Latest Developments:
- The Federal Ninth Circuit Court of Appeals reversed a lower court’s decision and upheld the California Attorney General’s requirement that nonprofit organizations that engage in political spending must disclose their donors to the state, as reported on an IRS Form, “Schedule B.” According to Politico, “The Americans for Prosperity Foundation had argued that the state’s rules requiring filing of the donor list violate the First Amendment by discouraging individuals from giving and by exposing them to threats and harassment.” Politico reports that in Americans for Prosperity Foundation v. Becerra, the court held that “the state had a legitimate need for the data and that the Koch-founded group had not shown a significant burden on donors.” As we previously reported, the U.S. Treasury Department has announced, in Revenue Procedure 2018-38, that the IRS will no longer require that the names and address of donors be disclosed on Schedule B for tax years starting with those that end December 31, 2018.
- The Federal Eighth Circuit Court Appeals affirmed a lower court ruling holding that the provisions of Missouri Constitutional Amendment 2, approved by voters in November 2016, which impose a ban on PAC to PAC transfers, violates the First Amendment. In Free and Fair Election Fund v. Missouri Ethics Commission the court noted that the Eleventh Circuit has upheld a ban on PAC to PAC contributions in Alabama, but distinguished the circumstances of that ban.
- The Massachusetts Supreme Court upheld the state’s ban on corporate contributions in 1A Auto, Inc. v. Director of the Office of Campaign and Political Finance. The Boston Herald reports that the court pointed out that a business may still spend as much as it likes on independent expenditures.
- The New York Joint Commission on Public Ethics met Wednesday, September 12.
- The Commission discussed a proposal to amend state law to permit the Commission Chair or designated staff to publicly disclose that a matter is under investigation, has been closed, or has been deferred at the request of law enforcement. Commissioners, by consensus, asked that the measure be posted online with a request for public comment. The matter will come back before the Commission next month with those public comments.
- On Thursday, September 20 at 1:30 p.m. EDT, the Commission will hold a training on the new lobby regulations. Over 500 people have signed up for the training, and as a result, the training will be live-streamed on the Internet. A video of the training will be subsequently posted on the Commission’s website
- The Oklahoma Ethics Commission meets Friday, September 14. The Commission’s agenda includes a discussion of three amendments to Rules, including campaign finance rules regarding coordination, lobbyist rules concerning disclosures, and revolving door provisions for elected officers and chief administrative officers.
- The California Fair Political Practices Commission meets next Thursday, September 20. The agenda includes a report from the Enforcement Review Task Force, a continuing discussion on Bitcoin and crypto currency contributions, and a discussion of Citizens for Responsibility & Ethics v. F.E.C, which staff finds inapplicable to the FPPC.
- The Oakland Public Ethics Commission met on Tuesday, September 11, 2018, and took up the matter of alleged improper gifts of sports tickets to the Mayor and to City Council Member McElhaney. The staff report (as detailed here last week) cleared them of any wrongdoing with regard to use of city tickets. Apparently, seven more cases of city officials’ allegedly improper use of tickets are pending; the Commission sent the matters back to staff for further consideration. The Commission expressed that, in the future, a “public purpose” must be provided to support the personal use of city tickets for exempt official business and referred the policy question regarding tickets to a subcommittee to clarify the Commission’s position. In addition, the San Francisco Chronicle reports that Council Member McElhaney faced a proposed penalty of $8,625 for taking improper gifts from a developer; the Commission reduced that penalty to $2,550.
In case you missed it:
- Free Stuff for Campaigns: The Federal Election Commission issued a ruling permitting Microsoft to provide “enhanced online account security services at no additional charge on a nonpartisan basis to its election-sensitive customers, including federal candidates and national party committees.” The commission found that the provision of the services is not a prohibited in-kind donation as the services provided are commercial in nature and not political.
- More Light on Dark Money: Issue One has issued a report entitled Dark Money Illuminated, which discusses the top 15 spenders of dark money, from the U.S. Chamber of Commerce (No. 1) to Planned Parenthood (No. 15). Issue One created a database of donors to those 15 entities.
- Judicial Campaign Settlement in the Land of Lincoln: State Farm settled a case in which it was accused of funneling campaign contributions through entities that are not required to disclose contributors. The Insurance Journal reports that the contributions were intended for an Illinois Supreme Court Justice who won and ultimately voted to wipe out a billion-dollar verdict against the company. The company denied wrong-doing, but agreed to pay a $250 million dollar fine.
- Not a Day at the Beach: Taxpayers May be Stuck for Ethics Violations: The Los Angeles Times reports that five current and former members of the California Coastal Commission were found to have violated ethics/disclosure laws and fined. In addition, Spotlight on Coastal Corruption, which brought the suit, has been awarded $959,000 in attorney’s fees. The Times speculates that taxpayers, rather than the commissioners, may end up footing that bill for these fees, which is in addition to the $650,000 spent on the Attorney General’s legal expenses to defend the commissioners. The Attorney General has appealed.