HomeEssential Ethics / May 1, 2023

Essential Ethics

May 1, 2023

Latest Developments: 

  • Maryland SB 269 and HB 192 Prohibit The Use of Cryptocurrency (or Any Non-US Currency) in Campaign Finance: Effective July 1, 2023, contributions to a campaign finance entity and donations to entities registered with the State Board of Elections, making independent expenditures or electioneering communications, cannot be made using cryptocurrency or any currency other than United States currency.
  • New Jersey Lawsuit Filed Against New Elections Transparency Act: On April 20, 2023, the executive director of New Jersey’s Election Law Enforcement Commission (“ELEC”) filed a lawsuit, Jeffrey Brindle v. State of New Jersey (complaint available at NJ Courts website), to block portions of the recently enacted Elections Transparency Act (“Act”) that relate to the removal and replacement of ELEC’s commissioners and the statute of limitations for ELEC enforcement actions. The complaint does not address or challenge the many other provisions of the Act that overhauled the state’s pay-to-play and campaign finance laws.

In Case You Missed It:

  • Supreme Court Justices United to Issue Statement on Existing Ethics Principles and Practices: Chief Justice John Roberts declined Senator Dick Durbin’s invitation to appear before the Senate Judiciary Committee on May 2, 2023 to discuss ethics reform for the Supreme Court. In a letter to Senator Durbin, Chief Justice Roberts attached a Statement of Ethics Principles and Practices signed by all nine Justices. The statement assures the public that the Justices consult a wide range of authorities when addressing ethical issues, including “broadly worded” canons that “are not themselves rules” but nonetheless provide guidance. Moreover, despite the Justices’ collective experience in interpreting rules and laws, the statement asserts that their financial disclosure reporting requirements are “sometimes complex,” and therefore, they rely on the committee reviewing their disclosures to provide clarity on certain issues or to send the filer a letter of inquiry when there are errors or omissions. The statement also defends the continued use of independent judgment by each individual Justice when facing a potential ethics concern (g., deciding to engage with the public or to recuse themselves from a case). Notably, there is no mention of potential ethics reform for the Supreme Court.
  • Fugees Rapper Guilty of Campaign Finance Violations and Illegal LobbyingThe Washington Post reports that, in a federal trial, a jury found Fugees rapper Pras Michel guilty of ten counts of corruption, including “campaign finance violations, money laundering, illegal lobbying…” According to authorities, Malaysian financier, fugitive Low Taek Jho, stole billions from Malaysia’s sovereign wealth fund, and in 2012, paid Michel $20 million to arrange for a photograph of himself with Obama. Michel used the money to buy over $800,000 in tickets to Obama events, mostly in other peoples’ names to avoid contribution limits, and prosecutors argued that these purchases were unlawful “conduit contributions” originating from Low (and his embezzled money). In addition, when Low was subject to a U.S. investigation, without registering as a lobbyist, Michel received tens of millions in compensation to lobby the Trump administration to end the probe.
  • West Haven, Connecticut’s Lawyer Awarded City Contracts to His Wife and Own Law FirmCT Mirror reports that West Haven’s top attorney, Lee Ternan, assigned legal work on city matters to his wife and his own private law firm, and the city mayor has suspended Tiernan for “purportedly not filling out an ethics report properly.” Unlike most city contracts worth more than $10,000, outside legal services approved by Tiernan, in his capacity as the city’s corporation counsel, or the mayor, are not required to go through a public bidding process. Still, the city charter explicitly prohibits a city official or employee from accepting any benefit or income “in addition to that received in his official capacity, for having exercised his official powers or performed his official duties.” 
  • Denver District Court Judge Ruled a Nonprofit Was Not Required to Disclose Donors: The Colorado Sun reports that a Denver District Court judge found a nonprofit that spent $4 million on 2020 ballot initiatives (24% of its overall spending that year) was not required to register and disclose its donors because its spending on a ballot initiative was not its “major purpose.” The judge also ruled that the nonprofit was not required to pay the $40,000 fine imposed by the state Secretary of State’s Office. The article notes that although the state legislature changed its campaign finance rules for dark-money groups in 2022, that change was not retroactive and did not apply to the 2020 activity of the nonprofit in this lawsuit.
  • Nebraska Councilman Federally Indicted For Conspiracy to Steal and Accepting Bribes: The Lincoln Journal Star reports that based on information gathered through wiretaps and text messages, an Omaha councilman, Vinny Palermo, and three other men, including former police officers, have been federally indicted for stealing money donated to a peace officers association and youth sports program. At least two of the men allegedly “provided personal and financial benefits, ‘to include airfare, luxury hotel accommodations, travel arrangements, and other items of value’ in exchange for official actions taken by Vinny Palermo in his capacity as a city councilman.”
  • Former New York Governor Cuomo Filed Lawsuit Against State Ethics Commission: Times Union reports that former New York Governor Andrew Cuomo filed a lawsuit against New York State Commission on Ethics and Lobbying Government, “alleging that it is so independent from the current governor it is unconstitutional.” If the court rules that the Commission is an unconstitutional body, then its enforcement action against Cuomo relating to his book, which the Commission asserts was produced by staff on government time, will be deemed invalid.