HomeEssential Ethics / October 21, 2022

Essential Ethics

October 21, 2022

Latest Developments:

  • The Center for Political Accountability announced that its noted “CPA-Zicklin Index of Corporate Political Disclosure and Accountability” would be expanded from “rating S&P 500 companies to evaluating the entire Russell 1000.” In effect, the expansion means the index now “gives attention to large and medium-cap U.S. companies that are not S&P 500 components.” The 2022 Index was released this month, providing its annual ranking of corporate political spending and transparency. JP Supra has more coverage.
  • The United States Department of Justice announced the sentencing this week of a former Congressional candidate “for wire fraud and falsification of records” related to his failed 2020 Congressional campaign. According to the DOJ, the former candidate received COVID-19 related federal loans for his small business and then “used a significant portion of these funds for…political advertisements.” He also “told employees…that they could continue to be paid their normal wages if they worked on his congressional campaign,” which they did. The candidate’s FEC report “omitted any in-kind contributions…including the thousands of dollars of in-kind contributions to his campaign in the form of employee time and work.”

In Case You Missed It:

  • Friendly PAC Causes an Internal Squabble: Politico reports on a public feud over resources between Democratic Coalition, a progressive political action committee, and a US Senate nominee supported by that PAC, whose campaign called the committee a “scam” for using the candidate’s likeness to raise funds. While the quarrel is only the latest in a controversial saga for the organization, accused by likeminded campaigns “of soliciting money from impassioned liberals only to spend it on its own operations,” it highlights increased attention on these PACs and their spending by “the federal government [which] has only recently begun to mobilize in earnest.” Indeed, the article notes that the FBI issued a warning last year, alerting donors to these potential cons and the “FEC heard recommendations from a working group [after the last election cycle] on how best to address the issue” of PAC fundraising and proper use of funds.
  • More Candidates Paying Themselves Back: Open Secrets reports on the increasing trend of post-election contributions to victorious federal candidates who self-funded and now seek to pay themselves back. The trend increased after a rule change, in response to the SCOTUS decision FEC v. Cruz, which removed the “restriction on an authorized committee’s repayment of personal loans.” The article notes that self-funding by federal candidates this year has already exceeded that of four of the last five election cycles. Critics contend that these developments allow candidates “to skirt contribution limits…effectively allow[ing] a candidate to go to hit up a single donor for more than the campaign contribution limits by asking them to also make contributions to their prior election cycles for loan forgiveness.”