Latest Developments:
- The U.S. Court of Appeals for the District of Columbia, in Campaign Legal Center, et. al v. F.E.C. upheld the Federal Election Commission’s exercise of prosecutorial discretion to not retroactively punish contributions made by LLCs and closely held corporations to Super PACs as prohibited contributions in the name of another. The commissioners had instead concluded that the application of the law to contributions made by such entities was unclear post Citizens United in light of conflicting Commission guidance and precedent, and it therefore would violate Due Process to punish without first clarifying the law going forward. (The Court did not review the clarifying interpretation announced by the commissioners.) Notably, this panel’s decision, which reviewed the merits of the FEC’s dismissal, conflicts with a June 2018 D.C. Circuit opinionthat held that FEC prosecutorial discretion dismissals were categorically unreviewable by the courts pursuant to Supreme Court precedent.
- A New York State Judge, in the case of Hurley v. The Public Campaign Financing and Election Commission, struck down the state’s new campaign finance law that was created by the Commission, thus invalidating various changes the commission proposed including a system of stricter limits and public financing. The judge ruled that the legislature could not delegate its legislative power to the Commission. The decision will likely be appealed and does not immediately impact public financing programs in other jurisdictions.
- The U.S. District Court for the District of New Jersey permanently enjoined the state’s dark money disclosure law. In ACLU v. Grewal, the court converted a temporary injunction into a permanent injunction. The action enjoined last year’s S. 150, which regulated independent expenditure committees. Law.com explains that the judge was “troubled by the law’s requirement that groups communicating purely factual information could be subjected to a disclosure scheme historically limited to election-related communications.”
- 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. Among the more notable developments:
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- The Federal Election Commission issued a statement on its operations during the COVID-19 crisis. The Commission will continue to process electronic filings but will not process mailed filings until it resumes normal operations. FEC offices are now closed to the public and employees are being urged to telecommute.
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- New York Joint Commission on Public Ethics has extended the deadline to file January/February lobbyist reports to March 31, 2020, as a result of COVID-19 concerns. Like other jurisdictions, the state has announced reduced availability and ways to reach staff for advice.
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- The Chair of the California Fair Political Practices Commission reached out to the regulated community to indicate that the commission is “developing a policy statement on late, missed, or incomplete filings caused as a result of various shelter in place orders and directives.”
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- The Executive Director of the Hawaii Ethics Commission indicated that the Commission is expected to extend the deadline for filing January-February lobbying reports from March 30 to April 30, 2020.
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- Ohio Election: The Ohio State Supreme Court will move quickly to decide whether the Ohio Secretary of State has the authority to move an election date, after the state’s Health Director shut down polling places. The Columbus Dispatch reports the legislature will meet next week to officially set a new date.
- The Office of Government Ethics issued Legal Advisory 20-02 concerning “Updated Resources on Agency Supplemental Ethics Regulations.” The office indicates that over 50 federal agencies have supplemental ethics regulations. According to the advisory, “Agencies typically identify the need for a supplemental ethics regulation based on their experience – for example, ethics officials repeatedly see the same ethics issue, or senior leaders raise concerns regarding certain activities.”
- The Governor of Wyoming signed SB Bill 20 which, among other things, revises the ban on corporate contributions to limit that ban to direct contributions to the candidate’s committee, a political party, or a PAC that coordinates with the candidate. The Secretary of State is directed to promulgate regulations to implement the legislation. The bill takes effect on July 1, 2020.
- The Governor of Maine approved SP 640, which revises and clarifies reporting of grassroots lobby activity. Previously, the law regulated “indirect lobbying” and required reporting when expenses exceed $15,000 in a reporting month. The new provision regulates “grassroots lobbying” and requires reporting when expenses exceed $2,000 in a reporting month. The bill takes effect on December 1, 2020.
- The Governor of Indiana approved HB 1288, which permits county boards of election to establish electronic filing systems.
Reminders:
Nielsen Merksamer
expresses its concern for all affected by the COVID-19 virus. Based in California, the firm has modified operations to accommodate shelter-in-place orders and remains committed to providing the highest level of service to our clients and the regulated community during this time of crisis.
In Case You Missed It:
- Personal Use Brings 11-Month Sentence: The Los Angeles Times reports that former U.S. Congressman Duncan Hunter was sentenced to 11 months in federal prison “for conspiring to illegally use more than $150,000 of his campaign money for personal benefit.”
- Lobbying for Federal Payout Prohibited: The Albuquerque Journal reports that a Washington D.C. lobbyist pleaded guilty to defrauding the government in connection with lobbying for the Big Crow program, located at an Albuquerque area Air Force base. According to another article in the Journal, the program was axed by the U.S. Army in 1999, but lived for another 10 years through earmarks obtained by lobbyists who were paid from the federal funds appropriated for the program, in violation of federal law.
- Gifts that Keep on Giving: The Detroit News contains a discussion of the “national trend of officeholders’ supporters using nonprofit accounts to raise money from undisclosed sources and then help causes tied to the elected officials.” The News analyzes behested payments made to the American Jobs Council, a nonprofit tied to the former Senate Majority Leader.
- Fundraising Infected by the Virus: Politico reports that the inability to have in-person fundraisers coupled with an economic downturn in which major donors’ investments are distressed has led to political fundraising challenges. The article describes the challenges and warns that “Coronavirus is starting to drain money from the expensive world of political campaigning.” As a result, the Wall Street Journal indicates that campaigns have “ramped up their digital and telephone fundraising efforts.”
- Short-Term Future of Lobbying in the U.S.?: Politico also reports on lobbying in the Capital of the European Union, noting that “the coronavirus has put traditional networking and lobbying in Brussels on ice.” The article finds that “with formal and informal meetings on hold, influencers are practicing telelobbying – trying to keep in touch with contacts, strategize and advance agendas through phone calls, video calls, webinars, emails and instant messages.”
- Election Catch 22: The Orange County Register points out that candidates for public office in the recent primary could “pay a thousand dollars or more to print a 250-word candidate statement in the sample ballots mailed to all 1.64 million registered voters in Orange County.” But there’s a catch, “Any candidate who prints a statement on the primary ballot has to agree to strict campaign spending limits, both for the primary and, if they go forward, the November general election.”