Latest Developments:
- The Internal Revenue Service published final amended regulations that revise rules governing when a nonprofit organization must disclose its donors on Schedule B. The Hill explains that “only charities that are tax-exempt under Section 501(c)(3) of the code and political organization(s) that are tax-exempt under Section 527 will still have to report contributor names and addresses.” The IRS also declared as “obsolete” its prior Revenue Procedure 2018-38, which sought to achieve the same result but was blocked by the courts. Many states have required copies of the donor information that formerly was submitted to the IRS. The result of the federal change, as Bloomberg Tax put it, is that the burden is “now on states to seek more information about nonprofit donors if they want it.”
- COVID-19 Update: Government officials, agencies, and courts continue to respond to the COVID-19 emergency. Each week we will add the latest information. For more information about filing deadlines, contact our Political Reporting Unit. Among the more notable developments this week:
-
- California COVID-19 Contracts are available online. But CalMatters reminds us that California does not require disclosure of lobbying for these procurement contracts. A 2016 bill would have required disclosure, but the former Governor vetoed it because public contract bidding procedures “contain ample opportunity for public scrutiny.” However, as the article points out, “all those rules are scrapped during an official state of emergency, which [Governor] Newsom declared on March 4 due to the pandemic.” The state has engaged in sole-source contracts worth hundreds of millions of dollars without much public scrutiny or legislative oversight. The contracts may be disclosed, but any lobbying connected to the contracts is not disclosed.
-
- The United States Court of Appeals for the District of Columbia turned down an effort by the American Association of Political Consultants to include registered lobbyists among the kinds of businesses that are eligible under the Paycheck Protection Act. The Hill reports that “the panel rejected the group’s argument that excluding lobbyists and political consultants from the loans violated the First Amendment.”
- The Washington Public Disclosure Commission met this week and, among other things, approved emergency regulations to implement SB 6152, which takes effect June 11. That bill concerns “foreign involvement and financing in campaign activities.” The regulations define “prohibited financing by foreign nationals” and “prohibited decision-making involvement by foreign nationals.” The regulations also set forth the form that committees must complete when a contribution is accepted to certify that the contribution is not from a foreign national. Staff promised that additional guidance will be issued in the future to supplement the regulations.
- The United States Court of Appeals for the District of Columbia issued an opinion in Freedom Watch, Inc. v. Google, in which the court reminds us that “the First Amendment ‘prohibits only governmental abridgment of speech.’” The plaintiffs alleged that several social media platforms conspired to suppress their speech. But the court noted that “‘a private entity who provides a forum for speech is not transformed by that fact alone into a state actor.’”
- The Governor of Oklahoma approved HB 3613, the “Personal Privacy Protection Act.” The measure bans state and local agencies from asking about “personal affiliation information,” which includes financial donor information. The Chickasaw Express-Times reports that the Governor’s approval of the measure “could result in the state’s electronic campaign reporting system being taken offline, according to Ashley Kemp, executive director of the state Ethics Commission.” The bill takes effect November 1, 2020.
Reminder:
New Subscribers: This email provides a summary of commentary, developments, and media reports for the current week. For the archive of weekly updates since February 2018 visit our website at: www.nmgovlaw.com/ee.
In Case You Missed It:
- Guess Who’s Coming to Dinner? – Your CEO: The Wall Street Journal reports on the U.S. Secretary of State’s dinner parties at taxpayer expense, which are under scrutiny by Congressional Democrats. Former diplomats told the Journal that “they were held to stricter standards regarding the use of taxpayer funds.” One former diplomat cautioned, “Simply to have celebrities or CEOs over to the State Department-and especially those that are almost entirely domestically focused-is quite questionable.”
- Lobbyist Gift Disparity: The St. Louis Post-Dispatch reviewed reports filed with the Missouri Ethics Commission now that the Missouri State Constitution bans lobbyist gifts to state officials. “Although Missouri lawmakers are banned from accepting all but the smallest gifts from lobbyists, local officials continue to rake in freebies from companies doing business with cities and counties.” Local gift bans have been proposed but not enacted by the legislature, according to the article.
- Spending Intent Disputed: According to the Associated Press, the Maine Commission on Governmental Ethics and Election Practices is seeking disclosure of donors by Stop the Corridor, a committee that spent over $1 million on television and social media ads to oppose a 145 mile transmission line. Approval of the transmission line will appear on the November ballot. The Commission’s action follows a staff investigation, which sought to determine if the organization must register as a political action committee or ballot question committee. According to the article, “Stop the Corridor said it did not have to disclose donors because it intended to influence the permitting process, not the referendum vote.”
- Troubled Trade Association Lobbyists: Politico reports that “K Street is in cutback mode.” One of the major problems is that trade associations rely on revenue from events they host. According to the article, “trade groups estimated they would lose at least a quarter of their revenue because of canceled events and conferences.” As a result, several associations have “laid off staffers since the pandemic hit.