HomeEssential Ethics / September 30, 2022

Essential Ethics

September 30, 2022

Latest Developments:

  • The Governor of California signed AB 1783, which, among other things, amends the Political Reform Act of 1974 to expand the definition of lobbyist “administrative action.” According to the legislative summary, while “[e]xisting law requires the Insurance Commissioner and the Director of the Department of Managed Health Care to approve certain transactions involving insurers and health care service plans, respectively…’administrative action’ now includes any decision or approval by the Insurance Commissioner or the Director of the Department of Managed Health Care under these provisions.”
  • The Securities and Exchange Commission fined four investment firms for violating federal pay-to-play rules, all of which were “five-figure civil penalties against four firms whose personnel made prohibited contributions of $1,000 or less, including a contribution of just $400.” The rule prohibits certain advisors who provide services to a state or local government entity from making a “political contribution to certain state or local government officials in the prior two years.” Notably, one commissioner questioned the public benefit achieved by these enforcement actions, and suggested that the SEC should consider ways of “better tailoring the rule… without hindering political engagement.” Mondaq provides more coverage.


On October 5 from 1- 2 PM ET, please join Nielsen Merksamer’s Joel Aurora and other practitioners and regulators for an ABA webinar titled, “Is the Tide on Campaign Finance Disclosure Quietly Shifting? A Look One Year After Americans for Prosperity v. Bonta.” This panel will discuss the state of nonprofit disclosure laws one year after Bonta, examining the outcome of challenges to campaign finances laws that were brought in the case’s aftermath and the surprising ways courts have applied the new Bonta standard of review in election law cases. Click here for more information and to sign up.

In Case You Missed It:

  • Laundering at the Spa: The Federal Election Commission refused to move forward on further investigation into a Florida spa that funneled campaign contributions to former President Trump for the Chinese government and other foreign moguls. The Miami Herald reports that Commission staff concludes laws were likely broken when spa owner Cindy Yang “over an 18-month period…published online ads targeting overseas clients — mostly from China — promoting Trump fundraisers as opportunities to mingle with the then-president, his family and other top Republicans.” Yang would then make the contributions in the name of friends. Commissioners who objected to further investigation cited the impending statute of limitations as not permitting sufficient time for a comprehensive interview. Additional FEC activity indicates that while this case for unique circumstances did not advance, investigating national cases remain a high and bipartisan priority.
  • Non-Profits May Proceed Unhindered in CA: The Governor of California vetoed SB 834which would have authorized the state Franchise Tax Board to revoke the tax exempt status of state non-profits allegedly involved “treason, insurrection, and seditious conspiracy, as provided” in federal law. The Sacramento Bee quoted the bill’s author as having the January 6, 2021 capitol riots in mind. Indeed, a legislative analysis “estimated California would spend $754,000 during fiscal year 2022-2023 and $1.1 million during fiscal year 2023-2024 and in subsequent years to investigate nonprofits” for these violations. The governor noted in his veto message that issue related to revoking non-profit status for these allegations, “are issues that should be evaluated through the judicial system with due process and a right to a hearing.”