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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 April 2, 2021

Latest Developments:

  • The Federal Election Commission issued Advisory Opinion 2021-03, which permits “Members of the United State Senate and United States House of Representatives… (to) use campaign funds to pay for bona fide, legitimate, professional personal security personnel to protect themselves and their immediate families due to threats arising from their status as officeholders…”
  • The Governor of Arizona approved B. 1104, which changes campaign finance reporting requirements. Instead of requiring that reports identify individuals who contribute more than $50, reports will now require identification of in-state individuals who contribute more than $100, and identification of out-of-state individuals who contribute any amount. The measure takes effect 90 days after the legislature adjourns.
  • The United States Supreme Court unanimously held in Facebook, Inc. v. Duguid that the Telephone Consumer Protection Act (TCPA) only prohibits robocalls/robotexts made using certain equipment. The Court overturned a Ninth Circuit decision that broadly applied the TCPA’s prohibition to any system that could automatically dial stored numbers, instead focusing on the text of the TCPA that limits the prohibition specifically to calls made using equipment that can use “a random or sequential number generator” to store or produce numbers to be called and then dials them. The decision will mean the TCPA prohibits fewer automated calls for fundraising and campaign activity.

In Case You Missed It:

  • Ethics Complaint for Zooming: The Baltimore Sun reports that Dr. Terri Hill, a plastic surgeon and Maryland State Legislator, “has acknowledged she twice logged in from the OR, once in February to testify on a bill and once for about an hour this month during a voting session.” In reaction, another physician “filed complaints with the Maryland Board of Physicians and the General Assembly’s Joint Committee on Legislative Ethics.” 
  • Pay-to-Play Investigation on High: According to the Chicago Tribune, federal investigators “have been scrutinizing campaign donations and other steps Green Thumb Industries took as it sought to secure growing and distribution licenses in Illinois and several other states.” While details have not emerged, “GTI’s executives and affiliates have spread cash to a number of politicians as well as a political action committee that were instrumental in the marijuana legalization effort…”
  • Aloha Bribes and GiftsHonolulu Civil Beat reports that five Honolulu Planning Department Employees have been indicted on federal charges for accepting various bribes and gifts. One cooperating contractor’s attorney explained, “They say ‘Hey if you want to get your permit passed through, you’re going to have to pay.’ And if they refuse to pay, they get kicked to the bottom of the list and their projects don’t get approved.”
  • Virtual Lobbying Gains AcceptanceThe Hill suggests that virtual lobbying is probably here to stay. The article quotes an executive with the Association of Equipment Manufacturers, who opined, “‘The fact that we can much, much more easily gather three or four CEOs for a half-day or a day worth of meetings with lawmakers in a much, much, much easier and cost-effective way, that’s a game-changer. We never thought to do that before.’” Lobbying in the future is “more likely to consist of a hybrid of meetings online and in Washington, along with fewer trips overall.”

WEEK OF March 26, 2021

Latest Developments:

  • The United States Court of Appeals for the Fourth Circuit reinstated a guilty verdict in United States v. Rafiekian. The defendant was accused of failing to register under the Foreign Agents Registration Act (FARA) when lobbying for Turkish interests. Politico quotes a FARA attorney who opines that the case “‘further strengthens the department’s zeal in going forward’ with its more aggressive pursuit of violations of the previously sleepy law.”
  • The Governor of Nevada signed AB 110, which revises the definition of “lobbyist.” The bill deletes the requirement that a lobbyist be physically present in the state capitol building or other legislative buildings and creates an additional exception from registration for persons who communicate with legislators only on an “infrequent or irregular basis.” The bill took effect immediately. This is Reno explains that lobbyists have until April 1 to register for the current session, “something they haven’t had to do this session,” because lobbyists “have not been allowed inside the legislative building…”
  • The Georgia Legislature approved SB 221, which permits the creation of “leadership committees.” Under the bill, these committees would be a “separate legal entity from a candidate’s campaign committee.” The Governor and Lieutenant Governor could each have a leadership committee; each Legislative caucus may establish two leadership committees. These committees are not subject to the state’s contribution limits. Funds could be used to support or defeat any candidate and used for expenses of holding office.
  • The Oklahoma Ethics Commission published revised contribution limits for the 2022 elections. The limit for individuals and other candidate committees contributing to a candidate committee increased from $2,800 to $2,900 per election.
  • The Governor of Arkansas signed SB 183, which bans the use of campaign funds to pay fines assessed by the Arkansas Ethics Commission.
  • The City of Aurora, Colorado approved an ordinance (p. 369) to require annual lobbyist registration and quarterly reporting. The ordinance takes effect August 1, 2021.
  • The Washington Public Disclosure Commission adopted permanent regulations governing contributions from foreign nationals. (Additional changes were adopted at the March meeting.) The regulation takes effect 30 days following formal publication.

In Case You Missed It:

  • Nevada Charges: The Associated Press reports that a Las Vegas area legislator, who resigned in January, is now charged with “misusing campaign funds and filing false voter registration and campaign finance records.” The 10 felony and two misdemeanor charges include allegations that he “misappropriated at least $11,150 in campaign funds.”
  • Bring Back your Money: According to CNBC, congressional fundraisers are lobbying corporations to “resume political donations after many suspended their contributions… Democratic fundraisers are urging companies to resume donations, citing their determination to oust the Republican lawmakers who encouraged and espoused the false election narrative that triggered the riot. On the other hand, Republican fundraisers have warned donors about Democrats’ intention to raise the corporate tax rate.”
  • Capitol Closed but Lobbyists Enter: Despite the closure of the Hawaiian State Capitol building to the public, Honolulu Civil Beat reports that “some individuals, including registered lobbyists, have been able to gain an audience with lawmakers in their offices after scheduling appointments.

WEEK OF March 19, 2021

Latest Developments:

  • The Governor of California issued a memo to his staff and department heads expanding a “ban on political consultants lobbying him and his administration to include unpaid advisers.” According to the Sacramento Bee, the Governor’s staff “asked the state’s Fair Political Practices Commission for advice on how to strengthen its ethics policies.” The San Francisco Chronicle clarifies that it effectively bans “the lobbyist and longtime Newsom adviser whose 50th birthday dinner at the French Laundry in November sparked intense scrutiny of their relationship.”
  • The City of Newark, New Jersey repealed its pay-to-play ordinanceTap Into Newark reports that the city repealed a 2011 ordinance with the intent to revert to the general state rules for developers. The change will mean “a $300 contribution per candidate ceiling” for contractors. Contractors could contribute more than $300 if subject to a “fair and open” bid competition.
  • The South Dakota Legislature approved a B. 103, which provides individuals who support a nonprofit corporation with a right of personal privacy regarding the release of personal affiliation information by a public agency. That protection includes preventing state agencies from requiring nonprofits to provide personal affiliation information, releasing or otherwise publicly disclosing that information, or requesting a government contractor to provide a list of nonprofit corporations to which it has provided support. The bill is pending on the Governor’s desk

In Case You Missed It:

  • PAC Contributions “Dropped off the Table”Roll Call reports that corporate contributions are “plummeting.” The article notes a “dramatic plunge in contributions by all corporate PACs following the deadly Jan. 6 riots on Capitol Hill.” Additionally, “‘COVID is a big factor,’” with corporate PACs reluctant to give, “If we’re not able to do events in person or do trips…”
  • Lobbyists Seek DiversityPolitico describes a new group, “the Diversity in Government Relations Coalition,” which has been formed to broaden the make-up of participants who lobby in Washington. The group intends “to conduct a demographic survey of the downtown world, from lobbying firms to trade groups to think tanks.” The group hopes to have a report by the end of the year and intends to promote “diversity, equity and inclusion” in lobbying organizations.
  • Probation for Quid Pro QuoNewJersey.com reports that the wife of the Mayor of Morristown, New Jersey was sentenced to probation for accepting a $10,000 campaign contribution “from a tax attorney who allegedly had been looking to lock-down lucrative municipal contracts.” She was “charged with bribery, but pleaded guilty to reduced charges in February of falsifying a campaign finance report.”

WEEK OF March 12, 2021

Latest Developments:

  • The Federal Lobbyist Registration threshold has increased from $13,000 in activity per quarter to $14,000 per quarter. The increase is effective for activity from January 1, 2021. As the Senate’s website explains, “An organization employing in-house lobbyists whose total expenses in connection with lobbying activities do not exceed and are not expected to exceed $14,000 in the quarterly period during which the registration would be made is not required to be registered.”
  • The departure of former longtime Illinois House Speaker Michael Madigan in the wake of ethics scandals has prompted bipartisan proposals for wholesale ethics reforms in the Illinois General Assembly. Local Springfield Media reports that former Speaker Madigan delayed ethics reforms for over a decade, but that the proliferation of ethics scandals during those years have heighted urgency and now “[b]oth Democrats and Republicans expect ethics reform to pass during this spring session, whether that is individual bills or a large reform package.”
  • Evolving Criteria for Canceling PAC Contributions: Bloomberg reports on how, in light of recent election related violence, many corporations are considering revising their PAC contribution standards, including soliciting input from employees and shareholders. Corporate PACs often reevaluate “giving criteria and respond to current events or controversial statements made by a candidate, but the scale and scope of the public reckoning is new These corporate PACs must figure out if they are “really going to shut down giving to somebody in a key position, who maybe has been the biggest champion for [their] cause on Capitol Hill because of one vote that had nothing to do with [their] cause.” Reuters is also covering this phenomenon and the Conference Board earlier surveyed companies who suspended donations after the Capitol Riots.

In Case You Missed It:

  • Nepotism & Behested Payments: The Charleston Gazette-Mail reports that the South Carolina Ethics Commission found that a county prosecutor violated the state’s ethics act when she hired her boyfriend as an assistant prosecutor. The article notes that the commission also concluded that an “organization that lobbies the Legislature may recognize a legislator by making a charitable contribution in the legislator’s name to a local homeless shelter in excess of the $25 limit on gifts in the Ethics Act.” Although no limit is imposed on the behested payments, they must still be included on the lobbyist’s disclosure report.
  • All in the Family: Father-son developers in Broward County, Florida find themselves in jail for a bribery scandal called one of the most notorious in the county’s history. The South Florida Sun Sentinel reports that “each [was] charged with six counts of extortion, two counts of racketeering and one count of organized fraud.” The developers had had a history of bribes “that led to a corruption scandal that saw a county commissioner imprisoned and political careers from School Board to City Hall maimed or destroyed… Prosecutors say they carried out a plan to ruin the current owner [of a property associated with the previous scandal] unless they were paid more than $3 million.”
  • The Massachusetts Office of Campaign and Political Finance issued Advisory Opinion 21-02 permitting Constitutional Officers and Legislators to use campaign funds to purchase “bullet-proof vests/body armor, pepper spray, and gas masks for themselves and/or their staff members.” The opinion holds that “In light of recent events in our nation’s capital, it is reasonable for c:andidates and their staff members to be concerned about their personal security…” The opinion allows the use of campaign funds “provided the expenditures are not primarily for the candidate’s or any other person’s personal use.” Note that the Federal Election Commission has a similar issue pending before it regarding use of campaign funds for personal security, Advisory Opinion Request 2021-03.
  • More Pleas in SF Corruption: The San Francisco Chronicle reports that the former Director of Neighborhood Services has “agreed to plead guilty to charges of conspiracy to commit money laundering and will cooperate with the continuing federal investigation into City Hall corruption.” She was the girlfriend of the Public Works Director who is “accused of being the key player in a scheme involving contractors, department heads and nonprofit groups.”

WEEK OF March 5, 2021

Latest Developments:

  • The Governor of Montana signed SB 1, which revises the definition of “lobbying.” The bill deleted references to “public officials” as the object of lobby efforts and instead uses the term “legislator” to clarify that lobbying pertains to influencing actions by legislators or the legislature. The measure also reduces the time the Commissioner of Political Practices is required to keep lobby reports from 10 years to four years.
  • The Office of Congressional Ethics issued a report finding that a Member of Congress “reported campaign disbursements that may not be legitimate and verifiable campaign expenditures attributable to bona fide campaign or political purposes.” It also found that “there is substantial reason to believe that Rep. Palazzo converted funds to personal use to pay expenses that were not legitimate…” The Hill Reports that the main allegations involve paying rent for a house the congressman owned that was allegedly used for campaign purposes.
  • The United States House of Representatives passed R. 1, a comprehensive measure that “addresses voter access, election integrity and security, campaign finance, and ethics” by, among other things, “expanding the prohibition on campaign spending by foreign nationals, requiring additional disclosure of campaign-related fundraising and spending, requiring additional disclaimers regarding certain political advertising, and establishing an alternative campaign funding system for certain federal offices.” The measure goes to the Senate for consideration.
  • The Washington State Attorney General filed a lawsuit against Google alleging that the company “failed to maintain documents and books of account with statutorily required information open for public inspection for each political advertisement or electioneering communication that Google accepted or provided for Washington State or local election campaigns since June 4, 2018.” The complaint also alleges that Google failed to file required reports. According to the Attorney General’s press release, despite Google’s announced moratorium on accepting political advertising in the state, “Washington political ads continued to appear on the platform.”

In Case You Missed It:

  • Corporate Political Activity Under Scrutiny: The Washington Post reports that corporations that paused their contribution activity after January 6 are nevertheless under pressure by some shareholders who seek corporate disclosure of political activity.  It also points out that “A Democratic-led SEC looks primed to deliver a long-sought victory for corporate political disclosure … to make such disclosure a blanket requirement for public companies.” According to Politico, the nominee to head the SEC has acknowledged in Senate confirmation hearings that “the agency would raise pressure on corporations to disclose their political spending activities, a long-running tension between SEC officials, big business and Democrats.”
  • Contractors Penalized for Corruption: The San Francisco Chronicle reveals that five city contractors implicated in the City Hall corruption scandal have been barred from receiving future city contracts. The San Francisco Chronicle also reports about a settlement with the city’s garbage collection contractor under which residents will receive nearly $100 million in rebates. According to the City Attorney’s press release, the agreement will also prohibit the contractor “from making any gift to any City employee or any contribution to a nonprofit at the behest of a City employee.”
  • The Massachusetts Office of Campaign and Political Finance has a new Executive Director, William Campbell, who currently serves as the Woburn (suburban Boston) City Clerk.  com noted that Campbell has previously run for state representative and Secretary of State. The current Secretary of State, who beat Campbell in the 2010 General Election, was on the search committee; he made the motion “to offer the job to Campbell and there was no dissent.”
  • Remote Lobbyist Entertainment: The Albuquerque Journal reports that despite the New Mexico Capitol being closed to the public, including lobbyists, lobbyists are still “picking up the tab” for food for legislators. “Lobbyists are trying to do their job under difficult conditions… A free lunch – or dinner – is built into the culture of the Roundhouse… One lobbyist told the Journal he just spent almost $490 on a recent lunch for a legislative committee – food delivered to the Roundhouse, without the lobbyist entering the building.”

WEEK OF February 26, 2021

Latest Developments:

  • The Ohio Secretary of State’s Office issued a revised campaign contribution limit chart for the period from February 25, 2021 to February 24, 2023. For example, the limit on contributions from a PAC to a statewide candidate, such as a candidate for Governor, increases from $13,292.35 to $13,704.41 per election.
  • The United States Department of Justice announced that a former Member of the Massachusetts House of Representatives “pleaded guilty … to illegally using campaign funds to pay for his personal expenses, defrauding a bank to obtain loans to purchase his home and repay his personal debts, and collecting income that he failed to report to the IRS.” According to the agency’s press release, the former member “was heavily in debt and gambled extensively at area casinos and online, and then used thousands of dollars in campaign funds to pay for various personal expenses such as dues at a local golf club, rental cars to travel to casinos, flowers for his girlfriend, gas, hotels, and restaurants.”

In Case You Missed It:

  • A. Ethics Commission Whistleblower: According to the Los Angeles Times, a former employee of the city’s Ethics Commission has come forward to charge that “a member of the City Council had ‘threatened to cut the Ethics Commission’s budget if they did not give more permissive advice’ on certain gift rules.” The current Executive Director of the Commission issued a denial from the former head of the commission, who was in charge at the time the threat was allegedly made.
  • Nevada Access: A group of lobbyists filed suit in federal court to obtain access to the Nevada Capitol Building. The Las Vegas Review-Journal reports that the lawsuit asserts “that emergency directives restricting access to lawmakers ‘plainly violate’ constitutional rights to free speech and to petition the government.”
  • Something Fishy in Wisconsin: The New York Times reports that a man dubbed Wisconsin’s “Sturgeon General” has been “accused of accepting $20,000 worth of caviar in an illegal bartering scheme.”  The man, a biologist employed by the state’s Department of Natural Resources, “oversees the traditional sturgeon spearing season in Lake Winnebago and its watershed.” He allegedly “accepted at least $20,000 in jars of caviar in return for supplying to a caviar processor eggs that had been collected under the guise of research.”

WEEK OF February 19, 2021

Latest Developments:

  • The Governor of Montana issued Executive Order 3-2021, which repeals the Previous Governor’s Executive Order 15-2018. That prior order required certain state contractors to disclose their political expenditures, including contributions and electioneering communications.
  • The Chair of the New York Joint Commission on Public Ethics resigned from his position. The Governor appointed a new chair, Camille Joseph Varlack. The Albany Times Union describes JCOPE’s accomplishments and controversies under the now former chair and notes that JCOPE declined comment on the reasons for the chair’s departure.
  • The Los Angeles City Ethics Commission announced fines totaling $162,500 against five people and entities that failed to register as lobbyists. The press release quotes the President of the Commission as pointing out that, “The public has a vital interest in knowing who is attempting to influence City action.”

In Case You Missed It:

  • 12 Years and $18 million for Campaign/Lobby ViolationsPolitico reports that Imaad Zuberi “was sentenced Thursday to 12 years behind bars.” He “pleaded guilty to charges of tax evasion, campaign finance violations and failing to register as a foreign agent” and must also “pay nearly $16 million in restitution and a nearly $2 million fine.”
  • First S.F. Corruption Sentence: The first person sentenced in the ever-widening corruption scandal that has engulfed San Francisco City Hall received one year in federal prison. According to the San Jose Mercury News, Florence Kong “pleaded guilty last year to bribing disgraced ex-public works director Mohammed Nuru with a $36,500 Rolex watch, paying for improvements to his summer home, and to lying to the FBI when they confronted her. In exchange, Nuru gave her construction recycling business contracts with the city.”
  • HR 1 Moves Forward: Roll Call reports that the House of Representatives plans a floor vote on HR 1, the comprehensive measure that “contains changes to campaign finance, voting and ethics laws.” The House is expected to take a vote the first week of March. The Majority Leader “called HR 1 ‘the centerpiece of Democrats’ agenda to make government more transparent and accountable to the people it serves.’”

WEEK OF February 12, 2021

Latest Developments:

  • The Los Angeles County District Attorney announced the indictment of the former Mayor of Maywood, the former City Manager, and the former Building and Planning Director, among others, for corruption involving campaign contributions and bribes in exchange for city contracts. Maywood is a tiny city in the center of Los Angele County. The Los Angeles Times explains that the ex-Mayor “took donations during his 2015 City Council campaign from contributors whom he promised to later reward with city work.”
  • New Mexico Ethics Commission approved Advisory Opinion 2021-05. The opinion permits a state legislator, notwithstanding the state’s blackout period, to collect campaign contributions during the legislative session for a campaign for federal office.

In Case You Missed It:

  • Aloha, Please: According to the Honolulu Civil Beat, “lawmakers want their ‘gifts of aloha’ back.”Gifts of aloha are described as “generally small food items, especially from lobbyists.” The Hawaii Ethics Commission’s new gift regulations banned “gifts of aloha.” “A handful of bills introduced in the Legislature this session would” revise the gift limit to “$25, the amount at which lawmakers were generally allowed to accept food gifts prior to the rules going into effect in November.”
  • Nevada’s Virtual Lobbying: The Nevada legislature is attempting to make adjustments to its current definition of lobbying given how virtual lobbying during the pandemic has lessened state lobbyist registration. Currently, Nevada law requires registration of a lobbyist who “[a]ppears in person in the Legislative Building or any other building in which the Legislature or any of its standing committees hold meetings.” AB 110 would strike that language and retain the lobbyist trigger as one who “communicates directly with a member of the Legislative Branch on behalf of someone other than himself or herself to influence legislative action.”
  • Personal Use in Mississippi: The Northeast Mississippi Daily Journal Reports that “Mississippi politicians continue to personally profit from their campaign funds, new state filings show, a practice that’s illegal in many other states and at the federal level.” One state official “paid himself $30,000 from his campaign account,” and noted that the expenditure was “‘personal.’” The article points out that the law was changed in 2017, but pre-2018 campaign funds can be used for personal expenses or simply pocketed when officials leave office.
  • More FARA Prosecutions PredictedPolitico reports that the Justice Department prosecutor who has “spearheaded the department’s crackdown on unregistered foreign agents” is leaving for private practice but he “predicted that DOJ will continue the crackdown under the Biden administration.” Under his leadership, “the department has seen foreign agent registrations soar, and reached record levels last year… as did the number of investigations opened.”

WEEK OF February 5, 2021

Reminders:

  • Contribution Limits Update: Nielsen Merksamer tracks contribution limit changes at the federal, state, and select local levels. During this period in the election cycle (between the November 2020 election and the beginning of 2021) we expect at least 11 states will adjust their contribution limits. In addition, a few states adjust lobbyist registration fees, lobbyist registration thresholds, and gift limits. We track those as well. 

Latest Developments:

  • The Federal Election Commission announced an increase in several federal campaign contribution limits which are indexed for inflation. Notably, the FEC increased the amount individuals may contribute to a candidate from $2,800 to $2,900 per election. The Commission also adjusted the limits for contributions from individuals and non-multicandidate PACS to national party committees and their non-campaign accounts.
  • Tennessee Bureau of Ethics and Campaign Finance revised contributions limits for 2021 and 2022. The new limits increase permissible PAC contributions from $12,300 to $12,700 per election for gubernatorial and state senate candidates and from $8,100 to $8,300 per election for other state and local offices. Individual contribution limits increase from $4,200 to $4,300 per election for contributions to gubernatorial candidates and state senate candidates.
  • San Diego City and County: The San Diego City Ethics Commission increased Contribution limits for candidates running for City Council in 2022. The adjustment increases limits from $600 to $650 per election from individuals. The city bans corporate contributions. Meanwhile, the San Diego County Registrar of Voters increased contribution limits for 2021 from $850 to $900 per election for county candidates.

In Case You Missed It:

  • Push Against So-Called “Dark Money”The Hill reports that “Top Democrats in the Senate are urging Treasury Secretary Janet Yellen to crack down on dark money spending in political campaigns.” Two Senators sent a letter to the Secretary asking her to “undertake a careful review of what the IRS has done, reform its approach, and rein in abuse by ‘dark money’ organizations.” The article notes that the pair want the Treasury Department to back a lawsuit by the California Attorney General regarding nonprofit disclosure and enforce existing 501(c)(4) regulations.
  • Better than “the Dog Ate my Homework”: The Associated Press reports that a Tennessee legislator told the Tennessee Bureau of Ethics and Campaign Finance that he can’t file his campaign disclosure report because the FBI took all his campaign finance records. The article quotes his letter stating, “‘I will get the information to you as soon as the documents / computers are released.’” The article also notes that “Federal authorities have not indicated what they are investigating after showing up to search the homes and legislative offices of [several legislators].”
  • Drive for Money: A Colorado Congresswoman “paid herself more than $22,000 in mileage reimbursements from her campaign account last year.” According to the Denver Post, as reported by MSN, her “mileage reimbursement ‘raises red flags,’ ethics experts say.” The article notes that she “would have had to drive 36,870 miles in just over seven months,” to justify one of the payments. Her campaign said that “She traveled to every nook and cranny of the district to speak with and hear from the people about their concerns.” The commentary acknowledges that the congresswoman, “a prolific in-person campaigner, traveled 17,623 miles between public events last year, according to the Post’s analysis.”

WEEK OF January 29, 2021

Latest Developments:

  • The Governor of Mississippi’s nonprofit organization, For All Mississippi, which was formed to organize “the 2020 gubernatorial inauguration for Governor-elect Tate Reeves,” filed its IRS Form 990.  Based on that public information, the Northeast Mississippi Daily Journal reports that The Mississippi Governor’s inaugural committee raised $1.6 million from donors whose identities are not disclosed, but paid “nearly $150,000 to a business owned by the governor’s brother and sister-in-law.” The organization received “donations ranging from $5,000 to $113,000, according to the IRS documents.” The Daily Journal’s article discusses other states’ disclosure requirements and notes that one lawmaker says, “he’s concerned about how 501(c)4 nonprofits can be used to skirt normal campaign finance laws.”
  • The Federal Election Commission issued Advisory Opinion 2020-06, which permits a Member of Congress to spend campaign funds on home security measures as recommended by the House Sergeant at Arms. Past opinions allowed campaign expenditures for security devices in response to “specific threats directed at” a Member. This opinion also acknowledges that the expenditure is appropriate in a “heightened threat environment.”
  • The United States Court of Appeals for the Third Circuit decided S. v. Smukler, which upheld a criminal conviction for campaign finance violations. The case concerns whether the defendant “willfully” violated the statute. He sought to get a client’s opponent to drop out of a race by coordinating contributions in excess of the limits to pay off the opponent’s campaign debts.
  • The South Dakota Secretary of State has set the 2021 gift limit for lobbyists. A Lobbyist may give a legislator no more than $106.43 in cumulative gifts during the 2021 calendar year.

In Case You Missed It:

  • Wild West PoliticsMSN reports that the New Mexico Secretary of State, following an arbitration order and dismissal of a federal suit brought by Cowboys for Trump, announced her intent to enforce the order. The “arbitration order requires Cowboys for Trump to register a political committee, file all its delinquent contribution and expenditure reports and pay $7,800 in fines.” According to the article, “Cowboys for Trump did not prove that their First Amendment rights were damaged by the Secretary of State’s attempt to enforce New Mexico campaign finance laws.”
  • Social Media ObstructionPolitico reports that “Facebook and Google’s on-again, off-again bans on political ads are hitting campaigns during a crucial fundraising window.” The bans “have essentially pressed pause on a political industry that spent $3.2 billion advertising on Google and Facebook in the last two and a half years.”
  • L.A. Corruption: According to the Los Angeles Times, “Former Los Angeles City Councilman Mitchell Englander was sentenced Monday to 14 months in prison for lying to federal authorities about his dealings with a businessman who provided him $15,000 in secret cash payments.” He is “the first person to be sentenced in a sprawling federal investigation into corruption at Los Angeles City Hall.”
  • Lobbying a Lawsuit: The Kansas City Star reports that, “A Canadian private equity firm accused in a lawsuit of mishandling investments by Missouri’s largest public pension hired a lobbyist to influence key legislators and put pressure on the pension outside of court proceedings.” The lobbyist unsuccessfully sought to arrange a meeting with his client, the Executive Director of the public pension system, and legislators. The article notes that, “Typically parties involved in litigation do not speak with one another outside of court proceedings, except through their attorneys of record.”

WEEK OF January 22, 2021

Latest Developments:

  • The Chair of the Democracy Reform Task Force in the United States House of Representatives reintroduced R. 1The Hill notes that one of the primary purposes of the bill is “to reduce the influence of lobbyists and to close the so-called revolving door.” The bill also makes changes to campaign finance provisions and revises the membership, powers, and authority of the Federal Election Commission and the powers and appointment of the Chair.
  • The (Incoming) President of the United States issued a new Executive Order governing ethics. The order bans gifts from lobbyists and imposes several revolving door restrictions. The Associated Press reports that the order prohibits incoming administration officials from accepting golden parachutes from their former employer and limits lobbying after leaving the administration for the duration of the Biden Administration or two years whichever is longer.
  • The (Outgoing) President of the United States issued an Executive Order withdrawing Executive Order 13770, which imposed a five-year revolving-door banPolitico reports that the order will “give some of his staff relief after appointees have had difficulty finding jobs in a Democratic-controlled capital.” According to ABC8 News, the “new order states: ‘Employees and former employees subject to the commitments in Executive Order 13770 will not be subject to those commitments after noon January 20, 2021.’” President Clinton issued a similar order at the end of his term.
  • The United States Department of Justice announced another prosecution for violation of the Foreign Agents Registration Act. According to the press release, the defendant identified himself as “a former political science professor or as an expert on foreign affairs.” He “pitched himself to Congress, journalists, and the American public as a neutral and objective expert on Iran.” However, the Department of Justice asserts that he “was actually a secret employee of the Government of Iran and the Permanent Mission of the Islamic Republic of Iran to the United Nations (IMUN) who was being paid to spread their propaganda.”
  • The Federal Election Commission issued Advisory Opinion 2020-02 regarding the purchase of political advertising by U.S. citizens living abroad. The Commission concluded “that the Act and Commission regulations do not prohibit [a U.S. citizen’s] proposed purchase of such online political advertisements even though you reside abroad. The Commission also concludes that neither the Act nor Commission regulations require you to provide Facebook or any other media platform with proof of a U.S. bank account or a U.S. residential address as a prerequisite to the purchase of political advertisements on their platforms.”

In Case You Missed It:

  • Goodbye AlohaHonolulu Civil Beat reports that, as the legislature convenes, one thing has changed: “A ban on food items and other items of nominal value affects state officials and the business of lobbyists.” New regulations adopted by the Hawaii State Ethics Commission include a “ban on ‘gifts of aloha.’” Gifts of Aloha are “small gifts and food.” The article quotes a commission spokesperson who says “‘if there’s some kind of authority vested in state officials over the persons giving the gifts, then the state official shouldn’t be accepting the gifts.’”
  • Second Thoughts: A North Dakota legislator has introduced a measure to require taxpayers to pay for legislators’ meals since lobbyists gifts were banned by a voter-adopted ethics reform. According to the Associated Press, one lawmaker lamented that “the removal of the lobbyist meals perk was forcing him to develop unhealthy eating habits….” The proponent told the AP that “dinners funded by lobbyists and other groups had gone from ‘steak and lobster to finger food’… Lawmakers used to joke about the weight they packed on during a session, but this session, he said, the freebie food is nonexistent.”

WEEK OF January 15, 2021

Latest Developments:

  • The Biden Inaugural Committee released its list of donors of $200 or more to the committee, which is formally “known as PIC 2021, Inc.” Politico notes that the list includes “tech companies Google, Microsoft and Qualcomm; internet service providers Verizon and Comcast; aerospace giant Boeing; labor union IBEW; health insurance company Anthem, Inc.; and medical technology company Masimo Corporation.”
  • The Arizona Secretary of State issued new campaign contributions limits, which took effect on January 1. Limits on contributions from individuals, partnerships, and PACs to state candidates increased from $5,200 to $5,300 per election cycle. The limit for contributions from “Mega PACs” to state candidates increased from $10,400 to $10,600.
  • Elections Canada announced that the contribution limit for federal offices in Canada have been increased by $25 for 2021 to $1,650 for the calendar year. 

In Case You Missed It:

  • Here Come the Ethics Reforms: The New York Times describes how “Congressional Democrats and a slew of groups are preparing to push for the kinds of ethics and governance changes not seen since the post-Watergate era.” The article notes that “Among the changes embraced by House Democratic leaders are limits on the president’s pardon powers, mandated release of a president’s tax returns, new enforcement powers for independent agencies and Congress, and firmer prohibitions against financial conflicts of interest in the White House.” A number of proposals have already been advanced in Congress, including the reintroduction of HR 1. The President-Elect is also touting an ethics reform plan.
  • Corporate Contribution PauseBloomberg News compiled a list of corporations “that say they are withholding political contributions after last week’s U.S. Capitol riot…”  The article groups the companies “into three broad categories: Those going after specific Republican lawmakers …, those going after objectors in general, and those withholding all contributions for now…”
  • Atlanta Ethics Settlement: According to WSB-TV2, the Georgia Government Transparency and Campaign Finance Commission fined the Mayor of Atlanta for “irregularities in her campaign finances during the 2017 mayor’s race.”
  • A. Pay-to-Play Probe Continues: The Eastsider LA reports that a company has agreed to pay a $1.2. fine as part of a non-prosecution agreement “to resolve a federal criminal investigation that focused on the firm’s relationship with former Los Angeles City Councilmember Jose Huizar, who voted to approve its 35-story project in downtown’s Arts District.” This is the latest in an “ongoing investigation into a wide-ranging pay-to-play scheme in which developers bribed Los Angeles city officials to secure official acts to benefit their real estate projects.”
  • San Francisco Ethics Investigation Topples City Administrator: The San Francisco Chronicle reports that the San Francisco City Administrator will resign February 1, just “weeks after federal prosecutors implicated her husband in an ever-expanding City Hall corruption scandal.” The article notes that she is “the latest domino to fall in a multipronged city hall bribery scheme that was first made public last year…”
  • Nevada Legislator Folds:  The Associated Press notes that a Las Vegas area legislator resigned amid an investigation into his use of campaign funds. Questions were also raised about whether his primary residence was in the district he represents. His letter of resignation simply explained, “With great regret, and because I believe that lawmakers are bound to uphold the law and act with honesty and integrity, I must admit my mistake and resign my office.” To date, no charges have been filed.
  • No-Bid Contract PR Star: The Associated Press reports that The Governor of Iowa and her aides appeared in and “helped make a marketing video for a Utah company that was awarded no-bid contracts for work on the coronavirus pandemic, a move that has raised allegations of favoritism and improper use of public resources.” The article notes that the “appearances go against long-standing guidance to avoid any hint of preferential treatment in relationships with contractors.”

WEEK OF January 8, 2021

Latest Developments:

  • The Oklahoma Ethics Commission met and adopted a new rule that revises lobbyist gift rules. The change creates an exception for informational materials provided by a lobbyist or lobbyist employer. Gifts of informational material valued at less than $100 need not be reported to the commission. Oklahoma Ethics Commission rules have the force of statutes unless rejected by the legislature in the next session. The new rule will take effect at the end of May 2021, when the legislature adjourns.
  • The North Carolina State Board of Elections announced that “Effective Jan. 1, 2021, the contribution limit for North Carolina political campaigns will increase by $200, from $5,400 to $5,600. No individual or political committee may contribute more than $5,600 to a candidate committee or political committee in any election.” 

In Case You Missed It:

  • LLC Contribution:  Politico describes a complaint filed by the former Chair of the California Fair Political Practices Commission regarding a contribution to an effort to recall the Governor of California. The recall effort received $500,000 from an LLC called Prov. 3:9. The former chair said Prov. 3:9“‘should have filed either as a recipient committee or multipurpose organization, or named the true source of funds…’” The campaign manager of the recall effort characterized the complaint as “an intimidation tactic.” The Sacramento Bee subsequently identified the member of the LLC, who “is opposing the governor for his actions limiting religious gatherings during the pandemic.”
  • New Administration Balancing ActThe Hill reports that the incoming administration is facing “progressives who want his administration to work as little as possible with K Street.” However, one consultant noted that “’we also understand that corporations make up our economy and they should have a seat at the table.’” The consultant noted that “a balanced approach would be best for Biden in juggling corporate interests and progressive interests. Meeting with lobbyists isn’t a problem, she said, if Biden also speaks with other groups and individuals who are not focused on corporate interests.”
  • Balancing Act Faces TestsThe Hill also tells us that “The brother of one of President-elect Joe Biden’s top advisers has recently secured a lobbying contract with (a) technology giant [Amazon].” That action puts the President-elect’s advisor in a position in which he “may need to recuse himself from matters that could potentially affect his brother’s clients.”
  • No Lobby Disclosure: According to the San Jose Spotlight, a Santa Clara County Grand Jury is investigating whether San Jose’s largest school district “possibly violated government ethics laws in the process” by failing to report its lobbying activity. The district hired a consultant to meet with the city on behalf of the school district to explore housing for teachers. According to the consultant, “all meetings between city officials and him were lobbying only in the city’s definition of the word.”
  • Money Not OKThe Oklahoman reports that Oklahoma Ethics Commission sued a PAC, the “Oklahoman’s For Healthy Living — for financial penalties, saying it ‘repeatedly and intentionally violated the campaign finance laws of Oklahoma.’” The PAC apparently failed to report most contributions and used prohibited corporate money to make the contributions. The Tulsa World notes that two lobbyists who ran the PAC have agreed to pay the “hefty financial penalties” for their participation as chair and treasurer of the PAC.
  • Gift Limits Settlement: According to the Florida Times-Union, two lobbyists have settled complaints with the Jacksonville Ethics Commission that they paid for trips to Atlanta, Georgia for local public officials which included a private jet trip and behind dug-out seats at a Braves playoff game. The action violated the city’s $100 limit on gifts from lobbyists. The article includes a link to the settlement.

WEEK OF December 25, 2020

Latest Developments:

  • The North Dakota Attorney General issued an opinion approving regulations of the state’s Ethics Commission. The regulations expand the definition of who qualifies as a lobbyist for purposes of gift rules to include all public officials. The opinion found “that the Ethics Commission is constitutionally authorized to promulgate a rule defining “lobby” and “lobbyist” … which expands the statutory definition of “lobby” and “lobbyist” in order to fulfill its constitutional mandate…”
  • 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 announced that it will, due to the pandemic, again delay application of the City’s new lobby registration requirements for nonprofits. The requirements were scheduled to be enforced January 1, 2021, but according to the notice, “the delay in implementation of the City’s non-profit lobbying laws until such time as the City and Board deem appropriate continues until at least April 1.”
  • The Federal Election Commission announced that “Shana M. Broussard, Sean J. Cooksey and Allen Dickerson have been sworn in as members of the Federal Election Commission, returning a quorum to the agency charged with administering and enforcing federal campaign finance law.” The Commission also announced that Shana Broussard will serve as Chair for the coming year and Allen Dickerson will be Vice Chair.
  • The Los Angeles City Ethics Commission is seeking comment on proposed amendments to the city’s lobbying laws. The proposal would redefine “who qualifies as a ‘lobbyist’ by moving from a time-based standard to a compensation-based standard.” It also includes “faster registration” and “more meaningful and frequent disclosure.” The Commission’s policy portal indicates that the commission will take comments and hold a meeting on the matter in January 2021.

In Case You Missed It:

  • Zombies Concern Prairie Statescom in Cedar Rapids reports on the existence of zombie campaign funds, specifically citing former Senator Tom Harkin, who last ran for office in 2008, but whose campaign fund “continued to spend over $60,000 during the 2019 and 2020 election cycle.” Meanwhile Colorado Politics reports that U.S. Senator Michael Bennet introduced “the Zeroing Out Money for Buying Influence after Elections (ZOMBIE) Act to address what happens with campaign money for federal candidates when they leave office.”
  • The Arizona Attorney General issued an opinion finding that a local “employment policy prohibiting County employees from making political contributions for any candidates for any elected County office violates employees’ constitutional rights guaranteed under the First Amendment.”

WEEK OF December 18, 2020

Latest Developments:

  • A Superior Court in Los Angeles issued an order turning down a suit to invalidate a California Fair Political Practices Commission (FPPC) regulation. That regulation requires disclosure of public money spent by public entities on election campaigns, an activity that is generally prohibited in the absence of a specific authorization by the Legislature. The Chair of the FPPC said in a release, that “‘This illegal and increasingly-used tactic by local government officials will continue to be a focus and priority for the FPPC.’”
  • The Seattle City Council approved an ordinance to require registration for grassroots lobbying. Registration and reporting are required whenever expenditures are made “exceeding $1,500 in the aggregate within any three-month period or exceeding $750 in the aggregate within any one-month period in presenting a program to the public, a substantial portion of which is intended, designed, or calculated primarily to influence legislation…” The measure takes effect 180 days following approval by the Mayor, which occurred on December 15.
  • The Governor of California issued an internal memo concerning ethics in his office. The Sacramento Bee explains that the Governor is “barring any paid campaign or political consultant from directly communicating on behalf of a client with the governor, members of his staff, or the agencies under his control for the purpose of influencing legislative or administrative action. He is also barring any registered lobbyists from serving as paid campaign or political consultants.” However, the San Francisco Chronicle points out that the memo does not bar revolving-door activity by some of the Governor’s closest friends who are lobbyists.
  • 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 Ohio signed HB 404 which extends many state licenses. The bill is an extension of a previous COVID-related emergency measure. The Ohio Joint Legislative Ethics Committee explains that the net effect of the bill on lobbyists is that all current lobbyist registrations will remain in effect until July 1, 2021. “A new renewal registration window will open in late spring 2021.” However, activity reports are still due by February 1, 2021. 
  • The Oklahoma Ethics Commission met and adopted a new rule that requires candidate committees formed before 2015 dissolve by the end of 2021. The commission considered and amended a proposal to revise lobbyist gift rules to create an exception for informational materials provided by a lobbyist or lobbyist employer. That rule will be considered for adoption at a future hearing. Oklahoma rules have the force of statutes unless rejected by the legislature in the next session. New rules take effect at the end of May 2021, when the legislature adjourns. 
  • The California State Controller announced the appointment of Catharine B. Baker to the Fair Political Practices CommissionBaker is an attorney in the East Bay area of California and replaces Allison Hayward on the Commission. 
  • The New York Joint Commission on Public Ethics met and considered proposed amendments to its regulation governing access to public records. The Commission also issued an announcement that all registrations and reports due in January 2021 will be considered timely filed if filed by January 29, 2021, due to changes made to the Comprehensive Lobby Regulation and changes to the online filing system.

 Reminder:

Just when you thought election deadlines had passed….California’s Governor has called a special election for a State Senate vacancy, triggering a primary election on March 2, 2021 and 24 hour reporting for certain campaign contributions.  Nielsen Merksamer clients will receive a Reporting Reminder with details. The state provides filing calendars on the FPPC’s Website.

 In Case You Missed It:

  • Ethics, Reconsidered: The Washington Post, on MSN, reports that the incoming administration is pondering how to balance the incoming president’s “official power and his family’s private interests.” The President-elect’s asserted that his “family will not be involved in any business” that is in conflict. “That pledge has now been handed over to lawyers for the presidential transition who are drafting new rules for the Biden White House that are likely to be more restrictive than the rules that governed the Obama administration.”
  • Real Money/Virtual Participation: According to the New York Times, the Biden Inaugural Committee is looking for contributions of up to $1,000,000 from corporations and $500,000 from individuals. Contributions at those levels include a menu of perks, described by the Times as including “‘event sponsorship opportunities,’ as well as access to virtual briefings with leaders of the inaugural committee and campaign, and invitations to virtual events with Mr. Biden and Jill Biden, the future first lady, and Vice President-elect Kamala Harris and her husband, Doug Emhoff.”

WEEK OF December 11, 2020

Latest Developments:

  • The United States Senate confirmed the nominations of three new Commissioners to the Federal Election Commission. The three Commissioners, approved on rollcall votes, are Shana M. Broussard (92-4), Sean J. Cooksey (50-46), and Allen Dickerson (49-47). Politico notes that the action restores “a quorum to the embattled agency and (gives) the government’s top campaign finance watchdog its first full slate of commissioners in years.”
  • The Hawaii State Ethics Commission announced that its long-anticipated amended regulations are now in effect. The extensive revisions include new rules governing gifts to public officials and new regulations concerning registration of and reporting by lobbyists. 
  • Montana’s Commissioner of Political Practices posted information (FAQ Question 3) that reflects the Commissioner’s increase of the lobbyist registration threshold from $2,600 to $2,650, effective January 1, 2021. Persons who make an agreement to receive $2,650 in annual compensation for lobbying must register. 
  • The Los Angeles City Ethics Commission announced the appointment of a long-time employee, David Tristan as the Commission’s new Executive Director. Tristan is a 29-year employee who most recently served as Deputy Executive Director of the Commission and replaces Heather Holt, who is termed-out. 

In Case You Missed It:

  • Florida Revolving Door: The Orlando Sentinel reports that notwithstanding a voter-approved constitutional amendment barring legislators from becoming lobbyists for six years after leaving office, four legislators have signed up to be lobbyists since last month’s election. A state department head also left her job in October to “lead a trade group for an industry she used to regulate.” The constitutional amendment, which was approved by 79% of the voters in 2018, does not take effect until the end of 2022.
  • Nice Work if You can Get itFox News reports that the Chair of the House Financial Services Committee has paid her daughter over $240,000 from campaign funds during the last election cycle. According to the article, the “bulk of Karen Waters’ payments were for ‘slate mailer’ services that the daughter provided for the campaign.”
  • Texas Trouble: The Dallas Morning News discloses that the Texas Ethics Commission has fined the Mayor of Arlington for accepting banned corporate contributions and other infractions. A campaign spokesperson “acknowledged oversights, with the campaign taking and reporting contributions ‘in the wrong format or by an incorrect entity.’”
  • European Lobbyist Registration Expanded: The European Parliament, Council, and Commission have established a “joint mandatory lobby register.” However, Politico reports that the agreement gives “each institution the license to individually interpret what it means” and to define which activities require registration. The new agreement adds the Council; the EU Parliament and Council have operated a Transparency Registration since 2011.

WEEK OF December 4, 2020

Latest Developments:

  • The President-Elect of the United StatesInaugural Committee is in business and accepting donations. However, the Committee’s donation page makes clear that it “does not accept contributions from lobbyists,… foreign agents…. or fossil fuel companies, their executives, or from PACs organized by them.”
  • The United States District Court for the District of Columbia unsealed an opinion and order related to obtaining emails in an investigation, which suggests that an unregistered lobbyist lobbied the White House Counsel’s office in an “alleged LDA (Lobbying Disclosure Act) scheme or Bribery-for pardon scheme.”USA Today summarizes the document by asserting that “The Justice Department is reviewing possible evidence of a secret scheme to obtain a presidential pardon in exchange for a ‘substantial political contribution.’”
  • The Senate Rules and Administration Committee approved the three nominees to the Federal Election Commission by voice vote. The nominations of Shana M. Broussard, Sean J. Cooksey, and Allen Dickerson advance to the full Senate for final confirmation.
  • The United States Department of Justice announced that five new individuals, including the former Deputy Mayor for Economic Development, have been indicted in the “widespread corruption scheme” centered around Los Angeles City Hall. The Los Angeles Times, reports that the former Deputy Mayor was “involved in shaking down developers who sought help pushing downtown real estate projects through the city’s approval process.” 
  • The Leon County, Florida Commission adopted amendments (pp. 1022 to 1051) relating to lobbyist registration and reporting under the County’s Code of Ethics Ordinance. Among other things, the amendments (1) provide for electronic lobbyist registration and reporting, including deleting the oath requirement, (2) delete the information exception to registration requirements, (3) revise the penalties for violations, and (4) create an appeal process for any penalties assessed. According to the Tallahassee Democrat, the intent of the revision of the ordinance is “to create more transparency for the public about who may be working to influence policy decisions.”
  • California Local Governments continue to enact their own contribution limits to avoid the state’s new default limit of $4,900 per election for local candidates, which takes effect January 1. The San Luis Obispo County Board of Supervisors adopted an ordinance setting campaign contribution limits at $25,000 per election for county offices. Meanwhile the Inglewood, California City Council approved Ordinance 21-02 (pp. 785–793) capping campaign contributions to city candidates at $100,000 per election.  

Reminders: 

COGEL, the Council on Governmental Ethics Laws, began its 42nd annual conference on December 1. Did you know Arkansas, Missouri, and Tennessee had changes in the law impacting the time, place and manner of campaign contributions? Find out more by attending the panel on Campaign Finance Litigation moderated by Nielsen Merksamer’s Jason Kaune and in the Blue Book of federal, state, local and Canadian litigation edited by Mike Kelly and Evann Whitelam. Interested persons may register here. Programs will be available through the month of December.

In Case You Missed It:

  • Influence for Sale: The Associated Press describes the actions of a major donor who leveraged his status into an influence peddling scheme and pleaded guilty to campaign finance violations. The article portrays him as “a ‘mercenary’ political donor who gave to anyone — often using illegal straw donor cutouts — he thought could help him. Pay to play, he explained to clients, was just ‘how America work(s).’” It notes that “Imaad Zuberi had the ear of top Democrats and Republicans alike — a reach that included private meetings with then-Vice President Joe Biden and VIP access at Donald Trump’s inauguration.”
  • SF Ethics Probe Expands: The San Francisco Chronicle reports that the federal prosecutors made another arrest in the “alleged City Hall corruption scheme.” The Chief of the San Francisco Public Utilities Commission was charged for “allegedly accepting bribes from a contractor — taking international trips, free meals and jewelry in exchange for insider information on city contracts.” He resigned his position according to the Mayor.
  • Pass the Bucks in the Buckeye State: The FBI arrested another Cincinnati City Council Member on federal corruption chargesCleveland.com reports that the Council Member “solicited and accepted $40,000 donations, made to a political action committee supporting his bid for mayor, from a city developer and two undercover FBI agents posing as the developer’s business partners. In exchange, [the Council Member] in December 2018 promised to ‘deliver the votes’ on City Council for a development project.” The Council Member said he “is innocent and vowed to fight the charges.”

WEEK OF November 20, 2020

Latest Developments:

  • The United States Senate Rules and Administration Committee held a hearing on three nominees to the Federal Election Commission on Wednesday. The President nominated Shana M. Broussard, Sean J. Cooksey, and Allen Dickerson to fill empty seats on the Commission. The Gazette Extra reports that, although the committee has not yet scheduled a vote to approve the nominees, the chair hopes to “move this year to confirm (the) three nominees.”
  • The California Fair Political Practices Commission formally approved inflation adjustments to gift and contribution limits. Under recently enacted legislation (AB 571), the limit applicable to state legislative candidates ($4,900) will apply to all city and county offices in jurisdictions that have not adopted their own limits, beginning January 1, 2021. 
  • The New Jersey Election Law Enforcement Commission formally adopted campaign finance adjustments that will apply to the 2021 gubernatorial election. The limit for contributions to candidates for Governor rises from $4,300 to $4,900 per election for 2021.
  • ALASKA CORRECTION: When all the votes were finally counted, Alaska Voters actually approved Measure 2, by a razor-thin margin of 50.55% to 49.45%. That measure requires disclosure of the original source and any intermediaries of contributions to independent expenditure committees over $2,000 in the aggregate during a calendar year. (We should have listened to the Anchorage Daily News which reported early in the month that “Alaska has the slowest ballot-counting process” and that the last votes wouldn’t “be counted until Nov. 18.”)

Reminders:

 COGEL, the Council on Governmental Ethics Laws, begins its 42nd annual conference December 1 at 3 p.m. EST in a virtual format. Interested persons may register here. The conference is free for members this year ($500 for nonmembers) and includes live presentations and prerecorded classes that may qualify for CLE. Programs will be available through the month of December. Nielsen Merksamer’s Jason Kaune moderates the panel on Campaign Finance Litigation and participants have access to a Blue Book of federal, state, local and Canadian litigation edited by Mike Kelly and Evann Whitelam. “COGEL is a professional organization for government agencies and other organizations working in ethics, elections, freedom of information, lobbying, and campaign finance.”

In Case You Missed It:

  • New Administration Purity Test?: According to Roll Call, “Progressive groups want the incoming administration to reject applicants they view as too cozy with corporate America, but Black and Latino lobbyists are mounting a counteroffensive, arguing that such prohibitions could limit diversity in the executive branch.” The issue is whether former registered lobbyists may serve in the Biden administration. Notwithstanding the controversy, the article notes that “corporate lobbyists say they already feel as if the incoming administration has an open ear.” ABC News reports that many prospective appointees may come from one firm “packed with Obama-era powerbrokers,” but that “President-elect Biden will require his appointees to be governed by an administration ethics pledge.” 
  • Washington State Campaign Finance Trial: The Columbian has an article from the Seattle Times describing the trial of a “serial initiative filer” who “solicited kickbacks, laundered political donations and flouted campaign finance law in an ongoing scheme to enrich himself and deceive his political donors and the public.” His attorney said the defendant “disclosed everything required of him under the state’s campaign finance laws and that, even if he hadn’t, it wasn’t his responsibility.” 
  • SF Ethics Probe: According to the San Francisco Chronicle, a former executive of a city contractor has been charged because he “funneled more than $1 million to [the former Public Works director] over the span of several years in an attempt to curry favor with the ex-Public Works director.” He allegedly used nonprofits “as an intermediary to funnel money” to benefit the former director and his family. “If convicted, he faces up to 30 years in prison and hundreds of thousands of dollars in fines.”
  • Canadian Conflict: The Montreal Gazette reports that the Quebec Minister of Economy, Innovation, and Export Trade was formally sanctioned for ethics violations by unanimous vote of the National Assembly. The Minister is the first provincial minister reprimanded by the National Assembly. According to the article, the Minister “placed himself in a situation where his personal interest could influence his independence and judgment as a cabinet minister because of his close friendship with (a) businessman and lobbyist.”

WEEK OF November 13, 2020

Latest Developments:

  • The Supreme Court of the United States, on Monday Nov. 9th, refused to grant cert to a case “challenging the legality of super PACs, which can raise and spend unlimited amounts of money in support of political candidates.” According to The Hill, “[t]he court did not explain its decision or indicate how many of the justices would have taken up the case.” The case was originally filed in 2016 by three bipartisan members of Congress. The FEC provides the relevant case law and history here.
  • Alaska Voters defeated Measure 2, by a vote of 56% to 44%. That measure would have, among other things, required disclosure of the original source and any intermediaries of contributions to independent expenditure committees over $2,000 in the aggregate during a calendar year.
  • Oklahoma City voters approved Proposition 9, which rewrote the city charter limitations on gifts from certain transportation providers and utilities. The ballot measure was approved by 70% of the voters. The measure (see p. 12) updated a charter provision last amended in 1957.

 In Case You Missed It:

  • Transition Team Revolving Door: The Wall Street Journal accounts that, as of November 11th, some “40 people serving on President-elect Joe Biden’s transition team are or were once registered lobbyists,” despite the reported President-elect’s promises to the contrary. Five of these people are currently registered as lobbyists. The Journal reports that the transition team’s “ethics rules don’t impose a blanket ban on lobbyists, but they require individuals who are registered lobbyists, or have registered as lobbyists within the past year, to get approval from the transition’s general counsel to serve on the team,” which have thus far been granted by the dozen.
  • Complaints Up: The Los Angeles Times reports that complaints about campaign law violations in California were sharply up in the period just before the election compared to the 2016 election. According to the article, the “state Fair Political Practices Commission received 445 complaints of campaign finance violations and other offenses from Oct. 1 through election day, compared with 307 in the five weeks leading up to the Nov. 8, 2016, election. The agency said it has so far opened investigations into 112 of the complaints filed in recent weeks.”
  • Foreign National no-no Campaign ContributionsFox 5 San Diego reports that an appeals court has sentenced foreign national Ravneet Singh to one year in prison for making an illegal campaign contribution. Singh was convinced in 2016 “for conspiring with a Mexican billionaire to make nearly $600,000 in illegal campaign contributions to a pair of 2012 San Diego mayoral candidates.” The judgement, which also includes a $10,000 fine, represents a re-sentencing as the appeals court also invalidated a related conviction this week. Essential Ethics covered this story in previous weeks so take a look at past issues for a more complete picture!
  • Personal Use: A former member of the Missouri House of Representatives pleaded guilty to federal charges stemming from personal use of campaign funds. The Louis Post-Dispatch reports that the former representative spent nearly $50,000 on personal expenses, “including for apartment rent, utilities, hotel, airfare and travel expenses and to cover bills at restaurants and bars.”
  • Cincinnati Red-hot Bribery: The FBI arrested Cincinnati council member Jeff Pastor this week for what is called “brazen bribery,” accepting payments from developers for payments. According to The Cincinnati Enquirer, Pastor “began soliciting money from developers within months of taking office and, in some instances, accepted bags of cash in return for his vote or other favorable treatment.”

WEEK OF November 6, 2020

Latest Developments:

  • Oregon Voters approved Measure 107, which permits the state legislature and local governments in Oregon to enact laws to “limit contributions made in connection with political campaigns or to influence the outcome of any election…” It also authorizes the passage of laws that require campaign finance disclosure and that identify persons or entities who paid for political advertisements.
  • Missouri Voters approved Amendment 3, which reduces the threshold for lobbyist gifts to public officials from $5 to zero and reduces campaign contribution limits.  The measure also moves the power to redraw districts from the state demographer to a bipartisan commission.
  • The Federal Election Commission received a complaint from Citizens for Responsibility and Ethics in Washington (“CREW”) alleging that the White House Chief of Staff misused campaign funds. In the complaint, CREW alleges that after Mark Meadows decided not to run for re-election to Congress, he used campaign funds for a number of personal expenses, including “$2,650 to a jewelry store, over $5,800 in payments for field representative mileage, and over $6,500 in spending at numerous restaurants and clubs, … as well as purchases at a grocery store and a ‘cupcakery.’”
  • The Hawaii State Ethics Commission fined the former Chief Examiner of the Department of Commerce and Consumer Affairs, Insurance Division $5,000 for accepting four meals worth a total of $654. According to the Commission’s Resolution of Charge, the former employee considered these “social dinners,” but they were paid for by Risk & Regulatory Consulting, LLC (RRC), a contractor overseen by the former Chief Examiner. The Chief Examiner was responsible for “negotiating the contract rate paid to RRC and for monitoring RRC’s performance of its work on all financial examinations.” 

In Case You Missed It:

  • New FEC Commissioners(?): According to Roll Call, the President of the United States is poised to nominate two new Commissioners of the Federal Election Commission. The article indicates that the two new Commissioners will be Sean J. Cooksey, currently counsel to U.S. Senator Josh Hawley (R-MO), and Shana M. Broussard, who is currently counsel to FEC Commissioner Steven Walther (Ind-NV).
  • Lingering COVID Problems: The Austin, Texas City Ethics Commission is grappling with a transparency problem. The Austin Monitor reports that the Commission meets in a back room at City Hall that was open to the public before the pandemic. But the Commission’s meetings are not broadcast. Currently, the only option for the public is to “wait a few days, and then check for an audio recording.” Participants can call in, but are urged to call in 15 minutes early. Commissioners are now looking at how “meetings could be streamed to the public.”
  • Multi-State Revolving Door: The Indianapolis Monthly reports that the Speaker of the Indiana House of Representatives is a registered lobbyist in the City of New York. The Speaker claims he does not lobby but has been listed for six years as a New York City lobbyist for his employer, College Board. He also assured the reporter that “‘there is an organizational firewall in place to ensure I am not involved in any of my employer’s matters involving the state of Indiana.’”
  • Bipartisan Consonance: According to the Wichita Eagle, both the “Kansas Democratic and Republican party committees likely violated state campaign finance law by failing to disclose which candidates they’re backing and attacking with more than $1.7 million in mailers this election cycle.” The article notes that the “Kansas Governmental Ethics Commission has notified both party committees and asked them to correct this year’s reports, but it’s unclear if the information will be available before the election.” Apparently neither party has correctly reported expenditures since 2010, noting that in “the past decade, both major state parties stopped reporting information that is required by state law.”

WEEK OF October 31, 2020

Latest Developments:

  • The New York Joint Commission on Public Ethics met and considered revisions to the Comprehensive Lobbying Regulations. The newest revisions are subject to formal notice and the state’s rule-making process and will be put through a new 45-day notice and comment period. Nevertheless, staff expects the Commission to approve the proposed revisions before the beginning of the next year as an emergency regulation.  The Commission also approved sending revised Source of Funding Regulations through the same process.
  • The Colorado Court of Appeals, in Dunafon v. Krupa, ruled that the Colorado Independent Ethics Commission is not a state agency, institution, or public body and therefore is neither subject to the Colorado Open Records Act (CORA) nor subject to the Colorado Open Meetings Law (CORL). The court found that the Independent Ethics Commission “is ‘not an executive agency; it is instead an independent, constitutionally created commission that is ‘separate and distinct from both the executive and legislative branches.’” 

In Case You Missed It:

  • Campaign Fund Misuse AllegedMSN reports from the Columbus Dispatch that the ex-speaker of the Ohio House has been using campaign funds to pay his legal expenses associated with federal corruption charges. While legal fees are a permissible expense of campaign committees, the article quotes from Ohio Elections Commission opinions, including “a 1996 opinion, (in which) members noted ‘that an expenditure for legal fees to defend against criminal charges is not an appropriate use of campaign funds on behalf of the officeholder.’”
  • Campaign Account Hacked: The Associated Press reports that hackers stole $2.3 million from the Wisconsin Republican Party’s federal campaign account. “The party noticed the suspicious activity on Oct. 22 and contacted the FBI on Friday… (T)he FBI is investigating.” According to the article, “hackers manipulated invoices from four vendors who were being paid for direct mail for Trump’s reelection efforts as well as for pro-Trump material such as hats to be handed out to supporters. Invoices and other documents were altered so when the party paid them for the services rendered, the money went to the hackers instead of the vendors.”
  • Guilty Plea in Campaign Finance Case: According to Politico, a Florida businessman became “the first defendant to plead guilty in a campaign finance and business fraud case involving associates of Rudy Giuliani.” The report states that “the men used foreign money to influence U.S. political campaigns to benefit their business ventures and to encourage (the U.S. ambassador to Ukraine’s) ouster.” The businessman admitted to a charge based on “false statements made to the Federal Election Commission about a $325,000 donation sent to the America First Action super PAC in May 2018 from a company called Global Energy Producers.”
  • Portland Mayor’s Loan Scrutinized: A Judge in Portland ruled that the Portland City Auditor must examine a complaint about the Portland Mayor’s $150,000 loan to his own campaignOregon Public Broadcasting reports that despite the Auditor’s view that the self-funding limitation “conflicts with the U.S. Supreme Court precedent,” the court “ruled that the city auditor had to follow the rules in the charter and city code and look into the complaint that alleged (the Mayor) violated campaign finance rules with his loan.”
  • Who’s Policing the TextsThe Wall Street Journal reports on wireless companies’ efforts to monitor campaigns that are “seeking to blast out millions of text messages in the days leading up to the election.” According to the article, “Wireless carriers last year agreed to new industry standards that require all political texters to secure explicit consent before sending messages.” But the article points out that campaigns have “cut back on door-to-door canvassing during the coronavirus pandemic,” making texts a “more critical tool.”

WEEK OF October 23, 2020

Latest Developments:

  • The Michigan Secretary of State released inflation-adjusted lobby reporting thresholds, fees, and penalties for 2021. The changes include an increase in the threshold that requires registration from expenditures of more than $2,535 in a 12-month period to $2575 and an increase in the monthly food and beverage limit from $63 to $64.
  • The Government of Yukon announced that “(a)ll lobbyists in Yukon are now required to report their activities. The Lobbyists Registration Act came into effect on October 15, 2020, making registration mandatory for those who meet the criteria set out in the Act.” Anyone who qualifies as a lobbyist should register at the Yukon Lobbyist Registry.  
  • The United States Department of Education issued a report that raises the specter of foreign influence and access to sensitive information at institutions of higher learning. Not unlike the Foreign Agents Registration Act (FARA), which requires disclosure of foreign agents attempting to influence the government, “Congress requires U.S. colleges and universities (‘institutions’) publicly to report foreign gifts and contracts to the U.S. Department of Education.” Last week we reported on the State Department’s effort to figure out the extent to which “think tanks” that provide it with information are funded by foreign sources. The Department of Education report found that only a few institutions self-report foreign money received and “many (institutions) appear to have inadequately, or in some cases failed entirely, to report as required by law.”
  • 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 Louisiana Legislature, in an extraordinary session, approved several election-related measures. Pertinent to political activity by individuals, corporations, and non-profits, HB 51 bans state and local officials from soliciting or accepting private donations to conduct elections during a state of emergency. The law specifically exempts the solicitation or use of in-kind contributions related to expenses related to seeking office. The bill goes to the Governor for his approval. 

In Case You Missed It:

  • FEC still MIAGovernment Executive reminds us that the Federal Election Commission cannot take any formal actions during this election season as it still lacks a quorum. One observer pointed out that the commission can’t meaningfully investigate violations, impose fines, engage in enforcement actions, or issue advisory opinions. He also notes that “candidates or political groups hoping to get legal guidance from the FEC have been unable to do so for most of the 2020 election cycle.”
  • October Surprise in Montana: According to the Bozeman Daily Chronicle, the Montana Commissioner of Political Practices found that a candidate for Governor “failed to properly report in-kind contributions” and “also accepted donations beyond the state limit.” The candidate’s campaign asserts that a “clerical error” was involved; the “commissioner’s office is now negotiating a settlement with (the candidate’s) campaign.”
  • Second Amendment Disclosure: The Casper Star-Tribune reports the Wyoming Gun Owners (WYGO) have been ordered to register as a result of paying for certain advertisements “targeting several candidates in the upcoming November elections.” The article quotes the letter, which asserts that the “‘Secretary of State’s Office has reviewed the advertisements paid for by WYGO and determined that they are clearly electioneering communications.’” The letter also notes that the organization is “‘not currently registered with the state as either a lobbying organization or a political action committee, which is required.’”
  • More Gun News: The San Jose Mercury-News reports that the main witness in an “alleged bribery scheme to trade political donations supporting Santa Clara County Sheriff Laurie Smith for concealed-carry weapons permits pleaded guilty.” According to the article, the group sought “to obtain up to a dozen concealed-carry weapons permits from the Santa Clara County Sheriff’s Office in exchange for $90,000 in donations to groups that supported” the Sheriff.
  • Lobbying Largely Immune from PandemicPolitico compares lobby revenue reported for the third quarter of 2020 with prior quarters and concludes that “some of Washington’s top lobbying firms saw near-record lobbying revenues in the third quarter of this year, proving once again that 2020 isn’t a typical year.” Despite the pandemic and the election year, which “isn’t traditionally a strong period for lobbying work,” apparently business “was driven by the federal government’s response to the pandemic and the massive (coronavirus) spending package.”
  • Virtual K StreetThe Hill reports on how lobbyists “are preparing for the difficulty of virtually getting to know newly elected members of Congress when they come to Washington for orientation next month.” The task is difficult “without in-person meetings or the fundraisers that typically populate K Street’s calendar shortly after a general election.”

WEEK OF October 16, 2020

Latest Developments: 

  • The United States Department of State issued a release requesting that U.S. “think tanks and other foreign policy organizations that wish to engage with the Department disclose prominently on their websites funding they receive from foreign governments, including state-owned or state-operated subsidiary entities.” The statement notes that disclosure is not a “requirement,” but whether disclosure is made will be considered.  It also makes clear that the “policy is distinct from disclosure requirements under the Foreign Agents Registration Act (FARA).” 
  • The Washington State Attorney General announced an agreement that Twitter will pay a $100,000 stipulated judgment to settle charges that it “failed to maintain and make available for public inspection documents and books of account specifying statutorily required information concerning political advertising sponsored through Twitter’s online platform.” The Attorney General’s announcement states that “at least 38 Washington candidates and committees reported paying $194,550 for political advertising on Twitter’s platform since 2012, and Twitter unlawfully failed to maintain the required records.”
  • The North Dakota Ethics Commission adopted gift rules for lobbyists. The state’s constitutional ban on gifts from lobbyists (Section 2) takes effect on January 1, 2021, but excludes gifts “given under conditions that do not raise ethical concerns, as determined by rules adopted by the ethics commission.” The new Commission rules provide exceptions that include campaign contributions; transportation, lodging, and meals for a speaker, panelist, or presenter, or a participant at a ceremonial event; gifts shared as a cultural or social norm at a public or private social and educational event; and food and beverage for immediate consumption. 

In Case You Missed It:

  • California Major Donors Listed: The San Jose Mercury-News reveals the list of the top Democrat and Republican donors in the state, along with a rundown of the major contributors to California ballot measures. The article points out that “(c)ampaign finance records fall quickly these days, as big money gets bigger and new records are set each election cycle. Still, what’s happening in 2020 is staggering.”
  • Watchdog Invites Other Watchdogs: According to CalMatters, concern for the misuse of taxpayer money to campaign remains high. With nearly $1.5 billion annually in new taxes and nearly $15 billion in bonds on the ballot, local officials “are tempted, in their zeal to persuade voters to vote for new taxes and bonds, to violate a state law prohibiting them from using taxpayer funds for campaign purposes.” Following success in fining Los Angeles County $1.35 million for violating that prohibition, the California “FPPC invited the public to use its ‘AdWATCH’ program to monitor the materials local officials are using to promote their tax and bond measures and upload questionable items to the agency for examination and perhaps investigation.” At this week’s FPPC meeting, staff advised the Commissioners that investigations of misuse in the current election have been opened.
  • Watchdog Needs a WatchdogFox 5 Atlanta reports that following a vote in which the Georgia Government Transparency and Campaign Finance Commission reached agreement with a judicial candidate for a $120 fine for accepting a contribution in excess of the legal limit, it became apparent that the candidate previously paid one of the members of the commission as a political strategist. Further investigation revealed multiple clients of that commissioner have appeared before the commission. In one instance a candidate “paid Commissioner Thompson’s company $8000 one month before his case came before the commission.”
  • Plea Deal for Financial ConflictCBS SF Bay Area reports that the “former executive director of the Oakland-Alameda County Coliseum Authority has reportedly accepted a plea deal on charges he violated conflict-of-interest laws by seeking a fee while negotiating the naming rights of the stadium.” The former ED will plead guilty to a misdemeanor, “serve three years probation under the deal, take an ethics course, and pay a fine to the stadium authority.” Court records indicate he pleaded no contest to a misdemeanor count of influencing a government decision in which he had a financial interest. A felony count of financial interest in a contract made in his official capacity was dismissed.

WEEK OF October 9, 2020

Latest Developments:

  • The California Fair Political Practices Commission has proposed a series of regulations that would adjust contribution and gift limits in the state, beginning January 1, 2021. The commission will hold a hearing on the regulations at its regular meeting this month. The proposals include increasing contribution limits for gubernatorial candidates from $31,000 to $32,400 and for legislative candidates from $4,700 to $4,900.  The state gift limit would increase from $500 to $520. 
  • The United States Department of Justice filed a criminal information in Washington, D.C. charging a former fundraiser with a violation of the Foreign Agents Registration Act for failing to register in connection with lobbying the Department of Justice on behalf of a Malaysian Fugitive. The Hill reports that the fundraiser conspired to “unsuccessfully lobby the Department of Justice to drop a probe into the $4.5 billion embezzlement scandal involving Malaysia’s state-owned investment fund, 1MDB.” 

In Case You Missed It:

  • Mayor Charged: The Mayor of Rochester, New York was indicted on two felony counts related to campaign finance and coordination violationsUSA Today reports that the Mayor allegedly coordinated with a PAC to bolster her reelection campaign spending. The allegations assert that transfers “in the hundreds of thousands of dollars” occurred.
  • Record Fine in Big Sky Country: According to the Montana Free Press, a “judge has ordered a pair of corporations to pay more than $1.76 million in fines for their roles in an illegal campaign scheme.” Half the amount was a penalty for “violating state campaign finance laws that prohibit corporations from contributing directly to campaigns.” The other half was for failure to report the contributions.
  • Self-Financing ChallengedOregon Public Broadcasting reports that a Portland mayoral candidate has challenged the incumbent’s loan of $150,000 to his own campaign as a violation of voter-approved restrictions. The provision has not been enforced, as the “city has taken the position that the self-funding portion of the charter conflicts with U.S. Supreme Court precedent and would not hold up in court.”
  • No Charity This Year: The Washington Post called out the Mayor of the District and a Council Member who “have not made a single donation this year from the special charitable funds they control.” Each has a “constituent services fund,” which is made up “mostly from leftover campaign money. The Mayor has “$219,000 in her fund for needy residents. During the pandemic, she has given $0.”

WEEK OF October 2, 2020

Latest Developments:

  • The Arizona Court of Appeals decided The Arizona Advocacy Network Foundation v. State of Arizona, which reinstates a statute that limits the Citizens Clean Elections Commission’s ability to require disclosure of political spending by nonprofit organizations. The Commission had sought to reclassify some tax-exempt organizations as political committees. The Arizona Daily Star, however, notes that the “appellate judges said lawmakers had no right to limit the Clean Elections Commission to policing only independent expenditures made on behalf of candidates who are accepting public financing.”
  • The United States Department of Justice announced that a grand jury has indicted a former Indiana state senator and a casino executive for laundering illegal corporate campaign contributions. The Associated Press reports that the executive allegedly recruited 15 individuals to act as straw donors and make maximum $2,700 contributions to the state senator’s federal campaign for election to the House of Representatives using corporate money.
  • The Governor of California signed AB 2151, which requires local governments that receive campaign reports place those reports on the Internet within 72 hours of the deadline for filing the reports. The law also requires that the agencies retain the records for four years from the date of the election to which they pertain.
  • The New Mexico State Ethics Commission reached a settlement with the Committee to Protect New Mexico Consumers to disclose “expenditures on campaign advertisements supporting a ballot question .” According to the Commission’s statement, “individuals or entities who spend more than $3,000 on independent expenditures are required to make disclosures.”

In Case You Missed It:

  • CARES Campaigns BewareWest Hawaii Today reports that the Hawaii County Council voted “to give each of the nine members $100,000 to direct to specific projects in their council district” out of an allocation of $80 million to the county from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. But handing out CARES money during an election season may run afoul of a prohibition in “federal laws about using CARES money to lobby or influence elections.”One Council Member who faces a runoff in November was barred from personally distributing the funds.
  • Behind Closed Doors: According to the Tennessean, a judge found that the Tennessee Registry of Elections violated the state’s Open Meeting Act when it reduced a state representative’s fine in a “secret vote” so that the representative would be eligible to file for reelection. “The vote was taken the night before the election filing deadline.” The article points out that the representative needed a resolution because he “likely would not have been able to file as a candidate without a settlement of his debt.”
  • Charitable Giving Plan Linked to Public Sale: The Florida Times-Union reports that when the publicly owned Jacksonville Electric Authority was put up for sale by the city, a potential buyer – Florida Power and Light – planned a campaign of making charitable contributions to charities associated with various public officials who would vote on any sale. Florida Power and Light “identified 15 ‘potential sponsorship opportunities’ and notes about each one,” including close ties to various officials. At the time, “bidders and their representatives were strictly forbidden from discussing the sale of JEA with any officials who would have a role in the decision-making process.” The article explains that the documents disclosing the plan were “obtained by a City Council committee investigating the failed sale.”

WEEK OF September 25, 2020

Latest Developments:

  • The New York Joint Commission on Public Ethics approved a new Advisory Opinion regarding gifts to third parties, including gifts from interested sources, that are solicited by public officials (also known as behested payments).  In addition, the Albany Times-Union reports that, after 15 months with no Executive Director, that position has been reposted.  The article notes that the Governor’s favored candidate for the post who “has been largely serving as the acting executive director,” has not been appointed as “there are not enough votes in favor” of her appointment.
  • The California Attorney General issued Opinion No. 18-901, which answers three questions about the California Fair Political Practices Commission.  The opinion (1) makes clear that Members of the Commission may not meet “privately over lunch” to discuss the state’s open meeting act; (2) the Commission may take action on matters listed on its agenda even if listed as a matter only on the agenda to be “discussed”; and (3) individual Members may respond to an email sent to all five members and other members of the public by replying only to the members of the public and not the other Commission Members.
  • The Cook County Board of Ethics has its third chair this year,Thomas Szromba.  The Chicago Tribune reports that the new chair is “principal senior counsel at Boeing” and the longest serving member of the current board.

In Case You Missed It:

  • Disclosing Contributions Never Sent:  The company behind the scandal that led to the ouster and arrest of the Speaker of the Ohio House filed a disclosure report in late August showing it made a number of contributions in early July before the scandal broke. The Business Journal (Youngstown) reports that those House Members, however, never received the reported contributions.  According to the article, a spokeswoman for the energy company “said that PAC donations are included in the report once they are placed into the accounting system to generate a check.  FirstEnergy opted to hold those checks that were not mailed after the FBI announced its investigation July 21, allowing more time for the company to investigate and assess the situation…. ‘FirstEnergy has canceled the unmailed checks from July 2020 out of an abundance of caution.'”
  • LA City Council Scandal Response:  The Daily Breeze reports that a city council committee “advanced several proposals on Wednesday, Sept. 23, intended to create more oversight and transparency of city development projects, in response to recent corruption cases.”  The Rules, Elections, and Intergovernmental Relations Committee considered several concepts including one “to seek ways to require any meetings between developers and individual council members be disclosed.”
  • Inaugural Contributions are Different:  The Jackson Clarion-Ledger notes that the Governor of Mississippi’s Inaugural Committee “has dissolved – and it’s unclear where its funds went.”  The article points out that inaugural contributions are unregulated in the state. “There is no contribution cap.  There is no public disclosure of donors.  There is no public accounting of how the money was spent.”
  • Electric Dance Around:  The Illinois Citizens Utility Board, a nonprofit, nonpartisan organization created by the state “can’t accept power company money.”  But WBEZ reports that the Board has received “millions of dollars in funding from a pair of ComEd-funded foundations over the past 20 years.”  Board members have also received gifts of entertainment from the foundations.

WEEK OF September 18, 2020

Latest Developments:

  • The Mayor of San Bernardino City vetoed an effort to continue unlimited campaign contributions in municipal elections.  The measure, MC-1543 (see pp. 37-41), is designed to avoid a state-imposed limit of $4,700 per election that will apply beginning January 1, 2021, in the absence of adoption of a local limit.  The San Bernardino Sun explains that four of the seven-member council favor the state limit; three prefer no limits.  The matter will likely be taken up again at the October 7, 2020 meeting.
  • The Chicago Board of Ethics announced that it would begin enforcing “the ban on lobbying by elected officials from the state or other units of local government in Illinois,” beginning October 1.  The ban took effect On April 14, 2020, but enforcement was postponed pending proposed changes.  Those changes have not been approved.
  • Saskatchewan Bill 195, which reduces the threshold requirements to register as a lobbyist was approved by the Lieutenant Governor in Council and took effect this week.  The measure reduces the threshold that requires registration from 100 hours of lobby activity to 30 hours per year.  The measure also bans gifts from lobbyists to public officials being lobbied.
  • The City Council of Fort Collins, Colorado approved two ordinances to revise elections procedures.  Ordinance 109-2020, among other things, bans certain committee-to-committee transfers.  Ordinance 112-2020 requires that contributions from LLCs be attributed to an individual and limits contributions to PACs that support candidates.

In Case You Missed It:

  • Personal Use Plea:  A now former Alabama State Senator pleaded guilty to misusing campaign funds.  Al.com reports that the Senator admitted to intentionally depositing campaign contributions into his personal account when he was a Montgomery City Council Member.  The Senator resigned on September 1 and was arrested two days later.  He “agreed to pay a $3,000 fine and to not run for or accept a public office for 10 years.”
  • More SF Corruption Charges:  The San Francisco Chronicle reports that two more contractors have been charged with bribing the former head of the Department of Public Works “with $20,000 in meals and a $40,000 tractor to use at his vacation home.  In exchange, prosecutors said, [the Director] provided the pair with ‘a steady stream of illegal inside information’ on a lucrative contract to build and operate an asphalt recycling plant.”
  • Revolving Door Temporarily SlowedRoll Call analyzes a new think-tank report about the congressional staffer brain drain caused by the revolving door.  The report begins with the observation that “Congress is a funnel to lucrative jobs in lobbying.  Between 40−45 percent see the private sector as their next career step.”  The Roll Call article considers the effect of COVID-19, noting that although “some K Street job opportunities have dried up, it seems a largely temporary phenomenon.”

WEEK OF September 11, 2020

Latest Developments:

  • The United States Department of Justice announced that a Glendale attorney pleaded guilty to conspiring to make and conceal conduit and excessive campaign contributions during the U.S. presidential election in 2016 and thereafter.”  He was accused of making “unlawful contributions to political committees, thereby circumventing contribution limits and causing the political committees to unwittingly submit false reports to the Federal Election Commission.”  Reuters reports that the attorney was “general counsel of Allied Wallet, a credit card payment services company,” and that other “executives at Allied Wallet were also allegedly in on the campaign donation scheme.”
  • The Massachusetts Office of Campaign and Political Finance announced a disposition agreement in a case in which a limited liability company made contributions to a Boston mayoral candidate by reimbursing employees for their contributions to the candidate.  Massachusetts prohibits contributions from corporations, including from LLCs.  The company agreed to pay a $75,000 fine for its scheme.  In one instance, 20 employees each donated $1,000 on the day following receipt of $1,000 checks from the company.

In Case You Missed It:

  • Postmaster General’s Contributions Scrutinized:  The Associated Press reports that the Postmaster General is facing an inquiry by House Democrats into “allegations that he encouraged employees at his former business to contribute to Republican candidates and then reimbursed them in the guise of bonuses, a violation of campaign finance laws.”
  • New Jersey Straw Donors Investigated:  According to the New Jersey Herald, public records show that a New Jersey law firm “earned more than $16 million from 20 public entities since 2010.”  At the same time, “friends and family members of a partner at [the firm] donated over $200,000 on behalf of the firm to politicians in towns all over New Jersey.”  The partner allegedly “recruited the five straw donors with an unnamed co-conspirator and reimbursed them for their donations.”  The New Jersey Attorney General “says the amount that traded hands was about $239,000.”
  • Publicly Financed Lobbying Reviewed:  Kansas is reviewing the amount of public funds that are spent on registered lobbyists.  The Salina Post describes a report by the Kansas Legislative Division of Post Audit to review “public funding from state agencies, local governments or associations tied to government activities.”  The report notes that the “lobbyists disclosed this universe of clients bankrolled by taxpayers paid them nearly $1.3 million in tax dollars during 2019.”  The report itself concludes that it is “not possible to know the full amount of public funds spent on lobbying” and recommends that the legislature “include a penalty for lobbyists who do not file a timely public funds report with the Secretary of State.”
  • Undisclosed Political Contributions:  The Wisconsin Examiner reports that a complaint filed with the IRS alleges that a nonprofit organization transferred “nearly $1 million” to its related 527 independent expenditure committee but failed to disclose the transfer to the IRS on its annual Form 990 filings.The complaint states that the nonprofit “failed to report any of this political campaign activity to the IRS,” but notes that the independent expenditure committee reported to the Wisconsin Ethics Commission that it received the contributions from the nonprofit.
  • Free Food a Victim of Pandemic:  The Detroit News reports that lobbyist spending on food and drink for Michigan officials dropped 62% this year.  Lobbyists were left with “fewer opportunities for direct access to lawmakers.”  Restaurants were closed by order of the Governor from mid-March to early June.
  • Additional Spending Reportedly Passes One Billion Dollars:  The Washington Times reported that “political groups’ dark money” spending is set to exceed $1 billion reported to the Federal Election Commission since the Supreme Court’s Citizens United decision in 2010.”   Drawing on studies from Issue One, an organization focused on campaign reform, the article apparently includes some fully disclosed independent expenditures, contributions by LLCs and state contributions disclosed after elections.  By that organization’s calculations, 54% of this additional money supported Democrats while 31% supported Republicans.  The article illustrates how different uses of the term “dark money” clouds the debate over disclosure and limits.

WEEK OF September 4, 2020

Latest Developments:

  • A United Stated District Court in Missouri issued an injunction in Make Liberty Win v. Zigler.  The court enjoined the Missouri Ethics Commission from enforcing a requirement that committees file a statement of organization at least 60 days before an election.  The plaintiff is a federal PAC that sought to establish a state PAC in order to influence a Missouri election.
  • A United States District Court in Montana upheld the Governor of Montana’s Executive Order 15-2018.  The Associated Press reports that the judge “upheld an executive order by Montana’s governor that requires companies to report political spending if they want to bid on large state contracts.” Specifically, the Executive Order requires “all entities submitting offers for state government contracts with a total contract value of over $25,000 for services or $50,000 for goods to disclose ‘covered expenditures’ [political contributions or expenditures] that the contracting entity has made within two years prior to submission of their bid or offer.”

In Case You Missed It:

  • FARA Guilty Plea:  The Associated Press reports that the American consultant involved in “an illicit lobbying effort to get the Trump administration to drop an investigation into the multibillion-dollar looting of a Malaysian state investment fund,” pleaded guilty.  Since we reported this story last week, she has pleaded “to a single count involving a violation of the Foreign Agents Registration Act, which requires individuals enlisted by foreign entities to lobby the U.S. government to register that work with the Justice Department.”  The unregistered agent “faces up to five years in prison and a $10,000 fine when she’s sentenced in January.”
  • Chicago Corruption Plea:  According to WBEZ, the former Cook County Commissioner charged with corruption, reported here last week, has reached a plea agreement.  He has admitted “he took ‘multiple extortion and bribe payments’ worth a total of more than $250,000.” He was investigated after telling a local businessman that campaign contributions were a “‘fixed cost’ of doing business in his district.”
  • Got His Goat:  A public official in Arizona resigned after accepting a goat as compensation for helping a group of farmers who were trying to secure water rights.  The Associated Press reports that the official “used city workers” in what was characterized as an “outside job.”  The farmers hired the official “as a consultant to help them get irrigation water from an (sic) property association, paying him with a goat for his work and agreeing to provide additional [cash] compensation if he was successful.”
  • Red Light Corruption:  The Chicago Tribune reports that a “former executive for a red-light camera company who wore a wire for the FBI as part of a sprawling public corruption investigation was charged Monday with bribery conspiracy in an alleged scheme to get cameras installed in Oak Lawn.”  The article points out that his previous cooperation “led to charges against a number of Democratic politicians and power players.”

WEEK OF August 28, 2020

Latest Developments:

  • The United States Court of Appeals for the D.C. Circuit issued an opinion in the case of CREW v. FEC, which struck down Federal Election Commission regulations and upheld the statutory requirement that contributors of $200 or more to independent expenditure committees be disclosedPolitico explains that the court found “the FEC’s regulations on the issue are invalid because they don’t go far enough to require the disclosures Congress mandated in the Federal Election Campaign Act.”  It is unclear whether Crossroads GPS, the real party in interest, will appeal.
  • Voters in the City of Naples, Florida approved a measure to create an independent Commission on Ethics and Governmental Integrity in the city.  Within the Commission is an Office of Ethics and Governmental Integrity headed by an Executive Director, which will have jurisdiction over lobbyist registration, reporting, and regulation, among other things.  The Naples Daily News reports that the measure was approved by 62% of the voters.
  • The North Dakota Supreme Court issued an opinion in Haugen, et al v. Jaeger, dropping Measure 3 from the November ballot.  We previously reported that the ballot measure would have created a top-four primary, required ranked-choice voting in the general election, and empowered the State Ethics Commission to redraw legislative boundaries.  The court explained that the initiative petition must contain the “measure’s full text” and the constitution prohibits “incorporating statutes by reference in a measure to amend the Constitution.”

Reminders: 

Corporate Political Activities 2020 – Government Contracting During COVID-19 and More:   The Pracitising Law Institute (PLI) will conduct its annual two-day conference online this year, on September 10 – 11, 2020.  Check out the expanded program on government contracts with Elli Abdoli, a revamped panel on nonprofits with counsel from the Human Rights Campaign and the popular, expanded Corporate Compliance and Ethics Program.  You may register here.  Clients will receive emails about a workshop and discounts for the conference.

Poll Workers Needed! – The American Bar Association Standing Committee on Election Law  is encouraging lawyers to step up and serve as poll workers during the upcoming November election.  The ABA is partnering with the National Association of Secretaries of State and the National Association of State Election Directors to create a gateway to the Secretary of States’ website, CANIVOTE.ORG.  That site directs any interested individual to a site where a person can sign up to be a poll worker in his or her own state.

In Case You Missed It:

  • Another FARA Prosecution:  The Justice Department has charged an American “consultant” with failure to register under the Foreign Agents Registration ActCourthouse News Service reports that the consultant allegedly lobbied the Trump Administration to drop criminal charges in a Malaysian money-laundering case.
  • Appeals Over:  Sheldon Silver, former Speaker of the New York Assembly, began his six-and-a-half-year sentence for corruption this week.  He was charged in 2015 and convicted in 2018.  The Associated Press reminds us that he was “convicted in a scheme that involved favors and business traded between two real estate developers and a law firm. He supported legislation in Albany that benefited the developers, who then referred certain tax business to a law firm that paid him fees.”
  • Personal Use Charges:  A powerful North Carolina Legislator was charged with a “scheme to secretly siphon donors’ money out of his campaign account and put it to personal use,” according to the Charlotte News & Observer.  The article notes that “he suddenly announced he was resigning from the state legislature, effective immediately.”  He was later charged “with not filing taxes and making false statements to a bank, in relation to his campaign finance scheme.”
  • Federal Plea:  A Los Angeles lobbyist agreed to plead guilty in the City Hall corruption case that continues to fester.  The Los Angeles Times reports that the lobbyist will admit to conspiring with an indicted Council Member to commit bribery.  The lobbyist faces up to five years in federal prison and has agreed to cooperate with prosecutors.
  • Cook County CorruptionWBEZ reports that a Cook County Commissioner has been charged with extortion in a case in which the Commissioner sought to shake down constituents for campaign contributions.  According to the article, the “victim paid the money after being ‘induced by the wrongful use of actual fear and threatened fear of economic harm.'”

WEEK OF August 21, 2020

Latest Developments:

  • The  United States District Court in Missoula, Montana, in Doctors for a Healthy Montana v. Fox, overturned Montana’s statute that requires that PACs use “a name or phrase: (i) that clearly identifies the economic or special interest, if identifiable, of a majority of its contributors; and (ii) if a majority of its contributors share a common employer, that identifies the employer.”  The court found that the law was “not a reasonable solution to the problem (‘of misleading voters through committee names’).”
  • 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 Utah Legislature returned August 20 for a special session.  According to the Salt Lake City Tribune, the legislature is meeting to consider COVID-related matters, including issues related to schools and the November election.
    • South Carolina’s Legislature will return on September 2, 2020 for a special session.  According to The State, the session “will likely expand absentee voting to registered S.C. voters ahead of the Nov. 3 general election because of the ongoing threat of COVID-19.”
  • The California Fair Political Practices Commission announced a $1.35 million penalty as a settlement with Los Angeles County in a matter in which the county spent county funds to support a tax increase on the ballot.  The state will split the money with the Howard Jarvis Taxpayers Association, which sued the County over the violations.  As Dan Walters, in CalMatters, points out — using public funds to support or oppose ballot measures is prohibited, but many public officials”often spend countless millions of taxpayer dollars on lavish ‘information’ campaigns that don’t even pretend to be neutral.”  Commissioner Hayward also announced at the meeting that she is leaving the Commission.

Reminders: 

Corporate Political Activities 2020 – Latest Developments:   The Pracitising Law Institute (PLI) will conduct its annual two-day conference online this year, on September 10 – 11, 2020.  You may register here.  Nielsen Merksamer clients will join together as customary the day before in a virtual client workshop to discuss new developments in political law, to share experiences and best practices and to earn CLE credit.  Clients and invitees will receive a save-the-date communication and discounts for the PLI conference.

In Case You Missed It:

  • FEC Diversity QuestionedThe Fulcrum reports that five dozen Federal Election Commission staff members sent a letter to the President and Senate leadership asking that they “nominate and confirm Commissioners of color.”  The article points out that, in “its 45-year history, the Federal Election Commission has had 31 commissioners – all but one of them white [Ann Ravel].”
  • Ohio Ethics Irony:  The former Ohio House Speaker, recently charged with racketeering, remains a member of the Joint Legislative Ethics Committee, “the body that investigates and rules on ethics and lobbying matters for the Ohio General Assembly.”  The Dayton Local News reports that the state law was written in a “way so that legislative leaders couldn’t easily remove JLEC members hostile to their interests and replace them with friendlier members.”
  • North Dakota Election Initiative:  Voters will consider an initiative measure in November that would create a top-four primary, require ranked-choice voting in the general election, and empower the State Ethics Commission to redraw legislative boundaries.  The Dickenson Press reports that the measure was certified while a challenge is pending before the State Supreme Court.  The Secretary of State indicated that ballots will be drafted by August 31, urging the court to reach a decision before that date.
  • Chicago Ethics Politics:  The Chicago Tribune interviewed ousted members of the Cook County Board of Ethics.  The deposed chair laments that recent “instances of political patronage and corruption investigations” makes her “wish Cook County’s Board of Commissioners had made progress on the suggested ethics reforms.”  According to the article, “three of the board members who crafted the reforms are gone, and their recommendations haven’t moved forward.”
  • Virtually NowhereNBC News reports on the effect that holding national political conventions on the internet has on lobbyists.  The report points out that “the absence of in-person conventions means the lobbyists have been effectively sidelined.”  The report quotes a former congressmember, now a lobbyist, who opines that “‘Lobbyists are going to save a lot of money, but they’re going to lose an opportunity to have influence and socialize and meet a lot of people that you would not otherwise.'”

WEEK OF August 14, 2020

Latest Developments:

  • 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:
    • Minnesota Legislature returned for a third special session this year.  The stated purpose is “to extend the COVID-19 Peacetime Emergency originally declared on March 13, 2020.”
    • The New York Joint Commission on Public Ethics, at its August meeting, indicated that the Commission’s Albany office will reopen by the end of August.
  • The New York Joint Commission on Public Ethics has formally published its proposed revisions to the comprehensive lobbying regulations.  The Commission has received and published a number of comments, including from Nielsen Merksamer.  The comment period closes on September 13.
  • The Florida Commission on Ethics, at its recent meeting, reviewed an allegation that a lobbyist “failed to properly register as an Executive Branch Lobbyist for a principal she represented and that she failed to file compensation reports for that principal as required by law.”  The Commission “found ‘no probable cause’ to believe that National Rifle Association lobbyist Marion Hammer didn’t adhere to state lobbyist registration requirements” or report compensation for lobbying, according to a report by the Florida Bulldog.  On the other hand, Politico reports that the lobbyist allegedly “received payments from the National Rifle Association under contracts that were improperly handled, according to a civil lawsuit filed Thursday by New York Attorney General Letitia James.”

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.   You can earn CLE credit and help the ABA formulate proposals to update election, campaign, and government ethics laws for the Twenty-First Century.   Join the conversation about Gender Parity in the Electoral Process on Monday, August 24.   Register here.  (Free for Members.)

Corporate Political Activities 2020 – Latest Developments:   The Practising Law Institute (PLI) will conduct its annual two-day conference online this year, on September 10 – 11, 2020.  You may register here.  Nielsen Merksamer clients will join together as customary the day before in a virtual client workshop to discuss new developments in political law, to share experiences and best practices and to earn CLE credit.  Clients and invitees will receive a save-the-date communication and discounts for the PLI conference.

In Case You Missed It:

  • L.A. Corruption Response:  The Los Angeles Times reports that the Los Angeles City Attorney is proposing an ordinance to allow the city to “revoke city permits and approvals for real estate projects if the City Council finds that developers or their representatives engaged in corruption.”  The proposal follows disclosure of a scheme in which a Council Member was indicted for allegedly accepting bribes from developers.  The proposal would also, in the case of projects tainted by corruption, “allow real estate developers and others to be barred from pursuing future developments in Los Angeles for a set period of time, or ban them permanently.”
  • L.A. City Council Ponders Disqualification:  The Los Angeles City Council, in response to the corruption probe described above, is considering a disqualification ordinance.  The Breeze reports that “city officials would be barred from voting on any issue affecting individuals or organizations donating to their campaigns.” Under the proposal, the city’s Ethics Commission would be asked to “review the recusal standards of other agencies,” and make recommendations “to improve the city’s conflict-of-interest policies.”
  • More California Local Contribution Limits: As the time approaches when California imposes contribution limits on local jurisdictions (under AB 571, which is operative January 1, 2021), more local jurisdictions may move to opt out and adopt their own limits.  The Riverside Press-Democrat reports that Riverside County is considering a $20,000 contribution limit, with some exceptions.
  • Chicago Corruption Plea:  The Chicago Tribune reports that a former Deputy Commissioner of the Chicago Department of Aviation is preparing to plead guilty to corruption charges.  The Deputy Commissioner allegedly bribed a state senator while working as a lobbyist for a construction company.

WEEK OF August 7, 2020

Latest Developments:

  • 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 Legislature adjourned its special session that focused on COVID-19 on August 6.  The Legislature passed several measures including AB 4, which revises election procedures due to the pandemic.
    • The Idaho Legislature will  meet in special session beginning August 24.  Idahonews.com notes that the “special session will be unprecedented in Idaho political history because there’s never been a special session in the midst of a pandemic.”  The session is expected to include election and liability issues related to the COVID-19 crisis.
  • The Governor of Minnesota announced four appointments to the six-member Campaign Finance and Public Disclosure Board. According to the Minneapolis Star-Tribune, the vacancies and lack of a quorum on the board “threatened to paralyze the panel’s political watchdog work in the midst of an election year.”  The article notes that “appointments require approval by a supermajority of lawmakers in both the state House and Senate, although they can begin their work immediately pending the Legislature’s return for its next regular session in January.”
  • The Fresno County Board of Supervisors approved a campaign contribution limit ordinance.  The ordinance sets a contribution limit of $30,000 per individual or any other entity, such as a PAC, per election cycle.   The measure faces a final vote on August 18.  According to GVwire.com, the Board vote was unanimous.  In the absence of taking this action, board limits would default to the state limit of $4,700 per election cycle in 2021.
  • The Federal Election Commission, in a Matter Under Review, reached an agreement with a federal contractor regarding a violation of the federal prohibition on contractor contributions.  Bloomberg Government explains that the federal contractor “was fined $17,000 for violating the longstanding ban on campaign contributions from a government contractor when it gave to the Congressional Leadership Fund, an independent-expenditure-only political action committee…”  The article notes that the “commission voted in secret to fine the company during a brief period earlier this summer when a quorum of commissioners was restored.”  The contractor’s lawyer indicated that the contractor “didn’t even know campaign money from government contractors was illegal.”

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.   You can earn CLE credit and help the ABA formulate proposals to update election, campaign, and government ethics laws for the Twenty-First Century.   Join the conversation about Gender Parity in the Electoral Process on Monday, August 24.   Register here.  (Free Members.)

In Case You Missed It:

  • Another Energy Company ImplicatedMSN picked up a Columbus Dispatch article that  names a second energy company as a source of dark money in a growing Ohio scandal.  Murray Energy Company is reportedly the “Company B” named in the indictment of the former Speaker of the Ohio House of Representatives.  “Dark Money Group 1,” referenced in the indictment, has been identified as Hardworking Ohioans, Inc.  According to the article, Murray calls itself the “largest underground coal company in the U.S.”
  • Contributor Settles:  A convicted businessman has settled charges by the Federal Election Commission that he used straw donors to funnel campaign contributions to U.S. Senate candidates in Nevada and Utah.  According to KSL.com, the FEC will drop pursuit of an $840,000 fine, as the businessman already “owes the federal government millions of dollars in connection with other cases and is limited in earning a living.”
  • Ethics Resignation:  The Chief Investment Officer of the California Public Employees Retirement System (CalPERS) resigned following questions about his Form 700 conflict-of-interest disclosures.  According to the Sacramento Bee, questions were raised about”investments in private equity firms and Chinese companies, two areas of investment in which his decisions have drawn scrutiny since his hiring in January 2019.”
  • Pawn Contributions:  According to the Detroit Free Press, “No Michigan lawmaker has sponsored more bills helpful to the pawn shop industry than state Sen. Peter Lucido.  And no Michigan lawmaker has collected more campaign cash from pawn brokers – who are not ranked among Michigan’s major political donors – than Lucido.”

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