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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 MARCH 16, 2018

Latest Developments:

Fair Political Practices Commission meets next Thursday, March 22, 2018.  Among the topics on the agenda for discussion:

  • Regulations 19401(recordkeeping requirements for mass mailing and earmarked funds) and 18450 (definition of “advertisement” for disclosure purposes).  Both of these include changes based on AB 249 (the Disclose Act) Enforcement.
  • Priorities and Procedures:  The Commission and staff will discuss the establishment of step-by-step procedures for the Enforcement Division to follow, which would be approved by the Commission and made available to the public.
  • Governance Committee Report.  The Ad Hoc Governance Committee recommends:
    • Establishment of four standing committees: Budget, Legislative, Personnel, and Law & Policy.
    • Each committee would be composed of two Commissioners.
    • Revised Governance Principles, under which certain policy matters are filtered through these committees.
  • Procedures for setting the Commission’s agenda.  This item is worth noting only in the respect that Commissioner Audero wrote a 6 page memo criticizing the Chair over how the agenda is created; a 5-page analysis was prepared by staff on how the Commission may adopt procedures to set the agenda.
  • Future regulations for discussion include amendments to the conflict-of-interest regulation, including clarification of the 500-foot property rule.  No particular time is specified for the Commission to consider this regulation.

San Francisco Ethics Commission meets today, Friday, March 16, 2018.  On the agenda:  the Commission will elect a new chair.  In addition, the Executive Director has announced that Jessica Blome, the Director of Enforcement is leaving the Commission.

In case you missed it:

  • R. 4916, introduced in Congress on February 2, 2018, would prohibit the IRS from requiring disclosure of donors on Schedule B of federal Form 990.  That Form 990 return, filed by nonprofits, requires those organizations to disclose the identities of donors and the amount contributed during the tax year.  The Washington Examiner reports that this information, which is supposed to be confidential, seems to have a nefarious way of becoming public.  The Examiner notes that the confidential information doesn’t really have much value to regulators but poses a huge risk to donors and the charities they favor, especially those with a political or controversial bent.
  • Colorado SB 116 would permit issuance of Capitol ID Cards to any member of the public who pays a fee of $250, submits a set of fingerprints, and undergoes a background check.  The bill would permit these Capitol ID holders to bypass metal detectors and other security measures.  Over 90% of Colorado lobbyists surveyed support the bill.  The Denver Post reports that the bill passed out of the Senate on March 15, 2016.  It now goes to the House.
  • Colorado’s Secretary of State released a draft of revised lobby regulations on March 15, 2018.  The proposed regulations would adopt new rules governing lobbyists.  According to the Secretary’s analysis it would, among other things, clarify that grassroots lobbying is not covered, and that communications by attorneys on behalf of clients are not covered.  It also clarifies who is a professional lobbyist, what constitutes a lobbying firm, and further clarifies their disclosure requirements.
  • S. News and World Report notes that the Massachusetts Supreme Court heard oral arguments this week (on March 6, 2018) in a challenge to the state’s century-old ban on corporate contributions to political candidates.  The case is 1A Auto, Inc. v. Sullivan.
  • C. Bill 22-0192 was signed by the Mayor of the District of Columbia on March 12, 2018.  The bill establishes a program for publicly funded campaigns in the district.


Latest Developments:

Oklahoma Ethics Commission meets today, Friday, March 9, 2018.  While we generally don’t monitor this commission closely, it’s worth noting that the meeting agenda includes a presentation by a current state legislator who is asking the Commission to engage in rulemaking to require that payments intended to influence be disclosed.

San Francisco Ethics Commission meets next Friday, March 16, 2018, but has not yet posted an agenda for the meeting.

In case you missed it:

  • Senate Bill 2482 was introduced by Senator Feinstein on March 1, 2018, and is cosponsored by Sens. Cornyn, Shaheen, and Young.  The bill would require the Department of Justice to enforce laws pertaining to unregistered, non-diplomatic operatives of foreign governments.  Roll Call reports that the bipartisan effort comes at a time when various interests have coalesced to stop HR 4170, which would require increased reporting under the Foreign Agents Registration Act (FARA), and passed out of committee in January.  SB 2482, among other things, deletes the exemption under FARA for registered lobbyists, and instead creates an exemption in the Lobby Disclosure Act for persons registered under FARA.

Currently FARA contains an exception for foreign agents who are registered under the Lobby Disclosure Act.  (22 U.S.C. 613(h).)  Section 5 of the bill would repeal subsection (h) of Section 613 in FARA and instead place an exception in the Lobby Disclosure Act (at 2 U.S.C. 1603(a)(3)) to provide that a person registered under FARA is not required to register as a lobbyist.

  • The Federal Judiciary has issued a new personnel policy covering employees of the Administrative Office of U.S. Courts and the Federal Judicial Center.  The new policy admonishes administrative employees not to donate to candidates or engage in partisan political activity.  The National Law Journal reports the new policy brings these employees under the same rules that apply to federal judges and courtroom employees.
  • Patrick McGreevy, of the Los Angeles Times, reported on March 3, 2018, on recent public filings that disclose gifts to California officials.  Something greater than $700,000 in gifts were made in 2017 to state officials, including over $44,000 to the Governor alone.  McGreevy notes that the Governor vetoed a bill in 2014 that would have further restricted gift-giving to state officials.
  • The Hill has a recap of Trump administration ethics problems.  The March 3, 2018, article summarizes the problems of a half dozen cabinet members who face questions about spending public funds on lavish travel and goods, accepting improper gifts, and violating the Hatch Act.  Does anyone know a good ethics lawyer who can give these guys some much-needed advice?
  • On the other side of the coin, the Oregonian reports that a the former Republic State Senate leader, who represents a rural district in the eastern part of the state, agonized over an ethical dilemma when given a gift of a Pendleton blanket by the Confederated Tribes of the Umatilla Reservation.  The tribal board was grateful for the Senator’s sponsorship of beneficial legislation, including a bill to stop looting at Native American burial sites.  However, the $249 blanket exceeded the state’s $50 gift limit.  He contacted the State Ethics Commission Director, explaining, accepting it might violate ethics regulations, but returning it “might constitute an insult.”  Ultimately, the Senator gave the blanket to the State Senate.


Latest Developments:

New York JCOPE met Tuesday (2/27/18).  JCOPE’s only discussion concerned a request for an exemption from disclosure of source of funding from the NY Civil Liberties Union, which was denied.  The still-pending lobby regulations were not discussed.

Oakland Public Ethics Commission has cancelled its March 5 meeting and will meet instead on March 26, 2018 for a retreat.

In case you missed it:

Colorado’s Secretary of State has released a draft of proposed amended Lobbyist Regulations.  The Secretary is seeking written comments on the draft through March 9, 2018; a public hearing will be held today (March 2, 2018).  Among other things, the regulations specify the contents of lobbyist registrations and disclosure reports.

Remember our report two weeks ago that a federal district court judge upheld Montana’s ban on political speech robocalls on a privately-owned telephone system in the case of Victory Processing v. Fox?  The Los Angeles Times followed up and reports that political robocalls in California must start with a live person announcing the nature of the call and disclosing the entity promoting the call.  The Times found these requirements are routinely ignored.

“Zombie Campaign Funds,” a term coined by the Tampa Bay Times in a January 31, 2018 article, are thriving.  These campaign funds of former (and sometimes dead) Members of the United States Congress are used “to finance their lifestyles, advance new careers and pay family members,” the Times investigation found.  The Los Angeles Daily News (February 24, 2018) uncovered four former southern California Members, Gary Miller, Henry Waxman, Hilda Solis, and Buck McKeon, who maintain Zombie accounts.  Rep. Mark Takano of Riverside is sponsoring the “Let it Go” Act, which would require that congressional campaign accounts be spent within 6 years of leaving office.

The U.S. Supreme Court examined Minnesota’s ban on political clothing and buttons at polling places, on Wednesday, February 28, 2018.  The Washington Post reports that the justices asked lots of questions about exactly what kind of clothing might be permissible to wear in a polling place.  The case arose when a voter, who wore a tea party shirt and a button that read, “Please I.D. Me,” was stopped at the polls and his name recorded for possible prosecution under the state’s ban.

The Federal Election Commission increased the lobbyist bundling disclosure threshold for 2018 from $17,900 to $18,200, based on the Consumer Price Index.  The actual disclosure is made by the candidate, party, or leadership committee. The commission’s notice was dated January 29, 2018, but published on February 12, 2018 in the Federal Register.


Latest Developments:

San Francisco Ethics Commission met last Friday (2/16/18).  The commission failed to put an amendment to the city’s ethics ordinance on the June ballot (Item 4).  The proposal was a watered-down version of the Commission’s original proposal from last fall, with amendments offered, coupled with a proposal from Supervisor Peskin to add major donor reporting.  The measure is not dead; it will continue on a path back to the Board of Supervisors, or may be placed on the November ballot.

Following over 4 hours of debate on the matter, the Chair of the Commission, Peter Keene, resigned in exasperation and walked out of the meeting, as reported by the San Francisco Examiner.  The Board was faced with a March 2 deadline to place a measure on the June ballot.

Los Angeles Ethics Commission met Tuesday (2/20/18).  The Commission listened to a staff presentation on contributions, matching funds, and campaign disclosure as a part of a new review of the city’s campaign finance laws.  The plan is to have changes in place for the 2020 election cycle.

New York JCOPE meets next Tuesday (2/27/18).  JCOPE has a scant agenda; the only substantive listing is an application for exemption from disclosure of source of funding from the NY Civil Liberties Union.  Noticeably absent from the agenda are the still-pending lobby regulations.

In case you missed it:

Reuters reports that on February 15, 2018, Citizens United lost an appeal in the federal Second Circuit Court of Appeals in New York in a case involving disclosure of its donors.  In Citizens United v. Schneiderman, the organization argued that the disclosure requirement was unconstitutional as chilling its speech and assembly rights and as a prior restraint on its ability to solicit money from donors.  Citizens United is considering an appeal to the United States Supreme Court.

US News & World Reports tells us that on February 13, 2018, the Missouri Supreme Court upheld a $230,000 charge by the Missouri Ethics Commission for campaign finance violations by a former Missouri State Senator.  In Wright Jones v. Missouri Ethics Commission, the court said that while the Missouri Constitution prohibits the Legislature from delegating to a commission the ability to impose fines, the Missouri Ethics Commission properly imposed penalty “fees” for violations.


Latest Developments:

Fair Political Practices Commission met Thursday (2/15/18).  The commission approved amendments to revolving door regulations and repealed of a mass mailing regulation that was placed into statute by SB 45.

Far more fascinating was the Commission’s 2+ hour discussion of paying 3 members retroactively for time spent on commission business since August 2017. Under current practice commissioners are paid for two days a month – a travel day plus the actual day of the commission meeting.  Commissioners Audero, Hatch, and Hayward want to be compensated for other work they have done.  The Commission seemed to be oblivious to the fact that the California Constitution (Article IV, Section 17) prohibits retroactive payments for work already done (although there may be work-arounds).  Commissioner Audero, whose official Commission biography states that she is “a partner in the Employment Law practice at Paul Hastings and is co-chair of the Employment Law Department in the Los Angeles Office,” apparently doesn’t know that office-holders in California are not “employees.”  She was fixated on earning minimum wage and actually got the commission to vote 5-0 to ask the California Attorney General to opine how the state Labor Commission’s order requiring that state employees be paid at least minimum wage applies to Commission members.  Commissioners eventually voted to adopt repealed FPPC Regulation § 18306 as a policy.  That policy would pay commissioners $12.50 per hour for official business on non-meeting days, and the policy will be applied retroactively to March 1, 2017.

San Francisco Ethics Commission meets this Friday (2/16/18).  The commission will discuss amendments to the city’s ordinance (Item 4), including provisions:

  • Requiring (or making voluntary) signed contributor cards.
  • Revising disclosure of bundled contributions.
  • Deleting the prohibition on contributions from persons with an interest in a land use matter.
  • Revising behested payment disclosures.

The commission will also discuss disclosure of online political communications, intending to have a draft ordinance by the Fall of 2018.

Los Angeles Ethics Commission meets next Tuesday (2/20/18).  Among other things, the Commission will begin a review of the city’s campaign finance laws.   The report indicates that actual proposals will be made at the April Commission meeting.

In case you missed it:

The Tax Cuts and Jobs Act of 2017 signed by the President on December 12, 2018, eliminated the income tax deduction for local lobbying, including lobbying of tribal governments.  The measure includes a ban on deductions for the portion of dues to membership organizations that is attributable to local lobbying expenses.  This will affect corporate clients that engage in local lobby efforts.  (See, Section 13308 of the bill.)

The Helena Independent Record reports that a federal district court judge, on February 9, 2018, upheld Montana’s ban on political speech robocalls on a privately-owned telephone system.  In Victory Processing v. Fox, the state argued that it had a compelling interest in prohibiting robocalls to nonconsenting parties; the plaintiff had argued, among other things, that residential privacy was not a compelling interest.

New Jersey Governor Phil Murphy signed Executive Order Number 2 on January 16, 2018, which includes a Code of Conduct for the Governor.  The Code of Conduct generally prohibits gifts to the Governor, with several significant exceptions.  This appears to be similar to Governor Christie’s Executive Order on the same subject.


Latest Developments:

Oakland Public Ethics Commission met Monday (2/5/18).  The Lobbyist Registration Subcommittee of the Commission approved a revised Lobbyist Registration Guide for 2018, which is the first update in 10 years.  The guide is now available on the Commission’s website.  The updated guide includes changes to the city’s ordinance and definitively states that, “’Grassroots lobbying’ is not covered by the Act.”

Fair Political Practices Commission meets next Thursday (2/15/16).  Among the items slated for discussion:

  • Amendment of revolving door regulations based on passage last year of AB 1620 and AB 551.
  • Repeal of a mass mailing regulation that was placed into statute by SB 45
  • Compensation of the Commissioners (i.e. expanding beyond the current 2-day per month cap on per diem payments to commissioners).

The Commission also provides notice that it will take up the following regulations in the near future:

  • March 2018:
    • Regulation 18450.1 (Adoption) – Proposed regulatory amendments to Regulation 18450.1 to maintain or eliminate minimum thresholds for advertisements requiring disclosure statements under AB 249, and to specify yard sign dimension limitations if minimum thresholds are maintained.
    • Regulation 18401 (Adoption) – Proposed regulatory amendment to Regulation 18401 to clarify recordkeeping requirements for earmarked funds, including accounting method for Executive Staff Reports determining top contributors when earmarked funds have been contributed, and mass electronic mailings as necessitated by AB 249.
  • Scheduling to be Determined:
    • Prenotice discussion of possible amendments to conflict of interest rules including: (1) rules for small shareholders and related business entities and (2) bright line materiality standards and clarification of the 500-foot property rule.

South Dakota Campaign Disclosure (2/5/18):  The Governor signed HB 1003 revising certain provisions concerning the content of the campaign finance disclosure reports.  It is effective immediately.

Tallahassee, Florida Gift Prohibition (1/31/18): The City Commission passed an Amendment to its Ethics Ordinance that, among other things, prohibits the solicitation of gifts from city contractors, lobbyists, or lobbyist employers to public officials and prohibits acceptance of those types of gifts if they exceed $100 in value.  The ordinance is effective immediately.

In case you missed it:

Lobbyist Sexual Harassment in California:  On February 6, 2018, Assembly Member Levine introduced AB 2055 to prohibit lobbyists from engaging in sexual harassment and authorize the Fair Political Practices Commission to ban a lobbyist from lobbying for up to 4 years for doing so.

Oklahoma Ethics Commission submitted its statutory changes for 2018 on February 6, 2018 to the state legislature.  The Oklahoma Ethics Commission has an unusual state constitutional power to promulgate rules that become statutes unless the state legislature vetoes those rules before it adjourns on May 25, 2018.  The proposed changes affect campaign reporting, revolving door provisions, and compliance provisions.

Citizens United, revisitedU.S. News & World Reports tells us that a Washington D.C.-based group, Equal Citizens, hopes to use a matter arising in Alaska to overturn Citizens United.

Save the dates….

Wednesday, September 5, 2018. Client Best Practices Workshop: Prior to PLI Corporate Political Activities Conference in Washington, D.C.

Research for clients….

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