of Nielsen Merksamer, who moderates the program. Learn all about the regulation of campaigns and get an understanding of some of the thorny issues troubling regulators and the public! Featured speakers include:Steve Berlin, Executive Director of the Chicago Board of Ethics; Megan Engelhardt, Assistant Executive Director of the Minnesota Campaign Finance and Public Disclosure Board; Amber Maltbie of Nossaman LLP., Sacramento. The online program will be held on Monday, January 27, 2020, at 1 PM Eastern (10 AM Pacific). The program is free for ABA members. Sign up here.
In Case You Missed It:
- Virginia Legislature Ponders Reform: WTOP reports that the Virginia Legislature will consider a variety of election proposals, including creation of a redistricting commission and campaign finance limits and bans.
- Locals Reject Control: California state campaign contribution limits are set to apply to local governments that do not have any campaign contribution regulations, beginning in 2021. While local governments may consider adopting their own limits in the meantime, the San Jose Mercury News reports that the City of San Leandro rejected a cap on contributions to city council candidates.
- Pay-to-Play in Oregon: Oregon Public Broadcasting reports that, in the state, which notoriously has no contribution restrictions, there is a “torrent of outside money to state candidates, much of it solicited by Oregon treasurers and attorneys general – the same elected officials whose offices decide which firms get the (officials’) work.” The current Attorney General and State Treasurer “say they remove themselves from decisions about which lawyers win state work, even as they ask law firms for reelection money.”In total, (the current State Treasurer) has received more than a quarter-million dollars from firms or attorneys with an interest in class-action work, state records show. None of them contributed money to (his) campaigns in his previous role as a state representative.