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Essential Ethics: Check Out the Latest Developments in Political Law, Public Briefings and Client Workshops

Nielsen Merksamer, a leader in national political law compliance, hosts briefings, workshops and communications to share best practices and recent developments in campaign finance, lobby disclosure and government ethics laws across the nation.  For the latest from our research team, read on….

WEEK OF July 31, 2020

Latest Developments:

  • The North Dakota Ethics Commission is seeking an opinion from the state’s Attorney General concerning the extent of its authority over gifts.  The commission is in the process of adopting proposed gift rules.  The Bismarck Tribune reports that gift rules adopted by the legislature don’t cover all the individuals over whom the commission has jurisdiction.  The Commission seeks clarity as to its “authority to expand on the definition of ‘lobbyist’ as it relates to gifts.”
  • The United States Attorney in Chicago announced that Commonwealth Edison (“ComEd”), the largest electric utility in Illinois, “agreed to pay $200 million to resolve a federal criminal investigation into a years-long bribery scheme.”  The CEO of ComEd subsequently apologized for his company’s part in the matter.  According to WGNTV, ComEd “admitted ‘wrongful conduct’  in an alleged bribery scheme involving Illinois House Speaker Rep. Michael Madigan.”
  • The California Fair Political Practices Commission appointed Galena West as its new Executive Director.  Ms. West has served as the Chief of the Enforcement Division for the past five years.

Reminders

 The Practising Law Institute presents Basics of the Federal Election Campaign Act 2020 on Tuesday, August 4 at 1 p.m. Eastern (10 a.m. Pacific).  The one-hour update covers federal candidate and PAC campaign law including issues with contributions, the Federal Election Commission, disclosure matters, and tax issues for political organizations.  The program is an introduction to and includes the three co-chairs of the Corporate Political Activities program, including Jason Kaune of Nielsen Merksamer. Register here.

In Case You Missed It:

  • Developers’ Dilemma:  The Los Angeles Times poses the question of what happens to the plans of developers who are alleged to have bribed a Los Angeles City Council Member?  None of the developers have been charged by investigators.  While none of the projects identified has been completed, city officials have taken steps to “obstruct one of those projects.” 
  • Fast Moves:  The Speaker of the Ohio House was unanimously ousted following his indictment on federal corruption charges.  The Toledo Blade reports that the former speaker has not resigned and retains his house seat.  AP reports that a former Supreme Court Justice, Representative Bob Cupp, has been chosen as the new speaker.  He is described as “a man of integrity” who can bring unity to the chamber.
  • Smokin’ Election Crime:  The Los Angeles County District Attorney announced a plea deal in a “scheme where money and cigarettes were offered to homeless people on Skid Row in exchange for false and forged signatures on ballot petitions and voter registration forms.”  KTLA reports that the group were given suspended state prison sentences; one person in the scheme remains at-large.

WEEK OF July 24, 2020

Latest Developments:

  • The Federal Bureau of Investigation announced the indictment of the Speaker of the Ohio House of Representatives, in addition to indicting a nonprofit 501(c)(4) organization and four other individuals, including three lobbyists.   The announcement alleges that an energy company funneled $60 Million to the nonprofit, which was created by the legislator.  The Columbus Dispatch reports that the nonprofit supported the legislator’s candidates and supported a bill “that included ‘a monthly charge on all Ohioans’ energy bills’ to subsidize the company’s two failing nuclear power plants, according to court documents.”  The FBI’s press release notes that the legislator allegedly received over $400,000 in personal benefits, “including funds to settle a personal lawsuit, to pay for costs associated with his residence in Florida, and to pay off thousands of dollars of credit card debt.”
  • 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:
    • The California Legislature will resume its regular session next week after delaying it by two weeks due to the pandemic.  The legislature will permit Members to vote remotely or by proxy.  The Sacramento Bee reports that Members need approval in advance to stay home and those who stay home will lose their per diem expense payments.  The session status of every state legislature may be found on the website of the National Conference of State Legislatures.

Reminders:

Interested in issues of gender and elections?As part of a year-long celebration of the Nineteenth Amendment, the American Bar Association is sponsoring a series of programs for lawyers about the progeny of women’s suffrage.  Upcoming programs include:  

  • The Power of Women in U.S. Elections,  at the ABA annual (virtual) conference on Friday, July 31.  “This panel will address voter suppression, election protection, and voting rights reform strategies ahead of the November 2020 election.”  Register here for the conference.
  • The 19th Amendment Then and Now: Lessons for the 21st Century.   The panel will “explore the legacies of the [Nineteenth] Amendment and engage in provocative conversations about how to ensure full and equal exercise of the right to vote for all.”  The program will be available after August 9, on demand, here. (Free for Members.)
  • Gender Parity in the Electoral Process, on Monday, August 24.  This ABA CLE program will cover the “current impact of the 19th Amendment, and other laws, on elections and our present democracy as reflected in a recent article, Looking at the Nineteenth Amendment through a Twenty-First Century Lens.”  The panel will be moderated by Jason Kaune of Nielsen Merksamer. Register here.  (Free for Members.)

In Case You Missed It:

  • Prison Time for Contributions:  The Louisville Courier Journal reports that a former state party chair and father of the former Kentucky Secretary of State was sentenced to 21 months in federal prison for funneling corporate contributions to his daughter’s U.S. Senate campaign.  Kentucky is one of the states that prohibits corporations from contributing to state office campaigns.  The article also points out that a campaign consultant involved in the scheme was sentenced to nine months in a halfway house, three years of supervision, and a $50,000 fine.
  • Golden Gate Clean-up Proposed:  As the FBI’s corruption probe widens in San Francisco City Hall, a Member of the Board of Supervisors introduced Ordinance 200787 to close a loophole in the city’s contracting process.  The San Francisco Chronicle reports that “the ‘No GRAFT Act’ – short for government rackets, abuses or fraudulent transactions – would create a blanket set of rules for how departments award contracts to prequalified pools of companies bidding for city work.”
  • New York Zombies:  The Adirondack Daily Enterprise reports on state campaign funds that continue after a public official leaves office.  According to the article, New York law “only requires that the fund be dissolved when the person who held or is holding office dies.” At least one currently registered lobbyist holds several hundred thousand dollars while another retired official holds over a million dollars in campaign funds.
  • Lobbying Pays OffRoll Call discloses that a trucking firm spent $210,000 on lobbyists in the days before it landed a $700,000,000 COVID-19 loan from the Department of the Treasury.  The loan gave the government a 29% stake in the firm.  The company was described as “struggling financially” before the pandemic but is viewed as “a ‘business critical to maintaining national security'” because of its defense contracts.

WEEK OF July 17, 2020

Latest Developments:

  • The Wisconsin Ethics Commission issued a formal opinion that lobbyists may make contributions to state candidates during contribution window regardless of whether or not the candidate appears on the ballot in the next election.
  • 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:
    • The California Legislature, which was scheduled to return to work last week, has postponed its session until the end of the month due to COVID-19.  The Los Angeles Times reports that two members of the legislature have tested positive and one has been hospitalized.
    • The National Conference of State Legislatures has a tracking tool that keeps track of legislative sessions that have been postponed or delayed by COVID-19.  In addition to California, both Illinois and Nebraska currently have sessions postponed by COVID-19.  One effect of the many delayed or extended sessions is that lobbyist reporting periods and deadlines may be different than in “normal” years.
  • The Missouri Ethics Commission announced a new online annual report that contains statistics of activity reported to the Commission.  According to the Commission, the report “includes real time data in both graphic and table form, reported to the MEC during a calendar year.  Electronic information can be found from calendar years 2017 forward, in the areas of campaign finance, lobbying, and personal financial disclosure.”
  • The Los Angeles City Ethics Commission published a summary explaining that members, officials, and other representatives of Business Improvement Districts must register as lobbyists if they meet the threshold qualifications in the city’s lobby ordinance.
  • The San Jose City Council is proposing to place a measure on the November ballot to create a strong mayor form of government.  Included in the proposal is a ban on contributions and gifts from lobbyists and a ban on gifts from contractors.  The Charter amendment would also require the Mayor and Council Members to recuse themselves on any matter that affects a person who has contributed to their campaign committees.

In Case You Missed It:

  • Contribution Sources Analyzed:  The Campaign Finance Institute issued a new report that indicates that large donors and PACs dominate funds raised in state campaigns.  While more than 5% of adults in Wisconsin and Rhode Island donate to those campaigns, 0.5% or less of all adults contribute to statewide or state legislative races in California and Utah.
  • California Oil Regulators Adopt Ethics:  The Palm Springs Desert Sun reports that the “California Geologic Energy Management Division (CalGEM) in particular has been the target of accusations of impropriety related to its leadership’s ethics.” According to the article, the new ethics policy “forbids employees from maintaining financial holdings, such as stocks, in businesses they regulate without written approval from the department’s director.”
  • SF Corruption Probe Widens:  According to the San Francisco Chronicle, The FBI investigation into corruption at San Francisco City Hall has taken a new turn. New subpoenas indicate that the FBI is looking for information about possible corruption in the City Administrator’s Office, the Planning Department, and the Department of Public Health.
  • Bribes or Contributions:  The Toledo Blade reports that, in the FBI’s investigation of Toledo City Council Members taking bribes, the “line between what constitutes a campaign contribution and what constitutes a bribe may be fuzzy to some because of a culture in which politicians and businesses, interest groups, and unions symbiotically support each other through campaign contributions and favorable votes on legislation.”  The article points out that everyone agrees that there is an “absolute ban on promising to vote for something in exchange for something of value.”

WEEK OF July 10, 2020

Latest Developments:

  • The United States Supreme Court, in Barr v. American Assn. of Political Consultants, upheld most of the Telephone Consumer Protection Act of 1991, which banned most robocalls.  Political consultants and others challenged the law based on the theory that an exception added to the law for debt collectors was impermissible as content-based.  CNN reports that the court upheld the ban on political robocalls to both landlines and cellphones, “rejecting a bid … to open the floodgates for campaign ads and other communications.”
  • 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:
    • The Nevada Legislative Counsel Bureau announced that lobbyists will not be required to register for the upcoming special legislative session.  The legislative building will be closed to the public due to the pandemic.The Nevada Legislative Counsel
    • The Texas Ethics Commission issued an advisory opinion regarding whether a lobbyist is “present” at an event via video technology, such as a Zoom meeting, for purposes of providing food and beverage under a gift exception.  (Ethics Advisory Opinion 556).
  • The Texas Ethics Commission also issued two other advisory opinions, including one addressing whether a contribution from a federal PAC to a federal Super PAC is an expenditure on a Texas election (Ethics Advisory Opinion 554).  The opinion is relevant to federal PACs active in the state which must measure the portion of expenditures made in the state to determine whether they remain an “out of state” committee or must instead file as a state PAC.
  • The Louisiana Board of Ethics adopted a regulation to increase the limit on the amount a lobbyist may spend for food, drink, or refreshments for a covered official to $63 at any single event, effective July 1, 2020.
  • The Oakland Public Ethics Commission launched a new online lobbyist registration and reporting system.  The system is available from the OakApps platform.  According to the Commission, “Going forward, all registration and report documents will be filed electronically.”

In Case You Missed It:

  • West Virginia Transition:  According to the Huntington Herald-Dispatch, Rebecca Stepto is retiring as the Executive Director of the West Virginia Ethics Commission at the end of the month.  The Commission appointed General Counsel Kim Weber as Interim Executive Director.
  • White House TransitionsPolitico reports that “(m)ore than 80 former administration officials have registered as lobbyists.”  The article characterizes the movement as a “mass migration to K Street” and discusses the practical application of the administration’s ethics pledge, which differs from federal revolving door statutes.   As the door revolves, the article also notes that some former administration officials who left and registered as lobbyists have “already returned to the government.”
  • Aloha to the Purse Strings:  The Honolulu Star-Advertiser reports that the City Council unanimously approved placing a charter amendment on the November ballot to give the Honolulu Ethics Commission more control over its own budget.  According to the article, the measure “would specifically prohibit the withholding of funds from the commission once its annual budget is approved by the Council each year.”

WEEK OF July 3, 2020

Latest Developments:

  • The President of the United States announced his intention to nominate Allen Dickerson to the Federal Election Commission.  The Wall Street Journal has background information about Mr. Dickerson.
  • The United States Department of Justice issued a release detailing the arrest of “four Toledo City Council members and a local attorney [who] have been engaged in a pay-to-play scheme involving bribes for Council votes.”  The group is alleged to have extorted money, including campaign contributions, from citizens seeking permits and other Council approvals.  The Toledo Blade quotes one legal scholar who opines that “(t)he line between legal financial contributions and criminal activity can be blurry.”
  • The San Francisco Controller issued a Public Integrity Report in response to the indictment of the former Director of Public Works.  The report covers potential problems with the procurement process, including instances when competitive bidding is not required, gift restrictions and exceptions, and enforcement of ethics provisions.

Reminder:

COVID-19 Update:  Government officials, agencies, and courts continue to respond to the COVID-19 emergency.  There are no major developments this week.  For more information about filing deadlines, contact our Political Reporting Unit.

In Case You Missed It:

  • Elections Official FinedThe New York City Conflict of Interests Board fined the Executive Director of the New York City Board of Elections in connection with his service as an unpaid advisory member of a vendor that sells software to his board.  Gothamist reports that the Executive Director received reimbursement for travel for which there was no city purpose.
  • Conflicts Waived for Congress:  The Washington Post reveals that Members of Congress and their families benefited from a “brief and barely noticed ‘blanket approval’ issued by the Trump administration [that] allows lawmakers, Small Business Administration staff, other federal officials and their families to bypass long-standing rules on conflicts of interest to seek funds for themselves” from the Paycheck Protection Program.
  • Timing is Everything:  The Salt Lake Tribune reports that a lawmaker and a lobbyist formed a PAC “one day after deadlines that would have required disclosing its donors and expenses before Tuesday’s primary election.”  According to the lobbyist, the “timing was purely coincidental and was in reaction to a late attack ad.”

WEEK OF June 26, 2020

Latest Developments:

  • The Federal Election Commission is losing its quorum, again.  Commissioner Caroline Hunter tendered her resignation to the President, effective July 3, 2020.  Politico reports that she will join the legal team of a nonprofit that works on criminal justice reform.  The Commission has a 300-case enforcement backlog and only regained its quorum last month after a 9-month hiatus.
  • The Federal Bureau of Investigation issued a release announcing that Jack Abramoff  has been charged in an information that alleges, among other things, that “he knowingly and corruptly failed to register as a lobbyist, as required by the Lobbying Disclosure Act, after being retained for lobbying efforts that would involve one or more lobbying communications with a federal official.  This is the first ever known prosecution of a lobbyist for a criminal violation of the Lobbying Disclosure Act.”
  • The New York Joint Commission on Public Ethics met and voted to send revisions to the Comprehensive Lobby Regulations and the Source of Funding (for lobbyists) to the formal rulemaking process.  The regulations will be formally published, and a 60-day public comment period will commence.
  • The Hawaii State Ethics Commission adopted amended administrative rules relating to lobbying and gifts.  The regulations are designed to eliminate double reporting by lobbyists and lobbyist employers, clarify grassroots lobbying, clarify the valuation of gifts, and provide exceptions for permissible gifts.  The rules must be approved by the Attorney General and the Governor before taking effect.
  • 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:
    • The New Mexico Supreme Court denied a writ, in Pritle v. Legislative Council (video link, decision at end), to overturn a decision of the legislative Council to bar lobbyists and the general public from sessions of the New Mexico State Legislature, for the duration of the pandemic.  A written court decision will follow.  According the Albuquerque Journal, members of the media will be granted access to the capitol building.
    • The California Fair Political Practices Commission announced that it will resume operating its telephone advice line on July 1, 2020.
  • The Federal Bureau of Investigation announced that it has “arrested Jose Huizar, an elected member of the Los Angeles City Council, on a federal racketeering charge that alleges he led a criminal enterprise that used his powerful position at City Hall to solicit and accept lucrative bribes and other financial benefits to enrich himself and his close associates in exchange for Huizar taking official actions favorable to the developers and others who financed and facilitated the bribes.”  The FBI’s press release alleges that the council member took at least $1.5 million in benefits in a “‘pay-to-play’ scheme.”

In Case You Missed It:

  • $200,000+ Contribution Doesn’t Disqualify: According to an article by Colorado Politics, an attorney contributed over $200,000 to oppose a judge in a retention election.  The attorney’s firm later tried to disqualify the judge from hearing a personal injury case involving the firm’s client.  The Colorado Court of Appeals, in Bocian v. Owners Ins. Co., found that “judicial disqualification is not warranted based on an attorney’s campaign contribution against the judge’s retention where insufficient facts are alleged to place the contribution in context, the contribution occurred months into the litigation, and judicial disqualification would encourage judge-shopping.”
  • Conventions Losing LusterRoll Call reports that corporations and trade associations may skip the national party conventions this year.”‘With dates moving and locations changing, that makes it hard to plan,’ said” one lobbyist.  “The virus isn’t the only thing weighing on corporate lobbying interests either.  Even before COVID-19 upended Americans’ lives, many corporations – worried about associating their brands overtly in politics – had been assessing whether the large investments would be worth it.”  A trade association lobbyist summed it up this way, “we realize the situation is fluid, and we are monitoring events and looking for new ways to participate.”
  • Trade Associations Lobby for Inclusion:  According to The Hill, trade associations are actively lobbying for the ability to qualify for small business loans. The associations continue to call “for changes to the Paycheck Protection Program (PPP) so 501(c)(6) organizations can receive loans.” The associations are concerned that “there may have been a misconception that 501(c)(6) organizations are primarily lobbying groups.”
  • Missouri Candidates Move to PACs: The Missourian reports that elected officials, whose campaigns are subject to contribution limits, have turned to the use of PACs.  PACs “have no limits on the amount they can receive in donations.”  According to the article, “candidates tell their wealthy donors to give to a particular PAC…  The PAC, which can accept unlimited donations, then spends the money to support the candidate who raised it.”

WEEK OF June 19, 2020

Latest Developments:

  • The Federal Election Commission met for the first time in 9 months, with a quorum as a result of the recent appointment of Trey Trainor to the Commission.  The Commission elected Mr. Trainor as its Chair.  The commission also unanimously approved three advisory opinions, AO 2019-15 (which permits a nonconnected committee to deduct a 6% processing fee from earmarked contributions), AO 2019-16 (which permits a nonauthorized committee to use the initials of a candidate), and AO 2019-18 (which analyzes online advertising bought and sold by an online platform).
  • The Alaska Supreme Court, in Meyer v. Alaskans for Better Elections, upheld placing Alaska’s Better Election Initiative, a campaign finance measure, on the November ballot.  The Lieutenant Governor had dropped it off the ballot as violative of the single subject rule.  The court found that the measure, which (1) requires disclosure of the true source of contributions of $2,000 or more, (2) provides for nonpartisan primaries and (3) requires ranked-choice voting, fits within the single subject of “election reform.”
  • 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:
    • The Federal Election Commission reopened portions of its office in “Phase I.” The Commission will process mail, including campaign finance reports filed by USPS, UPS, DHL, or FedEx.  The Commission’s office remains closed to the public.
    • The Chicago Board of Ethics has extended the time to complete lobbyist training.  According to the announcement “lobbyists registered with the City of Chicago must complete the Board’s lobbyist training prior to July 1st each year. Due to COVID-19, the Board has extended that date to the close of business December 31, 2020.”  The Board also announced that it would delay the implementation date for the new nonprofit lobby law from July 1, 2020 to January 1, 2021.

Reminder:

FPPC LLC Regulations:  The California Fair Political Practices Commission, concerned that dark money is passing through limited liability companies (LLCs) as conduits, adopted new regulations aimed at requiring more disclosure.  Among other things the new regulations define an LLC’s “responsible officer” as the individual who approved the contribution and require all committees receiving contributions from LLCs to either report the name of the LLC’s “responsible officer” or refund the contribution.  The new regulations also require LLCs that qualify as independent expenditure committees, recipient committees, or major donors to identify their responsible officer in their statements and reports.  In addition, the regulations provide that an LLC’s responsible officer may be held personally liable for violations of these provisions by the LLC.

In Case You Missed It:

  • Lobbyists Zoom to the FutureRoll Call reports on what lobbying may be like after the pandemic and the protests.   A survey of Washington lobbyists found that “60 percent of those respondents expect the pandemic will usher in a decline in traditional lobbying trips to the Hill and will bring about an even faster rise in digital advocacy and grassroots campaigns than what was already underway.”
  • No Lobbyist Means No Money:  According to the Los Angeles Times, there is a pressing need for public health funding, but there’s little organized advocacy and no paid lobbyists for that. “‘I’ve not met anybody who is a lobbyist for public health,’ said Assembly member Jim Wood (D-Santa Rosa), who chairs the Assembly Health Committee. ‘The organizations that wear the whitest of hats have the least resources. Consequently, it’s easier to say no.'”
  • Facebook Political Message Filter:  The New York Times reports that Facebook will permit users to turn off political advertisements.  According to the article, Facebook will “allow people in the United States to opt out of seeing social issue, electoral or political ads from candidates or political action committees in their Facebook or Instagram feeds.”
  • Personal Use Draws the DAA former county elections chief in the Bay Area has been charged with 34 felony counts “for illegally spending campaign funds for several years,” according to an article from the San Jose Mercury News.  The former official allegedly “used ($261,800 of) campaign money to cover personal expenses between May 2011 and June 2015.”

WEEK OF June 12, 2020

Latest Developments:

  • James E. Trainor III was formally sworn in as a member of the Federal Election Commission, according to an announcement by the Commission.  The Commission now has a quorum.  The Commission’s first public meeting is scheduled for June 18, 2020.
  • The Washington State Attorney General publicized a stipulated judgment against the Freedom Foundation in which the foundation agreed to pay $80,000 as a result of its failure to report in-kind contributions of assistance with proposed local ballot measures related to collective bargaining.
  • 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 ContractsCalMatters discusses its review of some $3 billion worth of no-bid contracts that California handed out during the COVID-19 crisis under some very questionable circumstances.  The article points out that, “in a few instances, readily available public records and some Googling should have raised potential red flags.”
    • Hawaii Contracts:  The Honolulu Civil Beat reports that a company owned by a major donor, who has “given more than $118,000 to about 40 campaigns since 2014,” was awarded a $1.4 million emergency, no-bid contract to clean municipal buses during the pandemic.  According to the article, “the company was hired before a contract was even sent to them.”  The owner counters, “‘We always abide by fair practices and provisions and with accountability’… I operate knowing there will be an audit, I just assume that.'”

Reminder:

 Washington State Senate Bill 6152 took effect June 11 along with the Washington Public Disclosure Commission’s emergency regulations.  The 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 information donors must provide to certify their contributions are not derived from foreign funds or involve foreign nationals.  Political committees are required to obtain this certification from donors and must return contributions that are not certified. We recommend that a certification be included with any contribution made in Washington State.

In Case You Missed It:

  • JCOPE Leadership in Limbo:  According to the Albany Times-Union, the search for a new executive director for the New York Joint Committee on Public Ethics has effectively stopped.  The last executive director left a year ago.   A search committee received over 100 applications, but after sorting those applications and finding “about nine contenders who were to be interviewed, the committee’s effort to hire a replacement suddenly ended.”  The leading candidate is the current General Counsel of JCOPE, but “there are not enough votes in favor of appointing [the current General Counsel], who is regarded as a highly qualified attorney, to the executive director position.”
  • Streaming DisclosureCNN reports on the surging market for political advertising on streaming services such as Hulu.  “But the migration by candidates, super PACs and political parties to streaming services has set off alarms for some campaign-finance watchdogs because the advertising isn’t subject to the same disclosure requirements that have governed traditional media for decades.” One observer opined that the “rules governing our campaigns have not kept pace with our changing modes of communication and changing life.”
  • Gift Hearing: According to Colorado Public Radio, the Colorado Independent Ethics Commission found that the former Governor violated the state’s gift ban twice, including accepting free travel to the commissioning of the U.S.S. Colorado.  The Commission dismissed complaints about four other trips.
  • SF Corruption Probe Widens:  The San Francisco Chronicle reports that three more officials, including the Mayor’s Director of the Office of Neighborhood Services and a pair of potential contractors, have been charged in a federal investigation of city hall corruption.  The Director of Public Works and a city restauranteur were charged in January with honest services fraud for conspiring to fix contracts.  The federal prosecutor alluded to more coconspirators who may be charged.

WEEK OF June 5, 2020

Latest Developments:  

  • The United States Third Circuit Court of Appeals, in Deon v. Barasch, struck down Pennsylvania’s broad ban on campaign contributions from the gaming industry.  The Harrisburg Patriot-News reports that the court found that the “state’s prohibition goes too far.” The article summarizes the conclusion that “Pennsylvania officials have not proven that their total ban is justified when those other states impose lesser restrictions that don’t severely infringe free speech rights.”
  • The United States Department of Justice’s Foreign Agents Registration Act (FARA) Unit recently released “Letters of Determination” transmitted from 2017 to the present that resulted in an entity or individual registering under FARA.  When the FARA Unit determines that a registration obligation exists, the Unit sends a Letter of Determination to the potential registration setting forth relevant facts, applicable statutory and regulatory provisions, and its analysis.  These Letters are largely unredacted and provide a greater level of legal analysis than the Advisory Opinions released publicly in 2018.  While only one Letter was issued under the current Chief of the FARA Unit, these Letters provide valuable information to those in the regulated community as to the Unit’s focus and interpretation of FARA.
  • The United States Supreme Court declined to review the Ninth Circuit’s decision in National Assn. for Gun Rights v. Magnan.  The decision upheld Montana’s requirement that nonprofits register as political committees if, within 60 days of an election, they run any type of advertising that refers to a candidate or ballot measure.  The case is now final.
  • 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:
    • The Chicago Board of Ethics, “in light of the COVID-19 pandemic,” further extended the deadline to file first quarter lobbyist activity reports, from June 1 to July 1, 2020.

Reminder:

 Elections Update:   Executive Order N-67-20, signed by California’s Governor on June 3, seeks to ensure in-person voting opportunities are available in sufficient numbers to maintain physical distancing.  It requires counties to provide three days of early voting starting the Saturday before election day and requires ballot drop-box locations be available between October 6 and November 3, while also allowing counties to consolidate voting locations, with at least one voting location per 10,000 registered voters.  The Legislature is also considering further action on universal mail elections.  For the latest information and inquiries about California government law resources related to the COVID-19 pandemic, check out our website.

 In Case You Missed It:

  • Nonpartisan EthicsThe Governor of Kentucky appointed three individuals to the five-member Kentucky Executive Branch Ethics Commission.  According to the Associated Press, the Democratic Governor “said he would take recommendations from the state attorney general and state auditor for two more positions. Both the AG and the auditor are Republicans.”
  • Unrelated(?):  The Mayor of Raleigh, according to the Raleigh News & Observer, “began interviewing for her new job with a construction company nine days after the company received a $6.3 million city contract.”  Critics call it a “conflict of interest.”  The contract was awarded to the lowest of six bids by unanimous approval of the city council including the Mayor.  The Mayor accepted her new job as Director of Business Development for the contractor about six weeks after the contract was awarded.
  • Virtually Tapping Lobbyists for Contributions:  The Hartford Current reports on how legislators turn to lobbyists for contributions as soon as the legislative session ends.  (Connecticut has a ban on contributions during the legislative session.)  Yet unlike past years, no post-session, in-person fundraisers are scheduled.  As an example, the Current quotes a fundraising email from a legislative leader stating that the leader’s PAC “‘was hoping to host a summer fundraiser, but in light of our social distancing efforts, I’d like to offer some 1-on-1 time, via Zoom.'”

WEEK OF May 29, 2020

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 LobbyistsPolitico 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.

WEEK OF May 22, 2020

Latest Developments

  • The United State Senate confirmed James E. Trainor III “to be a Member of the Federal Election Commission for a term expiring April 30, 2023.”  Politico points out that the action restores a quorum of the Commission after 37 weeks of hibernation.  Bloomberg Government reminds us that the commission “could resume its pattern of deadlocking on enforcement cases, leading to dismissal of alleged violations of disclosure requirements” and ending the ability of others to step in to file civil lawsuits against alleged transgressors.
  • 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:
    • The Governor of California, according to Politico, raised a “record $26M in donations for Covid-19.”  The article points out that many of the donors “lobbied the governor’s office on data privacy and other thorny regulatory matters” at the same time they were making the gifts at the behest of the Governor.  The Sacramento Bee names the major players and quotes a veteran consultant who opines “‘Even if they’re making those donations in order to buy access on legislative or regulatory matters, you still wouldn’t want to turn away those necessary supplies.'” Meanwhile the state’s Fair Political Practices Commission continues its deep dive into regulations about so-called behested donations.
    • New York Officials, as described by the New York Daily News, are mixing COVID-19 with self-promotion.  Politicians are handing out hand sanitizer and masks provided by donors.  The head of one watchdog group opined that “Campaigns do give away stuff.  Generally, it’s not particularly valuable stuff…  It’s not white and black but I think [candidates] should check with their lawyers.”
    • Federal Officeholders in Washington, D.C. are planning to resume political fundraisers in June.  But Roll Call reports that “lobbyists and corporate executives, cloistered in their home offices during the coronavirus pandemic, said they were unlikely to sign up for in-person political events in the coming weeks.”  Meanwhile, some fundraisers have “shifted to virtual events.”
  • The New Mexico State Ethics Commission, which was formed last year, presents a webinar on “Filing and litigating complaints with the State Ethics Commission” on Wednesday, June 3, at 12:00 Noon Mountain Daylight Time.  An agenda is available; interested persons may register here.
  • A U.S. District Court Judge issued a permanent injunction barring Arkansas from enforcing its restriction that prohibited campaign contributions more than two years before an election.  The action follows the Eighth Circuit Court of Appeals’ decision in Jones v. Jegley which upheld the judge’s temporary injunction.  The Arkansas Democrat-Gazette quotes the district court judge’s statement that “no new evidence will be presented, and a final order could be entered based on the current record.”
  • The Montana Commissioner of Political Practices sustained a complaint made against a dark money group that is promoting the state’s Attorney General.  The Billings Gazette reports that the American Prosperity Group asserts that its ads “were placed too early in the election cycle to be breaking state campaign law,” airing more than 60 days before the election.  But the Commissioner points out that voting began a month before the early June election and the statute applies to a 60-day period prior to “the initiation of voting in an election.”

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:

  • Big Money Move:  According to the Washington Post, “Donors can now give $620,600 to Biden and DNC.” The Biden Victory Fund, “a committee that raises money with the Democratic National Committee, on Saturday filed an agreement that allows wealthy donors to give large checks that will be shared by the campaign, the party and 26 state parties.”
  • Public Financing Still Alive:  The Brennan Center opines that the U.S. Supreme Court’s recent denial of review in Elster v. City of Seattle is an indication that “the Court continues to affirm that public financing programs are constitutional.” The Elster case left intact the Seattle public financing system that provides four $25 vouchers to eligible residents for contributions to candidates for city office.
  • Who Exactly is a Lobbyist?: City & State New York asks this question, but the answer is not always clear.  The article points out that “the scope of actions that require individuals to register as lobbyists is especially broad in New York.”
  • Business as Usual:  The San Diego Union-Tribune reports that a city official who allegedly took gifts in excess of state limits from city contractors remains on the job five years later.  According to the article, “officials learned about the corruption in 2015 and referred the case to the FBI.”  But the FBI dropped the case and the city has launched its own investigation.  The employee “advised the contractors to increase their projected costs in city contracts and approved options on the contracts that were worth millions of dollars.”  At the same time, the employee received Las Vegas show tickets, home improvements, theme park tickets, a television, meals, golf outings, airfare, hotel, and entry to a Bay Area sporting event.
  • Font Too Small:  The City Auditor imposed a $500 fine on the campaign committee of the Mayor of Portland, Oregon for sending a mailer that “included required disclosures in significantly smaller font than the majority of the text in the printed material.”  The Portland Mercury reports that the campaign previously was accused of a violation and received a warning letter, but this is the first fine issued to the Mayor’s committee.
  • Phantom PAC Returns & Refunds:  We previously reported Politico’s exposé of a PAC filing that reported large contributions and large expenditures.  Politico found that none of the recipients of expenditures had heard of the committee much less received any funds.  Now Politico reports that the phantom committee has “returned” the nearly $5 million in alleged contributions that it received, citing “‘refund due to POLITICO'” in a filing with the Federal Election Commission.

WEEK OF May 15, 2020

Latest Developments

  • The Missouri Legislature approved Senate Joint Resolution 38, which places a measure on the November ballot to reduce legislative contribution limits by $100 and eliminate inflation adjustments, revise the method of redistricting the legislature, and ban gifts from lobbyists and lobbyist employers, which currently are capped at $5 per gift.  St. Louis Public Radio reports that the measure is intended to revise the November 2018 Clean Missouri ballot measure that empowered a demographer to redraw districts.
  • COVID-19 Update:  Government 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:
    • The House Ethics Committee is unable to meet and act on any complaints during the pandemic.  Roll Call reports that until the committee can meet in person, “the Ethics panel cannot issue a subpoena, empanel an investigative subcommittee nor discipline members for conduct unbecoming of the chamber.”
  • The United States District Court for the District of Montana, in Doctors for a Healthy Montana v. Fox, ruled that Montana’s requirements that govern the naming of political committees are not unconstitutional.  According to Courthouse News, a complaint filed with the Commissioner of Political Practices alleges that a “majority of members… were not doctors, but politicians.”
  • The Washington Public Disclosure Commission issued draft regulations to implement the recently approved SB 6152, which bars contributions, expenditures, political advertising, or electioneering communications by a foreign national.  The new law takes effect June 11.  The Commission is seeking comments by May 20 and anticipates approval of emergency regulations at its May 28 meeting.
  • The United States Senate moved forward the nomination of James E. Trainor III to serve on the Federal Election Commission by acting on several procedural matters.  The Senate agreed to hear the matter in executive session, presented a cloture motion, and waived the mandatory quorum requirement.
  • The North Dakota Ethics Commission unveiled its new website.

Reminders:

The Practising Law Institute presents a one-hour program on COVID-19 Political Compliance Considerations for Companies and Nonprofits on May 21, 2020 at 1 p.m. EDT.  Register here for the briefing presented by Jason Kaune and Elli Abdoli of Nielsen Merksamer.  The program, which is free to PLI members, will outline the government ethics, lobby disclosure, and campaign finance rules you need to know in connection with working with public officials, donating goods, and engaging in political activity during the pandemic.

In Case You Missed It:

  • No Relief for Signature Gatherers:  The Arizona Supreme Court, in Arizonans for Second Chances v. Hobbs, turned down a request by four ballot measure committees to permit the committees to collect signatures online.  According to MSN/AZCentral, the committees wanted “to use the same website, known as E-Qual, that candidates for state offices use to get signatures for their nominating petitions.” Meanwhile, an Illinois judge rejected an effort by an initiative proponent to “reduce the signature requirement by 50 percent, enable voters to sign petitions electronically and allow those documents to be submitted electronically as well.”  The Peoria Journal Star reports that the organization found that the “threshold was impossible to meet given the issuance of Gov. JB Pritzker’s disaster proclamation and stay-at-home order.”
  • Signature Gatherers Seeking Relief:  North Dakota Voters First filed a suit in U.S. District Court in Fargo, “challenging the state’s in-person signature requirements,” according to the Minot Daily News.  In addition, Fair Maps Nevada, a ballot measure committee promoting an independent redistricting commission, filed a suit (Fair Maps Nevada v. Cegavske) in U.S. District Court for the District of Nevada.   The Las Vegas Review Journal reports that the organization “says COVID-19 restrictions have made traditional signature gathering impossible, and it has asked a federal judge for more time to collect signatures and permission to gather them electronically.”
  • Some Relief:  The Montana Secretary of Stateissued a Declaratory Ruling to MTCARES thatmodifies signature gathering requirements, allowing groups to mail in non-notarized signatures.  The Bozeman Daily Chronicle reports that the action follows a ruling in a case brought by another ballot measure group, New Approach Montana, which lost its lawsuit seeking to collect electronic signatures.  But according to the Missoulian, New Approach Montana has pivoted, and announced that it will begin collecting signatures with social distancing.

WEEK OF May 8, 2020

Latest Developments

The United States Supreme Court heard oral arguments in Barr v. American Association of Political Consultants, which questions whether a federal law that prohibits robocalls to cellphones violates the First Amendment.  SCOTUSblog’s analysis indicates that “most justices appeared convinced that the law was ‘content based’… and likely unconstitutional.  But the justices also appeared about as thrilled as the rest of us at the prospect of endless robocalls to our cellphones.”

  • The United States Supreme Court, in Kelly v. United States, tossed out the federal convictions of participants in the 2013 New Jersey Bridgegate debacle.  The Justices unanimously found that the scheme “did not aim to obtain money or property,” a necessary element of the statute, and noted that “not every corrupt act by state or local officials is a federal crime.”  Politico points out that the case “follows in a line of recent rulings that have diminished the power of federal prosecutors to go after corruption.”
  • COVID-19 Update:  Government 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:
    • The Honolulu Ethics Commission approved temporary changes to gift rules in order to permit “city police officers and other first responders to accept gifts from the public that are considered ‘tokens of aloha and acts of kindness’ for the duration of the new coronavirus outbreak,” according to the Honolulu Star Advertiser.
    • A Federal District Court Judge in New York has reinstated the June presidential primary election, which had been cancelled due to COVID-19.  Reuters reports that former candidate Andrew Yang was successful in obtaining an injunction to require that the election be held.  The State Board of Elections promises an appeal.
  • The Law and Policy Committee of the California Fair Political Practices Commission met to consider staff proposals to revise the Commission’s regulations on behested payments and propose legislative changes.  The staff memo notes that the Commission’s interest follows “recent media accounts investigating various behested payment practices that some believe could involve an undisclosed personal benefit or financial interest.”
  • The Maryland State Board of Public Works approved a settlement (page 13) in Washington Post v. McManus.  In that case, the Post and other media successfully sued to stop the state from requiring that online publishers collect information about political ads sold.  The Baltimore Sun reports that the plaintiffs successfully argued that the law was overbroad.

Reminders:

The Practising Law Institute presents a one-hour program on COVID-19 Political Compliance Considerations for Companies and Nonprofits on May 21, 2020 at 1 p.m. EDT.  Register here for the briefing presented by Jason Kaune and Elli Abdoli of Nielsen Merksamer.  The program, which is free to PLI members, will outline the government ethics, lobby disclosure, and campaign finance rules you need to know in connection with working with public officials, donating goods, and engaging in political activity during the pandemic.

The American Bar Association will conduct a webinar on Adapting Elections in a Pandemic: COVID-19 and Beyond on May 13, 2020 at 2 p.m. EDT.  Register here for the program which will discuss the impact of the COVID-19 crisis on elections, including vote-by-mail issues, and approaches that might be adapted to the November elections.

In Case You Missed It:

  • Oregon Contribution Saga Continues:  A candidate for Mayor of Portland continues to press in court to have contribution limits imposed on the incumbent Mayor in the current election.  The Portland Tribune reports that the fight will likely continue past the upcoming election.  Meanwhile, the Oregonian reports that the Governor is promoting a constitutional amendment for the November ballot that would permit contribution limits.
  • Beware of Phantom PACs:  Americans for Progressive Action USA filed a report with the Federal Election Commission disclosing more than $2.5 million in advertising and other expenses.  However, Politico investigated and tells us that none of it is real.  The article suggests that it is a phantom PAC created for nefarious purposes, and that “filing detailed FEC reports could be an attempt to create the appearance of credibility for some other means.”
  • Prospects of an FEC Quorum may Thwart SomeBloomberg Government reports that the Senate’s effort to confirm a new Commissioner of the FEC will lead the Federal Election Commission to “resume its pattern of deadlocking on enforcement cases, leading to dismissal of alleged violations.”  But without a quorum, campaign finance groups have been able to pursue private actions to enforce campaign finance statutes.  Meanwhile, The Hill reports that the Senate Rules Committee advanced the nomination of Trey Trainor, which now moves to the full Senate.
  • Help for Some LobbyistsThe Intercept reports that an effort is underway to extend provisions of the Paycheck Protection Act to trade groups that lobby (501(c)(6) organizations) and possibly to other nonprofits (501(c)(4) organizations).

WEEK OF May 1, 2020

Latest Developments

  • Oregon Supreme Court Fallout:  Last week we reported that the Oregon Supreme Court, in Multnomah County v. Merhwein, upheld local campaign contribution limits.  Immediately came speculation that the case may revive Measure 47 adopted by Oregon voters in 2006, which includes state and local campaign contribution limits and a prohibition against corporate contributions.  At the time, the Oregon Supreme Court interpreted the state constitution to prohibit contribution limits, but Measure 47 included a provision stating that the “Act shall nevertheless be codified and shall become effective at the time that the Oregon Constitution is found to allow, or is amended to allow, such limitations.”  In last week’s decision that local contribution limits do not violate the state’s constitution, the Court overruled its prior decision that contribution limits were unconstitutional.  The Secretary of State announced last Friday that political candidates could still collect contributions under current limits.  Expect more developments, potentially litigation, over whether the state will implement Measure 47 and, if so, whether its provisions are constitutional.  Stay tuned…
  • Portland, Oregon became the first battleground following the State Supreme Court decision, as a candidate for Mayor of Portland filed suit to enforce Portland’s similarly enacted contribution limits against all candidates participating in the municipal election on May 19Oregon Public Broadcasting reports that the suit seeks to force candidates who have exceeded the limits to return excess contributions.  City officials plan to enforce the rule prospectively beginning on May 4.
  • COVID-19 Update:  Government 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:
  • The Connecticut Office of State Ethics announced that the filing deadline for first quarter lobby reports, which was previously extended to May 10, has been extended to July 10.  The deadlines for April and May monthly reports have also been extended to July 10, 2020.
  • The Kentucky Legislative Ethics Commission advises that, while the due date for filing updated lobbying registration statements is May 15 for April activity, “(d)ue to the COVID-19 crisis, statements received after May 15 up to and including May 31, 2020 shall be considered timely filed if the filer emails a written explanation of the reason for delay to the Commission’s Executive Director.”
  • The Governor of Kentucky signed SB 157,which, among other things, allows a complaint for certain violations to be filed against a former lobbyist or lobbyist employer within one year after terminating lobbying registration.
  • The New York Joint Commission on Public Ethics met and discussed proposed amendments to its comprehensive lobby regulation.  Commission staff will begin a “preliminary comment period,” anticipating comments from the regulated community.  A formal rule-making process which requires commission approval before commencing, will have an additional notice and comment period.  The commission is also seeking comments for revisions to its source of funding regulation.
  • The City Council of National City, California adopted an ordinance that limits campaign contribution limits, capping contributions from individuals and businesses at $1,000 per calendar year.  The measure, which also bans contributions from city contractors, takes effect January 1, 2021.  The San Diego Union-Tribune reports that one of the motivations for the measure was the “significant increase in outside money pouring into local elections in National City in recent years.”

Reminders:

The Practising Law Institute presents a one-hour program on COVID-19 Political Compliance Considerations for Companies and Nonprofits on May 21, 2020 at 1 p.m. EDT.  Register here for the briefing presented by Jason Kaune and Elli Abdoli of Nielsen Merksamer.  The program, which is free to PLI members, will outline the government ethics, lobby disclosure, and campaign finance rules you need to know in connection with working with public officials, donating goods, and engaging in political activity during the pandemic.

In Case You Missed It:

  • Court Employees Unmuzzled:  The United States District Court for the District of Columbia issued an opinion striking down limits on political speech of court employees.  In Guffey v. Duff, the court reviewed the rules issued by the Administrative Office of the Courts that prohibit “partisan activities that its employees may undertake at all levels of electoral politics.”  The Washington Post reports that the judge found that the concern about perceptions of political influence in the judiciary “did not justify a new code of conduct barring employees from participating in political activities open to virtually all other federal workers.”
  • Fishy Gifts in Ohio:  The Toledo Blade reports that 40 current and former elected officials and state employees violated state law by accepting a free fishing trip from charter fishing boat captains who are licensed by the Ohio Division of Wildlife.  The Ohio Inspector General issued a report implicating the former Director of the Ohio Department of Natural Resources, state legislators, and others.

WEEK OF April 24, 2020

Latest Developments:

  • The Oregon Supreme Court, in Multnomah County v. Merhwein, upheld campaign contribution limits in the county that includes the City of Portland.  The court found that prior cases that overturned contribution limits “were erroneous in reasoning.”  The court concluded that “the contribution limits are not facially invalid” under the state’s Constitution.  Oregon Public Broadcasting notes that the ruling “opens the door to the adoption of new campaign money limits throughout Oregon.”
  • COVID-19 Update:  Government 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:
    • The United States District Court for the District of Columbia rejected a request to include lobbyists and other political consultants in the COVID-19 relief under the CARES Act.  In American Association Political Consultants v. U.S. Small Business Administration, the court indicated that a 24-year old regulation that excludes 18 different kinds of businesses from SBA general business loans embodies “SBA’s longstanding policy that the agency should not use federal funds to subsidize political consulting and lobbying.”  According to Courthouse News, the plaintiffs intended to use funds to “make payroll, not run political ads.”  Campaigns & Elections reports that the Association has filed an appeal.
    • A Federal Judge in Arizona issued an order rejecting requests from ballot measure campaigns to permit them to collect signatures online.  The judge cited the state’s constitutional requirements that the signatures be on a “sheet” and that the signature gatherer be physically present with the elector who signs the petition.  According to AZCentral, the Secretary of State supported the proposal while the Attorney General opposed it.  A similar lawsuit is pending in state courts.
    • The Hawaii State Ethics Commission has further extended the deadline for January-February lobbying expenditure reports to June 1, 2020, which is the same date that March-April reports are due.
    • The Iowa Ethics and Campaign Disclosure Board reminds filers that “(s)ince all campaign finance reports are required to be filed electronically, filing deadlines have not been changed.”  Anyone with COVID-19 related issues that impede timely filing is urged to contact the board.
    • The Internal Revenue Service has announced that it will extend the filing date for nonprofits, including political nonprofits, that file Form 990 information returns to July 15, 2020.
  • The California Fair Political Practices Commission’s Law and Policy Committee met, as we reported last week, to discuss proposed regulations and other possible actions to increase regulation of contributions by limited liability companies.  After accepting comments from the regulated community that were concerned about the complexity and lack of justification for the rule, it appears that the regulation will advance to the full Commission.  No timetable has been announced.   The FPPC continues its activism as it shelters in place with a meeting of the Digital Transparency Task Force on April 23.  The meeting will discuss the current legal landscape for regulating digital political lads and enforcement challenges.
  • The Federal Communications Commission issued a clarification (Order of Reconsideration) to indicate that it willapply a “standard of reasonableness and good faith decisionmaking” to broadcasters with regard to political advertisement disclosure.  Multichannel News reports that the standard applies “when it comes to deciding what political ads trigger disclosure requirements, and that the disclosure requirement clarification applies only to issue ads.”  The order also clarifies that the rules do not apply to candidate advertisements.

Reminders:

The Practising Law Institute presents a one-hour program on COVID-19 Political Compliance Considerations for Companies and Nonprofits on May 21, 2020 at 1 p.m. EDT.  Register here for the briefing presented by Jason Kaune and Elli Abdoli of Nielsen Merksamer.  The program, which is free to PLI members, will outline the government ethics, lobby disclosure, and campaign finance rules you need to know in connection with working with public officials, donating goods, and engaging in political activity during the pandemic.

In Case You Missed It:

  • Facebook Geography Lesson:  According to KFOX14, Facebook plans to label “some election-related posts with their geographic origin in an attempt to curb political misinformation by foreign-based pages that mimic legitimate groups and political parties.”  The article indicates that “Facebook will initially target pages based outside of the U.S. that reach a large number of people inside the U.S.”
  • Charity Begins at Home:  The Mayor of San Diego has raised more than $3 million in behested payments to charities, with roughly half of that amount going to the nonprofit he created.  The San Diego Union-Tribune reports that “(m)any of the donations have been made by people and companies with direct business interests before the city.”
  • Portland Mayor Ensnared by New Disclosure RulesThe Oregonian reports that the Portland City Auditor ruled, in response to a complaint, that the Mayor  “broke new city election rules by not properly disclosing his largest campaign contributors on his re-election website or two campaign social media accounts.”
  • Zombies Being KilledNBC Los Angeles reports that the station “is contacting nearly 100 former federal candidates who have no plans to run for office but are still sitting on enormous campaign war chests.”  According to the report, “hundreds of campaign accounts have been dormant for years, with a combined $200 million in cash sitting idle.”  Several former Congress members pledged to contribute their funds to charity in response to the inquiry.
  • Motor City Pay-to-Play: The President of the Detroit City Council is alleged to have received payments from a local bank that violate state pay-to-play laws.  The Intercept reports that officials from a bank with contracts with the Detroit police and pension fund made excessive contributions to the council president, who is also a trustee of the pension fund.

WEEK OF April 17, 2020

Latest Developments:

  • The Supreme Court of Washington State issued its decision on Washington v. Grocery Manufacturers Association, which reinstates an extraordinary $18 million fine.  In the trial court, the GMA was found to have violated the state’s campaign finance laws by effectively “laundering” campaign contributions, hiding the true source of funds it used to oppose an initiative.  The trial court imposed a $6 million fine and found that the violation was “intentional,” which warranted a treble fine of $18 million.  The Court of Appeals overturned the trebling of damages but declined to consider an excessive fines claim.  The Supreme Court held that the trial court, and not the Court of Appeals, had applied the correct legal standard as to the treble damages provision-it was only necessary for the violator to have intended to do the act that was illegal, not for the violator to have subjectively been aware of its illegality.  Thus, the Supreme Court reversed the Court of Appeals’ decision limiting the treble fines but remanded the case to that court for it to decide the excessive fine issue.
  • COVID-19 Update:  Many Regulatory Agencies have modified their practices in response to the COVID-19 emergency.  Some agencies have postponed hearings and are closed to the public, but available by telephone or internet.  Each week we will add the latest information.  For more information, contact our Political Reporting Unit.  Among the more notable developments this week:
    • Members of the Georgia Legislature are prohibited from raising “campaign contributions while the General Assembly’s 2020 session remains suspended due to the coronavirus outbreak.”  According to the Rome News-Tribune, the “Georgia Government Transparency and Campaign Finance Commission voted 3-2 to keep intact the prohibition against campaign fundraising that applies while the legislature is in session – even though lawmakers have been sent home indefinitely to wait out the COVID-19 pandemic.”
    • The Florida Commission on Ethics rejected a plea , in the form of a request for an advisory opinion, to relax the state’s gift ban on free advertising to permit cable television and internet providers to run public service announcements featuring public officialsOrlando Weekly reports that the Commission Chair “warned the carve-out could set a dangerous precedent.”
    • The California Fair Political Practices Commission reminded everyone that it hasn’t changed any deadlines.  The Commission asks that filers use “best efforts” to comply with reporting by existing deadlines and communicate any issues that “inhibit the filing of a lobbying report or statement” with the Secretary of State’s office.  However, at the commission meeting this week, the Chair advised that if people are late with reports for a reason related to the COVID-19 pandemic, “Enforcement will not be prosecuting those cases.”
    • The Austin, Texas City Clerk has announced that the deadline for filing first quarter lobbyist reports, which had been extended to May 1, is now further extended to May 30.
  • The Washington State Attorney General filed a complaint against Facebook (again) alleging that it “repeatedly and openly violated (the state’s) campaign finance disclosure laws.”  The Seattle Times reports that although Facebook announced that it would stop selling political advertising in Washington State after the last lawsuit, it sold “at least 171 ads to Washington state political committees, which have paid the company at least $525,000 since November 2018.”
  • The Governor of Virginia signed SB 217, which requires that contributions of $1,000 or more to a statewide candidate or legislative candidate that are received between January 1 and the start of the legislative session must be reported by January 15.
  • The Missouri Ethics Commission is back in business after the Governor appointed a new commissioner to the Commission.  The St. Louis Post-Dispatch reports that after “three weeks in limbo, the commission that regulates Missouri’s campaign finance laws will be able to meet again following a rushed effort to appoint a new member.”  The Commission had dropped to only three members of a six-person panel.

Reminders:

The California Fair Political Practices Commission’s Law and Policy Committee, along with staff, will meet on April 20 to discuss proposed regulations and other possible actions to require disclosure of political activity by limited liability companies.  The regulatory process is continuing at full speed, notwithstanding that the California legislature and most government agencies, including the FPPC, are hibernating.

In Case You Missed It:

  • “Essential” LobbyingPolitico reports on the phenomenon of “choosing winners and losers,” at the urging of lobbyists who convince federal, state, or local authorities that various businesses, from laundromats to cannabis dispensaries, are “essential” businesses that should remain open during the pandemic.
  • Political Consultants Sue over Exclusion:  According to Bloomberg, the American Association of Political Consultants sued the Trump administration after theSmall Business Administration, issued “rules prohibiting businesses ‘primarily engaged in political or lobbying activities” from receiving coronavirus relief loans.'”
  • Does Transparency aid Phishing?:  Cyberscoop explains that all of the public information available on the Federal Election Commission’s website is a “bounty” for those who launch phishing scams.  The article warns that in addition to transparency, “security is also important to the integrity of the process.”
  • Donor Disclosure LegislationBallotpedia offers a look at states with pending legislation regarding disclosure of information about donors to nonprofits, including those with political activity.  Specifically, Utah and West Virginia have enacted prohibitions on disclosure of donor information this year, thus ensuring donor privacy.
  • Alabama Supreme Court Overturns Some Ethics Charges:  Yahoo News reports that the court reviewed ethics charges against the former Alabama Speaker and overturned some charges.  Remaining charges include one stemming from side work as consultant, “rejecting defense claims that those contracts were unrelated to his position as House speaker…  Justices noted that when contacting a company for one client, Hubbard ‘identified himself as a state legislator and as Speaker of the House of Representatives.'”
  • More Online TransparencyTech Crunch reports that Reddit updated its political advertising policy, which among other things, includes “a new subreddit, r/RedditPoliticalAds, that will include information about advertisers, targeting, impressions and spending by each campaign.”  Politico notes that the “move follows in the footsteps of digital titans Facebook, Google and Twitter, who over the past two years have made more information about their political advertisers public amid scrutiny from lawmakers over foreign actors using their platforms to meddle in past U.S. elections.”
  • Defamation Lawsuit for Political Ads: Amid increasing and high-profile pressure on social media companies to police the truthfulness of political ads, the traditional press still faces the risk of liability for defamatory statements in political ads they publish.  According to the Hill, the Trump campaign has sued an NBC-affiliated television station in Wisconsin for a Super PAC ad that it broadcast, alleging the ad mischaracterizes the President’s statements.  Reviewing proposed ads for potential defamation litigation risk is an important part of a comprehensive legal compliance program.

WEEK OF April 10, 2020

Latest Developments:

  • The United States Government Accountability Office released its report on 2019 Lobbying Disclosure.  The report to congressional committees analyzes the accuracy of a sample of lobbying reports but does not make any recommendations.
  • COVID-19 Update:  Many Regulatory Agencies have modified their practices in response to the COVID-19 emergency.  Some agencies have postponed hearings and are closed to the public, but available by telephone or internet.  Each week we will add the latest information.  For more information, contact our Political Reporting Unit.  Among the more notable developments this week:
    • The House Committee on Ethics announced that it is extending the date for House Members and staff who are required to file financial disclosure statements from May 15 to August 13, 2020.  Roll Call points out that the Committee’s exception expressly does not apply to congressional candidates.
    • The Internal Revenue Service issued Notice 2020-23, which extends the deadline to file corporate tax returns, and any other federal tax payment or federal tax returns due between April 1 and July 15, to July 15, 2020.  Thus far, most nonprofits engaged in political and lobbying activities will still be required to file their annual information returns on May 15 or seek an extension.  However, the IRS will continue to update and expand the excused filings.  Stay tuned…
    • The Pennsylvania Department of State extended the deadline for filing lobbyist quarterly reports from April 30 to July 30, 2020.  Both the first and second quarter reports will be due on the same date.  The Department also waived the notarization requirement for campaign finance reports and will allow paper filers to email reports.
    • The Indiana Lobby Registration Commission announced that the May 31, 2020 deadline for filing first period lobbyist disclosure reports is extended to July 15.
    • The Colorado Supreme Court issued a ruling on a question from the legislature and found that the state’s constitutional limitation that the legislature may only meet for 120 days is not limited to consecutive days, thus permitting the legislature to return after a recess for the COVID-19 pandemic.
    • The City Auditor of Portland, Oregon announced that the extended deadline for first quarter lobbyist reports is now June 15, 2020, rather than April 15.
    • The City of Austin, Texas extended all deadlines, including the deadline for filing quarterly lobbyist disclosure reports to May 1, 2020.
    • The Illinois Joint Commission on Ethics and Lobbying Reform missed a March 31, 2020 deadline to issue a report outlining recommendations for ethics reforms.  The Chicago Sun Times reports that the Commission was forced to miss the deadline by the COVID-19 epidemic.  While the Commission hopes to have reform legislation passed this year, the absence of the legislature due to the virus has made that goal “increasingly difficult.”

Reminders:

The American Bar Association’s Standing Committee on Election Law has launched a new website that includes current information on elections in each of the 50 states.  The site includes information on the impact of COVID-19 on elections, how to vote absentee, and whether vote-by-mail is permissible.

In Case You Missed It:

  • FARA Filings for COVID-19: NBC News reports, based on FARA filings, that foreign governments “are using American lobbyists to promote their efforts to fight the coronavirus outbreak and safeguard their countries’ reputations in the U.S. capital.”
  • Procurement Lobbyist RulesLexology reminds everyone that “businesses and organizations seeking government assistance in COVID-19 crisis should pay attention to ‘procurement lobbying’ rules.”   The article points out that various governments “impose disclosure obligations and restrictions as a result of efforts to obtain government contracts and grants.
  • COVID-19 Lobbyist Boom:  We’ve recently reported on the surge in federal lobbying related to COVID-19, but now the numbers are in.  The Associated Press reports that “the number of companies and organizations hiring lobbyists shot up dramatically across the months of February, March and early April. Of the more than 700 registrations filed since the beginning of the year, at least 70 specifically mention the new virus, COVID-19 or a global health crisis.”
  • Signature Gathering ReliefThe Fulcrum reports that ballot measure campaigns across the country are suspending signature gathering efforts.  But relief may be on the way:  “Four states and one city have already made exceptions for ballot petitions given the current circumstances. Officials in Colorado, Utah, Washington, Oklahoma and San Diego have either granted deadline extensions for signature gathering or waived other obligationsBallotpedia has a page devoted to changes to ballot measures around the country as a result of the COVID-19 crisis.  In California, the San Diego Union-Tribune reports that “San Diego officials have delayed the deadline to propose ballot measures for the November election from April 8 to May 1 because of the COVID-19 pandemic.”

SEC Proxy Rule Lobbying:  According to Roll Call, The Securities and Exchange Commission’s proposed rule that would limit endless annual revisiting of the same shareholder proposals (which we reported when first proposed in November), is being intensively lobbied by business groups as well as by “liberal groups” in the course of the Commission’s comment period.  During that period, the Commission discloses that it received a large number of comments and that SEC officials held meetings with a number of interested parties.

WEEK OF April 3, 2020

Latest Developments:

  • COVID-19 Update:  Many Regulatory Agencies have modified their practices in response to the COVID-19 emergency.  Some agencies have postponed hearings and are closed to the public, but available by telephone or internet.  Each week we will add the latest information.  For more information, contact our Political Reporting Unit.  Among the more notable developments this week:
    • The Governor of New York issued Executive Order 202.6, which suspended or modified various ethics laws, including certain revolving door restrictions, limitations on behested contributions, and other gifts from interested persons.
    • The New York Joint Commission on Public Ethics  announced that it is suspending its lobbying random audit program, citing an “unnecessary administrative burden for the regulated community at this difficult time.”  The Commission also further extended the due date for January/February lobbyist reports to April 15.
    • The Federal Election Commission issued a notice of the status of its operations, indicating how it is treating filing deadlines, enforcement complaints, advisory opinions, litigation, and other matters during the pendency of the COVID-19 suspension of normal business operations.
    • Hawaii Ethics Commission extended the filing date for lobbyist activity reports for the January-February reporting period from March 31 to April 30, and authorized its Executive Director to further extend it if “appropriate.”
    • The North Carolina Secretary of State issued a Notice of Discretionary Enforcement Authority, which indicates that she will not impose any penalties on first quarter lobbyist reports that are due April 22, as long as the reports are filed by July 22, 2020.
    • The Chicago Board of Ethics announced that the April 20 filing deadline for first quarter lobbyist reports has been extended to June 1, 2020.  The extension also applies to ethics training requirements and official’s financial disclosure statements.
  • The Governor of Washington State approved SB 6152.  According to the legislative summary, the measure provides that no “contribution, expenditure, political advertising, or electioneering communication may be made or sponsored by a foreign national, financed in any part by a foreign national, or have a foreign national involved in the decision-making in any way.”  The measure uses the federal definition of “foreign national” and includes requirements that certain reports include a certification of compliance with these provisions.  The measure takes effect on June 11.
  • The United States Supreme Court turned down the Petition for Certiorari in the case of Elster v. Seattle, bringing an end to litigation that challenged Seattle’s “democracy voucher” program.  The Seattle Times reports that the plaintiffs “asked the nation’s highest court to take the case last year, after the Washington State Supreme Court upheld the program.”
  • The Governor of New York announced the highlights of an the 2021 state budget bill approved by the legislature, including automatic election recounts and “strengthening disclosure laws” by”streamlining the reporting process for 501(c)(3) and 501(c)(4) organizations.”  City and State New York indicates that the deal expands the oversight of nonprofits but will “roll back most of its provisions that would publicize donor information.”  According to the article, “(c)ertain nonprofits, such as those who have spent more than $10,000 in communication endorsing or opposing legislation, will have to submit annual financial disclosure reports to the state.”  The Gotham Gazette reports that the budget deal also includes reviving a public campaign financing system that was recently struck down by the courts.

Reminders:

The American Bar Association’s Standing Committee on Election Law has launched a new website that includes current information on elections in each of the 50 states.  The site includes information on the impact of COVID-19 on elections, how to vote absentee, and whether vote-by-mail is permissible.

In Case You Missed It:

  • PAC ChecksRoll Call reports that while individual donors often use credit cards, corporate PACs “still rely on delivering checks, some of which require more than one signature.”  As a result, corporate PACs “have a new problem to confront: “Getting checks to campaigns they’ve already pledged to support at events that happened before the coronavirus pandemic halted in-person fundraisers.” The issue is national and complicated by state deadlines and suspended or special legislative sessions.  Expect more pleas for help and caution about when and how to deliver contributions.
  • Virus Lobbying and ComplianceMSN News reports on a lobbyist “boomlet” as companies hire lobbyists to get regulatory approval for products designed to fight the virus.  Applications for approval of cleaning supplies, medical devices, medicines, and vaccines have “surged.”  Agencies are charged with everything from certifying disinfectants that can kill the virus to fighting fraudulent products.  More under the radar, but essential to compliance, is the advice law firms and consultants provide about compliance with shelter-in-place orders and federal relief.
  • Signature Gathering in the Age of COVID-19:  Petitions, circulation, and door-to-door canvassing are the lifeblood of campaigns.  Yet the virus has endangered and undermined ballot access.  Ballotpedia reports that an Arizona campaign finance initiative measure has suspended signature gathering.  Meanwhile, The Virginia Mercury tells us that a Virginia judge lowered the signature threshold for the Republican U.S. Senate primary.  In that case, the threshold is 10,000 signatures; the campaign had collected 3,700.  The judge lowered the threshold to 3,500 signatures for the 2020 primary only.  States with ballot measures find themselves in the dilemma of whether to change the rules, advance only those who qualified before the pandemic or delay elections… stay tuned.

WEEK OF March 27, 2020

Latest Developments:

  • COVID-19 Update:  Many Regulatory Agencies have modified their practices in response to the COVID-19 emergency.  Some agencies have postponed hearings and are closed to the public, but available by telephone or internet.  Each week we will add the latest information.  For more information, contact our Political Reporting Unit.  Among the more notable developments this week:
    • The Governor of Connecticut issued Executive Order 7J authorizing “the Secretary of the Office of Policy and Management or her designee, or the Commissioner of Administrative Services, as applicable, to take any action they deem necessary” to expedite certain contracts by modifying certain requirements including gift disclosure requirements for contracts that exceed $50,000CTPost reports that officials and regulators feel the “orders do not encompass the kind of pay-to-play scenarios that resulted in (prior scandals).”
    • The Connecticut Office of State Ethics announced that anyone who cannot meet the April 10 deadline for filing first quarter lobbyist reports will be granted a 30-day grace period, thus requiring those reports to be filed by May 10, 2020.
    • The California Fair Political Practices Commission issued a reminder that contributions made at the behest of a public official in the state must be reported to the Commission.  The notice quotes the Chair: “‘We don’t want to impose an unreasonable burden on those officials who are helping to raise money for food, supplies and other items.  But we also recognize the necessity of transparency, and we’re confident these guidelines will serve to accomplish both goals.'”  The reminder notes that if “an official makes best efforts to comply with the Political Reform Act’s behested payment reporting rules but is unable to do so due to the COVID-19 pandemic, the FPPC will consider this a strong mitigating factor in determining whether an enforcement action against the official is appropriate.”  The FPPC also extended the deadline for public officials to file their conflict of interest disclosures from April 1 to June 1, 2020.  The Commission has not altered deadlines for campaign reports, although it provided guidance and acknowledged that paper filings may be “difficult or even impossible.”
    • The Wisconsin Ethics Commission issued a statement announcing that its employees would be working from home, but the Commission provided a means of contacting the staff with questions.  The e-filing system remains available and the announcement points out that documents that must be notarized may be notarized pursuant to guidance issued by the state’s Department of Financial Institutions.
    • The Washington D.C. Board of Ethics and Government Accountability is operating via telecommuting, according to the board’s statement.  The Board also announced that it will refrain from imposing penalties for late lobby reports due April 15, 2020, if those reports are filed “before April 30.”
  • The United States Supreme Court denied a Petition for Certiorari in Doe v. F.E.CBloomberg Government explains that the “Supreme Court rejected a bid to keep secret a ‘John Doe’ donor who gave $1.7 million to a Republican super PAC in a move that could make it harder for political “dark money” groups to shield the identities of their biggest contributors.”
  • The Governor of Maine signed S.P. 654, which defines “caucus political action committee,” and permits each party in each house of the legislature to establish and maintain a caucus PAC.  The Associated Press reports that the effect of the law is to make caucus PACs subject to regulation by the Maine Ethics Commission.  The measure takes effect June 16.

Reminders:

Nielsen Merksamer expresses its concern for all affected by the COVID-19 virus.  Based in California, the firm has modified operations to accommodate shelter-in-place orders and remains committed to providing the highest level of service to our clients and the regulated community during this time of crisis.

In Case You Missed It:

  • FEC MIA:  According to Politico, campaigns are migrating from broadcast and print media to “social media and search engines.”  As the change “accelerated in recent weeks, one national player has been noticeably silent: The United States Federal Election Commission.”  The article criticizes the Commission, whose online media regulations were last updated in 2006.
  • FARA Violations Revealed:  In advance of the sentencing of a fundraiser who pleaded guilty to violating the Foreign Agents Registration Act for failing to register, Bloomberg reports that the government revealed that the fundraiser-lobbyist’s clients included “Saudis, Kuwaitis, a faction of the Libyan government, Sri Lanka and Turkey.”  The defendant “raised funds for the campaigns of Barack Obama, Hillary Clinton and the inaugural committee of President Donald Trump, and steered hundreds of thousands of dollars to the Republican and Democratic congressional campaign committees.”
  • Party On!:  According to the Washington Free Beacon Michael Bloomberg was able to donate $18 million to the Democratic National Party by “exploit(ing) a loophole in campaign finance laws.”  Individual contributions are subject to limitations ($35,500 to a party committee and $106,500 for a party building/convention fund).  But Bloomberg donated hundreds of millions to his presidential campaign committee; his committee is permitted to contribute unlimited leftover funds to the national party.

WEEK OF March 20, 2020

Latest Developments:

  • The U.S. Court of Appeals for the District of Columbia, in Campaign Legal Center, et. al v. F.E.C. upheld the Federal Election Commission’s exercise of prosecutorial discretion to not retroactively punish contributions made by LLCs and closely held corporations to Super PACs as prohibited contributions in the name of another.  The commissioners had instead concluded that the application of the law to contributions made by such entities was unclear post Citizens United in light of conflicting Commission guidance and precedent, and it therefore would violate Due Process to punish without first clarifying the law going forward.  (The Court did not review the clarifying interpretation announced by the commissioners.)  Notably, this panel’s decision, which reviewed the merits of the FEC’s dismissal, conflicts with a June 2018 D.C. Circuit opinionthat held that FEC prosecutorial discretion dismissals were categorically unreviewable by the courts pursuant to Supreme Court precedent.
  • A New York State Judge, in the case of Hurley v. The Public Campaign Financing and Election Commission, struck down the state’s new campaign finance law that was created by the Commission, thus invalidating various changes the commission proposed including a system of stricter limits and public financing.  The judge ruled that the legislature could not delegate its legislative power to the Commission.  The decision will likely be appealed and does not immediately impact public financing programs in other jurisdictions.
  • The U.S. District Court for the District of New Jersey permanently enjoined the state’s dark money disclosure law.  In ACLU v. Grewal, the court converted a temporary injunction into a permanent injunction.  The action enjoined last year’s S. 150, which regulated independent expenditure committeesLaw.com explains that the judge was “troubled by the law’s requirement that groups communicating purely factual information could be subjected to a disclosure scheme historically limited to election-related communications.”
  • Many Regulatory Agencies have modified their practices in response to the COVID-19 emergency.  Some agencies have postponed hearings and are closed to the public, but available by telephone or internet.  Among the more notable developments:
    • The Federal Election Commission issued a statement on its operations during the COVID-19 crisis.  The Commission will continue to process electronic filings but will not process mailed filings until it resumes normal operations.  FEC offices are now closed to the public and employees are being urged to telecommute.
    • New York Joint Commission on Public Ethics has extended the deadline to file January/February lobbyist reports to March 31, 2020, as a result of COVID-19 concerns.  Like other jurisdictions, the state has announced reduced availability and ways to reach staff for advice.
    • The Chair of the California Fair Political Practices Commission reached out to the regulated community to indicate that the commission is “developing a policy statement on late, missed, or incomplete filings caused as a result of various shelter in place orders and directives.”
    • The Executive Director of the Hawaii Ethics Commission indicated that the Commission is expected to extend the deadline for filing January-February lobbying reports from March 30 to April 30, 2020.
    • Ohio Election:  The Ohio State Supreme Court will move quickly to decide whether the Ohio Secretary of State has the authority to move an election date, after the state’s Health Director shut down polling places.  The Columbus Dispatch reports the legislature will meet next week to officially set a new date.
  • The Office of Government Ethics issued Legal Advisory 20-02 concerning “Updated Resources on Agency Supplemental Ethics Regulations.”  The office indicates that over 50 federal agencies have supplemental ethics regulations.  According to the advisory, “Agencies typically identify the need for a supplemental ethics regulation based on their experience – for example, ethics officials repeatedly see the same ethics issue, or senior leaders raise concerns regarding certain activities.”
  • The Governor of Wyoming signed SB Bill 20 which, among other things, revises the ban on corporate contributions to limit that ban to direct contributions to the candidate’s committee, a political party, or a PAC that coordinates with the candidate.  The Secretary of State is directed to promulgate regulations to implement the legislation.  The bill takes effect on July 1, 2020.
  • The Governor of Maine approved SP 640, which revises and clarifies reporting of grassroots lobby activity.  Previously, the law regulated “indirect lobbying” and required reporting when expenses exceed $15,000 in a reporting month.  The new provision regulates “grassroots lobbying” and requires reporting when expenses exceed $2,000 in a reporting month.  The bill takes effect on December 1, 2020.
  • The Governor of Indiana approved HB 1288, which permits county boards of election to establish electronic filing systems.

Reminders:

Nielsen Merksamer

expresses its concern for all affected by the COVID-19 virus.  Based in California, the firm has modified operations to accommodate shelter-in-place orders and remains committed to providing the highest level of service to our clients and the regulated community during this time of crisis.

In Case You Missed It:

  • Personal Use Brings 11-Month Sentence:  The Los Angeles Times reports that former U.S. Congressman Duncan Hunter was sentenced to 11 months in federal prison “for conspiring to illegally use more than $150,000 of his campaign money for personal benefit.”
  • Lobbying for Federal Payout Prohibited:  The Albuquerque Journal reports that a Washington D.C. lobbyist pleaded guilty to defrauding the government in connection with lobbying for the Big Crow program, located at an Albuquerque area Air Force base.  According to another article in the Journal, the program was axed by the U.S. Army in 1999, but lived for another 10 years through earmarks obtained by lobbyists who were paid from the federal funds appropriated for the program, in violation of federal law.
  • Gifts that Keep on Giving:  The Detroit News contains a discussion of the “national trend of officeholders’ supporters using nonprofit accounts to raise money from undisclosed sources and then help causes tied to the elected officials.”  The News analyzes behested payments made to the American Jobs Council, a nonprofit tied to the former Senate Majority Leader.
  • Fundraising Infected by the VirusPolitico reports that the inability to have in-person fundraisers coupled with an economic downturn in which major donors’ investments are distressed has led to political fundraising challenges.  The article describes the challenges and warns that “Coronavirus is starting to drain money from the expensive world of political campaigning.”  As a result, the Wall Street Journal indicates that campaigns have “ramped up their digital and telephone fundraising efforts.”
  • Short-Term Future of Lobbying in the U.S.?Politico also reports on lobbying in the Capital of the European Union, noting that “the coronavirus has put traditional networking and lobbying in Brussels on ice.”   The article finds that “with formal and informal meetings on hold, influencers are practicing telelobbying – trying to keep in touch with contacts, strategize and advance agendas through phone calls, video calls, webinars, emails and instant messages.”
  • Election Catch 22:  The Orange County Register points out that candidates for public office in the recent primary could “pay a thousand dollars or more to print a 250-word candidate statement in the sample ballots mailed to all 1.64 million registered voters in Orange County.”  But there’s a catch, “Any candidate who prints a statement on the primary ballot has to agree to strict campaign spending limits, both for the primary and, if they go forward, the November general election.”

WEEK OF March 13, 2020

Latest Developments:

  • The Senate Committee on Rules and Administration held its hearing on the nomination of James E. Trainor III to serve on the Federal Election Commission.  Rollcall reports that “Senators are likely to vote on his nomination in the coming weeks.”
  • The City of Glendale, California has a new lobbyist ordinance that took effect this week.  The ordinance mandates registration within 10 days of qualifying as a lobbyist and requires that lobbyists file quarterly reports disclosing compensation and activity expenses.  The fee for initial registration is $31.
  • The Washington State Attorney General announced a settlement in Washington v. Moberg in which the defendants agreed to pay $250,000 in penalties, costs and fees for distributing an electioneering communication without required disclosures.  The two men spent less than $3,900 to distribute the mailer during a 2014 election for county prosecutor.  In January 2020, the superior court granted partial summary judgment to the state and found that the pair tried to hide their activity, including by using a fake committee name and an out-of-state printer, and lying under oath about their involvement.  The Attorney General initially sought more than $450,000 in penalties, plus costs and fees.  According to the Yakima Herald, their lawyer called the amount of the settlement “grossly excessive.”

Reminders:

The Latest Edition of the Practising Law Institute’s quarterly journal, “Current,” contains an article entitled, State and Local Government Ethics Laws, by four Nielsen Merksamer attorneys, Elli Abdoli, Mike Columbo, Joel Aurora, and Jason Kaune.  The article provides a “summary of the prominent types of (government ethics) laws pertinent to state and local government and compliance tips for the regulated community.”  The journal is accessible to PLI subscribers.

America Votes is available from the American Bar Association Bookstore.  The book is described as a “must-read for anyone concerned about our political future.”  It covers the 2018 and 2020 election cycles, including issues regarding voter qualifications, the voting process, voting rights litigation, recounts, and redistricting.   Chris Skinnell and Jason Kaune of Nielsen Merksamer acted as peer reviewers for the book.

In Case You Missed It:

  • Democratic and Republican Governors Association Spend Big in Louisiana:  A story in the Advocate describes spending by both sides of the aisle, drawing from many interests, through local SuperPACs.  New Orleans Public Radio features commentary from pro-regulation groups who focus on contributions to the DGA and RGA from regulated entities which are banned from contributing directly to Louisiana elected officials.  Although the latest election has been postponed due to COVID-19, the coverage illustrates media highlighting spending by “outside groups” and “following the money” through various publicly filed state and IRS reports.
  • Chicago Union Contribution Limit:  An article in the Chicago Sun-Times describes how an SEIU organizer, who is running for the state house, not only received large contributions from the union, but also received large contributions from union-friendly elected officials. Those officials received large contributions from the union within a month of forwarding the exact amount of the contribution received to the SEIU organizer-candidate.  The candidate’s campaign spokesperson responded that the candidate “is happy to have supporters throughout the city who are excited about her campaign and believe in her ability to fight for working families.”  The Sun-Times notes that this pattern is similar to contributions made to a Chicago Teachers Union organizer who defeated an incumbent for a seat on the Cook County Board in 2018.
  • No-PAC-Money Pledge:  Federal candidates who have pledged not to take corporate PAC money still typically accept contributions from trade and business association PACs.  Roll Call reports that “trade association and member organization PACs are not designated as corporate PACs under the FEC’s classification process and therefore don’t violate the no-corporate-PAC pledge as crafted by advocacy groups promoting it.”
  • Pay to Play in L.A.:  The Los Angeles Times reports that a now former Los Angeles City Council Member has been indicted for accepting gifts from a person “seeking to increase his business opportunities in the city.”  According to the article, the “perks allegedly included a hotel room with amenities reserved for high rollers, an envelope stuffed with $10,000 in cash, lavish meals and bottle service at a nightclub, and a female escort sent to his room at the end of a long night of partying.”  The indictment came as part of a “sweeping [federal] probe that has delved into the worlds of L.A. politics and real estate development.”
  • Tracking Down Concerned Citizens:  The San Diego Union-Tribune reports that the California Fair Political Practices Commission is trying to track down advertisements with no disclosure information that are”attributed to an unregistered group called “Concerned Citizens of Carlsbad” along with robotic phone calls promoting “Goldstandardslate.com.”  The agency received copies of the material without requisite disclosure information through the AdWATCH program on its website.

WEEK OF March 6, 2020

Latest Developments:

  • The President of the United States approved Senate Bill 394, which revises the 1963 Presidential Transition Act and adds an ethics agreement provision.  Government Executive Media reports that the nonpartisan bill is designed to “clarify the General Services Administration’s responsibilities during changes in presidential administrations as well as require presidential candidates to publicly release ethics plans for their transitions before elections.”
  • The United States Senate will hold a confirmation hearing on March 10 for James E. “Trey” Trainor who was nominated to serve on the Federal Election Commission.  If confirmed, his presence would restore the Commission’s quorum necessary to conduct business.  The Austin American-Statesman reports that his nomination is not without controversy.
  • The Philadelphia Director of Finance certified an increase to campaign contributions limits, effective January 1, 2020.  Among the limit changes, individuals may contribute $3,100 to a candidate (up from $3,000) and PACs may contribute $12,600 to a candidate (up from $12,000).
  • The Wisconsin Ethics Commission issued an opinion clarifying what duties it considers to be exclusive to “lobbying.”  Employees whose duties are not exclusively lobbying must register by the fifth day of lobbying  within a six-month reporting period.  Grassroots efforts are not “exclusively lobbying.”

Reminders:

The Latest Edition of the Practising Law Institute’s quarterly journal, “Current,” contains an article entitled, State and Local Government Ethics Laws, by four Nielsen Merksamer attorneys, Elli Abdoli, Mike Columbo, Joel Aurora, and Jason Kaune.  The article provides a “summary of the prominent types of (government ethics) laws pertinent to state and local government and compliance tips for the regulated community.”  The journal is accessible to PLI subscribers.

 America Votes is available from the American Bar Association Bookstore.  The book is described as a “must-read for anyone concerned about our political future.”  It covers the 2018 and 2020 election cycles, including issues regarding voter qualifications, the voting process, voting rights litigation, recounts, and redistricting.   Chris Skinnell and Jason Kaune of Nielsen Merksamer acted as peer reviewers for the book.

In Case You Missed It:

  • New 49ers in the Golden StateCal Matters reports that California’s Disclose Act, which requires that advertising disclaimers include the name of donors who contribute $50,000, or more, is resulting in a number of $49,000 contributions.   The piece quotes one political consultant:  “‘The most common contribution in the world is right under the disclosure requirement,'” he said. “‘Who the hell would want their name on a f-ing mailer?'”
  • No More Juice from Florida:  A “major Florida GOP donor” was convicted of bribery in North Carolina.  The donor gave substantial sums to Florida politicians, but his “sudden interest in Florida politics coincided with increased scrutiny from Florida insurance regulators after years of wrangling.” Politico quotes an FBI special agent on the case, who said the defendants “plowed across the line from legal political donations to felonious bribery…  These men thought they could buy changes to North Carolina Department of Insurance personnel.”
  • Judge Ye Not:  A Rhode Island State Supreme Court Justice has spent more than a year appealing a $200 fine imposed by the Rhode Island Ethics Commission.  A WPRI investigative report revealed that the judge allegedly failed to “disclose his position as president of the St. Thomas More Society of Rhode Island when he filled out annual disclosure forms with the commission between 2010 and 2015.”  The matter was heard in the state’s Superior Court this week.

WEEK OF February 28, 2020

Latest Developments:

  • The New York Joint Commission on Public Ethics met this week and, among other things, unveiled proposed amendments to its Comprehensive Lobby Regulation.  As we previously reported, the major changes center on grassroots lobbying, including social media lobbying, and changes to definitions, including the definitions of “designated lobbyist” and “individual lobbyist.”  The Chair indicated that the Commission will vote next month on whether to move the draft forward to a rule-making process.
  • The California Fair Political Practices Commission commenced an investigation into unreported payments made to a nonprofit allegedly at the behest of a state legislator.  The Commission’s action was in response to the third installment of Cal Matters’ “Sweet Charity” investigative reports.  (See, “Tech Talk,” below.)  The latest report describes a tech conference funded by unknown tech interests whose identities and financial contributions to the conference are largely undisclosed.
  • The Chicago City Council approved an ordinance banning city officials and employees who have authority over city business or contracts from working or deriving income from any city contractor or party to any city contract, work, or business.
  • The Chicago Board of Ethics issued another opinion in its series on activity by nonprofits.  The Board reviewed several specific situations and provided its opinion as to when certain activities by individuals acting on behalf of a nonprofit organization constitute lobbying that requires registration.  The board also indicated that it will be releasing “draft Rules and Regulations covering lobbyist registration for individuals paid by nonprofit organizations.”

Reminder:

2020 Legislation:  Nielsen Merksamer has an active California lobbying practice based in Sacramento for those interested in monitoring or influencing California legislation.  In addition, Nielsen Merksamer tracks lobby and campaign bills around the country.  Forty-three state legislatures are now in session, with two more states scheduled to commence legislative sessions this spring.  Nielsen Merksamer is tracking more than 600 campaign finance and lobbyist-related bills in current legislative sessions nationwide.  We track bills from the time they are introduced until final disposition in the session.  When a bill becomes law, Nielsen Merksamer updates its summary for campaign or lobby law for that state; summaries are available to subscribers.

In Case You Missed It:

  • Scam PAC Sentence:  Scott B. MacKenzie, who pleaded guilty in October to operating PACs that raised money but spent it all on “fundraising, salaries and overhead,” was sentenced to a year in federal prison for making false statements to the Federal Election Commission.  The Center for Public Integrity explains that the charges stem from false reports for “two PACs: Conservative StrikeForce and Conservative Majority Fund.”  The article points out that the number of “PACs that raise small-dollar donations – and spend mostly on themselves – are proliferating.”
  • Tech TalkCal Matters describes how a couple of California legislators formed the “Tech Caucus” and solicited donations from internet, tech, and other business interests.  Formally known as the Foundation for California’s Technology and Innovation Economy, the group recently sent conference invitations to tech companies with specific offers: “For $50,000, contributors could moderate and pick a panel topic…  A $25,000 donation allowed them to place someone on a panel.  And $10,000… would buy attendance at the two-day event, including dinner with lawmakers.” The caucus and conference organizers believe the contributions need not be disclosed.  A former President of the Los Angeles Ethics Commission opined that “It doesn’t look like a real symposium, … It just looks like a place for donors to buy facetime.”
  • Three Years for a Book DealCNN reports that “the former Baltimore mayor whose tenure was cut short by a children’s book deal scandal, was sentenced Thursday to three years in prison.” She was also ordered to make restitution, forfeit certain property, and subsequently serve three years of probation “for corruption charges stemming from her role in the scheme.”According to the report, “prosecutors said that in some cases, the books were never delivered, while in others, the pair delivered the books and then converted them to their own use without the buyers’ knowledge, or double-sold books, profiting from the purchases.”

WEEK OF February 21, 2020

Latest Developments:

  • A United States District Court Judge indicated that he would uphold most of San Francisco’s recent ballot measure, which requires additional disclaimers on political advertising.  According to Courthouse News Services, the judge noted that “requiring lengthy disclaimers for small-print and short-length political ads is likely unconstitutional because they would ‘clearly just overwhelm the message.'”  Otherwise, the law, which “requires political ads disclose top donors and secondary funding sources,” would be upheld.
  • The Federal Election Commission continues without a quorum.  The United States District Court for the District of Columbia issued a default judgment against the Commission for failure “to plead or otherwise defend this action.”  According to the FEC’s own summary of the case, the plaintiffs in CREW v. FEC sought declaratory relief to require the Commission to act on a complaint that two federal superfund PACs funneled money to the reelection campaign of the Governor of Missouri.  (See, “Show Me the Money,” below.)
  • The Michigan Board of Canvassers approved a summary of a ballot measure that would place regulation of state lobbying in the Michigan Constitution.  The measure would ban lobbyist gifts, require registration within 48 hours, require both lobbyists and public officials to maintain contact logs, and impose a 2-year revolving door restriction.  The group has 180 days to collect signatures.  According to M Live Michigan, “the group will likely pay signature-gatherers for this effort. [The group’s spokesman] previously said the group expected to spend more than $1 million on the campaign because he anticipates a lot of opposition.”

Reminder:

2020 Legislation:  Nielsen Merksamer tracks lobby and campaign bills around the country.  Forty-four state legislatures are now in session, with two more states scheduled to commence legislative sessions this spring.  Nielsen Merksamer is tracking more than 600 campaign finance and lobbyist-related bills in current legislative sessions nationwide.  We track bills from the time they are introduced until final disposition in the session.  When a bill becomes law, Nielsen Merksamer updates its summary for campaign or lobby law for that state; summaries are available to subscribers.

In Case You Missed It:

  • Show Me the Money:  The Missouri Ethics Commission fined the former Governor of Missouri a total of $178,000 for two campaign finance violations.  According to the Kansas City Star, if the ex-Governor pays $38,000 of the fine and commits no more violations, the balance would be forgiven.  Several other allegations were dismissed pursuant to a consent decree.  A complaint remains pending with the Federal Election Commission.
  • Sweet CharityCal Matters details the increase in fundraising for nonprofit organizations by politicians in California.  The nonprofits, in turn, support the politician’s vision and, in some instances, provide salaries to relatives or travel opportunities for the politicians themselves.  These “behested payments” in the State of California have gone from a little over $100,000 in 2011 to nearly $3 million in 2019.
  • Charity Begins at HomeCal Matters follow-up story covers the ability of one California state legislator to consistently raise money and funnel it to various nonprofits where his wife was employed at the time of each contribution.  The article notes that several other state officials, including the Governor and the Secretary of State, have sought contributions for their spouses’ charities, but none of those spouses collect a salary for their involvement with the charity.
  • Real Estate Bonanza:  The North Carolina State Senate leader sold his townhouse to a lobbyist for a 32% gain after owning the home for just 3 years.  The Charlotte News & Observer reports that the Senator had previously received $73,500 in rental payment for the townhouse from his campaign committee, which was previously the subject of an ethics complaint.
  • The Business Advantage:  The Center for Responsive Politics explains “Why corporate PACs have an advantage.”  According to the article, business PACs (PACs affiliated with a corporation or trade association) “account for 73 percent of total PAC giving, dwarfing efforts from labor unions and issue-focused groups… By paying for PAC expenses with corporate funds, these companies can maximize their political giving. Issue-focused PACs, on the other hand, must spend donors’ money to pay for salaries and hefty fundraising fees.”
  • Disbarred and Banned for LifeWBTV reports that a Raleigh attorney pleaded guilty to “four counts of lobbying without registration.”  The attorney was “permanently banned from lobbying or practicing law.”  The Secretary of State’s investigation was prompted by a WBTV report.  The attorney indicated that “he agreed to plead guilty as a way to help his family and because he had already decided to retire from practicing law.”  His disbarment for the four counts of lobbying without registration and one count of obstruction of justice takes effect April 1, 2020.
  • Super Spending for Super TuesdayCal Matters analyzes independent spending on legislative races in the upcoming Super Tuesday California primary.  The article notes that “(w)ith two weeks to go before election day in California, businesses, labor unions, mega-wealthy political donors and other coalitions of deep-pocketed interests seeking a say in state lawmaking have opened the spigots.”  It lists the candidates who have benefited most from independent expenditures and the organizations that have spent the most.

WEEK OF February 14, 2020

Latest Developments:

  • The Internal Revenue Service held a hearing on Proposed Regulation 102508-16.  That regulation clarifies that 501(c)(4) organizations are not required to report information about their donors of more than $5,000.  According to the IRS analysis, “The proposed regulations would amend the final regulations to clarify that the need to provide the names and addresses of substantial contributors will generally apply only to tax-exempt organizations described in section 501(c)(3).”  The regulation replaces Revenue Procedure 2018-38, which was nullified by a court in Montana in Bullock v. IRS for failing to follow the federal Administrative Procedure Act in adopting the rule.  Bloomberg Tax reports that the hearing was dominated by groups in support of the new regulation.  Federal regulations generally take effect 30 days after publication in the Federal Register, but may take effect sooner.
  • The Oklahoma Ethics Commission published a new campaign contribution chart to reflect the 2020 increase in contribution limits.  The limits increased from $2,700 per election to $2,800 per election for contributions from individuals to state candidates and from state candidate committees to other state candidate committees.
  • The Canadian Federal Court of Appeals dismissed a challenge to the appointment of an Ethics Commissioner by the Governor-in-Council.  A group challenged the appointment because the commissioner is tasked with an on-going investigation of the ruling government.  In Democracy Watch v. Canada, the court was not “persuaded that the Governor in Council’s view is unreasonable.”  Democracy Watch plans to appeal to the Supreme Court.

Reminder:

2020 Legislation:  Nielsen Merksamer tracks lobby and campaign bills around the country.  Forty-four state legislatures are now in session, with two more states scheduled to commence legislative sessions this spring.  Nielsen Merksamer is tracking more than 600 campaign finance and lobbyist-related bills in current legislative sessions nationwide.  We track bills from the time they are introduced until final disposition in the session.  When a bill becomes law, Nielsen Merksamer updates its summary for campaign or lobby law for that state; summaries are available to subscribers.

In Case You Missed It:

  • APPrehensive about Muddled DisclosureForbes reports that a new App, called Goods Unite Us, is designed to disclose “what companies and their parent corporations spend on political influence and who receives that money.”  But the report indicates that “some companies are striking back with legal threats if they’re not removed from the app or if their data isn’t amended.”  Companies object to inclusion of personal contributions made by senior employees whose activity may not represent the company’s values.  Some “companies send cease and desist letters.” The app allows users to search a product brand name and find contribution activity of the company, related companies, officers and employees, and related PACs.  It also lists competitors as alternatives, allowing consumers to seek out their choice of Democratic- or Republic-leaning companies for similar products.
  • Muddier Disclosures:  Colorado’s Secretary of State is being criticized for failing to meet the requirements of a new law that mandates disclosure of lobby activity.  The Colorado Springs Gazette reports that “basic problems with the system persist, preventing the ability to look up electronic registrations and lobbying activity records for at least some of those required to file the disclosures.”
  • Snared by Transparency:  Common Cause, a fierce advocate for transparency, was fined for filing its Pennsylvania lobby disclosure report more than 3 months lateSpotlight PA reports that group has been late with four reports in the past two years.  The group said it “would fight the penalty in court” and blamed the Department of State for the late filing.  According to the article, the “state Ethics Commission imposed a $19,900 fine on Common Cause Pennsylvania” for the lapse.
  • Evading Transparency in Texas:  A new law that requires local governments that employ lobbyists to disclose what they lobbied and how much they spent is meeting “resistance.”  The Texas Monitor describes how “several cities denied having employed lobbyists, despite public records showing they have.”  The author of the law, which took effect in September, stated that it “‘doesn’t require anyone [to] stop lobbying. … It just asks that, if they are going to use taxpayer money to lobby, they disclose it.'”
  • Avoiding the CrossfireThe Hill reports that business groups and their lobbyists “are facing a new challenge as they look to advance their agendas in an increasingly polarized Washington and ahead of a contentious presidential election.”  While recent events have resulted in some anxiety, one lobbyist opined that “‘(t)he panic should be short-lived,” … both Leader McConnell and Speaker Pelosi said all hope is not lost for legislating this year.'”

WEEK OF February 7, 2020

Latest Developments:

  • The Oakland Ethics Commission published adjusted candidate contribution and expenditure limits for 2020.  The changes increase the contribution limit for candidates who voluntarily adopt campaign expenditure limits, from $800 to $900 per election.
  • The U.S. General Accounting Office provided a letter report on federal campaign finance enforcement issues to the Ranking Member of the Senate Committee on Rules and Administration.  The letter describes the role and responsibilities of the Federal Election Commission, the Department of Justice, and the Internal Revenue Service in ensuring compliance with federal election laws.  The report explains how the compliance system works and includes recommendations for “guidance addressing coordination” between the FEC and the DOJ, but notes that the recommendations are contingent upon a quorum of the Commission being in place.

In Case You Missed It:

  • Dark Money Cast the Shadow in IowaVox explains the various entities behind the Iowa Caucus debacle.  Shadow is the for-profit company that created the notoriously unreliable app and “drew a lot of attention.”  But Shadow is owned by a Democratic nonprofit organization called Acronym.  Acronym’s “umbrella” covers “multiple for-profit operations,” besides Shadow.  In addition, Acronym has a PAC called “Pacronym.” According to the article, “Acronym is a dark money group.  That means donations to its 501(c)(4) nonprofit don’t have to be reported, and we don’t entirely know who their money is coming from – or how much they have.”  However, the article notes that FEC filings indicate that Pacronym has received large donations from wealthy individuals ranging from hedge fund/venture capitalist types to director Steven Spielberg.  Yet Acronym remains somewhat of an enigma.  “Part of the issue is that Acronym’s structure is complex, unusual, and opaque. Its major plank may be a nonprofit, but the entities under it are not.”
  • City Contractors Paid for “Lavish” City Employees’ Party:  The San Francisco Examiner reports that Lefty O’Doul’s Foundation for Kids, a charity run by Nick Bovis who was arrested along with the Director of Public Works last week, “took in thousands of dollars from city contractors and appears to have used at least some of those donations to pay for a lavish party for Public Works employees.”  Emails from Bovis confirmed to the contractors that the money was for a public employees holiday party, but contractors were instructed to make checks out to the Kids charity so they could be deducted as charitable donations.  Tom O’Doul, who sits on the board of the Foundation for Kids and is a cousin of legendary baseball player Lefty O’Doul, was unaware of the corporate donations or of any public employee holiday party funded by the charity.  At least one of the contractors disputes the purpose of the contribution, claiming it was for a toy drive.  The Examiner’s report is a reminder that any corporate charitable donation should be carefully reviewed and scrutinized.
  • Colorado Lobby Regs CriticizedComplete Colorado warns that the state’s new lobby regulations imperil the ability of ordinary citizens to lobby their legislators unfettered by lobby registration.  The article notes that the “previous rules explicitly excluded ‘a political committee, volunteer, lobbyist, or citizen who lobbies on his or her behalf’ from the definition of lobbying for the purposes of regulation by the SOS.”  The new rules provide “no clear exemption for private citizens who contact officials about legislation outside of committee hearings.”  The article criticizes the Secretary of State’s efforts to regulate “grassroots lobbying” and “volunteer lobbyists” and laments that the provisions “may put private citizens at risk of being legally sanctioned if they don’t follow the complex regulations.”

WEEK OF January 31, 2020

Latest Developments:

  • The Missouri Ethics Commission, at its meeting this week,increased campaign contribution limits in accordance with new constitutional requirements.  The changes increase the contribution limits to $2,559 for Senate candidates and $2,046 for House candidates, per election.  The limits apply to the August and November 2020 election cycles.  The $5.00 gift limit remains unchanged.
  • The New York Joint Commission on Public Ethics discussed, but did not adopt, a new advisory opinion to provide guidance on the permissibility of gifts to third persons solicited by public officials, including behested contributions to charities.  The proposed opinion, which was returned to staff for some minor clarifications,  provides a number of factors to consider, but notes that “any gift made by an Interested Source to a third party upon a public official’s personal solicitation would be presumptively prohibited.”  Commission staff also discussed soon to be proposed updates and clarifications to the Comprehensive Lobby Regulations.  While many changes may be technical and clarifying, policy changes will be included.  Those changes include (1) a presumption that personal use of social media is not lobbying (as long as the person is not hired to use the social media), (2) providing that individuals who engage in grassroots lobbying do not have to register (only the entity would be required to register), (3) clarifying when a subsidiary needs to be reported by a parent as part of its lobbying activity, and (4) changes to the source of funding disclosure requirements.  A January 1, 2021, effective date is anticipated for those revised regulations following a notice and rulemaking process.
  • The United States Court of Appeals for the Eighth Circuit found the Arkansas’ blackout period that restricts the receipt of campaign contributions to a period two years before an election to be unconstitutional.  In Jones v. Jegley, the court found that the restriction “goes too far in light of the availability of other, closer-fitting alternatives.”  Bloomberg News reports that a longtime activist sought to make donations to candidates for the 2022 election, but was barred – so she sued.

Reminders:

Essential Ethics 2020:  With the 2020 elections just around the corner, join Nielsen Merksamer on Friday, February 7 at the Sutter Club in Sacramento, California, from 10:00 to 11:30 AM for a complimentary briefing on the key issues you need to know this election year in California.  Sign up here.  Contact Jay Carson (jcarson@nmgovlaw.com) with any questions.

In Case You Missed It:

  • Feds Allege Mr. Clean may be Dirty:  The San Francisco Director of Public Works, whose twitter handle is MrCleanSF, was arrested by the FBI on “suspicion of public corruption.” The San Francisco Chronicle reports that “the allegations concern ‘public trust fraud’ in the awarding of city contracts.”The article indicates that the “schemes involved an envelope of cash, fraudulent city contracts, improper gifts from a Chinese developer and a $2,000 bottle of wine, according to authorities.”  The 75-page complaint filed by the FBI in federal District Court details five different schemes the Director and a local restaurateur cooked up.
  • Corruption in Los Angeles Too:  The United States Department of Justice filed a motion in a criminal case that reveals that a southern California developer, who was indicted on bribery and honest services wire fraud charges, has engaged in a pattern of corrupt relationships.  Following the indictment, the FBI tapped the developer’s phone.  New allegations include using his own lobbyist as part of his activities and making campaign contributions in exchange for official favors.  The Los Angeles Times reports that “Federal investigators arrested (the developer) in 2018, accusing him of bribing a Los Angeles County employee in hopes of securing a lucrative government lease in Hawthorne.”  The county official pleaded guilty.  The new filing implicates officials in several jurisdictions.
  • Scam PACsReuters reports on the rising phenomenon of scam PACs – PACs in which virtually all the money received is spent on fundraising, rather than the “causes they profess to support.”“‘Scam PACs’ tend to slip through gaps among agencies that govern elections, charities and telemarketing, regulators say, leaving consumers exposed to misleading or fraudulent pitches.”  Neither the Federal Election Commission nor the Federal Trade Commission appears to have a grasp on controlling the spread of these scams.  The article notes that the “secretive nature of this and other fundraising operations makes (the PACs) difficult to pin down.”

WEEK OF January 24, 2020

Latest Developments:

  • The Chicago Board of Ethics released three new advisory opinions regarding activities that do not constitute lobbying.  The three related opinions are primarily targeted to activities by nonprofit organizations.  In its press release about the opinions, the board recited a list of activities that it considers not to be lobbying, including applying for permits and licenses, merely inviting officials to business or community meetings, and communicating indirectly with officials through newsletters, social media, or newspaper ads.
  • The Jacksonville Ethics Commission took action this week to ensure that the Jacksonville ethics director is able to sit in on meetings between bidders and JEA, the community-owned utility servicing Duval County (Jacksonville) and adjoining counties. The move comes after there was resistance to Jacksonville ethics director Donna Miller’s presence at JEA procurement meetings held last month in Atlanta. The Florida Times Union reports that current “City law gives the ethics director the power to request, obtain and have ‘full access’ to a broad array of records and data that is not otherwise deemed confidential by law…[and that] the Ethics Commission will ask the City Council to alter that ordinance by stripping out the reference to confidential information.”
  • The California Fair Political Practices Commission released its annual report with a focus on enforcements completed in 2019.  The Commission resolved 1,465 cases, which included 343 settlements with fines totaling over $793,384.   The agency also urged the public to report potential violations of advertisement disclaimer requirements through it’s “AdWATCH” program.

Reminders:

Essential Ethics 2020:  With the 2020 elections just around the corner, join Nielsen Merksamer on Friday, February 7 at the Sutter Club in Sacramento, California, from 10:00 to 11:30 AM for a complimentary briefing on the key issues you need to know this election year in California.  Sign up here.  Contact Jay Carson (jcarson@nmgovlaw.com) with any questions.

In Case You Missed It:

  • Top 25:  Public Citizen reports that, over the last 10 years, “25 ultrawealthy donors have been responsible for nearly half (47%) of all contributions by individuals to super PACs, providing $1.4 billion in super PAC contributions out of $2.96 billion in super PAC contributions from individuals.”  Sheldon Adelson, Tom Steyer, and Michael Bloomberg hold the top three spots.  Public Citizen’s complete report lists the 25, along with their total contributions, and places Jeff Bezos at number 25.
  • Follow the Money: The Nevada Independent reports that a PAC operated by a Las Vegas City Council Member paid her daughter’s company over $100,000 for catering and event planning. This report comes on the heels or recently passed legislation, SB 557, which barred personal use of campaign funds, but did not specifically address payments benefitting family members . That legislation was enacted after an American Bar Association Standing Committee on Campaign Finance Law‘s examination of Nevada’s campaign finance proposed reforms (with the participation of Nielsen Merksamer) during the last legislative session as the state considered stricter laws in the wake of scandal involving the personal use of campaign funds by a state legislator.
  • Three Years for Scam PAC:  A fundraiser who raised over $20 million for various Republican and conservative causes “but spent almost no money on political activity was sentenced to three years in prison.”  Politico reports that the “former president of the consulting firm Strategic Campaign Group, pleaded guilty last year to wire fraud.”  The article finds this to be “a sign federal authorities are beginning to crack down on ‘scam PACs’ that raise money from donors in the name of political causes but keep most of those funds for profit.”
  • Texas Two-Step:  The Houston Chronicle reports on the stunning lack of enforcement mechanisms the Texas Ethics Commission has at its disposal to collect fines for late and delinquent reports from lobbyists, candidates, and political committees. The Chronicle estimates that “the Texas Attorney General’s Office…has won the right to collect $1.1 million from late filers…but the office has then written off $800,000 as uncollectible.” Part of the problem, the article maintains, is that, unlike other states which can garnish wages and levy tax liens, “civil courts…[are] the only remedy for collecting unpaid fines.”
  • Watching Lobbyists in New Mexico:  A report issued by New Mexico Ethics Watch, Lobbyists and their Outsized Influence in New Mexico, analyzes the top lobbyists in New Mexico and their spending.  The report concentrates on four major lobby efforts; specifically: cannabis, firearms, film credits, and tobacco products.  The report discusses the use of PACs, a desire for lobbyist transparency, and makes recommendations for “how to reform laws governing lobbying and lobbyists.”
  • FEC Probes Excess Contributions:  The San Diego Tribune reports that a southern California congress member’s campaign has been questioned by the Federal Election Commission over the acceptance of contributions that exceed the $2,800 per election limit.  In response to the letter, the campaign indicated that it “completed all the refunds and redesignations required.”

WEEK OF January 17, 2020

Latest Developments:

  • The Treasury Inspector General for Tax Services analyzed the requirement that certain nonprofits register with the IRS within 60 days of formation.  The Inspector’s report is critical of the Internal Revenue Service’s failure to take “sufficient actions to identify noncompliant I.R.C. Section 501(c)(4) organizations despite having various sources of information that would allow it to do so.”  According to the Los Angeles Times, nearly 10,000 “politically active tax-exempt organizations” have failed to file the required notice, IRS Form 8976.  According to the Inspector General’s report, “IRS management agreed to use available information to enforce compliance and update notices and procedures.”
  • The Maine Legislature enacted S.B. 18 (Chapter 534), which became law this week without the Governor’s signature.  The bill establishes a blackout period for campaign contributions from lobbyists and lobbyist employers during the legislative session.  The ban does not apply to special elections.  Outside of the legislative session, lobbyists may only contribute to candidates for which the lobbyist is eligible to vote.  The bill takes effect 90 days after the legislative session ends; adjournment is expected April 15, 2020.
  • Elections Canada announced new contribution limits for 2020.  The revised limits generally permit Canadian individuals to give up to Can$1,625 per year to candidates and parties.  In addition, Elections Ontario announced that its contribution limit has also increased to Can$1,625 per year.  Separately, Elections British Columbia announced that the limit for an individual’s contributions to candidates has increased to Can$1,253.15 per year for 2020.
  • The Seattle City Council unanimously approved an ordinance to ban foreign money in local campaigns.  Council Bill 119731 bans campaign contributions from, and independent expenditures made by, “foreign-influenced corporations.” Foreign-influenced corporations include corporations with (1) a single foreign shareholder who has a 1% interest; (2) more than one foreign shareholders who collectively have a 5% interest; or (3) a foreign owner (more than 50% ownership) who participates in the decision-making process of the corporation’s political activities.  The measure requires other corporations to certify to the City Clerk within 7 days of making a contribution that they are not foreign-influenced.  The measure takes effect 30 days after the Mayor approves it.  The Council also approved Council Bill 119732, which requires commercial advertisers to retain certain information about political advertisements.
  • The New York State Campaign Finance Reform Commission’s report, issued December 1, 2019, began to take effect this month.  Provisions for public financing and lower contribution limits, however, will not take effect until the day after the next gubernatorial election on November 9, 2022, and will apply to the 2026 election cycle, according to an analysis by City & State New York.  The provisions that did take effect on January 1, 2020, generally pertain to procedures for candidates to appear on the ballot.
  • The United States Court of Appeals for the District of Columbia heard oral arguments in the case of Campaign Legal Center v. FEC, D.C. Cir., No. 18-5239 this week.  According to Bloomberg Government, the issue involves “the use of shell companies to hide donations in a case that could affect super PAC disclosure in the 2020 election.”  The article notes that “several donors (are) accused of violating campaign finance laws by funneling millions of dollars to super PACs that supported Mitt Romney and Barack Obama in the 2012 presidential race. Obscure corporations were listed as the donors in reports filed with the FEC.”
  • The United States Supreme Court turned down review of a challenge to the Security and Exchange Commission’s pay-to-play regulation.  That action leaves in place the decision in New York State Republican Party v. SEC, in which the U.S. Court of Appeals for the District of Columbia upheld the SEC’s rule barring investment advisors (placement agents) from making certain candidate campaign contributions.

Reminders:

Essential Ethics 2020:  With the 2020 elections just around the corner, join Nielsen Merksamer on Friday, February 7 at the Sutter Club in Sacramento, California, from 10:00 to 11:30 AM for a complimentary briefing on the key issues you need to know this election year in California.  Sign up here.  Contact Jay Carson (jcarson@nmgovlaw.com) with any questions.

The American Bar Association presents:  Campaign Finance Enforcement Trends: The Use of Public Resources and other Hot Topics.  Join Jason Kaune, of Nielsen Merksamer, who moderates the program.  Learn all about the regulation of campaigns and get an understanding of some of the thorny issues troubling regulators and the public!  Featured speakers include:Steve Berlin, Executive Director of the Chicago Board of Ethics; Megan Engelhardt, Assistant Executive Director of the Minnesota Campaign Finance and Public Disclosure Board; Amber Maltbie of Nossaman LLP., Sacramento.  The online program will be held on Monday, January 27, 2020, at 1 PM Eastern (10 AM Pacific).  The program is free for ABA members.  Sign up here.

In Case You Missed It:

  • Virginia Legislature Ponders ReformWTOP reports that the Virginia Legislature will consider a variety of election proposals, including creation of a redistricting commission and campaign finance limits and bans.
  • Locals Reject Control:  California state campaign contribution limits are set to apply to local governments that do not have any campaign contribution regulations, beginning in 2021.  While local governments may consider adopting their own limits in the meantime, the San Jose Mercury News reports that the City of San Leandro rejected a cap on contributions to city council candidates.
  • Pay-to-Play in OregonOregon Public Broadcasting reports that, in the state, which notoriously has no contribution restrictions, there is a “torrent of outside money to state candidates, much of it solicited by Oregon treasurers and attorneys general – the same elected officials whose offices decide which firms get the (officials’) work.”  The current Attorney General and State Treasurer “say they remove themselves from decisions about which lawyers win state work, even as they ask law firms for reelection money.”In total, (the current State Treasurer) has received more than a quarter-million dollars from firms or attorneys with an interest in class-action work, state records show. None of them contributed money to (his) campaigns in his previous role as a state representative.

WEEK OF January 10, 2020

Latest Developments:

  • The New Mexico Ethics Commission is open for business.  The Commission issued an announcement that, effective January 1, 2020, it “commences jurisdiction for administrative complaints alleging violations of New Mexico’s governmental conduct and disclosure laws.”  The Commission’s administrative rules are now in effect and the Commission has launched a website.
  • The Washington, D.C. Board of Ethics and Government Accountability reports that following the resignation of its Director, Brent Wolfingbarger, on December 31, the Board appointed Rochelle Ford as Acting Director.  According to the announcement, “Ms. Ford has previously served as the Board’s Senior Attorney Advisor and as the agency’s Interim General Counsel.”  LMTonline reports that Mr. Wolfingbarger resigned”amid criticism of the agency’s failure to promptly investigate complaints.”  A search for a permanent Director has commenced.
  • SEC Proposes Shareholder Restrictions:  The Securities and Exchange Commission has proposed new rules that revise procedural requirements for shareholder proposals at annual meetings.  Reuters reports that the effect of the proposal is to limit shareholder proposals at those meetings by raising the threshold stock ownership requirements and other threshold requirements for resubmission of a question raised at a previous shareholder meeting.  The Brennan Center for Justice opines that these changes will end or at least deter shareholder efforts to limit the use of corporate “dark money” in elections and require disclosure of corporate spending on lobby efforts.

Reminders:

Essential Ethics 2020:  With the 2020 elections just around the corner, join Nielsen Merksamer on Friday, February 7 at the Sutter Club in Sacramento, California, from 10:00 to 11:30 AM for a complimentary briefing on the key issues you need to know this election year in California.  Sign up here.  Contact Jay Carson (jcarson@nmgovlaw.com) with any questions.

The American Bar Association presents:  Campaign Finance Enforcement Trends: The Use of Public Resources and other Hot Topics.  Join Jason Kaune, of Nielsen Merksamer, who moderates the program.  Learn all about the regulation of campaigns and get an understanding of some of the thorny issues troubling regulators and the public!  Featured speakers include:Steve Berlin, Executive Director of the Chicago Board of Ethics; Megan Engelhardt, Assistant Executive Director of the Minnesota Campaign Finance and Public Disclosure Board; Amber Maltbie of Nossaman LLP., Sacramento.  The online program will be held on Monday, January 27, 2020, at 1 PM Eastern (10 AM Pacific).  The program is free for ABA members.  Sign up here.

The Council on Governmental Ethics Laws (COGEL) met December 15 to 18, 2019.  The conference is designed for government ethics administrators.  Jason Kaune and Evann Whitlam of Nielsen Merksamer moderated and facilitated a panel discussion entitled, “Campaign Finance Update: The ‘Must Know’ Litigation Developments,” with Megan McAllen, Director of Campaign Finance Litigation at the Campaign Legal Center and Tanya Senanyake, an Attorney for the Litigation Division at the Federal Election Commission.  Nielsen Merksamer edits an annual bluebook, compiled from government ethics administrators’ contributions.  The bluebook includes a synopsis of all major campaign finance litigation in the United States and Canada in the past year.  Nielsen Merksamer clients may obtain a free PDF of that publication by requesting a copy through their political attorney.

In Case You Missed It:

  • Bribery takes a Vacation:  An Illinois vendor reportedly bribed a person who sat on a committee that evaluated bids for nursing services for the Chicago Public Schools, according to the Chicago Sun-Times.  The Inspector General for the Chicago Public Schools found that the president of the vendor company allowed a member of the decision-making committee to stay in her vacation home.  The vendor was not awarded the $30 million contract, but later received another, albeit smaller, contract.
  • Please Regulate Us:  The Washington Post reports that “A bipartisan group of campaign finance lawyers on Monday urged the White House and congressional leaders to ‘work together and immediately’ to restore a voting quorum on the Federal Election Commission.”  While staff continues to work, “the agency cannot enforce the law.”
  • Lobby or Campaign, but not Both:  The Mayor of Town and Country, Missouri (a suburb of St. Louis), who has held office since 2005 and been a registered lobbyist since 1994, has agreed to close his campaign committee.  The St. Louis Post-Dispatch reports that “the Ethics Commission cited the relatively new requirement that ‘any person who registers as a lobbyist shall dissolve his or her campaign committee.'”  The mayor signed a consent decree to close his campaign committee but vows to run for re-election in 2021.  Several other local officials in the state are registered lobbyists and face the same dilemma.

WEEK OF January 3, 2020

Latest Developments:

  • The San Francisco Ethics Commission, at its recent meeting, adopted revised regulations with an additional 6 amendments. The regulations take into account changes made by Proposition F, approved by the voters at the November election, which bans contributions from LLCs and LLPs and restricts contributions from persons with financial interests in land use matters before elected officials.
  • The California Supreme Court ruled in San Diegans for Open Government v. Public Facilities Financing Authority that ordinary citizens do not have standing to challenge contracts in which government officials are financially interested.  State law prohibits public officials and employees from having a financial interest in public contracts that they make, but the court ruled that only a party to the contract can challenge it.  Cal Matters notes that the ruling allows “the foxes to guard the henhouse — and perhaps feast on its residents.” 
  • The Mayor of Chicago asked the Chicago Board of Ethics to delay, for three months, the implementation of the city’s ordinance that requires lobbyists for nonprofit organizations register with the city.  The ordinance, SO2019-5305, was passed July 24, 2019 and was scheduled to take effect January 1, 2020.  Crain’s Chicago Business explains the rationale for the delay and includes a copy of the Mayor’s letter.
  • British Columbia has a new Lobbyist Transparency Regulation that will take effect on May 4, 2020.  The new regulation reduces the threshold that requires registration from 100 hours to 50 hours per year, increases the disclosures required on monthly reports, and limits gifts by lobbyists.

Reminders:

The American Bar Association presents:  Campaign Finance Enforcement Trends: The Use of Public Resources and other Hot Topics.  Join Jason Kaune, of Nielsen Merksamer, who moderates the program.  Learn all about the regulation of campaigns and get an understanding of some of the thorny issues troubling regulators and the public!  Featured speakers include: Steve Berlin, Executive Director of the Chicago Board of Ethics; Megan Engelhardt, Assistant Executive Director of the Minnesota Campaign Finance and Public Disclosure Board; Amber Maltbie of Nossaman LLP., Sacramento.  The online program will be held on Monday, January 27, 2020, at 1 PM Eastern (10 AM Pacific).  The program is free for ABA members.  Sign up here.

The Council on Governmental Ethics Laws (COGEL) met December 15 to 18, 2019.  The conference is designed for government ethics administrators.  Jason Kaune and Evann Whitlam of Nielsen Merksamer moderated and facilitated a panel discussion entitled, “Campaign Finance Update: The ‘Must Know’ Litigation Developments,” with Megan McAllen, Director of Campaign Finance Litigation at the Campaign Legal Center and Tanya Senanyake, an Attorney for the Litigation Division at the Federal Election Commission.  Nielsen Merksamer edits an annual bluebook, compiled from government ethics administrators’ contributions.  The bluebook includes a synopsis of all major campaign finance litigation in the United States and Canada in the past year.  Nielsen Merksamer clients may obtain a free PDF of that publication by requesting a copy through their political attorney.

In Case You Missed It:

  • Sunshine State Welcomes Unlimited Corporate Contributions:  The Tallahassee Democrat explains that while Florida law limits contributions to $1,000 for state legislative candidates, candidates can control their own PACS, which do not have limits.   According to the article, the “PACs allow for big-dollar contributions, lavish spending and curious exchanges of funds between lawmakers.”
  • Revolving Door Locked:  A former Massachusetts Speaker of the House, who was convicted of public corruption and served five years in a federal prison, remains barred from registering as a lobbyist.  The Boston Globe reports that the Secretary of State’s office found that the former Speaker’s 2011 federal conviction prohibits him from registering as a lobbyist until 2021.  The former Speaker’s attorney promises a lawsuit in Suffolk Superior Court.
  • More Free Lunches in Honolulu:  We’ve previously reported on the ethics issues raised after a developer provided lunch to the Honolulu City Council and staff following a favorable vote.  Now, Honolulu Civil Beat reports that “a major city contractor” has bought lunch for the Department of Design and Construction and the Environmental Services’ Wastewater Division.  The company has “nearly $8 million in design and construction contracts alone,” according to the article.  Both the city and the contractor “said the food was just a ‘token of aloha’ that can be considered an exception to the regular ethics rules.”

WEEK OF December 20, 2019

Latest Developments:

  • The New York Joint Commission on Public Ethics (JCOPE) met this week.  On the agenda was a discussion of lobbying regulation.  Staff indicated that revisions to clarify the comprehensive lobby regulations adopted last year will be proposed at the Commission’s January meeting.  That announcement was followed by a disruptive demonstration at the meeting by Kat Sullivan, who has been battling with JCOPE over whether she is required to register as a lobbyist.  She carried a sign, threw confetti, and sang a song.  The New York Daily News described her performance as a “pitch-perfect protest in the form of a parody of the tune ‘Let it Go’ from Disney’s ‘Frozen.'”  The Chair advised her that JCOPE meetings do not provide for any public participation or public comment.
  • The Fair Political Practices Commission met this week and discussed, as an agenda item (Number 14), the ethics of commissioners making political contributions.  The Chair reiterated, in accordance with Commission policy, that Commissioners should not make contributions to federal candidates.  At the Chair’s behest, a Commissioner who was a donor to a 2020 presidential candidate was stripped of his subcommittee chairmanship.  The  Los Angeles Times reports that another Commissioner said that “the FPPC must be seen as an impartial watchdog over campaigns and said the recent controversy has undermined that perception.”  Meanwhile, at the end of last week, the Governor of California appointed E. Dotson Wilson to the California Fair Political Practices Commission, who attended his first meeting.  The Sacramento Bee reports that Mr. Wilson recently retired as the longest-serving Chief Clerk of the Assembly.  Prior to that, he was Deputy Chief of Staff to Willie Brown.
  • The Chicago City Council approved an  Ordinance SO2019-8541, which prohibits elected officials and employees from lobbying state, county, or any other local government on behalf of any person.  The ordinance contains some exceptions, including volunteer activities, political activities, and attorneys engaged in legal representation.
  • The Federal Communications Commission issued a citation and order in the case of a man who sent tens of thousands of robocalls to voters in the San Diego area in the final days before a California primary election for the State Assembly.  In Compliance reports that the proposed fine is $10 million.  The content of the calls was salacious and the sender failed to use caller ID, instead spoofing the phone number of another telemarketing firm.

In Case You Missed It:  

  • Spending Big on Judges: The Brennan Center for Justice issued a  27-page report that analyzed spending on state supreme court elections in the 2017-2018 election cycle and found a surprising amount of independent expenditures.  Interest groups accounted for 27% of the spending in state supreme court elections and, in some states, the spending was greater than candidate or party expenditures for those elections.  In Arkansas, for example, 84% of all spending in the Supreme Court election was by “special interest groups,” and not by the candidate or party.
  • Online Disclosure Reminder: California AB 2188, passed in 2018, takes effect January 1, 2020.  That bill, dubbed the Social Media Disclose Act, specifies the format for social media disclosure requirements and requires committees to provide certain information to the online platform.

WEEK OF December 13, 2019

Latest Developments:

  • The Tennessee Court of Appeals at Nashville issued its decision in Tennesseans for Sensible Elections Laws v. Tennessee Bureau of Ethics and Campaign Finance in which the court struck down a state statute that barred nonpartisan PACs from contributing to candidates during the last 10 days preceding an election.  Party-controlled PACs were not subject to the restriction.  The court found that the statute was “not ‘closely drawn’ to match the asserted governmental interest in preventing circumvention of the disclosure requirements (or combating political corruption.)”  Thus, the statute containing a blackout period unnecessarily abridged First Amendment rights.
  • The City Auditor of Portland, Oregon adopted and implemented revised lobby regulations.  Among other things, the new regulations clarify that money spent on grassroots lobbying counts toward the lobby registration threshold.  In addition, revised regulations regarding city officials’ reporting, which apply to lobbyist reporting as well, create a new gift exception for gifts of “cultural items.”  The regulations also establish a late filing penalty of $10 per day up to $500.
  • The City Commission of Tallahassee, Florida approved an update to the city’s ethics ordinance.  Among other things, the ordinance restricts application of the city’s gift rules, which previously applied to all city officers and employees, to “covered individuals,” consisting of public officials, employees required to file annual financial disclosures, and procurement employees.  The ordinance takes effect January 1, 2020.
  • The San Francisco Ethics Commission issued  draft regulations to implement the “Sunlight on Dark Money” initiative, which was approved by voters last month.  The commission will consider adopting the regulations at its December meeting.  Among other things, the regulations define “developer,” “discretionary review,” and “entitlement.”  They also set out formatting requirements for disclaimers that list the top three contributors in campaign advertisements.

In Case You Missed It:  

  • Pay-to-Play Tax:  A New York joint venture development project in Syracuse, New York “viewed political donations as a cost of doing business,” according to Syracuse.com.  The group itemized contributions to “two governors, a mayor and a county executive” as part of the costs of proposed project on state-owned land.  The revelation came as a result of a lawsuit over the project, but there “was nothing illegal about (the developer’s) campaign contributions.”  The article quotes critics of New York’s campaign finance laws, who characterize the contributions “as a ‘corruption tax’ (that businesses) have to pay to get things done.”
  • Not Many Foreign Agents Left on K Street in DC:  The  Washingtonian reports that the Muller investigation’s revival of enforcement of the Foreign Agents Registration Act (FARA) has largely stopped lobbying for foreign governments.  For years, foreign regimes resorted to illegal lobbying as a more expedient method to kill unfavorable legislation rather than using traditional diplomatic channels.  According to the article, “the feds didn’t do much to police this type of scheme for many years-and (lobbyists) always jumped for the cash.”  But in light of increase FARA enforcement, foreign countries’ former lobbyists “aren’t willing to bend the rules anymore, and others won’t touch the job even if it’s conducted aboveboard.”  According to one consultant, FARA has “‘put the fear of God’ into K Street.”
  • Free Lunch after Vote:  The Honolulu Civil Beat reveals that “Right after Honolulu City Council members voted on Wednesday to advance a controversial rezoning measure, they broke for lunch … paid for by a company representing the landowner.”  The article notes that although at least one council member and his staff declined to participate, the company reportedly has provided holiday lunches to the council and its staff for the past five years.
  • Lobbying is not just Meeting with Officials:  The Los Angeles City Ethics Commission issued a report about a former deputy city planning commissioner’s activities and fined him $37,000 for failing to register as a lobbyist.  The Los Angeles Times reports that the aide characterized “most of his work as ‘research oriented and administrative.'”  He told the Times that “(i)t didn’t rise to my understanding of what lobbying was… ‘I don’t meet with elected officials. I don’t engage in fundraising activity.'”  The Times notes that “(u)nder city rules, ‘lobbying activities’ can include research and providing advice.”
  • Digital Earmarks:  The President of the Ojai Unified School District Board was indicted by federal authorities as a part of scheme to funnel $1.8 million in contributions that exceeded permissible limits.  The Ventura Star reports that the board President worked as an outside contractor for an online payment processing company, Applied Wallet.  The payment company acted as a conduit to send excess contributions.  The contributions came from George Nader, who is also under indictment; they were made “with the goal of currying favor with a foreign government.”

WEEK OF December 6, 2019

Latest Developments:

  • The United States Department of Justice announced indictments against eight people for “conspiring to make and conceal conduit and excessive campaign contributions.”  Politico reports that, among those indicted is George Nader, a “(l)obbyist known for Trump ties (who is) charged with steering illegal contributions to (Hillary) Clinton” during the 2016 election.
  • The Fourth Circuit Court of Appeal affirmed a District Court’s holding that a Maryland law, which required online platforms (websites, social media, etc.), including those of press entities, to publish records about anyone sponsoring political speech on the platform and to maintain them for government inspection, is unconstitutional as applied to press entities.  In  Washington Post v. McManus the court found the requirements burdened activity protected by the First Amendment and were insufficiently tailored the stated purpose of combating foreign meddling.
  • The Washington, D.C. City Council held a special meeting this week and voted 12-0 to expel a member for ethics violations.  According to the Washington Post, the member is accused of “repeated ethics violations.”  The vote “was the first step in the process of expulsion, which requires approval by 11 members.”
  • The Governor of Illinois signed S.B. 1639, which requires lobbyists to disclose sub-lobbyists, any local governments in the state where the lobbyist is or will be registered, and any office the lobbyist holds in the state.  This bill also directs the Secretary of State to create a searchable public database of lobbyist information within 90 days.  The bill took effect December 5.
  • The Governor of Massachusetts approved H.B. 4087, which requires certain legislative and mayoral candidates and committees to designate a bank or other financial institution as their depository.  Thus, the measure will require those banks to file reports directly with the Massachusetts Office of Campaign and Political Finance that disclose the candidates and committees’ activities.  The measure takes effect April 30, 2020.  According to the Cape Code Times, this brings legislators and mayors into the same reporting system that statewide candidates have been using.
  • The Iowa Ethics and Campaign Disclosure Board announced the appointment of Mike Marshall as Executive Director.  He is the chief of licensure at the state’s Department of Public Health, but is best known as having served as the Secretary of the State Senate for 18 years.

In Case You Missed It:

  • JCOPE Backs Down in the face of F-Bombs and Negative Publicity:  The New York Joint Commission on Public Ethics has dropped any further action against a victim of child molestation who spent her own money to advocate for passage of the Child Victims Act.  The Albany Times-Union reports that the Commission sent the woman a 5-page letter concluding that, while she likely “exceeded the $5,000 spending threshold that requires registration as a lobbyist in New York by paying for signs promoting passage of the law,” the Commission “would not take further action.”  The letter lays out the Commission’s case, but also recites the woman’s profane and threatening communications to the Commission, noting that her responses were “in such a manner that the Commission was unable to resolve the matter.”  JCOPE threatened future enforcement if she doesn’t register or stop her activity.  The woman maintains that she spoke for herself, was not a lobbyist, and didn’t spend more than $5,000.
  • LA to Ban Developer Contributions – After all Contributions are Collected:  According to the Los Angeles Times, the city’s leaders are about to approve an ordinance that would ban contributions from real estate developers with projects pending in City Hall.  However, the fundraising restrictions will “go into effect after the March 2022 city primary election,” leaving “more than two years” to collect contributions.  In addition, officials will “still be able to ask real estate developers pursuing L.A. projects to make contributions to their favored charities and governmental initiatives – a practice known as “‘behesting.'”
  • Pay-to-Play Indictment:  The former head of the Oakland-Alameda Coliseum Authority has been charged with a crime for negotiating a deal on naming rights with RingCentral that included a $50,000 fee to the executive.  The San Francisco Chronicle reports that the executive “sent three emails to RingCentral – on June 17, June 20 and June 25 – each with a different invoice for $50,000.” 
  • Lobbyist Contributions Still FlowThe Hill reports that lobbyists gave over a half million dollars to 2020 presidential candidates, despite pledges of some candidates not to accept lobbyist money.  The figure includes contributions from federal, state, and local lobbyists and unregistered employees of lobbyist firms, but does not include contributions from in-house lobbyists.
  • Misuse of Nonprofit by Legislator in the Keystone State:  A West Philadelphia, Pennsylvania legislator will resign and plead guilty after being charged with “stealing more than $500,000 from her own nonprofit and spending it on family vacations, designer clothing, furs, personal bills – and her bid for the legislature.”  According to the Philadelphia Inquirer, she won a special election last March to replace a member of the legislature who was convicted of “bribery and other charges.”  The prosecutor states that the legislator “faces jail time.”
  • Colorado Dark MoneyComplete Colorado reports that a Washington, D.C.-based nonprofit spent nearly $11 million in Colorado in connection with the 2018 election.  The spending included a substantial amount spent on the state’s attorney general who bemoaned dark money spending during the campaign and called on his opponent to disclose sources of dark money.
  • Lobbyists as Ghost Writers:  According to the Washington Post, lawmakers in various states have admitted that editorials written in support of health care changes were, in fact, largely written or heavily edited by health care industry lobbyists.  The Post points out that “(n)one of the lawmakers’ columns discloses that they were written with the help of a lobbyist.” 

WEEK OF November 29, 2019

Latest Developments:

  • The United State Supreme Court vacated the Ninth Circuit Court of Appeals’ decision in Thompson v. Hebdon and sent the case back to the Ninth Circuit for reconsideration.  The Court’s per curium decision expressed concern that Alaska’s contribution limit of $500 from an individual to a candidate may be “too low.”
  • The U.S. Department of Justice issued an announcement that a Houston-based engineering company agreed to pay a $1.6 million fine for making campaign contributions through conduits.  According to the Justice Department, the company “made $323,300 in illegal conduit contributions through various employees and their family members to federal candidates and their committees.”  The company’s former CEO has been separately charged in a criminal complaint.

In Case You Missed It:

  • No Security Guards at the Revolving Door:  McClatchy DC reports that while Members of Congress and their staffers are supposed to refrain from lobbying for one or two years after government service, the bans are limited and “lobbyists who break the law are unlikely to be detected.”  The report indicates that the Government Accountability Office, the U.S. Attorney’s Office, the Clerk of the House, and the Secretary of the Senate, who are charged with monitoring or enforcing revolving door restrictions, don’t check whether lobbyists have violated the restrictions.  McClatchy found three members of Congress and countless staffers whose lobby forms indicated they violated the restrictions.  Further, the analysis didn’t “take into account so-called shadow lobbying,” in which individuals engage in activities below the threshold that requires lobbyist registration.
  • Four Million Dollars Buys Lobbyist Seven Years:  According to the Arkansas Democrat Gazette, a former lobbyist “received a seven-year prison sentence Monday for his role in a bribery scandal that also led to the convictions of five Arkansas legislators.”  The lobbyist “spent almost $4 million making illegal campaign donations, kickbacks and other gifts to Arkansas lawmakers between 2011 and 2017.”
  • FBI Interested in Coincidences:  Days before voting to spend nearly a million dollars to acquire a golf course for use as a solar farm, the Mayor of Independence, Missouri received over $10,000 in contributions from PACs funded by the company that would receive the contract to operate the solar project for the city.  The  Kansas City Star indicates that “FBI agents have been asking questions about the project.” The Mayor told the Star there was “no relationship between the donations and her vote.”

Can’t See the Money in Arizona:  The Arizona Capitol Times reports that the Arizona Secretary of State’s campaign finance websites are “broken.”  With less than a year before the next major election, the state’s “See the Money” website has never worked properly, according to the article.  The website is supposed to display information gathered by “Beacon,” the state’s campaign finance reporting tool.  A representative of the Arizona Action Network said she “can’t remember the last time they used the website because they’ve had so many issues with it.”  She and her coworkers use third-party websites that are “generally more accurate.”

WEEK OF November 22, 2019

Latest Developments:

  • The Oregon Supreme Court heard arguments this week on whether to overturn a 1997 ruling that prohibits campaign contribution limits in the stateOregon Public Broadcasting reports that the case arises as a result of a $500 contribution limit enacted in Multnomah County.  The article also notes that there is no time requirement for issuing the decision.
  • The Fair Political Practices Commission met this week and imposed a $150,000 fine on a former state legislator and county official for using over $130,000 of his campaign funds for a vacation in Asia and for a remodeling project on his home in Hawaii.  The Commission  approved a settlement agreement with former official, who agreed to the fine.   Nevertheless, the Sacramento Bee reports that “commissioners said the fine wasn’t enough.  They said they’ll consider asking the Legislature to increase the allowable penalty,” so that future offenders will pay even more.  “It’s a breathtaking arrogance,” said one commissioner.  The spending was concealed on campaign finance reports and the matter has been referred to the local District Attorney for further review.
  • The City Clerk of Austin, Texas announced increased campaign contribution limits of $400 (up from $350) that an individual can give to a candidate and aggregate contribution limit for other than natural persons of $38,000 per regular election (up from $37,000) and $25,000 for runoff elections.  The Austin Monitor reports that the Clerk told the City Council that the “limits are increasing for the first time in a number of years.”
  • The New York Joint Commission on Public Ethics met this week.  Among the items on the agenda, staff announced additional features of the Commission’s lobby application have been added to allow for extensions and terminations to be completed online.  They also indicated that the lobby app should be completed and fully functional by March 2020.
  • The Executive Director of the Iowa Ethics and Campaign Disclosure Board is stepping down after nearly a decade on the job.  The Des Moines Gazette reports that Megan Tooker is leaving in mid-December.  The Board discussed the process for selecting a new Director at its meeting last week.

In Case You Missed It:

  • Feds Throw the Book at Mayor:  The former Mayor of Baltimore, who resigned after it was disclosed that she was selling her children’s books to several local charities in an unseemly fashion, was indicted on federal tax evasion and wire fraud charges, according to CNN.  The report quotes a statement by the U.S. Attorney’s Office that the Mayor sold her books “‘to non-profit organizations and foundations, many of whom did business or attempted to do business with the Maryland and Baltimore City governments.'”  The former Mayor pleaded guilty to conspiracy and tax evasion charges, according to the Baltimore Sun.
  • New York Ethics Breach Investigated:  The Governor of New York was briefed about what happened during an executive session of the state’s Joint Commission on Public Ethics (JCOPE), according to the Albany Times-Union.  The session concerned a vote on whether to investigate one of the Governor’s aides.  The breach of confidentiality was investigated by the State Inspector General (a former Executive Director of JCOPE), but no public report was issued.
  • FARA Still Ensnares:  Activity by a lobbyist seeking to oust the former Ambassador to Ukraine “raises questions about whether he violated a federal law that requires lobbyists to disclose their work for foreign clients,” according to an article in USA Today.  The issue is whether the lobbyist, a former Congressman, should have disclosed that he was paid by two “Ukraine-linked clients” to make repeated phone calls seeking the Ambassador’s ouster, or whether, as the lobbyist says, “he made the calls as a ‘concerned American citizen,’ not as a lobbyist.”
  • More Side Effects of FEC Impotence:  The Campaign Legal Center brought suit against the Federal Election Commission, which failed to prosecute a case of coordination between Hillary for America and a super PAC.  Despite a recommendation by the Commission’s General Counsel to fine the super PAC, the Federal Election Commission failed to gain a majority vote of commission members to proceed.  Similarly, the FEC failed to gain enough votes to defend the suit brought by the CLC.  Following that failure, Hillary for America and the super PAC sought to intervene and defend the case in place of the FEC.  Despite the CLC’s opposition, a federal judge issued an order allowing those two parties to take the place of the FEC.  The CLC, concerned about the state of the FEC, commissioned a poll of likely voters who rated “corruption in our political system” as the “biggest problem facing the country.”  According to the poll, “71% want the FEC to take a more active role enforcing campaign finance laws,” which includes at least two-thirds support across party lines.
  • IRS Generates SunshinePolitico reports on a “massive ‘dark money’ group” that spent $141 million during the midterm elections on various causes.  The information was gleaned from the IRS Form 990 filed by the group, the Sixteen Thirty Fund.  According to the article, the group’s income included a contribution from one donor of $51.7 million, and it spent its money through a series of other nonprofits (listed on Schedule I of the Form 990).
  • Free Speech doesn’t include Assault:  The Associated Press reports that a Florida woman was sentenced to 15 days in federal prison for throwing a sports drink at a Florida congressman.  She pled guilty to assaulting a federal official; the incident occurred outside the Brew Ha Ha Bar and Restaurant in Pensacola, Florida, according to the Panama City News Herald.
  • Political Online Targets:  Google announced that it “will restrict how precisely political advertisers can target an audience on its online services,” according to the New York Times.  According to the article, “(p)olitical advertisers will be able to aim their messages at people based on their age, gender or location.”  But they will not be able to target “audiences based on their public voter records or political affiliations.”

WEEK OF November 15, 2019

Latest Developments:

  • The House Ethics Committee announced Thursday that it is suspending its investigation of Rep. Ross Spano (FL) at the Justice Department’s request. The Committee announced in September that it was “investigating the circumstances of loans to Spano’s campaign that…may have violated campaign finance laws.”  The request indicates that “the Justice Department is apparently conducting a criminal investigation…[given that] committee press releases have used the same language in the past in at least two cases of members of Congress who were investigated and charged with criminal offenses.”  Two of Spano’s 2018 election opponents filed complaints that he knowingly diverted to his campaign $180,000 in loans from friends and claimed them as personal funds.
  • “Sunlight on Dark Money,” San Francisco’s Prop F, passed overwhelmingly last week, which “means [that] campaigns will be forced to more prominently disclose who donates big chunks of money to a cause.”  In addition to the banning of contributions from LLCs, LLPs, and those with certain interests in land-use approval matters before the city, “campaign ads now will have to display the names and contribution totals of the top three donors giving $5,000 or more.  If any of the top three donors is a committee, the ad must also show the name and the dollar amount contributed by each of the top two major contributors of $5,000 or more to that committee.”  The measure received 76% of the vote, though it only needed a simple majority to pass.
  • Personal lawyer to the President Rudy Giuliani is facing federal probes surrounding his dealings with firms linked to the Ukraine, according to anonymous officials.  The investigation concerns “possible campaign finance violations and a failure to register as a foreign agent as part of an active investigation into his financial dealings.”  Indeed, the Manhattan US Attorney’s Office has “scrutinize[d] his activities in Ukraine as prosecutors investigated two of his associates…[who] were subsequently charged in the U.S. with illegally funneling hundreds of thousands of dollars to U.S. officials and a political action committee.”  Doubts remain as to the implications for Giuliani given the complexity of the matters involved.

In Case You Missed It:

  • Shining light on Beacon Hill (and Sacramento): Media outlets in Massachusetts and California appear to have a renewed interest in examining and securitizing the influence of state level lobbying activity.  A local television station in Boston claims with astonishment that “public records…[reveal] special interests spending about $45 million every year…in Massachusetts to try to influence which bills pass.”  With a similar tone, The Los Angeles Times estimates that “interest groups spent an average of about $2 million every day the Legislature was in session this year on lobbying – adding up to almost $33 million a month and a total of $296.4 million from January through September, a period spanning the legislative year for 2019.”  Apart from the sums spent, both outlets focus on the industries that are most active and the nexus between lobbyists and former lawmakers.
  • Ward room revolving doors: In the wake of three Illinois state officials  under federal investigation for influence peddling, city officials in Chicago are considering measurers similar to those proposed on the state-level.  The Chicago Sun Times reports that, under a proposed measure, “Chicago aldermen would be prohibited from lobbying state and local government – and their counterparts at those other levels would be barred from doing the same at City Hall.”  Two of Mayor Lori Lightfoot’s close allies have proposed the measure, including Alderman Matt O’Shea, who commented, “We’ve seen multiple ethical scandals across the state at multiple levels of government…If it continues, it’s not a question of if, but when the City Council is dragged in.”
  • TikTok races for influence: Amidst the extended national debate over foreign influence in national affairs, Bloomberg reports that the music video app TikTok is rapidly expanding its “advocacy priorities and…growing [its] lobbying operations.”  Regulators’ concerns about TikTok are multifaceted as it is owned by the Chinese company ByteDance Inc.  There are “concerns… that TikTok could pose a national security threat because of its Chinese ownership and the risk that the government in Beijing could get access to the app’s growing troves of user data.”  There also exist concerns about how foreign acquisitions of domestic businesses may “give foreign buyers access to data about U.S. citizens.”  While “lawmakers have pushed for a review, saying that TikTok poses a potential counter-intelligence threat,” the company has contracted with lobbying firms closely associated with the technology sector.

WEEK OF November 8, 2019

Latest Developments:

  • An Alaska superior court judge issued a ruling last week agreeing with the nonprofit group Equal Citizens that the Alaska Public Offices Commission (APOC) “abused its discretion by not revising” its opinion letter deeming that the state’s contribution limits to independent expenditure committees are unconstitutional.  The Ninth Circuit Court of Appeals ruled similarly in an analogous 2016 federal case, Thompson vs. Hebdon, yet the “APOC did not revise its enforcement practices,” according to local media.  These strict limits, initially passed in 1996, impose an “annual per-person $500 contribution limit to independent expenditure groups.”   Equal Citizens noted that its goal “is that the Alaska case makes its way to the U.S. Supreme Court to clarify aspects of Citizens United and how limits are enforced on contributions made to political groups”.
  • An administrative law judge reversed the imposition of a 2017 $465,000 fine on Jeremy Durham, a former Tennessee lawmaker, “for violating the state’s campaign finance laws hundreds of times, including spending money on sunglasses, suits and spa products.  While Durham is still under federal investigation, the judge made clear “that the legislature did not ‘give the registry an unbridled right to dole out civil penalties’.”  The Tennessean speculates that the ruling against the record fine “could benefit other lawmakers who use campaign money in similar manners.”  

In Case You Missed It:

  • They were merely freshman:  In the wake of first-term Rep. Katie Hill’s abrupt resignation last week, another freshman Democrat is being probed for misbehavior, this time for alleged campaign finance violations.  The Hill reports that “the House Ethics Committee announced…that it is extending a review of Rep. Lori Trahan related to how she made personal loans to her campaign during a contested primary last year.”  The article notes that candidates may make unlimited contributions and loans to themselves and that the Federal Election Commission permits these loans and contributions from accounts jointly held with spouses.  However, Trahan’s case has the added wrinkle of a prenuptial agreement with her husband and questions remain about how her family “moved money around” in order to finance her campaign.  Additionally, “Trahan also acknowledged that her campaign made errors in personal financial disclosure statements and federal election reports, noting that she has since hired a law firm to handle all future campaign reports.”
  • Testing the steel of Pittsburgh’s campaign finance regsNPR in Pittsburgh details the legal showdown between the Pittsburgh Ethics Hearing Board and outgoing Pittsburgh City Councilor Darlene Harris over the city’s campaign finance reporting requirements.  The campaign finance ordinance requires “candidates for city office…to file monthly reports for the three months prior to the primary and general elections… [which is] a more rigorous requirement than in state law.”  Harris, who filed according to state requirements, did not file according the city’s reporting schedule and has not paid fines imposed on her for this failure.  She contends “that the city has no authority to impose campaign-finance reporting requirements that go beyond those in state law.”
  • Land of Lincoln channels Honest Abe:  Under the cloud of three state legislators currently under federal investigation or indictment, Illinois politicians have released various calls for ethics reform.  On Wednesday, minority Republican lawmakers introduced two bills: HB 3956, imposing a stricter revolving door policy, and HB 3958, which prohibits, under penalty of felony, certain close family members of legislators from lobbying.  However, with “only three days remaining in the fall veto session, GOP lawmakers are unlikely to be able to advance their proposals before the legislature adjourns for the year.”  Meanwhile, the Democratic governor and state house speaker called for further study on how to address conflict of interest issues, especially after Monday’s arrest of “State Rep. Luis Arroyo, [who was] charged Monday with attempting to bribe a state senator to get support for gambling legislation that one of the clients [of the lobbying firm he manages] wanted.”
  • Countdown to collect cash in New York:  The  New York Post reports on Governor Andrew Cuomo’s manic fundraising pace only one year after winning a third term.  The fundraising frenzy takes place as the new Public Campaign Finance Commission, which Cuomo approved, “considers limiting campaign cash from wealthy donors… from $70,000 for statewide races to $12,000 in exchange for accepting matching public funds.”  Critics speculate that the increased activity “could be an attempt by Gov. Cuomo to beat the clock and raise as much as possible before lower contribution limits go into effect.”

WEEK OF November 1, 2019

Latest Developments:

  • The United States Eighth Circuit Court of Appeals ruled that an individual who is associated with a nonprofit organization but was not paid, spent no money, and made no gifts to public officials in the course of expressing his views to public officials and testifying before the state legislature is not required to register as a lobbyist.  In Calzone v. Summers, the court concluded that Missouri cannot require the plaintiff to register for engaging in First Amendment activities.  The state’s lobby registration and disclosure requirements – as applied – violate his First Amendment rights.
  • The Governor of New York signed A. 1641, which requires that all candidates and committees file their reports electronically.  The bill removes a $1,000 threshold and thus requires that all state and local candidates and committees file using the State Board of Election’s system.  Local paper filings are no longer required.  The measure takes effect on December 15.
  • The Tallahassee City Commission voted to ask the City Attorney’s Office to draft amendments to the city’s existing ethics ordinance, according to Tallahassee Reports.  The proposal, as described by the City Attorney in a workshop with the Commission, would generally grant more authority to the city’s Independent Ethics Board and would add procurement employees, among others, as “covered individuals” subject to ethics rules.  The proposal would, among other things, make contracts voidable if influenced by a prohibited gift, extend gift rules to all “covered individuals” (not just elected and appointed officials), increase penalties on lobbyists who fail to register, and require that vendors disclose campaign contributions.  An initial draft ordinance will be revised and presented back to the City Commission for approval.

In Case You Missed It:

  • Lobbyist or Victim-Advocate?:  The Albany Times-Union reports that an alleged rape victim, who did not register as a lobbyist, has filed suit against the New York Joint Commission on Public Ethics (JCOPE) for “conducting an ‘improper and abusive’ investigation into (the alleged victim) over her efforts to raise awareness about sexual assault and support for passing the Child Victim’s Act in 2018.”  Apparently she spent more than the $5,000 (from a settlement with the prep school where she was allegedly raped as a child) on advertisements, including billboards, an amount that exceeds threshold for lobbyist expenditures to require registration.  The New York Post notes that the “state’s Joint Commission on Public Ethics is standing by its decision to investigate a rape survivor for violating lobbying laws.”  (Editor’s note:  New York is in the Second Circuit, not the Eighth Circuit; see Calzone v. Summers, above.)
  • Taxpayer-Funded Lobbying not Transparent:  Leaders in rural Douglas County, Oregon spent “at least $43,000” over a four-year period traveling to Washington, D.C. to lobby federal officials to allow more timber harvesting activity.  The Oregonian reports that its questions and requests for information have yielded receipts for $579 worth of spending; the county is asking for $1,900 to pay for the time required to find the rest of the receipts.  The paper says that “Douglas County commissioners have used (a federal safety net) program to award themselves $30,000 a year to pay for lobbying trips.  It’s unclear exactly how much has been spent.”
  • Twitter says “No” to Political Ads:  Twitter announced that it will no longer carry political advertisementsCNN tells us that Twitter earned less than $3 million from the sale of political advertisements in the 2018 election cycle.  Facebook, which will continue to carry political ads, estimates that business will amount to less than 0.5% of its revenues next year.
  • Facebook and Google said it too, but “No” didn’t mean “No”:  Both Facebook and Google announced they would no longer sell state and local political advertisements in the State of Washington, according to the Seattle Times.  But since their announcements, both have continued to sell tens of thousands of dollars in political ads in the state.  Last week, the Times found at least 15 different ads for Seattle city council candidates on Facebook, noting that “(s)ome of those ads had been seen as many as 200,000 times, according to Facebook’s library of political ads.”  Both of those companies agreed to stop selling the ads after they were sued by the state’s Attorney General for failure to comply with the state’s strict campaign-finance disclosure laws and collectively paid $450,000 to settle the suit.  According to the Times, “(i)t’s not illegal for campaigns and PACs to advertise on Google and Facebook, it just runs counter to the companies’ self-imposed and self-enforced policies.”

WEEK OF October 25, 2019

Latest Developments:

  • The 2019 CPA-Zicklin Index of Corporate Political Disclosure and Accountability was published this week by the Center for Political Accountability and the University of Pennsylvania’s Wharton School.  According to the report, “(d)ata from the 2019 Index reflect large U.S. public companies increasing overall their acceptance and practice of disclosure and accountability with regard to their election-related spending…  In addition, the number of core companies fully disclosing or prohibiting election-related spending has increased since last year for each of the five categories of spending evaluated by the Index.”
  • The United States Department of Justice issued an announcement that it “filed a criminal case charging Imaad Shah Zuberi, a Southern California campaign fundraiser, with falsifying records to conceal his work as a foreign agent while lobbying high-level U.S. government officials.”  According to the Assistant Attorney General in charge of the prosecution, “The Department of Justice treats these crimes with the gravity that they deserve and will continue to aggressively identify, investigate and prosecute FARA violations.”  Zuberi agreed to plead guilty to three charges: the FARA violation, tax evasion, and campaign finance violations.  The campaign finance violation stems from “making conduit contributions in the names of other people, reimbursing contributions made by others, and being reimbursed for contributions he made.”  He faces up to 15 years in federal prison on those three charges.  According to Politico, his clients included “citizens of Saudi Arabia, Kuwait, Bahrain and Venezuela, (and)… Sri Lankan government officials.
  • The Auditor of Portland, Oregon has revised and re-posted proposed changes to the city’s lobbyist regulations.  The revisions include changes to proposed grassroots lobbying provisions.
  • The Los Angeles City Council approved an ordinance that revises the city’s ticket distribution policy to conform to changes mandated by the California Fair Political Practices Commission.  The ordinance prohibits disproportionate distribution of tickets to a single city officer.  The measure is expected to be signed by the Mayor.

Reminder:

The American Bar Association’s webinar, International Political Influence and Corruption in Elections: Will Recent Events Lead to Stricter U.S. Regulation? is available online.  The webinar is a timely overview of the laws regulating foreign influence and corruption, and possible changes to come, was the topic of a well-received American Bar Association panel discussion moderated by Nielsen Merksamer Of Counsel Mike Columbo and featuring a presentation by Federal Elections Commission Chair Ellen Weintraub.  The one-hour online CLE is available to ABA members free of charge and to the public for a fee, and may be accessed here: International Political Influence and Corruption in Elections.

In Case You Missed It:

  • Pennsylvania Campaign Spending Raises Eyebrows:  The Philadelphia Inquirer has probed into spending by state lawmakers and found a wide range of uses for campaign funds.  The paper notes that “campaign accounts must be used for ‘influencing the outcome of an election.’  But what qualifies is largely open to interpretation.”  While some of the spending may be questionable, the paper found that Pennsylvania is the only state with “neither contribution limits nor an explicit ban on spending campaign cash for personal use.”  The investigation found “more than 4,800 instances of obscured spending by nearly 300 campaigns.”  The paper also found spending that it called “downright bizarre,” including a “$146 promotional photo with `70s trio Tony Orlando and Dawn and (a) $10 ultraviolet dog urine detector.”
  • Lobby Business is GoodBloomberg reports, despite a perception of “partisan gridlock” in Congress, the federal lobbying business is booming.  “Health care, … battles in the tech sector, spending and authorization bills, the U.S. trade deal with Mexico and Canada and the Trump administration’s regulatory actions are among the areas that have kept lobbyists busy.”
  • New York Times not the Source of Biden Contributions:  In an article from Politico (Item 2), we learn that the Biden Campaign reported a contribution from a journalist for the New York Times.  The contribution, in fact, came from a Maryland rare books dealer with the same name as the Times journalist who made his contribution without an address or contact information.”  Committee staff apparently filled in the occupation and employer information, but guessed wrong.  Although commentary suggested that the error complied with a rule for federal committees to engage in “best efforts,” it is not clear that, in our view, a blind search would be legally compliant without obtaining confirmation from the contributor.
  • House Continues to Pass Election Reforms:  The House of Representatives passed its third bill aimed at preventing foreign interference in U.S. elections, according to  The Hill.  The bill “would require campaigns to report any illicit offers of assistance by foreign governments or agents and would take steps to ensure that online political advertisements are subject to the same rules as TV and radio ads.”  Nevertheless, the article points out that both the ACLU and the Senate Majority leader remain opposed.
  • Glendale moves to Regulate:  The Glendale, California City Council directed the City Attorney to draft a lobbyist ordinance.  The Glendale News-Press reports that the Mayor has “taken meetings with individuals he thought were simply concerned residents expressing their thoughts on a local development project or city contract, only to find out down the line that they were paid industry or company representatives.  ‘You feel bad. You feel fooled,'” he told the News-Press.  A senior assistant city attorney told the council that the ordinance would include a registration fee and quarterly reports.
  • Doing Time for Fundraising Fraud:  According to the Center for Public Integrity, a Washington, D.C. political fundraiser pleaded guilty this week to making a false statement, which included “‘materially false, fictitious and fraudulent statements and representations’ to the FEC.”  Although we’ve previously reported on this story, we note one new important observation:  “The Department of Justice, which may criminally prosecute people who run PACs, is becoming somewhat more aggressive, especially when it comes to investigating political action committees that allegedly mislead donors,” according to the article.

WEEK OF October 18, 2019

Latest Developments:

Reminder:

The American Bar Association’s webinar, International Political Influence and Corruption in Elections: Will Recent Events Lead to Stricter U.S. Regulation? is available online.  The webinar is a timely overview of the laws regulating foreign influence and corruption, and possible changes to come, was the topic of a well-received American Bar Association panel discussion moderated by Nielsen Merksamer Of Counsel Mike Columbo and featuring a presentation by Federal Elections Commission Chair Ellen Weintraub.  The one-hour online CLE is available to ABA members free of charge and to the public for a fee, and may be accessed here:  International Political Influence and Corruption in Elections.

In Case You Missed It:

  • Bundling as a Workaround:  The New York Daily News reports on an increasing use of bundling campaign contributions by developers and others who do business with New York City and, thus, are limited to $400 donations to mayoral candidates.  The Daily News found that “(d)uring the last wide-open election in 2013, a whopping $1.7 million was bundled and given to candidates for mayor, public advocate, comptroller, borough president and city council from 93 people doing business with the city at the time.”  According to the report, “(t)welve people who have city business, prohibiting them from giving more than a few hundred bucks themselves, have already bundled $112,405 in donations for 2021 candidates.”
  • FEC Struggles:  The Federal Election Commission continues to struggle without a quorum.  According to The Hill, “in the wake of the campaign finance violation charges leveled against two associates of Rudy Giuliani,” the Chair indicated that “there ‘may well be a lot of money that is slipping into our system that we just don’t know about.'”  The Chair lamented that “(w)hen campaign finance issues are on the front pages of the newspaper every single day, this is a particularly bad time for the FEC not to have a quorum.”
  • Democratic Lobbyists SqueezedThe Hill reports that “Democratic lobbyists find themselves in a tough spot, eager for their party to recapture the White House in 2020 but also bristling at the top-tier candidates’ attacks on K Street.”  Lobbyists have pointed out that while candidate’s “proposals may be intended to target K Street’s biggest spenders, they could also silence voices for progressive causes.”
  • Amazon Prime Election:  More than 40 states use one or more of Amazon’s web services for election-related matters.  According to Reuters, Amazon Web Services has quietly moved into the state and local election business and it “now runs state and county election websites, stores voter registration rolls and ballot data, facilitates overseas voting by military personnel and helps provide live election-night results, according to company documents and interviews.”  The Democratic and Republican parties, Joe Biden, and the Federal Election Commission also use Amazon Web Services.  The article points out the various benefits and risks to election users.
  • Disclosure Dispute:  The Legacy Foundation Action Fund is challenging the authority of the Citizens Clean Elections Commission to enforce campaign disclosure lawsArizona Capitol Times reports that the group is challenging the $96,000 fine that the Commission imposed for the group’s failure to disclose its activity.  The group asserted that its advertisements – aimed at the Mayor of Mesa, who was running for Governor – were not intended to influence the election; they were merely educational.  A Maricopa County Judge upheld the fine; a Notice of Appeal was filed this week with Arizona Court of Appeals.  The group has already been to the Arizona Supreme Court on this matter once, receiving an unfavorable decision.
  • Quit While You are Ahead:  A former county commissioner and senate candidate accused of fairly minor ethics violations settled a dispute with the Florida Ethics Commission by agreeing to pay a $500 fine and correct errors on his disclosure forms.  “(N)one of the errors appeared intentional or malicious.  Rather, they were the kind of errors candidates for office, especially novice candidates, make because of the somewhat labyrinthine nature of disclosure forms,” according to Flaglerlive.comHe subsequently refused to answer “a series of 27 basic questions seeking clarity about his previous candidacies and the forms he filed.  He just had to admit or deny statements.”  As a result, the proposed punishment has been increased to a $10,000 fine, along with a gubernatorial censure and reprimand.
  • Beware Blackout-Period Hazards:  The North Carolina Clean Energy Business Alliance, a lobbyist employer prohibited from soliciting contributions for legislators during a legislative session, sent out a solicitation for contributions to a legislator based on a favorable action he had taken just days before on a piece of legislation.  WBTV reports that the organization sent an email to members asking for contributions up to the maximum allowed for the member’s opposition to a bill sponsored by Duke Energy.  The organization believes it has the right to communicate with its members on any subject; the legislator says he will return any contributions received if the North Carolina Board of Elections rules the solicitation to be illegal.

WEEK OF October 11, 2019

Latest Developments:

  • The Governor of California signed several campaign and election law bills this week:
    • SB 47 requires that a petition for an initiative, referendum, or recall include the name of the committee promoting it, along with the names of the top contributors to the committee on the petition itself.
    • SB 71 prohibits the use of a candidate’s or official’s legal defense fund account to pay any penalty, judgment, or settlement of a claim of sexual harassment.
    • AB 201 provides an alternate means for campaign advertisement disclosure requirements in the case of a communication that is a text message.
    • AB 220 permits the use of campaign funds for child care expenses of a candidate.
    • AB 571 extends the state’s contribution limits to local elections, unless the local jurisdiction has established a “different” contribution limit. (Currently, this amount is $4,700 per election.)
    • AB 864 revises disclosure requirements for political advertising, including exempting requested emails from mass mailing disclosure requirements, i.e., emails to those who signed up to receive the emails.

Nielsen Merksamer will provide a brief analysis of all the important political law measures to clients after the last day for signing bills.

  • The Washington Public Disclosure Commission issued a new video “how to” reminder that the requirement that lobbyists report completion of their training takes effect on December 31, 2019. Thus, as lobbyists re-register, they must certify that they have completed the required lobbyist training course.

Reminder:

The Practising Law Institute’s a one-day, focused program on Corporate Political Compliance 2019, which was held in San Francisco, CA on October 3, 2019, is available online, and may be found here: Corporate Political Law Compliance 2019. Nielsen Merksamer co-chairs this program. Highlights of this year’s program included:

  • FPPC Chair Richard C. Miadich joined the Conference to give an update on the Commission’s Task Force to Study Best Practices for Regulating Campaign Activity on Digital Media.
  • Michael J. Sullivan, Executive Director of the Massachusetts Office of Campaign and Political Finance, explained the role of a state regulatory agency in the enforcement process.
  • McGregor W. Scott, U.S. Attorney for the Eastern District of California, discussed criminal prosecutions of political bribery cases.
  • A panel of Fortune 500 companies discussed their internal political law compliance programs. Participants included Altria, Boeing, Chevron, and General Electric.

In Case You Missed It:

  • Campaign Finance Violations Hit Ukraine Businessmen: CBS News reports that two men who play key parts in the Ukraine intrigue were arrested at Dulles Airport and charged with campaign finance violations for allegedly funneling foreign money to federal political committees. The two men, who are employed by the President’s personal attorney according to NBC News, “deceived ‘the candidates, campaigns, federal regulators, and the public by entering into secret agreements, laundering foreign money through bank accounts in the name of limited liability corporations, and through the use of straw donors … who purported to make legal campaign contributions'” (quoting the federal indictment). According to CNN, two others were also indicted, one of whom has been arrested.
  • “No Wonder Good People Don’t Run for Office in California”: The Orange County Register published an opinion that overwhelming disclosure requirements have a deleterious effect on well-meaning citizens who may not understand overly-detailed laws. The article provides an insight into how “citizens who enter politics independently are treated more harshly under the Political Reform Act than players who are on ‘the team.'” Without a “professional political campaign treasurer” and “a specialized political attorney,” candidates are far more likely to face severe penalties from the state’s Fair Political Practices Commission for lapses in compliance.
  • No Fingerprints on the Contributions: The Center for Responsive Politics tells us that “presidential candidates are still not revealing information about the well-connected donors helping them raise campaign cash. Federal candidates are not required to disclose information about bundlers – elite fundraisers who solicit contributions to a candidate from wealthy friends, business associates and other contacts – unless the bundler is a federal lobbyist. However, previous presidential candidates such as George W. Bush, John McCain, Barack Obama and Hillary Clinton voluntarily disclosed at least some information about their bundlers.”
  • Go to Jail; Go Directly to Jail; Do not Pass Go: The Mayor of Atlantic City, New Jersey resigned after admitting in federal court that he stole money from a youth basketball team that he founded, according to Fox News. The Mayor raised the money from donors “using his political office,” but spent it on personal expenses over the course of five years. His lawyer indicated that the Mayor “only admitted misusing private funds, not public money, which he argued made the mayor better than many of his predecessors.” The article notes that, “as of 2007, four of the city’s last eight mayors had been arrested on corruption charges and one-third of the nine-member City Council was either in prison or under house arrest.”
  • Maybe that’s why it’s called “PayPal”: A Maryland legislator resigned after being charged with wire fraud. The Washington Post reports that the delegate is accused of “soliciting donations that were directed to a PayPal account that was not disclosed in state campaign finance filings.” She apparently told supporters the money would go toward her re-election and to maintain her leadership position; instead, she spent the money on personal expenses.
  • Unlimited Gifts, but only for Elected Officials: The Wichita Eagle compared its city to neighboring cities and found that it is one of the few cities with no gift limits for city council members. The paper found that “city employees can be fired for accepting gifts, travel or meals from anyone doing business with the city, according to the city’s code of ethics. Those rules don’t apply to the mayor and city council.” Under current law, “Wichita’s mayor and city council members are free to take unlimited gifts.”
  • No more Gifts and Unlimited Travel: The Las Vegas Convention and Visitors Bureau has “approved new ethics rules Tuesday that ban members from accepting gifts and tighten controls over travel,” according to the  Las Vegas Review. As a result of an investigation about practices conducted by the Las Vegas Review, the Bureau “remove(d) a $400 limit on accepting gifts and no longer encourage(s) board members to travel abroad on LVCVA business.”

WEEK OF October 4, 2019

Latest Developments:

  • The U.S. District Court for the Southern District of New York, in Citizens Union of the City of New York v. Attorney General, struck down a New York ethics law that required that nonprofits that engage in certain lobbying or issue advocacy activities disclose their donors.  Specifically, the court struck down:  (1) a provision that required charities (501(c)(3) organizations) that make contributions to a nonprofit (501(c)(4) organization) that engages in lobbying activity disclose all donors that gave more than $2,500 to the charity and, (2) a provision that requires a nonprofit (501(c)(4)) to disclose donors of $1,000, or more if it spends more than $10,000 in a calendar year on communications to at least 500 people concerning the position of an elected official on potential or pending legislation, unless the donor’s money has been segregated for another purpose. The Albany Times Union reports on the case and notes that “the (Cuomo) administration is considering an appeal of the federal judge’s ruling.”
  • The U.S. District Court for the District of New Jersey enjoined portions of S. 150, approved by the Governor last June.  The New Jersey law requires that certain organizations engaged in making independent expenditures file disclosure reports if they raise or spend in excess of $3,000, including disclosure of the identity of major donors of over $10,000.  In Americans for Prosperity v. Grewel, the court enjoined New Jersey from requiring the disclosure of the identities of those donors because the plaintiff is likely to win its case on the merits.  The plaintiff asserts that the law would chill First Amendment rights by deterring potential contributors.  An article by NJ Spotlight points out that New Jersey has a variety of options to appeal the decision or fix the law.
  • The Governor of California signed A.B. 730 which prohibits distributing any so-called “deep fake” videos with malice intended to harm a candidate that include a picture of the candidate’s face superimposed on another person within 60 days of an election at which the candidate appears on the ballot.  The bill includes exceptions for, among others, satire or parody and certain media outlets.
  • The Washington, D.C. Metropolitan Area Transit Authority revised its ethics policy following criticism over its investigation of a former chair of the commission who was found to have a conflict of interest in a proceeding that was described as “secretive.”  The revised rules, according to the Washington Post, “include expanding and clarifying disclosure requirements, making the transit agency’s inspector general the primary investigator of probes and allowing the public access to written reports of findings and rulings. Board discussions about complaints or subsequent investigations will also be open to the public.”

In Case You Missed It:

  • No Quorum, but Enough for Headlines:  While the Federal Election Commission lacks a quorum to undertake any substantive business, two remaining commissioners engaged in public debate.  The Washington Post reports that the Chair was blocked by a fellow Commissioner from including “a draft memo on prohibited foreign national electoral activity” in the agency’s weekly digest that is emailed to interested parties.  The Chair nevertheless published it through 57 tweets.
  • Lobbyist/Corporate Cash Desperately Wanted Regardless of NomineePolitico reports that organizers of the Democratic National Convention in Milwaukee pandered to corporate lobbyists last week, seeking funding for the convention.  “Democratic National Committee officials explained during the meeting how corporations can help foot the bill for the convention, regardless of who the nominee is.”  Lobbyists expressed concern that corporate clients could be embarrassed as some of the leading candidates have rejected corporate PAC and lobbyist contributions.
  • Not Pay-to-Play, just a Software Glitch:  The President of the Brooklyn Borough, and a presumptive candidate for Mayor of New York City ran afoul of city ethics rules, for the third time, according to the New York Post.  An email blast sent to 23,000 people for a gala fundraiser hosted by Rosie Perez included recipients who have various business relationships with the city.  The Post points out that “the missive lacked one key thing: a mandatory disclaimer warning prospective donors that any contribution ‘will not affect any business dealings with the city or provide special access to city officials.‘”  A spokesman said “it was unintentional and blamed it on a Borough Hall computer error.”
  • “There Goes the Neighborhood”:  Residents in Washington, D.C. are decrying a trend that is a variation on gentrification:  lobbyists, fundraisers, and associations purchasing historical residences near the U.S. Capitol for nonresidential activityRoll Call reports that the trend has upset neighbors who complain the parties and activities result in additional traffic and noise, including catering trucks that block street access.  Also of concern is whether zoning laws have been violated and whether businesses are ducking commercial rate property tax rates and paying much lower residential property taxes.

WEEK OF September 27, 2019

Latest Developments:

  • The Montana Commissioner of Political Practices announced new campaign contribution limitsContribution limits are increased for contributions made on or after September 21, 2019.
  • The Governor of California signed three political law bills this week. Two bills make minor and technical changes and include: AB 902, which codifies several regulations of the Fair Political Practices Commission, including allowing an assistant treasurer to act in place of a treasurer of a committee and requiring that lobby coalitions file reports; and AB 946, which is a technical corrections bill that deletes obsolete and extraneous provisions of the Political Reform Act.  In addition, AB 909 requires that committee treasurers acknowledge, on a statement of organization and amendments, that any violation of their duties under the Political Reform Act is a crime.

Reminder:

The Practising Law Institute presents a one-day, focused program on Corporate Political Compliance 2019 in San Francisco, CA on October 3, 2019.  Nielsen Merksamer co-chairs this program.   Nielsen Merksamer clients who wish to attend in person in San Francisco should contact their political law attorney for complimentary attendance until September 30.  Nielsen Merksamer clients also enjoy a 20% discount off the cost of registration for the webcast using the code NFZ9 CPL19.  To sign up, use the following link: PLI One-Day Program in San Francisco.

The Nielsen Merksamer Essential Ethics October Sacramento briefing is being rescheduled.  Please stay tuned for updates.

In Case You Missed It:

  • New Sheriff in Town:  David Emadi, the recently appointed Executive Secretary of the Georgia Government Transparency and Campaign Finance Commission, filed complaints against 13 current members of the Georgia Legislature for campaign finance violations.  According to the Atlanta Constitution, “when he took over earlier this year [Emadi] was told lawmakers weren’t following campaign finance laws.”  Emadi is also reportedly “looking into violations by the campaign of Democratic gubernatorial nominee Stacey Abrams and Atlanta mayoral candidates,” according to the article.
  • Going Dark:  The Governor of Maryland has a “new super PAC and a related nonprofit (that) ‘can accept unlimited donations.'”  CTPost reports “the governor’s solicitation illustrates a troubling trend that has escalated over the past decade, as public officeholders find methods to raise unlimited money – some from undisclosed donors – in ways often prohibited for traditional candidate committees.”
  • Any Limits on New Powers?:  The newly-created North Dakota Ethics Commission is grappling with the extent of its powers.  At the first meeting, the new chair said he had received questions in a wide range of areas, “such as state lawmakers’ use of social media, and investigating ‘oil spills.'” He told the Grand Forks Herald that “‘people think … that we have authority over any kind of ethical question.‘”  An outside expert opined that the “Ethics Commission is essentially responsible for investigating complaints perceiving cronyism, favoritism or ‘poor behavior’ among legislators, state officials and lobbyists…  This is not a retributive committee.  It’s a restorative committee.”
  • Laid-Back Enforcement:  The Oregon State Elections Division is being excoriated for its loose enforcement practices.  The Oregonian reports that the gist of the Division’s enforcement investigation practice is to send a letter asking an accused if he or she violated state campaign law.  If the person replies “no” to the authorities, the case is closed, even if the accused told the media a different story.  As a result of this news, The Oregonian subsequently reports that the Elections Division is discussing changes, including asking for two elections investigators, positions that were cut in 2011 due to the recession.
  • FARA FlameoutPolitico reports, following the acquittal of a former Obama White House Counsel on FARA-related charges, that two others who worked with Paul Manafort are no longer under investigation for violations of the Foreign Agents Registration Act (FARA) relating to their work for Ukraine.  Both retroactively registered as foreign agents.
  • FARA Flameout 2:  In another article from Politico, a federal judge has overturned two FARA-related guilty verdicts against a colleague of Michael Flynn, who allegedly worked for Turkish interests.  The judge found “‘no substantial evidence that (the defendant) agreed to operate subject to the direction or control of the Turkish government.‘”

WEEK OF September 20, 2019

Latest Developments:

  • The Puerto Rico Department of Justice announced that it plans to launch its electronic executive lobbying registry this week, according to the  Weekly Journal. The former Governor of Puerto Rico issued Executive Order 2019-031 (Spanish) in July to require creation of an executive lobby registration platform, to be operated by the Department of Justice. According to the former Governor’s July Press Release (English), “(a)ny person who is a lobbyist and carries out any lobbying activity before a government agency must register with the Lobbyists Registry.”

Reminder:

The American Conference Institute presents the National Forum on the Foreign Agents Registrations Act on September 25, 2019 at the Washington Hilton in Washington, D.C.  Join Jason Kaune of Nielsen Merksamer, who is participating on a panel about “FARA Prosecutions in Practice: How Practitioners are Approaching the Toughest, Most Critical Decisions in the Wake of Recent, High Profile Cases.” Use Code S10-655-655D20.S and receive a 10% discount. To sign up, use the following link: National Forum on FARA.

The Practising Law Institute presents a one-day, focused program on Corporate Political Compliance 2019 in San Francisco, CA on October 3, 2019. Nielsen Merksamer co-chairs this program. Nielsen Merksamer clients who wish to attend in person in San Francisco should contact their political law attorney for complimentary attendance until September 30. Nielsen Merksamer clients also enjoy a 20% discount off the cost of registration for the webcast using the code NFZ9 CPL19. To sign up, use the following link: PLI One-Day Program in San Francisco.

Nielsen Merksamer presents a briefing concerning California election, government and political law on Essential Ethics:  What you Need to Know for 2020, on October 11, 2019, from 10:00 to 11:30 am at the Sutter Club in Sacramento. Join us for a complimentary briefing on the key issues you need to know for the 2020 election cycle. To sign up, use the following link: Essential Ethics 2020.

In Case You Missed It:

  • Pay-to-Play Restriction Remorse: According to NJ.com, “apparently many of the forces aligned with the “good guys” are finding it difficult to live by the same rules reformers imposed in the past.” Specifically, “(i)n Hoboken, the city council recently received legal advice that its pay to play laws are too strict, and that the city should adopt the less stringent state pay to play laws.”
  • PAC Scam: A Maryland political consultant who “raised close to $10 million – mostly from small-dollar donors, many of them elderly — while giving out just $48,400 to politicians,” has pleaded guilty to wire fraud, according to Politico. The article describes how he operated several PACs, collected donations, and “used the money to benefit himself and his associates.”
  • Lobbyists Rule!: The Associated Press reports that in less than three years, the President has “named more former lobbyists to Cabinet-level posts than his most recent predecessors did in eight.” According to the article, “the influence industry has flourished” under the current administration.
  • Family Funneling: Former Kentucky Democratic Party Chair James Lundergan, was found guilty last week “of illegally funneling…more than $200,000 in corporate contributions…to his daughter’s 2014 campaign against Senate Majority Leader Mitch McConnell.” According to The Washington Post, this conviction takes place amidst ongoing ethics investigations of his daughter, Kentucky Secretary of State Allison Lundergan Grimes, for using state voter information for partisan purposes.
  • The Ghost of Tammany Hall: Recently concluded federal and state investigations found that developers with business before New York City donated a combined $125,000 to a political non-profit controlled by Mayor Bill DeBlasio. One developer even received a call from the Mayor  “soon after a stop-work order had been lifted on a hotel and condominium project in Brooklyn Bridge Park,” soliciting a contribution to his political non-profit, The New York Times reports; the other developers were solicited by the Mayor’s agents. While no criminal charges were brought against the mayor for violating the State’s behested payment prohibition, the developers paid fines totaling $45,000 and the contributions remain the subject of a JCOPE investigation.
  • Privacy TransparencyPolitico reports that the author of a bill in California to revise online privacy laws is married to the COO of Ring.com. According to the article, “(s)tate conflict-of-interest law prohibits lawmakers from engaging in decisions in which they have a financial interest, said Adam Silver, chief counsel to Assembly legislative ethics committee. But, he said, the ‘public generally’ exception applies to cases in which an entire industry, profession or trade group would be affected by a law – rather than a small group of companies.” A spokesman for the Speaker’s office noted that “it is generally up to lawmakers to recuse themselves when appropriate.”
  • Illegal Lobbying, Chicago Style: The Chicago Board of Ethics levied a $25,000 fine against a “consultant” who engaged in lobby activities and failed to register, according to the Chicago Tribune. The article notes that a 2-year FBI investigation showed that the consultant offered Viagra and prostitutes to a former alderman in the course of his lobby efforts.

WEEK OF September 13, 2019

Latest Developments:

  • The Internal Revenue Service published a new proposed regulation that would, according to an accompanying news release, “incorporate relief from requirements to report contributor names and addresses on annual returns filed by certain tax-exempt organizations, previously provided in Revenue Procedure 2018-38. A recent court decision (Bullock v. IRS) held that the Treasury Department and the IRS should have followed notice and comment procedures in 2018 when announcing this relief with respect to providing contributor names and addresses, and these regulations provide the opportunity for notice and comment on that relief as well as on other proposed updates to existing regulations.”  The regulation will mean that nonprofit organizations that engage in political activity do not report the names and address of donors of $5,000 or more on their annual information returns to the IRS.
  • The Ninth Circuit Court of Appeals ruled that Montana’s prohibition against robocalls violated First Amendment protections.  In Victory Processing v. Fox, the court found that Montana’s statute regulating robocalls by restricting political speech was not narrowly tailored to address compelling governmental interests.
  • The Portland, Oregon City Auditor announced that certain campaign finance provisions adopted by the voters at the November 2018 election have been validated by the courts and take effect this month.  Among other provisions, “(E)ntities making more than $750 in independent expenditures to support or oppose city candidates now must register,” according to the Portland Tribune.
  • The New North Dakota Ethics Commission met for the first time this week.  The Bismarck Tribune reports that the session was mostly organizational and included a discussion of the optimal qualities the Commission desires in staff to be hired.
  • The New York Joint Commission on Public Ethics, at its September meeting, announced that it continues to enhance its online lobby application.  A public search query function is up and running and, in the very near future, the app will add the ability to complete online terminations and extensions, as well as file semi-annual report.
  • The Commission also turned down a request for exemption from rules requiring disclosure of donors from Smart Approaches to Marijuana – New York; the Albany Times-Union notes that previous requests for exemption that were denied by the Commission were subsequently overturned by a judicial hearing officer.

Reminder:

The American Conference Institute presents the National Forum on the Foreign Agents Registrations Act on September 25, 2019 at the Washington Hilton in Washington, D.C.   Join Jason Kaune of Nielsen Merksamer, who is participating on a panel about “FARA Prosecutions in Practice: How Practitioners are Approaching the Toughest, Most Critical Decisions in the Wake of Recent, High Profile Cases.”  Use Code S10-655-655D20.S and receive a 10% discount.  To sign up, use the following link: National Forum on FARA.

In Case You Missed It:

  • Everything is Green in Fall River, MA:  The FBI charged the Mayor of Fall River, Massachusetts with extortion, alleging that the Mayor sought cash and sometimes product from marijuana vendors in the city, according to Connecticut Public RadioIn a pay-to-play scheme, the Mayor issued city letters, required by prospective marijuana vendors for licensure, in exchange for about $600,000 in cash, loan forgiveness, and campaign contributions, as described by MassLive.  The wife of one marijuana vendor was fined for reimbursing others for making contributions to the Mayor.  He is also accused of extorting a portion of his Chief of Staff’s salary and shaking down a businessman for a “Batman” Rolex watch, per another MassLive report. The next Mayoral election will be held on September 17.
  • Should Lobbyist Regulation be Relevant?:  The Montana Commissioner of Political Practices notes that Montana statutes regulating lobbyist activity might not be up to date.  “You will find the word ‘telegraph’ in the current code as far as what lobbyists should be reporting – telephone and telegraph expenses. You won’t find the word ‘internet’ in there,” as the Bozeman Daily Chronicle quotes the Commissioner.  According to the article, his point is that “lawmakers should consider updating state lobbying rules to bring them ‘into the 21st century.'”  The Commissioner’s suggestions include electronic filing and regulating grassroots lobbying.
  • ACLU All in on Dark Money:  The American Civil Liberties Union filed suit “seeking to overturn a measure that would require political action organizations that accept so-called ‘dark money’ in New Jersey to disclose their donors,” according to NJ.com. “‘This law discourages people from donating to non-profit organizations that advocate for causes that they believe make people’s lives better,’ said ACLU-NJ Legal Director Jeanne LoCicero.”

Even Pay-to-Play is Bigger in Texas:  A Texas State Senator running for the U.S. Senate has disclosed in federal filings that he has substantial income from government contracts with seven Texas cities and districts according to the Texas Tribune. Disclosures for candidates for federal office are much greater than disclosures required of state officeholders.  “Voters were never able to get those kinds of basic details from the disclosures the longtime senator – or any other Texas lawmaker – has had to file under lax state ethics laws,” according to the article. 

WEEK OF September 6, 2019

Latest Developments:

  • The Commissioner of Canada Elections announced compliance agreements with two corporations that agreed to pay fines of nearly $450,000, a fine that represents three times the amount of illegal contributions made by these corporations in addition to the cost of the investigation.  According to Global News, the corporations, which are prohibited from contributing directly in Canadian elections, asked employees to make contributions and reimbursed them through personal expense claims.
  • The Governor of Montana is being sued by the Illinois Opportunity Project. The lawsuit seeks to block the Governor’s Executive Order, which requires disclosure of government contractor’s contributions in the case of a “contract value of over $25,000 for services or $50,000 for goods.”  According to the Great Falls Tribune, the group believes that “(p)rivacy in advocacy is especially important for people with unpopular and minority views.”

Reminder:

  • The American Conference Institute presents the National Forum on the Foreign Agents Registrations Act on September 25, 2019 at the Washington Hilton in Washington, D.C.   Join Jason Kaune of Nielsen Merksamer, who is participating on a panel about “FARA Prosecutions in Practice: How Practitioners are Approaching the Toughest, Most Critical Decisions in the Wake of Recent, High Profile Cases.”  Use Code S10-655-655D20.S and receive a 10% discount.  To sign up, use the following link: National Forum on FARA.

In Case You Missed It:

  • Be Sure to File Your Reports:  An unsuccessful 2010 candidate for the Rhode House of Representatives who raised $50 and filed one report “owed a whopping $118,120 in fines for failing to file his campaign finance forms on time,” according to the Boston Globe.  Given that he never closed his account and never filed any further reports, the former candidate racked up fines of $2 per day for every report missed since 2010.  At a hearing on the matter, the Board of Elections lowered the fine to $610, which represented “the amount the board spent on mailing, labor, and issuing subpoenas.”
  • Some Lobbyist Money is OK:  The Associated Press reports that Joe Biden has attended fundraisers at lobbyist’s homes, despite a pledge to “reject campaign cash from lobbyists.”  According to the article, “excluded from Biden’s pledge are lobbyists who work at the state level and those who lobby, or supervise lobbyists, but do not meet the legal threshold requiring them to register.”  His ban on lobbyist contributions applies only to registered federal lobbyists; he has accepted contributions from employees of federal lobbying firms who are not registered.
  • Speaking Fees and Campaign Activities Blurred:  Presidential candidate Andrew Yang accepted speaking fees from corporations after announcing his candidacy, according to ABC News.  Corporations may not contribute to candidates, but candidates may be permitted to accept fees for speeches independent from their campaign.  The network reports that the opening slide on his PowerPoint presentation included his campaign logo, but Yang contends the speech addressed issues discussed in his book.
  • Married, but not CoordinatingCNN reports that the company of the President’s campaign manager has “received hundreds of thousands of dollars from the President’s flagship political action committee, which is barred from coordinating with the campaign.”  His wife says she just does “payroll and invoicing,” but is the only person listed on the incorporation documents of Red State Data and Digital.  However, the campaign manager asserts that he is the sole owner.  Regardless, the PAC insists that it “strictly complies with FEC rules and regulations and any suggestion otherwise is patently false.”
  • It Pays to Play in School:  A Southern California school board member received more than $16,000 in donations from a PAC whose principal officer and major donors received contracts from the school board, according to the Whittier Daily News.  One no-bid contract was narrowly approved on a 3-2 vote, in which the new contract increased by $39,000 over the prior year’s $57,000 contract.  Other contracts were also approved by a 3-2 vote with the recipient school board member casting the deciding vote.   The article notes that, “Under California state law, (the board member) is not barred from voting on contracts involving companies that donate to a PAC or contracts involving a PAC’s principal officer.”
  • Memorial Campaign Donations:  The Allentown Morning Call reports that a recent obituary asked for campaign contributions for the decedent’s son, “in lieu of flowers.”  The son is running for District Attorney.  The paper notes that it is not unprecedented and it’s not illegal if properly reported when done in coordination with a campaign.
  • Not Guilty:  According to Politico, former Obama White House Counsel Greg Craig was found not guilty of deceiving federal authorities about his activities representing a foreign government.  Craig had prepared a report about the prosecution of a former Ukrainian Prime Minister and provided it to a journalist.  The Department of Justice alleged Craig’s distribution of the report was part of a media strategy for his foreign clients that would have required him to register as a foreign agent, disputing Craig’s representations to investigators that the journalist requested the report and that he distributed it to prevent its conclusions from being mischaracterized by the Ukrainians.

WEEK OF August 30, 2019

Latest Developments:

  • The California Third District Court of Appeal invalidated a measure that purported to allow public financing of elections in California.  In Howard Jarvis Taxpayers Assn. v. Newsom, the court found that Proposition 73, passed in 1988, prohibited public funding of political campaigns and that S.B. 1107, passed in 2016, sought to repeal that ban.  S.B. 1107 would have allowed public funding of political campaigns if the state or a local government established a dedicated fund for that purpose, but the court found that it conflicted with the voter-approved measure.
  • The Arizona Secretary of State released new lobbyist filing forms, which do not require notarization and may be filed by email.  The Secretary notes that, while her website is being updated, users may experience a delay in filing quarterly expense reports.
  • The Portland, Oregon Auditor published a draft of revised lobby regulations and asked for public comment on these regulations.  The regulations provide that attempts to gain “goodwill” constitute “lobbying” and that grassroots lobbying is “lobbying,” and also clarify who is a “city official” with influence for purposes of the city’s lobby law.  Comments are due by September 23.

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C.  The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities.  A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs.  To sign up, use the following links:  PLI Two-Day Conference in Washington D.C.PLI One-Day Program in San Francisco  (also webcast)

In Case You Missed It:

  • Hibernation at the FEC:  The six-member Federal Election Commission will be down to three members at the end of August, according to Roll Call.  The lack of a quorum means that the commission cannot meet and take any formal actions until at least one member is added.  The staff of 300+ employees will continue to collect information and monitor activity.
  • Disinformation Hearing:  The Chair of the Federal Election Commission has summoned Facebook, Google, and Twitter to a meeting in an effort to “identify effective policy approaches and practical tools that can minimize the disruption and confusion sown by fraudulent news and propaganda in the 2020 campaign,” according to Politico, which quotes the invitation.  The meeting is scheduled for September 17.
  • ID Required for Facebook Politics:  Facebook has announced that, beginning in mid-September, it will require that all political advertisers confirm their identities with a tax ID number or other government identification, according to the  Associated Press.  The verified group will be listed in a “paid for by” disclaimer.   “Advertisers who don’t have tax ID numbers, government websites or registrations with the Federal Election Commission will still be able to post ads by providing an address, verifiable phone number, business email and website,” according to the article.
  • Ethics Dilemma for Government Executive in the Hospitality Business:  The Governor of California placed his hospitality business, Plumpjack Group, in a blind trust run by his sister and issued an Executive Order barring state agencies from doing business with his chain of hotels, restaurants, stores, and bars.  But, as the Sacramento Bee reports, the Governor is facing the prospect of signing or vetoing bills that would affect the hospitality industry, in which his assets are heavily invested.  His actions have drawn comparisons to another government executive in the hotel business.

Nielsen Merksamer Investigates:  The California Supreme Court issued an announcement that it selected Art Scotland and Nielsen Merksamer to “spearhead an independent investigation into the partial disclosure related to the July (California State) Bar exam.” Scotland is a retired Justice of the State’s Third District Court of Appeal who joined Nielsen Merksamer in 2012.  According to the statement, the court “will ensure that there is a thorough and independent investigation into the circumstances surrounding the disclosure (of topics covered by the exam), and that appropriate steps are taken to protect the integrity of the bar examination and identify and address any consequences.”  The American Bar Association Journal reports that many recipients of the email from the California State Bar thought the revelation of question topics five days before the exam was a hoax; the Bar said the first email leak was accidental, but disclosure to all test-takers was made “out of an abundance of caution and fairness.”

WEEK OF August 23, 2019

Latest Developments:

  • The Mayor of San Diego approved Ordinance 21098, which requires a nexus between a lobbyist’s activity expenses and the city official.  Under the changes made by the ordinance, expenses must be disclosed if the lobbyist lobbied the official’s department, agency, or board within the previous 12 months or if it is reasonably foreseeable that the lobbyist will lobby the official’s department, agency, or board within the next 12 months.  Employment-related activity expenses, such as a salary or an amount for contract services that is paid to an official or an official’s immediate family member during a reporting period is reported in seven bracketed amounts.  The lowest bracket is $10 to $2,500 and the highest captures amounts over $100,000.
  • The City Council of Aurora, Colorado (part of the Denver metropolitan area) approved an ordinance this week that creates an Ethics Review Panel composed of judges, limits gifts to elected officials from lobbyists and other interested parties, and imposes revolving door restrictions.  According to the Colorado Sentinel, the council nixed an ordinance that would have required lobbyists to register and file activity reports.

Reminder:  

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C.  The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities.  A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs.  To sign up, use the following links:  PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

  • Nice Work if You Can Get It:  The Pittsburg Post-Gazette reports that the “large union crowd” for a presidential speech at a Beaver County petrochemical facility was paid to be there.  Royal Dutch Shell workers were given the option of being paid to attend the speech or taking the day off without pay.  According to a union source, “one day of work might amount to about $700 in pay, benefits and a per diem payment that out-of-town workers receive.”
  • Nice Work, but You Can’t Do It:  The former head of City Planning for Los Angeles is facing a record fine for repeated violations of revolving door provisions, according to the Los Angeles Times.  Former high-level officials are banned from lobbying their former employer for 12 months.  Michael LoGrande was aware of these restrictions when he violated them and has agreed to pay a $281,250 fine for his repeated violations.  The Los Angeles Times subsequently reported that during the same period that he was lobbying, the former official was also receiving more than $18,000 a month in consulting fees from the city’s Planning Department.
  • Pay $50,000 to PlayThe San Jose Mercury News reports that the $300,000-per-year CEO of the Oakland Coliseum Authority, a public joint powers authority, sought a $50,000 “finder’s fee” from the winning bidder for naming rights to the municipally-owned stadium.  After negotiating on behalf of the Authority and sending two invoices for his personal fee on Coliseum Authority letterhead to RingCentral, he resigned his position.  According to the article, under a state “self-dealing” law (California Government Code Section 1090) the contract may be in jeopardy.
  • More Perils of Contract Lobbying:  The Governor of Rhode Island is under scrutiny for awarding a billion dollar no-bid contract to International Game Technology (IGT) to run the state’s lottery, according to the Washington Free Beacon.  Governor Raimondo is also the Chair of the Democratic Governors Association and, it turns out, the Treasurer of that Association is a lobbyist for IGT.  The state’s Ethics Commission is now investigating.
  • Argument in Russian Election Interference Prosecution: “We Weren’t There and We Didn’t Spend Enough”: In a report by the Washington Times, a Russian consulting company, Concord Management and Consulting LLC, allegedly paid $1.25 million per month to the Russian Internet Research Agency to fund a social media campaign to interfere with elections in the U.S. and other countries.  Prosecutors allege that the U.S. activity required campaign finance filings with the Federal Election Commission (FEC) and registration with the Department of Justice (DOJ) under the Foreign Agents Registration Act.  Concord argues that the DOJ has failed to identify who should have registered with the FEC and DOJ, that it had no person present in the U.S. that could register as a foreign agent, and that it spent only $2,930 on independent expenditure ads and $1,833 on payroll for rallies in the U.S.
  • Facebook Blocks Political Ad for Targeting “Personal Attributes.”  Facebook reportedly pulled an ad by the Trump Campaign for violating its prohibition against “content that asserts or implies personal attributes,” including, among other things, “direct or indirect assertions or implications about a person’s … gender identity,”  according to The Hill.  The ad featured a crowd of women with the caption, “The Women for Trump Coalition needs the support of strong women like you!”

WEEK OF August 16, 2019

Latest Developments:

  • The North Dakota Ethics Commission has been appointed.  The Governor’s Office announced that the selection panel, which included the Governor and the majority and minority leaders of the State Senate, chose the five members for the newly formed commission.  The panel includes a retired general, a community college president, a former teacher and mayor, a retired judge, and a retired general counsel of a medical center.  Their terms begin on September 1.  The Bismarck Tribune reports that the Governor specifically sought a nonpartisan group and did not want former lobbyists or lawmakers appointed to the Commission.
  • The Ninth Circuit Court of Appeal upheld Montana’s requirement that nonprofits register as political committees if, within 60 days of an election, they run any type of advertising that refers to a candidate or ballot measure.  In National Association for Gun Rights, Inc. v. Mangan, the court found that the state’s requirement that organizations register if they spend more than $250 on a single electioneering communication was substantially related to important governmental interests and did not violate the First Amendment.  However, the court struck down the state’s requirement that the organization have a treasurer who is a registered voter in the State of Montana.
  • The Kentucky Legislative Ethics Commission announced that its Legal Counsel, Laura Hromyak Hendrix, has been selected as its new Executive Director and will assume that position on September 1. She replaces John Schaaf, who is retiring.  The State Journal has an article with biographical information about Ms. Hromyak Hendrix. 

Reminder:  

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C.  The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities.  A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs.  To sign up, use the following links:  PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

  • FARA-Related Prosecution Begins: The New York Times reports that, this week, the U.S. Department of Justice initiated a prosecution related to a potential failure to register under the Foreign Agents Registration Act.  In a matter arising from the Mueller investigation, Former Obama White House Counsel and prominent Washington lawyer Gregory Craig is charged with misleading federal agents about his activities on behalf of foreign interests.
  • When the Charitable is Political:  The New York Times is reporting on the increasing scrutiny that previously apolitical charities face when their benefactors are revealed as supporting unpopular political causes or candidates. In the wake of the controversy surrounding billionaire Stephen Ross’ political contributions and the ensuing pushback against his businesses and recipient charitable causes, many organizations are concerned that the trend may compromise their largest donors’ support. Many charities have increasingly come to depend on these large donors whose political activity is most at risk of exposure.
  • Perils of Contract Lobbying:  The lobbyist for the Missouri Police Chiefs Association quit “after a state audit blasted his role in a no-bid contract scheme that cost taxpayers $74,000,” according to the Louis Post-Dispatch.  According to the article, an appropriation was shifted from the Missouri Highway Patrol to the Department of Public Safety, which was then run by a former President of the Missouri Police Chiefs Association, who steered the contract to the Missouri Police Chiefs Charitable Foundation.
  • Local Government Coordination Questioned:  The California Fair Political Practices Commission is opening an investigation into whether three local transportation agencies conspired to promote an initiative measure to raise Bay Area tolls, according to the San Jose Mercury News.  California law prohibits the use of public monies to promote or oppose initiative measures.  The increased tolls are estimated to generate $4.5 billion in revenue to the agencies in the next few years, although the funds are now held in escrow due to legal challenges.

WEEK OF August 9, 2019

Latest Developments:

  • The Governor of Oregon signed two campaign finance disclosure bills this week:
    • HB 2716, which requires that communications in support or opposition of a candidate disclose the name of the committee and the top five donors of $10,000 or more.
    • HB 2983, which requires organizations that spend $10,000 or more on electioneering communications disclose their donors.   The bill also reduces the threshold requiring disclosure reporting for independent expenditures from $750 to $250.
  • The Federal Election Commission has published a “notification of availability” and is seeking public comment through September 30 on whether the Commission should engage in rulemaking to require disclosure of contributions of “valuable information,” which would include “foreign information” and “compromising information.”  The notice is in response to a petition the FEC received in April.
  • The California Fair Political Practices Commission adopted new regulations on conflict of interest.  The commission issued regulation concerning when an interest in a business is material and when an interest in a source of income is material.  Each regulation has a list of criteria for determining when the reasonably foreseeable financial effect of a governmental decision on one of these interests of a government official is material.
  • The Florida Commission on Ethics approved a new regulation defining the term “disproportionate benefit.”  Last November, voters approved a state constitutional amendment providing that “A public officer or public employee shall not abuse his or her public position in order to obtain a disproportionate benefit for himself or herself,” but deferred to the Commission to define the term.  The new regulation defines “disproportionate benefit” as a “benefit, privilege, exemption, or result arising from an act or omission by a public officer or public employee inconsistent with the proper performance of his or her public duties.” The regulation also includes several criteria to be considered in determining whether something constitutes a disproportionate benefit.  The legislature is required to enact penalties for violation of this provision by December 31, 2020.

Reminder:  

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C.  The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities.  A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs.  To sign up, use the following links:  PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast).  Nielsen Merksamer clients are invited to a workshop on September 4.

In Case You Missed It:

  • Special Purpose Accounts are too Dark:  The Center for Responsive Politics and the Campaign Legal Center have asked the Federal Election Commission to require that party special purpose accounts, known as “Cromnibus” accounts, be subject to disclosure requirements.  The petition requests “that the FEC promulgate rules and forms requiring national party committees to delineate within their reports the individual and aggregate transactions involving their Cromnibus accounts.”  CRP’s article points out that “accounts are not required to disclose basic information, and it is nearly impossible to track all contributions to these accounts under the current reporting structure.”
  • Last Bus Stop: Federal PenCourthouse News Services reports that the former head of the Dallas County Schools bus agency was sentenced to seven years in federal prison in a pay-to-play scheme in which he took $3 million in bribes for $70 million in school bus camera contracts awarded.  The school bus agency has since gone bankrupt and been dissolved by the voters.
  • Consulting is not LobbyingMaplight reports that in 2017, “corporate trade organizations and nonprofits” spent more money in Washington on consulting and advocacy than on lobbying, the latter of which requires disclosure, to influence public policy.  The article characterizes these as “vague expenses” and notes that they include grassroots lobbying activities.
  • Public Disclosure EmbarrassmentNPR discusses the fallout from publicizing information that has already been disclosed publicly; specifically, highlighting the list of donors to the President’s campaign.  The Los Angeles Times reports on efforts of SoulCycle and Equinox Gyms to distance themselves from contributions made by their owner/investor.
  • Too Much from One Source:  The Oakland Public Ethics Commission fined the Mayor of Oakland for accepting four times the maximum contribution from an individual Oakland developer.  The four contributions came from different entities, but all are owned by the same property developer.  According to the East Bay Times, the commission voted to impose an increased fine because the Mayor’s campaign received a similar group of four contributions in the 2014 election.

WEEK OF August 2, 2019

Latest Developments:

  • The United States District Court for the District of Montana overturned IRS Revenue Procedure 2018-38, which applied beginning with the 2018 tax year and ended the requirement that certain nonprofit organizations disclose donors of $5,000 or more to the Internal Revenue Service.  In Bullock v. IRS, the court found that the IRS began collecting the information on donors of $5,000 or more to 501(c)(4) organizations following adoption of a regulation in 1970.  The regulation took effect after a notice was published and the public had a period in which to comment on the matter.  The court found that the 2018 revenue procedure was a legislative rule that failed to follow the Administrative Procedure Act, which requires a notice and period for public comment before the rule can be implemented.  Bloomberg reports that the court ruling upends a change the IRS made last year that permitted so-called Section 501(c)4 groups, known as “social-welfare” organizations, to keep their donor lists private.”

Reminder:  

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C.  The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities.  A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs.  To sign up, use the following links:  PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

  • FARA Lobbyists using Zombies:  The Campaign Legal Center issued a new report on the use of so-called Zombie Campaign Funds, which are leftover congressional campaign funds that former members retain after leaving Congress.  The report raises concerns about former members who are now registered under the Foreign Agents Registration Act (FARA) and lobby for foreign governments.  These FARA lobbyists are using their zombie accounts to curry favor with current members of congress.  Following the release of the report, Roll Call detailed some of the specific instances of concern and potential fixes.
  • Pay-to-Play at work in New York StateNew York State has no restrictions on contributions by state contractors.  The New York Times reports that, as a result, a company that received a $23 million MTA contract and had never donated to the Governor, became one of Governor Cuomo’s “largest contributors” in his campaign for a third term.  The Times reports that the Governor has received more than $3 million from MTA contractors and industry groups since taking office in 2011.
  • Contributions as Insurance:  California’s newly elected Insurance Commissioner pledged not to take contributions from the insurance industry.  Following a San Diego Union-Tribune report that the Commissioner accepted contributions from insurance executives, the Union-Tribune subsequently revealed that he met with those executives about complaints pending in the Commissioner’s office and intervened on their behalfCal Matters notes that these events echo a similar pattern of a former Commissioner ousted as a result of scandalous dealings concerning money squeezed from insurance companies.
  • Tennessee Drops Speaker over Ethics:  The Tennessee House of Representatives selected a new Speaker in the wake of questions about the incumbent’s ethics.  The Tennessean reports that, among other things, (now former) Speaker Glen Casada faces questions over spending from his PAC and campaign accounts that contain over $500,000.  The newspaper reports that state officials are about to open an inquiry into Casada’s campaign spending and outlined four areas of potential problems.
  • How Fast Does the Revolving Door Spin?Public Citizen issued a report calling for reform, stating that, at the federal level, the “revolving door continues to spin at an alarming speed.” The report includes a state-by-state analysis of revolving door provisions, naming Iowa and North Dakota as the states with the broadest prohibition on lobbying after serving in state government.  Meanwhile, the Associated Press reports on what it’s like in Nebraska, one of seven states with no revolving-door restrictions.

WEEK OF July 26, 2019

Latest Developments:

  • The Chicago City Council unanimously approved the new Mayor’s ethics reform proposal this week. While much of the ordinance is aimed at bolstering the powers of the Inspector General and tightening rules for city officers and employees, the Chicago Board of Ethics Fact Sheet notes that the measure increases fines for most violations of the city ethics ordinance and shrinks the exemption from lobbyist registration for individuals who lobby on behalf of nonprofit organizations.  The changes to the lobby provisions take effect on January 1, 2020.
  • The Connecticut Office of State Ethics announced a new Executive Director, who succeeds the retiring Carol Carson. Peter Lewandowski, an associate general counsel at the agency, takes over on August 1, according to the Hartford Current.
  • The United States Department of Justice announced that a former congressional candidate has pleaded guilty to operating fraudulent and unregistered PACs, including a PAC called “Keeping America in Republican Control.” Between 2016 and 2018, the former candidate collected over $1.6 million in contributions for PACs that were never registered and spent over a million dollars on purely personal expenses from those contributions.  In addition, he “used the name of a former Ambassador and high-level military officer without the knowledge or permission of the person, even after being instructed not to do so.”
  • The New York Joint Commission on Public Ethics (JCOPE) met this week and, among other things on the agenda, announced that – due to technical difficulties with its Lobby Application program – the July 15, 2019 deadline to file bi-monthly reports was extended to July 30, to match the previous extension announced for semi-annual Lobbyist Employer reports.

Reminder:  

  • The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C.  The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities.  A one-day version of the program will be presented later in San Francisco, CA on October 3. A one-hour briefing on the basics of federal campaign finance law will be presented beforehand on August 1. Nielsen Merksamer co-chairs these programs.  To sign up, use the following links: One Hour Briefing on August 1 (Online, included in registration below); PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

  • Ready for Coordination: The Center for Responsive Politics reports that Republican commissioners on the Federal Election Commission have effectively let the Hillary Clinton campaign “off the hook for campaign coordination” with a super PAC.  The Commission dismissed a complaint on a party-line vote in which Democrats would have sustained the complaint that the Clinton campaign coordinated with a well-funded super PAC that collected unlimited contributions. The 2-2 tie vote meant that the complaint could not go forward.
  • Handwringing over Lobbyists’ Contributions: The San Jose Mercury News reports that Democratic presidential candidates are divided over whether to accept campaign contributions from lobbyists and, specifically, from individuals registered to lobby for foreign governments.  Leading candidates have eschewed donations from all registered federal lobbyists; other candidates who are “more strapped for funds” have accepted donations from individuals registered to lobby for foreign governments.  The matter arises at a time when candidates are “worried about foreign influence in the U.S. political system.”  Meanwhile, Politico reports that while many Democratic presidential candidates have refused and returned contributions from registered federal lobbyists, that hasn’t stopped them from accepting contributions from government relations professionals whose lobbying activity is just short of the threshold for registration.
  • Better than Googling: A Chicago website created by journalists lets citizens type in their address or ward number to see if their alderman has been indicted.  The site, com, with a tag line, “Because at this point you’ve gotta ask,” seeks to increase transparency in Chicago government.  According to Block Club Chicago, the Website “includes information on the aldermen who lead all 50 of Chicago’s wards, as well as the history of political corruption in each ward.” The article by Block Club quotes one of the founder’s comments about the statistics of indictment and conviction who says, “Chicago aldermen are batting about .300 when it comes to criminality.”
  • Toothless Ethics Commission: The Austin American-Statesman describes the Austin Ethics Review Commission’s powers as “relatively toothless” compared to other cities’ commissions.  The article points out that the commission can’t impose fines and is limited to sending “a mean letter or a meaner letter.”  “If it finds a violation, it can issue one of three types of letters or, in extreme cases, offer a recommendation that the person be removed from his or her job. Austin’s board can also refer cases for criminal prosecution by city attorneys, but it has not done so in recent decades,” according to the article.
  • Pay-to-Play a Good Bet in D.C.: A report from the Washington Post tells us that, as a result of a District of Columbia Council Member who cast a deciding vote on a no-bid sports gambling contract, his cousin will receive a $3 million subcontract from the gambling company.  The council member says he has no financial interest in his cousin’s company and is not familiar with it, despite the fact that it has the same street address as the council member’s construction company.
  • Charity under Fire for Political Activity: According to the Los Angeles Times , the California Attorney General filed a lawsuit against Move America Forward, a charity that sends care packages to troops, alleging “misspending resources from the charity, with some going to for-profit firms and other funds going to promote the Tea Party Express and political candidates.”  That activity would be a violation of the prohibition against political campaign activity by charities, according to the suit.  The Times quoted a spokesman for the charity who said that “much of the money paid was reimbursement for expenses he incurred in organizing nationwide tours with rallies for the troops that featured entertainers. He said the attorney general investigators mistook the reimbursement of expenses such as renting buses and hotel rooms for rally participants, and ‘fair’ commissions for fundraising.”
  • Scam PACs on the Rise: Politico tells us that “Conservative Majority Fund has raised nearly $10 million since mid-2012, but has made just $48,400 in political contributions.”  The article defines “scam PACs” as “organizations that take advantage of loosened campaign finance laws to reap windfalls for insiders while directing only a small portion of receipts to actual political advocacy.”  Politico notes that even President Trump’s campaign has issued a warning that “dishonest fundraising groups” are using the President’s name to raise money.
  • Bemoaning in Beantown: “A group of lobbyists, businesses, and nonprofits” presented a legal analysis to city officials complaining that Boston’s new lobby ordinance “could create barriers and burdens,” according to the Boston Globe.  The analysis expresses concern that “many individuals participating in a single meeting or phone call would be required to register as a lobbyist, submit disclosure reports, and pay a registration fee.”

WEEK OF July 19, 2019

Latest Developments:

  • The Supreme Court of Washington State upheld the City of Seattle’s taxpayer-funded “Democracy Voucher Program” in which each registered voter receives a voucher that can be given to a qualified candidate to redeem.  Two taxpayers challenged the property tax-funded program as a violation of their First Amendment rights.  However, in Elster and Pynchon v. City of Seattle, the unanimous court found that the “Democracy Voucher Program does not alter, abridge, restrict, censor, or burden speech” and does not “force association between taxpayers and any message conveyed by the program.”
  • The Arizona Corporation Commission–which regulates corporations, pipelines, railroads, securities, and public utilities–amended its ethics code this week to prohibit candidates for the Commission from accepting contributions from persons with matters before the Commission.  The ban also applies to sitting Commissioners who run for federal, state, or local office, and covers contributions from related or associated parties, owners, and affiliated PACs.
  • The Governor of California approved AB 903, which, among other things, clarifies that government agencies cannot spend money on campaigns and claim a “media exemption” from regulation.  The bill also clarifies that pre-election reports are due for all state primaries and general elections.
  • The Washington State Public Disclosure Commission reminded interested parties that new disclosure provisions take effect on July 28.  Existing law requires the top five contributors be disclosed; the new provisions require that for any committees listed in the top five, contributors to those feeder committees be disclosed until the contributors listed are all individuals or entities that are not committees.

 Reminder:  

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C.  The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities.  A one-day version of the program will be presented later in San Francisco, CA on October 3. A one-hour briefing on the basics of federal campaign finance law will be presented beforehand on August 1. Nielsen Merksamer co-chairs these programs.  To sign up, use the following links: One Hour Briefing on August 1 (Online, included in registration below); PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

  • Nielsen-Merksamer Expert on Federal Elections:  New York’s The City reports that Mayor Bill de Blasio used his state PAC to pay expenses of his federal campaign for President.  According to The City piece, the federal campaign reported that $80,000 in expenses were paid by the state PAC.  The article quotes Nielsen Merksamer’s Mike Columbo (a former FEC attorney):  “If the de Blasio campaign accepts an $80,000 in-kind contribution from a state PAC, they can expect ‘future correspondence from their FEC reports analyst and, perhaps, a call from the FEC’s Enforcement Division, to discuss federal contribution limits.’”
  • “Sunlight on Dark Money” is the name of a measure placed on the November ballot in San Francisco.  The San Francisco Examiner reports that the proposed ordinance would require disclosure of the top three donors paying for an advertisement and, if one of those is another committee, would require disclosure of the two top donors to that committee.  The measure also bans developers from making campaign contributions while a “land use matter” is pending approval and for 12 months following final approval.  In addition, it would require that disclosure reports be filed for independent expenditures that pay for a mass mailing.
  • Going DarkThe Tampa Bay Times reports that Andrew Gillum has moved his campaign money from a political committee to nonprofit in an apparent effort to shield activity from public reports.  Donations “will now go to the nonprofit, Forward Florida Action, instead of his political committee, Forward Florida.”  A spokesman said the change was because the nonprofit could “spend money on voter registration efforts in ways his political committee could not.”
  • Lobbyists Save Money in Ethics ReformSt Louis Public Radio reports that since voters adopted a $5 cap on spending by lobbyists on lawmakers in November, lobbyists’ spending has dropped by 94%, based on an analysis of data from the Missouri Ethics Commission.  According to the article, “most of the spending is now on larger events that all lawmakers can attend. There is still a $5 limit per lawmaker for those events.”
  • No Oration without Registration:  The Miami-Dade Commission on Ethics and Public Trust ruled that the Mayor of South Miami was not wrong when he told a lobbyist that the lobbyist could not speak at a city council meeting without registering as a lobbyist.   According to the Miami Herald, the lobbyist’s case was dismissed with prejudice after determining that the Mayor relied in good faith on advice from the City Attorney.
  • Pay-to-Play Reimbursement Request:  A Chicago developer renovating a Chicago Housing Authority (CHA) project asked the City of Chicago for reimbursement of an unusual expense, “Donation-Alderman $20,000.” The CHA’s Inspector General found the request to be a “red flag.”  The Chicago Tribune reports that the developer later dropped the request and “acknowledged to the Tribune that the FBI asked questions about the $20,000 reimbursement request.”
  • Other Shoe Drops in St. Louis:  We previously reported on the St. Louis County Executive who resigned and pleaded guilty to accepting bribes while in office.  The Associated Press informs us that a business man who was indicted following the County Executive’s conviction pleaded guilty to three bribery counts in federal court this week.  Businessman James Rollo is first person who was not a county employee to plead guilty in the St. Louis pay-to-play scheme that traded campaign contributions for county contracts; two other county employees have pleaded guilty to charges.

 

WEEK OF July 12, 2019

Latest Developments:

  • The Oregon Legislature approved Senate Joint Resolution 18, which places a measure on the November 2020 ballot that would permit the state and local governments to enact laws or ordinances to limit campaign contributions, require disclosure of contributions and expenditures, and require disclosure in campaign advertisements.
  • The Governor of California:
    • Signed AB 1043, which permits spending campaign funds on cybersecurity measures for devices of officials, candidates, and campaign workers.  The bill cites the Federal Election Commission’s recent Advisory Opinion 2018-15 in its findings and declarations regarding the need for campaign cybersecurity.
    • Signed SB 84, which extends the date for the Secretary of State to develop its online reporting process for campaign statements and lobbying information, from December 31, 2019, to February 2021.  Had it not been extended, the system would have been implemented during the 90-day reporting period for the March 2020 presidential primary.
  • The Governor of Hawaii approved SB 144, which provides that penalties for failure to register and failure to file an expenditure report may be imposed by the State Ethics Commission for a negligent failure, rather than a willful failure.  Violations are no longer a criminal offense, thus the threshold was lowered.  In addition, the bill provides for a settlement process.
  • Two States announced New Lobby Reporting Systems:
    • The Massachusetts Secretary of State reports that his office has transitioned to a new lobby reporting system.
    • The Maryland State Ethics Commission announced that it will have a new reporting system, expected to be live by September 1, 2019.
  • The Federal Election Commission approved three advisory opinions this week.  Advisory Opinion 2019-12 permits a company to offer cybersecurity services to federal candidates and political committees for no or a low cost on the same terms and conditions as offered to non-political clients.  Advisory Opinion 2019-09 permits a nonconnected PAC to sell T shirts with the names and likenesses of candidates as long as it treats the proceeds as contributions and complies with applicable disclaimer provisions.  In addition, Advisory Opinion 2019-08 allows a committee to distribute valueless digital blockchain tokens as an incentive to volunteers, because they are materially indistinguishable from other forms of campaign souvenirs.

 Reminder:  

The Practising Law Institute presents U.S. Political Activities by Multinational Corporations, with panelists Mike Columbo and Evann Whitelam, moderated by Jason Kaune, all of Nielsen Merksamer, on Tuesday, July 16, at 1:00 P.M. EDT.  In light of recent scandals, the hour-long discussion will focus on compliance with U.S. political laws – including the Foreign Agents Registration Act, the Federal Election Campaign Act, and the Lobbying Disclosure Act, among others – as they relate to multinational corporations; a summary of notable investigations and enforcements; and real-world scenarios and best practices for compliance.

Register Here for U.S. Political Activities by Multinational Corporations

 In Case You Missed It:

  • Easing the Contribution Limits:  The Board of Supervisors of Santa Cruz County, California, has approved a change to the county’s contribution limits, thus ending its distinction of having the lowest contribution limits in the Golden State.  According to the Santa Cruz Sentinel, the limits were increased from $400 to $500 for individual’s contributions to county candidates.  The $500 limit is consistent with many other local California jurisdictions.  Additionally, the new limit will increase by $25 every two years, starting in 2022.
  • Ending Contribution Time Restrictions:  According to the Arkansas Democrat-Gazette, a federal judge has blocked a state law that prohibits contributions more than two years before an election.  In Jones v. Jegley, the “blackout period” prevented Ms. Jones from contributing to the candidate of her choice in the 2022 election.  A notice of appeal has been filed.
  • Forming New Ethics:  The Albuquerque Journal reports that the first five members of the New Mexico Ethics Commission were sworn in on July 1 by the Chief Justice of the state’s Supreme Court.  The remaining two members will be chosen by those five, in a selection process slated for August.  An executive director will be selected after all seven members are in place.
  • Scranton Mayor Pleads in Pay-to-Play Scandal:  The Associated Press reports that the Mayor of Scranton, PA, pleaded guilty in federal court to bribery, extortion, and conspiracy.  According to the AP, the Mayor “collected tens of thousands of dollars in bribes by pressuring people who needed city permits or contracts. “
  • Pay-to-Play Insurance:  The San Diego Union-Tribune reports that, shortly after he was elected in 2018, California’s new State Insurance Commissioner began collecting campaign contributions from individuals associated with insurance companies that he regulates. The report indicates that the Insurance Commissioner accepted “more than $50,000 in donations in recent months from insurance company executives and their apparent spouses.”  According to the Union-Tribune, the Commissioner announced that he would return the money, following the paper’s exposé.
  • Show-Me the (Taxpayer’s) Money:  Missouri taxpayers paid over a half million dollars in legal fees to attorneys representing two “powerful lobbying groups,” according to the Louis Post-DispatchThe attorneys successfully sued in federal court to stop a ban on PAC-to-PAC contributions contained in a 2016 Missouri ballot measure.  The measure was approved by 70% of the voters, but the federal court found that the ban violated free speech laws.  Other parts of the measure took effect, including campaign contribution limits.
  • No More Dark Money in PhoenixAZCentral reports that a campaign finance measure passed by voters last November finally took effect after a review by the Governor’s office.  Eight months after it passed, the law now requires that any contribution of more than $1,000 to influence an election in Phoenix must be disclosed.

WEEK OF June 28, 2019

Latest Developments:

  • The New York Joint Commission on Public Ethics (NY JCOPE) met on Tuesday.  Commission staff announced that the deadline to file semi-annual lobbyist employer reports is extended to July 31, as a result of changes with the lobby reporting system.  The new online app for those lobbyist reports will not be available until the week of July 8, and as a result, the deadline is extended.
  • For lobbyist employers who also file bimonthly lobbyist reports, the new app will prepopulate pertinent portions of the semi-annual report, saving those lobbyist employers time.  However, the staff noted that in accordance with the new lobbyist regulation (§ 943.12(g)), lobbyist employers who use only in-house lobbyists do not have to file a (duplicative) semi-annual report if they file bi-monthly lobbyist reports.  Only those lobbyist employers who have an outside, retained lobbyist must file the semi-annual reports.
  • The Connecticut Citizens’ Ethics Advisory Board is searching for a new leader in the wake of the retirement of longtime Executive Director Carol CarsonThe Connecticut Mirror reports that Carson “is credited with returning stability and credibility to the role of ethics watchdog.”  She will retire August 1.
  • The Governor of Nevada signed B. 557, which prohibits use of contributions to pay a candidate a salary, and prohibits the use of unspent contributions for personal use or to pay the candidate a salary.

Reminder:  

  • The Practising Law Institute presents U.S. Political Activities by Multinational Corporations, with panelists Mike Columbo and Evann Whitelam, moderated by Jason Kaune, all of Nielsen Merksamer, on Tuesday, July 16, at 1:00 P.M. EDT.  The hour-long discussion will focus on how failure to comply with U.S. political laws – including the Foreign Agents Registration Act, the Federal Election Campaign Act, the Lobbying Disclosure Act, and others – can lead to adverse press and reputational harm, costly civil and criminal investigations, and penalties and prosecutions.  The class will examine today’s political climate as it affects regulation of international political activities and political law enforcement and include an overview of applicable U.S. political laws as they relate to multinational corporations; a summary of notable investigations and enforcements; and real-world scenarios and best practices for compliance. Register Here for U.S. Political Activities by Multinational Corporations

 In Case You Missed It:

  • No Lobbyist/FARA Money for Joe: Joe Biden’s campaign has refunded contributions received from a lobbyist for Qatar and Morocco, according to the San Jose Mercury-News.  Biden’s website contains a list of restrictions, including that his “campaign does not accept contributions from corporations or their PACs, unions, federal government contractors, national banks, those registered as federal lobbyists or under the Foreign Agents Registration Act, or foreign nationals.”
  • Tech PAC Dough:  A group of Microsoft workers is lobbying their colleagues to stop contributing to the company PAC, according to a report from OneZero. The PAC is supported by donations from more than 4,000 of Microsoft’s 140,000 employees.  The critics say “it felt duplicitous for Microsoft’s leaders to speak the language of progressive social causes… and then oversee an employee-funded PAC where roughly 50% of the money would go to conservative candidates who often oppose those same measures on a federal level.”
  • Pay-to-Play with the FBIThe San Francisco Chronicle reports that the son of an Oakland City Council Member was sentenced to a year in federal prison for accepting bribes from an FBI agent who posed as a developer seeking favorable treatment on contracts.
  • Federal Contractor Zapped:  The Federal Election Commission fined Ring Power Corporation $9,500 for making a $50,000 contribution to support Rick Scott’s Florida U.S. senatorial campaign, according to Rollcall.  The contribution from a federal contractor was refunded, but the FEC persisted in imposing the fine for violating the ban on contributions from federal contractors to federal campaigns.
  • Da Lawyers Weigh In:  Last week we reported that the Governor of New Jersey reluctantly signed 150, which requires the disclosure of donors to 501(c)(4) organizations that engage in political spending.  NorthJersey.com reports that the first lawsuit has been filed. “Americans for Prosperity, a group founded by megadonor brothers David and Charles Koch, asked a federal judge for the U.S. District Court of New Jersey to prevent New Jersey officials from enforcing the law until the suit is decided and to declare the law unconstitutional,” according to the article.  Constitutional concerns have also been raised by the ACLU, the Brennan Center for Justice, and the Governor himself because the law requires nonprofit donor disclosure for organizations that speak to legislation and policy, not just elections, and its requirements are vague.  Cleanup legislation to quickly fix the law was promised to secure the Governor’s signature, but has not yet been introduced.

WEEK OF June 21, 2019

Latest Developments:

  • The U.S. Court of Appeals for the District of Columbia issued a decision upholding the Security and Exchange Commission’s pay-to-play rule, which, among other things, limits the ability of investment advisors and brokers to make campaign contributions within 2 years of providing paid services to a government entity.  The court’s decision in Y. Republican State Committee v. S.E.C held that the rule does not violate the First Amendment.
  • The United States Supreme Court ruled that a government contractor is not a “state actor,” and thus not subject to First Amendment restrictions to which the government itself is subject,” unless performing a traditional and exclusive government function.  In Manhattan Community Access Corp. v Halleck, the court pointed out that the Free Speech Clause does not prohibit private abridgement of speech.  The case arose when a community access cable TV provider banned a content producer whose program criticized the government contractor cable access provider.
  • The Governor of New Jersey signed S 150, as he promised last week.  New Jersey Spotlight reports that the Governor did not like the bill, but anticipates that there will be a cleanup bill to eliminate objectionable portions of the measure.  The measure requires politically active nonprofit 501(c)(4) organizations to disclose their large donors.

In Case You Missed It:

  • Lobbyists Benefit from Legislature’s Snit:  The Oklahoma Ethics Commission, squeezed financially by the legislature, has lowered lobbyist fees rather than see its future revenue taken away. The Oklahoman reports that the legislature voted to cap the amount the Commission could spend from its revolving fund and removed the current surplus.  In response, the Commission reduced the amount of money going into the fund by cutting lobbyist registration fees from $250 to $100 for the next year.
  • Anyone can Apply, but Who will be Chosen?:  The Albany Times Union reports that a coalition of “good government groups” has released a letter asking for a process to recruit an independent Executive Director of the state’s ethics commission.  The New York Joint Commission on Public Ethics (NYJCOPE) has had three different executive directors since it was created in 2011, all of whom held jobs in Governor Cuomo’s administration.  June 28 is the publicly-posted application deadline for candidates seeking the position.
  • Walmart Rolling Back BribesThe New York Times reports that prosecutors, acting under the Federal Corrupt Practices Act (FCPA), have secured a guilty plea by the Brazilian subsidiary of Walmart.  The company agreed to pay a $282 million fine to settle charges of paying bribes to overseas officials, which is prohibited by the FCPA.  According to the article, payments were “often recorded on the company’s books with vague descriptions like ‘professional fees’ and ‘incidental.’”  Payments in Brazil included amounts paid to “the sorceress,” who was known “for the ability to obtain government permits quickly.”
  • Legislative Advocacy is not Lobbying: New Hampshire Public Radio reports that the state’s House Majority Leader, who is a teacher’s union president, “is adamant that he hasn’t broken any ethics rules by engaging in legislative advocacy” on behalf of the union while sitting as a legislator.  A complaint pending before the Legislative Ethics Committee will be heard next week.  The union’s public reports indicate that the Majority Leader was paid to spend 9 percent of his time on “political activities and lobbying.”  The Majority Leader’s predecessor as union president regularly registered as a lobbyist.  However, the Majority Leader says he “does not lobby individual legislators on bills of interest” to the union.
  • Lobbying Success in the Cornhusker State:  The number of lobbyists, spending on lobbyists, and the number of entities employing lobbyists has dramatically increased in Nebraska, according to the Lincoln Journal-Star.  The article quotes a Common Cause Nebraska report that “it has become generally accepted that if you want something done at the Capitol, you should hire a lobbyist.”

WEEK OF June 14, 2019

Latest Developments:

  • The Governor of Texas signed HB 2677. The bill, which takes effect September 27, 2019, restricts a person who has made specified contributions and expenditures from political funds from lobbying for two years from the date of the contribution or expenditure was made.
  • New Jersey legislators have sent the governor 150, which requires that independent expenditure committees report contributions in excess of $10,000 and expenditures in excess of $3,000. The measure specifically applies to IRC § 501(C)(4) and § 527 organizations. The governor vetoed a similar measure in May, but, as reported by New Jersey press, this bill represents a bargain that would “spare him from becoming the first governor in more than 20 years to have their veto overruled.”

In Case You Missed It:

  • The Russians are (Still) Coming: Senator Chuck Grassley penned an article in the Wall Street Journal announcing that he is introducing a bipartisan effort to beef up enforcement of the Foreign Agents Registration Act (FARA).  According the analysis, his bill would give the Attorney General new investigative tools, increase penalties for noncompliance, and require that the General Accounting Office study certain aspects of FARA, including whether the exemption from the Lobby Disclosure Act is appropriate or subject to abuse.
  • Hatch-ing a Crackdown: According to official records, the Office of Special Counsel has received a torrent of formal Hatch Act complaints since 2014 and is taking investigative action on many of these allegations. Indeed, members of both parties have been found to use their official positions in the Federal government to advocate for explicitly partisan or electoral political positions.
  • Rearranging the (Behested) Furniture: The California Fair Political Practices Commission has rejected a complaint from the Republican Party that alleged that the recently elected Lieutenant Governor’s receipt of union contributions to furnish her office was a violation of the Political Reform Act, according to the Sacramento Bee.  The Governor has raised more than $300,000 in behested payments to a nonprofit formed by her office, the Committee to Support the Office of the Lt. Governor.  The behested donations to the nonprofit organization are not subject to state campaign committee or officeholder account contribution limits.
  • Little Rock, Big Bribes: The Associated Press reports on the ongoing corruption scandal in Arkansas in which a healthcare official has pleaded guilty this week to bribing former State Sen. Jeremy Hutchinson. According to the plea, Hutchinson, who is the son of a former U.S. Senator and the current governor’s nephew, “voted for legislation, held up agency budgets and initiated legislative audits” to divert government funds to the healthcare company in question in exchange for bribes. Hutchison has pleaded not guilty in a related bribery case.

WEEK OF June 7, 2019

Latest Developments:

  • The United States Sixth Circuit Court of Appeals, in Schickel v. Dilger, upheld Kentucky’s ethics laws, overturning a lower-court ruling.  The court upheld a ban on lobbyists’ contributions to legislators, a restriction on contributions to legislators from lobbyist employers during the legislative session, a ban on gifts from lobbyists, and a ban on lobbyists serving as a treasurer for a legislator’s campaign committee.  Courthouse News Service notes that the court ruled that the restrictions “serve the legitimate government interest of cutting down on corruption.”
  • The Kentucky Executive Ethics Commission proposed new emergency regulations, which were published in the Administrative Register of Kentucky this week.  The regulations revise the registration process for executive agency lobbyists, lobbyist employers, and real parties in interest, beginning July 1, 2019.  The emergency regulations, if approved, will take effect on June 27, 2019.
  • The Nevada Legislature introduced SB 557 on June 1 and passed the measure overwhelmingly on June 3.  Initially, the bill would have required businesses and other organizations that make $10,000 or more in contributions during a calendar year to file an annual report itemizing the organization’s contributions.  But on the day of passage, the measure was amended to delete those provisions, leaving the bill’s main focus on restricting the use of campaign contributions by banning certain personal uses of contributions and prohibiting candidates from paying themselves a salary from those contributions.
  • Nassau County, New York has announced a new Vendors Code of Ethics.  Part of the initiative is implementing a “zero-tolerance” policy prohibiting the acceptance of gifts from vendors.  According to Newsday, the new rules also require that vendors certify compliance with the new ethics rules.  The policy, as summarized by Newsday, prohibits gifts and job offers to county employees and their family members and imposes a two-year revolving door provision in connection with contracted work.
  • The City of Richmond, Virginia, approved Ordinance 2019-115, which imposes a one-year revolving door restriction on city council members and other city officers and employees.  The measure prohibits representing a client for compensation on matters related to any agency or office of the city government in which the former officer or employee served or was employed during the one-year period before termination of employment or service.

In Case You Missed It:

  • Russia’s U.S. Radio Programing Requires FARA Registration:  A media company in Florida was ordered by the United States District Court to register under the Foreign Agents Registration Act after signing a deal to rebroadcast Russian state-owned media radio programming.  The Hollywood Reporter notes that this is a first, and speculates that perhaps Al Jazeera and the BBC may have to register.
  • Zombies Being Chased: The Federal Election Commission has contacted about 50 defunct campaigns that still have bank accounts with questions about spending.  The Tampa Bay Times, which originally broke the story about Zombie campaign funds a year ago, reports that the FEC has questioned Mitt Romney’s presidential campaign fund and Michele Bachmann’s campaign fund, among others, about inappropriate “apparent personal use” of those funds.
  • Attorney to the Rescue:  The Tennessee House of Representative named an Ethics Counsel following a scandal that forced the Speaker to resign his post.  The Tennessean reports that “the assistant director of the Tennessee Bureau of Ethics and Campaign Finance, was named Friday to the newly-created House legal position.”
  • Vindication for a Concerned Mom in Colorado:  The Governor of Colorado signed B. 232, which revises the procedure for filing a campaign finance complaint, including providing a period to cure a violation.  The legislation solves the problem after the courts declared the existing complaint process unconstitutional in Holland v. Williams.  That case involved “Tammy Holland of Strasburg, who ran two ads in the local I-70 Scout newspaper urging residents to vote in a local school board race in 2015, though she did not endorse any candidate in the ads,” according to Colorado Politics.  Her local school district superintendent filed a formal complaint against her for failure to register as a campaign committee.

WEEK OF May 31, 2019

Latest Developments:

  • The Governor of Washington signed HB 1195, but vetoed parts of the measure.  The bill revises campaign finance statues by changing definitional  threshold for an independent expenditure to $1,000 or more, requiring e-filing, allowing commissioners to hold over for up to one year, revising when campaign contribution limits are adjusted (once every two to five years, instead on each even-numbered year), and altering private attorney general enforcement provisions.  However, the Governor’s partial veto strikes out a provision that would have prohibited the public posting of officials’ financial disclosure statements.
  • The United States Ninth Circuit Court of Appeals issued an opinion in Tschida v. Motl, which struck down a provision of Montana’s law that prohibits disclosure of ethics complaints against public officials until certain findings are made by the Commissioner of Political Practices.  The court found that the statute violates the First Amendment.  According to the Associated Press, the decision “effectively makes all allegations of ethical breaches by elected and unelected state officials public information.”
  • The Bipartisan Select Committee on the Modernization of Congress made recommendations to “update the lobbying disclosure system.”   According to The Hill, the recommendations will “be drafted into legislation,” and “standardize how the disclosure system files and tracks the names of lobbyists, by giving each lobbyist a unique identifier.”
  • The Governor of Texas approved B. 1785, which requires that lobbyists indicate on their registration form if they are required to register under the federal Foreign Agents Registration Act (FARA).

In Case You Missed It:

  • New York Ethics Agencies’ Credibility Questioned: The Gotham Gazette has criticized multiple New York State and City ethics agencies for a lack of transparency in their investigatory process, calling them “completely compromised.” According to the article, “By design, many of these agencies are not required to inform the public about the complaints they receive, or are prohibited from doing so to prevent reputational harm against individuals or entities that may be the subject of a complaint. But good government groups say that must change in order to build trust in institutions, and that the public would be better served if agencies provided more transparency about how they handle complaints and report on outcomes of investigations.”  The implication is that cronies’ problems are not made public; but see the Ninth Circuit’s decision in Tschida v. Motl, described above, for its view of the issue.
  • Lobbyists need a Better Lobbyist:  Tennessee enacted B. 1262, which removes 15 professions, from athletic agents to veterinarians, from the imposition of an occupational “privilege tax.”  Only physicians and osteopaths, investment agents, brokers and advisers, attorneys, and lobbyists remain subject to the tax.
  • Fundraiser’s Remorse:  Last week we told you that the Los Angeles City Council voted 14-0 to ask the City Attorney to draft proposals limiting developer contributions.  The Los Angeles Times reports that there are “fresh doubts about how much of the overall plan will survive.” Restrictions on behested payments for charities and limiting contributions to those from individuals (prohibiting contributions from labor unions and businesses) seem particularly difficult for city politicians.  The article indicates that one council member “questioned whether fears about donations from real estate developers are merely ‘hysteria.’”

Pay-to-Play in Action:

  • “One of (New York Governor Andrew) Cuomo‘s most generous campaign donors,” who provided the Governor with free transportation on private jets, was “awarded the lucrative development rights for four of five land parcels at Long Island’s Republic Airport,” according to the Albany Times-Union.  The donor’s company was eventually awarded all of the development rights; “the Cuomo administration decided to un-designate the (original) winner” of the competitive bidding process.
  • Former Arkansas State Senator Jeremy Hutchinson, nephew of current Governor Asa Hutchinson, was indicted in federal court for accepting eight payments of $7,500 each from a subsidiary of Preferred Family Healthcare, Inc., as “a monthly retainer ‘purportedly as the Charity’s attorney’ even though he ‘often performed little, to no, legal work,’” according to the Arkansas Democrat Gazette.  The indictment concerns Hutchinson’s amendment of H.B. 1129 in 2014 that affected Medicaid service providers; his amendment stopped regulatory measures opposed by Preferred Family.

 

WEEK OF May 24, 2019

Latest Developments:

  • The Federal Election Commission met this week.  The agenda included a discussion of pending opinions and an interpretive rule.  The Commission issued a final opinion to Defending Digital Campaigns, AO 2018-12, which allows cybersecurity services to be provided to committees for free or at a reduced charge.   The Commission also discussed a draft interpretive rule that would allow national parties to use their headquarters building accounts to pay for cybersecurity measures.
  • The Governor of Colorado approved B. 1248, which requires that lobbyists electronically notify the Secretary of State of new lobby activity, including a new position taken on a bill, within 72 hours.  This portion of the bill takes effect on January 1, 2020.
  • The New York State Joint Committee on Public Ethics announced at the end of its meeting agenda that its Executive Director, Seth Agata, would be leaving at the end of June.  The Albany Times-Union reports that Agata, a former aide to Governor Cuomo, is leaving to work for a law firm that does not do business with the state.
  • The Governor of Washington State signed B. 5861, which requires that each lobbyist attest, at the time of registration, that he or she has completed a training course regarding the Legislative Code of Conduct and related policies.

In Case You Missed It:

  • 1-A Auto is Out of Gas:  The United States Supreme Court opted not to hear an appeal in the case of 1-A Auto v. Director of OCPF, which challenged Massachusetts’ ban on corporate contributions to candidates.  Bloomberg reports that the court “declined an opportunity to give businesses broader rights to contribute money to political candidates and causes.”
  • Stop the Money in La Land: The Los Angeles Daily News reports that the Los Angeles City Council requested, by a vote of 14-0, that the City Attorney draft three ordinances that would ban contributions to candidates from “non-individuals” and ban similar behested payments to politician’s charities.  Under one of the versions, “developers seeking city approval of projects would be restricted from making political contributions from the date the project application is filed until 12 months following the final resolution of the application.”  Another proposal would ban behested payments from “restricted” sources, including developers, lobbyists, lobbying firms, and contractors.
  • Pay-to Play has its Day in Court:  A superior court in Fort Wayne, Indiana heard arguments in a case that challenges the validity of the city’s pay-to-play restrictions, according to WBOI. The law provides that anyone looking to bid on a city project is limited to contributions of no more than $2,000.  A ruling is expected next week.

WEEK OF May 17, 2019

Latest Developments:

  • The Ninth Circuit Court of Appeals, in United States v. Singh, upheld the power of congress to prohibit campaign contributions from foreign nationals to state and local candidates.  In addition, the court found that the foreign nationals’ First Amendment rights were not violated.
  • The Washington State Public Disclosure Commission is seeking public comment on proposed emergency regulations to implement B. 1195, which is pending before the Governor and would take effect immediately if and when signed.  That bill, among other things, requires electronic filing, revises the threshold for reporting independent expenditures, revises the frequency of campaign contribution limit adjustments, and revises the private attorney general enforcement provisions.  In a separate matter, the Commission launched a new web-based app “to simplify the registration process for candidates and political committees.”
  • The Governor of Oregon signed B. 2488, which prohibits contributions to candidates, PACs, and ballot measure committees using cryptocurrency.  The Governor also approved H.B. 2595 which revises revolving door provisions for legislators by deleting a variable period, and allowing them to begin lobbying one year after ceasing to be a member of the legislature.
  • Montana’s Governor signed HB 181 requiring electronic reporting by candidates and PACs and revising the thresholds and deadlines for reporting contributions.  The Governor also approved B. 326 which, among other things, prohibits any person from soliciting or accepting political contributions or expenditures from foreign nationals, and authorizes penalties for violations.
  • The Governor of Georgia approved B. 213, which, among other things changes certain due dates for campaign reports.

In Case You Missed It:

  • Rapper’s Campaign Cash Laundry:  Rapper Pras, of the Fugees, has been indicted, along with a Malaysian financier, for laundering foreign money and funneling it through straw donors to the Obama campaign.  The New York Times reports that the financier transferred $21 million to the rapper, of which $865,000 went to the Obama campaign through some 20 straw donors.
  • Discord at the Federal Election CommissionThe Center for Public Integrity obtained responses from members of the Federal Election Commission to questions posed by the Committee on House Administration.  According to the article, the Chair of that house committee has “has openly doubted the FEC’s ability to function as the agency struggles with deadlocked votes, internal conflict, chronic vacancies and low morale.”  Additionally, the article “lays bare the internal conflicts and challenges” of the Commission as it copes with long-term gridlock.
  • Candidate Committees Must Die One Year after Candidate:  The Governor of Maryland signed B. 950, which requires that, within one year of a candidate’s death, the candidate’s authorized campaign committee must pay all bills, dispose of remaining funds, terminate, and file a final campaign report.  The measure took effect immediately as an emergency measure.
  • Votes for Sale for Campaign Contributions (Part I):  A Michigan legislator has been accused of offering his vote for sale, according to the Detroit Free Press.  Larry Inman sent a series of text messages offering to vote “no” on a bill to repeal a prevailing wage law in exchange for campaign contributions and has been indicted on federal extortion and bribery charges.
  • Votes for Sale for Campaign Contributions (Part II):  President Trump pardoned the former minority leader of the California Assembly, who was convicted in 1994 of racketeering for selling his vote to an undercover FBI agent in exchange for a campaign contribution.  The San Francisco Chronicle reports that Pat Nolan befriended Jared Kushner and his father through his prison ministry when the elder Kushner was sentenced to prison for tax evasion.
  • How Pay-to-Play Works:  The Jackson Clarion-Ledger explains how pay-to-play works in the Mississippi legislature.  The article describes how one Mississippi company has “been sidestepping competitive bids to get state education money” by receiving earmarks in the state budget.  The article points out that vendors make campaign contributions to lawmakers and these lawmakers then write earmarks into the budget; however, “vendors and politicians say these facts are unconnected.”

WEEK OF May 10, 2019

Latest Developments:

  • The United States District Court in South Dakota struck down a 2018 state constitutional amendment that prohibited contributions to ballot question committees from nonresidents, including businesses.  In SD Voice v. Noem, the court found that Initiated Measure 24  violated the First Amendment because it was “not even closely drawn to avoid unnecessary abridgment of associational freedoms.” The court also found that it “without question violates the Commerce Clause and is unconstitutional.”
  • The Federal Election Commission met this week.  The primary focus of the meeting was a discussion of pending opinions; no decision was reached on either opinion.  The first opinion discussed was regarding Defending Digital Campaigns, a bipartisan group that wants to provide free or reduced-cost cybersecurity services to federal candidates or parties.  The second opinion concerns a streaming service, System 73, which wants to pay a political committee a license fee for exclusive rights to stream a political event.
  • Philadelphia, Pennsylvania has major changes to its campaign finance law that took effect on May 1.  According to the city’s Advisory Alert, the changes include revised contribution limits, and enhanced disclosure of electioneering communications.
  • The United States House of Representatives has a new form to request permission for Members and staff to engage in fundraising for charitable organizations.  According to Roll Call, the House Ethics Committee has issued a memo describing a “simplified process for fundraising requests.”   According to the Roll Call, “members would find it easier to get written approval from the Ethics panel before making solicitations on an organization’s behalf.”
  • North Dakota has punted on ethics.  Constitutional Amendment 1, enacted by the voters in November 2018, established a state ethics commission.  SB 2148, as introduced, was a 24-page bill detailing the power of the ethics commission, including enforcement powers.  The Governor signed B. 2148, which is now a one-paragraph bill requiring a study of the implementation of the ethics provisions of the state constitution.  The constitutional amendment gives the legislature three years to enact implementation and enforcement legislation.
  • The Oakland Public Ethics Commission, as part of its agenda, voted to conditionally endorse a proposal by the City Council President to require that recipient committees and independent expenditure committees disclose the identities of those persons who control the committee.  The proposal would also require key city employees to file a disclosure notice within 10 days if they solicit contributions from persons who do or seek to do business with the city.

In Case You Missed It:

  • California Fundraising Loophole Continues:  A loophole that permits candidates to raise unlimited money for ballot measure committees remains in place.   The Los Angeles Times reports that the California Legislature has, once again, killed legislation to limit how much money officials may raise for a controlled ballot measure committee.  According to the article, at least 31 legislators have ballot measure committees.  However, “few have spent money to support or oppose a proposition; most spend it on things like political consultants, polling and travel. The rules don’t require the committee to ever engage in ballot measure politicking.”
  • Bipartisan Response to Russia:  A version of the 2017 Honest Ads Act has been reintroduced this week in each house of Congress.  The measure would require “disclosure of those paying for online political ads and create a publicly available database of political ads that appear on major online platforms,” according to the Center for Responsive Politics.  The bill reintroduction is in response to the Mueller Report, which identified at least $100,000 in online political ads paid for by Russian entities in violation of federal law.
  • High on Lobbying:  The Boston Globe reports that the newest business in Massachusetts – Marijuana – rely on a tried and true method for success:  employing lobbyists.  According to the Globe, “at least 12 of the 17 recreational pot stores open as of May 1 hired lobbyists or former politicians.”  The article notes that a number of high-profile former officials are lobbying in exchange for some extraordinary payments.
  • New York Lobby Rules Struggle:  Despite new rules that took effect January 1, 2019, which require more disclosure, including the names of public officials lobbied, “some of Albany’s biggest power players aren’t complying with the rule so far,” according to the Albany Times Union.  But “many top firms are trying to comply,” according to the article.
  • Mayor doesn’t Speak to Lobbyists – but He Hears From Them:  The Mayor of New York is quoted as saying last week, “I don’t sit down with lobbyists, I don’t talk to lobbyists and I haven’t for years,” in a report by the New York Daily News.  But a Daily News analysis indicates that, “De Blasio’s deputy mayors, commissioners and high-ranking aides had at least 358 meetings and talks with both commercial and in-house lobbyists in just 11 months.”
  • States Seek Schedule B:  New York and New Jersey have filed a lawsuit against the IRS over a rule change last summer that eliminated disclosure of donors to 501(c) organizations, thus shielding identities of sources of money used for political purposes.  The Huffington Post indicates that the suit is arises because the rule change “veils the identities of so-called ‘dark money’ contributors to certain tax-exempt groups.”
  • Follow up and bye-bye:
    • We previously reported on the pay-to-play scandal in St. Louis; this week the County Executive resigned and pled guilty in federal court, according to the Louis Post-Dispatch.
    • We have also reported on the pay-to-play shenanigans of the Mayor of Baltimore; according to MSN, she has also resigned.

WEEK OF May 3, 2019

Latest Developments:

  • The Governor of Maine approved B. 29, which bars legislators from registering as compensated lobbyists for one year after their term of office ends.  The measure applies beginning with the next legislature.
  • Maryland has followed a trend of requiring lobbyists, among others with special access to the state legislative complex, to complete sexual harassment prevention training. The Governor signed HB 679 on April 30, which requires this training.
  • The Governor of California announced the appointment of Richard Miadich as Chair of the California FPPC.  Miadich, according to the Los Angeles Times, is a political ally who co-chaired the successful Proposition 64 campaign, which legalized recreational marijuana in California.  Miadich has been the managing partner of a political law firm in Sacramento.

In Case You Missed It:

  • Challenging Pay-to-Play Restrictions:  A Fort Wayne, Indiana, contractor and his wife are suing the city claiming that they shouldn’t have to choose between business and political activism.  Under city law, the couple lose their ability to obtain city contracts if they contribute more than $2,000 to a candidate with the authority to award the contract.  The Journal Gazette reports that the couple believe that the “ordinance to curb so-called pay-to-play practices violates their rights to free speech and equal protection under the law.”
  • Show-Me The Money:  Following our report a few weeks ago that federal agents had served search warrants in an apparent pay-to-play investigation in which contracts were linked to contributions, the Louis Post-Dispatch reports that the St. Louis County Executive has been indicted on charges of theft of honest services.  His is accused of accepting bribes in a pay-to-play “scheme.”  Following indictment, he resigned his post and surrendered his law license.
  • When the Fox Guards the Henhouse:  The former Illinois Inspector General lamented that the ethics system in Illinois is broken.  In an op-ed piece for the Chicago Tribune, the ex-watchdog says the system is broken. In a separate article about the op-ed, the Tribune reports that the Inspector General cannot perform basic functions of her job because the position is subordinate to the Legislative Ethics Commission, which is made up entirely of members of the State Legislature who have inherent conflicts of interest.
  • Good for me, but not for thee:  Real Clear Politics reports on the dilemma of certain candidates who, on the campaign stump, excoriate so-called “dark money” from corporate and union backed political non-profits, yet in practice depend on such spending. Largely, these candidates seem content to let organizations spend this type of money on their behalf.

 

WEEK OF April 26, 2019

Latest Developments:

  • The Governor of Maryland approved B. 79, which requires that lobbyist registrations and reports be filed electronically.
  • The Governor of Alabama signed B. 289, which creates an exception from the requirement that a person register as a lobbyist if the person is an “economic development professional.”  The exception applies to an “individual seeking to advance specific, good faith economic development or trade promotion projects or related objectives for a business, chamber of commerce or similar nonprofit economic development organization (or specified governmental entities).”
  • The Governor of Washington approved B. 1375, which extends the contribution limits imposed on candidates for Commissioner of the Seattle and Tacoma Ports to commissioner candidates in all 75 port commissions in the state.
  • The Governor of Tennessee approved B. 170, which eliminates term limits for members of the Tennessee Ethics Commission and extends the time period for the General Assembly to confirm appointees to that commission.
  • The Governor of Maine signed P. 599, which adds racial harassment to the list of subjects included in required lobbyist education and training.

In Case You Missed It:

  • IRS Ducks Dark Money Issues – For Now: ProPublica reports that the IRS has all but stopped enforcing provisions relating to political spending by 501(c)(4) organizations.  Following the Lois Lerner scandal and budget cuts, the exempt organization division shrank; however, the article points out that the unit is rebuilding and adding staff, although the number of staff is still below its peak earlier in the decade.  According to the new division chief who replaced Lerner, the “division’s priority is to ‘stay on top of our application inventory, and probably the exam side of the house is going to suffer for that.’”
  • South Dakota Ballot Measure Money Ban ChallengedInitiated Measure 24, which was approved by 55% of the voters last November, banned contributions by out-of-state entities to ballot measure committees.  The Attorney General’s analysis indicated that “the measure is likely to be challenged on constitutional grounds.”  The Daily Republic reports that 6 plaintiffs, including a group backed by the Koch brothers, filed suit last week to challenge the ban.
  • Pay-to-Play by the Book, Part II: We previously reported on the Mayor of Baltimore’s troubles when it was disclosed that she was selling self-published children’s books to local entities. Now, CNN reports that federal agents executed search warrants this week at her home, her offices, and the office of her attorney.  Meanwhile, the Baltimore Sun reports that as a result of the Mayor’s actions, the City Council is considering new ethics rules, the city ethics board has opened an investigation, and the State Prosecutor is also investigating the matter.
  • Lobbyist Behavior in the Rockies:  While some states have taken steps through training and threats to pull credentials, Colorado has “no mechanism to hold lobbyists and other third parties who work (in the capitol) accountable if they harass someone,” according to Colorado Public Radio.  The article notes that, “the legislature has spent nearly $400,000 dealing with workplace harassment so far.”  However, as the session draws to a close, the legislature has yet to agree on a plan, although both houses appear to be ready to set up bipartisan committees to deal with harassment.

WEEK OF April 19, 2019

Latest Developments:

  • The Federal Election Commission staff has issued a draft opinion regarding the circumstances under which a political committee can receive contributions that consist of cryptocurrency mining operations.  The opinion is subject to public comment and review by the Commissioners.
  • The Arizona Attorney General issued a report this week regarding two contradictory laws that were passed in 2018 concerning disclosure of dark money in local elections.  AZCentral reports that the State of Arizona passed a state law in 2018 “that prohibits municipalities from requiring that political non-profits disclose their donors.” However, according to the article, voters in the City of Tempe approved a measure that requires the “disclosure of original and intermediary sources of major contributions used to influence city elections.”  The Attorney General’s report found that both laws are valid on their face.  The Attorney General clarified that the local law cannot be used to force non-profit organizations to reveal their donors.

In Case You Missed It:

  • FARA Earthquake AftershocksPolitico reminds that although the Mueller probe is over, investigations and prosecutions of violations of the Foreign Agents Registration Act have lobbyists “on edge – again.”  The indictment of the former Obama White House Counsel last week continues to cause grief.  “A letter from the FARA enforcement unit now ‘has to be taken as seriously as a heart attack,’” according to one lawyer who provides advice on the law.
  • Contributors to be Unmasked:  The Federal Election Commission is about to release the source of a $1.7 million contribution to a super PAC.  After a lengthy fight that has raged since the contribution was made in 2012, a federal appeals court in Washington D.C. has ruled, in Doe 1 and Doe 2 v. FEC, that the First Amendment does not prohibit the FEC from releasing the identity of the contributors in this case.  According to Politico, the FEC will release the names of the source of the money as soon as the case is final and not subject to further appeal.
  • NYC Mayor violated Ethics RulesThe City reports that Mayor Bill De Blasio violated city ethics rules in soliciting donations from interested persons seeking city favors, despite repeated warnings not to do so from the city’s Ethics Commission.  The two and a half year probe ended last October, but the conclusions were only disclosed and reported this week following a request under the Freedom of Information Law.
  • Contributions from CharityThe Washington Post reports that executives of a Missouri (501(c)(3)) charity have been indicted for making political contributions to Missouri politicians.  The indictment alleges that the charity, which runs mental health and substance abuse programs, funneled the contributions through a lobby firm.  Three former lawmakers, who were not accused of wrongdoing, acknowledged receiving the contributions and participating in fundraisers organized by the charity and apparently did not realize that charitable funds were involved.
  • Disclosure Enforcement:  California politicians’ disclosure forms are “political works” that are protected speech under the anti-SLAPP provisions.  The San Jose Mercury News reports that a judge has thrown out a suit that was brought by private parties against the Mayor of Santa Clara a week before the election.  The opinion does not prohibit government agencies from going after filers.  But according to the article, Bob Stern, “one of the authors of the 1974 Political Reform Act that requires officials to disclose conflicts of interest, said the ruling is surprising. The law has a provision that allows private citizens with standing to sue to enforce it in the event law enforcement agencies fail to do so.”
  • Volunteer Lobbyist in Court:  A federal appeals court is hearing arguments about whether Missouri can compel unpaid individuals to register as lobbyists Louis Pubic Radio reports that while there is agreement that paid lobbyists should register and report their activity, the parties disagree as to volunteers.  A district court and a panel of the 8th circuit held that registration was required; this week, the whole 8th circuit, sitting en banc, will review the case.

WEEK OF April 12, 2019

Latest Developments:

  • The Governor of New Mexico signed B. 3, a campaign finance measure.  Among other things, the measure revises campaign finance reporting deadlines and reporting thresholds, and revises the dates when an election cycle begins and ends.  It also defines “independent expenditure” and imposes reporting requirements on those expenditures.  The bill defines “legislative caucus committee” and establishes limits for contributions to those committees.
  • The San Diego Ethics Commission met this week.  Among the items on the agenda was a discussion of proposed amendments to the city’s lobby ordinance.  Those changes would expand reporting of activity expenses, and require that activity expenses that consist of salary paid to an official be reported in specified bracketed amounts.

In Case You Missed It:

  • Everybody Gets to Register!:   In an interesting development, the Associated Press and the New York Times reported that an investigation stemming from the Mueller probe has resulted in an indictment against former Obama White House Counsel Greg Craig. Last month, Craig’s former law firm, Skadden, Arps, Slate, Meagher & Flom settled a civil suit for $4.6 million and “publicly acknowledged that it failed to register with the government for its work for the Ukraine.” That civil suit “laid much of the blame for the firm’s conduct on Craig…alleging he made several “false and misleading statements to the government, allowing the firm to avoid registration.” Craig denies having lied to the government.
  • Promises that cost nothing:  Politico reports that while “nearly one-fifth of the Democratic caucus” in the House pledged not to accept corporate PAC contributions,  lobbyists for many corporations have still found ways to engage these lawmakers with contributions. Various “Democratic lawmakers who have promised to steer clear of corporate PACs allow the same corporations’ lobbyists to write them personal checks — and in some cases even host fundraisers for them.” The issue has ignited a debate among some Democratic groups about what kind of contributions they deem acceptable to accept, based mostly on their sources. Some “Democrats on K Street are frustrated by what they view as arbitrary restrictions on which kinds of money lawmakers will take and which kinds are forbidden.”
  • Nobody’s Home:  Bloomberg has reported on the decline, since 2016, of enforcement staffers at the US Attorney’s for the District of Columbia, “which is responsible for policing the lobby industry.” The consequence is that 59% of the 3,800 Congressional referrals of potential lobby law violations between 2009-2018 “are still pending and could take years to resolve, according to a new government report.” For example, in 2016, 6 part time lawyers and 1 full time paralegal handled enforcement of the Lobbying Disclosure Act. In 2018, compliance enforcement numbered 1 part time lawyer, 1 full time paralegal, and 1 part time paralegal. This dearth of staff has enabled “so-called ‘shadow lobbyists’ [to] have long careers influencing Congress without ever registering or filing public reports.”

WEEK OF April 5, 2019

Latest Developments:

  •  The Governor of New Mexico signed the State Ethics Commission Act, S.B. 668.  The measure gives the new commission authority over the regulation of campaign finance and lobbyists, among other things.  The bill takes effect on July 1, 2019, with the operation of certain provisions, including enforcement powers, delayed until January 1, 2020.  According to the Santa Fe New Mexican, the Governor indicated that “for a long time, New Mexico has been waiting for an ethics watchdog with teeth.”  The article points out that “seventy-five percent of New Mexico voters in last year’s election backed a constitutional amendment to create an ethics commission.”
  • Utah’s Governor approved HB 64, which extends provisions of the Lobby Disclosure and Registration Act to require registration and reporting in connection with influencing local officials and state and local school boards.  The bill takes effect 60 days after adjournment of the legislature.
  • The United States Government Accountability Office issued its 2018 Lobbying Disclosure According to the GAO’s report, 33% of LD-203 reports were missing reportable contributions and 19% of LD-2 reports failed to disclose one or more previous positions required to be disclosed.  The report is based on random samples of reports filed in the last half of 2017 and the first half of 2018.
  • The Governor of Idaho signed lobby and campaign finance bills this week.  SB 1153 revises lobby registration requirements to include email addresses, and requires reporting only from lobbyists; lobbyist employers would receive an email notice when their lobbyist has filed a report.  The bill also splits the concept of the person who uses a lobbyist into two different definitions:  a lobbyist’s employer (for in-house lobbyists) and a lobbyist’s client (for contract lobbyists).  SB 1113 makes changes to campaign finance provisions by increasing the threshold that requires a committee to register, broadens application of the law to local offices, and requires monthly reporting by candidates and ballot measures monthly during an election year and annually otherwise.
  •  The Colorado Secretary of State issued temporary rules, effective immediately, which increase campaign contribution limits.  The amount that may be contributed to the Governor, Secretary of State, State Treasurer, or Attorney General is increased from $575 to $625 per election.  The limit on contributions to a political party is increased from $3,650 to $4,025 per year.  Legislative, State Board of Education, University of Colorado Regent, and District Attorney contribution limits were not adjusted.

Reminders:

Panel on Foreign Political Activities:  What will be the regulatory aftershock of the Mueller Report?  American Bar Association (ABA) members attending the 2019 Annual Conference of the Section of International Law interested in the impact on lobby filings, the latest developments in enforcement of FARA and FCPA, H.R. 1 and state litigation over social media legislation, and the FEC’s pursuit of foreign money should attend a panel called “International Political Influence and Corruption: Will Recent Scandals Lead to Stricter U.S. Regulations” on April 10, 2019 featuring FEC Chair Ellen Weintraub, David Laufman, formerly Chief of the DOJ Counterintelligence and Export Control Section, Severin Wirz, Senior Director of Anti-Corruption at TIAA, and Mike Columbo and Jason Kaune (moderator) of Nielsen Merksamer.

In Case You Missed It:

  •  FARA, the Mueller Legacy: As reported by com, the Mueller investigation had a greater impact on the lobbyist community than on the White House.  The investigation “sparked a flurry of foreign agent filings by the city’s well-heeled power brokers. It has also prompted a stepped-up effort at the Justice Department to enforce the Foreign Agents Registration Act.”  According to a Justice Department official, “prosecutors are transitioning ‘from treating FARA as an administrative obligation and regulatory obligation to one that is increasingly an enforcement priority.’”
  • “No Watchdog for the Watchdogs”The Center for Public Integrity reports on the intrigue in trying to fill the Inspector General post at the Federal Election Commission.  The position has been vacant since March 2017, and efforts to fill it have resulted in the resignation of a senior human resources specialist, apparently after the staff was directed to reinstate candidates who had been found not to meet the minimum qualifications.
  • Feds Probe St. Louis Pay-to-Play:  The S. Attorney in St. Louis has delivered “wide-ranging subpoenas to St. Louis County,” and “plunged the county — and the future of the region’s government — into chaos,” according to the St. Louis Post-Dispatch.  The inquiry appears to be aimed at linkage between campaign contributions and county contracts.
  • Pay-to-Play by the Book:  The Mayor of Baltimore has taken a health leave of absence, according to MSN,  following the disclosure that the University of Maryland Medical System paid her $100,000 per year for five years for copies of her self-published children’s book, under a no-bid contract, while she sat on that system’s board.  The article also notes that Associated Black Charities acknowledged it spent $80,000 to buy 10,000 books from the Mayor.
  • Lobbyists Head Back to the Lobby:  Pennsylvania officials have closed the special, ornate “lobbyist room” adjacent to the state’s House of Representatives’ chamber.  According to the Associated Press, the room was a “vestige of the past” and an “anachronism,” where lobbyists could watch the proceedings, print out bills, and send messages to legislators using a special state-paid page.  However, the article points out that “lawmakers allow themselves to accept gifts of any value from lobbyists, whether dinners, trips or tickets to golf courses, sporting events or concerts.”
  • Koch Zero for Donor List:  The U.S. Ninth Circuit Court of Appeals turned down a Koch-brothers aligned group’s request for an en banc review of their challenge to California’s request for donor information.  Politico reports that the effort to reverse a decision of a 9th circuit panel last September, which allowed California to ask for information on donors to the brothers’ Americans for Prosperity Foundation, was denied despite a vigorous dissent.  The group had challenged the California Attorney General’s requirement that nonprofit organizations submit a copy of their Federal Schedule B, which lists major donors to the group.
  •  Kentucky Lobbyist Contribution Ban – the Workaround:  The Louisville Courier-Journal tells us that, notwithstanding a state ban on contributions from lobbyists to state legislators, state lobbyists gave nearly $320,000 last year to state political parties.  “A relatively small group of lobbyists provide a significant and steady cash flow,” according to the article.  Party money is used to support legislative candidates.
  • Congressman Ensnared:  A North Carolina Congressman has been caught up in a corruption probe.  Politico reports that a PAC controlled by Congressman Mark Warner, referred to as “Public Official A” in court filings, received $150,000 at the same time the donor was asking for the congressman’s help with the State Insurance Commissioner.  According to WRAL, the state’s largest political donor and the chair of the state GOP have been indicted.
  •  Gambling on Disclosure:  According to the Indianapolis Star, the Governor of Indiana received gifts of travel, at least one of which was not reported.  An “Indiana casino magnate” paid for private jet travel for the Governor apparently made the gifts to the Republican Governors Association, but earmarked the trips for Governor Holcomb. The Star reports that “experts found the flights particularly concerning because one was never disclosed to the Internal Revenue Service, as required by law.”

WEEK OF MARCH 29, 2019

Latest Developments:

  • The Federal Election Commission met this week and considered an agenda laden with draft advisory opinions.  The Commission approved three opinions, including Opinion 2019-01 for It Starts Now, which permits a new form of funds that consist of earmarked funds solicited to be contributed to a candidate upon the candidate’s receipt of an endorsement by an organization by a specified date, as provided in the solicitation.  The Commission also approved Opinion 2019-02 for Bill Nelson for Senate, which permits excess recount funds to be transferred to either a charity or to a national party fund for recounts, contests, or other legal processes, as long as those funds are not used to influence a federal election.  The Chair indicated that this is an area ripe for rulemaking.  In addition, the Commission approved Opinion 2019-03 that the Libertarian Party of the District of Columbia is a state committee.
  • The Governor of West Virginia approved a measure to revise campaign finance registration and reporting requirements and to increase contribution limits.  SB 622 will increase contribution limits to $2,800 per election for candidates and $10,000 per year for caucus committees and party executive committees.  The bill takes effect in June.
  • The Governor of Kentucky signed SB 6, which extends revolving door provisions from 6 months to 1 year, slightly revises the definitions of executive agency lobbyist and lobbying activity, and requires lobbyists to itemize their compensation by lobbyist employer.  The bill also clarifies that the contingent fee prohibition applies to lobbyists who lobby procurement contracts.  Employers who pay procurement lobbyists a percentage of the contract awarded are barred from doing business with the state for 5 years.  The bill takes effect in June.
  • The Governor of Mississippi approved B. 1205, which prohibits state and local agencies from collecting personal information from 501(c) organizations and prohibits asking state or local contractors or prospective contractors about contributions to those nonprofit organizations.  The Mississippi Meridian Star informs us that the bill is aimed at “protect(ing) dark money.” Nonprofit organizations will not be required to disclose any donor information.  The bill takes effect July 1, 2019.
  • The Governor of Utah signed B. 147 which prohibits lobbyists from violating federal or state law, or legislative policies, covering workplace discrimination and harassment.  The measure also permits lobbyists who are victims of workplace discrimination or harassment to file complaints against executive or legislative employees, as applicable.  In addition, the bill replaces the biennial lobbyist registration period with annual reregistration, and includes a slight fee increase.
  • The Washington State Public Disclosure Commission met this week and adopted final regulations to implement the state’s Disclose Act.  Those regulations and amendments are included in the Commission’s agenda, although the commission adopted some minor changes to that text at its meeting.
  • The Connecticut State Elections Enforcement Commission issued a notice that it intends to issue a Declaratory Ruling on the extent to which polling expenditures must be disclosed.  According to the request, most pollsters do not own call centers and use a third-party contractor.  The issue is whether the secondary payee must be disclosed and to what extent a treasurer is required to determine if a pollster uses a subcontractor.  The matter will be heard at the Commission’s April meeting; a ruling could be issued as early as at its May meeting.

Reminders:

Panel on Foreign Political Activities:  What will be the regulatory aftershock of the Mueller Report?  American Bar Association (ABA) members attending the 2019 Annual Conference of the Section of International Law interested in the impact on lobby filings, the latest developments in enforcement of FARA and FCPA, H.R. 1 and state litigation over social media legislation, and the FEC’s pursuit of foreign money should attend a panel called “International Political Influence and Corruption: Will Recent Scandals Lead to Stricter U.S. Regulations” on April 10, 2019 featuring FEC Chair Ellen Weintraub, David Laufman, formerly Chief of the DOJ Counterintelligence and Export Control Section, Severin Wirz, Senior Director of Anti-Corruption at TIAA, and Mike Columbo and Jason Kaune (moderator) of Nielsen Merksamer.

In Case You Missed It:

  • “No PAC Money” Pledge a Threat to Bipartisan Corporate PACs:  An article by Roll Call describes the issues that corporate PACs confront when they try to split contributions in a bipartisan fashion among Democrats and Republicans and one side chooses to decline the contributions.  The article mentions, however, that “even some no-PAC-pledge-takers have suggested corporate donations go instead to the party committees or party leaders, who welcome such cash.”
  • The Flow of Foreign MoneyThe Center for Responsive Politics reports that, following Citizens United, “foreign-based corporations or U.S. subsidiaries of foreign-based corporations have contributed millions of dollars to super PACs and hybrid PACs.”  However, regarding corporate-affiliated PACs, the Chair of the Federal Election Commission said “contributions from PACs of foreign companies are a ‘red herring issue’ that distracts from real challenges of foreign influence.  ‘I don’t have a problem with that at all — those are American citizens and that is their money that they’re using,” she said.’”
  • Gwyneth Paltrow Project Ok’d:  On March 5, 2019, voters in West Hollywood rejected a referendum aimed at rescinding the City Council’s approval of a multi-use development project on Sunset Boulevard. According to the latest report by the Los Angeles County Registrar, 60.3% of West Hollywood voters favored the development. Nielsen Merksamer served as Treasurer and counsel to the campaign, which brought together numerous community and elected leaders, as well as an overwhelming majority of West Hollywood residents, in support of the “Arts Club Project.”  Ballotpedia reports that the site was purchased and is being developed by a group that includes actress Gwyneth Paltrow.
  • Nevada Legislation Roulette:  Following the resignation of a former Democratic State Senate leader who left after using campaign funds for personal use, as previously reported here, the Reno Gazette-Journal tells us that reform proposals are beginning to emerge from Republicans.  According to the article, the Governor “said he’d recently spoken with legislative leaders about potential campaign finance fixes, but didn’t volunteer specifics on those discussions.”
  • Seeking Less Sunshine in the Land of the Midnight Sun:  The Anchorage Daily News reports that the Alaska Senate is seeking to roll back the ethics law it passed last year.  The state Senate approved B. 89 which would delete provisions that prohibit certain conflicts of interest.  Lawmakers complained that they couldn’t discuss matters with their spouses who work in fields subject to legislative actions.  The bill goes to the House.

WEEK OF MARCH 22, 2019

Latest Developments:

  • S. Eighth Circuit Court of Appeals – update:  We previously reported that the Eighth Circuit Court of Appeals decided that Missouri’s requirement that all lobbyists register and report their activity even if not receiving compensation is constitutional, in Calzone v. Summers.  The court found that the state has an interest in transparency that transcends whether the person is paid or not.  However, State Policy Network reports that the Eight Circuit has vacated that decision and ordered an en banc hearing, which is scheduled for April.

In Case You Missed It:

  • That was then; this is now: The New York Times reports that while Democrats vowed reform in Albany, NY, the “money still flows.”  According to the article, “[s]tate officials, including Gov. Andrew M. Cuomo and legislative leaders past and present, have long talked about the need to revamp campaign finance laws and to limit the influence of lobbyists, but little has changed.”  Democrats are firmly in charge for the first time in several years, but multiple fundraisers are held each night, and proposals to ban that fundraising practice during the legislative session have “gone nowhere.”
  • Rhode Island Racket:  Unsuccessful Rhode Island Congressional candidate Harold Russell Taub pled guilty to misuse of political contributions and wire fraud. As Politico reports, Taub “solicited more than $1.6 million to two organizations he falsely presented as political action committees… [and] used more than half of what he collected for ‘purely personal expenses.” The ruse began during Taub’s 2016 campaign and continued until 2018.
  • Cannabis Conundrum:  The Los Angeles Times details the challenges California’s nascent cannabis industry faces as it undertakes government relations. Under Proposition 64 (2016), which authorized the growing and sale of recreational marijuana, local municipalities have the authority to permit or prohibit the sale of the drug in their particular jurisdictions. Consequently, accusations of bribery and graft have plagued local California officials.  The Times reports that “[i]n the more than two years since California voters approved the licensed growing and sale of recreational marijuana, the state has had a half-dozen government corruption cases as black-market operators try to game the system, through bribery and other means.”

Reminders:

  • Panel on Foreign Political Activities:  What will be the regulatory aftershock of the Mueller Report?  American Bar Association (ABA) members attending the 2019 Annual Conference of the Section of International Law interested in the impact on lobby filings, the latest developments in enforcement of FARA and FCPA, H.R. 1 and state litigation over social media legislation, and the FEC’s pursuit of foreign money should attend a panel called “International Political Influence and Corruption: Will Recent Scandals Lead to Stricter U.S. Regulations” on April 10, 2019 featuring FEC Chair Ellen Weintraub, David Laufman, formerly Chief of the DOJ Counterintelligence and Export Control Section, Severin Wirz, Senior Director of Anti-Corruption at TIAA, and Mike Columbo and Jason Kaune (moderator) of Nielsen Merksamer.

WEEK OF MARCH 15, 2019

Latest Developments:

  • The Governor of Arkansas signed B. 256 (Act 342) to prohibit state constitutional officers and legislators from registering as a lobbyist in any jurisdiction while serving as an elected official in the state.  The measure takes effect 90 days after adjournment.
  • The United States House of Representatives passed the Democrat’s signature ethics reform bill, HR 1, on a party-line vote.  But Bloomberg News reports that Senate Leader Mitch McConnell doesn’t “plan to even bring it to the floor here in the Senate.”
  • The Governor of Montana announced his support for SB 326, a bill just introduced that would ban campaign contributions by domestic subsidiaries of foreign corporations.  The Helena Independent Record reports that, “The bill would ban political spending by corporations considered to be ‘foreign influenced,’ which is determined by ownership.”

In Case You Missed It:

  • Lobbying Washington is Evolving:  According to Washingtonian, lobbying in the Trump era is changing to suit the audience of one:  the President.  Total spending on lobbying is way up – to $3.8 billion.  The form of the lobbying now includes targeted twitter ads, both in Washington and at Mar-a-lago, ads in newspapers that Trump reads, and hiring TV pundits to appear on Fox News.
  • Losing the Money Game in Las VegasThe Nevada Independent reports that former Nevada Senate leader Kelvin Atkinson, who resigned last week, plead guilty to charges in federal court, including that he used about $249,000 in campaign contributions for personal use.  The long-time Las Vegas politician may have embezzled nearly a half million dollars, according to authorities, who said the actual amount was “indiscernible.”  Prosecutors are seeking a sentence of 33 months.
  • Las Vegas Lobby Games:  The Las Vegas Review-Journal investigated the Clark County Clerk’s lobby registration system, and found lax enforcement of lobbyist registration and disclosure reporting requirements.   “On hundreds of occasions last year lobbyists may have failed to disclose communications within five days of meeting with a commissioner as required by law,” the Review Journal “Lobbyists, who are responsible for turning in the forms, properly recorded more than 500 meetings with commissioners last year. But the Review-Journal’s analysis found more than 300 meetings with lobbyists that appeared on commissioners’ calendars and check-in logs had not been disclosed.”
  • Same Game Result, but with a Soccer Stadium:  The Miami-Dade Ethics Commission dismissed a high-profile complaint against a stadium development group that includes David Beckham, after finding that “almost nobody in Miami-Dade County was complying with or enforcing the disclosure law,” according to the Miami Herald.  Registration forms reportedly failed to ask the right questions of registrants.  The result is that investigators are working “with the county clerk and municipalities to fix their registration processes to improve transparency.”
  • Right to Rise Deflated by Foreign Money:  The Jeb-related PAC, Right to Rise, was fined $390,000 for accepting a contribution from American Pacific International Capital, whose owners are Chinese.  According to Mother Jones, “Neil Bush initially solicited the money from two Chinese nationals—Gordon Tang, the chair of APIC, and Huaidan Chen, a board member.”
  • More Foreign Money InvestigationsCNBC reports that the U.S. Department of Justice is probing whether a $100,000 contribution to the Trump Victory PAC actually came from a Malaysian fugitive who is believed to be living in China.  Jho Low transferred $1.5 million to LNS Capital, whose owner later made the $100,000 donation.  The Justice Department is investigating whether there is a linkage; Low denies any knowledge about the contribution by LNS Capital’s owner.
  • Foreign Money Criminal Court Battle:  The United States Ninth Circuit Court of Appeals heard arguments this week in the cases of two men convicted of campaign finance violations.  Politico reports that the men argued that the “federal law banning campaign donations by foreigners is unconstitutional when applied to non-federal elections, at least with respect to foreigners who have significant ties to the U.S.”
  • Michigan Dark MoneyThe Detroit News reports that “Progressive Advocacy Trust is one of at least five local Democratic Party slush funds that have operated in the shadows since at least 2002,” and has avoided all disclosure requirements by engaging only in issue advocacy.  The group spent more than $2 million to help elect Governor Gretchen Whitmer.  The spending “triggered outrage from progressive activists and cries of hypocrisy as the Democratic party (sic) publicly pushes for transparency and campaign finance reform.”
  • JCOPE Structure Ripe for Remodeling?:  The New York State Legislature is – once again – reviewing the structure of ethics administration in the state, according to New York Newsday.  At least a half dozen bills have been introduced to replace or reform the Joint Committee on Public Ethics.
  • Revolving Harassment Door:  The Albany Times-Union details what happens when a lawmaker who was accused of sexual harassment becomes employed by a lobbying firm.  The former lawmaker is barred by revolving door laws from registering as a lobbyist for 2 year; but that has not stopped him from working for a lobbying firm.  A Sexual Harassment Working Group, made up of former legislative staffers touched by harassment, called attention to the lobby firm employee, who represents several clients.
  • Lobbyist Entertainment Gone Awry:  The Topeka Capital-Journal reports that a group of Kansas lobbyists and legislators, including the House Speaker and Rep. Susan Concannon, R-Beloit, were kicked out of the White Linen Restaurant and banned from returning as the group was drinking heavily and “rowdy enough to upset those dining at other tables.”  The Topeka Capital-Journal notes that “On Yelp, every rating is a 5 except for one by Susan C. on March 2, who wrote: ‘Extremely rude management is not worth tolerating for the good food.’”

WEEK OF MARCH 8, 2019

Latest Developments:

  • The Hawaii State Ethics Commission announced that its new Lobbying Electronic Filing System is now available.  The new system permits e-filing of lobbyist registrations and expenditure reports.
  • The New York State Senate unanimously passed S 3167, which would ban procurement contractors from contributing to officeholders and candidates for offices that oversee contracts with the contractor during a restricted period.  The bill moves to the State Assembly for consideration.  According to S. News and World Report, the Governor and Assembly Democrats have their own ethics reform measures, all of which arise following several pay-to-play scandals in the state.
  • The Oregon Government Ethics Commission met this week, and among the agenda items (Item 20) was a stipulated settlement with the former First Lady, Cylvia Hayes.   The former First Lady agreed to pay a fine of $44,000 for using her position for personal profit.  However, The Oregonian reports that the Commission unanimously rejected the stipulation.  The article notes that the former First Lady is in bankruptcy court and the fines will not likely be collected.
  • The Mayor of Los Angeles approved City Council Ordinance 18600, which requires that city procurement contractors disclose any contracts or sponsorships with the National Rifle Association.  The ordinance provides exceptions for a number of contractors, including pension and other investment contracts, single-source contracts, and urgent needs.  The NRA promised a lawsuit, according to the Los Angeles Times.

In Case You Missed It:

  • Mueller’s Teammate goes to Bat for FARA:  Reuters reports that Brandon Van Grack, a prosecutor who has been with Robert Mueller’s Russia investigation, will lead a team of attorneys and staff who have been tasked with enforcing the Foreign Agents Registration Act (FARA).  Assistant Attorney General John Demers said the mission of the team is to “make sure the FARA law, which requires disclosure of lobbying on behalf of foreign interests, is more aggressively enforced,” according to the article.
  • Big Bucks before Blackout:  The Orlando Sentinel reports on the tradition of making huge campaign contributions on the evening before the start of a 60-day blackout period during the state’s legislative session.  The article cites theme park owners, utilities, “big sugar,” and tobacco interests as the largest donors.  “Those millions of dollars in donations help drive a largely hidden agenda,” according to the article.
  • High Maintenance Legislators:  California lawmakers received over $810,000 in meals, travel, and other gifts last year.  The Los Angeles Times details some of the more interesting educational travel and gifts that legislators accepted during the past year.
  • High License Fee, so Cannabis Campaign Contributions Banned:  According to the Hartford Courant, the Connecticut State Elections Enforcement Commission has ruled that marijuana growers are barred from making campaign contributions under the ban on contributions from procurement contractors, based on their licenses from the state.  Declaratory Ruling 2019-01 reasons that the state growing licenses cost more than $50,000, thus the licensees are subject to state contractor restrictions. However, cannabis dispensaries, which do not pay high fees, are not prohibited from making contributions.
  • Deadbeat Violators:  According to The State, in Columbia, South Carolina, lobbyists, politicians, and other groups owe the South Carolina State Ethics Commission more than $2.4 million in fines that the state may never collect.  “’The Ethics Commission has limited legal tools to collect from people,” the article says, quoting a former attorney for the commission.
  • Everyone Needs a Lobbyist: A software start-up company in New Hampshire, EchoRidge, is developing a platform that will connect individuals and small groups with lobbyists, according to the Concord Monitor.  The CEO of EchoRidge points out that, “If you want to accomplish something, lobbying can make it happen.”  The article further states that the goal is to help people “find a cause, develop legislation to help that cause, then hire lobbyists to get it passed.”  The company reportedly has a pilot project in California with churches seeking money for assistance to aged-out foster children.  The program is “Facebook meets Kickstarter meets Upwork, except it’s all politics,” according to the CEO.
  • Loss of a Gadfly:  One of California’s more erudite politicians has resigned from the San Francisco Ethics Commission, calling it “not very effective,” according to the San Francisco Chronicle.  Nonagenarian Quentin Kopp, a former San Francisco Supervisor, California State Senator, and Superior Court Judge, referred to the commission as, “ineffective and a waste of taxpayer money.” “I don’t think anyone is afraid of the Ethics Commission who is in competitive political life in San Francisco,” he said.  He plans to spend his time working on a November ballot measure to limit campaign contributions from persons with land-use decisions before the city. The measure “would also prohibit limited liability corporations and limited partnerships from donating to campaigns,” according to the article.

WEEK OF MARCH 1, 2019

Latest Developments:

  • The New York Joint Commission on Public Ethics held its monthly meeting this week.  Among the items on its agenda, was a discussion on the state’s lobby application.  The Commission plans to have its new filing application available next week and will have “How To” videos along with a fully-staffed help desk to ensure smooth filing of the bi-monthly reports.  Users will find that the new app is populated with any measures listed on the registration intended to be the subject of lobbying.
  • The Louisiana Board of Ethics, at its February meeting, voted  to approve an agenda item to increase the amount that lobbyists may spend on food and drink for a public official from $61 to $62 per event.  The new limit will take effect July 1, 2019.
  • The Washington Public Disclosure Commission met this week and received comments on its permanent regulations to implement the Disclose Act, which took effect January 1, 2019.  The Commission may adopt them at its March meeting.  The Commission also adopted a revision of its Interpretation regarding loans to Campaigns.  The revision is intended to modernize the document, not to make any substantive changes.

In Case You Missed It:

  • Transparent Hiring at the Georgia Transparency and Campaign Finance CommissionYahoo News reports that 9 lawyers are in the running to be the next Executive Director of Georgia’s ethics commission.  Notably among the candidates is Mike Sullivan, who currently heads the Massachusetts Office of Campaign and Political Finance.
  • Does it Matter whether the Law is Enforced?:  The Dallas Morning News reports that, “By their own reports, most current Dallas City Council members committed apparent violations of the city’s campaign finance laws in recent years.”  According to the report, campaign finance reports, as filed, show contributions that exceed local limits. However, the Morning News found that, “No one in city government examines the campaign finance filings to find violations.”
  • Rooting out Corruption:  Arkansas legislative leaders, following a series of corruption cases, are proposing a package of ethics reform bills according to the Associated Press.  “A flurry of cases in the past two years has been eye-popping,” according to the AP article.  The AP quotes the Senate President as expressing a determination that “the culture of greed and corruption is over.”

WEEK OF FEBRUARY 22, 2019

Latest Developments:

  • The Governor of Wyoming signed Senate File 18 (Chapter 1, 2019 Statutes) which, among other things, increases the frequency of campaign reporting for PACs and candidates, and requires reporting of independent expenditures and electioneering communications.  The measure takes effect July 1, 2019.
  • The United States Supreme Court turned down a petition to hear an appeal of Montanans for Community Development v. Mangan.  That case challenged Montana’s 2015 Disclose Act, and specifically the requirement that PACs file reports for activity that exceeds $250 in a calendar year.  The Ninth Circuit’s unpublished opinion upholding that law prevails.
  • The Director of the U.S. Office of Government Ethics (belatedly) issued guidance on what federal employees can and cannot do when furloughed during a government shutdown.  The guidance is a reminder that any gift from a donor who is a “prohibited source” will create problems, as will employment of a furloughed federal employee for whom the employment may be a conflict.

In Case You Missed It:

  • New Board orders New Election:  The recently reconstituted North Carolina State Elections Board ordered a new election in the case of a congressional race in which the purported victor was accused of orchestrating voter fraud.  The New York Times reports that the apparent winner of the election had financed an illegal scheme to collect absentee ballots.  A new election has not yet been scheduled.
  • Revolving Door Opened at the White House:  According to ProPublica, 33 former Trump officials are engaged in some form of lobbying, including 18 who have actually registered as lobbyists.  The activity has occurred despite a Trump Executive Order requiring administration officials to promise not to lobby for 5 years after termination.
  • Oregon Earmarks under Scrutiny:  The Oregonian reports the story of a former Oregon lawmaker who participated in the “dubious campaign practice” of accepting money on the condition that it is passed through to another candidate.  The Oregon Ethics Commission takes the position that if the true source of the donation is not disclosed, that violation is a felony punishable by a fine of up to $125,000 and five years in prison.  “The practice of rerouting contributions… was common in Salem,” according to the former lawmaker.
  • Ask, but Don’t Tell:  Politicians are raising money for charity, but not reporting their activity according to the Los Angeles Times.  The article describes the failure of a number of city officials to report behested payments as required by law.  “A. officials have a long history of drumming up charitable donations from a range of City Hall interests,” according to the Times.
  • When Taxpayers are (Unwitting) Political Donors:  The California Fair Political Practices Commission is seeking authority to prosecute violations of state law in which government entities spend taxpayer money on political campaigns.  According to the Los Angeles Times, “since 2015, the agency has received 34 allegations of public agencies misusing taxpayer funds for campaign purposes, including mass mailings.”

At its meeting this week, the Commission was confronted by yet another angry complainant who asserted that a group operated by city officials out of Burbank City Hall used hotel tax funds to promote a ballot measure to expand Burbank Airport.  The Commission currently lacks the authority to investigate, other than to assess fines against those entities that fail to report their activity.

  • You Can’t Take it with You:  A former congressional candidate from Rhode Island has been charged with violating personal use prohibitions by transferring over $700,000 in campaign contributions to his personal accounts.  According to The Hill, H. Russell Taub also withdrew over $100,000 in in cash and spent more than $200,000 on personal expenses using campaign donations, thus bilking his campaign of over a million dollars.

WEEK OF FEBRUARY 15, 2019

Latest Developments:

  • The New Mexico Legislature finally introduced a bill to implement a state ethics commission.  Following adoption at the November election of a state constitutional amendment that required creation of an independent ethics commission, a 49-page bill was introduced this week to set up the commission.  According to the Albuquerque Journal, 4 is the only bill on the subject to be introduced since the legislative session began on January 15.
  • The Georgia State Ethics Commission is moving quickly to fill the position of Executive Director, following the incumbent’s resignation at the end of last week, according to com.  Stefan Ritter left amid an investigation/scandal; the Commission is seeking a replacement who is a member of the Georgia bar, preferably with 10 years of professional experience.

In Case You Missed It:

  • Problems with Revolving Doors: The latest group of ex-lawmakers who are seeking government relations work without registering as lobbyists are facing growing criticism, according to The Hill.  The article notes that “(c)ritics say former lawmakers have been the biggest offenders when it comes to working in the influence world without formally registering.”  However, a source told The Hill that, “(t)here’s a difference between being paid to provide clients with insights and advice based on your experience and being paid to pick up the phone and make direct contacts with federal officials and advocate on behalf of clients.”
  • A Former Regulator seeks to be among the Regulated: Ann Ravel, former Chair of the Federal Election Commission and former Chair of the California Fair Political Practices Commission has filed papers to run for a California State Senate seat, according to the San Jose Mercury News.  She joins a crowded field of candidates who are seeking to succeed a termed-out state senator.
  • Pay-to-Play Laws Generate Lawsuit:  Courthouse News reports that an Illinois property management firm has challenged the Illinois pay-to-play laws in federal court.  The Habitat Company lost a state management contract when its majority owner and his wife made contributions to gubernatorial candidates.  In The Habitat Co. et al v. Illinois Housing Development Authority et al, the plaintiffs challenge the Illinois Procurement Act as violating the First and Fourteenth Amendments to the U.S. Constitution.
  • Disclosure of Independent Expenditures Lags:  The Associated Press reports that following the decision last August in Citizens for Responsibility and Ethics in Washington v. the Federal Election Commission, observers expected more disclosure of independent expenditures.  But the Federal Election Commission’s guidance following the decision failed to generate more transparency.   Only 8% of groups making independent expenditures revealed their donors, according to the article.
  • Should the National Inquirer Register under the Foreign Agents Registration Act?:  The United States Department of Justice responded to a request for an advisory opinion about whether a media company should register as a foreign agent after publishing a “fawning” report about a foreign leader that coincided with the leader’s visit.  NBC News reports that the media company in question is AMI, the parent of the National Enquirer, and the leader was the Crown Prince of Saudi Arabia.
  • Lobbyists Don’t Wait in the Lobby Anymore:  They pay someone to do it for them.  According to MSN News, neophyte Rep. Ocasio-Cortez was shocked to learn that there’s a thriving business of people who stand in line for congressional hearings and hold a place for lobbyists.  The article quotes Linestanding.com (“a leader in the Congressional line standing business since 1985”) as indicating that the current rate is $48 per hour, with a recommended 24 hours for high profile hearings.  Supreme Court line standing has gone for as much as $6,000 for a single oral argument.

WEEK OF FEBRUARY 8, 2019

Latest Developments:

  • The Federal Election Commission announced revised contribution limits for the 2019-2020 election cycle based on changes to the consumer price index.  For example, under the new contribution limits, individuals may contribute up to $2,800 to federal candidates for President, U.S. Senate, or the U.S. House of Representatives.
  • The Federal Election Commission also met this week for the first time this year.  The Chair noted that activity for the 2020 election has begun, but the Commission was closed during a portion of December and January, leading to a significant backlog of work.  She indicated that the Commission has 326 pending enforcement cases, of which over 50 are nearing the statute of limitations.
  • The Governor of Tennessee issued Executive Order No. 2 that revises the prior Governor’s Executive Order No. 20 from 2012.  It continues to, among other things, prohibit gifts to executive branch employees from any person who is seeking a contract or other state business, is regulated by the employee’s department, or has interests affected by the employee’s performance of official duties.  The order contains some revised exceptions, including dropping the requirement that an official be a speaker at a meeting in order to receive a gift of food, entertainment, or interstate travel.  In a related matter, last month, the Tennessee Ethics Commission raised the per-event gift limit to $63 and the annual aggregate limit for gifts from a lobbyist employer to a covered person to $126.
  • The Governor of New Mexico signed SB 191, which we reported here two weeks ago as being on a fast-track “rocket docket.”  The measure requires that lobbyist and lobbyist employer expenditures of under $100 be disclosed in the aggregate on their periodic reports.  The bill provides that those aggregate expenditures be listed, in lump sums in three categories:  meals and beverages, other entertainment, and other expenditures.  The bill takes effect July 1, 2019 and, thus, will not affect expenditures in the current session, which is expected to adjourn in mid-March.
  • The Massachusetts Office of Campaign and Political Finance released draft regulations to, among other things, lower the limit on contributions that unions can make to a candidate from $15,000 to $1,000.  The change follows the case of 1A Auto, Inc. v. Director of the Office of Campaign and Political Finance, in which the Massachusetts Supreme Court upheld the state’s ban on corporate contributions.  Mass Live quotes the Executive Director of Common Cause, who favored the change, as believing that the new rule will provide “consistent contribution limits that are applied across the board and without big exceptions.”  Currently, corporations can contribute nothing; individuals can contribute $1,000, and unions can contribute $15,000.  The new rule would put unions on par with individuals. The rules also require registration and reporting for independent expenditure PACs and for electioneering communications.

In Case You Missed It:

  • Limits in OregonOregon Public Broadcasting reports that the Oregon Supreme Court has “agreed to fast-track a case that proponents hope will let the state limit campaign contributions.”  Multnomah County imposed a $500 limit on contributions to county candidates, despite a 1997 state Supreme Court ruling that contribution limits violate the state’s free speech protections.  If the county limits are upheld, the case would “open the door for statewide campaign finance regulations.”
  • Gifts that Keep on Giving:  According to the Tampa Bay Times, an ethics complaint against former Tallahassee Mayor and gubernatorial candidate Andrew Gillum is moving forward after probable cause was found that he accepted gifts from lobbyists in violation of state law.  The former mayor allegedly accepted gifts in excess of $100 on trips to Costa Rica and New York City.
  • More Ethics Reform Proposals:  The Hill reports that, in addition to the Democrats’ much heralded ethics bill, so many lawmakers have introduced ethics measures that it is “a sign the topic will dominate into the 2020 campaigns.”  These assorted campaign finance, lobby regulation, and anti-corruption bills “allow individual members to highlight specific proposals as well as offer some pieces a chance for bipartisan support,” according to the article.
  • Careful What You Wish For:  An Alaska lawmaker was forced to withdraw a health care reform bill as a result of new ethics reforms, according to the Juneau Empire.  Her husband is a health care professional and new rules prohibit legislators from voting on measures that would financially affect a family member.  Although the original ethics measure was aimed at “lawmakers who have connections to the oil industry,” it has a much broader application.

WEEK OF FEBRUARY 1, 2019

Latest Developments:

  • The Governor of New York has signed A 776 and S 1101, which make clear that limited liability companies are subject to the prohibition on corporate contributions and require LLCs to file annual disclosure reports with the State Board of Elections if they make independent expenditures.

In addition, the Governor announced a comprehensive Lobby Reform Proposal.  Among other things, it would decrease the threshold required to register to $500, require lobbyists to report campaign contributions, extend revolving door provisions from 2 to 5 years, and increase penalties on lobbyists who fail to comply with the lobby law.  The measure has been introduced in both houses of the legislature as Assembly Bill 2010 and Senate Bill 1510.  These latter bills are marked as bills to implement the state’s budget.

  • The New York Joint Commission on Public Ethics met on Thursday, January 29.  In accordance with its agenda, the Commission discussed, at length, the Governor’s proposed legislation to revise provisions of state law.  (See above.)
  • The Montana Commissioner of Political Practices has adjusted the registration threshold to require that any person who receives annual compensation of more than $2,600 to lobby must register (up from $2,550 for last year).  Similarly, a lobbyist employer who pays more than $2,600 to a lobbyist must file a lobbyist principal authorization.
  • Columbus Ohio adopted Ordinance 3386-2018 that, among other things, imposes a $10,000 limit on contributions to candidates (but adjusted by the state’s inflation factor adjustment), requires that candidate and ballot measure committees file disclosure reports, and requires that independent expenditures for “election period communications” be disclosed, including the source of funds for those expenditures.

In Case You Missed It:

  • FARA Way:  The Hill reports that lawmakers continue to push for reform to the Foreign Agents Registration Act (FARA).  According to the article, “updating the decades-old law and toughening enforcement is a top concern” of Sen. Grassley and others in the Senate.

WEEK OF JANUARY 25, 2019

Latest Developments:

  • The Mayor of Washington, D.C. signed a major campaign finance measure, Bill 22-107 (now C. Act 22-578).  Among other things, the measure enacts pay-to-play restrictions on contractors, prohibits lobbyists from bundling contributions, and moves the Office of Campaign Finance to a new independent Campaign Finance Board.  The bill also raises the threshold for reporting independent expenditures from $50 to $1,000 and requires PACs to create a segregated account in order to make independent expenditures.  The measure takes effect in February, following a 30-day Congressional review period.
  • The United States Senate issued a notice this week to registered lobbyists reminding them that lobbyists must disclose any convictions for certain financial and related crimes on all registrations and quarterly reports filed after January 3, 2019, following enactment of the JACK Act.
  • The Washington State Public Disclosure Commission met this week.  The Commission’s agenda included an attachment that indicates the Commission plans adopt permanent regulations for the Washington Disclose Act in the next six months.  Staff has also recommended that the Commission update interpretations regarding (1) the “primary purpose” test to determine if an organization is subject to regulation; and, (2) online campaign activities.  The Commission adopted revisions to its current interpretations for pre-election reports and for contributions made online and via text message.

In Case You Missed It:

  • More Authority Needed:  The Vermont Ethics Commission, which was created only a year ago, is seeking to expand its authority.  According to VTDigger, the Commission is seeking investigatory authority, along with additional staff to conduct examinations.
  • More Lobbyist Reporting:  The New Mexico Legislature is fast-tracking a bill to revise lobbyist reporting rulesNew Mexico in Depth reports that a bill two years ago “inadvertently” dropped the requirement that lobbyists report expenditures under $100.  The changes made by SB 191 would require that expenditures under $100 be reported, in the aggregate, on the lobbyist’s report.  The bill is part of the legislature’s “Rocket Docket,” and has passed the State Senate in the space of one week.
  • More Lobbyist SpendingLobbyist spending has significantly increased in Connecticut, according to the Hartford Courant.  A hospital group spent $9.7 in its lobby effort over 4 years; a casino group spent $7.2 million over 3 years.  Total spending on lobbying last year was $97 million, which is up from $75 million in 2011-2012.
  • More ComplaintsThe Arkansas Ethics Commission is overwhelmed by the number of complaints it has received within the last year.  The Northwest Arkansas Democrat Gazette reports that the agency is “at the breaking point.”  Commission investigations have led to five state lawmakers’ convictions for federal crimes in the past 3 years, but the agency remains underfunded and needs more investigative staff.

WEEK OF JANUARY 18, 2019

Latest Developments:

  • The United States Supreme Court denied a petition to hear an appeal from the Ninth Circuit decision in Lair v. Mangan, a case that raised two issues:  (1) whether Montana’s base candidate contribution limits on individual and political committees are unconstitutional under the First Amendment; and,  (2) whether Montana’s aggregate candidate contribution limits from all political party entities are unconstitutional under the First Amendment.
  • The Washington State Supreme Court, in Washington v. Evergreen Freedom Foundation, ruled that an organization that provided free legal services to proponents of local ballot measures is required to file disclosure reports with the Washington State Public Disclosure Commission.  The organization must report the value of its services as an independent expenditure in support of a ballot measure.
  • Campaign Contribution Limits Increase:  A number of states have revised their campaign contribution limits for elections held in the new 2-year election cycle.  Among the states that have recently announced changes are:

Clients with access to campaign finance law summaries through the the Nielsen Merksamer Client Portal will find pertinent updated limits in each summary in the coming weeks.

  • The Wyoming Secretary of State announced a new online Lobbyist Registration System.  The new Lobbyist Center includes the registration portal, a real time list of registered lobbyists, and a variety of resources for interested people.  Amendments, terminations, and reports must still be submitted via email on a form that may be downloaded.

In Case You Missed It:

  • What Happens if Nobody’s Home?Politico reports that Democrats have expressed concern that the Federal Election Commission is closed for business during the government shutdown.  In a letter to the Chair of the FEC, Senate Democrats wondered whether the Commission is capable of exercising its core functions and brought up the fact that the agency’s computers were hacked during a 2013 shutdown.
  • More FARA Fallout from the Russia Investigation:  The U.S. Department of Justice continues to crack down on those who fail to register under the Foreign Agents Registration Act (FARA)The Wall Street Journal reports that “big law” firm Skadden Arps has agreed to retroactively register under FARA and pay over the $4.6 million it made when it provided services to the Ukrainian Ministry of Justice in 2012.
  • New Congressional Members Embrace Leadership PAC FundsRoll Call details the widespread use of “leadership PACs,” which it calls “slush funds,” by incoming freshmen who campaigned against the influence of money in politics.
  • Oklahoma Ethics Shuns Leadership PAC Funds:  According to NewsOK, the Oklahoma Ethics Commission voted to ban state legislators from operating leadership PACs.  However, the legislature, which may veto Commission rules, is expected to reject the rule change.

WEEK OF JANUARY 11, 2019

Latest Developments:

  • The United States District Court for the District of Maryland, in Washington Post v. McManus, found that the state’s Online Electioneering Transparency and Accountability Act, which was intended to curb foreign online/social media activity in domestic elections, is overbroad and violates the First Amendment rights of members of the domestic press, who sought an injunction.
  • The Federal Election Commission remains closed due to the federal shutdown.  The commission announced that it will not provide services, most of its staff will not be at work, and it will not respond to any pending matters until it reopens.  The Commission website remains up, although content will not be updated.  The public may continue to send comments on its two pending rulemaking matters.  Electronic filings may be made, although no staff is available to assist with any technical problems.  The Commission will not accept any paper filings during the shutdown.  All documents and materials required to be filed will be considered timely if received within 24 hours after the Commission reopens for business.
  • The California Fair Political Practices Commission meets next Thursday.  The meeting will be held in Oakland and will be attended by Nielsen Merksamer Attorney Joel Aurora.  The agenda includes a discussion of the Commission’s legislative agenda, including whether to request a bill to authorize the Commission to prosecute unlawful use of public funds for campaign activities.  The Commission will also consider adoption of proposed changes to regulations concerning conflicts of interest and the streamline settlement program.  Regulations that the commission will take up in the future include:
    • Discussion of advice letter procedures, including possible criteria for elevating requests for advice to opinion requests.
    • Review of procedures for probable cause proceedings under Commission Regulation 18361.4.
    • Discussion of gift rules as applicable to an agency provided tickets or passes under Commission Regulation 18944.1.
    • Discussion of the definition of “nondonor funds” for purposes of Section 84222.
    • Discussion of campaigning by governmental agencies under Commission Regulations 18420.1 and 18901.1.

In Case You Missed It:

  • Ethics First: House Democrats followed through on their promise and introduced an ethics bill as their first measureHR 1 intends to “reduce the influence of big money in politics, and strengthen ethics rules for public servants,” according to its title.  NPR provides the details on the broad contents of the bill; Open Secrets has an article on the campaign finance aspects of HR 1.  Those provisions include disclosure of dark money, digital advertising disclosure, and a call for a constitutional amendment to overturn Citizens United.
  • Crowded Revolving DoorRoll Call reports that “the revolving door between Capitol Hill and K Street kicked into hyper-spin” with newly former members of Congress and their staffs seeking jobs in the lobby industry.  However, an unusually large number of people leaving Congress and seeking jobs has resulted in an oversupply of talent.
  • Beware of Ethics Issues if Dealing with Furloughed Employees:  Idled federal employees who have set up GoFundMe pages or who are seeking second jobs are still subject to federal ethics provisions according to the Federal News NetworkThose individuals remain federal employees during the furlough and are subject to all applicable federal ethics laws, which include provisions limiting gifts to federal employees – especially from prohibited sources.  Outside jobs must be vetted by the federal employee’s agency ethics officer, which is typically the agency general counsel during a government shutdown.
  • Choice of Organization Form Results in Dark Money:  According to Politico, Protecting America Now, a 501(c)(4) formed to support the nomination of Scott Pruitt to head the EPA, is being criticized for, among other things, choosing the wrong form of organization.  Critics say the organization should have formed as a 527 organization which may be formed “‘primarily for the purpose’ of trying to influence ‘the selection, nomination, election, or appointment’ of anyone to public office.”  A 527 organization would have disclosed its donors, whereas a 501(c)(4) is not required to publicly disclose those donors.
  • Chicago PoliticsThe longest serving and, reportedly, Chicago’s most powerful Alderman has been charged in federal court with trying to shake down the owner of several local fast food franchises.  According to the Chicago Tribune, Alderman Ed Burke sought to steer business to his private law firm from a firm that was seeking building permits.  The powerful alderman’s wife is one of seven members of the Illinois Supreme Court.
  • Initiatives – The Playground of Billionaires:  The San Francisco Chronicle reports that “the price of putting an initiative on the ballot is soaring” in California.  The current cost to qualify an initiative is about $2 million.  With a recent high voter turnout, the number of signatures that will be required – which is a percentage of last November’s high turnout – will dramatically increase, and hence the higher costs.

WEEK OF JANUARY 4, 2019

Latest Developments:

  • President Trump signed the JACK Act (“Justice Against Corruption on K Street Act of 2018”; 2896).  That measure requires federal lobbyists to disclose convictions for certain financial crimes on their lobbyist registration and quarterly reportsBloomberg has a rundown on the details of the measure and its implications.
  • North Carolina Lobby Regulation has flip-flopped.  In June, the North Carolina Secretary of State issued a letter notifying interested persons that lobby regulation was being transferred to the new State Board of Elections and Ethics Enforcement.  On December 28, 2018 she advised stakeholders that the Secretary of State’s Lobby Compliance Division is once again operational, and has jurisdiction following a judicial decision.  The state board was ruled unconstitutional in October, according to the Charlotte News & Observer; the court’s order has now been implemented.  A new State Board of Elections and a separate State Ethics Commission are being established by 1029, which became law by veto override on December 27, 2018.  Section 3.4(b) of that measure specifically transfers authority over lobbyist registration back to the Secretary of State.
  • The Oklahoma Ethics Commission has released “Questions and Answers” as to how its proposal to require reporting of grassroots lobbying will work.
  • The Oakland Ethics Commission meets Monday, January 7.  According to its agenda, the Commission will elect new officers for 2019, and will select an ad-hoc member of the commission from a pool of 6 applicants.
  • The Washington State Public Disclosure Commission issued a reminder that, effective January 1, “some nonprofits that make contributions or expenditures in Washington election campaigns above certain thresholds” must register as incidental committees and disclose certain donors on a report.

In case you missed it:

  • No More Free Lunch:  The St Louis Post-Dispatch reports that there is quite literally no more free lunch at the state legislature.  Following adoption of a constitutional amendment by the voters that limited gifts to $5, free food and free tickets to events will be a thing of the past.  Jefferson City restaurants are bracing for the change, but at least one enterprising bar “is offering the ‘Clean Mo Cocktail,’ a concoction of rum and lime juice ‘topped with nothing, no garnish.’  The selling price is $4.63 down from the usual price of $8, to keep the drink under the $5 limit.”
  • New Ethics Commission Planned:  The Bismarck Tribune reports that a North Dakota legislator is seeking a bipartisan consensus for a bill draft that would create a state ethics commission, as required by a recently enacted state constitutional amendment.  The legislature has returned to the state capitol for a four-month session.  According to the article, there is a “plan to bring in expert witnesses from other states with experience creating an ethics commission.”
  • Federal Crackdown:  Federal Prosecutors may be poised for a crackdown on those who violate the Foreign Agents Registration Act (FARA) following the conviction of two people by the Special Prosecutor.  The Hill reports that “Robert Mueller’s Russia investigation has given federal prosecutors momentum to litigate alleged violations of what until last year was an obscure law governing foreign lobbying.”
  • California Crackdown:  The California Fair Political Practices Commission’s fine imposed on the Bay Area Rapid Transit District may signal a change in how local governments operate political campaigns.  Dan Walters reports in Cal Matters that a crackdown may be coming.
  • Reform in the South:  The Alabama Code of Ethics Clarification and Reform Commission is nearing completion of a project that will provide several alternative proposals on different ethics issues to the state’s legislature, when it meets this March.  According to the Montgomery Advertiser, the legislature created the commission last spring following a scandal; the commission will hold a public hearing on January 31 on the proposed changes.
  • More Regulation:  The Colorado Sun reports that the incoming Secretary of State “is convening a working group to advise her on campaign finance reform as she prepares to take office Jan. 8.”  Dark money and disclosure gaps are her priority, according to the article.

WEEK OF DECEMBER 21, 2018

Latest Developments:

  • The U.S. Congress passed the JACK Act (“Justice Against Corruption on K Street Act of 2018”; 2896).  That measure would require federal lobbyists to disclose convictions for certain financial crimes on their lobbyist registration and quarterly reports.  The bill now goes to the President for approval.  The Senate passed the measure in August; the House approved the bill on December 20.
  • The Philadelphia Board of Ethics updated its campaign finance regulation (Regulation 1).  According to the Board, the revisions include new guidance on in-kind contributions, disclosure of expenditures, and removing the aggregate limits on PAC contributions in nonelection years, in light of the McCutcheon
  • The Hawaii Ethics Commission has announced that its new electronic filing system for lobbyist registration and reporting will be available in January 2019.
  • The Oklahoma Ethics Commission met Friday, December 14. According to its agenda, the Commission held hearings on proposed amendments to campaign finance rules regarding coordinated activities and committee-to-committee contributions and lobbyist rules that would require disclosure of grassroots lobbying expenses.
  • The New York Joint Commission on Public Ethics: The Commission’s agenda includes a report from commission staff regarding the ongoing process to revise and update the lobbying application.  Staff used their report opportunity to tout their new filing portal (opened on December 17) and to publicize their online materials that explain the lobby registration and reporting system.  The staff is very solicitous about providing help; they promise there will be “no gotcha” as customers learn to use the new system.
  • The day after JCOPE’s hearing, it settled a lawsuit that challenged its new lobby regulations, according to the Albany Times Union.  “The Times Union has learned that under the terms of the settlement, the 92 pages of regulations passed in April by the state Joint Commission on Public Ethics are defined simply as a ‘statement’ for how the ethics watchdog agency plans to administer and enforce state lobbying law.”  The article indicates that they will be guidelines, although the parties appear to disagree as to whether violations would be subject to fines.

COGEL Bluebook:

  • The Council on Governmental Ethics Laws (COGEL) met December 9 to 12.  The conference is designed for government ethics administrators from around North America.  Jason Kaune of Nielsen Merksamer moderated a panel discussion entitled, “Campaign Finance Update: The ‘Must Know’ Litigation Developments,” with FEC Assistant General Counsel Charles Kitcher and Megan McAllen from the Campaign Legal Center.  Nielsen Merksamer edits an annual bluebook, compiled from government ethics administrators’ contributions and was distributed at the conference.  The bluebook includes a synopsis of all major campaign finance litigation in the United States and Canada in the past year.  Nielsen Merksamer clients may obtain a free PDF of that publication by requesting a copy through their political attorney.

In case you missed it:

  • The Devil is in the Details: Voters in New Mexico approved a constitutional amendment last month that established an independent State Ethics Commission.  However, as reported by the Las Cruces Sun News, legislators are wrestling with how much transparency to require in the enabling legislation that sets up the actual commission.  Some legislators fear that frivolous complaints may be used as weapons.  However, the Albuquerque Journal has editorialized in favor of an open and transparent commission, citing several recent examples of corruption that resulted in convictions.
  • Lobbying Receptions Cancelled:  Following adoption of a comprehensive ethics measure in North Dakota by the voters, the Dickenson Press reports that a number of lobbying groups have cancelled plans for legislative receptions.  The constitutional amendment, which took effect immediately, bans most lobbyist gifts, but does provide several exceptions including for “social settings.”  However, rules detailing how those exceptions work are not required to be in place for two years, thus leaving lobbyists in a gray area.
  • Turkey Lobbyists:  Two former associates of ex-National Security Advisor Michael Flynn were indicted on charges of secretly lobbying for the Republic of Turkey in violation of federal lobby laws, according to the New York Times.   The charges are reportedly part of a crack-down on unregistered foreign lobbing as a result of the Muller investigation.
  • Foreign Money WoesThe Washington Post reports that the incoming Chair of the House Intelligence Committee plans to investigate foreign funding of or involvement in the President’s inauguration.  The Inaugural Committee stated that it “was in full compliance will all applicable laws.”
  • The “F” Stops Here:  The Federal Election Commission doesn’t find any humor in vulgar or threatening names.  According to Politico, the FEC has noticed an uptick in PAC registrations that include vulgar language or threats directed at specific public officials.  The FEC reportedly removed some of the offensive names from its website and referred the matters to the U.S. Secret Service.
  • Watch the Invite ListRoll Call reports that the House Ethics Committee is reminding incoming lawmakers that, while they may use campaign funds to host receptions marking their swearing-in, their events can’t be campaign or political events.  Further, they can’t use office funds for the purely social events.  The ethics panel advises that a “workaround” is using a third party to sponsor an honorific event.  But the panel also advises that its advice might change if the rules change at the outset, with new leadership in the House.

Meeting Notices:

  • The San Francisco Ethics Commission meets Friday, December 21.  The Commission’s agenda includes a staff presentation on recommended amendments to campaign finance and conflict-of-interest regulations.
  • The California Fair Political Practices Commission met Thursday, December 20.  Items on the agenda, include an enforcement against the SF Bay Area Rapid Transit District which spent money to promote its $3.5 billion bond measure.  In response to public comments, including from a legislator’s staff member, FPPC counsel explained that state statutes regarding misuse of public funds for campaign purposes are within the jurisdiction of the Attorney General and local district attorneys.  However, whether expenditures of public monies are legal or illegal, public entities must still disclose campaign expenditures; they are subject to the same requirements as anyone else.

WEEK OF DECEMBER 14, 2018

Latest Developments:

  • The Federal Election Commission met on December 13.  The agenda included a discussion of an opinion, as requested by Sen. Ron Wyden (D-OR), on whether a Member of Congress may use campaign money to pay for cyber security for his or her personal devices; the measure had been deferred twice before. According to The Hill, the Commission voted unanimously to approve Sen. Wyden’s measure, which he brought forth after Google disclosed in September that several Senators’ email addresses were compromised by foreign hackers.
  • The Center for Responsive Politics is reporting on a last-minute move by Michigan legislators to that would move the authority over issues related to campaign finance from the Secretary of State to a bipartisan committee, composed of 3 Democrats and 3 Republicans, all appointed by the governor. Some see it as a move to take power away from the incoming Secretary of State that would create gridlock, while proponents contend it will promote fairness.

COGEL Bluebook:

  • The Council on Governmental Ethics Laws (COGEL) met December 9 to 12.  The conference is designed for government ethics administrators from around North America.  Jason Kaune of Nielsen Merksamer will moderate a panel discussion entitled, “Campaign Finance Update: The ‘Must Know’ Litigation Developments,” with FEC Assistant General Counsel Charles Kitcher and Megan McAllen from the Campaign Legal Center.  Nielsen Merksamer edits an annual bluebook, compiled from government ethics administrators’ contributions and distributed at the conference.  The bluebook includes a synopsis of all major campaign finance litigation in the United States and Canada in the past year.  Nielsen Merksamer clients may obtain a free PDF of that publication by requesting a copy through their political attorney.

In case you missed it:

  • The state and its money are soon parted:  The Louis Dispatch is reporting that Missouri “paid more than $158,000 in October to a Texas law firm that successfully fought a state campaign finance law” requiring that campaign committees be formed no later than 30 days before an election. The payment of legal fees stems from the decisions of a federal district court and a federal appeals court which found that the state’s blackout period is an unconstitutional prior restraint on political speech in violation of the First Amendment. Missouri tried to enforce this provision in 2014 when the state contended that Missourians for Fiscal Accountability registered less than two weeks before the election.
  • No rest for the weary:  Politico reports that Rep-Elect Ross Spano has encountered difficulties hiring staff as he faces charges of campaign finance irregularities. Spano “recently admitted in a letter to the Federal Election Commission that he might have committed to campaign finance ‘violation’ in failing for two months to disclose $ 180,000” he accepted from two friends. Spano, “who personally loaned his campaign $ 174,500, says the funds he received were loans.” His former opponents have called for an FBI investigation and the House Ethics Committee may examine the case. Roll Call also reported on Spano’s past campaign finance issues.

Meeting Notices:

  • The New York Joint Commission on Public Ethics (JCOPE) meets next Tuesday, December 18.  On the agenda is a report from commission staff regarding the ongoing process to revise and update the lobbying application.
  • The Los Angeles City Ethics Commission also meets next Tuesday.  The agenda includes numerous areas of interest, including an action item to update the election filing deadlines in light of the new even-year election schedule.
  • The California Fair Political Practices Commission meets next Thursday, December 20.  Numerous enforcement matter are on its agenda, in addition to a report from the Enforcement Taskforce on its streamline program and warning letter protocol.

WEEK OF DECEMBER 7, 2018

Latest Developments:

  • The Mayor of Baltimore, Maryland signed Ordinance 18-0230 on December 3, 2018.  That measure will require semi-annual lobbyist activity reporting on July 31 and January 31, in place of the annual reports previously required.  The ordinance takes effect 90 days after enactment or 30 days after development of an online tool to permit lobbyists to file reports electronically, whichever is later.
  • The Federal Election Commission met on December 6.  The agenda included a discussion of an opinion on whether a member of Congress may use campaign money to pay for cyber security for his personal devices; however, once again, the commission deferred action until its next meeting – next week. Also next week, several Commission members and staff members will be attending and presenting in programs at the Council on Governmental Ethics Laws (COGEL).

COGEL Bluebook:

  • The Council on Governmental Ethics Laws (COGEL) meets December 9 to 12.  The conference is designed for government ethics administrators from around North America.  Jason Kaune of Nielsen Merksamer will moderate a panel discussion entitled, “Campaign Finance Update: The ‘Must Know’ Litigation Developments,” with FEC Assistant General Counsel Charles Kitcher and Megan McAllen from the Campaign Legal Center.  Nielsen Merksamer edits an annual bluebook, compiled from government ethics administrators’ contributions and distributed at the conference.  The bluebook includes a synopsis of all major campaign finance litigation in the United States and Canada in the past year.  Nielsen Merksamer clients may obtain a free PDF of that publication by requesting a copy through their political attorney.

In case you missed it:

  • Pay-to-Play on the Ropes in D.C.:  The Washington D.C. City Council unanimously approved a pay to play ordinance, according to the Washington Post.  The legislation, which would ban campaign contributions from city contractors with more than $250,000 in contracts, still requires the approval of the Mayor and is subject to review by the U.S. Congress.
  • Gifts of Travel Results in Trip out the Door:  Saskatchewan employees who accepted a gift of a trip to the PGA Championship in Charlotte, North Carolina were fired for accepting a gift from a vendor that had not been pre-approved, according to CBC News.  Their employer, Saskatchewan eHealth, has a policy expressly forbidding that type of travel.  Nevertheless employees took other vendor-paid travel that was pre-approved by their agency; however, sometimes that “pre-approval” was signed after the trip was taken.  According to one expert who was interviewed, “Companies offer these things for a reason – because it’s part of their own cost of doing business. They’re trying to curry favour, build relationships and that’s really part of their marketing.”
  • Don’t Run for Office without Consulting a Good Political Law Attorney:  An incoming freshman Florida congressman is facing FEC fines and possible jail time for large loans to his campaign that went unreported for months, according to Roll Call.  The Member-elect loaned his campaign $167,000 and borrowed another $190,000 from friends, far in excess of campaign limits, and failed to file disclosure reports until just before the election.  The loans initially were reported by the Tampa Bay Times on the eve of the election.

Meeting Notices:

  • The Federal Election Commission meets again on December 13.  The agenda includes a discussion of an opinion on whether a member of Congress may use campaign money to pay for cyber security for his personal devices.

WEEK OF NOVEMBER 30, 2018

Latest Developments:

  • The Ninth Circuit Court of Appeals issued a decision in Thompson v. Hebdon, in which three individuals and the Republican Party challenged Alaska’s campaign contribution limits. The court upheld the challenged state limits on contributions to candidates and to non-political party groups, but barred the state’s limit on aggregate contributions that a candidate may accept from nonresidents of Alaska.  The court reasoned that the nonresident limit did not target an important state interest.  The case will be discussed on December 10 at the COGEL conference.  (See below).  The Anchorage Daily News reports on the anticipated impact of the ruling.
  • The Eighth Circuit Court of Appeals has decided that Missouri’s requirement that all lobbyists register and report their activity even if not receiving compensation is constitutional, rebuffing a challenge in Calzone v. Summers.  The court found that the state has an interest in transparency that transcends whether the person is paid or not.  The Kansas City Star reports that some lawyers think the ruling “could force everyday Missourians to register as lobbyists.”
  • The Governor of Missouri, Michael Parson, issued an Executive Order revising former Governor Greitens’ Executive Order on ethics.  The Louis Post-Dispatch describes the order as tweaking the former Governor’s order to conform the definition of “gift” to an existing Missouri statutory definition in an effort to end a federal lawsuit that alleged the prior order violated the First Amendment.  The order also reinstates a revolving door provision that prohibits members of the Governor’s staff from becoming executive lobbyists during the Governor’s term.
  • The New York Joint Commission on Public Ethics (JCOPE) met briefly on Tuesday.  Among the items on the agenda that were discussed was the new lobby application web page.  The commission expects to have a new lobby registration portal operational on December 10.

COGEL Bluebook:

  • The Council on Governmental Ethics Laws (COGEL) meets December 9 to 12.  The conference is designed for government ethics administrators from around North America.  Jason Kaune of Nielsen Merksamer will moderate a panel discussion entitled, “Campaign Finance Update: The ‘Must Know’ Litigation Developments.” Nielsen Merksamer edits an annual bluebook, compiled from government ethics administrators’ contributions and distributed at the conference.  The bluebook includes a synopsis of all major campaign finance litigation in the United States and Canada in the past year.  Nielsen Merksamer clients may obtain a free PDF of that publication by requesting a copy through their political attorney.

In case you missed it:

  • Ethics out of the Blue:  Newly empowered house Democrats say that their first priority is a bill that includes ethics reform, according to NPR.   Among other things, the conceptual bill (no draft language exists) would overturn Citizen’s United, require more campaign spending disclosure, expand anti-bribery statutes, and require disclosure of the president’s tax returns.
  • No PAC Money – The Workaround:  Faced with a number of freshmen members of Congress who have pledged not to take corporate PAC money, Roll Call reports that, “Instead of PAC dollars, corporate interests plan to rely on individual personal donations from their executives, lobbyists and other consultants, instead [sic] of the collective contributions from corporate PACs.”  The “no PACs pledge” has also led to increased participation in meet and greet events and to mobilizing people in member’s districts.
  • Football Ethics:  The Connecticut Citizen’s Ethics Advisory Board is appealing a superior court decision overturning the board’s finding that the University of Connecticut’s new football coach was a state employee who violated nepotism laws when he arranged for a job for his son on his new football team.  The Hartford Courant reports that the matter turns on the Board’s opinion that the coach became a state employee when he signed a letter of intent, before he actually began work.  During that period after signing the letter, but before he began working at the university, he negotiated a contract for his son.
  • Big Families = Big Contributions:  A peculiar exception in South Dakota campaign finance law has led to an odd result.  The Rapid City Journal reports that while state law caps contributions to statewide candidates at $4,000, “immediate family” are excluded from that limit.  That term is defined broadly in state law to include all those within the third degree of kinship (including great grandparents, grandnephews, and cousins), thus permitting unlimited contributions from a potentially large group.  Secretary of State Shantel Krebs told the paper that “the exemption is probably not common knowledge among the general public, but is well known among candidates.  ‘It gets used quite a bit,’ Krebs said.”
  • No Finesse in Utah:  A lobbyist asked a state senator for a meeting and in the same email expressed a desire to deliver a campaign check, according to the Salt Lake Tribune.  The article quotes another state senator, “A lawyer might argue that no legal lines were crossed, but the people of Utah know it’s not right to hold out a campaign contribution while asking for an interview with a man who oversees the state budget.  Even if it is legal, it’s corrupt.  This was pay to play.”
  • Could a large expenditure be a contribution that violates limits? The Charleston Post and Courier reports that a South Carolina Democrat was successful in halting ads supporting his opponent that were paid for by the GOP State Senate Caucus.  The caucus was limited to making a $5,000 contribution to his opponent, but additionally spent large sums on its own advertisements supporting the candidate.  According to the Columbia State, a judge agreed that under state law, caucus committees are limited to $5,000 to support a state candidate; the caucus spent over $200,000 on the ads.  The caucus plans to appeal the injunction.

Meeting Notices:

  • The California Fair Political Practices Commission Budget and Personnel Committee has a meeting scheduled for December 6, 2018, although no agenda has been posted.
  • The Federal Election Commission meets on December 6.  The agenda includes a discussion of an opinion on whether a member of Congress may use campaign money to pay for cyber security for his personal devices.

WEEK OF NOVEMBER 16, 2018

Latest Developments:

  • The Washington, D.C. City Council’s budget trailer measure, Act 22-422, includes the “Board of Ethics and Government Accountability Amendment Act of 2018 (Title I, Subtitle I of the Act).  That act, among other things, switches the district from semiannual lobby reports to quarterly lobby reports due on the 15th of January, April, July, and October.  Those reports must include “a precise description of the subject matter” of all written or oral communications, including the bill, resolution, contract, or other legislation related to the lobbying efforts.  The act also revises the definition of “administrative decision.”
  • The California Fair Political Practices Commission met Thursday, November 15.  As described in the Agenda, the Commission adopted new gift limits, campaign contribution limits, and officeholder account limits.  The new limits are based on changes to the Consumer Price Index, and apply to activity in 2019-2020.  The changes include an increase of the gift limit to $500.
  • The Federal Election Commission met Thursday, November 15, but generally put off any decision about the two opinions pending before the Commission.  The two opinions on the Agenda pertained to (1) permitting the provision of security software to protect personal electronic devices from cyber threats for free, without being an impermissible campaign contribution, and (2) permitting the use of campaign funds to pay for cyber security measures for a U.S. Senator’s personal devices and accounts.
  • Anne Arundel County (County Seat:  Annapolis), Maryland enacted Bill No. 80-18, a comprehensive amendment to it ethics law; the measure takes effect on December 6, 2018.  Among other things, it permits the County Ethics Commission to suspend or revoke lobby registrations for certain violations, provides a 2-year statute of limitations for that action, and provides a process for reinstatement.  It deletes a gift exception for tickets to charitable, cultural, or political events.  The measure also provides for the proration of compensation reportable for lobby activities and places limits on persons who assist the county in creating procurement specifications.

In case you missed it:

  • The Election is Over – Let the Lawsuits Begin:  North Dakotans for Public Integrity, which promoted North Dakota Measure 1, the state’s newly enacted ethics reform, is planning to stay in business because “it’s anticipating legal challenges by opponents,” according to the Bismarck Tribune.  The Tribune notes that while objections come from business interests like the Chamber of Commerce, diverse groups from the ACLU to the Catholic Church have also criticized aspects of the measure.

Meanwhile, according to the St. Louis Dispatch, the same groups that tried to keep the Clean Missouri initiative off the ballot are “mulling further legal action aimed at stopping the reforms.  ‘We fully intend to oppose Clean Missouri any way we can,’ said Dan Mehan, executive director of the Missouri Chamber of Commerce and Industry.”

  • The Election is Over – Buy Your Inaugural Tickets Now:  Massachusetts does not have a limit on contributions to inaugural committees, but Governor Charlie Baker is voluntarily limiting contributions to $25,000.  The Boston Globe reports that “Baker and Lieutenant Governor Karyn Polito officially reopened their inaugural committee on Tuesday, state campaign finance records show. But it had already begun soliciting cash in the days before…”  (This serves as a reminder to check with your political law attorney before making contributions to an inaugural committee.  Limits and prohibitions vary by state.)
  • The Election is Over – But Don’t Talk to the Lobbyist:  David Beckham’s soccer team won an election in Miami that gives his group the right to negotiate to turn a city-owned golf course into a major league soccer stadium, according to the Miami Herald.  But a day after the election, an ethics complaint stopped that process.  The Miami Herald also reports that the complaint filed with the Miami-Dade Ethics Commission alleges that the member of Beckham’s group who registered as a lobbyist failed to complete a required lobbyist ethics training course before urging city commissioners to place the measure on the ballot.  “City Attorney Victoria Mendez instructed city commissioners and employees not to take any meetings or phone calls from officials from the team,” according to the article, until the complaint is resolved.
  • Banks want to be in the Money Game:  New Jersey bankers filed suit over a century old ban on banks’ contributions to, or expenditures in connection with, candidates and political parties.  Yahoo Finance reports that in New Jersey Bankers Assn. v. Grewal, the 88 members of the bankers association want to be able to make contributions to state and local candidates and to political parties.  The ban was enacted when Woodrow Wilson was Governor.
  • Maybe not the Alamo, but…: The Texas Tribune reports that the Texas Ethics Commission is under attack!  In Empower Texas, Inc. v. Texas Ethics Commission, a Texas appellate court found that the plaintiffs had sufficient grounds to challenge the authority of the Commission.  Empower Texas alleges that the Commission’s exercise of statutory authority is unconstitutional – that it does not have the power to regulate campaigns and contributions.  A lower court had dismissed the matter in 2016, but the appellate court’s action revives the suit.

WEEK OF NOVEMBER 9, 2018

Latest Developments:

  • Election Day Results: Several States provided voters with the opportunity on Election Day to vote on ballot measures that covered, gifts, campaign contributions, redistricting commissions, public officials’ conduct, and lobbyist activityNPR has a discussion of the most important issues contained within these measures.  The election results are summarized below:
  • Arizona Proposition 306 [Passed]: Prohibits statewide and legislative candidates for office from transferring funds from public financing accounts (“clean election accounts”) to either political parties or tax-exempt 501(a) organizations that can engage in activity to influence elections. The measure also removes the Citizens Clean Election Commission’s exemption from rule-making requirements, thus making that commission’s regulations subject to the state’s Administrative Procedures Act. (Yes – 56% with 99% of precincts reporting.)
  • Colorado Amendment 75 [Failed]: Provides that if a statewide or legislative candidate contributes one million dollars or more to his or her own campaign, other candidates in that race may accept five times the normal campaign contribution limit. (No 66% with 100% of precincts reporting.)
  • Colorado Amendment Y and Amendment Z [Both Passed]: These two measures on the ballot would create congressional and legislative redistricting commissions, respectively.  The Independent Congressional Redistricting Commission and the Independent Legislative Redistricting Commission would each be composed of four Democrats, four Republicans, and four independents, selected in a process conducted under the supervision of three retired judges appointed by the Chief Justice of the Colorado Supreme Court. (Yes 71% for both, with 100% of precincts reporting.)
  • Florida Amendment 12 (Constitutional Revision 7) [Passed]: Expands current restrictions on lobbying. State and local public officials would be banned from lobbying for six years.  Those officials are currently banned for two years after leaving office.  The measure would also prohibit public officials from lobbying another government agency while currently holding a public office.  The proposal would additionally ban public officeholders and their families and businesses from receiving a “disproportionate benefit” as a result of their status as an officeholder.  That term would be defined later by the state’s ethics commission.  (Requires 60% vote for passage; Yes 79% with 99% of precincts reporting.)
  • Massachusetts Question 2 [Passed]: Establishes a 15-member citizens’ commission to consider and recommend potential amendments to the United States Constitution to establish that corporations do not have the same Constitutional rights as human beings and that campaign contributions and expenditures may be regulated.  The measure, among other things, states that, “Citizens United v. FEC presents a serious and direct threat to our democracy.”  (Yes 71% with 99% precincts of precincts reporting.)
  • Michigan Proposal 2 [Passed]: Creates an Independent Citizens Redistricting Commission to redistrict both congressional and legislative districts.  The Secretary of State would be responsible for providing support services to the commission.  At least four commissioners must be Democrats, at least four must be Republicans, and at least five would be unaffiliated voters.  Public officials, party officials, and lobbyists would be ineligible to serve on the commission. (Yes 61% with 100% precincts of precincts reporting.)
  • Missouri Amendment 1 [Passed]: Revises state law on lobbying, gifts, campaign finance, redistricting, and public records. Lobbying: legislators and legislative employees would have to wait two years before becoming a paid lobbyist.  Gifts: legislators and legislative employees may not accept gifts of more than five dollars in value. Campaign finance: establishes cash contribution limits for legislative candidates ($2,500 for Senate candidates; $2,000 for House candidates) for each election cycle, prohibits disguising the source of contributions, and prohibits fundraising on public property. Redistricting: creates the “non-partisan state demographer,” who would be selected by the State Auditor and the majority and minority leaders in the State Senate for a five-year term to redraw district maps. Public records: legislative records are considered public records; all legislative proceedings would be subject to laws governing public access.  (Yes 62% with 99% precincts of precincts reporting.)
  • New Mexico Constitutional Amendment 2 [Passed]: Creates a seven-member State Ethics Commission that would investigate and adjudicate complaints concerning standards of ethical conduct for state officers and employees of the executive and legislative branches of government, candidates or other participants in elections, lobbyists, and government contractors.  (Yes 75% with 100% precincts of precincts reporting.)
  • North Carolina Legislatively Referred Constitutional Amendment (House Bill 4) [Failed]: Removes the Governor’spower to make appointments to the Bipartisan State Board of Ethics and Elections Enforcement and reduces the board from 9 members to 8.  Those 8 would be split, with four Republicans and four Democrats, all appointed by the legislature.  (No 62%, with 99% precincts of precincts reporting.)
  • North Dakota Initiated Constitutional Measure 1 [Passed]:  Establishes a five-member North Dakota Ethics Commission selected by the Governor and the majority and minority leaders in the State Senate; the commission could adopt ethics rules. The measure also prohibits gifts from lobbyists to public officials, with certain exceptions, prohibits lobbyists from delivering campaign contributions from others, and prohibits public officials from lobbying for two years after leaving office.   It bans contributions from foreign entities and persons as well as personal use of campaign contributions, and requires that reports of campaign expenditures over $200 be electronically accessible to the public.  (Yes 54%, with 100% precincts reporting.)
  • Oklahoma State Question 798 [Failed]: Provides that the Governor and Lieutenant Governor be elected on a single joint ticket beginning in 2026.  (No 54%, with 100% precincts reporting.)
  • South Dakota Constitutional Amendment W [Failed]: Requires lobbyist registration and disclosure, prohibits gifts from lobbyists to senior public officials, with some exceptions, and prohibits lobbyists from delivering contributions made by others.  Prohibits contributions in the State Capitol building, contributions by foreign governments, personal use of campaign contributions, and use of state property by public officials for personal gain.  Prohibits corporations and labor unions from making campaign contributions to state or local candidates.  Establishes election-cycle contribution limits for candidates ranging from $500 for State Representative or local offices to $4,000 for Governor.  Replaces the old board with a new State Government Accountability Board as an independent commission appointed by the Governor and Supreme Court, and empowered to adopt ethics rules.

The initiative would also require voter approval for any substantive changes to a voter-approved initiative or referendum. This measure was proposed in response to the state legislature repealing Initiative 22, a campaign finance and election-related measure approved by voters in 2016. Initiative 22 was an initiated state statute, which meant that the legislature was able to repeal or amend it. This 2018 initiative is a constitutional amendment and can’t be repealed or amended without voter approval.  (No 55%, with 100% precincts of precincts reporting.)

  • South Dakota Initiated Measure 24 [Passed]: Prohibits contributions to ballot question committees from non-residents, out-of-state political committees, and entities that haven’t filed with the Secretary of State’s office for the preceding four years.  (Yes 56%, with 100% precincts reporting.)
  • Utah Proposition 4 [Passed]: Establishes the Utah Independent Redistricting Commission to recommend revised congressional and legislative districts following a federal census or other specified events.  The chair of commission would be appointed by the Governor, and the other six members would be appointed by various legislative leaders.  Proposed maps would be submitted to Chief Justice of the State Supreme Court who would determine if the maps meet certain criteria. The approved maps would be submitted to the legislature for its approval.  (Yes 50.6%, with 100% of precincts reporting.)
  • Boston, Massachusetts enacted a new Lobby Ordinance. The measure requires annual registration with, and quarterly reporting to, the new Municipal Lobbying Compliance Commission.  Those who lobby 25 hours or less in a quarter or who receive less than $2,500 during a quarter would be exempt.
  • The Federal Election Commission meets next Thursday, November 15. The Commission’s Agenda includes a discussion of only one version of the draft advisory opinion that would permit the provision of security software to protect personal electronic devices from cyber threats for free, without being an impermissible campaign contribution.
  • The California Fair Political Practices Commission meets next Thursday, November 15. The agenda includes adoption of new gift limits, campaign contribution limits, and officeholder account limits.

In case you missed it:

  • Repackaging PACs: Corporate PACs are rebuilding their image according to Politico, after a midterm election that saw a large number of candidates refuse to accept corporate PAC money.  The National Association of Business PACs points out that “the real villain in politics is unchecked spending by super PACs and mystery donors, not the more-regulated fundraising committees attached to businesses and trade groups.”  The group is seeking to raise the limit on the amount a PAC can contribute to a single candidate.
  • Can you Build a Fence to Keep Money Out?: The South Dakota Measure passed Tuesday (see above) that prohibits out-of-state contributions for ballot measures is likely to face a challenge.  The Rapid City Journal interviewed sources from Americans for Prosperity, Common Cause, and Ballotpedia, among others, about the measure.  Most are skeptical about a state’s ability to restrict out-of-state ballot measure contributions; some are willing to say the measure is “clearly unconstitutional.”
  • Vacation Time in D.C.: Monday and Tuesday of election week was vacation time for many lobbyists in Washington, D.C., according to Politico“Members of Congress are getting help before Election Day from a tiny but influential subset of on-the-ground volunteers: Washington lobbyists eager to help their old bosses — and perhaps their own careers.”  Many lobbyists took vacation time and spent the past weekend in states across the country knocking on doors to help turn out voters.
  • Too Many Lobbyists up North?: The CBC reports that Canadian Senators “are being lobbied more than ever — and some are feeling overwhelmed.”  One Senator complained that “lobbyists have been given ‘too much time and too much importance.’”  A representative of the lobbyists’ trade association countered that “lobbyists also offer politicians practical advice, flag provisions that might be unworkable, point out unintended consequences, and offer recommendations to close loopholes.”

WEEK OF NOVEMBER 2, 2018

Latest Developments:

  • A United States District Court in Illinois issued an opinion in Proft and Liberty Principles PAC v. Madigan. Under Illinois law certain events result in the lifting of limits on contributions to candidates.  However, the court ruled that lifting the limits does not permit independent expenditure committees to contribute directly to candidate committees or to coordinate with them.  Courthouse News Service summarized the court analysis, noting “the state has a valid anti-corruption interest in ensuring that money raised for independent expenditures be used only for that purpose and not as campaign contributions.”
  • The New York Joint Commission on Public Ethics met Tuesday, October 30. Among other things, the Commission discussed their new electronic system for lobbyist registration and reporting, in conjunction with the new lobby regulations.  Additional resources, including an updated lobby guide should be available in mid-November; a new registration portal should be open by December 3.

In case you missed it:

  • Election Transparency Buried in Paper: The Kentucky Registry of Election Finance cannot process paper election reports fast enough.  The Associated Press reports that the Registry of Election Finance has 12 staffers who cannot enter the data fast enough to make it available to the public.  Virtually all candidates have filed on paper this year.  According to the article, “Registry of Election Finance chairman Craig Dilger pleaded with lawmakers Wednesday to pass a law next year requiring all candidates to file their campaign-finance reports electronically, something most states already do.”  Lawmakers have approved funds for a new computer system, but have not yet required electronic reporting.
  • Less than a Week to Go, and Still in the Dark: The New York Times discusses something called the “Hub Project,” a Democratic organization with “(a) structure unknown even to some of those involved.” Fourteen groups around the country are “funded and coordinated out of a single office in Washington, with the goal of battering Republicans… during the midterm elections.”  The group’s executive director, according to the Times, “displayed no ambivalence about using undisclosed contributions — traditionally a source of dismay for Democrats — to punish Republicans for last year’s $1.5 trillion tax law and their attempts to repeal the Affordable Care Act.  ‘We don’t believe in unilateral disarmament,’” he said.
  • Encouraging Pay to Play: The Voice of San Diego reports that 80% of construction companies that gave $5,000 or more to a pro-school bond campaign in the last seven years received contracts with the San Diego Unified School District.  According to the article, most of these were “service provider contracts,” not competitively bid contracts awarded to the lowest bidder.  In fact, none of the donors sought those type of competitively bid contracts.
  • Ethics Bumps in the Road: The Washington Post reports that the Florida Commission on Ethics charged the Mayor of Lantana, Florida with asking for sex in exchange for approving speed bumps on a constituent’s street.  After witnessing several accidents involving animals and children, a resident asked the city to install speed bumps on her street.  The Mayor allegedly said, “have sex with me and I will guarantee that you get your speed humps that you want.”   The Commission “found probable cause that [the Mayor] ‘misused his position to attempt to obtain a sexual benefit for himself,’ and ‘solicited sex from a constituent based on an understanding his vote, official action, or judgment would be influenced.’”

WEEK OF OCTOBER 26, 2018

Latest Developments:

  • The Federal Election Commission met Thursday, October 25. The only substantive matter on the agenda was a proposed opinion regarding whether: (1) to permit the provision of cybersecurity services to federal candidates and national parties for free because it is not for the purpose of influencing an election; or, (2) to prohibit it as an impermissible in-kind contribution.  The matter was put over to a future meeting.
  • The United States Department of Justice announced an indictment of a former lobbyist on obstruction of justice charges. The department alleges that Christopher Petrella was lobbying in support of a fraudulent scheme and, among other things, provided a false quarterly lobbyist report to federal law enforcement officials.
  • The California Fair Political Commission has issued a notice that it will hold a hearing on proposed amendments to gift limit and campaign contribution limit regulations at its meeting on November 15, 2018. The Commission proposes to increase the annual gift limit to $500 beginning January 1, 2019.  Campaign contribution limits are proposed to increase, among others, to $4,700 per election for legislative candidates and to $31,000 per election for candidates for Governor.
  • The New York Joint Commission on Public Ethics meets next Tuesday, October 30. The agenda includes a discussion of proposed legislation to allow public disclosure of some matters under investigation and a pending opinion regarding post-employment restrictions.

In case you missed it:

  • Bad Timing: The North Carolina State Board of Elections and Ethics Enforcement fined a federal PAC over $40,000 for a series of contributions made during the state legislature’s blackout period.  According to NC Policy Watch, 48 contributions were dated on days that the General Assembly was in session, although the checks were not sent out until a later date.
  • Do you Live in a Swamp?: The Coalition for Integrity has published its States With Anti-corruption Measures for Public Officials [S.W.A.M.P.] Index Report 2018.  The group’s interactive map shows, at a glance, which states have the toughest and the weakest laws on ethics and transparency.  Scores range from 0% in North Dakota to 78% in Washington State.
  • Billionaires with Carpetbags Full of Cash: The Center for Public Integrity has compiled a list of billionaires who have contributed to state ballot measures, including in many states far from their own homes.  The article describes “how billionaires from other states are shaping this year’s ballot measures.”
  • Federal Clean-Up Crew Still in NY: The New York Times reports that Dean Skelos, former Senate Majority Leader was sentenced in federal court to four years and three months for corruption, which included businessmen paying his son $300 for “no show” jobs.  Also, according to the Times, his son was sentenced to four years in federal prison.  Meanwhile, the Rochester Democrat & Chronicle reports that New York Assemblyman Joe Errigo was charged this month in federal District Court in Rochester with taking bribes in connection with the introduction of legislation to influence a local development.
  • South Carolina Corruption Trial: The former Chair of the State House of Representatives Judiciary Committee is on trial for corruption.  The State newspaper, in Columbia, South Carolina, reports that the trial of Jim Harrison will determine whether “untraceable, undisclosed payments made to lawmakers or on their behalf — is legal in South Carolina.  Lawmakers are supposed to report money that their employers get from companies that lobby the Legislature, and Harrison (allegedly) didn’t do that.”
  • False Reporting in North Carolina: The Charlotte News and Observer reports that the North Carolina State Board of Elections and Ethics Enforcement found that a state representative failed to report $141,000 in campaign contributions, including $25,000 in ATM withdrawals.  The board found that bank records had been altered, and it unanimously referred the matter for prosecution.

WEEK OF OCTOBER 19, 2018

Latest Developments:

  • The Governor of North Dakota has announced a final Ethics Policy, which forbids gifts that exceed $50 in value to the Governor, Lieutenant Governor, or their employees, according to the Bismarck Tribune.
  • The Alaska Public Offices Commission is wavering on lobbyist involvement in campaign contributions: Alaska prohibits lobbyists from collecting or delivering campaign contributions to candidates for the legislature or Governor.  However, according to Fairbanks Daily News-Miner, informal advice from the Alaska Public Offices Commission (APOC) permits lobbyists to inform others of upcoming fundraisers.  That advice has led lobbyists to email public officials’ fundraiser invitations to others.  APOC’s director cautions that informal advice is non-binding and won’t protect a lobbyist if a complaint is filed.  Moreover, following the press reports, APOC staff has drafted an opinion to stop the practice; the opinion will be presented to the Commission for approval in January.
  • San Francisco, CA, Ordinance No. 212-18 took effect on October 14, 2018. That ordinance requires disclosure of candidate and third party spending in elections for the city’s Retirement Board, Health Service Board, and Retiree Health Care Trust Board.  Any person who makes expenditures totaling $1,000 or more in a calendar year to support or oppose a candidate must register and file regular reports and must use an account at an office of a bank located in San Francisco.
  • The Federal Election Commission meets next Thursday, October 25.

In case you missed it:

  • CEO Political Spending: Market Watch reports that America’s CEOs are investing in the midterm elections.  Although some CEOs avoid partisan politics, the article indicates that at least 388 of the S&P 500 CEOs have collectively contributed over $24 million to various political groups and candidates.  Market Watch created a searchable database with its findings.
  • Dark Money Struggles to Find the Light: Notwithstanding a court order to reveal their donors, according to Politico, few organizations disclosed their donors as a reporting deadline passed on October 15.  Of the 18 so-called “dark-money political groups” tracked by the Campaign Legal Center, only four filed reports disclosing their donors.
  • Never Report Today What you Can Report After the Election: Politico also reports on the accelerating phenomenon of Super PACs opened just after a reporting deadline that spend large amounts and don’t’ file any reports until after the election.  According to the article, “The strategy – which is legal – is proving increasingly popular among Democrats and Republicans.”  The article contains a lengthy list of Super PACs that successfully avoided pre-election disclosure.

WEEK OF OCTOBER 12, 2018

Latest Developments:

  • The Federal Election Commission provided advice on how to report independent expenditures following the decision in CREW v. FEC. The advice applies to persons other than political committees that make independent expenditures aggregating more than $250 in a calendar year for a particular election.
  • In California, the state’s Fair Political Practices Commission (agenda), Los Angeles City Ethics Commission (agenda) and the San Francisco Ethics Commission all meet during the week of October 15.
  • The Washington State Court of Appeals upheld a $319,281.58 fine imposed on Food Democracy Action! for concealing its activity during an election. In State of Washington v. Food Democracy Action!, the court found that the organization solicited and received over 7,000 contributions totaling nearly $300,000 to support Initiative 522.  The organization, in turn, contributed large lump sums to the Yes on I-522 campaign; that campaign reported the amounts as contributions from Food Democracy.  After the election, when the Washington State Public Disclosure Commission began an investigation, Food Democracy registered as a political committee and filed a disclosure report listing its contributors.  I-522 would have required GMO disclosure labels, but narrowly failed passage in the 2012.
  • The Oklahoma Ethics Commission meets Friday, October 12. The Commission’s agenda includes a continuing discussion of proposed amendments to three ethics rules that concern: (1) coordination, (2) expenditures to influence legislation, and (3) candidate committee to candidate committee transfers.
  • CPA-Zicklin announced the release of its 2018 Index of Corporate Political Disclosure and Accountability. The annual publication analyzes and scores political disclosure and accountability policies and practices of leading U.S. public companies.

In case you missed it:

  • What Happens When There’s no Deadline in the Ordinance: The Fort Meyers New-Press reports that an audit by the Lee County (Florida) Clerk of the Court found that 60 percent of registered lobbyist failed to file required quarterly or annual statements of their activity.  [Editor’s note:  Nielsen Merksamer clients who subscribe have access to the Nielsen Merksamer Summary of Lee County, Florida Lobby Law, which includes information on the deadline to file lobbyist reports in Lee County.]
  • Murky Money: Politico describes the technique of political spending against opponents timed so that disclosure of the source occurs only after the election is over.  The method relies on creating a Super PAC right after a reporting deadline has passed and raising and spending all the money before the next reporting deadline, which is often after the election occurs.  The article points out that Super PACs created between October 18 and November 6 won’t have to file reports until after the midterm election.  An alternative technique is to borrow money, spend it, and seek contributions after the election.
  • Money and Games: The Federalist Society reports that the “’no duh’ school of campaign finance regulation suffered another welcome correction in September.”  Last week we noted that the Philadelphia Inquirer wants the state legislature to enact new restrictions following a U.S. District Court’s decision in Deon v. Barasch that the state’s ban on contributions from gaming interests is too broad and therefore unconstitutional.  The Federalist Society points out that the same code section was previously struck down by the Pennsylvania Supreme Court in 2009, but the legislature’s response was to simply add language to the Gaming Act describing what it thought was a compelling state interest, rather than amending the challenged statute and tailor it.
  • The Public has to Guess: According to the Santa Fe New Mexican, a 2016 change to the lobby laws which brought about electronic filing also stripped away the requirement that gifts of less than $100 to lawmakers be disclosed.  As a result, many of the biggest spending lobbyists do not reveal who received food and beverage or other gifts.

WEEK OF OCTOBER 5, 2018

Latest Developments:

  • The Illinois First District Court of Appeal upheld Cook County’s restrictions on campaign contributions from lobbyists and persons seeking official actions from the county. In Berrios v. Cook County Board of Commissioners, the County Assessor and a private attorney doing business before the assessor’s office challenged those restrictions.

Ballot Measures to Watch in November:

Several states around the country have political law measures on the November ballot.  These measures include various changes to campaign contribution limits, lobbyist gifts, revolving door provisions, and creating or revising ethics commissions or redistricting commissions.

  • Arizona Proposition 306: Prohibits candidates for office from using public financing accounts (often called “clean election accounts”) to give funds to either political parties or tax-exempt 501(a) organizations that can engage in actions to influence elections. The measure would also remove the Citizens Clean Election Commission’s exemption from rule-making requirements.
  • Colorado Amendment 75: Creates the ability for candidates to accept five times as much in contributions to their campaigns as is normally allowed only if another candidate contributes $1 million or more to his or her own campaign.
  • Colorado Amendment Y and Amendment Z: These two measures on the ballot would create congressional and legislative redistricting commissions.
  • Florida Constitutional Revision 7: Expands current restrictions on lobbying for compensation by former public officers, creates restrictions on lobbying for compensation by currently serving public officers, provides exceptions, and prohibits certain abuse of public office for personal benefit.
  • Massachusetts Question 2: Establishes a 15-member commission that to recommend constitutional amendments related to corporate personhood and political spending. The commission would be required to report on political spending in Massachusetts and the ability of states to regulate corporations, and to draft proposals for constitutional amendments. The commission would also be tasked with recommending that personhood does not include corporations and with overturning Citizens United v. FEC.
  • Michigan Proposal 2: Creates the Independent Citizens Redistricting Commission that would draw both congressional and legislative district lines. Selection process occurs through the secretary of state’s office, with 13 commissioners randomly selected from a pool of registered voters. Four members would self-identify with each of the two major parties, five would be unaffiliated/independent. Current and former elected officials, lobbyists, and party officers would not be eligible.
  • Missouri Amendment 1: Reforms lobbying, campaign finance, redistricting, and public records. Lobbying: legislators and legislative employees have to wait two years before becoming a paid lobbyist and both could not accept gifts above $5 in value. Campaign finance: establishes cash contribution limits for legislative candidates and candidate committees for each election cycle, prohibits disguising who contributions are from, and prohibits fundraising on public property. Redistricting: governs legislative redistricting by creating a non-partisan state demographer position who would be selected through a special process and draw maps to present to the legislature. Partisan fairness and competitiveness would be two of the criteria. Public records: legislative records are considered public records.
  • New Mexico Constitutional Amendment 2: Creates a seven-member state ethics commission tasked with investigating alleged violations of ethical conduct by state officials, executive and legislative employees, candidates, lobbyists, government contractors, and others as provided by law.
  • North Carolina Legislatively Referred Constitutional Amendment (House Bill 4): Removes the governor’spower to make appointments to the Bipartisan State Board of Ethics and Elections Enforcement, meaning legislative leaders would make all eight appointments to the board.
  • North Dakota Initiated Constitutional Measure 1:  Establishes a 5-member ethics commission selected by the governor and state senate, bans campaign contributions from foreign entities and people, creates lobbyist restrictions, establishes conflict of interest regulations for public officials, and requires that campaign finances be publicly accessible.
  • Oklahoma State Question 798: The governor and lieutenant governor would be elected on a joint ticket starting with the 2026 election.
  • South Dakota Constitutional Amendment W: Restricts lobbyist gifts to politicians, bans foreign money in SD elections, toughens ethics law enforcement, reduces special interest money in SD elections, and removes the ability of the legislature to overturn a ballot measure passed by the public.  The initiative would replace the existing ethics and accountability commission with a seven-member accountability board with new provisions determining board member selection and expanded duties and authorities of the board—including authority over members of the legislature. The initiative would also establish campaign finance and lobbying restrictions, require voter approval for any substantive changes to a voter-approved initiative or referendum, require voter approval to make alterations to the state’s initiative and referendum process, and constitutionalize the simple majority requirement for the approval of initiatives and referendums on the ballot. This measure was proposed in response to the state legislature repealing Initiative 22, a campaign finance and election-related measure approved by voters in 2016. Initiative 22 was an initiated state statute, which meant that the legislature was able to repeal or amend it. This 2018 initiative is a constitutional amendment and can’t be repealed or amended without voter approval.
  • South Dakota Initiated Measure 24: Bans out-of-state contributions to ballot question committees from non-residents, out-of-state political committees, and entities that haven’t filed with the Secretary of State’s office for the preceding four years.
  • Utah: Establishes a commission to draw both congressional and legislative districts in the redistricting process. The commission would have seven members and needs at least five members to approve between one and three maps that are submitted to state Supreme Court chief justice who determines if the maps meet the criteria. Then the approved plans are submitted to the legislature for approval. The measure establishes criteria ranked in order of importance.

In case you missed it:

  • Bright Lights in a Legislative Black-out Period: Despite a ban on contributions from lobbyists and their employers to legislators in North Carolina during the legislature’s session, com reports that two co-CEOs of a company that employs seven lobbyists managed to give $41,000 to legislators during the period.  Under a so-called “loophole,” CEOs and PACs are not expressly covered by the ban which prohibits contributions from lobbyists and the corporations or others that employ the lobbyists.  More than $1.1 million flowed into legislators’ campaign accounts during the six-week session.
  • The Odds may be Stacked: The Philadelphia Inquirer has called on the Pennsylvania legislature to enact some kind of limits on contributions following a U.S. District Court’s decision in Deon v. Barasch that the state’s ban on contributions from gaming interests was too broad.  The Inquirer noted that the state has no limit on campaign contributions and cited a study that links the presence of casinos to an increase in public corruption.
  • Follow the Money: NPR reports on the “outside money” spent both in favor and in opposition to Brett Kavanaugh’s confirmation to the Supreme Court.
  • Panem et Circenses: Meanwhile, Roll Call details the calls for Sen. John Kyl to recuse himself on voting for Kavanaugh’s confirmation. The Judicial Crisis Network, which reportedly has spent more than $12 million in favor of Kavanaugh, reported paying Kyl for federal lobbying last year while he was a lobbyist at Covington & Burling, a position he held until his recent appointment to replace the late Sen. John McCain.

WEEK OF SEPTEMBER 28, 2018

Latest Developments:

  • A State Court in Nashville has enjoined Tennessee’s Pre-Election Blackout Period: In Tennesseans for Sensible Election Laws v. Tennessee Bureau of Ethics and Campaign Finance et al, 18-0821-III, plaintiffs sought to make contributions within 10 days of an election but were faced with the threat of criminal prosecution.  According to The Tennessean, on Wednesday, September 26, the judge enjoined the law prohibiting political action committees from making campaign contributions to candidates within 10 days of an election.  The state plans to appeal.
  • The California Fair Political Practices Commission issued a regulation banning contributions by cryptocurrency. The Commission expressed skepticism based on the ability to money launder cryptocurrencies and the lack of oversight of those cryptocurrencies.

Reminder —  PLI is coming to San Francisco October 4 and 5:

PLI will hold a repeat performance of the popular Corporate Political Activities 2018:  Complying with Campaign Finance, Lobbying and Ethics Laws in San Francisco on October 4 and 5.  The program will be webcast. The keynote speaker will be Richard Hasen, election law blogger, renowned professor, and author.  For more information, check out the full program here.   Nielsen Merksamer clients and California Political Attorney Association members receive a discount.  Please contact a political law attorney at the firm for additional information.

In case you missed it:

  • Junketeer’s Remorse: Rollcall reports that the U.S. Department of Justice has indicted a man for unlawfully funneling money from an Azerbaijani oil company through a nonprofit to pay for a congressional fact-finding trip to Azerbaijan.  Ten lawmakers and more than 30 aides took the trip in 2013.  Federal provisions permit members of congress to take educational trips paid by nonprofit organizations, but not by private entities.  Kevin Oksuz, who is now a fugitive, is an American citizen who ran the nonprofit organization and took money from an oil company operated by the Azerbaijani government.  Congressional members and their staffs were forced to return gifts received during the trip.
  • Concern about Contributions from Canada: A Canadian company is accused of illegally contributing to Oregon candidates and PACs through a US subsidiary.  According to the Bend Bulletin, the company is trying to build a LNG plant in Coos Bay along with a pipeline and says the contributions are from U.S. activity.  The Oregon Elections Director says state law doesn’t address subsidiaries of foreign companies, but indicates that federal is applicable.  Federal rules require that contributions come from a separate segregated fund.
  • Meanwhile Canada Aspires to Higher Ethics: Canada’s House of Commons’ Ethics Committee has launched a review of the country’s Lobby Act and the Conflict of Interest Act.  The Ottawa Globe and Mail reports that the announcement of the study “comes on the heels of a Globe and Mail analysis of Liberal Party fundraising records, which found more than 200 instances of lobbyists attending Liberal fundraisers since early 2017, when the party said it would be imposing tight restrictions on the attendance of lobbyists.”
  • Orange is the New Dark: The Voice of OC reports that nearly $3 million in so-called dark money has flowed into hotly contested house races in Orange County, California, with much more expected to flow before the election.  Once a bastion of California Republicans, four Republican seats are viewed as battlegrounds.  At least 14 different nonprofit organizations or PACs have spent money, most of which are based out-of-state.  Some money can be traced to out-of-state billionaires, including Sheldon Adelson and Charles Koch on the Republican side, and George Soros and Michael Bloomberg on the Democrat side.
  • Bama Reform: The Alabama Code of Ethics Clarification and Reform Commission will vote on proposals to reform state law at its October meeting.  com reports that, among other things, the Commission will consider redefining who is a lobbyist employer.  The current law defines the term “principal” as a business or person who employs a lobbyist. The Commission will seek to clarify which individual employees and board members of a business that hires a lobbyist are considered principals (lobbyist employers).
  • Private Jet Travel OK for Hawkeye Governor: The Des Moines Register reports that Governor Reynolds has been cleared by the Iowa Ethics and Campaign Disclosure Board of any wrongdoing in accepting 9 trips on private aircraft.  “The board voted to dismiss the complaints against Reynolds, concluding the flights were ‘legitimate in-kind campaign contributions and allowable under Iowa’s gift law.’”
  • Still No Money for Ethics: The Oklahoma Supreme Court ruled against the Oklahoma Ethics Commission in its effort to force the state legislature to provide more funding to the Commission.  NewOK reports that the court indicated that the Commission must follow the same budgetary procedure as other state agencies.

WEEK OF SEPTEMBER 21, 2018

Latest Developments:

  • The Oklahoma Ethics Commission, at its meeting on Friday, September 14, unanimously adopted Ethics Rule Amendment 2019-03, which consists of revolving door provisions that prohibit elected officials and agency heads from lobbying for two years following their service. The rule change will take effect in 2019, following the adjournment of the legislature, if the legislature does not affirmatively reject the rule.
  • The California Fair Political Practices Commission met Thursday, September 20. Among other things, the Commission voted to issue an opinion that polls do not require a disclaimer if not intended to influence voters.  In addition, the Governor of California has signed and vetoed laws affecting state political law.  Contact Nielsen Merksamer with any questions.
  • The Federal Election Commission announced that the Supreme Court, on Tuesday, September 18, lifted the Chief Justice’s stay of a lower court ruling in Crossroads Grassroots Policy Strategies, v. Citizens for Responsibility and Ethics In Washington, et al, a campaign finance case relating to disclosure.
  • The D.C. Circuit Court of Appeals dismissed as premature American Action Network’s (AAN) appeal of the district court holding that the amount a group spends on electioneering communications presumptively counts towards deeming that group has a major purpose of nominating or electing candidates and, therefore, that it must register as a political committee.  The Court relied upon the “final judgment rule” to dismiss the case, rather than reaching the merits.  The Court’s dismissal means that Citizens for Responsibility in Ethics (CREW) will be able to proceed with its own private attorney general suit against AAN which alleged that AAN failed to register and disclose donors as a political committee based on ads run in 2010.

Reminder – PLI Coming to San Francisco October 4 and 5:

PLI will hold a repeat performance of the popular Corporate Political Activities 2018:  Complying with Campaign Finance, Lobbying and Ethics Laws in San Francisco on October 4 and 5.  The program will be webcast. The keynote speaker will be Richard Hasen, election law blogger, renowned professor, and author.  For more information, check out the full program here.   Nielsen Merksamer clients and California Political Attorney Association members receive a discount.  Please contact a political law attorney at the firm for additional information.

In case you missed it:

  • The Rules Apply to Everyone: CNN reports that federal prosecutors are considering criminal charges against both former Obama White House Counsel Greg Craig and his then law firm for failure to register as a foreign agent under the Foreign Agents Registration Act (FARA).  The investigation grew out of the probe by Robert Muller and apparently relates to activities by Paul Manafort, who sought the law firm’s help for Ukraine.  The firm reportedly received $4.6 million in fees through the Manafort connection.  According to CNN, Democratic lobbyist Tony Podesta and former Republican Congressman Vin Weber are also under investigation for FARA violations.
  • But Congress isn’t Concerned: Congress had great interest in updating and strengthening FARA in the period after Paul Manafort was indicted.  However, according to Politico, Congress has lost its enthusiasm for overhauling FARA, with Mike Johnson (R-La.), a leading proponent of reform, declaring that, “There’s these very fierce efforts to maintain the status quo.”  FARA legislation appears dead for the year.
  • Put Away those Quill Pens: com reports that the United States Senate is finally moving to electronic filing of campaign reports for U.S. Senate candidates.  If the President approves a bill pending on his desk, candidates would file electronically with the Federal Election Commission, rather than paper filings with the Secretary of the Senate.
  • My Way or No Highway: According to CBSSacramento, the California Fair Political Practices Commission is reportedly investigating whether campaign rules were violated when Caltrans employees or contractors distributed fliers opposing Proposition 6, a ballot measure that would repeal gas tax hikes enacted last year.  Laurie Berman, Director of Caltrans, stated the personnel identified in a complaint filed by proponents of the measure were Caltrans private contractors and that “the Department does not condone political advocacy or the distribution of campaign information on work project sites and is contacting its contractors to remind them of this.”  The article notes that, “Construction companies and unions representing construction workers, who stand to benefit from more road work, are among the biggest funders of the campaign to defeat Proposition 6.”

WEEK OF SEPTEMBER 14, 2018

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 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.

WEEK OF SEPTEMBER 7, 2018

Latest Developments:

  • The Federal Election Commission is touting a campaign safety information program established by the Federal Bureau of Investigation. The FBI program, called “Protected Voices,” is intended to raise awareness among campaigns of the risk of cyber influence operations.  The FBI urges each “campaign to enhance its own cyber hygiene, the technological equivalent of locking your doors and windows.”
  • The New York Joint Commission on Public Ethics meets next Wednesday, September 12. The agenda includes a discussion of 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.

In case you missed it:

  • National Champion Golden State Warriors present a Municipal Ethics Challenge: The San Francisco Chronicle reports that the Mayor of Oakland has been cleared of any wrongdoing for personally using $54,000 worth of sports tickets she received from the city under its ticket policy.  Another council member personally used $320,000 in sports tickets.  Generally, the City of Oakland limits gifts from a single source to $250 in value per year.  But the law has exceptions, including for “personal oversight” of the municipally-owned sports arena and stadium.  The Mayor and council member both used the personal oversight exception for their acceptance of sports tickets, which included the Golden State Warriors NBA playoffs and finals tickets that had face values of $5,000 and $10,000 per ticket, respectively.  Those post-season games required lots of personal oversight; no word on whether there has been any interest whatsoever in personal oversight of the Oakland Athletics’ stadium.  Maybe later this year, if the Athletics make it to the playoffs as a wildcard?
  • Alaska puts Drinks on Ice: Alaska has a new ethics reform measure that would make Carrie Nation proud.  The Cordova Times indicates that the Governor approved House Bill 44 which, among other things, adds additional limitations on gifts from lobbyists to legislators.  The exception that permits gifts of food or beverages for immediate consumption is now limited to food or nonalcoholic beverages and also is limited to a value of $15 or less, unless it is provided as part of an event that is open to all legislators or legislative employees.
  • Payday Lending may have Paid Off Too Well: Federal Authorities are building a corruption case against Ohio Ex-Speaker Cliff Rosenberger that relates to an effort to stall payday lending reform legislation.  The Dayton Daily News reports that in a response to media requests, the government released a copy of the search warrant and subpoena served in the case.  Those documents show the government sought records relating to “payday lending legislation; evidence of payments, kickbacks, bribes or other benefits such as payment of travel-related expenses…”  The ex-speaker is alleged to have received travel and other benefits in exchange for holding up the legislation.
  • How Much does it Take?: The Kansas City Star reports on the effect of lobbyists’ gifts and campaign contributions on legislative policy.  The Star interviewed a variety of interested people on whether small gifts, large contributions, or dark money can buy a Missouri legislator’s vote.
  • Now Earn 5% Cash Back or Miles on Fines for Ethics Violations: The California Fair Political Practices Commission announced this week that it would finally start accepting credit and debit cards for payments of enforcement fines.  No more need to get a cashier’s check or money order, according to the press release; the Commission is finally stepping into the twenty-first century.
  • Disclose as I say, not as I do: The FPPC’s press release promoting its new payment mechanism, as described and linked immediately above, fails to disclose one tiny detail.  Before you start earning that cash back or those miles, read the (8.5-point Helvetica) fine print in the lower right hand corner of the actual payment form:  A convenience fee of 3.0 % will be charged by a third party processor for this transaction.   Yes, we believe that is a “disclosure,” although it is neither “the same size as the majority” of the form, nor is it “14-point, bold, sans serif type in contrasting print color.”  (Those font size requirements are among the ones that the Commission imposes on others with regard to various political advertising disclosures.)

WEEK OF AUGUST 31, 2018

Latest Developments:

Among the recollections of the late Sen. John McCain’s legislative achievements, NPR ran a segment on the Senator’s impact on Campaign Finance, including his essential role in the so-called Bipartisan Campaign Reform Act of 2002, better known as McCain-Feingold. Unmentioned was McCain’s checkered past as a member of the “Keating Five” corruption scandal, which took place amidst the larger Savings and Loans collapse of the late 1980s. McCain himself cited the scandal as an impetus for his often-Quixotic undertakings for reform.

Nosce te Ipsum: The LA Times reports on Gov. Jerry Brown’s Monday veto of a bill that would have prevented politicians from paying family members an amount greater than fair-market value for goods and services. Sponsored by Assemblyman Marc Steinorth (R-Rancho Cucamonga), the bill sought to ban politicians from making excessive payments to parents, children and siblings working on their campaigns.

Reminder:  

Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 p.m.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

In case you missed it:

  • Ongoing North Carolina litigation, taking place amidst the invalidation of its Congressional districts, has led to an order to halt the printing of ballots pending review of the NACCP’s challenge of the language of two Constitutional amendments set for the November ballot. Analysts claim that these developments threaten chaos for the upcoming general elections.
  • Tallahassee Mayor Andrew Gillum’s stunning upset in Tuesday’s Democratic gubernatorial primary has brought attention to the ongoing FBI corruption investigation that appears to be focused on Tallahassee City Since Gillum’s victory, both Slate and Fox News have covered the investigation and its nexus to the mayor.
  • Ex-Pa. Mayor Convicted In Pay-To-Play Scheme: Law 360 reports that a Pennsylvania federal jury on Thursday found ex-Reading Mayor Vaughn Spencer guilty on charges of bribery and wire fraud in connection with a scheme in which he solicited campaign donations from city vendors in exchange for lucrative contracts.

WEEK OF AUGUST 24, 2018

Latest Developments:

The Governor of New York signed SB 4761, which bans the use of placement agents, including registered lobbyists, who seek to obtain investments by the New York State Common Retirement Fund.  The bill takes effect immediately.

The Los Angeles City Ethics Commission met Tuesday, August 21.  The Commission’s agenda included possible action on various proposed campaign finance changes.  The result, according to the Los Angeles Times, is that the Commission tabled a proposal to ban contributions from real estate developers.  However, the Commission approved increased public financing provisions (matching funds) and sent that proposal to the City Council for consideration.

The Kansas Governmental Ethics Commission voted this week to permit the use of campaign funds to pay for child care, according to KCUR.  The intent is to make it easier for parents to run for office.  The move follows a similar decision by the Federal Election Commission earlier this year, as reported by NPR.

The Kentucky Legislative Ethics Commission asked the Legislature to amend the state’s ethics provisions.  According to WPFL, the Commission is seeking authority to dismiss politically motivated charges when the complainant makes public statements about the case.  The commission also proposed provisions requiring additional gift disclosure and clarifying that the Commission has jurisdiction over those who have left office.

The Baltimore City Council gave initial approval to an ordinance that would require quarterly lobbyist disclosure reports instead of annual reports.  A final vote on the Transparency in Lobbying Act is scheduled for September 17, 2018.

Reminder:  

Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 p.m.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

In case you missed it:

  • First Amendment Lawsuit Filed: Courthouse News Services reports that a coalition of press entities, including the Washington Post, has filed suit to block Maryland’s new online political ad disclosure law.  The plaintiffs contend that the law is unconstitutional for its regulation of newspapers, including the threat of criminal prosecution for non-compliance, and that its provisions are unconstitutionally vague and overbroad.  They also assert that the law is impossible to follow and conflicts with the Communications Decency Act of 1996.  As we reported earlier, Google announced that it could not comply with the law and therefore would no longer accept political ads in Maryland, but Facebook is on board with the law.
  • More Money, eh? The Richland Standard reports that Canada’s Lobby Czar is seeking a budget increase to modernize the office and respond to growing demands.  Her budget has not been increased in 10 years, despite an increase in the number of lobbyists.  The office is seeking money to fund a new website and updates to the lobby registry.
  • Looking for a Drain in the Swamp: Elizabeth Warren has proposedsweeping anti-corruption legislation according to Politico.  The Anti-Corruption and Integrity Act proposes a lifetime ban on lobbying by the President, members of Congress, and cabinet officials.  It would also impose a six-year revolving-door restriction on other federal officials and ban lobbying by foreign governments and companies.  The measure would ban lobbyist campaign contributions, contingency fees, and gifts to members of Congress.
  • Please, No Green from Grass: According to the New York Times, Wells Fargo noticed a candidate for Florida Agriculture Commissioner was “advocating for expanded patient access to medical marijuana.”  The bank asked the campaign if it would accept contributions from lobbyists and others in the medical marijuana industry.  After the campaign replied affirmatively, the bank closed the campaign’s account.  Bank of America, Citigroup and JPMorgan Chase said their banks did not have policies that would prevent them from offering services to a candidate who accepts money from that industry.

WEEK OF AUGUST 17, 2018

Latest Developments:

A United States District Court Judge in Wyoming found the state’s ban on campaign robocalls to be unconstitutional.  According to Government.com, the ban on political calls was far more restrictive than the limits on commercial robocalls.  In Victory Processing LLC. v. Wyoming Attorney General, the plaintiffs asserted that the robocalls ban violated their right to free speech under the First Amendment.

The California Fair Political Practices Commission met on Thursday, August 16.  The Commission announced that its phone lines would be open longer hours beginning September 1, and running through Election Day. (Temporary hours: Mon.-Tue. 9 – 12; Wed.-Thurs. 1 – 4 [Usual hours are Mon.-Thurs. 9-11:30 a.m.])  The Commission also adopted updated campaign manuals and forms, with changes reflecting new legislation.

The Los Angeles City Ethics Commission meets next Tuesday, August 21.  The Commission’s agenda includes possible action on proposed campaign finance changes.

Reminder:  

Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 p.m.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

In case you missed it:

  • New “Disclosure” Subterfuges: Politico reports that the newest method to avoid donor disclosure is timing formation of committees so close to an election that the first donor disclosure reports are due after the election.  Another method is to borrow the money to make expenditures and collect donations later to avoid donor disclosure on pre-election reports.
  • It’s an election year, and California’s campaign watchdogs are busy fighting among themselves,” according to the Sacramento Bee.  The Bee has a review of the various commissioners’ shenanigans over the past year, from their successful efforts to increase their pay to “self-indulgent” review and revision of internal operations.
  • Atlanta Lobby Ordinance Introduced: The Atlanta Daily World reports that the City of Atlanta is considering requiring all lobbyists to register.  The proposal would cover lobbying pertaining to legislation, contracts, and zoning matters.  The move follows a widening corruption investigation by federal prosecutors who are looking into payments to city employees who steered contracts to vendors who paid them, as reported by the Charlotte Observer.
  • Trump Discounts Raise Ethics Issues: Politico reports that President Trump’s Bedminster, New Jersey golf club is offering merchandise discounts to individuals who sport Secret Service pins that identify them as administration staffers.  Unless the discount is available to all employees, it would appear to be a gift, subject to federal gift limitations, according to sources quoted in the article.

WEEK OF AUGUST 10, 2018

Latest Developments:

A federal District Court Judge in Washington, D.C. issued a 113-page opinion invalidating a 38-year old Federal Election Commission regulation that required any person’s federal Independent Expenditure Report to only disclose contributors to the ad addressed by that report.  The Court instead held that the makers of an IE must disclose all of its contributors.  The decision’s implications for trade associations and nonprofits making any independent expenditures, and their donors, could be significant, and the Court stated that the FEC could enforce this requirement retroactively.  Pro-regulation groups hailed the decision as a blow to “dark money groups,” according to Politico.

The Wisconsin Ethics Commission has appointed another interim Ethics Administrator:  The Commission has appointed Florida attorney Daniel Carlton, Jr. as its new interim administrator.  The Wisconsin Law Journal reports that Carlton previously worked for the Florida Ethics Commission.  Wisconsin has struggled to find an acceptable leader since the demise of the old Government Accountability Board which occurred as a result of that board’s investigation of Gov. Scott Walker.

The California Fair Political Practices Commission meets next Thursday, August 16.  The Agenda, includes discussions about newly revised manuals and the use of Bitcoin for contributions.  The Commission will consider potential regulations about the use of Bitcoin at its September meeting and regulations for top donor disclosure under the Disclose Act at its October meeting.  Curiously, following appointment of a new Chair, none of the upstart subcommittees met in the past month.  Perhaps peace has returned to the Commission.

In case you missed it:

  • CNN reports that Special Counsel Robert Mueller has referred several possible violations of FARA to federal prosecutors in New York. The article infers that individuals who worked for the Podesta Group, Mercury Public Affairs, and Skadden Arps failed to register under the Foreign Agent Registration Act (FARA) while doing work for groups associated with Ukraine.
  • The New York Joint Commission on Public Ethics has been called “a puppet controlled by the Governor.” City & State New York reports that since JCOPE has been in existence, it has found only two legislators guilty of misconduct, while prosecutors have convicted 15 legislators of crimes.  Cuomo’s opponents are calling for a new ethics structure; the article notes that both Cuomo and his predecessor, Eliott Spitzer, created new ethics commissions upon taking office.
  • Up North, there is a different approach: CNBC reports that Mario Dion, Canada’s new Conflict of Interest and Ethics Commissioner says that “My dream is that I will never be called (a lapdog).”  He says he would rather be criticized for being too harsh than for being too lenient.
  • NBC News asserts that the Trump Hotel in Washington, D.C. may be a “5-star conflict of interest.” Using public filings and social media sites, NBC analyzed spending at the hotel by the Republican Party, foreign governments, and federal agencies.  The report indicates that the hotel “continues to serve as a clubhouse for the (Trump) administration and its supporters.”

Reminder:  

Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 pm.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

WEEK OF AUGUST 3, 2018

Latest Developments:

The New York Joint Commission on Public Ethics (JCOPE) met on July 31.  The Commission highlighted its efforts to educate the public on the new lobby regulations that take effect on January 1.  The Commission will hold an educational program in Albany on September 20 for lobbyists and others to learn about the new regulations.  That program will be posted later on the Commission’s website.  The Commission has also issued a “Key Features” document that is an effort to put highlights of the new regulations in plain English.  In addition, the Commission will host an educational seminar on the First Amendment and lobbying in October.

A North Dakota Ethics constitutional amendment is the first measure to qualify for the November Ballot.  The West Fargo Pioneer reports that the initiative measure would “prevent lobbyists from giving gifts to public officials and would establish an ethics commission that could investigate public officials, candidates, and lobbyists.”

In case you missed it:

  • In Oklahoma, it’s the Legislature vs. the Ethics Commission: NewsOK reports on the continuing battle between the state’s legislature and the Oklahoma Ethics Commission over budget appropriations for the new fiscal year.  The Commission requested $4.5 million but received only $710,000 from the legislature.  The matter is before the State Supreme Court.  The Commission’s counsel suggested the agency was underfunded because it has imposed new restrictions on legislators, including limiting gifts from lobbyists.
  • Dems and GOP agree on something: How to use PACs to fund luxury lifestyles. NBC News takes a look at a new report by the Campaign Legal Center, which documents incredible amounts of leadership PAC money spent to support federal officeholders’ over-the-top lifestyles.
  • Soda Tax Proponents Failed to Report Lobby Activity: Philadelphians for Fair Future, which raised over $2 million to promote a tax on soda, was fined more than $8,000 for multiple ethics violations, including failure to register and report its lobby activities.  The Philadelphia Business Journal reports the group hired five different firms and individuals who lobbied on its behalf, but all failed to register as lobbyists and neither the lobbyists nor PFF reported any of the activity.  PFF characterized the matter as “simple filing errors” that were inadvertent.
  • Liberals have Dark Money too: The Sixteen Thirty Fund has been identified as the source of funding for a myriad of liberal causes.  Politico characterizes the group as a secret organization using the type of structure developed by the Koch brothers.  The group has engaged in advocacy in about a dozen congressional races in 2018.
  • Pay-to-Play in New York State: Chief Investment Officer reports that a New York State Common Retirement Fund portfolio manager was sentenced to 21 months in prison for taking bribes in the form of “prostitutes, narcotics, travel, lavish meals, tickets to sporting events, luxury gifts, and cash payments.”  A managing director for Sterne Agee and a Vice President of FTN Financial also pled guilty to providing the bribes.
  • Reform of the Foreign Agents Registration Act appears to be supported by both sides of the aisle. But Rollcall reports that congressional efforts to update FARA have stalled just as Paul Manafort goes to trial on a wide variety of charges, including the allegation that he failed to register as required under FARA.  Although a dozen or more bills have been introduced, no single bill has emerged with any momentum.

WEEK OF JULY 27, 2018

Latest Developments:

The Governor of Montana has filed suit against the U.S. Treasury Department and Internal Revenue Service seeking to block the revenue procedure that eliminates the reporting of the identity of contributors to politically active nonprofits that make political expenditures.  Reuters reports that Governor Steve Bullock believes the loss of reporting will lead to foreign money in U.S. elections. The changes were made by the U.S. Treasury Department in Revenue Procedure 2018-38, as we reported last week.

The New York Joint Commission on Public Ethics (JCOPE) meets next Tuesday, July 31, but does not list anything particularly remarkable on its agenda.

Reminder:  

August 1 is the PLI One-Hour Briefing on the “Basics of the Federal Election Campaign Act 2018.”  You can sign up at the Practising Law Institute.

In case you missed it:

  • A jury in Alabama convicted an attorney and a coal executive of bribing a state legislator. The Lexington Ledger reports that an attorney from Balch and Bingham along with a Vice President of Drummond Co. were found guilty of conspiracy, bribery, three counts of honest services wire fraud and money laundering.  The defendants asked the legislator to oppose expansion of an EPA Superfund site and prioritization of the cleanup.
  • The Los Angeles Times reports that the California Secretary of State’s efforts to update the state’s website for disclosure of campaign contributions and lobby activity is nearly a year behind schedule and its budget has doubled.
  • The Georgia Government Transparency and Campaign Finance Commission has posted the General Assembly’s sexual harassment policy. As we told you in our May 18, 2018 edition, the Governor of Georgia signed B. 973 on May 10, 2018.  That bill requires all lobbyists to agree to abide by the sexual harassment policy.  The policy applies to lobbyists, “during the period in which they either have legislative business at the state capitol or are doing legislative business with the Senate, the House of Representatives, or a joint office (‘third parties’).”  Lobbyists are required to acknowledge that they have read the policy each time they register.
  • Sunshine in the Orange County, CA Ethics Commission is hard to find: The Voice of OC tells us that Orange County Campaign Finance and Ethics Commission officials have declined to identify persons who were caught violating county campaign finance laws.  Notwithstanding the California Public Records Act, The Voice reports that the “enforcement process was set up to be handled mostly in secret so violations wouldn’t be used in political campaigns.”
  • Congressional Leadership PACs under Scrutiny: Roll Call reports that a bipartisan group of retired congressmen have sent a letter to the FEC asking it to re-examine the use of contributions to congressional leadership PACs for expenses such as “country club fees, clothing purchases, and trips to Disneyworld.”  A report indicated that only 45% of the money contributed actually went to candidates or political committees.
  • Calmatters describes some of the recent turmoil at the California Fair Political Practices Commission. Through it all, the commission has settled a record number of cases and imposed more than a million dollars in fines in the last year.  However, it also has an enormous backlog of cases.

WEEK OF JULY 27, 2018

Latest Developments:

The Governor of Montana has filed suit against the U.S. Treasury Department and Internal Revenue Service seeking to block the revenue procedure that eliminates the reporting of the identity of contributors to politically active nonprofits that make political expenditures.  Reuters reports that Governor Steve Bullock believes the loss of reporting will lead to foreign money in U.S. elections. The changes were made by the U.S. Treasury Department in Revenue Procedure 2018-38, as we reported last week.

The New York Joint Commission on Public Ethics (JCOPE) meets next Tuesday, July 31, but does not list anything particularly remarkable on its agenda.

Reminder:  

August 1 is the PLI One-Hour Briefing on the “Basics of the Federal Election Campaign Act 2018.”  You can sign up at the Practising Law Institute.

In case you missed it:

  • A jury in Alabama convicted an attorney and a coal executive of bribing a state legislator. The Lexington Ledger reports that an attorney from Balch and Bingham along with a Vice President of Drummond Co. were found guilty of conspiracy, bribery, three counts of honest services wire fraud and money laundering.  The defendants asked the legislator to oppose expansion of an EPA Superfund site and prioritization of the cleanup.
  • The Los Angeles Times reports that the California Secretary of State’s efforts to update the state’s website for disclosure of campaign contributions and lobby activity is nearly a year behind schedule and its budget has doubled.
  • The Georgia Government Transparency and Campaign Finance Commission has posted the General Assembly’s sexual harassment policy. As we told you in our May 18, 2018 edition, the Governor of Georgia signed B. 973 on May 10, 2018.  That bill requires all lobbyists to agree to abide by the sexual harassment policy.  The policy applies to lobbyists, “during the period in which they either have legislative business at the state capitol or are doing legislative business with the Senate, the House of Representatives, or a joint office (‘third parties’).”  Lobbyists are required to acknowledge that they have read the policy each time they register.
  • Sunshine in the Orange County, CA Ethics Commission is hard to find: The Voice of OC tells us that Orange County Campaign Finance and Ethics Commission officials have declined to identify persons who were caught violating county campaign finance laws.  Notwithstanding the California Public Records Act, The Voice reports that the “enforcement process was set up to be handled mostly in secret so violations wouldn’t be used in political campaigns.”
  • Congressional Leadership PACs under Scrutiny: Roll Call reports that a bipartisan group of retired congressmen have sent a letter to the FEC asking it to re-examine the use of contributions to congressional leadership PACs for expenses such as “country club fees, clothing purchases, and trips to Disneyworld.”  A report indicated that only 45% of the money contributed actually went to candidates or political committees.
  • Calmatters describes some of the recent turmoil at the California Fair Political Practices Commission. Through it all, the commission has settled a record number of cases and imposed more than a million dollars in fines in the last year.  However, it also has an enormous backlog of cases.

WEEK OF JULY 20, 2018

Latest Developments:

The United States Treasury Department announced that it will no longer require the names and addresses of donors to be included on Schedule B, which is filed with IRS Form 990, for any nonprofit other than a charity (501(c)(3) organization) or PAC (527 organization).  For example, nonprofit social organizations that engage in political speech and register under IRC Section 501(c)(4), such as ballot measure committees, will no longer disclose the names and addresses of their donors.  Filers will still disclose each contribution of $5,000 or more received without names and addresses.  The changes are contained in Revenue Procedure 2018-38 and will apply to tax years ending on or after December 31, 2018.

The California Fair Political Practices Commission met Thursday, July 19, 2018, with the following results:

  • New Chair Alice Germond expressed three goals: (1) to hold more meetings around the state, outside of Sacramento; (2) to partner with educational institutions and public groups with interest in the Commission; and (3) to continue the streamlining process, making things simple and clear for individuals who want to run for office.
  • The Commission voted to withdraw the Andrews advice letter, which required charities who have contributed restricted funds to nevertheless be listed as a top donor, and instead create a regulation on this point as to when a top donor may be omitted.
  • The Commission announced the appointment of a chair for its task force concerning enforcement.
  • The Commission voted to support AB 2689, which prohibits legislative contributions by appointees subject to legislative confirmation. It deadlocked on support for AB 84, a bill about legislative caucus committees (see below).

The San Francisco Ethics Commission meets Friday, July 20.  The Commission’s agenda includes a discussion of staff proposals for regulations regarding requests for opinions.

Reminder:   August 1 is the PLI One-Hour Briefing on the “Basics of the Federal Election Campaign Act 2018.”  You can sign up at the Practising Law Institute.

In case you missed it:

  • Politico reports that the Treasury Department is on the defensive over its decision to stop collecting donor information. (See above.)  The department says it doesn’t use the information, the collection of which dates to the Nixon administration.  Critics say it eliminates transparency and the ability to follow the money.
  • Rollcall has reactions to the Treasury’s new Revenue Procedure from both sides. On one side, Sen. Mitch McConnell said that the existing government collection of data can “chill political speech and invite harassment of citizens.”  At the other end of the spectrum, Sen. Jon Tester called the move, “the swampiest, darkest, dirtiest decision.”
  • The Campaign Legal Center issued a summary of Supreme Court Nominee Brett Kavanaugh’s stance on campaign finance issues. “(H)e would expand the power of big money in politics,” according to the article.  The Institute for Free Speech responded with its own analysis castigating the CLC, and noting that Judge Kavanaugh’s opinions, “generally gave the First Amendment a robust interpretation protective of individual rights.”
  • New Ways to Give: California Assembly Bill 84 was gutted on July 5, and new provisions were inserted.  The newly amended bill would permit each party in each house of the legislature to establish a “caucus committee” with the same contribution limits as a political party committee.  Politico reports that state Democratic Party officials fear the move will dilute their power, saying that the bill would “untether some campaign cash from the party endorsement system.”  The bill would permit legislative leaders to control more campaign cash.
  • Ouch: The Security and Exchange Commission fined Sofinnova Ventures, a bioscience investment firm, $120,000 for a $2,500 contribution made by one of its employees that violated the SEC’s pay-to-play rulePensions & Investments reports that the Illinois Teachers’ Retirement System had invested some $45 million in Sofinnova funds and the firm had a contract to provide investment services to the System when one of its employees made the contribution to a candidate for Governor, who subsequently won.

WEEK OF JULY 13, 2018

Latest Developments:

Sexual Harassment Developments: In Maine, SB 695 was enacted. It requires Legislators, legislative staff and lobbyists to attend and complete a course of in- person education and training regarding harassment, including sexual harassment, at the beginning of each regular session of the Legislature. It requires the Legislative Council to develop and implement the course. Rules and further instructions are pending.

The California Fair Political Practices Commission meets July 19. The commission is slated to further discuss appropriate questions for an AG Opinion regarding the Bagley-Keene Open Meeting Act that they agreed to request at the January 2018 meeting. Further, in keeping with a February 18th agreement, a task force is meeting to conduct a holistic review of the Enforcement Division’s practices and procedures. One of its purposes is to create a procedures manual that provides an overview of how an enforcement complaint is filed, opened, investigated and resolved. Our firm, among others, is represented on the task force.

In case you missed it:

  • What’s good for the goose…USA TODAY published a story in which they calculate that so-called “secret money” (or perhaps the more ominous and ubiquitous pejorative label “dark money”) has thus far funded more than 40% of outside congressional ads. The supposedly objective story appeared to convey a bias against this form of campaign finance, taking to task what are considered Republican friendly groups as being on the offensive while portraying Democratic friendly groups as merely spending this “secret money” as defensive measures.
  • Free Speech Can’t Catch a Break:  Only July 12, NPR reviewed “A Riveting Documentary [that] Sheds Light on ‘Dark Money.’” The similarly titled Dark Money film focuses on the ongoing campaign finance litigation in Montana and is directed by Kimberly Reed, a native of that state. The review agreed entirely with the film’s premise, that “invisible corporate shenanigans…threatens to sink our democracy outright,” employing dramatic language throughout, labeling the campaign finance issues an “assault on the American electoral and judicial process by corporations whose agenda is nothing less than the dismantling of government itself.” The melodrama reaches an apex when the reviewer describes Dark Money as “a hair-raisingly specific American tale of illicit power.”

WEEK OF JULY 6, 2018

Latest Developments:

The California Fair Political Practices Enforcement Review Task Force meets next Wednesday, June 11.  The Commission created the task force to obtain input from the regulated community and other interested parties regarding creating/revising the commission’s enforcement manual.  The agenda includes organizational activities such as selecting a leader and establishing goals.

The Missouri Ethics Commission issued two new regulations that contain (1) clarifications on when an out-of-state committee, including a federal PAC, must register and (2) related definitions. The regulations take effect on August 8, 2018, in time for the General Election Cycle.

In case you missed it:

  • The New York Times traces the Supreme Court’s view of the First Amendment over the last few decades, from the days of Earl Warren to the Roberts court. The most recent incarnation of the court is skeptical about any government effort to regulate speech.  Decisions from Buckley v. Valeo to Citizen’s United to this year’s decisions regarding speech about abortion and union dues show the court’s evolving view of the First Amendment.
  • Google isn’t that tech savvy: Google says it lacks the capability to comply with new Maryland requirements for disclosure of online advertisements, according to the Baltimore Sun.  The new law requires disclosure of who is paying for political ads and how much they are paying.  In the absence of the ability to comply, Google indicates that it will stop selling political ads for Maryland state and local races.
  • Ann Ravel, former Chair of the Federal Election Commission is now on the staff of Maplight, which is known for its online research tools regarding the influence of money on political decisions. According to Maplight, “She will develop a robust, evidence-based policy platform to address deceptive politics and strategically advance solutions that safeguard our political system.”
  • A reporter for TV Station WRAL Raleigh, in North Carolina tracked down dark money spending on TV ads, Facebook ads, and mailers in North Carolina campaigns. According the report, the common element behind the various groups with different names is a single Democratic political law attorney, Michael Weisel.
  • The Texas Statesman reports that the Texas Ethics Commission fined a consultant for creating a deceptive website to attack a candidate. Mike Lewis, a candidate for County Chair of the Democratic Party created a website called LewisforChair.com.  According to the Commission , the consultant created a website called Lewis4Chair that redirected users to TheRealMikeLewis.com.  The consultant violated a Texas statute that prohibits entering into a contract to publish a campaign communication from a source other than its true source with intent to injure a candidate and was fined $1,500.

WEEK OF JUNE 29, 2018

Latest Developments:

California Governor Jerry Brown appointed a new Chair of the state’s Fair Political Practices Commission last Friday.  According to the Sacramento Bee, Alice T. Germond joins the Commission after a lengthy political career that includes serving as the Governor’s Deputy Campaign Manager in his 1978 re-election.  Her term will expire in January.

In case you missed it:

  • No coordination allowed – but signals permitted: The Federal Election Commission has dismissed a complaint that a candidate’s public posts on his website that were subsequently copied by an independent expenditure committee were “coordinated.”  According to Politico, candidates signaled their desires this way during the 2016 elections.  The Commission found that similarities in ads were insignificant evidence of private coordination.
  • Kaiser Health News reports that when a drug company was faced with public pressure over the high cost of its products, it spent more on Washington lobbyists and its PAC spent more money on federal candidates, doubling its contributions over that of the previous year. Facing mounting criticism, including a lawsuit and a dropping stock price, Novo Nordisk, a Danish multinational, doubled what its American employee PAC spent on federal candidates and the company itself increased what it spent on lobbying to $3.2 million.
  • How do you know if you are a “foreign agent?” Bloomberg Government describes the conflicting advice often given by the federal Justice Department.  Bloomberg looked at the advisory opinions recently released by the Justice Department and found a very complex decision-making process as to who is a foreign agent and who is not.
  • Congressional staffers have first class seats on the gravy train. The Washington Examiner reports that one congressional staffer, Oliver Schwab who is chief of staff to Rep. David Schweikert, managed to spend more than $5,000 from congressional funds on a lavish Super Bowl weekend in 2015, which doesn’t include the many gifts of entertainment received over that weekend.  He spent over $800 per night on a hotel room and $660 for a rental car for the weekend.  Politico indicates that the House Ethics Committee has launched an investigation into Schweikert and Schwab’s spending of public funds and alleged illegal campaign contributions.
  • Don’t mess with Montana: The Missoula Current reports that, in a dispute between the Montana Commissioner of Political Practices and the Montana Shooting Sports Association, the association alleges that it has been fined $28,000 for stapling supporting documents to the wrong form.  The president of the association states that all forms were placed in one envelope, but that a list of candidates that should have been attached to Form C-2 was instead attached to Form C-7.
  • An Arkansas State Senator was sentenced to 18 months in federal prison for submitting fraudulent bids through straw men to the Western Arkansas Economic Development District, which was responsible for administering state General Improvement Funds in his district, according to Arkansas Business. The now former Senator pocketed tens of thousands of dollars in state funds; the court ordered restitution.

WEEK OF JUNE 22, 2018

Latest Developments:

The Oklahoma Ethics Commission raised lobby registration fees by $100 to $250, beginning July 1.  According to The Oklahoman, the increase follows a dispute with the state’s legislature which gave the commission no general fund monies for support for the upcoming fiscal year.  The commission will be forced to fund all of its operations from fee income during the 2018-2019 fiscal year.

Colorado Secretary of State Wayne Williams issued new Campaign and Political Finance Regulations on June 19, 2018, following a federal court decision in Holland v. Williams last week, as reported here.  The new rules include a different procedure for filing complaints that allege a violation of campaign and political finance laws. (See Rule 18 of the new regulations.)  Complaints are no longer sent to the Office of Administrative Courts within 3 days, but instead are reviewed and may be investigated by the Secretary of State’s Office.  Someone deserves an award for responsive governmental action – these new rules were adopted as emergency regulations exactly one week after the federal district court issued its opinion.  The Denver Post reports on the details.

The California Fair Political Practices Commission met Thursday, June 21, 2018.  Following the resignation of the Chair and her most vocal opponent, the Commission returned to a more collegial form.  Among the agenda items discussed:

  • The Ad Hoc Committee on Enforcement has 15 members who have volunteered to participate.
  • The Commission debated whether Bitcoin and other virtual currencies should be acceptable as campaign contributions and whether the nature of crypto currencies is as cash or as property. (See the action of the federal Office of Government Ethics, below).  Staff will continue to research the issue.
  • The Commission voted to support 3 bills pending before the legislature: AB 664 (prohibits spouse compensation from campaign funds), AB 2155 (ad disclosures), and AB 2880 (contracts with local ethics agencies).
  • Bob Stern’s request that the Commission sponsor legislation year to make the Chair of the Commission a part-time position did not have the unanimous support required to move forward, and the concept was referred to the Subcommittee on Law and Policy for further study. The Los Angeles Times reports that the Commissioners essentially deadlocked on the matter.

The United States Office of Government Ethics has issued Guidance that virtual currencies must be disclosed as “property.”  Virtual currencies (such as Bitcoin) are not true legal tender and, as such, federal officers and employees must disclose their holdings in these crypto currencies.  As an investment asset, holding a virtual currency may create a conflict of interest, according to the Guidance, dated June 18, 2018.

The New York Joint Commission on Public Ethics (JCOPE) meets next Tuesday with a very light agenda.

In case you missed it:

  • The New York Times reports on the phenomenon of consultants who peddle influence failing to register as lobbyists. Tightening the rules has resulted in more lobbyists deregistering and becoming shadow lobbyists who purport to be political strategists or consultants rather than lobbyists.
  • Kansas SB 394 takes effect July 1, 2018. That bill broadens the definition of lobbying to include most lobbying of the executive branch (not just rules and regulations) and administrative matters in the judicial branch.  The bill will cover procurement lobbying, with minor exceptions.  It also increases the executive branch gift of a meal provision from $25 to $40 to match the general legislative lobbyist gift limit.
  • Misuse of Expertise: A Justice of the West Virginia Supreme Court, who authored a book on corruption in the state, has been indicted on 22 federal corruption charges.  Law and Crime reports that Justice Allen Loughry has been charged with, among other things, using a government credit card for personal use and taking a historical Supreme Court desk to his house for use in a home office.

WEEK OF JUNE 15, 2018

Latest Developments:

The United States Supreme Court says it’s “OK” to wear your “political” T Shirt to the Polls.  In Minnesota Voters Alliance v. Mansky, the court (in a 7 to 2 decision) struck down Minnesota’s ban on wearing political apparel at a polling station as a violation of the Free Speech clause of the First Amendment.  The court indicated that a state could prohibit forms of campaign advocacy at the polling place, but found Minnesota’s ban too broad.  The ban on “political” apparel was used to initially bar a voter with a T shirt containing a Tea Party Patriots’ logo and the words, “Don’t Tread on Me,” and a button that said, “Please ID Me.”

The Eighth Circuit Court of Appeals struck down a Missouri law that required committees to form and register at least 30 days before an election.  In Missourians for Fiscal Responsibility v. Klahr, the court found that that the restriction “prohibits (or at least significantly burdens)” political speech.  The Missourians group had formed 14 days before an election, in violation of the Missouri statute.  The court noted that the only legitimate governmental interest for restricting campaign finances is preventing corruption or the appearance of corruption.  The time restriction was not narrowly tailored and did not address that issue.

The San Francisco Ethics Commission meets Friday, June 15.  The agenda includes a discussion about future priorities.  Among the 20 items on the “Policy Prioritization Plan” are reviews of the lobby code, expenditure lobbying, the major developer disclosure program, behested payments, and the lobby regulations.

The California Fair Political Practices Commission meets next Thursday.  Among the agenda items:

  • Bob Stern is asking the Commission to sponsor legislation this year to make the Chair of the Commission a part-time position by January 2019. He states that he “made a mistake” in making the Chair a full-time position when he drafted the original Political Reform Act initiative.
  • Staff is asking the Commission to consider Regulation 18700.2 at its August meeting. That regulation would determine when an official has a financial interest in a parent, subsidiary, or otherwise related business entity for purposes of the Political Reform Act’s conflict of interest provisions.
  • Commissioner Audero of the California Fair Political Practices Commission resigned following the resignation of the Chair. The Sacramento Bee reports that Commissioner Audero has been appointed by as the U.S. Magistrate for the Central District of California.  Her departure leaves in doubt how the two-person subcommittees will function.  The Commission is down to only three sitting members of a 5-member panel.
  • In response to commissioners’ request, staff is proposing that the Commission hold its September meeting at Los Angeles City Hall.

In case you missed it:

  • The S. Justice Department released 49 opinions regarding the Foreign Agents Registration Act (FARA). These opinions date back to 2010 and provide guidance as to when registration is required under FARA.
  • Colorado Politics reports that a federal district judge in Colorado has barred private complaints against political speech. Under the state’s campaign finance laws, any person who believes that a campaign finance violation has occurred may file a written complaint which must be referred to an administrative law judge within three days.  In Holland v. Williams, a mom who placed ads in the local paper that criticized the Common Core education curriculum and urged citizens to vote in a school board election, but did not urge or oppose any particular candidate, became the subject of a complaint that the mom had not registered as a political committee.  The court found the enforcement provisions to be unconstitutional. The law purported to regulate core political speech because it was content-based, and the statue failed the “strict scrutiny” test.
  • The San Francisco Board of Supervisors approved amendments to the city’s Campaign and Governmental Conduct Code, which take effect on June 30, 2018. Among other things, the changes increase disclosure requirements, revise pay-to-play provisions, expand the class of persons who may bring a private attorney general action and collect fees and costs, and impose new duties on public officials regarding conflicts and recusals.

WEEK OF JUNE 8, 2018

Latest Developments:

Montana Governor Steve Bullock signed an executive order today (6/8/18) that requires anyone who seeks to do business with the state’s executive branch (contracts for goods of more than $50,000 or services of more than $25,000) disclose any expenditures for electioneering communications if the aggregate is over $2,500 in the past 24 months.  Contracts that last more than 2 years would require an annual, updated disclosure.  The state’s Department of Administration is directed to implement the disclosure policy by September 1, 2018.

The California Fair Political Practices Commission held a special meeting on Monday, June 4, 2018.  The four commission members unanimously approved new governance regulations that strip power from the chair (who resigned last week) and divide it among two bipartisan subcommittees and the Executive Director.

In case you missed it:

  • Before his resignation, the Governor of Missouri, Eric Greitens, was ordered to comply with a legislative subpoena to produce records of his nonprofit and his campaign to show whether the campaign coordinated so-called “dark money” spending by the nonprofit in support of the Governor, according to the Kansas City Star. However, following his resignation, the legislative investigation ended and the special counsel for the legislative committee withdrew his request, but reiterated his view that the records ought to be public.

WEEK OF JUNE 1, 2018

Latest Developments:

The Oklahoma Ethics Commission meets Friday, June 8.  A discussion of the fee schedule, effective July 1, 2018 is on the agenda.  Among the fees that are the subject of review, are registration fees for lobbyists, lobbyist employers, and PACs, and late fees.

The California Fair Political Practices Commission will hold a special meeting on Monday, June 4, 2018.  The sole matter on the Commission’s agenda is approval of governance regulations to establish two bipartisan subcommittees, a Budget and Personnel Committee and a Law and Policy Committee.  Each committee will consist of two members each, none of whom is the Chair of the Commission.  Facing a mutinous group of commissioners, the Sacramento Bee reported that Chair Remke resigned.

The Oakland Ethics Commission meets Monday, June 4, 2018, with a long but unremarkable agenda.  However, within the Director’s report are the goals for 2018-2019, which include establishing e-filing for lobbyist registrations and for reporting of behested payments.

In case you missed it:

  • NPR reports on the deadlocked efforts of the Federal Election Commission to limit foreign influence. The partisan division of the commission remains a roadblock to any solution.
  • The risks of secret corporate political spending are discussed in an article by The Hill. Following the revelations of AT&T and Novartis’ spending on Michael Cohen, The Hill notes that, “Secrecy blown up by inadvertent disclosure can aggravate the bad optics of a suspicious expenditure on politics.”
  • A cautionary tale from Rod Blagojevich (remember him?): The Washington Examiner reports on the Wall Street Journal interview in which the former Governor of Illinois philosophizes about his prison time (year 6 of 14) for what he characterizes as “practicing politics” by raising campaign contributions.  The U.S. Supreme Court declined to hear his appeal in April of this year.
  • Is the Federal Election Commission powerful enough to kill Zombies? Bloomberg Government reports that the Campaign Legal Center and others are pushing the FEC to adopt rules to crack down on the perceived personal use of old “zombie” campaign funds.  The FEC has announced that it will review campaign funds for former officeholders who have been out of office for more than one term, beginning in July.

WEEK OF MAY 25, 2018

Latest Developments:

The New York Joint Commission on Public Ethics met Tuesday, May 22, 2018.  Among the agenda items discussed:

  • The Executive Director reported on three legislative proposals, including one to require lobbyist disclosure of campaign fundraising activity, one to impose accomplice liability for violations of ethics laws, and another that would enhance penalties for violators including permitting debarment of lobbyists for failure to file required reports. The latter proposal would also extend the “look-back” period for repeat offenders from 5 years to 10.  The Executive Director noted that three proposals from 2017 were introduced as bills, although the Commission has not taken a position on any of them.  The 2018 proposals, as with the prior year, are simply staff suggestions that are put out for public discussion.  The Commission did not take any formal action to endorse any of the current proposals.
  • The Commission unanimously adopted amendments to four regulations pertaining to Financial Disclosure Statements.

The Oklahoma Legislature adjourned on May 3, 2018.  Under the unique provisions of the Oklahoma Constitution, Ethics Rule amendments proposed by the Oklahoma Ethics Commission that were not rejected by the state’s legislature become statutes and are operative upon adjournment.  Changes include:

  • Documents that are required to be filed electronically are due on the date specified, and the deadline is no longer extended to the next business day after a weekend or holiday, under amended Rule 1.4. For example, lobbyist reports that were due on Saturday, May 5 technically were due on that day, not on the following Monday.
  • PACs that have made a contribution to a candidate may make a post-election contribution if the aggregate does not exceed the $5,000 contribution limit. Under the former version of Rule 2.33, only PACs that did not make any contribution to that candidate were permitted to make any post-election contribution.

In case you missed it:

  • US News and World Report tells us that the Ninth Circuit Court of Appeals has upheld Montana’s campaign reporting requirements. In Montanans for Community Development v. Mangan, the court found that the appellant’s claim that the law was vague, overbroad, and unconstitutional as applied to MCD was without merit.  The court found, among other things, that the disclosure requirements are substantially related to a sufficiently important governmental interest.
  • The Digital Advertising Alliance, an organization that establishes and enforces social media advertising guidelines, has announced a new set of guidelines for political advertising, according to the Wall Street Journal. Ads that advocate the election or defeat of a candidate for federal and certain statewide elections must include a link to a site with additional detail about who placed the ad, their contact information, and the details of their political spending and contributions.
  • The Associated Press reports that the U.S. Justice Department is cracking down on violations of the Foreign Agents Registration Act (FARA). According to the AP’s article, the Justice Department has not changed any interpretation of FARA, but is stepping up enforcement of the act.
  • On May 17, 2018, an all-Republican panel of the Texas Court of Appeals, Third District in Austin, issued a ruling in Sullivan v. Texas Ethics Commission.  In 2012, the Ethics Commission found that conservative commentator Sullivan, who contacted officials to influence legislation for compensation in his role as President of Empower Texans, failed to register as a lobbyist and fined him $10,000.  Sullivan sought to dismiss the matter under the Texas Citizens Participation Act (TCPA), which protects citizens who speak on matters of public concern from retaliatory lawsuits.  The court found the statutes must be harmonized and held that the TCPA did not apply; it coexists with the lobby registration statute.

WEEK OF MAY 18, 2018

Latest Developments:

The New York Joint Commission on Public Ethics meets next Tuesday, May 22, 2018.  Among the agenda items:

  • A staff report about three legislative proposals, including one to require lobbyist disclosure of campaign contributions and another that would permit debarment of lobbyists for failure to file required reports.
  • Amendments to four regulations pertaining to Financial Disclosure Statements.

Colorado’s Secretary of State adopted new Lobby Regulations.  The regulations, among other things, require that, beginning January 1, 2019, a lobbyist report all position changes (monitor, oppose, or support) with the monthly disclosure statement.  A controversial provision that would have required disclosure of the terms of new lobbyist engagements was dropped.  The regulations take effect May 30, 2018, which is 20 days after publication in the Colorado Register.

The California Fair Political Practices Commission met Thursday, May 17, 2018.  Among the more interesting actions:

  • At the urging of Commissioner Audero, the Commission voted to establish a large task force regarding enforcement review. The task force will be composed of a wide variety of stakeholders.
  • The Commission voted to circumscribe language that can be put in closure letters in enforcement and voted to amend a closure letter sent