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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 May 17, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF May 10, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF May 3, 2019

Latest Developments:

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

In Case You Missed It:

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

 

WEEK OF April 26, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 19, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 12, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 5, 2019

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF MARCH 29, 2019

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF MARCH 22, 2019

Latest Developments:

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

In Case You Missed It:

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

Reminders:

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

WEEK OF MARCH 15, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF MARCH 8, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF MARCH 1, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF FEBRUARY 22, 2019

Latest Developments:

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

In Case You Missed It:

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

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

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

WEEK OF FEBRUARY 15, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF FEBRUARY 8, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF FEBRUARY 1, 2019

Latest Developments:

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

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

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

In Case You Missed It:

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

WEEK OF JANUARY 25, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF JANUARY 18, 2019

Latest Developments:

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

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

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

In Case You Missed It:

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

WEEK OF JANUARY 11, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF JANUARY 4, 2019

Latest Developments:

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

In case you missed it:

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

WEEK OF DECEMBER 21, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF DECEMBER 14, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF DECEMBER 7, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF NOVEMBER 30, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF NOVEMBER 16, 2018

Latest Developments:

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

In case you missed it:

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

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

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

WEEK OF NOVEMBER 9, 2018

Latest Developments:

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

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

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

In case you missed it:

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

WEEK OF NOVEMBER 2, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 26, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 19, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 12, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 5, 2018

Latest Developments:

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

Ballot Measures to Watch in November:

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

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

In case you missed it:

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

WEEK OF SEPTEMBER 28, 2018

Latest Developments:

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

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

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

In case you missed it:

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

WEEK OF SEPTEMBER 21, 2018

Latest Developments:

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

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

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

In case you missed it:

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

WEEK OF SEPTEMBER 14, 2018

Latest Developments:

  • The Federal Ninth Circuit Court of Appeals reversed a lower court’s decision and upheld the California Attorney General’s requirement that nonprofit organizations that engage in political spending must disclose their donors to the state, as reported on an IRS Form, “Schedule B.” According to Politico, “The Americans for Prosperity Foundation had argued that the state’s rules requiring filing of the donor list violate the First Amendment by discouraging individuals from giving and by exposing them to threats and harassment.”   Politico reports that in Americans for Prosperity Foundation v. Becerra, the court held that “the state had a legitimate need for the data and that the Koch-founded group had not shown a significant burden on donors.”  As we previously reported, the U.S. Treasury Department has announced, in Revenue Procedure 2018-38, that the IRS will no longer require that the names and address of donors be disclosed on Schedule B for tax years starting with those that end December 31, 2018.
  • The Federal Eighth Circuit Court Appeals affirmed a lower court ruling holding that the provisions of Missouri Constitutional Amendment 2, approved by voters in November 2016, which impose a ban on PAC to PAC transfers, violates the First Amendment. In Free and Fair Election Fund v. Missouri Ethics Commission the court noted that the Eleventh Circuit has upheld a ban on PAC to PAC contributions in Alabama, but distinguished the circumstances of that ban.
  • The New York Joint Commission on Public Ethics met Wednesday, September 12.
  • The Commission discussed a proposal to amend state law to permit the Commission Chair or designated staff to publicly disclose that a matter is under investigation, has been closed, or has been deferred at the request of law enforcement. Commissioners, by consensus, asked that the measure be posted online with a request for public comment.  The matter will come back before the Commission next month with those public comments.
  • On Thursday, September 20 at 1:30 p.m. EDT, the Commission will hold a training on the new lobby regulations. Over 500 people have signed up for the training, and as a result, the training will be live-streamed on the Internet.  A video of the training will be subsequently posted on the Commission’s website
  • The Oklahoma Ethics Commission meets Friday, September 14. The Commission’s agenda includes a discussion of three amendments to Rules, including campaign finance rules regarding coordination, lobbyist rules concerning disclosures, and revolving door provisions for elected officers and chief administrative officers.
  • The California Fair Political Practices Commission meets next Thursday, September 20. The agenda includes a report from the Enforcement Review Task Force, a continuing discussion on Bitcoin and crypto currency contributions, and a discussion of Citizens for Responsibility & Ethics v. F.E.C, which staff finds inapplicable to the FPPC.
  • The Oakland Public Ethics Commission met on Tuesday, September 11, 2018, and took up the matter of alleged improper gifts of sports tickets to the Mayor and to City Council Member McElhaney. The staff report (as detailed here last week) cleared them of any wrongdoing with regard to use of city tickets.  Apparently, seven more cases of city officials’ allegedly improper use of tickets are pending; the Commission sent the matters back to staff for further consideration.  The Commission expressed that, in the future, a “public purpose” must be provided to support the personal use of city tickets for exempt official business and referred the policy question regarding tickets to a subcommittee to clarify the Commission’s position.  In addition, the San Francisco Chronicle reports that Council Member McElhaney faced a proposed penalty of $8,625 for taking improper gifts from a developer; the Commission reduced that penalty to $2,550.

In case you missed it:

  • Free Stuff for Campaigns: The Federal Election Commission issued a ruling permitting Microsoft to provide “enhanced online account security services at no additional charge on a nonpartisan basis to its election-sensitive customers, including federal candidates and national party committees.”  The commission found that the provision of the services is not a prohibited in-kind donation as the services provided are commercial in nature and not political.
  • More Light on Dark Money: Issue One has issued a report entitled Dark Money Illuminated, which discusses the top 15 spenders of dark money, from the U.S. Chamber of Commerce (No. 1) to Planned Parenthood (No. 15).  Issue One created a database of donors to those 15 entities.
  • Judicial Campaign Settlement in the Land of Lincoln: State Farm settled a case in which it was accused of funneling campaign contributions through entities that are not required to disclose contributors.  The Insurance Journal reports that the contributions were intended for an Illinois Supreme Court Justice who won and ultimately voted to wipe out a billion-dollar verdict against the company.  The company denied wrong-doing, but agreed to pay a $250 million dollar fine.
  • Not a Day at the Beach: Taxpayers May be Stuck for Ethics Violations: The Los Angeles Times reports that five current and former members of the California Coastal Commission were found to have violated ethics/disclosure laws and fined.  In addition, Spotlight on Coastal Corruption, which brought the suit, has been awarded $959,000 in attorney’s fees.  The Times speculates that taxpayers, rather than the commissioners, may end up footing that bill for these fees, which is in addition to the $650,000 spent on the Attorney General’s legal expenses to defend the commissioners.  The Attorney General has appealed.

WEEK OF SEPTEMBER 7, 2018

Latest Developments:

  • The Federal Election Commission is touting a campaign safety information program established by the Federal Bureau of Investigation. The FBI program, called “Protected Voices,” is intended to raise awareness among campaigns of the risk of cyber influence operations.  The FBI urges each “campaign to enhance its own cyber hygiene, the technological equivalent of locking your doors and windows.”
  • The New York Joint Commission on Public Ethics meets next Wednesday, September 12. The agenda includes a discussion of a proposal to amend state law to permit the Commission Chair or designated staff to publicly disclose that a matter is under investigation, has been closed, or has been deferred at the request of law enforcement.

In case you missed it:

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

WEEK OF AUGUST 31, 2018

Latest Developments:

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

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

Reminder:  

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

In case you missed it:

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

WEEK OF AUGUST 24, 2018

Latest Developments:

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

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

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

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

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

Reminder:  

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

In case you missed it:

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

WEEK OF AUGUST 17, 2018

Latest Developments:

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

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

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

Reminder:  

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

In case you missed it:

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

WEEK OF AUGUST 10, 2018

Latest Developments:

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

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

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

In case you missed it:

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

Reminder:  

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

WEEK OF AUGUST 3, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF JULY 27, 2018

Latest Developments:

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

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

Reminder:  

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

In case you missed it:

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

WEEK OF JULY 27, 2018

Latest Developments:

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

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

Reminder:  

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

In case you missed it:

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

WEEK OF JULY 20, 2018

Latest Developments:

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

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

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

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

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

In case you missed it:

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

WEEK OF JULY 13, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF JULY 6, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF JUNE 29, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF JUNE 22, 2018

Latest Developments:

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

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

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

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

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

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

In case you missed it:

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

WEEK OF JUNE 15, 2018

Latest Developments:

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

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

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

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

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

In case you missed it:

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

WEEK OF JUNE 8, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF JUNE 1, 2018

Latest Developments:

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

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

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

In case you missed it:

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

WEEK OF MAY 25, 2018

Latest Developments:

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

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

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

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

In case you missed it:

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

WEEK OF MAY 18, 2018

Latest Developments:

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

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

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

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

  • At the urging of Commissioner Audero, the Commission voted to establish a large task force regarding enforcement review. The task force will be composed of a wide variety of stakeholders.
  • The Commission voted to circumscribe language that can be put in closure letters in enforcement and voted to amend a closure letter sent to a Novato City Council Member.
  • Commissioner Audero remains fixated on being paid at least minimum wage for her service; however, the Commission failed to take further action on the matter.

The Governor of Georgia signed H.B. 973 on May 10, 2018.  That bill requires all lobbyists to agree to abide by the General Assembly’s sexual harassment policy.

The San Diego City Council passed an amendment to the City’s Election Campaign Control Ordinance.  According to the San Diego Union Tribune, the amended ordinance requires disclosure on the City’s website of donors of $10,000 or more, and adopts provisions similar to the State of California’s recently enacted Disclose Act specifying the size and placement of disclosures in advertising.

In case you missed it:

  • The New York Times reports that on May 11, 2018, a federal appeals court upheld the convictions of three former staffers of Ron Paul’s presidential campaign. The staffers were convicted of causing false records and expenditure reports and making false statements by arranging for money to be funneled to a state senator who endorsed Paul.
  • Mike Columbo of Nielsen Merksamer is the author of an article for the Institute for Free Speech about Citizens for Responsibility and Ethics in Washington v. Fed. Election Comm’n. The article analyzes a recent controversial decision by a federal District Court in Washington, D.C.  The court ordered the FEC to presumptively treat all so called “electioneering communications,” which include issue ads run in the months before an election, as evidence a group may be required to register as a political committee and disclose its donors.  The court’s new rule would be retroactively applied to a nonprofit organization’s ads broadcast shortly before the 2010 general election.  The article notes that the decision has been appealed and concludes that it should be reversed.
  • Sheldon Silver, the former Speaker of the New York State Assembly was found guilty in a retrial which took place less than a year after his original conviction was thrown out, according to the New York Times. He was convicted in 2015, but that conviction was overturned following the U.S. Supreme Court’s 2016 decision regarding former Virginia Governor Bob McDonnell (McDonnell v. United States, 579 U.S. ___ (2016).)
  • An Arkansas Supreme Court Justice, who is running for reelection, filed suit for defamation seeking to end advertisements funded by “dark money.” The Arkansas Times reports that Associate Justice Courtney Goodson is the target of ads by the Judicial Crisis Network, a 501(c)(4) organization that supports one of her opponents.
  • Politico reports that AT&T and Novartis issued mea culpas following the revelation that they engaged Michael Cohen as a consultant. The CEO of AT&T stated that his General Counsel “David (McAtee)’s number one priority is to ensure every one of the individuals and firms we use in the political arena are people who share our high standards and who we would be proud to have associated with AT&T.” That observation stands as an important reminder that it is a good idea to review all contracts with all political consultants, not just those of registered lobbyists.
  • Following the death of former California Governor George Deukmejian last week, the Sacramento Bee dredged up a parody song from 1987, “Walk like a Deukmejian,” that takes us back to when Jerry Brown was an unabashed liberal whose controversial appointee to the state’s Supreme Court, Rose Bird, was recalled in 1986 following a campaign led by Governor Deukmejian.  If you remember Dr. Demento (who created Weird Al), Walk like an Egyptian, or Campbell v. Acuff-Rose Music, Inc. 510 U.S. 569 (1994), you will enjoy the song.

WEEK OF MAY 11, 2018

Latest Developments:

The California Fair Political Practices Commission meets next Thursday, May 17 to take up its regular agenda.  Among the interesting bits before the Commission:

  • Staff has written a memo explaining that Commissioners are not entitled to minimum wage for their Commission activities.  Staff has indicated that it will send its analysis to the Attorney General if the Commission wishes to pursue an Attorney General opinion.
  • Staff is recommending that the Commission formally support SB 1239 (Hertzberg) which would further the efforts to have all campaign filings completed electronically, rather than on paper.  The bill deletes monetary thresholds, thereby requiring all fillings to be made electronically, and makes various technical and clean-up changes.
  • The Executive Director has announced that, “(f)or personal reasons, General Counsel, Jack Woodside is returning to a Staff Counsel position in the Legal Division. Assistant General Counsel, Brian Lau, will be serving as Acting General Counsel.”  A process will be determined as to how to search for a new General Counsel.

The San Francisco Ethics Commission held a special meeting on May 7.

  • New Commissioner:  Kevin Ryan, who resigned after less than a month on the Commission, was replaced by retired Deputy City Attorney Noreen Ambrose.  Ms. Ambrose, in her capacity with the City Attorney’s Office, served variously as General Counsel to the S.F. Port Commission and the S.F. Public Utilities Commission.
  • The Commission adopted the May 3 version of proposed amendments to the Campaign Finance Reform Ordinance.  Those changes generally pertain to additional requirements imposed on candidates, but also require the Commission to create a webpage for each election specifically disclosing/tracing independent expenditures in support or opposition to candidates.  The measure goes back to the Board of Supervisors for consideration.

In case you missed it:

  • The Albany Times Union reports that New York State’s recently passed lobby regulations already may be facing a challenge.   A compliance lawyer says he “plans to file an Article 78 proceeding seeking to overturn them.”  The regulations will require increased disclosure, which has ruffled some feathers.
  • The New York Times Magazine has a fascinating article about corruption around the world.  According to the Times, the trend is that “(c)orruption is being exposed, denounced and prosecuted more vigorously, and at higher levels, than ever.”  Will ethics and compliance with ethical standards take root around the world?  We observe a rise in efforts of U.S. companies that are active internationally seeking to uphold ethical norms.  The Times notes that “The goal is to build ‘systems of integrity’ throughout society.”

WEEK OF MAY 4, 2018

Latest Developments:

The Ninth Circuit Court of Appeals, in a three-paragraph Order on May 2, 2018, denied a petition for rehearing en banc in a case arising from a case that challenged Montana’s campaign contribution limits.  That case, Lair v. Motl, upheld those campaign contribution limits.  Following the short order, five conservative judges wrote a lengthy dissent, as described by the San Francisco Chronicle, asserting that the decision violates economic free speech and contravenes Citizen United and McCutcheon.  The dissent appears to implore the Supreme Court to review the case.

Oakland Public Ethics Commission meets on Monday, May 7, 2018, with a light agenda.

In case you missed it:

  • The Secretary of State of Louisiana, the state’s chief elections officer, has resigned his office amid allegations of sexual harassment, according the New Orleans Times-Picayune.  His resignation is effective May 8, 2018.

WEEK OF APRIL 27, 2018

Latest Developments:

The New York Joint Commission on Public Ethics met on Tuesday, April 24, 2018.  Among the items on the agenda was the Comprehensive Lobbying Regulations.  Following two years of drafts, discussion, debate, and interested persons meetings, the commission formally adopted the Comprehensive Lobby Regulations, which will take effect January 1, 2019.

In case you missed it:

  • Politico reports that the America Action Network (AAN), a nonprofit affiliated with Rep. Paul Ryan, was sued by Citizens for Responsibility and Ethics in Washington (CREW).  CREW alleges that AAN is actually a political committee and should be registered as such, and is not a nonprofit 501(c)(4) social welfare organization.  The purpose of the suit is to make AAN disclose its donors.
  • The Washington Post has an article about Sen. Bob Mendez’s appearance before the Senate Ethics Committee.  The Committee admonished him for accepting gifts and advocating on behalf of the donor.  The Committee also ordered him to pay back the gifts, and – according to USA Today – to update his disclosure forms to reflect the gifts.

WEEK OF APRIL 20, 2018

Latest Developments:

In Kansas, the Governor signed S.B. 394, which adds additional lobbyist registration triggers and additional exceptions to lobbyist registration requirements.  The bill also includes new gift rules and disclosure requirements.

The California Fair Political Practices Commission met on Thursday, April 19, 2018.  Once again, the Commission had a contentious debate over the governance structure of the Commission.  The Chair has met with the Governor’s office and expressed concern that the regulation would fundamentally restructure the Commission in a manner not contemplated by the original initiative statute.  Other Commissioners expressed concern that their proposal was not being moved forward as fast as they expected.

The San Francisco Ethics Commission held a special meeting on Wednesday, April 18, 2018 at which they chose Commissioner Chiu as the Chair and Commissioner Kopp at the Vice Chair.  The Commission discussed the proposed changes to the Anti-Corruption and Accountability Ordinance, as amended in the recent joint meeting with the Board of Supervisors.  The Commission adopted the ordinance with a minor clarifying amendment by Commissioner Kopp.  The Commission voted down Commissioner Kopp’s effort to add back a ban on behested payments and an authorization to share recoveries under a right of private action.  Commissioner Kopp also gave an impassioned speech against pay-to-play contributions.

The Los Angeles City Ethics Commission will meet Tuesday, April 24, 2018.  The agenda includes a presentation in connection with the Commission’s review of campaign finance laws.

The Colorado Secretary of State held a hearing on proposed amended lobby regulations on Monday, April 16. Comments focused on the following points:

  • The increase in disclosure requirements, in general, is burdensome.
  • Requiring that, for each new client, a summary of the terms and conditions of the agreement must be disclosed will impinge on confidential, and proprietary information that generally includes a nondisclosure agreement.
  • Beginning January 1, 2019, the date of each change of position on each bill must be disclosed in the report due the following month, creating a terrible record-keeping burden.

In case you missed it:

  • Arizona Central (USA Today) tells us that a Phoenix legal assistant at a major law firm that lobbies the city pled guilty to one felony count of forgery in a lobby compliance scandal.  After failing to file lobby disclosure reports with the city for two years, the legal assistant forged an attorney’s signature and backdated documents asserting that the reports had been filed.  She was initially charged with 16 counts of perjury, fraud, and filing false documents.  Last year, Phoenix stiffened its penalties for noncompliance as the scandal unfolded given that the city’s lobby law enforcement was found to be “toothless.”  Lobby registrations increased by 23% in the past year.
  • The San Francisco Chronicle reports that City Attorney Dennis Herrera has appointed a former judge and federal prosecutor Kevin Ryan to the San Francisco Ethics Commission.  Ryan was presiding judge of the Criminal Court Division of the San Francisco Superior Court when appointed by President George W. Bush to replace Robert Muller as the U.S. Attorney for the Northern District of California in 2002.
  • In Everett, Washington, the Herald reports on a backlash against too many complaints filed against candidates for administrative mistakes that are unintentional.  HB 2938 was passed by the legislature and signed, but “partially” vetoed by the Governor.  The bill amends a 1972 voter initiative to take authority away from the state’s Attorney General and instead require that all complaints first be vetted by the Washington Public Disclosure Commission.  The Governor’s message indicates that two sections were vetoed due to drafting errors.  The requirement that complaints be vetted through the Commission remains intact.  However, in the Governor’s veto message, he urged the Commission and the Attorney General to work together to clarify roles, adopt rules, and draft legislation for introduction in the next session to make improvements in the statute.

WEEK OF APRIL 13, 2018

Latest Developments:

The FPPC has released its agenda for the meeting next week.  The April 19 meeting will include pre-notice discussion of regulations to implement the recommendations of the Ad Hoc Governance Committee and a review of the Commission’s ability to review and modify a closure letter

The San Francisco Ethics Commission will hold a special meeting on Wednesday, April 18, 2018.  The agenda includes only two items: (1) to choose a new chair and (2) to discuss the proposed changes to the Anti-Corruption and Accountability Ordinance, as amended in the recent joint meeting with the Board of Supervisors.

The Colorado Secretary of State will hold a hearing on proposed amended lobby regulations on Monday, April 16.

In case you missed it:

  • The New York Times reports that corporate giving is often used as a political tool.  A group of researchers found a connection between corporate charitable activity and politicians’ favorite charities.  The study showed “a pattern of contributions to 1,087 charities linked to 451 members of Congress.”
  • Salon reports that Arizona Republicans are seeking to protect dark money from disclosure.  The legislature passed HB 2153 which was signed by Governor Ducey on April 5, 2018.  The bill preempts municipalities from requiring disclosure by tax-exempt IRC 501 organizations.  Under the bill, local governments may not require registration, reporting, or disclosure of an organization’s IRS Form 990 Schedule B (list of donors).
  • The Brennan Center for Justice has issued a new report, Getting Foreign Funds out of America’s Elections.  The report includes recommendations to update political spending laws for the Internet, eliminate dark money by requiring disclosure, extend the ban on foreign money to domestic corporations owned by foreign interests, and reform the FEC.
  • A suit against President Trump alleging inadequate financial disclosure was tossed by a federal judge, according to Politico.  The plaintiff argued that the President failed to adequately disclose his debts in sufficient detail in a report required by the Ethics in Government Act.  The case, Lovitky v. Trump, noted that it was within the discretion of the Office of Government Ethics as to what to require and the President was not required to provide specificity.  The case was dismissed for lack of standing.

WEEK OF APRIL 6, 2018

Latest Developments:

The California Attorney General issued an opinion on April 3, 2018, that a city council member who is also an attorney may not advocate on behalf of a client’s interests that are adverse to the city’s interests.  Further, a city council member who is also an attorney may not participate in governmental decisions concerning a client’s interests when those interests that are adverse to the city’s interests.

The SF Ethics Commission participated in a joint meeting with SF Board of Supervisors on Tuesday, April 3, 2018.  Following a staff presentation at the meeting, the Commission adopted a number of amendments to its proposal to amend the San Francisco Anti-Corruption and Accountability Ordinance.  The Board of Supervisors accepted additional amendments and referred those changes back to the Commission.  (See the minutes of the joint meeting at pages 16 to 19 of the board’s minutes.)

Oakland Ethics Commission held its regular monthly meeting on Monday, April 2, 2018.  The Commission listened to a presentation from Open Oakland, a community nonprofit, which previewed a planned web-based tool to expand campaign finance disclosure covering contributions to candidates and Oakland ballot measures.

In case you missed it:

  • New York Joint Commission on Public Ethics’ much anticipated new website moves the commission’s web presence into the 21st Their old, clunky website is gone!  In its place is a much more useful and user-friendly resource center.
  • The Alabama Senate adopted SR 51 which expresses a policy against sexual harassment.  The policy applies to legislators, staff, lobbyists, and others “involved in the work of the legislature.”

WEEK OF MARCH 30, 2018

Latest Developments:

New York Joint Commission on Public Ethics met on March 27, 2018.  Staff demonstrated a new website that will become available to the public next week.  The staff has also issued a new Procurement Lobbying Guide.  In addition, the commission discussed pending legislation that would require disclosure of lobbyists’ fundraising activity and also permit debarment of lobbyists who file false statements.  The Commission may bring these up at a future meeting and take a position.  Similar proposals have been in print in the form of Assembly Bills 7161, 7162, and 7163.

Oakland Ethics Commission holds its regular monthly meeting on Monday, April 2, 2018.  As part of the agenda, the Commission lists as a key project for 2018-19 creating an e-filing system for lobbyist registration.  (Currently the Commission asks that registrations be emailed to the Commission, but also accepts registration by mail or facsimile.)

In case you missed it:

  • Politico reports that a federal judge has rejected a request to prohibit the disclosure of donors to a PAC.  In Doe v. FEC, The judged ruled that the FEC has discretion to release the names of donors to the Now or Never PAC in the course of an FEC investigation.
  • The Secretary of the Environmental Protection Agency, who paid $50 a night for a room in a condo on Capitol Hill owned by a health care lobbyist who is married to an energy lobbyist, did not receive a prohibited giftUSA Today reports that the EPA’s senior ethics counsel found that it was a routine business transaction between friends.  The article says that the watchdog group Public Citizen has asked the EPA’s Inspector General to launch an investigation.
  • S. News and World Report indicates that a bipartisan group in North Dakota is circulating an initiative measure to amend the state’s constitution to create an independent ethics commission.
  • Governor Tom Wolf of Pennsylvania, has proposed a wide variety of ethics reforms, including a gift ban for public officials, pay-to-play disclosure of contributions by state contractors, and campaign contribution limits.
  • The Albany Times Union has an article about a New York appellate court’s decision to uphold the state’s “LLC loophole.” Presiding Justice Elizabeth Garry wrote, in a 4-1 decision, that closing the loophole, which allows each limited liability company owned by a person to give up to $150,000 annually in New York elections, “was a matter for the Legislature, not the courts.”
  • Oregon Public Broadcasting reports that earlier this month (March 2018), a judge in Portland struck the $500 contribution limit for candidates in Multnomah County, which was passed by ballot initiative.  An effort is underway to fast track the appeal to the Oregon Supreme Court.
  • The Monterey Herald reports that two Monterey County, California, Supervisors have formed an ad hoc committee to bring campaign finance reform to county races.  The supervisors are holding invitation-only meetings at which they have aim to build support for contribution limits and spending caps for local races.

WEEK OF MARCH 23, 2018

Latest Developments:

Federal BudgetHouse Bill 1625 has been approved by Congress signed by the President.  Buried within the bill are a few provisions that pertain to political activity:

  • Section 125 (page 468) prohibits the IRS from finalizing a regulation that would spell out candidate-related political activity that would not be considered to promote social welfare (thus disqualifying a 501(c)(4) organization).
  • Section 631 (page 568) prohibits the SEC from issuing any regulations requiring “disclosure of political contributions, contributions by tax exempt organizations, or dues paid to trade associations.”
  • Section 735 (page 588) prohibits requiring any federal contractor to disclose any contribution, independent expenditure, or payment for an electioneering communication for a candidate for federal office

Additionally, The Hill reports that, in a separate report attached to HB 1625, Congress has asked the “Federal Election Commission to issue a report about illegal foreign political contributions in elections, its enforcement measures, and how it works to combat them.”  The required report is due 180 days after passage of HB 1625.

California Fair Political Practices Commission met Thursday, March 22, 2018.  The commission took the following actions, among others:

  • Adopted amendments to Regulation 18401(recordkeeping requirements for mass mailing and earmarked funds)
  • Debated three versions of amendments to Regulation 18450.1 (definition of “advertisement” for disclosure purposes).  The Commission adopted “Option 3.”
  • Commissioner Audero asked that all procedures and training materials for the Enforcement Division to follow, be placed on a public website.  The Commission reached consensus that staff should proceed to have an Interested Persons meeting on the subject.
  • Commissioner Hayward reported on behalf of the Ad Hoc Governance Committee which recommended establishment of four standing committees, each composed of two Commissioners though which certain policy matters would be filtered.  Commissioner Hayward asked for feedback and welcomed input from the public, with a view to revisiting the issue next month, and presenting the recommendations in the form of a regulation.
  • Commissioner Audero discussed procedures for setting the Commission’s agenda.  She would like to have permission for each Commissioner to add their own items to the monthly agenda.  She clearly feels that the Chair controls the agenda and filters submissions.  The Commission voted 3 to 2 to change the procedure.
  • Commissioner Hayward objected to the advice letter issued regarding Senator Mendoza that permitted use of a legal defense fund to pay expenses associated with claims of sexual harassment.  The Commission voted to withdraw the letter.

San Francisco Ethics Commission met last Friday, March 16, 2018.

  • The Commission put off election of a new Chair until the April Meeting.  One member was absent and the Commission has one vacancy; hence the Commission postponed the decision.
  • In addition, Commissioner Kopp continued to press for an independent counsel for the commission.  He indicated that on a regular basis, almost monthly, the City Attorney, who represents the Commission, also represents respondents to an ethics complaint.  The matter was continued to April, pending additional information from the staff.

Oakland Ethics Commission meets on Monday, March 26, 2018, for a special meeting “to conduct strategic planning, performance, and operational activities.”  Among the topics on the agenda is how staff should handle complaints of violations of the Sunshine Ordinance by the Ethics Commission itself.  (Two complaints are pending.)

New York Joint Commission on Public Ethics meets next Tuesday, March 27.  The notable matters on the agenda scheduled for discussion include staff legislative proposals and discussion of a new website.  Once again, noticeably absent is any mention of the comprehensive lobby regulations first published in October 2016.  They remain featured on the commission’s website.

In case you missed it:

  • The Governor of Washington State signed the Washington State Disclose Act of 2018 (SB 5991) on March 19, 2018.  That act requires nonprofit organizations that do not otherwise fit within the definition of a political committee to nevertheless register and file reports as an “incidental committee” if they expect to make $25,000 in political contributions or expenditures in a calendar year and receive aggregate contributions of $10,000 or more from a single source during the calendar year.  These incidental committees will be required to file regular reports disclosing their top 10 donors who have contributed at least $10,000 in the calendar year.
  • Florida SB 1628 passed both houses of the legislature, but died on the last night of the session (March 10, 2018) while awaiting concurrence.  That bill would have authorized the leaders in each house or the Governor to suspend a lobbyist’s registration if he or she is found to have violated workplace or sexual harassment prohibitions.
  • The Governor of Utah approved two bills in the past week:
  • HB 206 creates a new gift exception for gifts to the state; however the gift may not be consumable or perishable and may not be transferred to benefit one or more public officials.
  • HB 320 prohibits contributions to the Lieutenant Governor, Attorney General, State Auditor, or State Treasurer while the legislature is in session.

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.

WEEK OF MARCH 9, 2018

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.

WEEK OF MARCH 2, 2018

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.


WEEK OF FEBRUARY 23, 2018

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.

WEEK OF FEBRUARY 16, 2018

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.

WEEK OF FEBRUARY 9, 2018

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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