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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 November 25, 2022

Latest Developments:

  • The California Fair Political Practices Commission formally adopted revised contribution limits and increased gift limits. For 2023-2024, the gift limit increases from $520 to $590.  Contribution limits for gubernatorial elections increase to $36,400 per person per election and legislative and local candidates’ limits increase to $5,500. Other increases apply to other constitutional officers and special limits apply to contributions from small contributor committees.
  • Louisville, Kentucky approved a lobbyist ordinance, which requires that lobbyists and lobbyist employers register within 7 days of engagement. Lobbyists and employers will be required to file disclosure statements by July 1 and January 1, covering activity from December 16 to June 15 and June 16 to December 15, respectively.  The ordinance creates limits on gifts from lobbyists and lobbyist employers to public officials. The measure takes effect in 6 months and will require biennial renewals at the end of even-numbered years.
  • The Akron City Council approved Ordinance O-303-2022 to increase limits on contributions to candidates for mayor, city council, and city ward positions. Mayor and council member limits increase from $750 to $1,000 per election, and city ward candidate limits increase from $500 to $750 per election. New PAC limits allow PACs to contribute $2,000 to mayor and council candidates and $1,500 to ward candidates in lieu of the old limits.

Reminders: 

The Council on Governmental Ethics Laws (COGEL) meets in Montreal, Canada December 4 to 7, 2022. The conference focuses on developments in five disciplines: campaign finance, lobbying, ethics, elections, and freedom of information. Interested persons can register here. Nielsen Merksamer’s Jason Kaune leads the session on developments in campaign finance litigation.

In Case You Missed It:

  • Passive Watchdog: The Los Angeles Times, in an editorial, asserts that “California’s political ethics watchdog needs to start baring some teeth.” The piece claims that the Fair Political Practices Commission is “overloaded with old, unresolved cases and is not properly prioritizing those that need urgent attention.” The article cites several specific officials whose cases are of concern.
  • Federal Conflicts: The Wall Street Journal reports the Campaign Legal Center has filed complaints with the federal government alleging that the government is failing to enforce conflict-of-interest laws. The Journal notes that “thousands of federal employees at 50 federal agencies held stock in companies that were regulated by the agencies where those employees worked.”
  • Met Gala Snub Generates Investigation: According to the New York Times, a Congresswoman from New York who was dropped from the annual Met Gala invitation list sought to be reinstated on the guest list. The Office of Congressional Ethics issued a report recommending that the matter be further investigated because she “may have solicited or accepted impermissible gifts associated with her attendance at the Met Gala.” After the Met removed her from the guest list, her “efforts to gain free attendance may implicate the prohibition on solicitation of gifts under federal law and House rules…” The report points out that “Members may only accept unsolicited offers of free attendance.”
  • Special Session Spawns Lobbyist Penalties: The Idaho Capital Sun reports that, after a one-day special session of the legislature, “most registered lobbyists were still required to submit a report about any related lobbying activities they might have participated in around the session, even if the report showed no activity.” The Secretary of State fined ninety-one lobbyists a total of $24,000.
  • Limiting Citizen Initiatives: The Ohio Capital Journal describes an effort by some legislators to require that “citizen-led constitutional amendments gain a 60% supermajority at the ballot for passage…” The proponents intend that measure to “‘safeguard Ohio’s constitution from special interests…’” Curiously, the article points out that “11 of 16 citizen-led amendments have failed since 2000, so it wasn’t clear exactly why they want to raise the bar higher as they also noted of the five measures that passed, three cleared 60% at the ballot box.”
  • Revolving Door Starts to SpinPolitico reports on the cyclical phenomenon of departing lawmakers “trying to land a comfy K Street gig.” The article notes that “Former lawmakers are prohibited from directly lobbying their former colleagues during a “cooling-off period” that lasts one year for House members and two years for senators.” However, former lawmakers commonly provide guidance, rather than direct lobbying – a “kind of advising… referred to as ‘shadow lobbying…’”

WEEK OF November 11, 2022

Latest Developments: 

  • Voters in Arizona Approved Proposition 211, which requires disclosure of total campaign media spending or acceptance of in-kind contributions, in an election cycle if $50,000 or more is spent in statewide campaigns, or more than $25,000 other campaigns, with certain exceptions. Entities must disclose donors of $5,000 or more and must provide certain notice to donors. The full text of the measure may be found in the Arizona 2022 General Election Publicity Pamphlet.
  • Michigan Voters Passed Proposition 1, which imposes 12-year term limits and requires constitutional officers and legislators to file disclosure reports. Those reports include, among other things, disclosure of gifts and travel reimbursements received from lobbyists and lobbyist employers and disclosure of charitable contributions made by lobbyists and lobbyist employers at the behest of the official. The first disclosure statement is due April 15, 2024 and contemplates enabling legislation before December 31, 2023. 
  • Voters also Passed Term Limits in North Dakota in Constitutional Measure 1, which imposes an 8-year limit on legislators and a two-term limit on the Governor. The measure takes effect January 1, 2023. 
  • The Voters of Portland, Maine amended the city’s charter by approving Ballot Question 3 and Ballot Question 8. Ballot Question 8 requires the city council to establish an ethics commission and requires the council, upon recommendation of the ethics commission, to establish a code of ethics. Question 3 concerns campaign finance and includes provisions that prohibit corporate contributions to candidates, limit contributions from entities substantially under foreign influence and require that contributions be reported to the city clerk.

Reminders: 

Hearing on the Timing of California’s Expanded Local Pay to Play Law: The California Fair Political Practices Commission will consider a staff memorandum at a hearing on November 18 that will ask for direction in applying the state’s expansion of a law that triggers disqualification for contributions over $250 and extends a ban of making contributions under SB 1439Staff takes the position that the law should reach back to contributions made in 2022. According to the Los Angeles Daily News, Steve Glazer, the author of the bill, said SB 1439 “‘may be one of the most significant reforms of the last 50 years.’”

The Council on Governmental Ethics Laws (COGEL) meets in Montreal, Canada December 4 to 7, 2022. The conference focuses on developments in five disciplines: campaign finance, lobbying, ethics, elections, and freedom of information. Interested persons can register here. Nielsen Merksamer’s Jason Kaune leads the session on developments in campaign finance litigation.

In Case You Missed It: 

  • New Federal Rule on Internet Communication Disclaimers Proposed: The Federal Election Commission will consider a proposed rule on internet communication disclaimers. The commission indicates that it intends to implement changes “in light of technological advances since the Commission last 10 revised its rules governing internet disclaimers in 2006, and to address questions from the public 11 about the application of those rules to internet communications.” Axios explains the genesis of the rule and the resulting intrigue.
  • Failure to Disclose Lawsuit: The New Mexico Ethics Commission announced that it filed a lawsuit against an organization that failed disclose to the commission that the organization “spent thousands of dollars on text message advertising campaigns seeking to influence the outcome of a New Mexico ballot question…”
  • Fine for Late FilingThe Oregonian reports that the Oregon State Elections Divisions will fine the National Rifle Association for failing to timely file a donation to oppose an Oregon gun control ballot measure. The NRA will be fined one-half percent of the contribution amount per day for the 64 days that the report was late (i.e., 32%). The NRA did not provide any comment on the late filing.
  • Coordination LawsuitOpen Secrets discloses that the Ready for Ron hybrid PAC sued the Federal Election Commission over a rule that limits the PAC’s ability to share a list of supporters, including contact information. “At the heart of the lawsuit is whether that list – something campaigns typically spend a lot of money compiling – is political speech or an in-kind contribution.”

WEEK OF November 4, 2022

Latest Developments: 

  • The District of Columbia’s Pay-to-Play Law Takes Effect November 9, 2022. The law was supposed to take effect November 2020, but it was paused for lack of funding.  The District’s Fiscal Year 2022 Budget (at page 207) provides that the law “…shall not apply to … “contract extensions or modifications, sought, entered into, or executed before November 9, 2022,” thus making it applicable to new or extended contracts on and after that date. 
  • The Alaska Public Offices Commission (APOC) issued an order to the Republican Governors Association (RGA) and A Stronger Alaska questioning whether “sufficient separation between the two entities” exists and warning that penalties lie ahead if “the two entities are one in the same.” Alaska Public Media explains a complaint filed with APOC accused RGA of creating “a shell organization called A Stronger Alaska in order to evade state campaign disclosure laws.”

Reminders: 

  • Hearing on the Timing of California’s Expanded Local Pay to Play Law: The California Fair Political Practices Commission will consider a staff memorandum at a hearing on November 18 that will ask for direction in applying the state’s expansion of a law that triggers disqualification for contributions over $250 and extends a ban of making contributions under SB 1439Staff takes the position that the law should reach back to contributions made in 2022. According to the Los Angeles Daily News, Steve Glazer, the author of the bill, said SB 1439 “‘may be one of the most significant reforms of the last 50 years.’”

In Case You Missed It: 

  • Congressional Candidate Describes the Laundry Process: According to the Vermont Digger, a candidate for Vermont’s lone house seat, in a radio interview, described how he “‘drained’ his wife’s business’s bank account and distributed roughly $25,000 among family members — including his toddler son, June — who then donated the money to his campaign. [The candidate] said he is now recouping the money by collecting a salary from his campaign.” Campaign finance experts agreed that the action “appears to have violated the [Federal Election Commission’s] ban on contributions ‘in the name of another,’ colloquially known as the straw donor ban.” 
  • A Jury in a Federal District Court in Brooklyn acquitted Tom Barrak of charges that he was an unregistered foreign agent lobbying for the United Arab Emirates. CNN explains that “In the last five years the Justice Department revived a criminal statute that laid dormant for decades and brought numerous criminal cases under the Foreign Agents Registration Act, known as FARA, against individuals who were lobbying for foreign governments or companies without disclosing it, as required by law, to the attorney general. … Barrack, who wasn’t charged under the FARA statute, was indicted on charges he acted as an unregistered agent of a foreign government. The statute, known as “espionage lite” by the national security community, is often reserved for cases involving spies. 
  • L.A. City Council Bribery Trial Begins: A foreign-owned hotel company is on trial in Los Angeles for allegedly bribing a city council member for support of a development projectSpectrum News 1 reports that the trial is part of a “July 2020 racketeering indictment against [the council member] and various associates. The 34-count indictment, alleging wide-ranging political corruption, was broken up into three trials in LA federal court.” 
  • Can’t Change Your Mind: A Federal Judge in Colorado, in Archer et al. v. Griswoldrejected a candidate’s efforts to get out of voluntary spending limits in his race for the Colorado House. The Colorado Springs Gazette reports that the candidate “had inadvertently signed up for voluntary spending limits when he registered his candidacy.” The voluntary spending limits permit an opt out; the candidate argued that he did not opt into the limit regime.
  • Montana Ethics Leadership Change Pending: The Commissioner of Political Practices, Jeff Mangan has announced his impending departure. The Helena Independent Record points out that few of the state’s Commissioners of Political Practice have served out their entire single five-year term, and many have “come under fire for bringing a perceived partisan bias to their work investigating political complaints.”

WEEK OF October 28, 2022

Latest Developments: 

  • A US Federal District Court in Illinois blocked two campaign finance reforms recently enacted in that state. The laws affected judicial elections, with one “prohibiting a judicial candidate from receiving contributions from any ‘out-of-state person’…[while the] second provision prohibits an independent expenditure committee…from accepting contributions from any single person in a cumulative amount that exceeds $500,000.” The judge’s memorandum explained that “[t]he plaintiffs have shown that they have no adequate remedy at law and will suffer irreparable harm” if the restrictions remained in effect for the upcoming elections.
  • The DC Office of Campaign Finance ruled this week that a City Council candidate misused funds she received from the District’s public election funding program and ordered her to return the money. The issue arose when the candidate paid for poll that surveyed the candidate performance for another City Council race (for which she was not the candidate). The results of the poll were said to have improperly influenced that election when several like-minded candidates dropped out of the race en masse, ostensibly to not split the vote. DCist has more.
  • A Superior Court in King County, Washington imposed a more than $24 million fine on a major tech company for hundreds of violations of the state’s campaign finance disclosure and transparency laws. The company repeatedly declined to disclose the information state law requires of political ads on its social media platform. NPR has more analysis.

In Case You Missed It:

  • Ethics Reform on the Horizon in Hawaii: The Honolulu Civil Beat reports that the Hawaii Commission to Improve Standards of Conduct released several suggestions which would impose additional requirements on lobbyists and those trying to influence lawmakers. Among the recommendations are “proposals…[which] would mandate annual ethics training for lobbyists, require them to disclose a list of bill numbers they are trying to influence and prohibit them from giving gifts to legislators and government employees.” The suggestions come on the heels of “two former lawmakers…[being] charged with taking bribes in order to influence legislation” earlier this year and increasing concerns about “lawmakers’ outside business interests.” Observers note that “the question remains how far lawmakers will be willing to go in imposing more rules on themselves.”
  • When Agencies Aren’t Doing Their Job: Local media reports that Starr County, Texas may not be maintaining or even collecting campaign finance reports, as it required to under state law. The discovery arose when a local judicial candidate filed a records request with the county for his opponent’s campaign finance report and “the county said in response…that it does ‘not currently retain’ the reports’”. Outside groups then officially requested other county level campaign finance reports, only to be given the same response. The article notes that this finding calls into question “whether candidates are filing reports at all and whether the county ever maintained the reports to begin with”.

WEEK OF October 21, 2022

Latest Developments:

  • The Center for Political Accountability announced that its noted “CPA-Zicklin Index of Corporate Political Disclosure and Accountability” would be expanded from “rating S&P 500 companies to evaluating the entire Russell 1000.” In effect, the expansion means the index now “gives attention to large and medium-cap U.S. companies that are not S&P 500 components.” The 2022 Index was released this month, providing its annual ranking of corporate political spending and transparency. JP Supra has more coverage.
  • The United States Department of Justice announced the sentencing this week of a former Congressional candidate “for wire fraud and falsification of records” related to his failed 2020 Congressional campaign. According to the DOJ, the former candidate received COVID-19 related federal loans for his small business and then “used a significant portion of these funds for…political advertisements.” He also “told employees…that they could continue to be paid their normal wages if they worked on his congressional campaign,” which they did. The candidate’s FEC report “omitted any in-kind contributions…including the thousands of dollars of in-kind contributions to his campaign in the form of employee time and work.”

In Case You Missed It:

  • Friendly PAC Causes an Internal Squabble: Politico reports on a public feud over resources between Democratic Coalition, a progressive political action committee, and a US Senate nominee supported by that PAC, whose campaign called the committee a “scam” for using the candidate’s likeness to raise funds. While the quarrel is only the latest in a controversial saga for the organization, accused by likeminded campaigns “of soliciting money from impassioned liberals only to spend it on its own operations,” it highlights increased attention on these PACs and their spending by “the federal government [which] has only recently begun to mobilize in earnest.” Indeed, the article notes that the FBI issued a warning last year, alerting donors to these potential cons and the “FEC heard recommendations from a working group [after the last election cycle] on how best to address the issue” of PAC fundraising and proper use of funds.
  • More Candidates Paying Themselves Back: Open Secrets reports on the increasing trend of post-election contributions to victorious federal candidates who self-funded and now seek to pay themselves back. The trend increased after a rule change, in response to the SCOTUS decision FEC v. Cruz, which removed the “restriction on an authorized committee’s repayment of personal loans.” The article notes that self-funding by federal candidates this year has already exceeded that of four of the last five election cycles. Critics contend that these developments allow candidates “to skirt contribution limits…effectively allow[ing] a candidate to go to hit up a single donor for more than the campaign contribution limits by asking them to also make contributions to their prior election cycles for loan forgiveness.”

WEEK OF October 14, 2022

Latest Developments:

  • A US District Court Judge this week dismissed a Department of Justice suit accusing casino magnate Steve Wynn of being “an agent of the People’s Republic of China…[and] seek[ing] an injunction forcing him to register as such under the Foreign Agents Registration Act (FARA).” The suit stems from “conversations with members of the Trump Administration regarding the PRC’s interest in the return of an unnamed Chinese businessperson, who fled China in 2014 and sought political asylum in the United States….[with the DOJ] alleging that Wynn traded these lobbying efforts for favorable treatment of his casino business in Macau.” While the ruling stresses that the decision applies to civil, not criminal action, it concluded that “longstanding court precedent bars the Justice Department from requiring foreign agents to retroactively register once they are no longer doing the work in question.” The Wall Street Journal provides more coverage.
  • A Texas State Court of Appeals dismissed a lawsuit in Sullivan v. Texas Ethics Commission, affirming the constitutionality of the Commission itself and upholding a political fine levied against Michael Sullivan, the former head of a political non-profit. Importantly, the court “reaffirmed the agency’s authority to enforce election laws, which Sullivan had called into question in the suit, claiming it violated the separation of powers principle because it’s a legislatively appointed office with executive power to discipline.” The Houston Chronicle provides more coverage.

In Case You Missed It:

  • Undeterred from Campaign Contributions in Anaheim: The Voice of OC reports on the staggering sums spent in this year’s Anaheim municipal elections by the very businesses implicated in recent city-wide corruption and campaign finance scandals. One major entertainment and resort company with a city-focused PAC has already spent at least $1.3 million on its “preferred candidates…[including] hundreds of thousands of dollars for internet ads and direct political mailers to bolster their campaigns. Notably given that the former mayor was at the center of one of the recent Anaheim scandals, the PAC in question and the city chamber of commerce “haven’t spent money on the race.”
  • Slap on the Wrist for Illegal Campaign Contribution: The Colorado Springs Gazette reports on the imposition of a $1,000 fine by the Secretary of State on Colorado Springs Forward for a nonprofit’s illegal campaign contribution to two El Paso County commissioner candidates. The Gazette notes that state “law prohibits corporations from contributing to candidates or political parties. Additionally, the $5,000 contributions were over the $2,500 campaign donation limit a county candidate may receive under state law.” An affiliated PAC routinely makes campaign contributions, which an agent for that organization claims was the source confusion about who could make the donation. Critics contend that the fine was nominal at best and that the existence of the PAC demonstrates the organization was sufficiently familiar with state campaign finance laws.
  • Alleged Illegal Coordination in the Last Frontier: The Alaska Public Offices Commission has decided to hold an emergency hearing as to whether the incumbent governor illegally coordinated with a non-profit organization to make political expenditures favoring his current reelection campaign. The Anchorage Daily News reports that government watchdog groups filed a complaint claiming that the governor “schemed ‘to improperly subsidize his campaign’ using public funds and coordinating”. The group points to the fact that the head of the nonprofit was simultaneously listed as the treasurer for the governor’s campaign earlier in the year. The governor’s “campaign responded by asking that the complaint be dismissed” while the complainants want to keep the nonprofit from ”spending the $3 million it has in its account going into the final month before Election Day”.

WEEK OF October 7, 2022

Latest Developments:

  • The Governor of California signed a suite of bills related to the state Political Reform Act.One of those bills, AB 1798, requiring certain disclosures on electronic advertisements, is inoperative. That bill defers to SB 1360, which “[r]evises requirements for certain political advertisements to identify the top contributors to the campaign committee paying for the advertisement.” Another bill SB 459will require disclaimers on issue advertisements. Most significant for any campaign contributor to local candidates is SB 1439, which expands the state’s limited “pay to play” restrictions from appointed board members to all local officials making decisions involving a “license, permit or other entitlement for use,” extends the prohibited period for contributions from 3 months to 12 months and expands donor disclosure requirements for contributions made 12 months before a covered proceeding. Please contact your Nielsen Merksamer attorney for more updates on how these new laws affect your organization.
  • A Washington State Superior Court Judge ruled this week that a major social media company “intentionally violated Washington’s longstanding campaign finance law 822 times”. That law “requires ad sellers…to disclose the names and addresses of political ad buyers, the targets of such ads and the total number of views of each ad.” The state Attorney General had previously sued for violations in 2018, for which the company was fined and then agreed not to advertise political ads in the state. According to the ruling, the company “continued to knowingly display Washington Political Advertising on its platform…continued to solicit [these ads]…[and]was aware that its ‘ban’ would not, and did not, stop all such advertising from continuing to be displayed on its platform”. The social media company in question initially filed a challenge to the law, which the same judge dismissed last week. The Seattle Times has more coverage.

Reminder:

If you’re a registered lobbyist in New York City, you or an employee must complete a biannual Lobbying Bureau training program. If you have yet to satisfy the requirement, please contact our political reporting unit to for more information at compliance@nmgovlaw.com.

In Case You Missed It:

  • The Effects of Digital Fundraising’s Ubiquity: In an analysis piece, The New York Times reflects on what it calls “a race to the bottom to inflame a party’s own voters with the most intensity and frequency”, driven in large part by the tone of ubiquitous text and email political fundraising solicitations. The solicitations’ tone notwithstanding, they have had the effect of raising tens of millions of dollars for candidates with little chance of winning. As the Times notes, “candidates with no hope of winning are raising ungodly sums from online [individuals]…drawn to their flashy videos and clever slams. Such is particularly the case when said candidates are running against notably loathed” or controversial candidates. Yet, this phenomenon deprives that money to traditional political party apparatuses who can, arguably, use the money in a more centralized and “efficient” manner.
  • K-Street Anticipates Change in DC Power: In advance of this year’s forthcoming Congressional midterm elections, The Washington Post reports that Capitol hill lobbyist interests are anticipating a change in House control by hiring former staff to high-ranking Republicans. These new hires have “held briefings [for their new employers] and drafted memos for clients on what a Republican House would mean for them. And they’ve been shepherding clients to meet with Republican lawmakers and staffers who are likely to be in positions of power.” Additionally, “the likelihood that the House will flip has led companies to reach out to lobbying firms with [existing] strong House Republican ties”.

WEEK OF September 30, 2022

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF September 23, 2022

Latest Developments:

  • The United States Senate defeated S 443, otherwise known as the so-called “DISCLOSE Act” on a 49-49 party-line vote. The Act would have “provide[d] for additional disclosure requirements for corporations, labor organizations, Super PACs and other entities.” According to the lead sponsor, it would also contain “a ‘stand by your ad’ provision requiring…organizations to identify those behind political ads – including disclosing…top five funders at the end of television ads.” The Washington Post reports more.
  • The Governor of California signed AB 2127, which authorizes digitally signed reports, including lobby reports, to the Secretary of State (SOS) to be accepted via email and not require an additional paper filing to serve as the true and original copy. The bill is meant to provide a solution while the SOS office develops a new e-filing system. The CA Fair Political Practices website provides additional guidance for digital signatures.

Reminder:

Lobbying in New York State?   Like many jurisdictions, New York requires lobbyists to attend ethics trainings, and NY State changed its training process earlier this year. Instead of logging in through the old online portal, the new Commission on Ethics and Lobbying in Government has released a slide deck on their website that lobbyists need to review before signing an affirmation form. Lobbyists who complete the course via the online portal this year will still be credited for completion, but the state recommends using the new training slides and affirmation form if there are any issues with the online portal. https://ethics.ny.gov/ethics-lobbyists-training

Reminder:

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

In Case You Missed It:

  • “Frank(ed)” Communication in Congressional Ads:  The Hill reports on a growing trend of sitting members of Congress taking advantage of the long-standing practice of “franked communications” (by which Congressmembers officially connect with their constituents by mailers, television/radio ads, and even the internet) in their reelection bids. While taxpayer funded franked communications are part of a long-standing practice of constituent communication, a rule change at the end of the last Congress moves the blackout for these communications to 60 days before an election, down from 90 days.  Now, voters are seeing scores of television, social media, and internet ads which are strikingly similar to campaign commercials, often touting an incumbent’s accomplishments on the most salient electoral issues. Critics contend “[it] giv[es] incumbent members an advantage in elections on the taxpayers’ dime,” while others note that a bipartisan commission reviews all communications.
  • Nonprofits Also Have Public Contract Ethics Concerns: According to the Los Angeles Times, a public corruption probe concerning Pay-2-Play and favoritism issues in awarding contracts has been taken over by the California Department of Justice in an effort to avoid political controversy between the elected Sheriff and the subject of the investigation, Supervisor Sheila Kuehl. According to the Times, Kuehl allegedly funneled “contracts worth more than $800,000” to an anti- domestic violence non-profit run by her friend and used her influence to extend the contract “without a competitive bid or analysis…[even though] the hotline [the non-profit was commission to develop] was a ‘complete failure’”. Additionally, facts presented to the court “detail campaign contributions Kuehl received from [the director of the nonprofit] and others associated with the nonprofit, alleging that ‘the donations can be seen as having been given for payment in return for the future awarding of the’ hotline contracts.”

 WEEK OF September 15, 2022

Latest Developments:

  • The United States Department of Justice indicted a Hawaii businessman developer as well the Maui County official he allegedly bribed with over $2 million in exchange for favoritism with government contracts. The DOJ contends that the official “accepted bribes… comprised of cash, bank deposits, casino chips, travel benefits, and/or other gifts…in exchange for [his] agreement, in his official capacity as a Maui County official…to steer and award over $19 million dollars in sole source contracts and purchase orders to [the developer’s] company.” The Washington Post and Maui Now provide more details.
  • The City of Anaheim, California approved new lobbyist regulations which seek to address many of the issues that enabled the ongoing scandal surrounding its former mayor and a Major League Baseball team. Among the changes include making it a criminal misdemeanor, punishable by jail time, to report false information or omit information on a lobbyist report. The Orange County Register details more in its coverage.

Reminder:

Nielsen Merksamer invites you to join our PLI Post-Conference Briefing. We will share the top take-aways from the conference to help guide your campaign finance, lobbying disclosure and government ethics compliance programs in the year ahead. We will provide topics and ask for your feedback in emails leading to our workshop. For more information, please contact agibbons@nmgovlaw.com for details and RSVP.

The full PLI conference can be viewed on-demand here

In Case You Missed It:

  • Will the FEC let a PAC be a PAC? Politico reports that a political action committee seeking to cajole Florida Governor Ron DeSantis into a 2024 presidential run faces an uncertain future before the Federal Elections Commission. Earlier this year, the PAC asked the FEC to approve its plan to give its list of supporters to the governor for free and the Commission, this week, appears to have deadlocked, “vot[ing]… to reject a draft advisory opinion that would have explicitly” permitted this gift. Still, it “split 3-3 along partisan lines on another draft advisory opinion that says the PAC cannot provide the names and contact information to DeSantis at any point.” The PAC argues that a list of supporters does not have the same value as a list of donors and Politico reports that the FEC may address the issue in a future opinion.
  •  Direct Democracy Discouraged: Politico reports on a trend of increasing GOP efforts to curtail ballot initiatives in certain states. The move come in the wake of recent progressive wins in which “initiatives have been used to legalize marijuana, expand Medicaid, create independent redistricting commissions and raise the minimum wage.” This year, Arizona is poised to raise its threshold for tax related matters to 60% and Arkansas is seeking to “apply [a 60% threshold] to constitutional amendments and citizen-initiated state statutes on any subject matter.” Recently, Florida limited ballot initiative fundraising, Nebraska tightened regulations on signature gathering, and half a dozen other states are considering tighter restrictions on their respective initiative processes.

WEEK OF September 9, 2022

Latest Developments:

  • A US Federal District court convicted former Atlanta city official Mitzi Bickers in the latest development of a pay-to-play scandal which also ensnarled two city contractors and the former mayor. The DOJ alleged that “Bickers sold sensitive, non-public information to…[two contractors] that was critical to their ability to obtain certain valuable contracts.” The contractors then funneled money to Bickers by paying her cash “up-front” to secure a contract and also paid “’kick-backs,’ where Bickers instructed…[the contractors] to inflate the cost of their work with the City so that…[they] could then pay Bickers a percentage of what they earned.” The implicated contractors previously pleaded guilty to bribery and money laundering and were sentenced to prison terms
  • A Washington State Superior Court Judge ruled that a prominent social networking company failed to adequately comply with state political advertisement disclosure law.The law in question “requires campaign advertisers, including entities….that host political ads, to make information about Washington political ads that run on their platforms available for public inspection in a timely manner.” The court agreed that the platform committed hundreds of violations since 2018 and faces fines of up to $10,000 per violation, or up to three times that amount if intentional.
  • A US District Court in Indiana approved the sentencing for a former Delaware County contractor who entered into plea bargain in June. The contractor bribed a local party officer and funneled money to a sanitary district official “to illegally contribute to [a former mayor’s] campaign”, for favorable consideration for public contracts. The judge “ordered…[the contractor] to pay $104,750 in restitution to the…sanitation district. In lieu of a prison sentence, he’ll spend two years on probation.” Local media provides more details.

Reminder

Nielsen Merksamer invites you to join our PLI Post-Conference Briefing. We will share the top take-aways from the conference to help guide your campaign finance, lobbying disclosure and government ethics compliance programs in the year ahead. We will provide topics and ask for your feedback in emails leading to our workshop. For more information, please contact agibbons@nmgovlaw.com for details and RSVP.

In Case You Missed It:

  • FEC Says “Zuckerbucks” Not Campaign Contributions:The Washington Post reports on unanimous bipartisan votes the Federal Election Commission made last month rejecting complaints made against a tech mogul’s more than $400 million contributions to local jurisdictions ostensibly made to improve voting infrastructure and turnout in 2020. The contributions had become controversial, with numerous objections claiming that the donations constituted excess contributions and even a “failure to register as a political committee” which favored one party’s turnout over another. These arguments were rejected, with representatives for the tech mogul contending that these contributions “were made in full compliance with the law to…ensure that residents could vote regardless of their party or candidate preference.”
  • Can Federal Criminals Lobby in Massachusetts?: The Massachusetts Supreme Judicial Court considered this week a Commonwealth law that prohibits former officials from registering as state lobbyists for ten years if they were convicted of a state Courthouse News Service reports that the case involves former state House speaker Salvatore DeMasi who, in 2011, was convicted in federal court for accepting bribes and subsequently served a prison sentence. When DeMasi attempted to register as a lobbyist afterward, his filing was rejected given his conviction—a decision that DeMasi challenged. However, the trial court ruled against the denial, “[b]ecause the statute discusses state convictions only…[finding that] a federal corruption conviction does not prevent a former official” convicted of a federal crime from lobbying.” The case notwithstanding, DeMasi successfully registered as a lobbyist last year given that the 10-year period in question lapsed.
  • Grand Canyon State Considers Disclosure Referendum: Local media reports that a ballot initiative requiring independent expenditure committees disclosure of true source of funds will appear on the November ballot. If approved, it “would require that anyone making independent expenditures of more than $50,000 on a statewide campaign or $25,000 on a local campaign disclose the names of the “money’s original sources.” The initiative defines “‘original source’ as the person or business who earned the money that was contributed.”

WEEK OF September 2, 2022

Latest Developments:

  • The Attorney General of the United States released a memorandum concerning new restrictions on political activities of non-career department employees. The memo provides these employees with new admonishments, cautioning that they “may not participate in any partisan political event in any capacity…both public and non-public partisan political events.” The rules also rescind exceptions for participation in these events when an employee’s spouse pursues public office or on “the evening of election day.” More in Politico.
  • A Federal District Court in Puerto Rico proceeded this week with the prosecution of a Venezuelan national and financier who bribed Puerto Rico officials, promising major campaign donations in exchange for public personnel changes. The indictment claims that “from December 2019 through June 2020, then-Governor of Puerto Rico Wanda Vazquez…allegedly engaged in a bribery scheme with [the financier]…to finance [Vazquez’s] 2020 gubernatorial election campaign. Bloomberg provides further details.

Reminder:  

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 8-9, 2022 in Washington, D.C.  The conference is also hybrid online and on-demand, so it may also be viewed in segments. To sign up, use the following link:  PLI Two-Day Conference in Washington D.C.

In Case You Missed It:

  • Colorado Springs Forward:  The Colorado Springs Gazette reports that a local civic nonprofit will have to appear before state administrative courts for making outsized donations to two county candidates violating the state’s ban on corporate contributions to candidates. The Secretary of State office refused to dismiss the complaint even though a state inquiry “found the violation was cured” when the candidates returned the contributions. Oneissue is “the implication of quid-pro-quo corruption between the nonprofit corporation and the candidates…[as] the signatory of the contribution check operates a museum that received $500,000 in federal coronavirus pandemic relief funds through El Paso County four months before…[the] campaign donations from the nonprofit were issued.” The Secretary of State’s office found a defense that the mistake “by volunteers” was unintentional “not plausible,” noting other political activity by the nonprofit and affiliates.
  • California’s Campaign Debt Conundrum:  The Voice of San Diego reports that the city of Chula Vista has gained little traction in the year after its council voted unanimously to address a major campaign finance lacuna. The issue concerns “campaign debt…when candidates… spend more than they raise in donations, and the difference is listed on disclosure reports as an accrued expense — essentially a credit.” Then, once victorious candidates “secure a position of influence…[they] go back out and raise more money.” Chula Vista law “doesn’t offer a timeline for when those bills are due…these costs of campaign goods and services become donations, subject to a $360 per person cap, if they’re not paid upfront.” The issue has manifested half a dozen times over the last decade, with allegations certain victorious officials soliciting debt repayment contributions from entities who have business with the city.
  • A Dummy Contribution to a Ghost Candidate:  Local media in Orlando, Florida recounts the criminal court proceedings of former GOP county chair Ben Paris who made prohibited donations to a spoiler candidate allegedly fielded to siphon votes away from the opposing party candidate. The scheme was successful in narrowly electing Paris’s former boss, but the trial concerns Paris skirting individual campaign limits by making a contribution in the name of his cousin. 

WEEK OF August 26, 2022

Latest Developments:

  • The US Department of Justice arrested the former speaker of the Tennessee state House of Representatives Glen Casada as part of a larger corruption probe involving other legislators. PBS reports that Casada and a top aid stand accused of “exploit[ing] their positions of power by working with another unnamed lawmaker to funnel money to themselves using a political consulting firm that concealed their involvement… by submitting sham invoices to the State of Tennessee in the names of political consulting companies owned by Casada.” They face up to 20 years of prison.
  • A Federal Court in San Francisco proceeded this week with the sentencing of that City’s former Public Works Director Mohammed Nuru on bribery and corruption. Local media reports that Nuru was accused of “accepting more than $1 million of bribes over 12 years to steer city contracts to his friends. Also charged in the case — developers, contractors, a restaurant owner, two recology executives, and Nuru’s girlfriend, the former director of the Mayor’s Office of Neighborhood Services.” At the proceedings, the “prosecution ask[ed] for a 9-year prison sentence; the defense wants three years.” The scandal is notable for its wide reach in the San Francisco business and political establishment, ensnaring even the mayor.
  • The New York State Board of Elections settled a campaign finance violation with the committee for New York Republican state senators and agreed to a $200,000 settlement related to “housekeeping” accounts, according to the Olean Times Herald.  As a general matter, state law caps corporate contributions to $5,000, making housekeeping accounts a popular recipient of support by the regulated community.  The committee was accused of having improperly used its housekeeping account funds during “the 2016 election by issuing a series of campaign-style mailers that allegedly crossed a line into expressly seeking election of GOP candidates… a[A] housekeeping account is supposed to be used to maintain a ‘permanent headquarters and staff’ for ‘ordinary’ party activities.” Contributions to the housekeeping accounts are otherwise uncapped. The state enforcement agents “pursued the case under the theory that — because Senate Republicans used the housekeeping account for campaigning — donations to the housekeeping fund in 2016 should be counted as contributions to the campaign account.”  Contributors in this settlement were not directly impacted. The settlement has not yet been provided to the public.

Reminder:  

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 8-9, 2022 in Washington, D.C.  The program comprehensively covers federal and national campaign finance, government ethics and lobbying disclosure laws, including panels on nonprofits (day one), compliance best practices (day two), government contracting, and several focused on state and local issues. Nielsen Merksamer’s Jason Kaune co-chairs the conference and Elli Abdoli participates as expert faculty. The conference is also hybrid online and on-demand, so it may also be viewed in segments. To sign up, use the following link:  PLI Two-Day Conference in Washington D.C.

In Case You Missed It:

  • The Anaheim Saga Continues…: The Anaheim City Council voted 4-2 to issue a response to the June grand jury report about the sale of the Angel’s stadium, a scandal currently embroiling that city. The response specifically pushes back on many of the report’s findings and recommendations for future ethics reforms. According to Epoch Times, for example, “Anaheim disagreed that it violated the ‘spirit’ of California’s Brown Act, an open meeting law that addresses, among other actions, how city councils can discuss real estate negotiations and payments,” arguing that all requirements were satisfied. Notably, it also differed with the report’s assessment that it was improper to appoint the former mayor (who resigned after being caught up himself in the stadium scandal) to the committee negotiating the sale and to then suggest adding more city council members to future similar committees. The response argues that “[a]dding more elected officials would further politicize the matter.”
  • Is “WinRed” in the Red?: Open Secrets reports on an FEC complaint filed against Republican affiliated contribution processing platform WinRed. The complainant, the Campaign Legal Center, allege that the company greatly underreported its operational costs relative to the political contributions they processed, disclosing “less than $2,700 in operating expenses since January 2019 despite processing over $2.8 billion in earmarked contributions – and $212 million in contribution refunds – during that period.” Good government groups claim that “[i]t is ‘virtually impossible’ that WinRed processed billions of dollars in contributions without incurring substantial administrative costs.” Further, they “did not disclose receiving any free goods or services as ‘in-kind’ contributions…[whereas] ActBlue [their Democrat equivalent] disclosed over $4.7 million to its affiliated company.”

WEEK OF August 19, 2022

Latest Developments:

  • The Federal Elections Commission advised a tech giant with a ubiquitous email platform “that a proposed pilot program allowing political campaigns to evade automated spam detection would not violate federal campaign finance law.” The Washington Post reports that the 6-month trial was proposed after conservative groups complained that their campaign and fundraising emails were disproportionately being sent to Spam folders, according to one public university study. While one Democrat was joined by three Republicans on the Commission in approving the program, one Democrat abstained and another voted against the program, arguing “that such a program would represent a prohibited in-kind contribution.”
  • The Los Angeles Ethics Commission unanimously imposed an almost $80,000 fine on a former city councilman in yet another Southern California scandal. Some five years ago, according to the Los Angeles Times, then City Councilman Mitchell Englander attended a Las Vegas excursion with businessman and other council staffers, with paid accommodations, free alcohol, and a gratuity of $10,000 in cash. In 2020, Englander previously “agreed to plead guilty to a single felony count of scheming to falsify material facts,” after having been charged with other violations of federal law. Investigators for the committee argued that “[t]he violations are serious because the monetary value of the gifts received significantly exceeded the gift limit, because of the nature of the gifts, and the circumstances in which they were received.”
  • The Miami-Dade County Commission on Ethics and Public Trust released a notice explaining its lobbyist reporting enforcement in the coming months. In 2021, the county approved changes to its lobbyist registration and reporting requirements that calls for significantly more disclosure for both lobbyists and lobbyist employers. While they simultaneously developed an electronic filing system, “the development of the technology has encountered some issues and has not caught up with the legislative changes.” In light of these technological shortcomings, the Commission’s notice informed the regulated community that it “will be exercising a significant amount of discretion and will be receptive to lobbyists appeals and deferring on enforcement actions”. According to the bulletin, grace periods will be extended and fines for late filing may be waived if appealed by September 1st.

In Case You Missed It:

  • Citizens United More than a Decade On:  The Wall Street Journal opines on predictions of the effects, more than ten years on, that the Citizens United vs. FEC SCOTUS decision would have on government policy and other areas of corporate interest. The Journal incorporates the outcomes derived from a study of three academics affiliated with the University of California and terms those predictions “a canard.” The study focused on the trajectory of state tax policy—recognized as an area of acute interest for the corporations making political contributions. It found that, in the 23 states which had their bans on contributions effectively nullified by the decision, “the study was not able to identify economically or statistically significant effects of corporate independent expenditures on state tax policy, including tax rates, discretionary tax breaks, and tax revenues.” The Journal concludes that “[i]f billionaires were able to buy elections to lower state taxes, you’d think they would have done it by now.”
  • What’s Going on in SoCal?: The Anaheim City Council voted unanimously (with one abstention) to contract “an outside firm… to investigate any questionable campaign contributions made to former…or current councilmembers in the wake of a federal corruption probe tied to the proposed sale of Angel Stadium.” The Los Angeles Times relates that the investigation, which will be handled by the JL Group and headed by a retired judge, takes place amidst the ongoing federal probe into ethical lapses by multiple officials and with municipal elections only a few months away. As reported, “it was the firm’s lack of ties to the city or officials that seemed to sway the City Council in choosing the JL Group over three other companies bidding to conduct the investigation…Councilmembers said they hoped the investigation would offer residents transparency.”
  • Age is Just a Number: Mercury News reports on a newly proposed rule change from the California Fair Political Practices Commission regarding the minimum age of campaign treasurers. The proposal stems from a fine the Commission imposed in May on San Jose City Councilman who “hired his teenage [14 year old!] cousin for his 2016 campaign committee…giv[ing] his cousin $43,000 in cash…[which] was later misreported on campaign disclosures.” The rule “would prohibit minors from serving in key positions if they are required by their position to sign campaign finance documents under penalty of perjury…It would apply to all political committees…[including] local councilmember races.” Critics contend that “it sends a chilling effect to young campaigns.”
  • Central Valley Campaign Crimes: Defeated U.S. Rep. T.J. Cox of California was arrested this week on a serious of federal charges, including campaign finance violations related to his Congressional campaigns. According to CNN, Cox “set up a plan to fund and reimburse donations to his 2018 congressional campaign from friends and family members, according to the indictment…[which]totaled more than $25,000.” He also “allegedly created off-the-book bank accounts and took funds from companies with which he was affiliated…obtain[ing] over $1.7 million.” Cox plead not guilty to “15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud and one count of campaign contribution fraud.”

WEEK OF August 12, 2022

Latest Developments:

  • The US DOJ Office of Government Ethics released a report detailing the finding of “its annual survey of prosecutions involving the conflict of interest criminal statutes…and other related statutes for calendar year 2021.” According to FedWeek, [t]he cited cases primarily involved charges of conflict of interests arising from bribery but also involved issues of improper supplementation of salary, false statements, unauthorized representation of claims against the government…among others.” The OGE hopes that the survey will serve as “a useful resource ethics officials can use to educate employees about how these laws apply in real-world situations.”
  • The Missouri Ethics Commission published guidance on the particulars of the regulations allowing certain corporations to directly make campaign contributions in anticipation of changes in statute which will become effective August 28th. The changes allow LLCs in operation for more than a year to directly make contributions if they “indicate that…[they are] a legitimate business with a legitimate business interest and…not created for the sole purpose of making campaign contributions.” As the Louis Post-Dispatch reports, the changes come some four years “after former Gov. Eric Greitens was investigated for using ‘shell companies’ to bankroll his 2016 campaign for governor… [with investigations] suggesting that the…governor’s campaign worked to conceal the identity of donors.” The statutory change was approved by the current governor as HB 2400.

In Case You Missed It:

  • Lawmakers Want More Federal Contractor Disclosure: Some 65 members of Congress singed a letter to President Joe Biden urging him to tighten reporting and other regulatory burdens for federal contractors. According to FCW, the signatories are “calling for an executive order that would mandate political spending disclosures for large federal contractors, many of which spend millions on political action committees during election cycles to get around federal laws barring contractors from making political expenditures.” In response, the organization which represents many federal contractors retorted that, “[i]n addition to providing no new information, the proposed reporting would slow down a contracting process that is already too slow in meeting government needs today and might actually undermine trust rather than increase it.”
  • “Gold Clubs” aren’t Just for Flying: Politico reports on the emerging trend of so-called “gold clubs”: elite and expensive places where lobbyists are promised intimate and fancy settings with lawmakers and which carry a corresponding price tag. The so-called clubs are, in fact, access to a “bundle” of campaign events, where attendance is capped in the dozens and facetime with top officials is almost a given, allowing lobbyists “the opportunity to develop almost a familial relationship with him or her over a series of them.” The phenomenon is meant to preference individual donors over PAC donations and lawmakers term their donors with such euphemisms as “kitchen cabinet” or “season pass” holders. Critics contend that, while similar concepts have existed for some time, their current popularity “offer[s] a way for campaigns to lock in significant donations from individuals amid an insatiable need to raise money.”
  • Who’s Picking up the Tab?: A discreet and undisclosed extravagant soiree between Pennsylvania legislators and lobbyists has garnered attention from local media and is leaving watchdog groups wondering who might be covering the bill. The Pittsburg Post-Gazette provides details on the invitation-only gathering of a group of Keystone state lawmakers to which lobbyists were invited to provide various levels of sponsorship, which, under state law, went unreported. Watchdog groups lament that the event underscores that “Pennsylvania is among a minority of states that places no limits on the value of gifts special interests can give legislators…[and that] the Legislature has blocked nearly every effort to limit the ability of special interests to shower lawmakers with dinners, drinks and travel” or otherwise enhance reporting requirements.

WEEK OF August 5, 2022

Latest Developments:

  • A District Court Judge in Alaska dismissed a lawsuit “request[ing] to block campaign finance provisions of a ballot measure approved by Alaska voters in 2020, finding that the plaintiffs had not demonstrated a likelihood of success on their outlined claims.” The Anchorage Daily News reports that the challenged provisions concerned independent expenditure groups and includes “disclosure rules [the plaintiffs claim] are unconstitutional and burdensome…[such as] disclaimers required for ads and required reporting around contributions greater than $2,000 that are given to or received by independent expenditure groups.” The court noted that precedent establishes that “lower federal courts should ordinarily not alter … election rules on the eve of an election.” The decision is Smith et al v. Helzer et al.
  • The Texas Ethics Commission’s servers crashed upon receiving the campaign finance reports from a prominent gubernatorial candidate, although “the commission’s system [still] successfully processed approximately 3,500 such reports due” by the deadline. The Texas Signal reports that the commission attributes the failure to the submitted file’s size and has requested more than $700,000 in additional appropriations “to upgrade their dated equipment…warning that their servers will likely crash again in October, when reports are due.” No indication was given that other filings from PACs—or the regulated community generally—were affected.
  • The League of Women Voters filed a lawsuit against the city of Cupertino, CA over what it termed “[an] ‘overly broad and vague’ [lobby]…ordinance. [T]he League decided to take action because [as they argue] the law stifles watchdog groups from speaking out at public meetings.” According to the San Jose Mercury News, the confusion surrounding the law, passed in 2021, stems from the possibility that “nonprofits [and their board members and employees] can still be subject to ordinance if they’re lobbying for a ‘specific project, issue or person’ and have received monetary compensation for it.” The League maintains that this possibility threatens their rights to speech and association.

In Case You Missed It:

  • PAC Money Not Being Spent on Campaigns:  After an eminent journalist withdrew from the Oregon gubernatorial race due to the state’s strict residency requirements, he transferred his nearly one million dollars in campaign funds to a PAC headed by his wife. What is rather unique and interest about this move, as Oregon Public Broadcasting reports, is the use of the funds, which are entirely unrelated to any electoral or campaign finance purposes. As OPB writes, “the financial shift was a way [for the candidate] to distance himself from the money while still working on his plan for spending it: He wants to create an innovative loan program to help Oregonians pay for job training.”
  • Verbosely Under Reporting: Watchdog groups are criticizing U.S. House candidate Royce White’s quarterly finance report for including dense explanations yet simultaneously obscuring true sources of donations and questionable expenditures.  Heartland Signal reports that “the White campaign’s report was ‘unusually specific, listing every cup of coffee bought while on the campaign trail… [and yet still] does little to clarify where White’s campaign is spending its money.’” The group Public Citizen criticizes the campaign’s reports for using cryptic shorthand for expenditures and a flurry of end of quarter transfers [which are] often “use[d] to cloak the original source of funds, such as from corporations or foreign principals.”

WEEK OF July 29, 2022

Latest Developments:

  • The Federal Elections Commission met on July 28th. Among its notable action items was an advice letter concerning the often-nebulous regulations governing so-called nonconnected committees. The question involved whether the inclusion of two Members of Congress on the board of Hispanic Leadership Trust (HLT) rendered the HLT a leadership PAC or otherwise affiliated HLT with those two Members’ leadership PACs.  There was also an inquiry as to whether any of HLT’s “bylaw provisions governing its officers’ fundraising activities would allow it to remain unaffiliated with those officers’ leadership PACs.” The Commission concluded that “HLT would not be a leadership PAC” under those conditions, “assuming that no Member of Congress or current candidate for federal office represents more than 33% of the seats required for a quorum of HLT’s board of directors.”
  • The Alabama Secretary of State Office issued several clarifications regarding its 2022 Federal PAC reporting requirements. Most importantly, the “updated guidelines provide that all PACs that raise or spend money to influence an election for a state or local office, including federal PACs… must [still] register and file” with the state.

Reminder:

Basics of the Federal Election Campaign Act 2022:   The Pracitising Law Institute (PLI) will conduct, in just one hour, a briefing of federal candidate and PAC campaign law, as regulated by the Federal Election Campaign Act (FECA). It is available in-person and online. Featuring Nielsen Merksamer’s Jason Kaune! You may register here.

In Case You Missed It:

  • Keeping the Lights on in the Sunshine State: The Orlando Sentinel reports on an unfolding scandal involving Florida Power and Light (FPL), the nation’s largest electricity provider. Regarding one state legislator who proposed a bill that would affect FPL’s profits, a leaked email quoted the CEO directing his vice presidents “to make his life a living hell…. seriously.” Soon after, an affiliated consulting firm recruited a candidate with the same last name to challenge the legislator and split the vote in his primary. The legislator lost and the stealth “candidate later admitted he was bribed to run.” According to the Sentinel, the incident is one of many which “illustrates the political obstacles policymakers and experts face as they attempt to cut climate pollution from the power sector…[and exposes] decades of extensive influence-peddling on behalf of utility clients.”
  • Public Financing No More on Long Island:  Local media reports that the Suffolk County (New York ) legislature overrode the county executive’s veto of that jurisdiction’s public campaign financing system approved last month. The County executive called it “a step backwards,” citing the potential to exclude disadvantaged groups and to create conflicts of interest. Legislatures in favor of repeal claimed that they “would rather use the program’s $2.6 million on public safety” and that potential conflicts with campaign contributors could be resolved by recusals on a case-by-case basis.
  • Beaver State Updates: The Oregon Government Ethics Commission (OGEC) released its quarterly newsletter, highlighting their conflict of interest and gift policies. Among its pertinent updates is news of the resignation of Robert Johnson, a commissioner who only joined the OGEC in 2021. His departure was precipitated by his election as a judge last month. While “OGEC Commissioners are allowed to serve on multiple boards or agencies…they cannot be a part of both the Judicial and Executive branches of government at the same time.”

WEEK OF July 22, 2022

Latest Developments:

  • The California Fair Political Practices Commission met on July 21st and decided several pending matters. Notably, the Commission adopted a regulation to “repeal the existing prohibition on cryptocurrency campaign contributions…and [which] permit[s] the making of contributions with cryptocurrency though a payment processor.” The Associated Press notes that “California had been one of nine states that prohibited cryptocurrency contributions. Twelve states, plus Washington D.C., allow cryptocurrency contributions in some form.”
  • The City of Brentwood, California will enact municipal campaign finance limits. The Press reports that the City Council voted unanimously on two ordinances which would limit contributions to “$500 per contributor per candidate…[and] also use $25,000 of the general fund in order to enforce the proposed limits.” The limits take effect at once under an emergency ordinance. As detailed in previous blogs, a change in California law requires localities to adopt their own limits or default to state limits.

In Case You Missed It:

  • Build Back K-Street: Politico details the “boom” in federal lobbying activity and spending as negotiations continue on ambitious legislation packages. Recently filed second quarter disclosures released just this week reveal that “[b]usiness on K Street remained white hot…with many firms only building on the record-breaking lobbying revenues they saw over the same period a year ago” when a multi-trillion legislation package was under consideration. Of note, only two of the top twenty firms disclosed a dip in fees from the previous quarter and eight firms experienced revenue growth of at least ten percent.
  • Sunshine on Using PACs for Legal Bills: The Tallahassee Democrat reports on the curious, though not unprecedented, phenomenon of Political Action Committees using funds ostensibly raised for campaign contribution bundling to cover ex-candidates’ criminal defense expenses. In the case of the unsuccessful 2018 Florida gubernatorial candidate Andrew Gillum, the PAC that spent lavishly on his campaign and is at the center of his alleged ethics violations is now spending hundreds of thousands on his legal defense. Gillum and an advisor “were indicted in June…[for] wire fraud and conspiracy to commit mail fraud for allegedly funneling campaign donations into their own bank accounts.” By 2020, the PAC in question “spent more than $700,000 on legal expenses related to the FBI probe” and recently paid Gillum’s lawyers another $440,181.
  • Campaign Finance Overhaul Stalled in Anaheim:  The ethically beleaguered City of Anaheim failed to pass campaign finance reform measures at its City Council meeting last week. Voice of OC reports that multiple proposals surfaced for addressing the multi-layered Orange County scandals that have emerged this year. The Council reached consensus in June for a proposal that would “require donor-related vote recusals if the money came from a PAC…[and place] restrictions on campaign debt, an issue…tied to some of the bribery and quid-pro-quo schemes alleged by the FBI.” The council still deadlocked on the “tamer version” proposed this month which did not contain these provisions.

WEEK OF July 15, 2022

Latest Developments:

  • The Governor of Missouri signed HB 2400, which will take effect at the end of August. Notably, the bill “prohibit[s] public agencies from disclosing or requiring the disclosure of personal information” from individuals, non-profit organizations and “current or prospective contractor[s].” Additionally, the bill also permits…limited liability compan[ies] that have been in existence for over one year…to make campaign contributions” provided they comply with state campaign disclosure requirements.
  • The California Fair Political Practices Commission, at its July 21st meeting, will address In the Matter of Andrew Do. Do, an Orange County Supervisor and director of CalOptima, allegedly “violated pay-to-play restrictions…when…[he used his] official position to influence governmental contracting decisions involving a participant who contributed to [his] campaign.” Additionally, “Do also failed to timely file behested payment reports disclosing eight payments totaling approximately $110,440.”
  • The City of Philadelphia enacted Bill No. 220049, which makes several city-level campaign finance changes. Among the notable changes, the law prohibits “a campaign… [from] making any expenditures related to a covered election through any other person or vendor.” The bill clarifies that “incidental” expenditures a vendor incurs will not count toward contribution limits.

In Case You Missed It:

  • How Close is Too Close?:  Politico covers internal executive branch concerns regarding a recent video in which President Joe Biden  gave “a straight-to-camera endorsement…[for businessman Eric] Schmidt’s “Quad Fellowship”— a new scholarship for American, Indian, Japanese and Australian graduate school students that is operated and administered by…the charity arm that Schmidt uses for a variety of initiatives in science and technology.” The endorsement highlights financial ties Schmidt has with Biden administration. Politico previously reported on the allocation of hundreds of billions of dollars in federal high-tech investments.
  • Election Law Shakeup Further Down the West Coast:  In the past, we detailed the changes to Seattle’s campaign finance laws, including its public funding provisions. Now, some 800 miles south in Oakland, local media reports on impending efforts to introduce similar changes in that city. On July 11th, the “City Council voted to place both the council term limits measure and the ‘democracy dollars’ measure on the Nov. 8 general election ballot.” According to the San Francisco Chronicle, “the measure would give every Oakland adult…$100 in vouchers to use in elections supporting a candidate in city or school board elections.” The Seattle program inspired this measure; like that program, the vouchers are available to all adult residents, regardless of voter registration status and city candidates must field a larger base of small donors before becoming eligible for the vouchers.
  • Hawaii Prosecutors Want Sharper Tools:  Following high profile corruption federal level investigations into state and local Hawaii officials, county prosecutors throughout the state suggested harsher penalties for public officials who betray public trust. Honolulu Civil Beat reports that the prosecutors’ recommendation was part of a forum this week before “The Commission to Improve Standards of Conduct, a group tasked with beefing up government standards and ethics…[whose] hours-long forum [was intended] to generate more ideas to crack down on public corruption in Hawaii.”. 

WEEK OF July 8, 2022

Latest Developments:

  • The Ninth Circuit Court of Appeals decided Butcher V Knudsen, ruling that Montana’s campaign finance restrictions are “unconstitutionally vague” as applied to the defendants. The case concerns two retired and politically involved men who ran a website that tracked Republican legislators’ voting records. When they were invited by Republican leaders to speak about their work and paid for their own travel expenses, the state’s “Commissioner of Political Practices determined that…[they] had formed a ‘political committee’ under Montana law” and subsequently imposed a civil fine. The Court found that the defendants “engaged in core political speech that lies at the heart of the First Amendment…[and that] insufficiently defined legal regimes can discourage valuable speech and invite unbalanced government regulation of less popular views.”
  • The State of New York, effective July 8th, has a new ethics agency, the Commission on Ethics and Lobbying in Government, which replaces the now defunct Joint Commission on Public Ethics (JCOPE). Part of a January 2022 budget bill formed the new commission, which seeks to avoid the pitfalls of the predecessor agency and provides that law school deans and other ethics experts attest to the integrity of commission appointees. As JD Supra reports, JCOPE was heavily panned as beholden to the officials who appointed them; the new commission seeks to address this criticism by reducing the number of appointees made by political officials and allowing the chair to be elected by commission members instead of “serv[ing] at the pleasure of the Governor.” Interestingly, “the new law does not alter, revoke, or rescind any regulations or advisory opinions issued by JCOPE that are currently in effect.”

In Case You Missed It:

  • IRS’s Non-Profit Expressway: The New York Times reports on a recently uncovered scam of fraudulent non-profit committees established and run by a convicted criminal. Prosecutors accuse Ian Hosang of embezzling
    “about $152,000 in donations that flowed through 23 of his nonprofits.
    [Most problematically,] Mr. Hosang did not need to do much to promote the groups; the money came in through online giving platforms that let users choose among I.R.S.-approved charities.” That Hosang was sloppy makes the IRS oversights even more problematic. Analysts blame an expedited process the IRS implemented which streamlines approval and was meant to address persistent backlogs and accusations the agency was denying applications based on ideology. Indeed, under this process, “the denial rate for new charities — which had been as high as one in 53 applicants in the old system — fell to one in 2,400 in this one.”
  • Tart Orange County Cures: In the wake of the scandals plaguing Orange County and neighboring Anaheim, the county seat of Santa Ana is now considering a lobbyist registration and reporting ordinance of its own. The Los Angeles Times reports that the city “council unanimously gave initial approval to an ordinance that requires lobbyists to register with the city or face penalties… [arguing it will] ‘promote public confidence and trust, preserve the integrity of local government decision-making, and provide members of the community with access to information.’” While several steps remain until final passage, the mayor also commented that municipal campaign finance changes may be next.
  • JCOPE’s Coda: On the eve of its termination, New York’s now non-operational Joint Commission on Public Ethics released a report on the process leading up to its much-criticized approval of the former governor’s $5.1 million book contract. The report, according to local media, finds that the governor’s office exerted extreme pressure on JCOPE and that the agency “failed to assert itself as a watchdog agency against the Governor.” JCOPE revoked its approval for the book deal in November, after the governor left office. According to Politico, “the book deal became a priority in multiple investigations, including the Democratic-led Assembly impeachment inquiry that determined…[the former governor] used government resources to write it.”

Latest Developments:

WEEK OF July 1, 2022

  • The State of Tennessee will begin implementing Public Chapter 1087 which imposes, beginning July 1st, “changes…for existing and new political action committees (PACs), candidates, and organizations tax-exempt under the IRS as 501(c)(4),(5), and (6)” with multiple effective dates until January, 2023. As JD Supra reports, the changes effective this month, include requiring “new multicandidate PACs, before conducting any financial activities…[to] certify the names and addresses of all officers and persons who ‘directly control campaign expenditures.’ Existing PACs must make the same certifications by January 31, 2023. Changes in officer makeup must be reported no later than thirty days after the change.”
  • The United States Department of Justice “presented a new policy at a Securities Industry and Financial Markets Association event that requires chief compliance officers (CCO) to certify that compliance programs have been ‘reasonably designed to prevent anti-corruption violations.’” As the National Law Review reports, the policy stems from a recent settlement of case involving a mining giant “after it pleaded guilty to bribery and market manipulation charges…[and] is meant to ensure that CCOs stay in the loop on potential company violations” which included Foreign Corrupt Practices Act violations.  Still, concerns have been raised as to the exposure these officers may face to personal liability and that it may “undermine their authority by opening CCOs to internal pressure to execute a certification.”

In Case You Missed It:

  • Los Angeles Saga Continues: The Journal Record reports that a Los Angeles developer was found guilty of bribery, obstruction of justice, and wire fraud, gifting $500,000 to a city councilman and his assistant for special preferences. The case involved the developer seeking “help in resolving a labor issue involving [the developer’s] company’s planned construction of a large commercial and condominium complex in the city’s burgeoning downtown district. At the time, [the city councilman] chaired the city’s powerful Planning and Land Use Management Committee.” The developer could face up to 30 years in prison and the company may have a fine imposed as high as $1.5 million.
  • Anaheim Slammed: An Orange County, California grand jury heavily criticized the City of Anaheim, already ensnarled in a multi-layered scandal centered on its former mayor, for the process by which the Major League Baseball stadium was approved. As the Los Angles Times details, the grand jury said in its report that, “[t]he city council majority’s inappropriate handling of the stadium property transactions betrayed its constituents…demonstrat[ing] a persistent lack of transparency and rushed decision-making … exacerbating distrust by the public, state and local government officials, and even some members of its own city council.” Still, the city manager and mayor pro tem continue to back the stadium deal and maintain that their proceedings were transparent and in good faith, notwithstanding the previous mayor’s alleged improprieties.
  • Campaign Finance Reform on the Aloha Islands: We reported in recent weeks about state-level efforts to enact tougher government ethics regulations in the wake of high-profile arrests of officials for corruption. Now, the Honolulu Civil Beat details considerations the state is making regarding “a handful of measures aimed at tightening campaign finance laws and reducing the influence of money in politics.” This week, the Campaign Spending Commission proposed several reforms to the Commission to Improve Standards of Conduct. Among the most notable was to close “a loophole in the law still allows employees and officers of those companies [with government contracts] to continue making political donations.” An additional proposal “would put an end to a practice by state lawmakers that exploits a legal loophole allowing them to funnel campaign funds to their colleagues. [in which] some, particularly those with large war chests, often buy tickets to their colleagues’ fundraisers to get around the prohibition.”

WEEK OF June 24th, 2022

Latest Developments:

  • The United States District Court for the Northern District of Florida, in ACLU of Florida v. Byrd, permanently enjoined provisions of Florida’s SB 1890. That bill, passed last year, purported to limit contributions to ballot measures to $3,000 per person.  A measure passed this year, HB 921, sought to limit the application of the $3,000 cap to nonresidents.  The Court found that both measures violated the First Amendment, citing Citizens Against Rent Control/Coal. for Fair Hous. v. City of Berkeley.  The ACLU issued a statement saying, among other things, “We are grateful that the state lost in its attempt to eradicate citizens’ initiatives from Florida.”
  • The New York Independent Review Committee for Nominations to the Commission on Ethics and Lobbying In Government (“IRC”) issued its Procedures for the evaluation of nominees to the new commission. The committee is composed of a group of New York law school deans, who are tasked with vetting candidates to serve on the state’s new Commission on Ethics and Lobbying in Government (CELIG).  In announcing the procedures, the committee noted that “JCOPE sunsets and the new Commission takes effect on July 8, 2022.”

In Case You Missed It:

  • Campaign Finance Review: The Coalition for Integrity issued its State Campaign Finance Index 2022, which “analyzes the (campaign finance) laws of 50 states and the District of Columbia” and the agencies that enforce those laws.  The Index examines “the millions of dollars flowing to state level campaigns.”  The report considers “whether these agencies have investigative and enforcement authority, as well as laws that contain prohibitions on campaign coordination, limits on campaign contribution and disclosure of those contributions, requirements for transparency of funding of independent expenditures and political advertisements, and the availability of campaign finance information.”   Washington State, California, and Maine came out at the top;  Utah, South Dakota, and Indiana were ranked at the bottom.
  • Contributors Beware: Politico reports on the indictment of Andrew Gillum, former Mayor of Tallahassee and a one-time candidate for Governor.  The charges allege that Gillum “illegally solicited campaign contributions between 2016 and 2019 and promised political favors in return for the financial support.”  The article points out that federal agents apparently asked a Gillum aide about other donors, including “a founder and chief investment officer of a Connecticut-based hedge fund and major national Democratic donor.”
  • Reform on Hold: Following the Mayor’s resignation amid a federal corruption investigation, the Voice of OC reports that “Anaheim City Council members deadlocked on a campaign finance reform in an effort to lessen special interests’ influence on policy decisions… After a majority of the council debated the issue for hours – over the course of two city council meetings this month – council members deadlocked 3-3 late Tuesday night over an ordinance that would’ve required a 72-hour reporting window for all campaign contributions of $250 or more, along with mandatory recusal periods.”
  • Lobby Activity in 2021: Open Secrets issued a report on state and federal lobbying for calendar year 2021.  One conclusion of the report is not a surprise: “Lobbying spending continues to grow at both the state and federal levels…”  The report also contains a detailed analysis of spending by the pharmaceutical industry.

WEEK OF June 17th, 2022

Latest Developments:

  • The Governor of New Hampshire signed SB 348, which categorically permits contributions during a pre-declaration exploratory period, thus permitting contributions in 3 phases of an election cycle, which also includes the primary and general phases. The law takes effect January 1, 2023 and essentially places in statute the state Attorney General’s existing analysis of the state’s campaign finance laws.
  • The State of Vermont will enact a statewide code of ethics when SB 171 becomes effective July 1st, applying to all elected and appointed state officers and employees. Among its provisions are a new conflict of interest policy applicable to members of all branches of state government, new gift limitations and exceptions, and post-government employment restrictions. Notably, the revolving door provisions for legislative branch employees prohibits them from “advocat[ing] for anyone other than the State, concerning any matter in which the State has a direct and substantial interest” before the legislature or their former office for one year after leaving public service. 

In Case You Missed It:

  • Aloha to Ethics Reforms?: The Hawaii Tribune-Herald reports that, in the wake of two former state legislators pleading guilty to accepting bribes, state lawmakers have passed legislation aiming to increase campaign finance transparency and enforce government ethics. Yet, despite required ethics courses for legislators and ranked choice elections, critics still “lamented lawmakers” failure to ban all campaign fundraising during the legislative session. Instead, lawmakers passed a narrower measure that would prohibit holding fundraisers.” A former legislator “said [that] in his experience lawmakers raise most of their campaign funds not at fundraising events but by calling people and asking them for money…[and that] ‘a lot of the donors will have issues before the Legislature,’ [citing]… big business executives or major landowners as examples.”
  • JCOPE’s Swan Song: New York State’s soon to be defunct Joint Commission on Public Ethics (JCOPE) is still actively investigating a compliance attorney who was formerly a top government enforcement officer in the state and is now one of the agency’s largest detractors. The Albany Times Union reports that he formerly indicated that his experience in ethics enforcement could help clients limit disclosure, which he allegedly did for a lobbying coalition that spent more than $800,000 on an issue ad, but whose disclosures allegedly fell short of the agency’s regulations. He claims that he disclosed the entity’s activity according to the rules governing what JCOPE termed “coalitions” which he claims is merely “a mythical name that they created in regulations — one that serves to hide the identity of the members… By definition, that’s what a coalition is.” The agency seeks more than $4 million in fines, even as it is due to wind down in a month.
  • Anaheim’s Ethics Reckoning Continues: The Voice of OC reports on the ongoing efforts to increase the state’s enforcement power in the wake of the multi-layered ethics scandal enveloping the City of Anaheim. Now, legislators want to tighten California’s Surplus Land Act to allow state agencies “to nullify land deals if it’s been determined the land sale is illegal.” After it was revealed that Anaheim had violated the Act in the sale of the Major League Baseball stadium, the Attorney General still “let the deal go through with some additional affordable housing requirements” so long as the city paid the $96 million fine. The transaction was ultimately halted in light of the ongoing FBI investigation.

WEEK OF June 10th, 2022

  • The Federal Bureau of Investigation confiscated the digital records of retired Marine General John R. Allen, “who authorities say made false statements and withheld ‘incriminating’ documents about his role in an illegal foreign lobbying campaign on behalf of the wealthy Persian Gulf nation of Qatar.” NPR reports on the details of potential FARA violations. Notably, Qatar was a prominent donor to the Brookings Institute, which Allen headed, until being placed on administrative leave this week
  • The Governor of Illinois approved HB 716, which limits the amount of outside contributions to a self-funded committee to elect a judicial candidate. The measure also limits the amount that organizations that are not required to disclose their donors may contribute to judicial candidates.  The bill takes effect immediately and applies to elections beginning this year.
  • The Way to San Jose: San Jose Spotlight reports on a complaint claiming that San Jose’s current Mayor may have violated campaign finance regulations by forming a political action committee (PAC) and raising money from the regulated community to support candidates, other than himself, running in local elections. It further alleges that the PAC and sponsoring nonprofit exceeded local limits and skirted local disclosure requirements. Contributors apparently were not directly targeted in the complaint. The mayor’s representatives called the complaint “frivolous” and the City Attorney responded that “the municipal code ‘does not prohibit’ [a sitting mayor not running for reelection] from opening and personally fundraising for a PAC—even ahead of the fundraising period. The mayor is also not subject to the contribution limits in San Jose.” The PAC was operated in reliance on a 2014 trial court decision trial court decision, involving the last mayor, finding that a state law prohibiting independent expenditures by candidate-controlled PACs is unconstitutional. Even so, the current mayor stepped down as head of the PAC after an opinion from the Fair Political Practices Commission earlier this year.

In Case You Missed It:

  • Buckeye PAC Coordination: We previously reported on committees formed to support specific candidates posting information and research on their websites advantageous to their preferred candidate and which could be made use of by that candidate’s campaign. Now, local Ohio Media is reporting on a lawsuit filed against a United States Senate Candidate from Ohio, alleging that “a covert website…where [a] super PAC posted numerous campaign research, polling and strategy documents.” constituted a prohibited in-kind contribution. As an example, the lawsuit points to an ad the campaign ran that is nearly identical to a script posted on the PAC’s website. The complaint also argues that “although the website was technically publicly available, it couldn’t easily be found through search engines [and] that once the super PAC’s leaders found a different campaign using data they’d posted to the site, they treated it as a data leak.”
  • SoCal’s Soul Searching: The multi-layered scandal in Anaheim, California, and in Southern California generally, has many officials “reexamining the influence of special interest groups – [what the FBI alleges is] a special interest ‘cadre.’” Voice of OC contends that, at the very least, there will be increased scrutiny for PACs funded by major corporations with interests before the City and renewed pressure for local campaign finance restrictions. In fact, “Council members voted 5-0 to bring back the campaign finance discussion at its next meeting and to put out bids for an outside investigative firm to examine all contracts voted on by city council members that benefit some of the entities wrapped up in the FBI corruption probe.”

WEEK OF June 3rd, 2022

  • The Governor of Tennessee signed a pair of bills affecting lobbyists and campaign finance enforcement. SB 884 eliminates the privilege tax that the state imposes on lobbyists, effective May 31, 2022. This annual occupation tax previously applied only to persons registered to lobby the state government. SB 1005 concerns settlement procedure, disallowing the state Registry of Election Finance to settle civil penalties outside of regular meetings or a special meeting called for that purpose if the penalties exceed $25,000.
  • The State of Maryland enacted SB 15, which focuses on campaign finance enforcement. Among its noteworthy provisions are restricting those with unpaid election related penalties or fines from candidacy or as a treasurer for “campaign finance entities.” The bill also requires specific proactive procedures for enforcing the payment of fines and referrals for additional civil and even criminal action.
  • The Governor of Oklahoma signed HB 3056, which “authorizes municipalities…to enact a comprehensive code of campaign finance and personal disclosure ordinances.” While the bill permits these cities to create provisions for “hearing and enforcement,” it also caps civil fines at $500.

In Case You Missed It:

  • Southern California’s Small World: The growing political corruption scandals in Anaheim shed light on a larger issue of political corruption more broadly in Southern California. The Los Angeles Times laments that the “FBI’s Los Angeles office has been extraordinarily busy at City Hall, launching probes into councilmembers, lobbyists, city lawyers, political aides and executives at the Department of Water and Power — some of whom have pleaded guilty.” Similarly, Cal Matters situates the multi-layered Anaheim scandals and the implicated actors within a larger setting of “an unsavory history of local government corruption in Southern California…The common denominator…is that local government decisions can have enormous economic consequences, ranging from trash hauling franchises to real estate developments…[and] [t]hose who may benefit from municipal actions have an obvious motive to influence decision makers and often hire those with inside connections, such as campaign consultants.”
  • Windy City Blows Over Ethics Reform: Local media reports on stalled efforts to reform Chicago’s ethics code and the mayor’s role in the diminishing prospects that these reforms will pass before the 2023 municipal elections. The proposal, “which has failed to advance in the two months since its introduction…would hike the maximum fine for violating the city’s ethics ordinance from $5,000 to $20,000 as part of an effort to grapple with Chicago’s seemingly intractable legacy of graft and mismanagement.” The mayor, who was elected on an anti-corruption platform in 2019, has apparently conveyed mixed signals about her position on the proposal and even “instructed her allies on the City Council to use a parliamentary maneuver during the May 25 City Council meeting to prevent… holding a hearing on the proposal this month.”  The proposal would also include stricter conflict of interest, pay-to-play, and revolving door provisions.
  • Staff Literally Handle Congressman’s Dirty Laundry: Roll Call reports on the ethics imbroglio surrounding West Virginia Alex Mooney as detailed in a report from the Congressional Ethics Office. Mooney apparently violated Congressional ethics rules when he and his family vacationed last year at the Ritz-Carlton in Aruba, paid for by HSP Direct, a company with which Mr. Mooney has significant financial and personal ties, “to the tune of over $10,800 for travel, lodging, meals, amenities, entertainment and activities.” Mooney and his family apparently also required Congressional and campaign staff to perform personal errands, including mechanic work on their cars, tutoring their children, dog-sitting, and other “tasks that had no connection to official duties.” The New York Times reports that “former staff members also were expected to gather Mr. Mooney’s dirty clothes from various places in the official office and have them taken to the dry cleaner… Mr. Mooney also asked an aide to take a shirt and a towel home with her to wash in her washing machine.”

WEEK OF May 27th, 2022

Latest Developments:

  • The United States Senate confirmed elections lawyer Dara Lindenbaum to the Federal Elections Commission with a bipartisan vote. As Roll Call reports, the Commission “in recent years had too few commissioners to conduct official business or even hold meetings. When Lindenbaum joins the agency, five [of the] commissioners will have been confirmed since May 2020.” Lindenbaum has agreed to recuse herself for two years from matters coming before the Commission which may involve clients she represented, some of whom are still active in electoral politics.
  • The Governor of Florida signed HB 7001, which implements a constitutional provision (Article II, Section 8(f)) previously adopted by the voters. The constitutional provision bans lobbying for six years after public officials leave office.  The bill adds detailed definitions in connection with that provision and imposes penalties, including a fine of up to $10,000, for violation of the ban.  Both the constitutional provision and the bill take effect December 31, 2022.
  • The California Fair Political Practices Commission issued a press release announcing “a new guide to make it easier for public entities to understand and follow the rules involved with spending taxpayer money to inform the public on issues involving political campaigns.” Under California’s Political Reform Act, public entities must disclose their expenditures, even when prohibitions regarding these expenditures fall outside of the Commission’s jurisdiction. The press release notes that violations of FPPC rules have multiplied “[i]n recent years [given]…a noticeable increase in campaign activity by public agencies… us[ing] public monies to produce communications – letters, flyers, radio, or television spots – intended to persuade voters to support or oppose ballot measures instead of simply providing voters with impartial information.”

In Case You Missed It:

  • Mayor Has His Wings Clipped: The Mayor of Anaheim, California resigned this week amidst an expensive federal probe into City officials concerning multiple corruption and money laundering allegations. As Politico reports, the accusations contend that the Mayor “sought to turn the city’s prolonged attempt to sell [the MLB] Angel Stadium…to his personal advantage… us[ing] an intermediary to pass confidential information about those talks to an Angels representative… [and concurrently] discussed his intention to ask an Angels representative for half a million dollars or more in campaign donations in exchange for his work advancing the proposed stadium deal.” The Mayor maintains his innocence and a “judge has halted the planned stadium transaction at the request of the California Department of Justice.”
  • Court Revelations Make Corporation Blush: The growing Anaheim dragnet sheds light on one major corporation’s machinations in local politics as detailed in FBI and related court documents. According to the Los Angeles Times, these documents refer to “Company A” and they “provide an unusually detailed look inside how the company works to shape events away from public view.” While not accused of any wrongdoing, the company’s influencing was revealed in recorded deliberations with City officials and other businesses interests. One such example is providing input for a script written for an Anaheim official (which the LA Times deduces is the now-former Mayor) arguing for a municipal bond measure which would cover revenue shortfall due to the pandemic. The corporation’s representative subsequently criticized the mayor’s delivery of the statement, which included copious praise for “Company A.”
  • Country Club Campaigning: The Office of Congressional Ethics revealed potential campaign finance violations against Texas Rep. Ronny Jackson. According to New York Times, the Congressman’s campaign apparently used campaign funds for expenditures for membership at a country club that “allowed him and his wife unlimited use of the club’s dining rooms, gym, banquet and meeting rooms, as well as access to club events and other benefits…in violation of Federal Election Commission regulations prohibiting the use of campaign funds for such purposes.” Jackson claims that the club membership was to be used for meeting and fundraising purposes, although he “refused to cooperate with the investigation, and his campaign’s treasurer and accounting firm refused to provide documents to investigators.” The Times notes that the club is part of a larger nationwide network of country clubs and golf courses and that thousands of campaign dollars have since been spent on monthly dues, dining, and meeting events.

WEEK OF May 20th, 2022

Latest Developments:

  • The Supreme Court of the United States, in FEC vs Cruz, ruled in favor of Sen. Ted Cruz in a case involving post-election contributions for repayment of a loan he made to his 2018 campaign which was $10,000 over the specified limit. As the Associated Press notes, in doing so, the Court struck down parts of the 2002 election reform law which held “that if a candidate lends his or her campaign money before an election, the campaign cannot repay the candidate more than $250,000 using money raised after Election Day.” The majority opinion notes “that the provision ‘burdens core political speech without proper justification’” and that there are still individual contribution limits per election, regardless if they come before or after election day.
  • The Governor of Maryland signed a pair of ethics bills with consequences for both campaign finance and local ethics commissions conflict of interest policies. SB 239 prohibits “publish[ing] any contributor information from any report or statement…in newspapers, magazines, books, websites, or other similar media for…commercial solicitation.” HB 1059, requires bi-county ethics commissions to adopt “conflict of interest standards applicable to public officials” that mirror similar state conflict-of-interest laws.

In Case You Missed It:

  • DOJ Sues Gaming Magnate: The US Department of Justice has sued casino owner and businessman Steve Wynn, who has close ties to former President Donald Trump, for allegedly lobbying on behalf of the Chinese government. As the New York Times reports, the lawsuit claims that, on multiple occasions “in 2017, Mr. Wynn pushed Mr. Trump [and other administration officials] to deport…[an unnamed] Chinese businessman who had sought asylum in the United States.” One objective of the lawsuit is to compel Mr. Wynn to register as a foreign agent. The DOJ claims “that it had asked Mr. Wynn to register himself as a foreign agent under the Foreign Agents Registration Act in 2018, 2021, and April of this year, but that he had refused.”
  • Synchronization not Coordination: The New York Times profiles the slew of moderate Democratic candidates working around campaign finance regulations openly providing detailed information for friendly PACs to use on their behalf. In many cases, it takes the form of “a red-bordered box on an obscure corner of…[a campaign] website” with opposition research, target demographics, and talking points that PACs can easily adapt for ads and other campaign expenditures.  According to the Times, “campaign watchdogs complain that the practice…effectively evad[es] the strict donation limits imposed on federal candidates.”
  • Ban on Out-of-State Contributions Unfair?: A 2021 law Illinois banning out-of-state contributions for judicial candidates is now claimed to favor in-state wealthy interests and hamper small donors, such as family members living outside Illinois whose support might be essential. Injustice Watch reports on the numerous judicial candidates who have had to return mostly small donations from family members and claim that “[w]ealthier candidates often have the advantage of being able to self-fund their campaigns while leaving others unable to make up the difference”. Critics further contend that the ban “doesn’t address the bill’s intention of deterring outside influence that is more likely to come from in-state corporations and special interest groups.”
  • When Work from Home Includes Campaign Offices: Business Insider covers the case of a Florida Congressional candidate facing FEC inquiries regarding her use of campaign funds for personal expenses like home electric bills. The article notes that, while there are narrowly defined personal uses such as private security that are permitted, candidates may not apply “donor funds for personal use, whether it be for rent, home internet, cable service, personal travel, or to pay for an energy bill…to prevent candidates from financially enriching themselves”. However, the candidate responded that her “campaign has used her home for campaign organizational and strategy meetings, campaign fundraising, general work space for campaign staff and volunteers” and other campaign related projects and that such reimbursements are valid.

WEEK OF May 13th, 2022

Latest Developments:

  • The Governor of New Jersey conditionally vetoed an anti-corruption bill earlier this week, contending that it might “allow those who offer, solicit or accept bribes for corrupt acts to find loopholes to evade criminal liability, which would then result in future legal arguments and judicial decisions.” As New Jersey media reports, the governor’s concern stems from a recent appellate decision regarding a failed mayoral candidate who was offered money by an attorney who wanted to be hired by the city. “A Superior Court judge ruled last year that because O’Donnell was not an elected official at the time, he had no power to make promises in return for the money. The appellate court decision in April said the ruling should be overturned and that judges from both the state trial court and the federal court were wrong because bribery is a ‘reciprocal crime’”. The bill now returns to the legislature with the governor’s suggested revisions to address loopholes which might not cover transgressions of these sorts.
  • The United States Department of Justice announced the arrest of two Puerto Rico mayors in a pay-to-pay scandal in which the mayors accepted cash payments from vendors in exchange for municipal contracts. According to WRIC, the arrests are part of a larger FBI initiative to uncover political corruption in Puerto Rico. Both mayors stand accused of “involvement in a bribery conspiracy…in which [they]received and accepted cash payments from two businessmen in exchange for awarding municipal contracts for waste disposal services, asphalt and paving services and debris removal, as well as payment of outstanding invoices on the contracts.” One mayor received at least $32,000 and the other at least $15,000.
  • The Alaska Public Office Commission has given notice of proposed regulations “dealing with contributions, independent expenditures, political communications, reporting requirements, and penalty mitigation.” Responding to the 2020 campaign overhaul initiative approved by voters, the statutory revisions augment post-election campaign contribution reporting requirements, further define “prohibited contributions”, refine reporting requirements for non-profit committees, and seek to institute 24 hours reporting, among other changes. The public comment period ends June 8th and the full text of the regulations can be found here.

In Case You Missed It:

  • Cloning PACs in the Natural State: The Arkansas Times reports on the proliferation of what they term “cloned PACs”, political action committees “funded by the same person or persons to multiply influence in political races.” While in Arkansas “a corporation or individual can put up to $5,000 in PAC,” by establishing distinct entities, the same contributors could donate to each organization which each have their own separate contribution limits. While the Times points out that multiple PACs were involved in recent state campaign finance scandals, the article acknowledges the legality of the practice.
  • Portland Contribution Limit Workaround: Oregon Public Broadcasting provides an analysis of this, the second election cycle in which the City of Portland’s public financing program has been in effect. In this year’s city council races, as in the 2020 cycle, individuals affiliated with the business and labor political action committee Portland United have given heavily to that PAC in addition to donating the maximum of $250 to their preferred candidate who is also receiving public funds. Critics contend that this phenomenon frustrates the program’s goal of “reduc[ing] the influence of big money in politics.” Instead of raising the caps to counteract PAC’s spending, the Portland Commissioner challenged by the PAC-supported candidate indicated that she will approach the City Attorney to require that future candidates disavow the committees making expenditures on their behalf or be suspended from the matching funds program.

WEEK OF May 6th, 2022

Latest Developments:

  • The United States House of Representatives passed S 3059, which would “require federal judicial officers, bankruptcy judges, and magistrate judges to file periodic transaction reports disclosing certain securities transactions….Specifically, the bill requires federal judicial officers, bankruptcy judges, and magistrate judges to file reports within 45 days after a purchase, sale, or exchange that exceeds $1,000 in stocks, bonds, commodities futures, and other forms of securities.” Having previously passed the Senate, the bill now heads to the President for signature or veto.
  • The Center for Political Accountability has released their “Practical Stake: Corporations, Political Spending, and Democracy” report on corporate contributions to candidates for approximately the last four years. Analyzing contributions made through business affiliated PACs, 501(c)4 organizations, and trade associations, the Center then correlates these donations with policy positions taken by recipient lawmakers. In “the report, [the Center] then sets out a framework for companies to evaluate their political spending and align it with core company values and core democracy values, mitigating risks to their self-interest and to democracy.”
  • The Colorado Senate voted to move forward with SB 237, which would “define ‘major purpose’ in campaign finance statutes and the parameters under which it would apply, particularly when it comes to issue committees.” As Colorado Politics reports, the bill has broad bipartisan support and seeks to “establish clear thresholds on spending, above which an organization would qualify as having a ‘major purpose’ of supporting a ballot measure and which would trigger registration as an issue committee, as well as a requirement to file campaign finance reports.”
  • The City of Cincinnati is moving forward with a ban on campaign contributions from certain developers after the City Manager approved rules which will go into effect later this month. As local media reports, these “rules prohibit sitting council members and the mayor from soliciting or accepting campaign donations from…[developers] with active business at council.” The rules stem from an ethics ordinance passed last year in the wake of 3 City Council members arrested for alleged bribery. Still, critics argue that “the ordinance should be broadened to include more than just developers, because other types of people have a financial interest in decisions made by council.”

Reminders:

The Practising Law Institute presents Advanced Topics in Ethics and Compliance 2022: State and Local Government Contracts, a one-hour session on May 12, 2022, from 10:45-11:45 PT/1:45-2:45 ET, chaired by Elli Abdoli of Nielsen Merksamer. Watch online or attend in person in New York City.

Interested persons may register here.  CLE credit will be available.

In Case You Missed It:

  • Challenge Against Corporate Contribution Ban Denied (Again): The Supreme Court of the United States, without comment, denied certiorari to yet another challenge to direct corporate contributions to candidates. In refusing to hear Lundergan vs. USA on Monday, the Court, without noted dissent, was asked to consider “whether the federal ban on corporate contributions is unconstitutional as applied to intrafamilial contributions from a closely held, family-run corporation.” The case involved the contributions of the appellant, the father of a former Kentucky statewide office holder, facing criminal prosecution for contributions made to his daughter’s campaign.
  • To Comment or Not to Comment?: In the wake of Florida’s decision to rescind certain business incentives for Disney after the latter’s criticism of recent legislation, corporate executives are reported to be concerned with how to avoid fallout for their own companies should they opine on hot button concerns. Indeed, the Wall Street Journal reports that “[a]t many companies, vocal employees have in recent years pushed bosses to take public stands on social and political issues…[and now] Florida’s pushback against Disney has raised the stakes.” While, “[t]he old idea that CEOs should focus on shareholder returns and stay out of politics lingers in some corporate suites, even in a politicized age of public social-media discussions and more-activist workforces… the consequences of weighing in appear to be changing.”
  • PAC Goes Public to Support Outsider Senate Candidate: Politico reports about the highly novel approach a Peter Theil backed super PAC took to helping the successful nomination of the largely understaffed come-from-behind J.D. Vance campaign for U.S. Senate in Ohio. Indeed, the super PAC, “set up a public website publish[ing] a trove of sensitive documents — from thousands of pages of polling data, to memos assessing the strengths and weaknesses of Vance’s opponents, to a 177-page opposition research book detailing all of the areas where Vance’s opponents might attack him.” While publishing the information this way made it available to everybody, it picked up the slack for a candidate who otherwise lacked much of the institutional campaign infrastructure of the other establishment candidates.” Also noteworthy, “Theil…[gave] $15 million in total to bolster Vance — the largest amount ever given to boost a single Senate candidate.”
  • FARA’s Long Reach: The U.S. Department of Justice is being asked to investigate celebrity physician and Pennsylvania Senatorial candidate, Dr. Mehmet Oz for what an advocacy group claims is a violation of the Foreign Agents Registration Act. The accusation stems from a promotional video and ad appearances the candidate made for Turkish Airlines, which according to the New York Post, is 49.12% controlled by the Turkish government as of 2015. While Dr. Oz’s spokesperson contends that “[i]ndividuals and firms working to advance the bona fide commercial interests of a foreign business are not subject to FARA and not required to register,” a FARA expert contends that this type of public relations work would “likely…not qualify for the [commercial] exemption because the activities would directly promote the public or political interests of the foreign government.”
  • Virtual Disclosure Considerations: In the wake of pandemic driven increase in virtual meetings, a report by Austin city auditors has brought to light the disclosure gap created by the lack of a requirement that lobbyists register their virtual meetings with City officials as they are required to do for in-person meetings. While the report noted that compliance with lobbyist registration and reporting was consistent, “nothing in city code requires either the lobbyist or the person being lobbied to keep a record,” according to The Austin Monitor. The report recommends revising the lobby ordinance to incorporate virtual meetings, similar to other Texas cities such as San Antonio and Dallas.

WEEK OF April 29th, 2022

Latest Developments:

  • The United States Supreme Court has declined, without comment, to hear a challenge to Rhode Island’s campaign finance reporting requirements. The state “requires independent expenditure groups to disclose all donors giving at least $1,000 and for the advertisements themselves to list the group responsible and top five largest donors.” Conservative groups, whose challenges did not prevail in two previous federal courts, “argued that making donors identify themselves could subject them to criticism and harassment. They called for a judgment-free “safe space” for political contributions.”
  • The Washington Public Disclosure Commission is considering raising the trigger for reporting late cycle campaign contributions from $1,000 to $1,500, citing “the economic changes reflected in the inflationary index.” The so-called “last-minute contributions” refer to donations made “six days before the primary and 21 days before the general election.” The adjustment would be effective for the 2022 election cycle under an expedited process which would skip most public review.
  • Taco Campaign Drive: The California First Appellate District-Division Two ruled this week that East Palo Alto City Councilmember Antonio Lopez did not engage in illegal electioneering during his 2020 election bid by giving out free tacos near a San Mateo County ballot drop box, and polling place. Lopez had advertised free tacos to those who showed up at the polling place and the court found that, ultimately, “the provision of tacos did not reward any voter for voting or voting for any particular person. The tacos were given to the entire community, including people who obviously could not vote, including children.”

 In Case You Missed It:

  • Private Clubs No More in Minnesota Legislature: The Minnesota Post reports that a bill pending before the state legislature “would ban contributions to any club set up by a political committee of a candidate or a political caucus of the Legislature that provides access to lawmakers.” The ban was apparently requested by the Minnesota Campaign Finance Board, given that the current arrangement allows “charging membership dues to a club that provides access to Capitol decision-makers” to get around contribution session ban that already exists in law. Critics contend that the current arrangement provides “a way to accept money from, say, lobbyists, before session and a way to give those lobbyists special and private access to lawmakers during session.”
  • Lobbyists Squeezed out of Committee Rooms: California Globe is reporting on dwindling seating capacity in public spaces previously available to lobbyists at the California Legislature. Both the state Senate and Assembly are “still requiring social distancing in committee hearing rooms, greatly diminishing available seating for lobbyists and members of the public,” with some not even permitting 14% capacity.  These restrictions are especially problematic for lobbyists as some committees have “not allow[ed] public/lobbyist phone-in testimony… [which] has been the only way…many lobbyists have been able to testify at legislative committee hearings” since the beginning of the pandemic.

WEEK OF April 22nd, 2022

Latest Developments:

  • The Governor of Maine signed P. 619, which permits businesses to “contribute the paid staff time of its employees and independent contractors to establish the committee and to provide fundraising and administrative services directly to the committee.”  The measure also provides for inflation adjustments for the existing limit on individuals’ contributions to corporate-affiliated PACs beginning in 2023.
  • The Governor of Colorado signed B. 1060, which caps contributions to school board candidates. Individuals may contribute up to $2,500 and small contributor committees may contribute up to $25,000 per election cycle.  The measure takes effect July 1.
  • The Wisconsin Ethics Commission reminded lobbyists that they may now make contributions to “candidates for non-legislative partisan state offices.” The window for making personal contributions to legislative offices will open next month after the legislature finishes its “veto review floorperiod” and adjourns for the year.

In Case You Missed It:

  • Ethics Agency Chastised: Tennessee Lookout reports that “[a] judge on Monday deemed the Tennessee Bureau of Ethics and Campaign Finance guilty of ‘willfully’ violating a court order barring the collection of registration fees from nonpartisan political action committees.”  The court found the Bureau violated a 2018 injunction prohibiting it from collecting the fees.
  • Santa Fe Disclosure Law Upheld: According to the Santa Fe New Mexican, the United States Supreme Court turned down a petition for review of the city’s campaign spending disclosure requirements.  In Rio Grande Foundation v. Santa Fe, a nonprofit, which spent money to oppose a soda tax, challenged the city’s “ordinance that forces nonprofit organizations that spend more than $250 supporting or opposing a ballot initiative to place on a publicly-accessible government list the names, addresses, and employment information of any donor who contributes even a penny to the organization for that purpose.”
  • New York Reforms Analyzed: The Gotham Gazette reviewed recent changes to New York lobby and campaign finance provisions that were included in a state budget act.  The article explains the negotiations on what would replace JCOPE, as well as details on additional public campaign financing, voting reforms, and changes to the state’s open meeting law that were contained in the bill.

WEEK OF April 15th, 2022

Latest Developments:

  • The Governor of New York signed A 9006, a budget bill that replaces New York’s Joint Commission on Public Ethics with the Commission on Ethics and Lobbying in Government. (See Part QQ of the bill, beginning on page 151.)  The 11-member commission will be appointed by various officeholders, subject to approval by an independent review committee made up of deans of ABA accredited law schools.  However, the commission will choose its own chair and executive director, and the executive director will be responsible for hiring the staff.  Members of the commission will serve staggered four-year terms.  The measure continues the effect of “regulations or advisory opinions in effect on the effective date of this section that were issued by predecessor ethics and lobbying bodies.”  These provisions of the bill take effect July 8, 2022.
  • The United States House of Representatives Committee on the Judiciary held a hearing on “Enhancing the Foreign Agents Registration Act of 1938.” Politico explains that “Lawmakers and a legal scholar, government watchdog and nonprofit advocate debated whether the Foreign Agents Registration Act should be expanded or reined in during a hearing… on the 1938 law — the first such session dedicated to FARA held by the House Judiciary Committee since 1991.”
  • The Governor of Utah approved HB 90, which extends coverage of the Lobby Disclosure and Regulation Act to local officials and educational officials, i.e., county, municipal, and school board officials. It permits those government entities to enact stricter measures.  The bill also requires registration of “foreign agents.”  The measure takes effect May 3, 2022.
  • The Governor of Virginia signed HB 492, which requires the Virginia Department of Elections to randomly audit the campaign finance statements of a 10% of legislative campaign committees and 1% of other campaign committees.  The measure becomes operative January 1, 2024.
  • The Seattle Ethics Commission increased the contribution limit for candidates not participating in the democracy voucher program from $550 to $600 per election cycle for the 2022 election cycle.
  • The United States Department of Justice announced an indictment of New York Lt. Governor Brian Benjamin on corruption charges. The New York Times reports “The five-count indictment charging Mr. Benjamin said that while he was a state senator, he had conspired to direct $50,000 in state funds to a Harlem real estate developer’s charity. In exchange, the developer gathered thousands of dollars in illegal contributions to Mr. Benjamin’s 2020 Senate campaign and his unsuccessful 2021 bid for New York City comptroller…” The developer is accused of filling “out campaign contribution forms in front of Mr. Benjamin, signing the forms not in his name, but in the names of his relatives…” He steered “a series of fraudulent donations to the comptroller campaign.  Some were made in the names of individuals, including the developer’s 2-year-old grandchild, who did not consent to them; others had donated money but were fully reimbursed.”  Benjamin resigned within hours after the indictment was unsealed.

Reminder:

Voting and the Disability Community:  Disabled voters faced unique challenges in elections held during the pandemic, particularly in regard to privacy and access to all-mail voting.  The American Bar Association will be considering how to improve the law and best practices by election administrators.   If you are interested in the topic, join Nielsen Merksamer’s Jason Kaune and others at this webinar on Wednesday, April 20 at 3 p.m. Eastern (Noon Pacific) open to ABA members.  Register here.

In Case You Missed It:

  • BART May Cancel Contract over Spousal Conflict: According to the California Fair Political Practices Commission California “Government Code Section 1090 prohibits an officer, employee, or agency from participating in making government contracts in which the official or employee within the agency has a financial interest.”  The Los Angeles Times reports that the Bay Area Rapid Transit District “may be required to void a $40-million construction management contract after an investigation revealed a potential conflict of interest… The manager clearly had a role in making several contracts with the firm…”  The manager’s spouse is an employee of the contractor and “received an annual profit-sharing distribution from the firm, and the firm’s contracts with BART likely contributed to at least some of those profits…”
  • High Flying Ethics Issues: KIVT4 explains that “Members of Congress are limited to earning a maximum of $29,895 from outside sources of income in 2022, according to rules set by the House Ethics Committee.”  A Hawaiian member “earned $29,151.79 from Hawaiian Airlines in 2021… His outside income also raised questions about a potential conflict of interest, since Hawaiian Airlines has business before the House Transportation and Infrastructure Committee. [The member] serves on that committee, which has jurisdiction over the airline industry. [His] office defended his seat on the Transportation and Infrastructure Committee, saying his background as a commercial pilot offers a ‘unique perspective.’”
  • FEC Cracks Down on Canadians: According to the New York Times, “A Canadian steel industry billionaire illegally helped steer $1.75 million in donations to a pro-Trump super PAC and has agreed to pay one of the largest fines ever levied by the Federal Election Commission to settle the case… [The billionaire] played a role in directing one of his executives who is a U.S. citizen to send in the contributions — some of the largest made by any donor to the super PAC — even though federal law prohibits foreigners from participating in decision making related to campaign donations, as well as from directly writing campaign checks.”
  • Entire Ethics Panel Resigns: Maryland Matters reports that the volunteer “ethics panel that produced a controversial set of findings against members of the Prince George’s County Board of Education is stepping down en masse.  The panel notified board chair Juanita D. Miller of their intention to resign as a group in an April 3 letter that was obtained by Maryland Matters. The departures will take effect on Friday and will leave the (school) board, which has been dogged by allegations of misconduct, without ethics overseers.”
  • Straw Donor Plea: The United States Department of Justice announced that former state senator and congressional candidate Brent Waltz “pled guilty in federal court … to two felonies: making and receiving conduit contributions, and making false statements to the Federal Bureau of Investigation.  Waltz faces up to five years in prison for each offense.”  The Indianapolis Star explains that the “he participated in a scheme to funnel $40,500 in illegal contributions to his failed campaign for Congress in 2015.” Money from a casino operator “was funneled through a Maryland political consultant” and that money was used “to reimburse more than a dozen ‘straw donors’ who contributed to Waltz’s campaign for U.S. House.”

WEEK OF April 8th, 2022

Latest Developments:

  • The U.S. Government Accountability Office issued a report to congressional committees regarding compliance with lobby reporting requirements. The report found that “most lobbyists provided documentation for key elements of their disclosure reports to demonstrate compliance with the Lobbying Disclosure Act of 1995, as amended (LDA)…  GAO estimates that
    • 92 percent of lobbyists who filed new registrations also filed LD-2 reports as required for the quarter in which they first registered…;
    • 97 percent of all lobbyists who filed provided documentation for lobbying income and expenses;
    • 35 percent of all LD-2 reports may not have properly disclosed one or more previously held covered positions as required; and
    • 7 percent of LD-203 reports were missing reportable contributions.”
  • The Governor of Florida signed HB 921, which prohibits nonresidents and out-of-state PACs from contributing more than $3,000 to a “political committee that is the sponsor of or is in opposition to a constitutional amendment proposed by initiative.” The limit applies until “the Secretary of State has issued a certificate of ballot position and a designating number for the proposed amendment that the political committee is sponsoring or opposing.”
  • The California Attorney General issued an Opinion 19-1001 finding that the state’s “statutory ban on [Fair Political Practices] Commissioner (political) contributions applies to candidates in federal elections held in this State.” The Attorney General reviewed a statute that he said “fosters impartiality by prohibiting Commissioners from engaging in certain political activities during their tenure. Commissioners may not serve as an officer of a political party or partisan organization, work as a lobbyist, or hold or seek another public office. Nor may Commissioners ‘participate in or contribute to an election campaign.’” The opinion reviews other provisions of the Political Reform Act covering federal activity, some of which were preempted (for example, additional filings by federal officials) and others that remain (notably the state’s pay to play law’s applicability to certain federal contributions.)   The opinion was triggered when a commissioner contributed to a federal presidential candidate.
  • Voters in the City of St. Louis approved Proposition R, an ethics measure that includes an independent redistricting commission and prohibits various conflicts of interest. Among other things, the measure prohibits any “Alderperson or employee of the Board of Alderpersons” from working as a lobbyist or seeking to “directly or indirectly influence a decision of the City or any department or agency thereof until one year after termination of their service or employment.”  The voters approved the measure by a 69% to 31% margin.

In Case You Missed It:

  • Case Closed: The Federal Election Commission has resolved its case against former Congressman Duncan Hunter and his campaign committee.  The Hunters agreed to pay a $12,000 fine; the committee earlier agreed to pay a $4,000 fine.  The San Diego Union-Tribune explains that the fines were for “wrongly spending campaign donations for personal use…”  Hunter resigned from office after both he and his wife pleaded guilty to criminal charges related to the contribution activity.  Both were pardoned by President Trump.
  • Cuomo Sues JCOPE: The Albany Times-Union reports that former Governor Andrew Cuomo’s attorney “filed a complaint asking the state inspector general’s office to investigate their claim that members of the [New York Joint] commission [on Public Ethics] or its staff leaked confidential information about Cuomo’s dealings with the ethics panel.  [His attorney] also filed a lawsuit in state Supreme Court late Friday challenging the commission’s efforts to make him return more than $5 million in proceeds from a book he wrote about his administration’s handling of the pandemic.”
  • Another Corruption-Related Resignation: The San Francisco Chronicle reports that the head of San Francisco’s Department of the Environment, Debbie Raphael, resigned in advance of a report detailing her solicitation of a city contractor for a contribution to fund events.  One city supervisor called for a “hearing after recent reports from the San Francisco Standard that Raphael ‘may have been complicit in granting a sizable and controversial landfill contract to Recology while soliciting a $25,000 contribution’…”  A new city ordinance, effective this year, bans behested payments from interested parties, including city contractors, lobbyists, and permit consultants.
  • 130+ Ethics Charges: The Charleston Post & Courier describes the plight of a state legislator who “is facing more than 130 ethics charges related to allegations he mishandled campaign funds. Among the most serious charges against the four-term House member: that Hill spent campaign money on a personal mortgage, accepted — but didn’t report — cash donations, and failed to publicly report fundraising and spending for his Statehouse campaigns.”   The article notes that  the “investigation sprang from an audit that found Hill’s campaign records were a mess.”

WEEK OF April 1st, 2022

Latest Developments:

  • A Federal Grand Jury in Tennessee saw top state lawmakers, including the current state-House speaker, testify this week amidst a years-long “investigation [of]…a case involving the creation of a political vendor that gave kickbacks to lawmakers,” according to The LA Illuminator. Additionally, Nashville 5 reports that, as part of the probe, it is alleged that “former House Speaker Glen Casada received ‘kickbacks’ in exchange for steering business to that company, Phoenix Solutions…[which] was secretly controlled by longtime Casada aide.”
  • Federal Prosecutors in Arkansas announced a settlement on Thursday in which a health care non-profit “agreed to forfeit more than $6.9 million to the federal government and pay more than $1.1 million in restitution to Arkansas.” The organization, Preferred Family Health Care, “admitted that its former officers and employees conspired to embezzle funds from the charity and bribe Arkansas legislators.” Arkansas Business reports that several former executives from the charity, former Arkansas legislators, and others have pleaded guilty in federal court as part of the corruption probe, including a lobbyist for the organization who pled guilty in 2019 to bribery and was sentenced to seven years in prison.
  • The Hawaii Commission to Improve Standards of Conduct, commissioned by the state legislature, issued its interim report in which it suggested several legislative proposals to “improve standards of conduct among elected officials and employees as safeguards against the further erosion of public trust and confidence in government.” As Hawaii Public Radio reports, the Commission was formed in the wake of two former lawmakers charged with bribery and proposed such legislation as increasing fines on Super PACs that raise more than $10,000 from a single source, increase state Attorney General staff for prosecution of public corruption crimes, and prohibit fundraising during the legislative session, among others.

In Case You Missed It:

  • Colorado PAC’s Phantom Funds: The Colorado Secretary of State Elections Division has agreed to look further into a Colorado Springs party official’s complaint that a PAC made contributions to local candidates that it apparently did not have the money to cover. According to the notice, the PAC “reported no contributions since July 2016 and showed an on-hand balance of only $850…[yet] made two prohibited $5,000 contributions to two candidate committees for county office in October 2021, which were not reported in Respondent’s required disclosure reports.” While the candidates returned the part of the contributions in excess of the legal limit, the Colorado Springs Independent distills the larger question as, “[w]here did the 10K come from?”
  • Pelican State Campaign Practices: The Advocate is reporting on Louisiana state AG Jeff Landry’s decade-long campaign practice of paying a staffing business he owns for campaign related expenses, estimated at more than $420,000 over the last 15 years. Public records show that “Landry is the sole owner of [the recipient] firm and earns more than $200,000 in annual income from it.” Good government watchdog groups in the state contend that the practice obscures who is being paid by the campaign for services. At the same time, “Louisiana law doesn’t directly address whether political candidates may spend campaign cash on their own companies.”
  • Old Line Campaign Funds for Legal Defense: We reported last week on state attorney Marilyn Mosby’s alleged campaign irregularities in that deceased relatives’ names were listed as campaign contributors years after their demise. This week, The Baltimore Sun reports that the embattled official received a favorable determination regarding another campaign finance complaint. Facing “federal charges of perjury and making false statements following a nearly yearlong probe into her personal finances and campaign spending” the Maryland State Board of Elections determined that her and her politician husband’s “use of campaign funds for the legal defense…did not violate state election law.” While state law prohibits campaign funds from being used for lawsuits not immediately related to the campaign, the Mosby’s argued that “the investigation…‘inserted itself into almost every aspect of their lives — including their respective campaign committees’”.

WEEK OF March 25th, 2022

Latest Developments:

  • The Oregon Supreme Court issued a ruling in Ofsink v. Fagan, turning down an appeal asking the “Secretary of State to withdraw her orders that disqualified their  initiative  petitions  from  appearing  on the November 2022 general election ballot.”  The initiatives would have permitted Oregon voters to consider campaign contribution limits at the November 2022 election.  Oregon Public Broadcasting explains that “The decision is almost certainly a fatal blow to the effort to institute campaign finance limits this year.”
  • A federal judge in Wyoming “ruled that the state cannot force a Second Amendment advocacy group to share the names of its donors.” According the Cowboy State Daily, the judge found that “‘the state can only impose these disclosure and disclaimer requirements where it satisfies exacting scrutiny.’” He found that “it would be impossible for the [Wyoming Gun Owners] to determine which contributions would be used specifically for political advertising and which would be used to pay for other activities.”  He also found “the statute is also unconstitutional because it calls for the reporting of expenditures which ‘relate to’ campaign communications, a term he said was unconstitutionally vague.”
  • A US District Court judge sentenced “[a] Ukraine-born U.S. businessman…to one year and one day in prison on Tuesday after being convicted last year… for funneling money from Russian tycoon Andrey Muraviev to U.S. political candidates who could help a cannabis company he was building.” The defendant sought to avoid prison time by claiming that he can better help Ukrainian refugees and charitable efforts in his home country, but the judge claimed the sentence would serve as a deterrent. The sentencing comes amidst the federal government “target[ing] wealthy Russian businessmen with possible sanctions, asset seizures and criminal charges to pressure the Kremlin to stop its invasion of Ukraine.”

Reminders:

The Practising Law Institute presentsNonprofit Involvement in Elections: What to Look for in 2022, a one-hour webinar on March 29, 2022, from 10-11 am PT, moderated by Joel Aurora of Nielsen Merksamer.

Interested persons may register here.  CLE credit will be available.

In Case You Missed It:

  • Failure to Register PAC Results in Criminal Charges: The New Mexico Attorney General announced that he had filed criminal charges “against Couy Griffin for one count of violating the Campaign Reporting Act.  The Associated Press explains that the ‘’New Mexico elected official was charged Friday with a misdemeanor campaign finance violation for refusing to register his political group Cowboys for Trump.”  The charges come after Griffin lost an appeal in the 10th Circuit  (Cowboys for Trump v. Toulouse Oliver).  The Associate Press reports that Griffin is “planning a fresh challenge to the reporting requirement.”
  • Deceased Reportedly Made Campaign Contributions in Baltimore: Baltimore City’s State Attorney Marilyn Mosby’s late grandfather, deceased since 2015, is listed on campaign finance reports as having made campaign contributions in 2017 and 2021 to both her campaign account and that of her Baltimore City Councilmember husband. According to local media, Mosby, who is under “indict[ment] on federal charges of perjury and making false statements on a loan application…chalked up the contribution made in Mosby’s late grandfather’s name as an ‘administrative oversight’.”
  • State Capitols Reopening: The Hartford Courant reports that, after two years, “mask-wearing lobbyists say they are happy to be back [in the state capitol building] after having little personal access to lawmakers during the entire pandemic.”  The article points out that “Lobbying is the art of personal persuasion, reading body language, and making follow-up points.  That is very hard to do on the phone or on Zoom.”
  • Atoning for Years of Missing Campaign Finance Reports: Local media in Charlotte, North Carolina is reports on former City Council member James “Smuggie” Mitchell’s contrite statements for missing three years of campaign finance reports. Fox46 reports that Mitchell, who is running again City Council, “failed to file his campaign finance reports with the Mecklenburg County Board of Elections Office for almost three years. The last campaign finance report filed by Mitchell was in July of 2019.” Last year, the former council member had “resigned due to a conflict of interest when he got a job as the CEO of a construction company that did business with the City.”

WEEK OF March 18th, 2022

Latest Developments:

  • The Governor of Wyoming signed SB 80, which requires “all campaigns and political action committees to file an itemized statement of contributions and expenditures,” not just those that expend funds during the reporting period, and increases the penalty for failure to file a campaign report from a flat $500 to an open-ended amount of up to $500 per day until the report is filed.  The bill takes effect July 1.
  • NYC Ends Lobbyist Disclosure Policy: New York City’s new mayor “dispensed with a de Blasio-era policy to voluntarily disclose meetings top administration officials take with lobbyists.”  Politico explains that “Two City Hall attorneys alerted administration employees of the change in a March 1 memo laying out rules governing communication with lobbyists… ‘Mayor’s Office employees are not required to maintain or file any reports or documents in connection with their meetings with lobbyists,’ the attorneys wrote, effectively undoing a discretionary policy former Mayor Bill de Blasio instituted to mandate routine disclosure of lobbying meetings.”
  • New York State Crackdown on LLCs: New York Focus reports that the New York State Board of Elections “identified about 3,400 LLCs that had donated to political campaigns but failed to file a ‘statement of interest’ form listing their owners and how much of the company each one owns, as required by… law.” The Board “has begun to enforce the law by notifying thousands of corporate donors that they are violating it.” The report also asserts that “dozens of LLCs also violated annual donation limits, donating as much as eight times the $5,000 cap.  [The board’s counsel]  said that after the letters, the next step in enforcement will be to investigate those violations.”
  • The Tennessee Registry of Election Finance voted this week to send a case to prosecutors concerning fraud and kickbacks involving a former state House speaker and other lawmakers, according to the Crossville Chronicle. As we reported last week, one state lawmaker involved in the scheme pleaded guilty to wire fraud and agreed to collaborate with prosecutors, with analysts predicting future indictments. Now, “[f]ederal authorities say…[multiple lawmakers] collaborated on a separate consulting firm…as a way to funnel money to themselves secretively and illegally through both campaign and taxpayer-funded work.” Another PAC and additional collaborators are named in the probe.

Reminders:

The Practising Law Institute presents Nonprofit Involvement in Elections: What to Look for in 2022, a one-hour webinar on March 29, 2022, from 10-11 am PT, moderated by Joel Aurora of Nielsen Merksamer.

This program will address the role of nonprofits as vital participants in elections, praised for nonpartisanship by some and derided as vehicles for “dark money” by others.  With the 2022 midterm elections rapidly approaching, nonprofit organizations will again be involved in a range of election-related activities.  As a result, it is crucial that nonprofit organizations—including 501(c)(3), 501(c)(4), and 501(c)(6) groups—and corporate donors understand the laws governing participation in advocacy and politics.

Interested persons may register here.  CLE credit will be available.

In Case You Missed It:

  • The trial of Rep. Jeff Fortenberry (Nebraska) over campaign finance charges began on Thursday, as the latest development in the federal lawmaker’s years long legal ordeal. Fortenberry is accused of accepting illegal campaign contributions from a foreign national through straw donors and later lying about it to federal investigators. As the Wall Street Journal reports, federal prosecutors contend that Fortenberry “continued to deceive investigators, despite multiple ‘off-ramps’ and ‘opportunities to disclose the truth, and that he did so because it benefited him, it benefited his friends and it preserved his ability to get additional money.’”
  • Straw Donors Not Guilty: A federal jury in the District of Columbia acquitted two men, who the Department of Justice asserted acted as a conduit to make prohibited contributions from a global payments company to the Hilary Clinton campaign (and later to “Republican causes”).  Politico  notes that “To prove a criminal violation of campaign finance laws, prosecutors have to show that a defendant willfully violated the statutes, essentially that he or she knew that it was illegal to donate in someone else’s name or to exceed donation limits and did so anyway.  A Justice Department spokesperson declined to comment on the verdicts.”
  • Another Straw Donor Indicted: CNBC reports that “A Russian oligarch linked to men previously charged with making an illegal donation to a political action committee set up for former President Donald Trump was himself indicted by a federal grand jury in New York for using those men to funnel contributions to other politicians…  (He) is accused of wiring $1 million to (the straw donors) to fund the political contributions in November 2018 in advance of the elections that year.”
  • Washington Lobbying Sets Record: The Washington Post reports that “The lobbying industry had a record year in 2021, taking in $3.7 billion in revenue…”  According to the article, “3,700 new companies and organizations hired lobbyists since start of the pandemic… The surge came as companies and associations aimed to roll back regulations on their industries — many of them pandemic-related — while others vied for a slice of the trillions in new spending.”
  • Pro Bono Lobbyists for Ukraine: CNBC discloses that “Lobbyists are working to connect Ukrainian officials with powerful allies in the U.S., including mayors, governors and representatives of at least one firearm’s dealer in an effort to help the war-torn country in its fight against Russia. At least one U.S. firm and a separate lawyer each recently disclosed to the Department of Justice’s FARA unit that they started pro bono work for Ukrainian government officials since the start of Russia’s invasion.”

WEEK OF March 11th, 2022

Latest Developments:

  • The Wyoming Legislature approved and sent to the Governor HB 49, which requires corporations and other entities that spend $1,000 or more on independent expenditures or electioneering communications to register and file reports of their activity. If signed by the Governor, the measure would take effect on July 1, 2022.
  • The New York Joint Commission on Public Ethics announced that its “systems have been restored and operations are resuming” following a cyber security incident. “Any filings due between February 17 and March 9 will be automatically granted an extension to March 31. Additionally, the March 15 lobbying bi-monthly report deadline is also extended to March 31.”
  • The Chicago Board of Ethics issued Advisory Opinion 22005.A , which lists 15 factors to be considered when determining whether “a PAC or other non-official candidate political committee is to be considered and properly and accurately treated as an additional political fundraising committee ‘of’ a City elected official or candidate for City office, thereby subjecting its contributors to the same limitations (as) contributors to the candidate’s official candidate committee…”
  • The California Fair Political Practices Commission announced that it has issued its annual report regarding regulatory and enforcement activity in 2021. The Commission also issued a draft opinion on the treatment of the creation and sale of non-fungible tokens as a fundraising devise for a campaign committee.  The opinion holds that the entire amount of the sale should be reported as a contribution.  The commission will consider adopting the opinion at its meeting this month.
  • The United States Department of Justice announced that a Tennessee State Representative “pleaded guilty… to a single count of honest services wire fraud, following charges filed (last week).” She allegedly set up a political mail company operated by a fictitious political consultant and received kickbacks.  Axios Nashville explains that she resigned from the legislature when the charges were filed.  The article infers that more indictments may be on the way.

In Case You Missed It:

  • Grocers Settle Record Case: The Associated Press reports that following the January decision Washington v. Grocery Manufacturers Assn., in which the Washington Supreme Court again upheld a record $18 million fine for failure to timely register and file disclosure reports in a 2013 initiative measure campaign, the association, settled “the case for $9 million, including $3 million in donations to two charities that fight hunger.”
  • Russian Lobbying Ended: According to Politico, “Russia’s invasion of Ukraine has done something previous tensions between Moscow and Washington could not: convince American lobbyists to turn down money from Kremlin allies. Even after the annexation of Crimea in 2014 and reports that Russia interfered in the 2016 election, the spigot of Russian money to K Street kept flowing. Over the past eight years, firms doing legal, lobbying, and PR work reported payments of roughly $18 million to do work for six Russian entities…”  Roll Call further reports that some Washington law and lobby firms  are “winding down, or at least reevaluating, operations in Russia…”  One firm said it was “‘suspending operations in Moscow pending further developments… We will continue our efforts to provide humanitarian aid and pro bono assistance to Ukrainian refugees and others in need…”
  • Fine for Failure to Disclose: The Texas Ethics Commission fined a Houston official $30,000 for a “deceptive mailer supporting his run for City Council back in 2019.”  The mailer inferred certain endorsements which were not true.  Bay Area Houston reports that the official “paid for the mailer but did not disclose it on his ethics report… (he) claimed he had nothing to do with the mailer but receipts and emails between him and the printer show this was not true.  (He also) instructed the printer to NOT include the political disclaimer ‘Political Ad Paid for by….’”

WEEK OF March 4th, 2022

Latest Developments:

  • The Alaska Public Offices Commission has advised us that, “In light of the Ninth Circuit Court of Appeals ruling in Thompson v. Hebdon, APOC staff issued a draft advisory opinion concerning contribution limits. Staff recommended that the limits in effect prior to those struck down as unconstitutional be revived and adjusted for inflation. On Monday, February 28, 2022, the Commission held a meeting to consider staff’s draft opinion and on March 3, 2022, issued its Final Order disapproving the draft opinion. Accordingly, until the Alaska State Legislature takes action on this issue, there are no longer any individual-to-candidate; individual-to-non-political party; non-political party group-to-candidate; and non-political party group-to-non-political party contributions limits for Alaska’s state and local elections.”
  • The New York Joint Commission on Public Ethics posted a statement on its website saying that it “learned that it was the target of a deliberate malicious cyberattack, specifically to the web server that houses, among other systems, JCOPE’s Lobbying Application and Financial Disclosure Statement Online Filing System… Extensions will be automatically granted for any filings that were due and could not be submitted because of the outage; those extensions will be determined once the systems have been brought back online.”

In Case You Missed It:

  • No Enforcement in New York: According to New York Focus, “Thousands of political campaigns have violated campaign finance law but faced no consequences, according to the official in charge of the state Board of Elections’ enforcement arm… In all, 3,451 campaigns have violated the disclosure law,” but zero enforcement actions have been brought.
  • Contingent Fees OK if it’s not Lobbying: The Sacramento Bee describes a practice in which two consultants “were promised a $2 million bounty fee” to get state regulators to approve an insurance company acquisition deal.  Like many states, California bans contingency fee lobbying, but its lobby law only covers legislative matters, rulemaking, and ratemaking.  “Lobbyists are generally forbidden from charging success fees for their work, but the payment… was legal because the work they did doesn’t qualify as lobbying under California law.”
  • C. Lobbying Returning to Normal: Bloomberg Government reports that  “some lobbyists and industry associations are resuming their trek to Washington and have devised work-arounds to deal with continued restrictions on entering the Capitol complex… More than 50 different business groups plan Washington trips, with industry fly-ins beginning March 2, according to Ed Mortimer, a U.S. Chamber of Commerce vice president. He said these visits will be complemented with Zoom and Teams chats as well as traditional meetings with lawmakers when they are back in their home states.”
  • C. Lobbyists asking for Post-COVID Access: Roll Call describes an effort by the National Institute for Lobbying and Ethics to “urge Congress to… reopen (legislative buildings) to the people without appointments starting July 11, 2022… Currently, lobbyists may conduct in-person meetings on Capitol Hill, so long as a congressional aide signs them in and escorts them around the buildings.”
  • Oklahoma not OK with Out-of-State Influence: Oklahoma Watch reports that “Several Oklahoma lawmakers are looking to add hurdles for citizen-led groups to pass the type of state questions” that legalized marijuana, expanded Medicaid, and changed some felonies to misdemeanors.  Among the proposals are measures to require a majority of voters in two-thirds of Oklahoma counties to vote for some state questions to take effect statewide; mandate background checks for petition circulators; and block out-of-state donations for initiative or referendum campaigns.  The article includes an analysis of how much money in recent initiative campaigns came from out of state.
  • Activists Protest Lack of Lobbyist Gift Ban: A group of protesters disrupted a “Pennsylvania Press Club luncheon Monday in an effort to pressure (Pennsylvania) House leadership to take action on (legislation to ban gifts to lawmakers).”  The Harrisburg Patriot-News reports “Hotel security staff and others encouraged the group to leave the room, which they did.”  The article points out that the speaker is  supportive, offering “kudos” to the Governor for imposing gift rules on executive officers.  The protesters say they “don’t know the full extent of the gift culture in Harrisburg because while legislators only report receiving $40,000 a year in gifts, lobbyists report gifting legislators $1.5 million a year in gifts…”
  • Funny Money: Colorado Politics discloses that “A House staffer went into the men’s public bathroom at the north end of the (Colorado) Capitol basement and found an envelope some time overnight. Inside were checks, made out to the Senate Majority Fund, the independent expenditure committee that helps to finance Republican campaigns for the state Senate.”  The envelope, with checks allegedly “in the five figures,” is “now in the hands of Senate staff.” According to the article, “Sen. Paul Lundeen of Monument, who is in charge of the majority fund, told Colorado Politics he won’t accept those checks, given that they were left “on site.”  ‘It’s a best practice in my opinion’ not to accept contributions within the Capitol, Lundeen said.”

WEEK OF February 25th, 2022

Latest Developments:

  • The Iowa Ethics Commission issued Advisory Opinion 2022-01 permitting campaign contributions in cryptocurrency, and declaring that those contributions are to be reported as “in-kind contributions.” The currency is valued at the time of liquidation.  Committees are prohibited from spending cryptocurrency on goods or services, because all expenditures must be made from a bank account in a financial institution located in Iowa.
  • The United States Department of Justice has published the comments it received in response to its advance notice of rulemaking in connection with the Foreign Agents Registration Act. Reuters explains that “Several large U.S. law firms have made recommendations to the U.S. Justice Department that they said will provide more clarity regarding the public disclosure requirements.”
  • The United States Tenth Circuit Court of Appeals, in Cowboys for Trump v. Toulouse Oliver, ruled that Cowboys for Trump is a political committee required to register with, and report to, the State of New Mexico. The court affirmed a lower court’s decision not to enjoin the Secretary of State’s efforts to enforce state disclosure laws.  Among other things, the court found that the plaintiffs “have not established their donors have suffered or are likely to suffer an injury in fact due to the reporting or disclaimer requirements.”
  • A California State Senator introduced a B. 1367, which would “prohibit a state agency… from awarding a contract for which the state agency has not secured at least 3 competitive bids or proposals to a company that has made a behested payment at the behest of the Governor in the preceding 12 months.” The Sacramento Bee quotes the author, who said he was “concerned about the increasing use of massive no-bid contracts.  I believe a transparent and accountable government is a good government…”

Reminders:

The Practising Law Institute presents Nonprofit Involvement in Elections: What to Look for in 2022, a one-hour webinar on March 29, 2022, from 10-11 am PT, moderated by Joel Aurora of Nielsen Merksamer.

This program will address the role of nonprofits as vital participants in elections, praised for nonpartisanship by some and derided as vehicles for “dark money” by others.  With the 2022 midterm elections rapidly approaching, nonprofit organizations will again be involved in a range of election-related activities.  As a result, it is crucial that nonprofit organizations—including 501(c)(3), 501(c)(4), and 501(c)(6) groups—and corporate donors understand the laws governing participation in advocacy and politics.

Interested persons may register here.  CLE credit will be available.

In Case You Missed It:

  • Tennessee Lobbyist Contributions: NewsChannel 5 Nashville continues its coverage of state lobbyist activities with a report on lobbyists’ campaign contributions.  “More than a decade ago, lawmakers supposedly tried to outlaw the practice.”  The article describes lobbyists’ use of “bundling” contributions from others and passing on contributions from lobbyist employers and affiliated PACs, noting that “it gives them a chance to personally put the checks into the hands of the lawmakers they’re trying to influence.”
  • A. Fundraiser Limits: Knock LA reports that a commissioner for the Los Angeles Department of Water and Power sent out invitations to a fundraiser at her home for a city councilmember who is running for City Controller.  The article points out that “it is prohibited for city commissioners to hold fundraisers for a candidate for office. It is also a violation of city ethics laws for city officials to ask someone else to make a contribution, to put their names on an invitation, to put their name or signature on a fundraising event, to use their home for a fundraising event, or to act as an ‘agent or intermediary in the making of a contribution.’”  The fundraiser was held in October 2021; the councilmember “did not respond” to Knock LA.
  • Russian Effect on Lobbyists: According to The Hill, the Russian Invasion of Ukraine has an impact on D.C.-based lobbyists.  ”Lobbying firms have terminated their contracts with the company behind the Nord Stream 2 natural gas pipeline after the U.S. imposed sanctions on the Russian firm in the wake of Moscow’s invasion of Ukraine.”  The article points out that lobby firms collected a few million dollars lobbying on behalf of various parties interested in the pipeline.

WEEK OF February 18th, 2022

Latest Developments:

  • The San Francisco Ethics Commission published a draft measure, which it plans to place on the June 2022 ballot, that would re-write existing ethics provisions. A special meeting to hear from the pubic is scheduled for February 25.  The commission also published a 12-page summary of the 126-page measure.  Among other things, the measure would expand gift limitations and extend the lobbyist gift ban to permit consultants.
  • DuPage County, Illinois (suburban Chicago) repealed its lobby ordinance [Item 9H]. The action follows the state’s adoption of a lobby law that requires state registration and reporting for all local lobby activities, except those in the City of Chicago.

Reminders:

The Practising Law Institute presents Nonprofit Involvement in Elections: What to Look for in 2022, a one-hour webinar on March 29, 2022, from 10-11 am PT, moderated by Joel Aurora of Nielsen Merksamer.

This program will address the role of nonprofits as vital participants in elections, praised for nonpartisanship by some and derided as vehicles for “dark money” by others.  With the 2022 midterm elections rapidly approaching, nonprofit organizations will again be involved in a range of election-related activities.  As a result, it is crucial that nonprofit organizations—including 501(c)(3), 501(c)(4), and 501(c)(6) groups—and corporate donors understand the laws governing participation in advocacy and politics.

Interested persons may register here.  CLE credit will be available.

In Case You Missed It:

  • “Ghost” Lobbyists Targeted in Florida: The Tallahassee Democrat reports that Citizens for Ethics Reform, which backed the amendment that created Tallahassee’s Ethics Commission, is pushing an effort to reform lobbying provisions. One member of the group asserts that the law has “a huge built-in loophole that allows ‘ghost lobbyists’ to work behind the scenes influencing city policy for their clients.”  The group complains that current law has a “‘circular narrative’ in which lobbying is defined as work done by a lobbyist and a lobbyist is defined as someone engaged in lobbying.”  The Tallahassee Democrat indicates that City Commissioners will consider the recommendations in March.
  • Tennessee Lobbyist Spending: NewsChannel 5 Nashville reveals that lobbyists and lobbyist employers spend an estimated $60 million each year “to Influence Tennessee state officials.”   The article notes that over the years education and healthcare have replaced alcohol and tobacco as the biggest spenders on lobbying “because these issues have become political.”
  • New Mexico Lobbyist Spending: Capital & Main complains that “Lax reporting laws leave politicians and the public in the dark about legislation backers.”  The article describes an effort to “require lobbyists and their employers to file much more complete expense reports and list which bills they are lobbying for or against[and] require groups to disclose how much they pay their lobbyists.”
  • Silver State of Affairs: Nevada Current describes conflicts of interest as “the Nevada way.”  The article cites a number of  recent cases of conflicts and asserts that the “Nevada Ethics Commission, charged with investigating and sanctioning conflicts, has long been viewed as a paper tiger… The Ethics Commission resolved eight complaints in 2021.  All were dismissed, according to its annual report.”
  • Corporate Contribution Ban “Workaround”: Politico reports that despite “company bans on giving to Republicans who voted against certifying President Joe Biden’s victory on Jan. 6,” lobbyists for several of those companies “gave personal donations to Republicans who objected to the presidential election results…  The under-the-radar donations meant that even as the companies stuck to their Jan. 6 pledges, their lobbyists” supported GOP lawmakers who may assume “leadership roles in the House if Republicans take back control in the midterm elections.”
  • Zombie PACs Still Among Us: Politico has an update on “Zombie accounts, or those that continue after a candidate retires or loses an election…”  Some deceased officials left committees that are well-funded; some “left behind committees with outstanding compliance issues or unresolved IOUs.”  Candidates from Herman Cain to John Lewis left PACs that have become zombies.

WEEK OF February 11th, 2022

Latest Developments:

  • A United States District Court judge in Georgia issued a preliminary injunction barring the incumbent Governor from spending leadership committee funds on his reelection campaign. Leadership committees are not subject to the same contribution limits as candidate committees.KTAR News reports the judge wrote “that the U.S. Supreme Court has said imposing different contribution limits on candidates competing for the same office violates the First Amendment.” The challenger’s campaign asserted the extra committee “gives [incumbent Governor] Kemp a significant and unfair fundraising and spending advantage in the primary.”
  • The Oregon Secretary of State rejected three ballot measures to limit campaign contributions in Oregon because the “constitution requires initiative petitions include the full text of the proposed measure.” Oregon Public Broadcasting reports that the proposals “would create new limits on how much money individuals, advocacy groups, labor organizations, corporations and political parties can contribute to candidates and causes.”
  • A Montana Judge struck down portions of the recently enacted SB 319. Those portions (1) required judges to recuse themselves in cases in which the received certain campaign contributions and (2) prohibited certain political activities on college campuses. The Billings Gazette explains that the late amendments “violated the state Constitution when they added sections unrelated to the original intent of the bill.” The provisions of the bill that established joint fundraising committees were not challenged.
  • The United States Department of Justice posted several new advisory opinions regarding the Foreign Agents Registration Act. Many of these recent opinions focus on the activities of foreign nonprofit organizations operating in the United States.
  • The US DOJ also issued a press release this week concerning the indictment of “[t]hree Hawaii-based executives of a government contractor…for allegedly making unlawful campaign contributions to a candidate for Congress and a political action committee.” According to The Hill, these executives skirted Federal rules prohibiting contractors from making campaign contributions by establishing shell companies and reimbursing family members for donations to a pro-Sen. Susan Collins super PAC during her 2020 election. These charges carry “up to five years in prison and a $250,000 fine on each count.”

In Case You Missed It:

  • Flip-flopping on Personal Use: VPM Politfact reports on several Virginia state delegates who, in recent years, “support[ed] a bill that would have prohibited candidates from using campaign funds for personal expenses,” but which ultimately died in the state Senate. However, now in a legislative majority, these same delegates voted to kill an identical bill in subcommittee. Critics contend that the lawmakers “in the past had a ‘free pass’ in supporting the ban because they knew it would die in the Senate…[now] there’s growing momentum in the Senate for the ban this year and if the[y] supported the bill it might actually become law.”
  •  Gifts of Legal Services Questioned: The Associated Press reports that groups are pressuring the New York Joint Commission on Public Ethics to “investigate whether former Gov. Andrew Cuomo broke the law by accepting free help from a group of former aides who worked to defend him against sexual harassment allegations.” The former Governor reportedly “turned to a team of outside advisers — former members of his administration — who provided the Democrat with strategic advice and public relations help. Several of those ex-aides worked for companies that lobby the state or have had state contracts.” But his attorney noted that “New York’s gift ban doesn’t apply to family members or friends…”

WEEK OF February 4th, 2022

Latest Developments:

  • The Federal Election Commission announced its “Lobbyist bundling disclosure threshold increases” for 2022. The updated FEC rules “require certain political committees to disclose information about lobbyists/registrants and lobbyist/registrant PACs whose bundled contributions within a covered period exceed” $20,200.
  • The Oakland, CA Public Ethics Commission issued its annual adjustment to campaign contribution limits. The limits apply per election cycle in the city.
  • The Ohio Ethics Commission issued a press release calling on the General Assembly to increase penalties on “persons or entities convicted of providing unlawful gifts or payments to any public official or employee in state or local government.” The proposal includes a “prohibition from participating in any future public contracts for 5 years, plus the authority for courts to order additional fines equal to the amount of such payments.  Currently, such violations of this criminal law carry only a fine of up to $1,000 and/or 6 months in prison.”

In Case You Missed It:

  • Alaska Campaign Cash: The Anchorage Daily News reminds us that, following a court case, “Candidates in Alaska’s local and state-level elections this year will be able to collect campaign contributions triple the amount allowed in past races…”  A pending Alaska Public Office Commission draft opinion proposes to return contribution limits to the prior limit of $1,500, which was the limit before the $500 limit, which was struck down.  However, the Dailly News points out that “because [the $1,500 limit is] a preliminary proposal from the commission’s staff, APOC’s five commissioners could still vote to change them at an upcoming meeting.”
  • Nonprofit Election Money Analyzed: The New York Times looked at the 2020 election and reviewed “15 of the most politically active nonprofit organizations” affiliated with each of the two major political parties.  The article notes that “nonprofits do not abide by the same transparency rules or donation limits as parties or campaigns — though they can underwrite many similar activities: advertising, polling, research, voter registration and mobilization and legal fights over voting rules.” However, the Times acknowledged its own shortcomings:  “Lax disclosure rules and the groups’ intentional opacity make a comprehensive assessment of secret money difficult, if not impossible. Nonprofits come and go, adapting to shifts in political power and tactics. Some exist in the gray space between philanthropy and politics, many transfer money back and forth, and some can remain hidden in unexamined tax filings for years.”

WEEK OF January 28th, 2022

Latest Developments:

  • The White House announced the nomination of Dara Lindenbaum to the Federal Election Commission. Politico describes Lindenbaum as “a campaign finance attorney,” who “was general counsel to Stacey Abrams’ 2018 Georgia gubernatorial run and deputy general counsel for former Maryland Gov. Martin O’Malley’s 2016 presidential bid.”
  • The Massachusetts Office of Campaign and Political Finance (OCPF) issued 35 draft amended regulations concerning campaign finance. The proposed revisions make the regulations consistent with recent statutory changes, address changes in agency practice, and respond to frequently raised questions.  OCPF will hold a public hearing on February 15, 2022, on the proposals.
  • The Arizona Court of Appeals, in Legacy Foundation Action Fund v. Citizens Clean Election Commission, upheld a $95,000 fine imposed by the Commission. The Legacy Foundation disputed the jurisdiction of the Commission to impose a fine for violating independent expenditure reporting requirements.  However, the court found that Legacy failed to file a timely appeal and was precluded from challenging the jurisdiction of the Commission.  com explains that the 2014 case has already been to the state’s Supreme Court with the same result.

In Case You Missed It:

  • Illinois Supreme Court, in Sigcho-Lopez v. The Illinois State Board of Elections, is considering whether campaign funds can be used to pay for an individual’s legal defense in a public corruption case. The court heard oral arguments on the case this week.  WCIA reports that the State Board of Elections dismissed the original complaint and “said if the General Assembly wanted to enact a specific prohibition on the use of campaign funds for legal fees, they could write that into the law.”
  • Federal Legislative Lobbying Expected to Ebb: Roll Call reports that following another record year of lobbying, “Lobbyists say they expect a slower pace of legislative activity later this year, as the midterm elections cast a shadow over Capitol Hill. But many predict an uptick in regulatory and executive branch matters in the second year of the Biden administration.”

WEEK OF January 21st, 2022

Latest Developments:
  • The U.S. Senate Republican Leader filed an Amicus brief with U.S. Supreme Court in FEC v. Cruz, which seeks to strike down loan repayment restrictions in the McCain-Feingold Bipartisan Campaign Reform Act of 2002. Senator McConnell’s brief urges that “the Court should strike the entire statute.”  However, Politico reports that at the oral argument, “there was little sign that the justices intend to transform the pending case into a broadside at campaign finance law.”  USA Today, via MSN, explains the case and the positions taken by all sides.
  • The Washington State Supreme Court upheld an extraordinary campaign finance fine, in State of Washington v. Grocery Manufacturers Association. The Seattle Times, as posted on the court’s website, reports the court “upheld a record $18 million fine against a national grocery industry group for violating state campaign finance laws during a 2013 battle against a food-labeling initiative…  An attorney for the grocery group, which since has renamed itself the Consumer Brands Association, said it was disappointed in Thursday’s ruling and may take its case to the U.S. Supreme Court.”
  • A Federal Judge struck down Montana’s Clean Campaign Act in Montana Citizens for Right to Work v. Mangan. The Helena Independent Record explains that the judge found “that the 2007 campaign practices law violated a political committee’s free speech and due process rights under the U.S. Constitution.”  According to the article, the “Montana Citizens for Right To Work, a political committee that was active during the 2020 elections, in September filed a challenge to the state’s requirement that candidates and political committees give targeted candidates a heads-up on attack ads published or broadcast within 10 days of Election Day.”  An attorney for the plaintiff said, “the law places an unconstitutional burden on its right to speak freely.”
  • The Colorado Court of Appeals , in No Laporte v. Board of County Commissioners, considered “whether campaign contributions can, under the Due Process Clause, disqualify an elected official from serving as a decisionmaker in quasi-judicial proceedings.” Legal Newsline explains that the court, relying on the U.S. Supreme Court decision in Caperton v. A.T. Massey Coal Co, “rejected claims a county commissioner should have recused himself from voting on a concrete plant permit because the company’s shareholders contributed several thousand dollars to his campaign.”
  • The Washington Public Disclosure Commission released proposed amended rules regarding “how commercial advertisers respond to requests for records of the political advertising and electioneering communication it provides, the format for making such information available, and the content that must be disclosed.”
  • The Oregon Ethics Commission latest quarterly newsletter, Ethics Matters, reminds us that a slew of amended regulations took effect on December 31, 2021, including revised rules pertaining to lobbying and gifts.

In Case You Missed It:

  • C. Pay-to-Play Law to Take Effect: JDSupra reports that after two years of delay for lack of funding to enforce the law, the District of Columbia’s pay-to-play law will take effect November 9, 2022.  Essentially, “the ban will affect those having or seeking business of $250,000 or more with the District government,” prohibiting political contributions to covered officials.
  • Minimizing Risk in Corporate Political Spending: The Harvard Business Review asserts that “political donations greatly heighten corporate risk.”   It argues “that corporations need to implement systematic and principled reforms to avoid future gaffes and controversies, reduce their involvement in time-wasting and costly political spending, and better align their lobbying and donations with their stated values.”
  • Big Money in Massachusetts: The Boston Globe reports that the “single largest political donation in state history” was recently made to a ballot measure, continuing an upward trend spike in ballot measure spending across the country.
  • What Happened to $400 Million in Campaign Funds: Business Insider reports on the status of the now-dormant Presidential Election Campaign Fund.  The fund continues to grow with tax form check offs.  Major candidates haven’t tapped the fund since 2008, but congress is unable to agree on what to do with the money in the fund.

WEEK OF January 14th, 2022

Latest Developments:

  • The Federal Election Commission announced adjustments to campaign fine amounts. The new penalty amounts and the formulae for calculating them are published in the Federal Register
  • The California Fair Political Practices Commission revealed the five largest donors and recipients of behested payments in the state over the past five years. “Behested payments” occur when “an elected official who fundraises or otherwise solicits payments from one individual or organization to be given to another individual or organization.”  The FPPC also created a portal with a means to search for those payments.  There is no limit on these charitable donations, but payments of $5,000 or more must be reported.  The Associated Press describes the activity and provides perspective on the issues raised by the donations.
  • The Brennan Center for Justice notes that “There are over 8,000 local and state election officials in the United States, and the vast majority are elected.”  The center vows to track those elections in 2022. “Another indication of the increased prominence of these races is a dramatic increase in the resources of one national group active in them, the Democratic Association of Secretaries of State. Only once in its history has it raised a six-figure sum in the first half of an odd-numbered year: $202,000 in 2019. But in the first half of 2021, the group took in more than $1 million. Republicans do not have a direct counterpart, but the Republican State Leadership Committee, which spends in secretary of state races along with legislative races, is also seeing an increase in funds.” Hence the regulated community may see more solicitations for these races this year, directly or through other sources.

In Case You Missed It:

  • Georgia Contribution Lawsuit: The Hill reports that David Perdue, who is running for Governor, has sued Georgia over a new law (SB 221) approved by the incumbent Governor “allowing those vying for governor, lieutenant governor and party leadership roles to create ‘leadership committees’ with no caps on individual campaign contributions.”  The article notes that “Critics of the law have argued that it gives incumbent candidates an unfair advantage, as nonincumbent candidates must win a party primary before they can establish a leadership committee.”
  • January 6 Analysis: Yale Insights opines in an article, “A Year Later, Most CEOs Are Keeping Their Post-Insurrection Promises,” that, based on FEC filings, Fortune 500 CEOs continue to withhold corporate contributions from “GOP election objectors… While a handful of companies… did renege [according to some recent stories], the remarkable consistency—rather than those exceptions—should be the headline.”
  • Social Lobbying: The Washington Post reports about a study reported in the University of Chicago Press concerning “social lobbying.”  The Post concludes that “interest groups are more likely to get what they ask for when they meet legislators or their staff socially. Much like everyone else, public officials are more easily persuaded in such settings.”
  • Another Suit against the FEC: The Ohio Capital Journal describes the experience of a campaign watchdog (CREW) in filing a complaint with the Federal Election Commission, having the commission deadlock on the complaint, and subsequently suing the commission itself.  “The case underscores the structural deficiencies and glacial pace of campaign finance enforcement.” The case has lingered so long that looking at it “is to step into a previous political lifetime.  Their main focus early on? Former House Speaker John Boehner…”

WEEK OF January 7, 2022

Latest Developments:

  • The Conference Board released the results of a survey that “reveals the environment for corporate political activity shows no signs of calming in 2022.” The report cites hot-button issues, employees, and investors as factors contributing to the tumultuous environment for corporations that engage in political spending.
  • The New Mexico State Ethics Commission released a proposed new Disclosure Act that would replace the current act, and require additional disclosures. The Albuquerque Journal explains that the proposal has “increased transparency requirements for lobbyists” and would require reporting “gifts of $50 or more from lobbyists…”
  • Elections Canada posted the annual increase to contribution limits for 2022. The chart notes that “The limits increase by $25 on January 1 in each subsequent year.” The new limit is $1,675 to each candidate, party, or leadership contestant.
  • The Campaign Legal Center issued a report, Top Ten Transparency Upgrades for Ethics Commissions, “to provide state and local ethics commissions with innovative transparency solutions to improve how they effectively implement their ethics programs.” The report includes specific recommendations and examples from ethics commissions around the country.
  • The Hawaii State Ethics Commission named Robert D. Harris as its new Executive Director and General Counsel.

In Case You Missed It:

  • Replacing NY JCOPE: The Governor of New York wants to replace the state’s Joint Commission on Public Ethics with a new commission run by law school deans. The Buffalo News reports that new entity would be subject to open meeting and freedom of information laws. But some things would remain the same: “like JCOPE, it would police ethics in state agencies and also be the reporting and enforcement entity of the lobbying industry in Albany.”
  • Delaware Ends Mandatory Campaign Fines: The Associated Press reports that a new Delaware law revises the way fines are imposed and calculated for failure to file campaign finance reports. According to the article, the change “eliminates the mandatory $50 daily fine and instead says the commissioner ‘may’ issue a citation. A citation would carry a fine of $50 a day, along with mandated training for filing reports, but the maximum fine would be capped at 100 days, or $5,000.” According to the AP, “candidates and committees owed more than $600,000 in fines for failing to file campaign finance reports just for the 2020 election cycle alone.”
  • Hoosier Lobbying: The Indianapolis Star names the top 25 spenders on lobbying activities over the past five years in an effort to influence the state legislature. “Most are companies or trade groups from industries that are highly regulated by state government.”
  • More Corporate PAC January 6 ReviewRoll Call reports on the results of a webinar that looked at corporate PAC contributions, which paused for many PACs in 2021 and remain paused for some. “The political risks, and potential rewards, of corporate PACs aren’t going away this year… Some companies said they are still evaluating what to do next.”

WEEK OF December 31, 2021

Latest Developments:

  • The Cambridge, Massachusetts City Council approved a pay-to-play policy order, including a draft ordinance POR 2020 #240 (page 57), which prohibits contributions to city officials “in excess of the threshold of $200.00 per year within one calendar year immediately preceding the date of the contract or agreement.” The measure also applies to those seeking permits and zoning changes. However, as Wicked Local points out, the actual language is still in draft form and the “law will take effect at an unspecified date in 2022.”

In Case You Missed It:

  • Federal Lobbyist Diversity Questioned: According to Politico, “Members of the Congressional Black Caucus have a warning for Washington, D.C., lobbyists: Diversify your firms or you won’t have an audience with us.” The article notes that “The business community itself is pushing to diversify the ranks of people it hires to represent it in D.C., prompted by ‘clients who no longer want meetings with a bunch of old white guys,’…”
  • FARA Prosecution Controversy: Politico reports that a businesswoman who pleaded guilty to a FARA violation filed an ethics complaint with the U.S. Department of Justice alleging that the DOJ was actively investigating her attorney at the time her plea was “coerced.” “She is currently set to be sentenced in April, but that could be impacted by the new complaint…” The ethics complaint “threatens to roil two major cases in the Justice Department’s high-profile effort to crack down on foreign influence in the U.S. political system.”
  • What Happened to Oregon Contribution Limits?: The Eugene Weekly reminds us that “The voters of Oregon want campaign finance limits so much that 78 percent voted to amend the state Constitution last year [2020] to expressly allow them (Measure 107). So where are they?” The article blames the fact that Oregon “legislators were elected with more corporate money than in any other state in the U.S.” It notes that “As we go into the 2022 short legislative session, there are still no clear plans to limit campaign donations.”

WEEK OF December 24, 2021

Latest Developments:

  • The Cook County Board of Commissioners approved Ordinance 20-4404. The Chicago Tribune calls it the “biggest overhaul in 15 years.” The ordinance requires more disclosure; however, the “annual amount that vendors and lobbyists can donate to Cook County elected officials and candidates in non-election years would double from $750 to $1,500.” The article also notes that the county was caught unaware as a recent state law preempted portions of the county’s law and ”will be discussing the viability of seeking an exemption for the county from the state’s lobbying regulations for the next legislative session in an effort to resume County regulation.”
  • The Baltimore County Council approved Bill 102-21 to establish a county fund for public financing of county elections. The measure takes effect 45 days after enactment. The Baltimore Sun explains that “County executive candidates who opt into the program would not be allowed to spend more than $1.4 million in a primary or general election. Those running for council may not spend more than $150,000.”

In Case You Missed It:

  • Revolving Door Attacked: The Springfield News-Leader reports that a Missouri lawmaker is suing the Missouri Ethics Commission to overturn the state’s revolving door provisions that prevent him from becoming a lobbyist for two years. His federal lawsuit “alleges that his inability to register as a lobbyist to serve a prospective client was denying him income. He also argues that because the two-year restriction ‘bans (him) from saying certain things, backed by the threat of criminal prosecution,’ it is unconstitutional.”
  • Revolving Door Wide OpenThe Oklahoman reports that “Oklahoma is one of seven states with no type of ban on lawmakers or public officials from entering the lobbying profession for a certain amount of time…” The article explains the ease of moving from state legislator or staffer to a lobbyist position. It notes that the Oklahoma “Ethics Commission voted twice in recent years to establish ‘cooling off’ laws that would ban public officials from moving straight into a lobbying job. But each time those rules were voted down by the state Legislature.”
  • New York State Reforms: According to The City, “Gov. Kathy Hochul plans to overhaul the state government’s ethics agency as she runs for election and tries to distance herself from scandal-wrecked former governor Andrew Cuomo…” The article quotes a spokesperson for Hochul, who said that “the governor ‘is committed to instituting real ethics reforms and restoring trust in government, and we will continue to work with legislators and good government groups to reform JCOPE and improve ethics oversight to better serve New Yorkers.’”
  • SF Fraud Case: The San Francisco Chronicle reports that the former San Francisco Public Works Director agreed to plead guilty two years after his initial arrest in what prosecutors “called ‘a long-running scheme involving multiple bribes and kickbacks’ during his term as head of Public Works.” In the deal, he admitted to receiving “money, international trips, expensive jewelry, high-end wine and other goods and services from city contractors and developers in exchange for preferential treatment and confidential information about city business.”

WEEK OF December 17, 2021

Latest Developments:

  • The New York Joint Commission on Public Ethics ordered former Governor Cuomo to repay money he earned from a book deal. NPR explains that the Governor “promised it would have nothing to do with the ins and outs of his role as the state’s leader. He also pledged to write it on his own time and without tapping into any of the state’s vast resources. But New York’s Joint Commission on Public Ethics says that’s not at all what happened…” An attorney for the former Governor said that the commission’s actions “‘exceed its own authority and appear to be driven by political interests rather than the facts and the law…’”
  • U.S. Representative Jamie Raskin introduced HR 6283, which would “apply the ban on contributions and expenditures by foreign nationals under [the Federal Election Campaign Act of 1971] to foreign-controlled, foreign-influenced, and foreign-owned domestic business entities.” The Hill explains that the reintroduction of the House measure “would block foreign-owned corporations from spending company funds to influence U.S. elections”
  • The Dallas City Council approved an ordinance in response to corruption issues in city government. The Dallas Morning-News explains that the City Council approved several of the Mayor’s proposals to “strengthen transparency and accountability to residents as well as make reporting ethics violations and rules more clear.” The package creates an Inspector General in the City Attorney’s Office, bolsters ethics training, expands conflict-of-interest rules, bans those seeking public subsidies from lobbying for them, and expands the Ethics Advisory Commission. The ordinance also includes a $300 annual limit on gifts from lobbyists. The measure takes effect immediately, with some exceptions.
  • The City of Portland Open and Accountable Elections Commission adopted new regulations governing its Small Donor Elections Program. The program caps small contributions at $250, but permits seed money contributions of $500, and allows loans and in-kind contributions of up to $5,000 under certain circumstances.
  • The Delaware County (adjacent to Philadelphia), Pennsylvania Council approved Ordinance 2021-13, which requires county contractors to disclose campaign contributions with their bid and annually thereafter. The measure applies to contracts that require County Council approval ($50,000 or more) beginning April 1, 2022.

In Case You Missed It:

  • The Federal Election Commission selected Allen Dickerson as its chair and Steven T. Walther as its vice chair for 2022.
  • Coffee Brews Campaign Cash: The Miami Herald explains that Tampa General Hospital, a 501(c)(3) charity, is prohibited from making political donations, but three of its top officers run a for-profit coffee company that operates a Starbucks and another coffee house in its hospitals. The coffee company has given over $300,000 since 2019 to its PAC, the Friends of Tampa General Hospital, which has doled out the cash to politicians in the state. “Two campaign finance experts told the Herald/Times that there didn’t appear to be anything illegal or improper about the hospital-related coffee business’ donations.”
  • January 6 Contributions: According to The Hill, the “nation’s biggest companies have steadily ramped up their donations to GOP lawmakers who voted against certifying the 2020 election results… Corporate America expressed concern about the state of U.S. democracy after supporters of former President Trump attempted to overturn the election results. But companies have signaled they don’t want to lose influence with the GOP, which is broadly favored to win back control of Congress in next year’s midterm elections.”
  • Colorado Group FinedColorado Public Radio reports that the Colorado Secretary of State’s Office fined a group $40,000 for failure to reveal its donors. “Critics of the group argued that Unite for Colorado crossed the line between nonprofits and political groups. A complaint filed in August 2020 argued that the group was spending so heavily — and was so closely involved in politics — that it should have registered as a political issue committee and reported more detail on its financial activities.” The group spent “about $4 million on three different ballot initiatives,” and is affiliated with Unite for Colorado Action IEC, which supports candidates.
  •  $25,000 Fine for Personal Use: The Associated Press reports that a Georgia Appeals Court Judge agreed to a $25,000 fine after he “used campaign money to pay for trips to Hawaii and Israel.”  He had also been accused of “transferring money from his old legislative campaign account to financially prop up his former law firm between 2015 and 2019.” A former legislator, the judge is suspended during judicial disciplinary hearings.

WEEK OF December 10, 2021

Latest Developments:

  • The United States Department of Justice announced that it is “considering changes to key regulations” with an intent to “modernize and clarify the scope and meaning of [the] Foreign Agents Registration Act (FARA).”While the DOJ does not offer specific language, it has posted a notice describing portions of the regulations that it intends to update.
  • The San Francisco Board of Supervisors unanimously approved an ordinance to limit behested payments. The ordinance would prohibit “elected officials, department heads, commissioners, and designated employees from soliciting behested payments from interested parties.” The measure would take effect 30 days after approval by the mayor

In Case You Missed It:

  • Campaign Finance Disclosure Upgrade: The Arkansas Democrat-Gazette reports that “state lawmakers and the Arkansas secretary of state’s office are taking steps to procure a new computerized system [‘for tracking political campaign contributions and expenditures’]at an estimated cost of $750,000 to $1 million.” The current system has been described as “‘clunky,’ ‘tedious,’ ‘not user-friendly,’ ‘inaccurate,’ [and] ‘antiquated.’” However, the new system “isn’t expected to be in place until after the November 2022 general election.”
  • Group Sues FEC over Disclosure: A Wisconsin group filed a lawsuit against the Federal Election Commission “seeking to strike down campaign finance regulations that it says limit its free speech rights.” According to the Milwaukee Journal Sentinel, the group “was reluctant to spend money in two congressional races because it feared the Federal Election Commission would try to force it to disclose the names of its donors.”
  • Four Years for Scam PACs: According to the Washington Post (via MSN), a Las Vegas man who operated both pro-Trump and pro-Biden PACs, as well as obtaining fraudulent Paycheck Protection Program loans was sentenced to 4 years in federal prison. He “copied his ads, website and online donation page from legitimate digital fundraising groups.” He raised nearly $350,000, “mostly in small amounts.”

WEEK OF December 3, 2021

Latest Developments:

  • The Center for Political Accountability released the 2021 CPA- Zicklin Index of Corporate Political Disclosure and AccountabilityRoll Call quotes the Center’s President as saying that “‘companies are moving in a turbulent political climate to better manage the risks of spending to sway elections.’” The article reports an increase in corporate board committee review of political contributions and expenditures, and voluntary disclosure by tax-exempt organizations that are not otherwise required to disclose detailed activity.
  • The California Fair Political Practices Commission adopted new regulations to permit the use of electronic signatures on filings with the Commission, updating lobbyist recordkeeping, and regarding disclosure of expenditures for amplification of online communications.

Reminder:

COGEL, the Council on Governmental Ethics Laws, begins its annual conference on Monday, December 6 at 1:30 p.m. EST, in a virtual format. Interested persons may register here. The three-day conference is $400 for members ($1,000 for nonmembers) and includes live presentations via Zoom. The interactive conference offers an opportunity to hear from regulatory authorities throughout the country, including the Chair of the Federal Election Commission. Classes may qualify for CLE. “COGEL is a professional organization for government agencies and other organizations working in ethics, elections, freedom of information, lobbying, and campaign finance.”

In Case You Missed It:

  • Missouri Money: The Missouri Independent reports that a Missouri lobbyist has drawn scrutiny from his setting up multiple PACs that his corporate clients support. “Corporations are banned from giving directly to candidates in Missouri. And contribution limits cap how much a candidate can take from an individual or PAC. Setting up multiple PACs opens the opportunity to skirt those regulations.” One watchdog opined that “‘This appears to be a way of cleverly exploiting a loophole in campaign finance law…’”
  • Contribution Ban Debated: According to the Arizona Mirror, the Arizona Corporation Commission has rejected assertions by the Legislative Council that “a provision of the [commission’s] ethics policy limiting commissioners’ ability to vote on matters involving utilities that have provided funding for their campaigns, overstepped the commission’s legal authority by prohibiting its members from participating in their official duties.”  The code was “enacted in response to high-profile and controversial campaign spending” by a utility in 2014 and 2016.
  • North Dakota Rules Debated: The Bismarck Tribune reports on the North Dakota Ethics Commission’s efforts to adopt regulations concerning conflict of interest for quasi-judicial proceedings. Critics voiced objections to excluding campaign contributions from the definition of “significant financial interest,” thereby permitting members of the Industrial Commission and the Public Service Commission to accept contributions from those they regulate.
  • New Jersey Ponders IE DisclosureInsider New Jersey describes the concern of the Executive Director of the New Jersey Election Law Enforcement Commission over the explosion of independent expenditures in New Jersey Elections. The article points out that the groups “are required to disclose only their expenditures, not the source of their money.” The commission’s “proposed reforms that would strengthen accountable political parties and bring parity between them and independent groups.”
  • Pardon Lobbyist Failed to Register: The Daily Beast reports that a former Department of Justice Official “was directly involved in White House clemency negotiations possibly as late as Trump’s last full day in office, but never registered as a lobbyist while advocating for pardons…” The official was listed in a filing as an “advocate” and received “$400,000 last year in unspecified “consulting” fees.” The article quotes a Common Cause spokesperson who opines that “the laws surrounding lobbying for pardons specifically are fuzzy… [however,] a number of Trump lobbyists saw fit to disclose that work.”
  • Candy does not Influence: The Wisconsin State Journal discloses that the Madison, Wisconsin Ethics Board ruled that when the assessor gave candy to members of the (property tax assessment) Board of Review prior to a hearing on reassessment of two multi-million dollar properties, she “did not violate ethics laws.” City and state ethics laws “prohibit providing “anything of value” to members of a public body if it could reasonably be expected to influence a vote or decision.”
  • Et Tu, Brute?The State (Columbia, SC) reports that the South Carolina Ethics Commission found that a candidate “spent thousands of campaign dollars on personal expenses… all while his campaign repeatedly failed to report details about who was contributing to his gubernatorial bid… [T]he S.C. Ethics Commission began investigating the Charleston businessman after one of [his] own campaign aides filed a complaint…”

WEEK OF November 19, 2021

Latest Developments:

  • The Governor of New Jersey approved A 227, which requires members of the Drug Utilization Review Board to disclose gifts from the pharmaceutical industry as well as other financial interests members have in that industry. The measure took effect immediately.
  • The Governor of Illinois signed SB 536 which, among other things, provides that in judicial elections a “political committee may not accept contributions from any group that is not required by law to disclose the identity of its contributors or accept contributions from any out-of-state source.” NPR Illinois explains that the sponsor indicated that “the legal community and scholars” are “progressively worried about undue influence in judicial elections, especially appellate and supreme court justices whose terms last a decade.” The measure took effect immediately.

In Case You Missed It:

  • New Pennsylvania Lobby Reporting “Useless”: Lancaster Online reports that “Lobbyists and lobbying firms are for the first time disclosing their financial interests in companies for which they lobby…” However, the article characterizes the disclosures as “haphazard and, arguably, useless…” The article points out that “Amid a narrow reporting period and few guidelines, lobbyists interpreted the new requirement in a variety of ways.”
  • Behested Payments Lead to Indictment: Two more individuals were indicted in the continuing corruption inquiry at San Francisco City Hall. According to the San Francisco Chronicle, one former official “asked his clients to make charitable contributions to San Francisco Golden Gate Rugby Association ‘intending that those donations would influence’ then- San Francisco senior building inspector Bernie Curran ”in the performance of his official duties…”
  • No Book Deal: The New York Joint Commission on Public Ethics, at its monthly meeting, voted to revoke its staff’s informal advisory opinion that granted approval for former Governor Cuomo to publish a book while in office. Politico explains that the opinion conditioned its approval on the Governor’s promise “not to use state resources or personnel on the lucrative endeavor. News has since emerged that state employees did help with the book…”
  • Loans as Contributions: According to USA Today, the Federal Election Commission accused a U.S. Senator’s campaign “of accepting millions of dollars of potentially improper loans…” The Senator’s campaign countered that “all the loans and contributions were legal.” The issue, as described by the article, is that “Most of that money came from financial institutions ‘that did not appear to be made in the ordinary course of business’ because the banks were not assured repayment. FEC auditors said that means they appeared to be prohibited contributions from financial institutions.”
  • Secret Lobbyist Fines: The Albany Times-Union reports that the New York Joint Commission on Public Ethics.
    acknowledges that it has collected over $250,000 in fines from lobbyists for late reports. However, “officials will say little else about the program, including which lobbyists have faced penalties, why they’ve been fined – or why their staff chooses to forgive certain fines. The secrecy of the program makes it difficult to know whether the ethics agency is enforcing the rules evenhandedly…”

WEEK OF November 12, 2021

Latest Developments:

  • Federal Contractor Relieved: A company accused of violating the prohibition against federal contractor contributions can rest more easily. Bloomberg Government reports that, after months of investigation, the Commission essentially came to the same conclusion as in a prior case and declined to find probable cause of a violation under the circumstances.  The article questioned whether “a company giving money to a super PAC doesn’t have to be ‘separate and distinct’ from one having government contracts.” However, a detailed statement by the three Republican commissioners offers the reasoning behind the decision, criticizes the test proposed by commission attorneys for determining when a company or its affiliate hold a government contact, and questions whether the prohibition would survive a court challenge in regard to Super PAC contributions. The decision does not immediately impact other recent enforcements against corporations contributing to federal Super PACs.
  • A Federal Election Commission draft audit report accuses Senator Mike Braun’s 2018 campaign of “receiv[ing] ‘apparent prohibited loans’ and lines of credit totaling $8.5 million. Most of that money came from financial institutions ‘that did not appear to be made in the ordinary course of business’ because the banks were not assured repayment.” As USA Today reports, Braun contends that “it’s not abnormal for ‘creditworthy’ individuals such as Braun to get unsecured lines of credit” and that the banks did not provide the loans “for the purpose of influencing the outcome of the Candidate’s candidacy…[but] in their own commercial interests.” 
  • The Washington Public Disclosure Commission released the text of its proposed amendments to regulations regarding digital political advertising disclosure. The Commission describes the changes as: “Permitting additional time for a commercial advertiser to respond to a request for inspecting records, where the sponsor has not identified an order as political advertising; Requiring the commercial advertiser selling the ad to provide its own identification with the ad if it is published on another platform; and Clarifying the scope of demographic information a digital advertiser is required to maintain for public inspection.” A hearing is set for December 2. Comments are due by November 29, 2021
  • The San Francisco Ethics Commission released its draft ordinance and regulation amendments in its efforts to restrict gifts to public officials from restricted sources. The proposal is a response to a federal investigation of City Hall and charges that “allege numerous instances in which individuals seeking favorable outcomes from City government provided meals, travel, luxury goods, and other gifts in an attempt to influence the actions of City officers and employees.” A hearing is scheduled for December 2.

In Case You Missed It:

  • PAC Impersonators: Federal prosecutors indicted PAC administrators for allegedly “us[ing] the name and likeness of Donald Trump and other politicians to ostensibly raise money for a network of political action committees.” Yet, as Politico reports, of the $3.5 million raised leading up to the 2016 election, only $19 was distributed to candidate or any political purpose. The indictment, which was unsealed on Wednesday, “charged [Matt] Tunstall and Robert Reyes with conspiracy to commit wire fraud and to lie to the Federal Election Committee.” Prosecutors also indicted Tunstall with additional “counts of wire fraud and money laundering” and a “third associate…with conspiracy to commit wire fraud and to lie to the FEC and multiple counts of wire fraud.”
  • Corporate America Coming Back to the GOP: According to Politico, Republican lobbyists say that “big business is warming up to the Republican Party again, less than a year after Jan. 6 but with the 2022 elections in sight.” Recent election results “ignited interest from their corporate clients on making inroads with GOP officials on the Hill.”
  • Double Barreled Donations: The Milwaukee Independent reports that two PACs affiliated with a prominent second amendment group allegedly made $35 million in coordinated illegal campaign contributions to various candidates for federal office. A suit filed this week in federal court claims that the PACs “and the [federal candidate] campaigns us[ed] the same political messaging firms to disguise coordinated campaign activity as independent advertising.” The lawsuit contends that the firm is actually one company operating under two names and was employed to “coordinate, create and place complementary advertisements — exactly the type of coordination that is not supposed to be allowed between campaigns and outside groups.”

WEEK OF November 5, 2021

Latest Developments:

  • The Federal Election Commission determined, in MUR 7523, that foreign corporations may contribute to ballot measure campaigns if not otherwise prohibited by state or local law. The facts presented to the Commission indicate that a Canadian subsidiary of an Australian mining corporation contributed to oppose a Montana ballot measure that affected permits for hard rock mines. The analysis states that federal law prohibits foreign nationals from “making a contribution or donation of money or other thing of value, or an expenditure, independent expenditure, or disbursement, in connection with a federal, state, or local election.” However, it points out that the Federal Election Campaign Act of 1971 regulates “‘only candidate elections, not referenda or other issue-based ballot measures.’” The matter, approved on a 4-2 vote, was disclosed by Axios.
  • The Alaska Public Offices Commission released Advisory Opinion 21-09-CD, which asserts that because the Ninth Circuit Court of Appeals case (Thompson v. Hebdon) case is now final, Alaska should revive the contribution limits in place before the limits struck down by Thompson were enacted. In other words, commission staff believe the case did not result in no limits on contributions, but rather a return to the prior limits, as adjusted for inflation. The new (old) limits are “$1,500 per calendar year for individual-to-candidate and individual-to-group; and $3,000 per calendar year for non-political party group-to-candidate and non-political party group-to-non-political party group.” The commission must approve the opinion; its next meeting is on January 26, 2022.

In Case You Missed It:

  • Giffords Takes Aim at NRA (and FEC)Politico reports that “the gun control advocacy group founded by former Rep. Gabby Giffords, sued the National Rifle Association” accusing “the NRA of using shell companies to coordinate about $35 million of election spending illegally by running ad buys through what was actually a common vendor, in violation of FEC rules.” The case arose because the Federal Election Commission was not able to comply with a federal court order to take action on the original complaint filed with the commission. “It’s a rare instance of a defendant being authorized to pursue legal action against an alleged violator of campaign finance law directly,” which Giffords observed. A spokesperson piled onto the FEC asserting that there is a “systematic problem” of not enforcing campaign finance laws although, with a quorum, the agency has started acting on backlogged enforcements.
  • Loophole” Gifts: Following a recent report by the San Francisco Ethics Commission on city gift laws, KQED reports that San Francisco “officials got free tickets to [the] pricey Outside Lands fest through [an] ethically questionable loophole.” The festival organizer gave the tickets to the city Parks and Recreation Department, which in turn distributed them to officials; current law prohibits the organizer from gifting the tickets directly to officials.“(W)hile the practice follows the letter of the law, it most certainly flouts the spirit of the law, particularly given the sheer number of free tickets doled out. Between 2015 and 2019 — the last year the festival took place — the department distributed some 1,855 free tickets [valued at over $430,000] to public officials across the city, including department staffers and employees in other city departments.”
  • Straw Donors Lining Up: Following the conviction of Lev Parnas, Open Secrets has a rundown on pending foreign national straw donor cases, noting that “other prosecutions in similar cases are just beginning.” Two groups of cases are working their way through the justice system, one involving contributions from a Lebanese-Nigerian billionaire, and one involving contributions from a “Russian national” and a “Chinese national.”
  • Pay-to-Play Plea: The Morristown Daily Record (New Jersey) reports that an attorney pleaded guilty to “operating a brazen pay-to-play scheme by recruiting others to donate $250,000 to political players in several counties, all in an effort to nab lucrative taxpayer-funded legal contracts” He “admitted he and ‘another attorney’ used a straw donor scheme, which are set up so individuals or companies barred from giving political contributions can do so without tipping off the authorities. Donors contribute instead and then they get reimbursed, which is illegal.”
  • Electric Utility Expenditure Generates Skepticism: According to the Washington Free Beacon, a U.S. Senator asked a Virginia electric utility that serves most of the state whether it made the candidate [Terry McAuliffe] aware “of the $250,000 it spent on his behalf, and whether anything was promised in return for the spending blitz.” The action follows a report in Axios that disclosed the spending by Dominion Energy. The Free Beacon reports that “Dominion apologized after the spending effort was revealed by Axios …”

WEEK OF October 29, 2021

Latest Developments:

  • The U.S. Ninth Circuit Court of Appeals determined that it will not rehear Thompson v. Hebdon, after the request for a new hearing was withdrawn. The action leaves in place the court’s decision this summer overturning certain Alaska campaign contribution limits. The Anchorage Daily News explains that the state did not support a judge’s call for an en banc hearing to review the decision because “further legal action could result in a stricter decision that reduces the Legislature’s ability to pass new limits.” 
  • The Cincinnati City Council unanimously approved two ordinances – one limiting campaign contributions and another creating an ethics manager – following a corruption scandal last year. The first ordinance prohibits “the solicitation or acceptance of campaign contributions from persons having a financial interest in City business while that business is pending before Council.” The second ordinance creates “a new position of ethics and good government counselor within the Department of Law to support ethics, election, and campaign finance efforts.”

In Case You Missed It:

  • Investing in PoliticsCNBC reports that “Private equity and hedge funds accounted for over $625 million in political spending during the cycle leading up to the 2020 election, with the lion’s share going to campaign contributions…” According to the article, the amount “was the most this segment of the financial industry spent on lobbying and campaign contributions in a two-year campaign cycle…”
  • Contributions Linked to No-Bid Contracts: According to the Denver Gazette, Colorado campaign contributors have benefited from contracts paid for with “custodial funds” controlled by constitutional officers. “A spokesperson for [the Colorado Attorney General] confirmed that $262,000 in no-bid contracts went to firms headed by a handful of attorneys who made large campaign contributions to [the Attorney General’s] campaign.” In addition, the Secretary of State “sent $2.8 million in federal emergency COVID-19 mitigation funds — “almost half of the CARES Act cash allocated to her office — to a politically well-connected, Washington D.C.-based public relations and lobbying firm to produce a set of TV ads…”
  • Campaign Contribution ConvictionCNN reports that “Lev Parnas was convicted on six counts related to ‘influence buying’ campaign finance schemes… The Ukrainian businessman was also convicted for using money from Igor Fruman – who previously pleaded guilty — and a fake company to funnel hundreds of thousands in political contributions to GOP and pro-Donald Trump committees and then lying about it to the Federal Election Commission.”
  • Federal Campaign Finance Indictment: The Associated Press reports that a federal grand jury indicted a Tennessee State Senator for violating campaign finance laws. The S. Department of Justice explained the Senator and an associate “conspired with others to violate federal campaign finance laws to secretly and unlawfully funnel ‘soft money’… to his authorized federal campaign committee. [The Senator] and others also caused a national political organization to make illegal, excessive contributions to [his] federal campaign committee by secretly coordinating with the organization on advertisements … and to cause false reports of contributions and expenditures to be filed with the Federal Election Commission.” The lawmaker called “the charges a ‘political witch hunt.’”

WEEK OF October 22, 2021

Latest Developments:

  • The FBI announced this week the indictment of US Rep. Jeff Fortenberry “on federal charges that he lied to the FBI and concealed information about illegal campaign contributions that he accepted from foreign sources.” Fortenberry denies the charges, stemming from alleged “illegal contributions that his 2016 campaign received from a Nigerian-born billionaire named Gilbert Chagoury who lives in Paris.” According to the Lincoln Journal Star, “Chagoury allegedly arranged for $30,000 in cash to be contributed to Fortenberry’s campaign through other individuals during a fundraising event in Los Angeles.” 
  • The California Fair Political Practices Commission approved, with minor adjustments, staff-proposed regulations concerning so-called behested payments. CalMatters reports that rules come after a one-and-a-half-year debate about the trend of “politicians increasingly us[ing] charitable organizations to raise and spend money outside the limits of the state’s strict campaign finance laws.” The rules clarify when elected officials, and CPUC commissioners, truly “behest” and require increased disclosure of lawmakers’ ties to nonprofits, including when the official has an employment or controlling relationship with the nonprofit, any relationship with a member of their immediate family, or member of their campaign or officeholder staff, and when the payor of a behested payment is involved in a proceeding before the official’s agency. The regulation also seeks to force disclosure of the identity of donors utilizing “donor advised funds.” Overall, the rules require more diligence by officials soliciting payments and do not place new obligations on donors. California has not followed the lead of other states that restrict behested payments by certain sources or in particular circumstances. The Commission made clear that only the Legislature can change the law surrounding these payments.
  • Pennsylvania Senate Leaders have introduced an ethics reform package “that would impose new requirements for lobbyists and political consultants to avoid conflicts of interest and define the relationship between lawmakers and those who try to influence them.” The package comes nearly a year after the Senate president was exposed for taking a trip to Arizona “organized by…a Harrisburg-based firm that helps fundraise for elected officials…and lobbies officials once they are in office.” Among the changes proposed include “requir[ing] lobbyists to register clients seeking state funding…bar[ing] state agencies from hiring an outside firm or lobbyist to lobby any branch of government…prevent[ing] lobbyists from being registered political consultants and prohibit political consultants from lobbying a state official,” and a one-year revolving door restriction. 

In Case You Missed It:

  • Recalling Campaign Donations: Court filings by the Michigan Secretary of State indicate that Gretchen Whitmer will have to dispose of donations she raised outside of the normal limits in preparation for a potential recall. Detroit News reports that Whitmer raised $3.4 million under a “state policy on recalls…[allowing] contributions, above the normal $7,150 limit on individual donors.” However, since a recall is unlikely to qualify before the last year of Whitmer’s term when it could not legally transpire, the excess funds must be returned or donated. Still, “[a]n important question will be what [she]…eventually does with the excess funds… If they’re donated to a political organization, they could still be used to benefit the governor’s reelection. 
  • Funds for me but not for thee: The Seattle Times editorial board opines on a 2019 campaign finance loophole drafted by City Council President M. Lorena Gonzalez which now directly benefits her as she runs for Seattle mayor. The “ordinance, which restricts business contributions to city political races for being ‘foreign influenced,’” still imposes few corresponding restrictions on contributions from labor unions. The Times contends that the ordinance “threshold for ‘foreign-influenced’ is…low [given that it captures] any foreign person [who] owns 1% of a company’s stock — or if total American ownership falls below 95%.”
  • Rocky Mountain Campaign Finance Complaints: Boulder (Colorado) residents resubmitted a campaign finance complaint against a City Council member after their initial complaint was dismissed on technical grounds. The residents allege Council Member Steve Rosenblum “exceeded the city’s expenditure limits when he sought legal assistance to research, prepare and file a lawsuit against…a group of community members.” By participating in the municipal matching funds program, Rosenblum agreed to abide by spending limits, yet the citizens contend that “[p]aid work in support of a candidate’s campaign for public relations, investigative work and/or legal fees” must be considered “a campaign expense just as surely as the purchase of yard signs and printing costs are” and, thus, Rosenblum exceeded the legal spending limits.

WEEK OF October 15, 2021

Latest Developments:

  • The Governor of Illinois signed SB 539. The comprehensive ethics reform bill expands lobbyist registration and reporting to include lobbying local government, and revises provisions relating to procurement, revolving door restrictions, and campaign contributions. The measure takes effect on January 1, 2022. 
  • The Alaska Public Offices Commission imposed a fine of $38,500 against the Mayor of Anchorage’s campaign committee for violations of campaign contribution and disclosure laws. The Midnight Sun explains that the fine was imposed “for a repeated pattern of incomplete and misleading reports that had the result of never giving the public a clear picture of campaign was up to until well after he won office… The final report takes note of the ‘pervasiveness of the violations’ and how ‘despite filing a total of seventeen amendments to the four reports, Bronson for Mayor never fully complied with its reporting obligations.’”
  • The New Mexico Secretary of State issued its 2020 Campaign Finance Random Examination Report. According to the Associated Press, “After a four-year hiatus, state election regulators have resumed spot-checks on campaign finance disclosures by politicians, election candidates and political committees, with 10 accounts referred to New Mexico’s fledgling State Ethics Commission and state prosecutors for possible enforcement action.”

In Case You Missed It:

  • SEIU Chief Charged with Embezzling Campaign Funds: The Sacramento Bee reports that the California Attorney General charged the Executive Director of Service Employees International Union California with “multiple counts of tax fraud, embezzlement, perjury and failure to pay unemployment insurance taxes.” The charges stem from an investigation started by the Fair Political Practices Commission into an “allegation that [she] as treasurer for a 2014 state senate campaign directed spending to her husband for campaign services he did not provide.”
  • Matriculation on the Government Dime: The Associated Press reports on corruption allegations involving a father-son pair of former state legislators. The father, now a Los Angeles City Councilmember and a former Los Angeles County Supervisor, “promised to steer millions of dollars in [Los Angeles County] contracts to the [University of Southern California] if his son got a scholarship and a teaching job.” The Dean of USC’s School of Social Work promised “a full-tuition scholarship and a paid professorship, and concocted a scheme to funnel $100,000 in [the father’s] campaign funds through the university ‘to a non-profit to be operated by the [son]’…” The U.S. Department of Justice statement on the matter notes that the latter kickback scheme “violated multiple university policies regarding the funding of nonprofits”; the DOJ also indicted the now former dean on corruption charges. The DOJ did not charge the son, who resigned from the legislature in 2017 following sexual harassment allegations. 
  • Campaign Finance Trial Begins:Reuters notes that the trial of Lev Parnas began in New York City this week, with the prosecutor alleging that he “used $100,000 from a wealthy Russian businessman to make illegal donations to U.S. politicians.” The New York Times frames the arguments of the two sides with the questions, “Was Lev Parnas a businessman who cared about energy independence and marijuana legalization? Or a conniver who flouted campaign finance laws?”
  • No Guns, No Government Contracts: The Dallas Morning News reports on the impact on banks of a new Texas law that bans state and local governments from doing business with vendors “that limit business with the firearms industry.” SB 19 requires companies with government contracts of $100,000 or more to certify that they do not discriminate against a “firearm entity or firearm trade association.” The measure took effect September 1, 2021.
  • Beware Scam PACsThe Daily Beast reminds us that scam PACs are still operating, navigating in a gray area. Those organizations purport to support a political cause but the money “goes almost entirely to telemarketing and consulting outfits… One way to identify a scam PAC is by comparing how much money they spend on ‘operating expenses,’ which go to overhead, fundraising, and administrative costs, with how much they spend on ‘independent expenditures,’ which go to support candidates. These groups all report vast discrepancies between those two types of payments, spending nearly all their money on ‘operating expenses’ to sketchy companies, and hardly any on politics.”
  • Federal Prison for Contract Kickback: The Associated Press reports that a federal judge sentenced a former Indiana Mayor to 21 months in federal prison for accepting what the former Mayor called a “payment for consulting work” and that his attorney called a “gratuity.” A trucking company paid him $13,000 “in return for steering about $1.1 million in city contracts to the company.”

WEEK OF October 8, 2021

Latest Developments:

  • The Georgia Government Transparency and Campaign Finance Commission approved an increase in contribution limits. The new limits are: $7,600 for each primary and general election for statewide offices, $4,500 for each runoff election for statewide offices, $3,000 each for primary and general election for legislative and local offices, and $1,600 for each runoff election for legislative and local offices. The amounts are in the aggregate, per election cycle. The increases are effective immediately.
  • The New Hampshire Attorney General issued “guidance on our interpretation and enforcement of our State’s lobbyist laws related to reporting.” The guidance focuses on in-house lobbyists and provides that “permitting an individual or entity to avoid registration and reporting simply because the nature of his/her/its employment is primarily for a non-lobbying purpose would frustrate the intent of the statute.”
  • The New York Joint Commission on Public Ethics has another new Chair this month, Jose Nieves, who is a criminal defense attorney from Queens. The Commission held a meeting almost exclusively in executive session and, when it returned to public session, announced that it had retained independent counsel to “conduct an inquiry into the legal and procedural operations of the Commission.”
  • The San Francisco Ethics Commission issued its report on Gifts to City Departments. The Commission’s review of gift laws comes “In light of the recent corruption allegations brought by federal and local agencies against City officials and contractors…” The recommendations in the report largely center on further limiting gifts from “restricted sources” and requiring additional disclosure. Specifically, the recommendations are aimed at prohibiting gifts to any city official that pass through an intermediary from what is otherwise a restricted source for that official.

Reminder:

Corporate Political Activities 2021 – Latest Developments:  The Pracitising Law Institute (PLI) will conduct its annual two-day conference on October 12-13, 2021, both in-person and online. You may register here.

In Case You Missed It:

  • Resignation for Campaign Finance Violations: According to ABC13 WHAM, the Mayor of Rochester, New York resigned from office, effective December 1, as part of a plea agreement in which she pleaded guilty to a misdemeanor charge of “accepting donations over the state limits in (her) 2017 re-election campaign.” Her attorney “said any mishandling of campaign funds was not intentional.”
  • Campaign Committee and Lobbying Don’t Mix: The Columbia Missourian reports that the Missouri Ethics Commission told the current Mayor of Columbia, who is also a registered lobbyist, to “terminate his campaign committee.” The Mayor is not running for reelection, and state law “requires that registered lobbyists must dissolve their candidate committees and that the campaign money should be returned to donors or contributed to a nonprofit group or political party committee.”
  • Oregon Congressional Candidate’s Funds Questioned: According to ABC News, a former Member of Congress, who lost in 2020, donated leftover campaign funds to a veteran’s nonprofit that he created. Instead of aiding veterans, the money has been used to nurture his “political ambitions, providing $65,000, records show, to his 2022 bid for a rematch with longtime Democratic Rep. Peter DeFazio.” According to the article, “the transfer of $65,000 from [his] nonprofit to his campaign was listed as a ‘refund’ in filings…”
  • Georgia Rethinks Ban on Campaign Funds for Security: The Georgia Recorder notes that “seven years ago, the state ethics commission ruled candidates and officeholders could not use campaign funds to help secure their homes.” However, following several serious incidents, including what one official described as “a torrent of abuse, attacks & death threats,” the Georgia Government Transparency and Campaign Finance Commission appears ready to approve a new advisory opinion at its next meeting in December permitting the use of campaign funds for home security.
  • Free Lunch Program: The Associated Press reports that “Free lunches earn business access to New Mexico lawmakers.” New Mexico legislators receive no salary; they only receive a per diem for travel expenses. As a result, “staff and legislators depend on food during the legislative sessions and interim committee hearings.” The article notes that the buying legislators’ lunch is “a legal and a frequent practice that some people find unappetizing.” But one watchdog group explained that “as long as they are disclosed, it’s legal for companies to buy legislators lunches and give gifts.”

WEEK OF October 1, 2021

Latest Developments:

  • The United States Supreme Court agreed to hear Federal Election Commission v. Cruz, a case that challenges the limit on the amount of personal loans that can be repaid to a candidate. Current law limits loan repayments to candidates at $250,000 from money raised after an election. The case raises the issue of whether the rule violates the Free Speech Clause of the First Amendment. Reuters explains that the “case involves a provision of a 2002 campaign finance law that limits the amount of money that candidates can accept from donors after an election as they try to recoup money they personally lent to their formal campaign organizations.”
  • The Governor of California signed a series of bills that affect the Political Reform Act. SB 686, requires a limited liability company that qualifies as a committee under the Act to disclose its membership to the Secretary of StateAB 1367 increases the penalty for misusing campaign funds in a manner that results in an “egregious personal benefit.” AB 319 expands the state’s prohibition on contributions from foreign governments or principals to “contributions and expenditures in connection with an election of a candidate to state or local office.” The measures take effect January 1, 2022.

Reminder:

Corporate Political Activities 2021 – Latest Developments:  The Pracitising Law Institute (PLI) will conduct its annual two-day conference on October 12-13, 2021, both in-person and online. You may register here.

In Case You Missed It:

  • Campaign Funds for Legal Defense: According to the Chicago Sun-Times, the Illinois Supreme Court will “rule on the thorny question of whether Illinois politicians can dip into their campaign funds to pay for their criminal defense or other legal troubles.” The case involves a Chicago alderman who used $220,000 for defense lawyers while under federal investigation. The Chief Justice has recused herself because her husband, an Alderman, has spent over $2 million in campaign contributions on legal fees.
  • PAC Funds to Support a LifestyleNewsweek describes a report [All Expenses Paid] from the Campaign Legal Center that alleges that some Members of Congress are “using their leadership PACs as ‘slush funds’ to pay for extravagances such as expensive hotels and fine dining…. Leadership PACs are meant for members of a party and lawmakers seeking reelection, but the groups’ findings suggest many in Congress are using the money for non-political expenses.”
  • Paper Fined for Charging Candidates for Coverage: The Washington Public Disclosure Commission fined the Tacoma Weekly $15,000 for violating the law “on three occasions by soliciting money from three candidates seeking public office in 2020, as consideration for an endorsement, article or other communication…” The Tacoma Tribune characterized the action as “cash in exchange for news coverage.”
  • Record Fine: The Oakland Ethics Commission announced that it issued a $309,600 fine in the case of a city building inspector “who was found to have committed 47 violations of the Oakland Government Ethics Act, including bribery, conflict of interest, failing to report income, misusing a City position, and misusing City resources.” The San Jose Mercury News notes that in one instance, he made a contract with an owner under court order to repair her property to “do the work himself — despite the conflict of interest — and then conducted incomplete inspections of his own work.”
  • PAC Personal Use: A former Chicago Alderman pleaded guilty to “wire fraud and money laundering, admitting he took nearly $38,000 from the Chicago [City Council] Progressive Reform Caucus to pay for personal expenses.” The Chicago Sun-Times reports that he used the PAC money “as a personal piggy bank, stealing thousands to pay for a relative’s college tuition, skydiving excursions — and even at Lover’s Lane.”

WEEK OF September 24, 2021

Latest Developments:

  • The United States First Circuit Court of Appeals, in Gaspee Project v. Mederos, upheld Rhode Island’s “limited disclosure of funding sources responsible for certain independent expenditures and electioneering communications.” The court found that the laws bore “a substantial relation to a sufficiently important governmental interest and are narrowly tailored enough to withstand exacting scrutiny.” The Providence Journal reports that an appeal to the U.S. Supreme Court is planned.

Reminder:

Corporate Political Activities 2021 – Latest Developments:  The Pracitising Law Institute (PLI) will conduct its annual two-day conference on October 12-13, 2021, both in-person and online. You may register here.

In Case You Missed It:

  • Contractor Sentenced: The San Francisco Chronicle reports that a city contractor was sentenced to two years in federal prison for his part in bribing the former head of the San Francisco Department of Public Works in exchange for “a lucrative contract to build and operate an asphalt recycling plant on land owned by the Port of San Francisco.”
  • Pay-to-Play Mayor Sentenced: The Mayor of Fall River Massachusetts was sentenced to six years in prison for corruption. The Fall River Herald News reminds us that the Mayor “was convicted in May of devising a pay-to-play scheme in Fall River, extorting bribes from marijuana businessmen looking to open up shop in the city.”
  • Fine for Soliciting Contractor Contributions: The Bowling Green Daily News reports that the former Director of the Rhode Island Department of Administration, which “oversees hundreds of millions of dollars’ worth of state contracting and spending” agreed to “pay a $4,500 fine to settle an ethics complaint over his solicitation of campaign donations from state vendors for a mayoral run.” The article notes that the former director “admitted in the settlement [with the State Ethics Commission] that six separate solicitations from an owner or officer of a company that does business with the state violated the code of ethics.” He previously obtained an advisory opinion from the Ethics Commission outlining what fundraising was permissible, and asserted that “he ‘never knowingly solicited contributions from vendors.’”
  • Foreign Solicitations Result in IndictmentsPolitico describes two new federal indictments for “facilitating a campaign contribution by a foreign national, acting as a straw donor and causing the filing of false campaign finance reports.” The pair of fundraisers are accused of “funneling $25,000 from a Russian national into the Trump campaign in 2016.”

WEEK OF September 17, 2021

Latest Developments:

  • The Illinois Legislature, after rebuffing the Governor’s request to amend SB 539 earlier, passed the requested amendments to the ethics bill at the beginning of a one-day session called to “consider a comprehensive energy package.” The Mattoon Journal-Gazette & Times-Courier explains that the week before, when the ethics bill was brought up at the end of a one-day session on redistricting, “Republicans pulled their support while several Democrats had already left the building, leaving the amended bill with only 59 votes, far short of the 71 votes needed to pass.” The amended measure makes extensive changes to ethics, campaign finance, and lobbying laws. The bill will take effect January 1, 2022, after approval by the Governor.
  • The Federal Election Commission “found no reason to believe that Twitter, Inc. violated [certain election laws] by making a corporate in-kind contributions” when it “blocked users from sharing links to and posting certain information from the New York Post articles relating to hacked and personal information” about Hunter Biden. The decision in Twitter, et al found that “because Twitter’s actions reflect a commercial, rather than electoral purpose, they were not contributions.” Moreover “Twitter’s actions… were not coordinated with the Biden Committee, and as such also did not constitute contributions.”
  • The Governor of New York appointed James Dering as the new acting Chair of the Joint Commission on Public Ethics. Dering is a holdover appointee from the Cuomo administration. According to CBS6 Albany, the appointment occurred “Just four minutes before Tuesday’s JCOPE meeting…” The Governor’s office issued a statement to CBS6 indicating that the Governor is “‘actively working to make more appointments and pursue bold reforms to JCOPE to improve ethics oversight and support the Governor’s efforts to restore trust in government.’”
  • The Chicago Board of Ethics imposed a $5,000 fine in an enforcement action (see pp. 31-32) for failing to register when “lobbying the Mayor to influence [an] ‘administrative action.’” The Chicago Tribune explains that the Board issued the fine against the owner of Chicago’s WNBA team because the owner emailed the Mayor’s wife seeking help on legislation that could lead to his acquisition of a gaming license. She forwarded the email to the Mayor and said the Mayor would call him.

Reminder:

Corporate Political Activities 2021 – Latest Developments:  The Pracitising Law Institute (PLI) will conduct its annual two-day conference on October 12-13, 2021, both in-person and online. You may register here.

In Case You Missed It:

  • Guilty Plea: According to the NBC News, Igor Fruman “pleaded guilty to a single count of solicitation of a contribution by a foreign national, who was not identified by prosecutors.” According to the article, he “sent text messages to the foreign national and that person’s agent seeking $1 million in political contributions and that the foreign national wired two $500,000 installments for that purpose.” Fruman “said he was not aware of laws prohibiting foreign campaign contributions at the time he engaged in the donation scheme.” Fruman is best known for making “headlines for helping Rudy Giuliani seek damaging information on Joe Biden in Ukraine.”
  • Campaign Finance Disclosure Sought: The Baltimore Sun reveals that the Maryland State Board of Elections sent a letter to former Lt. Governor Steele following receipt of a complaint that he was “using a federal account to raise and spend money for a future state campaign in Maryland.” His spokesperson indicated that the letter is a “vindication that they are properly using their federal account in advance of potentially launching a gubernatorial campaign and creating a state campaign finance account.” The article explains that “a [federal] 527 account has significant advantages, such as no limit on how much an individual or company can donate to the committee. A campaign committee organized under Maryland law can accept only a maximum of $6,000 per donor for each four-year cycle.”
  • New Jersey Complaint DisposalPolitico reports on the New Jersey Election Law Enforcement Commission’s practice of quietly” deleting complaints from its website after disposing of them in executive session. A vocal critic asserted that “‘The public has no clue as to why the dismissals occurred…’”  The Commission’s Executive Director countered that “‘Even after dismissed complaints have been taken down from our website, members of the public still are entitled to obtain copies under the Open Public Meetings Act…’”

WEEK OF September 10, 2021

Latest Developments:

  • The Alaska Supreme Court sided with the Alaska Public Offices Commission in determining that limits on contributions to independent expenditure committees are unconstitutional. In APOC v. Patrick, the court found that existing limits are unconstitutional as applied to those groups, citing Citizens United. In another case, Resource Development Council for Alaska v. Vote Yes for Alaska’s Fair Share, the court struck down the state’s $1 per signature limit on compensation for initiative signature gatherers as an unconstitutional restriction on political speech.
  • The House Committee on Ethics issued several statements acknowledging investigations into Member’s transgressions. Roll Call explains that the House Ethics Committee is investigating four Members of Congress for ethics violations; among them is one member who allegedly “spent thousands in campaign funds on personal pursuits, including on fast food and family vacations.”
  • The United States Department of Justice announced that three related trash contractors, in the ongoing investigation of corruption at City Hall, “have agreed to pay $36 million in criminal penalties” and cooperate with prosecutors. In addition to the $36 million fine, the deferred prosecution agreement obligates [the company] to fully cooperate with government investigations, to implement an enhanced corporate compliance program, and to provide annual reports to the United States Attorney’s Office on implementation and remediation.” The prosecution agreement specifically requires that the compliance program include “developing new travel and expense policies, guidance, and reporting mechanisms; new charitable contribution policies and procedures; adoption of a no-gift policy for public officials; [and] training for all employees that might interact with public officials…”

Reminder:

Corporate Political Activities 2021 – Latest Developments:  The Pracitising Law Institute (PLI) will conduct its annual two-day conference on October 12-13, 2021, both in-person and online. You may register here.

In Case You Missed It:

  • Senate Candidate Charged: According to Courthouse News Services, a Milwaukee Alderwoman who is running for U.S. Senate in 2022 has been charged with felony violations of campaign finance law. The article states that, among the charges, she allegedly “misused more than $13,000 in campaign funds for personal expenses and around $3,200 in campaign funds during travel for city of Milwaukee business, and deposited about $2,700 in campaign checks into her personal bank accounts.”
  • Failure to FileWCNC reports that the North Carolina State Board of Elections has assessed a total of more than $330,000 in fines against campaign committees so far this year “for filing their 2020 routine campaign finance paperwork late or failing to file their 2020 reports altogether.” One campaign told WCNC that “transactions were filed accurately with the FEC but not with the state…”
  • Pay-to-Play LA: The A. Daily Breeze updates the ongoing L.A. corruption case, which it describes as “a $1.5 million pay-to-play scheme in which real estate developers were shaken down for cash and campaign donations in exchange for help getting building projects through the city’s approval process.” The article sums up a councilmember’s defense as “favors aren’t bribes.” His attorneys assert that his “only crime was acting as an ‘evangelist for robust development’…”
  • Southern California Contract Corruption: The Los Angeles Times reports that L.A. County prosecutors have charged four men with corruption in connection with contracts to build a solar power facility for the City of Industry in Southern California. Among those charged are the city’s former manager, the developer, and a former state legislator (who was convicted and sent to prison in 1994 for taking a bribe in an FBI sting known as “Shrimpscam”). The developer is accused of “embezzlement, money laundering, grand theft and misappropriation of public funds”; others are alleged to have “a financial conflict of interest.”

WEEK OF September 3, 2021

Latest Developments:

  • Multnomah County, Oregon (County Seat: Portland) announced that it will implement campaign contribution limits. According to the release, a “Circuit Court judge has ruled that Multnomah County’s campaign contribution limits are constitutional and do not violate free speech rights guaranteed by the First Amendment.” Accordingly, the “County Elections Division will implement the contribution limits. More information on implementation will be posted in the coming weeks…”
  • The Pennsylvania Secretary of State added a page to its website explaining Lobbying Disclosure Equity Reports. The site includes FAQs, a link to the reporting site, and a reminder that the first reports are due October 7, 2021, for the 12-month period ending June 30, 2021.

Reminder:

Corporate Political Activities 2021 – Latest Developments: The Pracitising Law Institute (PLI) will conduct its annual two-day conference on October 12-13, 2021, both in-person and online. You may register here. Separately, Nielsen Merksamer clients will join together on September 9, 2021, in a virtual client workshop to discuss new developments in political law, to share experiences and best practices and to earn CLE credit. Clients can email Donna Flanagan for additional information.

In Case You Missed It:

  • They Can Say They Tried: The Governor of Illinois, who previously announced his support for an ethics reform bill, SB 539,  returned the bill to the state legislature. In his message, the Governor asked legislators to remove language that “confuses and interferes with the existing processes of the Executive Inspectors General.” He characterized the change as “one technical drafting error.” Although the Senate accepted the change, the house rejected the amendment, thus killing the legislation.
  • Georgia Leadership AdvantageS. News & World Report points out that Georgia’s new law permitting unlimited spending by leadership committees is “described by analysts as an ‘incumbent protection scheme’” that offers “the current governor a massive advantage in a crucial race next year.” An incumbent may set up a leadership committee that is allowed to collect unlimited contributions from individuals at any time; a challenger can only set one up after becoming a nominee for the office.
  • No-Bid Contracts for Contributors: The Associated Press reports that a former aide sued the Indiana State Treasurer alleging that she “violated state law in handing out contracts that paid more than $6 million to firms linked to her political supporters.” The article says that the lawsuit asserts that “contracts went to eight banks, a financial services company and the Indianapolis law firm Ice Miller. It says all 10 companies either directly contributed or had business ties with others who contributed to Mitchell’s 2014 or 2018 treasurer campaigns, or her unsuccessful 2020 run for Congress.”
  • Repeal and ReplaceSpectrum 1 News in Syracuse is reporting that, in the wake of former Gov. Andrew Cuomo’s recent resignation, certain good government groups are calling for wholesale replacement of the state’s ethics commission (JCOPE). JCOPE, created by the Cuomo administration a decade ago, “has long been criticized for lacking transparency in its decision making or investigation and pursuit of small-bore targets.” State legislators have proposed a constitutional amendment that would replace the commission…designed to be more independent [in which a] majority of the commission’s members would be appointed by the judiciary, not the legislature or the governor.”
  • Nonprofits Fights for Anonymity: According to the Colorado Sun, “A deep-pocketed nonprofit that has directed millions of dollars to conservative causes in Colorado over the past two years is heading for a showdown with Democratic Secretary of State Jena Griswold over whether it can keep its donors secret.” The group is appealing a $40,000 fine for failing to disclose its donors in connection with $4 million it spent opposing three ballot initiatives in 2020.
  • Detroit City Hall Corruption: The Federal Bureau of Investigation acknowledged that it searched Detroit City Hall and other locations “as part of an ongoing public corruption investigation.” The Detroit Daily News reveals that the investigation concerns city towing operations, bribery, and “secretly” paying for campaign advertising billboards.
  • Non-Disclosure on Voluntary Disclosure FormWBTV reports that the Charlotte City Manager, Economic Development Director, and several other City officials are in the process of resubmitting their conflict of interest disclosure forms after they “failed to disclose numerous organizations…[they are] involved with on government ethics forms.” One such conflict-of-interest concerns “a project that has gone past schedule and overbudget…[and] is being led by…a nonprofit for which [City Manager] Jones is a volunteer board member.” Curiously, however, “City ordinance does not require city employees or the City Manager to fill out the…form” although they do so voluntarily.

WEEK OF August 27, 2021

Latest Developments: 

  • The California Fair Political Practices Commission adopted a new regulation requiring disclosure when a committee pays for website advertisements or third-party social media advertisements.  The commission also amended two other regulations related to online communications paid for by committees.  These changes take effect January 1, 2022.
  • The New York Joint Commission on Public Ethics changed its course on investigating former Governor Cuomo at its meeting this week.  The commission voted to ask the New York Attorney General to investigate a leak at the Commission regarding an investigation into one of the former governor’s associates.   The commission also agreed to revisit the commission’s permission for the former governor to publish a book while in office, which will appear on the September meeting agenda.  The New York Post explains the actions and notes that “JCOPE, often criticized as a lapdog instead of an ethics watchdog, is being more assertive now that Cuomo is out of power.”

In Case You Missed It:

  • Another Unregistered Foreign Lobbying InvestigationThe Hill cites a Wall Street Journal report that the Department of justice is investigating a lobbyist who “set up an advocacy group without disclosing its ties to Qatar.” The lobbyist reportedly “did not disclose his ties to Yemen Crisis Watch, or register the group under foreign lobbying laws, despite receiving $250,000 from the Embassy of Qatar.”
  • More Personal UseRoll Call reports that the Office of Congressional Ethics found that a West Virginia Congressman “spent thousands of campaign dollars on personal expenses, including numerous fast food meals and family excursions to West Virginia resorts.” He has since “paid his campaign back more than $12,000.”  The report also found that the “campaign failed to properly disclose at least” $40,000 in accordance with Federal Election Commission regulations.
  • Afghanistan Spurs Lobbying ActivityPolitico observes that, as a result of geopolitical changes, “a slew of Middle Eastern countries — Qatar, Libya and Turkey among them — have put out feelers to D.C. lobbying firms in an effort to bolster their presence in the U.S. capital… A few lobbying firms, meanwhile, have already reached out to pitch their services to Ali Nazary, Afghan resistance leader Ahmad Massoud’s head of foreign relations and spokesperson.”  The article also notes that “Government officials and organizations in Saudi Arabia, among the most aggressive countries in its D.C. lobbying presence, reported paying $31 million to their FARA-registered lobbyists and public relations professionals in 2020.”

WEEK OF August 20, 2021

Latest Developments: 

  • The Chair of the New York Joint Public Ethics Commission resigned.  She was appointed by the Governor to the position in February.  The Albany Times-Union reports that she told the Governor in June that she intended to resign as she never expected to serve more than six months as chair.  JCOPE, which has responsibility for overseeing lobbying and ethics in the state, recently updated its policy concerning release of information about investigations.
  • The North Carolina Utilities Commission issued its final rules [Attachment A] regarding “public utility expenditures on lobbying, advertising, political contributions, and other matters.”  The rules essentially prohibit public utilities from recovering from its ratepayers “any direct or indirect expenditure” in connection with those items and require a certification to that effect from the utilities in every application for a change in rates.  NC Policy Watch explains the evolution of the rules, which are a result of a 2018 petition. 

In Case You Missed It:

  • Alaska Won’t Appeal:  The Associated Press reports that a spokesperson for the Alaska Department of Law indicated that the state will not appeal the recent 9th Circuit Court of Appeals decision that struck down certain Alaska campaign contribution limits.  “‘The resources and risks to pursue a rehearing of the Ninth Circuit en banc, or a further appeal, are too great,’ she wrote. ‘We encourage the legislature to address this issue…’”
  • Foreign Agents ContributeOpenSecrets.org discloses that registered foreign agents and lobbyists for companies with foreign parents made $33.5 million in political contributions during the 2020 election cycle.  The article points out that “Foreign nationals are prohibited by federal law from making contributions to political groups or campaigns to influence U.S. elections.”  The $33.5 million contributed includes “contributions to federal-level campaigns as well as outside groups like political action committees and super PACs that are registered with the FEC.  PACs affiliated with firms of registered foreign agents contributed even more.”
  • Ethics Collections:  The Columbia Post and Courier reports that the South Carolina Ethics Commission is owed fines totaling “(n)early $2.9 million racked up by 370 politicians, local officials and various deadbeats who refuse to pay up.”  The commission has been desperately trying to get officials “to file campaign reports and ethics disclosures that state law requires of public officials.”  The commission is not alone; the “state House and Senate ethics committees, which initially handle ethics complaints against legislators, have scores of debtors.”
  • Punishing Personal Use:  Leadership of the California Fair Political Practices Commission, in an opinion piece in the East Bay Times, urges that penalties for personal use of campaign funds be revised to be proportionate to the offense. According to the article, current law provides that “the candidate who misspends campaign funds on themselves faces the same maximum fines as the candidate who accidentally makes a campaign reporting mistake. The fine for both is $5,000 per violation.”  A bill before the legislature would increase penalties when campaign funds are spent for an “egregious personal benefit.”
  • No Prison for Personal Use:  A North Carolina legislator, who used $365,000 of his campaign funds for personal use, must “pay a $1,000 fine and avoid getting in trouble again for the next two years.  The Charlotte News & Observer reports that “he took the money in order to prop up his struggling farm.”  As part of the plea agreement with the U.S. Department of Justice, he must also repay the $365,000 that he took.
  • Ethics in Focus:  The San Gabriel Valley Tribune reveals that the City of El Monte, California removed a city council member “from her position as mayor pro tem and revoked her membership in outside commissions this week in response to allegations that she accepted thousands of dollars in gifts form a lobbyist.”  The council will consider new measures to regulate ethics, “including lobbyist registration, gift limits and a revolving door policy — at its first meeting in September.”

WEEK OF August 13, 2021

In Case You Missed It:

  • Pay-to-Play Conviction: The New Mexico Attorney General announced that a Rio Arriba County Commissioner was convicted for violating the state’s procurement code. The Commissioner failed to disclose campaign contributions he made to an Española Public School Board candidate; the school board gave the Commissioner a no-bid personal services contract, which required the disclosure.
  • Fines for Late Reports: The Alaska Public Offices Commission fined the Mayor of Anchorage for failing to report within 24 hours contributions that were received in the final days before an election. The penalty is $500 per day for each day a report is late. One fine was issued for $15,500 (31 days late) and another fine was issued for $18,000 (36 days late).Alaska’s News Source explains that these fines are on top of fines assessed against the Mayor totaling $52,650 issued in July for “failing to accurately disclose campaign finances in a timely manner, and for receiving over-the-limit contributions…”
  • Ethics Commission Dustup: According to the Daily Memphian, Shelby County Commissioners overrode the County Mayor’s veto of a measure to create a new ethics advisory panel. The panel would advise county commissioners about the Mayor’s appointees to the county Ethics Commission and about amendments to the county ethics ordinance. The county Ethics Commission investigates complaints against officials and oversees lobbyist registration and reporting.
  • Contributions Matriculate: The Washington Examiner questions the timing of contributions made from Congressman Ted Lieu’s campaign funds to Stanford University. The Congressman’s campaign committee gave $50,000 to his alma mater “a few months before his son applied to Stanford.”
  • Contribution Follows ContractsPolitico reports that a Utah health company used a lobbyist and fundraiser to secure no-bid contracts with the Florida Governor’s Division of Emergency Management [DEM] “then gave the Republican governor a $100,000 political contribution.” A spokesperson for the Governor said that “the Governor is not involved in the selection of vendors at DEM or any other agency…. This contract and/or contracts were entered into by DEM.”

WEEK OF August 6, 2021

Latest Developments:

  • The Ninth Circuit Court of Appeals issued a new opinion in Thompson v. Hebdon. The previous decision of the court was vacated by the United States Supreme Court in 2019. (That Supreme Court case is here: Thompson v. Hebdon.) In the new opinion, the court “affirmed the district court’s bench trial judgment upholding Alaska’s political party-to-party candidate limit.” Yet it also “reversed the district court’s judgment as to the individual-to-candidate limit, the individual-to-group limit, and the nonresident aggregate limit,” thus abrogating those limits.
  • The Tenth Circuit Court of Appeals decided Rio Grande Foundation v. Santa Fe, in which the court upheld the City of Santa Fe’s campaign finance disclosure requirements. According to the court, the city requires that “any person or entity that makes expenditures of $250 or more during a single Santa Fe election on public communications relating to a candidate or ballot measure must disclose certain information to the city clerk.” The Foundation argued that its speech was chilled, but the court found that the Foundation lacked standing because it failed to show injury.
  • The Miami-Dade Board of County Commissioners enacted revisions to the city’s lobbyist ordinance. Ordinance 21-73 adds definitions for “expenditure,” “lobbying activity,” and “procurement matters,” revises county personnel covered by the ordinance, revises registration exceptions, including certain procurement matters, requires amendments within 15 days of the change in information, and requires annual reports, even if a lobbyist has no expenditures to report. The amended ordinance took effect July 30.
  • The Governor of New Hampshire approved HB 263. According to the official Analysis, the bill “repeals voluntary expenditure limits, increases the expenditure and contribution reporting threshold for all political entities, and modifies the maximum contribution amount a person may contribute to candidate committees and political committees. This bill also increases the dollar threshold for reporting by political committees.”
  • The Federal Election Commission adopted Advisory Opinion 2021-07, which permits a for-profit online platform to solicit and make contributions to federal candidates. The organization’s proposed services include “(1) enabling its clients to transfer funds to [the organization] and make contributions from those funds, and (2) providing a “convenient vehicle” through which individuals authorized by [the organization’s] clients may solicit those clients for contributions.”
  • Aurora, Colorado opened its Lobbyist Registration Portal. The city’s Ordinance 2021-08 took effect August 1 and quarterly activity reports are required; the first report is due October 15. The city’s website notes that “The City Clerk will accept complaints regarding compliance starting Jan. 16, 2022. The City Clerk’s Office will focus on education and compliance in the regulation of lobbyists during the year the ordinance takes effect. Lobbyists will not be subject to revocation, suspension nor sanctions for any violations in 2021.”

In Case You Missed It:

  • Campaign Contributions Followed by Increased SpendingKJZZ reports that Arizona lawmakers invested more in private prisons after receiving record-high campaign contributions from private prison interests. “(A) member of the Joint Legislative Budget Committee said he couldn’t say if the move would save Arizona money, only that lobbyists asked the committee for an increase in their contracts and they received it.” 
  • Procurement Consultant Sues for Payment: A Cleveland lobbyist, who helped arrange a $21 million dollar contract for personal protective equipment with the state’s nonprofit economic development corporation at the outset of the pandemic, is suing for nonpayment of his commission. com reports that “the company [that supplied the PPE] says it doesn’t owe anything. Its lawyer says since state law bars anyone from getting paid a percentage of a state contract they lobbied on, the contract is illegal. The dispute comes down to what the definition of lobbying is.”
  • Unreported Gift Prompts Push for Ethics Reform: The Los Angeles Times reveals that the “El Monte City Council has launched an effort to create an ethics commission” following the Times disclosure of unreported “financial assistance from a lobbyist to help pay for [a councilmember’s] breast augmentation surgery.” The councilmember and the lobbyist were formerly best friends but had a falling out when the councilmember “voted against allowing retail sales of cannabis in the city, a proposal that [the lobbyist] had championed.”
  • Maine Investigates LLC that Operated as a PAC: The Portland Press-Herald reports that “The Maine ethics commission voted Friday to launch an investigation into” an LLC that donated $150,000 to Maine Democrats four days after formation. The LLC dissolved 14 months later with “no public evidence the company conducted any other business.” The commission’s executive director noted that “if the company’s only purpose was to donate funds to the party Maine law required it to register as a political action committee and disclose who donated money to it.” If it “was an actual company, the large donation to the party would not have raised any concerns because it would have been allowed under the law.”
  • San Francisco Ethics Commission Fines Mayor: According to the San Francisco Chronicle, the San Francisco Ethics Commission has proposed a $22,792 fine for the Mayor’s various ethics violations. Among other things, she used her position to ask the former Governor to release her brother from prison after he had “served about two decades of a 44-year sentence for involuntary manslaughter and armed robbery,” and accepted a gift from “the former Public Works director who was charged by the FBI in 2019 for fraud.” Her brother remains in prison and the former Public Works Director is awaiting trial.

WEEK OF July 30, 2021

Latest Developments:

  • The North Dakota Ethics Commission approved a $10 food and drink exception to its gift rules for public officials. At their July 29 meeting, effective immediately, “[f]ood or beverage with a value of $10 or less…[may be] purchased for a public official in conjunction with an informal social and educational event.” The food must be consumed at the event and a state resident must be present.

In Case You Missed It:

  • Disarray in the DC Suburbs: The Prince George’s County, Maryland School Board is at a standstill after considering an ethics committee recommendation that 7 of its 14 members be removed over conflict-of-interest violations. According to Maryland Matters, “prior to the board’s public meeting, the [unaccused] members convened in closed session and voted to accept the ethics committee’s determination.” Yet, in open session, the implicated members blocked the board from proceeding on the ethics charges and the board failed to arrive at a resolution.
  • The Missouri Ethics Commission is seeking $191,550 from former state-Rep. Courtney Curtis for failure to pay fines stemming from past ethics orders. Curtis was sentenced in March after he “pleaded guilty earlier that month to federal charges revolving around his misuse of campaign funds” and is currently in federal prison, according to the Louis Post Dispatch. His initial fines were $19,150, meaning the Commission is imposing ten times the amount.
  • Michigan Campaign Finance Loophole: Michigan Live reports that complaints have been filed in Michigan, where the incumbent governor is employing a nearly 40-year-old precedent “to collect unlimited funds from individual donors.” The 1983 ruling dispenses with caps for individual contribution limits to candidate committees (currently $7,150) if the candidate is facing a recall. Opponents contend the governor is exploiting the exception given that a recall “is not actively being sought.”
  • Major Fines in The Last Frontier: Staff for the Alaska Public Officers Commission recommended $52,650 in fines for alleged campaign finance violations against Anchorage Mayor Dave Bronson’s 2021 election campaign. According to the commission, the committee failed to “disclose tens of thousands of dollars in debt for more than seven months after it was incurred — until after this year’s April 6 election and the May 11 runoff — among multiple other infractions of state campaign finance rules.” The Anchorage Daily News reports that the Mayor’s campaign says it is cooperating with the ongoing investigation.
  • Campaign Funds for Legal Defense in the Empire StateLocal media reports that New York State legislators and good government groups are pushing reforms in the state campaign finance laws that permit politicians “to pay lawyers defending them against allegations of wrongdoing” with campaign funds. In the wake a string of high ranking and high-profile politicians, including the former assembly speaker and current governor, using campaign funds for legal defense of personal wrongdoing, it has appeared unseemly to groups pushing reform. In defense of the practice, a spokesperson for the governor maintained that “[u]sing campaign funds instead of taxpayer dollars for this purpose has been well established for decades.”

WEEK OF July 23, 2021

Latest Developments:

  • The Governor of Illinois indicated that he will sign SB 539, according to the Chicago Tribune. Among other things, the bill would expand state lobbyist registration to include local lobbyists, regulate consultants who work for lobbyists, expand revolving door provisions, and expand the geographic coverage of the prohibition on making certain campaign contributions during a legislative session. The Governor has 60 days from June 30 in which to sign the bill.
  • The United States Department of Justice announced that a federal grand jury issued an indictment of a former Trump presidential campaign advisor. The New York Times describes the indictment as “federal charges of violating a federal law requiring lobbyists for foreign interests to disclose their work to the Justice Department.”

In Case You Missed It:

  • Zombies to Rise in 2022Bloomberg News reports that with a number of congressional retirements in 2022, additional campaign funds will become “zombies,” which are campaign funds controlled by former officeholders who are not seeking election to any other office. According to the article, one retiring senator “is sitting on more than $16 million in two campaign accounts—far more money than any other retiring lawmaker has ever had… Many of these so-called zombie committees last for years after the lawmakers who established them left electoral politics or even died, even though the Federal Election Commission has urged them to disburse their money and shut down. Few enforcement actions have been taken, and actual penalties are rare.”
  • Keeping Promises is Ethical: Politico reports on increasing pressure on the Biden administration “to follow through on his campaign promise to press for an aggressive 25-point plan for ethics reform” in the face of what some watchdog groups see as a meager legislative push. While the President has enacted executive orders governing his staff, ethics advocates stress that “longer lasting reforms come through legislative action.”
  • When the Dead Contribute: According to Roll Call, a Member of Congress reported a contribution from a donor who had been dead for seven months. The campaign later “amended disclosure forms filed with the Federal Election Commission to remove the dead woman’s name.” The contribution is now from her husband. The article notes that Federal Election Commission advisory opinions permit contributions from decedents in limited circumstances.
  • Nonprofits Beware: The Associated Press confirms that the IRS received a complaint against a nonprofit charity alleging that the nonprofit engaged in partisan politics. The organization is “ registered as a 501(c)(3) nonprofit, [and thus] barred under U.S. Internal Revenue code from ‘directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.’” The organization indicated that it does not share information with political parties but provides a database to legislators “not… for campaigning but for communicating with constituents.”
  • Lobby Business BoomingRoll Call describes how “Cash floods K Street as Democrats focus on spending and taxes.” One lobbyist noted the driving force is that “‘Democrats continue to embark on one of the most ambitious policy agendas in recent history.’” With multiple issues, including taxes, infrastructure and earmarks, trade, and healthcare all up for consideration in legislation, another lobbyist noted, “‘It’s like having 10 fronts working all at the same time.”

WEEK OF July 16, 2021

Latest Developments:

  • The Pennsylvania Legislature passed B. 336 last month, which includes a provision that requires lobbyists file “equity reports” that disclose their equity interest in the entity for which they are lobbying. The measure became law this month without the Governor’s signature and takes effect September 7. However, the new electronic reporting requirement is not expected to be in place until 2022.  Stay tuned…
  • The Governor of Connecticut approved B. 6444, which deletes certain requirements that applicable contractors with contracts of $500,000 or more separately certify compliance with state ethics provisions. Instead, the bill requires that the contracts themselves include those provisions. According to the bill analysis, the measure concerns “contractors’ compliance with (1) state ethics laws; (2) restrictions on gifts, investments, political contributions and solicitations, and use of consultants; and (3) nondiscrimination and affirmative action requirements. It also codifies and expands upon provisions in an existing executive order that require certain state contractors to disclose any campaign contributions.” The bill was signed June 28 and became effective July 1, 2021.
  • Annapolis, Maryland adopted Ordinance 15-21, which requires persons who make aggregate independent expenditures of $5,000, or more in a municipal election to register within 48 hours. Expenditures of $10,000, or more, must be reported within 48 hours.

In Case You Missed It:

  • Jailtime for Campaign Finance Violations: The San Francisco Chronicle reports that a former California legislator was sentenced to one year in the county jail for misusing campaign funds. Prosecutors charged over 30 felonies, including for “alleged personal use of more than $260,000 in campaign funds.” Those funds were used “to pay for restaurants, airfare, a $36,000 vacation to Asia and credit-card charges related to the remodel of a home he owned in Hawaii.” The former legislator, who pleaded guilty to nine counts, will also lose his license to practice law and is barred from holding future public office.
  • PAC Donations Whipsawed: The Detroit News reports that Toyota stopped PAC congressional donations after the January 6 insurrection, then resumed making donations the following month. Faced with a threat from The Lincoln Project to run ads against donors, “beginning with Toyota,” the car company “will no longer donate to members of Congress who voted against certifying the 2020 election in January… The Lincoln Project said it would no longer air the Toyota ad after Thursday, and declined to comment on what other companies it plans to target.”
  • Checking Up on Pre-checked Boxes: According to the Washington Post, at least four state attorneys general are “are looking into the online fundraising practices of both major political parties… The practices being examined include the use of pre-checked boxes that lock in recurring donations from political donors who may not intend to sign up for more than one contribution.”
  • Charitable Gifts Under Scrutiny: The California Fair Political Practices Commission discussed gift giving to politicians’ favorite charities, with “a proposal to require elected officials to provide more information on special interest donations to their nonprofits.” Cal Matters notes that “Donations … to nonprofits controlled by legislators, their staff and family members (have) become an increasingly common way for politicians to raise and spend money outside the limits of the state’s strict campaign finance laws.”
  • Mississippi Gift Largesse: The Mississippi Daily Journal reports that in the last two years, “lobbyists for six of Mississippi’s eight public universities gave out almost $100,000 in gifts to lawmakers and other public officials…” The article discusses the lack of transparency in a state with no gift restrictions: Gift-givers “sometimes fail to describe what they are buying for elected officials in their public reports.” While some seek reform, “past efforts never made it out of committee.”
  • Married at a Campaign Event: According to Newsweek, the mayor of a small city in Michigan “defended using thousands of dollars in campaign funds to help pay for his daughter’s wedding by stating that it doubled as a campaign event.” While the mayor acknowledged that “using the money for the wedding created ‘poor optics,’ he did not believe it constituted an improper use of funds.” One critic opined, “If the wedding of your own daughter could be a campaign event, what sort of event cannot be a campaign function?”

WEEK OF July 9, 2021

Latest Developments:

  • The Governor of Montana approved B. 224. Among other things, the bill increases contribution limits for contributions from PACs and individuals to candidates for state and local offices and repeals the aggregate limit on contributions that candidates may accept from PACs. The measure takes effect October 1, 2021.
  • The Governor of Minnesota approved F. 9, a tax bill that includes a provision to prohibit a “sitting member of the legislature” from working for or receiving compensation from any lobby or government relations business. The Minnesota Reformer explains that the measure is aimed at a current member who took a position as director of public affairs for a D.C. area lobby firm. The provision takes effect January 3, 2023.
  • Hawaii’s Legislature approved HB 671 last April, which broadens the state’s one-year revolving door restrictions imposed on former legislators and extends the application of the law to executive officeholders and senior appointees. Inasmuch as the Governor failed to sign or veto the measure within 45 business days of adjournment, the measure now becomes law and will take effect on January 1, 2022.

In Case You Missed It:

  • Corporate Campaign Disclosure Bill Introduced: A Pennsylvania Congressman introduced R. 4359, which would “require corporations to disclose to their shareholders the amounts disbursed for certain political activity.”
  • Campaign Finance Enforcement Ignored: The Northeast Mississippi Daily Journal reports that more than $150,000 in fines for failing to file timely campaign disclosure statements have gone unpaid since 2018. “Only about $30,000 worth of fines were paid – or waived due to valid excuse – over the three years.” The parties involved in enforcement agree that the current law needs work. “‘Ironing out the statutes regarding deadlines, consequences, and the specific duties of the state agencies involved would help us hold candidates and political committees more accountable and streamline the overall process,’” according to a spokesperson for the Secretary of State.
  • Fine for Failing to Register: The Idaho Capital Sun reports that the state’s Attorney General fined a lobbyist for a nonprofit “$250 for lobbying on Idaho’s higher education budget without first registering as a lobbyist.” The lobbyist first registered on April 14, 2021, but reported $14,000 in expenditures in March. The Secretary of State requires that lobbyists register before engaging in any lobbying activity and referred the matter to the Attorney General, who imposed the “Late Lobbyist Registration Fine.”
  • Ethics Agency Conundrum: The Los Angeles Times explains the difficult situation that ethics agencies, such as the Los Angeles City Ethics Commission, face when they are financially dependent on the elected officials they regulate. One council candidate noted, “If you require Ethics Commission employees to be beholden to the City Council for their salaries, for the department’s funding, you give them no power.” Another observer put it more bluntly, “If you are the executive director, of course you know there’s super weirdness with having to ask for a pay raise from the officers you’re overseeing.”
  • More Campaign Finance Challenges?: According to an analysis by The Hill, the “Supreme Court’s recent donor disclosure ruling could embolden future challenges to campaign finance rules.” The article points out that Chief Justice John Roberts wrote that disclosure laws must be “narrowly tailored” to important government interests. Experts say Roberts’s opinion effectively toughens the standard of review for all laws that compel disclosure, including election rules.”

WEEK OF July 2, 2021

Latest Developments:

  • The United States Supreme Court decided Americans for Prosperity Foundation v. Bonta, in which the court found that the California Attorney General’s requirement that nonprofit organizations disclose the identities of their major donors violates the First Amendment right to free association. The court effectively enjoined the California Attorney General from collecting copies of “Schedule B” from the organization’s annual tax filings, which historically listed the organization’s donors. No word yet as to whether the Attorney General will propose a more “narrowly tailored” requirement or if the IRS, under the new administration, will change its current requirements with regard to redacting information on Schedule Bs for certain organizations.
  • The Louisiana Board of Ethics issued a regulation that increased the limit for food, drink, or refreshments to $65, effective July 1, 2021. State law generally prohibits gifts to public officials and employees, but among the exceptions is a gift of food and drink, including incidental transportation and entertainment, consumed while the personal guest of the giver.

Reminders:

  • The California Lt. Governor has officially set the recall election for California’s Governor for September 14, 2021.  The setting of the date starts a 24-hour reporting period for certain contributions. Reporting clients will receive more information.  The Fair Political Practices Commission will be updating its Filings Schedule.
  • The California Legislature is moving forward with significant changes to lobbyist reporting. B. 459 was amended and approved by the Assembly Elections Committee. Amendments this past week removed monthly reporting and expanded administrative lobbying from the bill. However, the measure still would require 24-hour reporting in the 60 days before the session adjourns. Those reports require disclosure of each communication and the client position communicated for each bill within 24 hours of the communication. The reporting provisions would not take effect until one year after the Secretary of State completes its current update to its electronic reporting system.

In Case You Missed It:

  • Proxy Wars Heat UpRoll Call discusses the continuing proxy battles to increase transparency in corporate political spending. The article notes recent passage of campaign spending disclosure shareholder proposals at “Netflix Inc., railway operator Norfolk Southern Corp., and GEO Group Inc., which runs immigration detention facilities… In total, 34 proposals across all [Environmental and Social Governance] topics gained majority support this season, compared to 21 last year, according to Proxy Preview.”
  • Foreign Agent Registrations Uporg reports that “China, Qatar and Russia dominated the top 10 ranking of countries spending the most on foreign influence, lobbying and propaganda operations targeting the United States in 2020.” The “three countries quickly rose to the top of the foreign spending rank,” but that rise doesn’t mean more spending as “much of the spike in reported spending can be attributed to new registrations.” The increase in registrations follows a Justice Department effort to crack down on unregistered agents.
  • More FARA Inquiries: According to Bloomberg News, “Rudy Giuliani is the subject of a Justice Department inquiry into possible foreign lobbying for Turkish interests separate from a criminal probe of his activities in Ukraine.” The report indicates that this is not a criminal inquiry. The Department of Justice “could issue a determination letter requiring him to register as a lobbyist and also disclose all details of contacts he had with U.S. and Turkish officials.”
  • Montana Law Stopped: We recently reported on Montana SB 319, which authorizes the use of joint fundraising committees, regulates public college student political activity, and disqualifies a judge if the judge has accepted more than half the maximum campaign contribution from a lawyer in the case. A state court judge will reportedly issue a preliminary injunction to prevent two provisions of the bill from taking effect. The Helena Independent Record reports that the judge will block the portions of the bill relating to college students and judges.
  • FEC Ponders Candidate CompensationRoll Call reports on the Federal Election Commission’s consideration of a proposal, Regulation 2021-01, which would allow candidate committees to pay salaries to federal candidates and to provide them with health benefits. The article points out that “if the FEC changes the rules, it would be the latest in a string of shifts from the agency making it easier for candidates to tap campaign funds for what, in the past, would have been deemed personal expenses.”

WEEK OF June 25, 2021

Latest Developments:

  • The Governor of Maine approved P. 467 (LD 1417), which bans business entities from contributing to candidates and leadership PACs and caps contributions to PACs. The Maine Wire reports that the Governor signed 9 election- and campaign finance-related bills, including H.P. 1099 (LD 1485), which caps the amount an organization can pay for services contributed to a PAC and H.P. 1011 (L.D. 1377), which among other things, requires that internet videos contain the same audible and written disclosure statement (listing the top three funders) as broadcast or cable television political communications. These bills take effect 90 days after the end of the special session, which is currently in recess until June 30.
  • The Governor of Louisiana signed B. 4, which removes the aggregate cap on contributions from PACs. According to the bill’s digest, under existing law “the total amount of combined contributions for both the primary and general elections that may be accepted by a candidate and his principal and subsidiary campaign committees from political committees shall not exceed $80,000 for major office candidates, $60,000 for district office candidates, and $20,000 for other office candidates in aggregate.” The bill repeals those caps and takes effect August 1.

In Case You Missed It:

  • Activist Shareholders Pressure Corporations over ContributionsRoll Call describes a letter recently sent to corporate directors by Majority Action, a self-described group “that empowers shareholders to hold corporations accountable.” The article indicates that the group is “pressing 82 corporations to be transparent about donations to candidates and causes as contributions resume after a pause in the wake of the Jan. 6 attack on the Capitol… The letter asks companies to provide public disclosure of the amount and recipient of every election-related expenditure, including those made through political action committees and third-party groups such as trade associations.”
  • Reporting Regrets: The Alaska Public Offices Commission, in Delaiarro v. Pruitt, fined a former legislator nearly $20,000 – only 2% of the maximum fine allowable – based on the “widespread and serious nature of the violations.” The allegations included failing to timely report expenditures, failing to provide details of expenditures, making untimely reimbursements to himself, and accepting prohibited campaign contributions. According to Alaska Public Media, the former legislator issued a statement saying, “‘In hindsight, I wish I would’ve hired someone to do my reports instead of trying to balance that and a campaign by myself.’”
  • Crypto Currency AcceptedThe Hill reports that “The National Republican Congressional Committee (NRCC) will begin soliciting cryptocurrency donations.” The article notes that the committee is the first national party committee to accept cryptocurrency. The Committee will use a service to convert the contributions to U.S. dollars before transfer to the Committee in order to avoid a Federal Election Commission cap on cryptocurrency contributions.
  • Lobbyist Access: The Ohio Capital Journal reports that Ohio lobbyists can obtain cardkeys to the State Capitol and nearby buildings, which permits them to “skip security lines, access elevator bays in the office buildings, and enter the Statehouse after hours.” According to a statement from the Ohio Lobbying Association, “All individuals registered with [the Joint Legislative Ethics Committee] and in good standing are eligible to apply and pay for a pass to the select state buildings…” The Ohio Capital Journal acknowledged that its own reporters “are OLCA [Ohio Legislative Correspondents Association] members and have Capitol access cards.”

WEEK OF June 18, 2021

Latest Developments:

  • Washington State settled, for the second time since 2018, with a major tech giant for not complying with the record retention requirements under state campaign finance laws. According to the settlement, the company will pay $400,000 plus attorney fees for selling political ads to candidates on its “hosted networks… and the tech company did not, as required, retain information about the ads and the candidates.” While other media have been subject to the law, the state alleged certain tech companies have not complied.
  • The Federal Elections Commission dismissed a complaint contending that Democratic National Committee cooperated with Ukraine during the 2016 campaign to bolster the campaign of Hillary Clinton and damage the campaign of former president Trump. “The accusation, filed by a Trump ally, claims that a former DNC consultant sought harmful information about then Trump campaign manager Paul Manafort, a potential violation of campaign finance laws.” The commission voted 4-2 that there was not probable cause.
  • The San Francisco Ethics Commission imposed fines on two former City employees for not disclosing their consulting services for an entire year. In settling, the two former employees, who work for the same firm, acknowledge that they “failed to disclose their permit consulting activity for a full year…[and] failed to timely report 80 contacts with City employees or officials on behalf of multiple clients for which they were collectively paid more than $50,000 for their services.” The duo was fined $12,670 for a combined 8 counts of not filing quarterly reports for their permit consulting services.

In Case You Missed It:

  • A Rhode Island Judge sentenced former Rep-Elect Laufton Ascencao for using funds for his 2018 campaign for the state House from the local Sierra Club chapter of which he was treasurer during his run for office. The Boston Globe reports that “Ascencao pleaded no contest to a charge of felony embezzlement” among other four campaign finance violations. His prison sentence was suspended and he is ordered to pay restitution to the club.
  • Governor Can Pay Daughter for Hair and Makeup: The New Mexico state election chief has deemed as a legal campaign finance expenditure Gov. Michelle Lujan Grisham’s “use of campaign funds on hair and makeup services” paid to her daughter’s beauty business. The Albuquerque Journal reports that the governor’s reelection campaign made the expenditure in advance of Lujan Grisham’s media appearances during last year’s Democratic National Convention.
  • Campaign Funds to Fight Charge of Improperly Using Campaign Funds: Congressman Steven Palazzo, under investigation for misappropriation of campaign funds since last year, has confirmed that his campaign then made $61,000 in legal expenditures for his defense in the matter. The (Mississippi) Clarion Ledger details that “there is substantial evidence Palazzo misused campaign funds for his own personal benefit…spend[ing]$20,000 renovating a riverfront home he owned …[and paying] himself $60,000 in rent. An analysis by Forbes indicates Palazzo’s legal expenses “do not appear to violate federal election law.”
  • Sarkozy ne sait pas quoiExamining campaign finance issues on the Continent, Nicolas Sarkozy, the embattled former president of France, has denied responsibility for alleged illegal expenditures his 2012 campaign made. Sarkozy has faced numerous ethics charges relating to his tenure, but this issue concerns whether his campaign “splurged nearly double the 22.5 million euros ($27.28 million) allowed under electoral law on extravagant campaign rallies, then hired a friendly public relations agency to hide the cost.” Prosecutors argue that the former president personally benefited from the expenditures while Sarkozy argues that he is “known for delegating.”

WEEK OF June 11, 2021

Latest Developments:

  • The Governor of Maine signed HB 497, which increases lobbyist registration fees from $200 to $250 and from $100 to $125 for reach lobbyist associate. The legislation notes that the increased fees are intended to “provide ongoing allocations for expenditures related to administering and enforcing lobbyist disclosure requirements including the costs of…technology.”
  • The New Hampshire Legislature has sent HB 263 to the governor for approval. As reported by local media, the bill would “end the voluntary campaign spending program that allowed candidates who abided by the limits to receive higher maximum contributions from individuals.”It also would increase the primary and the general elections per donor limit to $5,000 each, “allowing any donor to give as much as $10,000 to a candidate during an election cycle.”

In Case You Missed It:

  • Corporate Two-Edged Sword: The New York Times describes the problems corporations encounter if they “take one position and make donations that support another.” In the context of current battles over voting rights, the article points out that “Investors are battling with corporate boards, filing shareholder resolutions that demand more transparency and accountability about political donations. Increasingly, they’re winning.”
  • PAC Money Flowing AgainRoll Call reports that although PAC contributions are down, PACs “have begun to send more money to lawmakers.” The article quotes the Executive Director of the National Association of Business PACs, who opined that “Employees continue to believe their company and trade association PACs are important ways for them to exercise their civic duty and provide support to lawmakers who will advocate for their jobs, industries, and communities.”
  • Seeing Green in The Land of Enchantment: The New Mexico Political Report outlines emerging ethics issues as compliance infrastructure develops in the face of the recently passed Cannabis Regulation Act. As they note, the Act has given rise to a niche market for cannabis adjacent businesses, particularly those aimed at guiding business owners through the process.” Not surprisingly, those offering this specialized knowledge are those closely associated with the Act’s passage, which “raises questions about the ethics of state and local lawmakers selling their services in an industry they sometimes have a hand at creating.”

WEEK OF June 4, 2021

Latest Developments:

  • The Illinois Legislature approved a comprehensive ethics reform measure, B. 539. Among other things, the bill prohibits public officers from registering as lobbyists for 6 months after leaving office, bans government officials from lobbying other government entities for compensation, and requires that “consultants,” as defined, register as lobbyists. The bill expands lobbyist regulation to apply to those who lobby local officials, those who solicit others to lobby, and requires local lobbyists, except those in Chicago, to register with the Secretary of State. The measure also expands the prohibition on fundraising during a legislative session. The bill goes to the Governor for approval and would take effect January 1, 2022.
  • The United States District Court for the District of Columbia issued an opinion in Cruz v. Federal Election Commission, which found that the federal $250,000 “loan-repayment limit restricts political expression.” Senator Cruz had loaned his campaign more than $250,000 and, under federal rules, unpaid personal loans in excess of $250,000 are deemed to be a contribution if still unpaid 20 days after an election. Courthouse News notes that the “three-judge panel of the U.S. District Court for the District of Columbia unanimously rejected arguments from the FEC that the rule is necessary to prevent quid pro quo corruption.”
  • A Bipartisan Pair of Congressmen introduced R. 3389, which would end the revolving door for officials who represent foreign governments. According to the Members’ press release, the measure would “ban retired members of Congress, senior executive branch officials, and general and flag officers of the Armed Forces from lobbying on behalf of foreign interests.” OpenSecrets quotes one observer, “‘These are all people with security clearances. These are people who had access to top secret information, and their next job is to work for an authoritarian regime? I think that should worry people,’…”

In Case You Missed It:

  • DOJ Scrutinizes Foreign Lobbying: According to Politico, the U.S. Department of Justice is “looking at whether Blue Star Strategies illegally lobbied on behalf of a Ukrainian company that counted Hunter Biden as a board member.” The article notes that “The probe comes as the Justice Department ramps up its scrutiny of foreign governments’ efforts to influence U.S. politics through covert lobbying operations.” One commentator observed that the “Justice Department enforcement of FARA is now considerably more rigorous, seen not only in high-profile criminal prosecutions but also in day-to-day regulatory enforcement such as administrative inquiries into why parties are not registered, accountability for deficiencies in filings, and inspections of books and records…”
  • Charitable Contributions for California’s First Partner: The Sacramento Bee reports that “in recent years, as Newsom’s political star ascended, records show his wife’s nonprofit received more than $800,000 from a dozen corporations that regularly lobby state government on matters affecting their financial bottom lines.” According to the article, those same “donors also gave about $1.3 million to Newsom’s political committees, records show, and some have also donated hundreds of thousands to other charities at Newsom’s behest.” The Newsom’s 2019 tax return show that the first partner “was paid $150,000” by the nonprofit.
  • Watchdogs MergingMaryland Matters reports that the Center for Responsive Politics and the National Institute on Money in Politics are merging into a single entity, “OpenSecrets.” According to the article, “The merger will create a new one-stop shop for integrated federal, state and local data on campaign finance, lobbying and more.” The combined entity will debut a new website later in 2021.
  • Postmaster General Investigated: The Washington Post reports that the Postmaster General is under investigation “in connection with campaign fundraising activity involving his former business.” The Post previously reported that employees “were pressured by DeJoy or his aides to attend political fundraisers or make contributions to Republican candidates, and then were paid back through bonuses.” The Postmaster “adamantly disputed that he broke the law…”

WEEK OF May 28, 2021

Latest Developments:

  • The Supreme Court of Connecticut, in Markey et al. v. State Elections Enforcement Commission, overturned civil fines imposed on candidates who misused public campaign funds to “cast a negative light on a candidate running in a different race without properly allocating the cost among campaign committees that were permitted under the [public campaign] financing program to make such expenditures.” The decision, on procedural grounds, found that the Commission mischaracterized its actions on the candidates’ petition. The Supreme Court returned the matter to the trial court to hear the merits of the case.
  • The New York Joint Commission on Public Ethics introduced its new Executive Director, Judge Sanford N. Berland. Judge Berland recently retired from the New York State Court of Claims.
  • The North Dakota Ethics Commission issued a proposed regulation to implement a new $10 gift exception for food and beverage purchased for a public official at an informal social and educational event that is consumed at the event. A hearing is scheduled for June 29, 2021. The Bismarck Tribune quotes the Executive Director of the Commission, noting that “he reviewed the Capitol Cafe menu, and ‘this would allow an individual to purchase modest lunch or breakfast and coffee for a public official as they educate them on whatever concerns them.’”

In Case You Missed It:

  • Gifts Down During PandemicSpotlight Pennsylvania reports that “Public filings with the State Ethics Commission show that, with some exceptions, Pennsylvania’s 253 lawmakers did not report receiving anything of great value last year as the pandemic raged…” The article notes that Pennsylvania has “no limit on the size or number of gifts elected officials can accept.”
  • New Jersey Pay-to-Play Loophole: According to Politico, “Several months after the Union County Improvement Authority awarded a no-bid contract to design a new $100 million county government complex in Elizabeth, top members of the architecture firm that received it opened their checkbooks and donated to the nascent Assembly campaign of a high-ranking authority official.” New Jersey’s pay-to-play laws do not prohibit a local official involved in contracting from raising contributions for a campaign for state office.
  • Lobbying Returns in D.C.Roll Call reports that “After more than a year of virtual-only advocacy because of the COVID-19 pandemic, the freshly vaccinated lobbying set is reemerging for real-life meetings on the Hill and in-person fundraisers, as well as meals and sit-downs to reconnect with clients and co-workers… Though virtual events still dominate, Democrats and Republicans have scheduled real-life activities, including destination fundraisers and meetings, in the coming weeks and months.”
  • San Diego Disclosure goes Dark: The San Diego Reader reveals that the City of San Diego’s campaign disclosure system “has been down for weeks without any public announcement, except for a note on the site that filings would return soon.” The city’s contract with outside vendor Netfile apparently expired April 30, although it could be extended. The City Council approved a new contract with Pasadena Consulting.
  • Prechecked Box Legislation IntroducedThe Hill reports that a group of Democrats are introducing a bill “to prevent default recurring political donations.” Sen. Amy Klobuchar introduced 1786, the Rescuing Every Contributor from Unwanted Recurrences” (RECUR) Act. The measure comes in response to the FEC asking congress to ban the practice. “The bill would create a new opt-in requirement so that contributors have to actively consent to the recurring donations.”

WEEK OF May 21, 2021

Latest Developments:

  • The Governor of Florida signed SB 1890, which limits contributions to ballot measure committees to $3,000 until the measure has qualified for the ballot. [The ACLU has filed suit to enjoin this provision.] Among other things, the measure also preempts local contribution limits that differ from state limits and all local limits on electioneering communications and independent expenditures. The bill takes effect July 1, 2021.
  • The Governor of Maryland approved B. 4, which expands the state’s gift limits to ban public officials and state employees from accepting gifts from persons representing local governments. Maryland Matters explains that the state’s gift law generally requires that food and beverages be consumed in the presence of a lobbyist to be permissible. In the age of virtual lobbying, lobbyists for local governments were able to continue to purchase meals while other lobbyists were prohibited from doing so. The measure also prohibits retaliation for reporting or participating in an investigation of a state’s ethics law violation. The bill takes effect June 1, 2021.
  • The Chair of the California Fair Political Practices Commission, considering recent newsworthy events, asked staff at the recent meeting to discuss the use of “donor-advised funds” in connection with the behested payment regulations scheduled for hearing in July. He also asked staff to discuss at a future hearing, whether the Commission has any regulatory authority over the use of checkboxes for recurring contributions in campaign fundraising.

In Case You Missed It:

  • Bundle, in Lieu of Pay-to-Play Limit: The Gothamist compared New York City’s Doing Business Database to the City Campaign Finance Board’s registered bundler list in connection with the New York City Mayor’s race. According to the article, “Two dozen people who are limited from contributing to candidates because of their business ties with the city are legally circumventing those restrictions by serving as “bundlers,” or moneymakers who collect donations for candidates.”
  • Corporate Political Spending TransparencyMarketWatch reports that the New York State Common Retirement Fund has successfully passed several shareholder proposals to require “more detailed disclosure” of corporate “direct and indirect political spending.” The article indicates that “transparency advocates are now taking the fight to the next level: the Securities and Exchange Commission. Congressional Democrats want to remove a budget rider that in recent years has prevented the SEC from issuing a rule requiring public companies to disclose their political spending.”
  • Recurring Contribution Format Thrives: We reported last week that the Federal Election Commission is asking Congress to ban the practice of collecting recurring contributions through prechecked boxes. This week, Politico reports that the practice is alive and well among candidates in the California gubernatorial recall election, although the Governor’s committee stopped using the format this month.
  • Paying Penalties with Campaign Cash: The New York Daily News reports that a candidate for New York City Comptroller used funds from his State Assembly campaign to pay a fine imposed in connection with his 2009 campaign for City Comptroller. Critics argue that it is a personal use of campaign funds to pay a fine and that state campaign funds cannot be used for a city election. The candidate’s attorney says that it was not a personal use and that campaign funds can be used “in connection with anything arising out of a political campaign.”
  • Pay-to-Play Investigation: The San Diego Union-Tribune reports that a San Diego developer who was nominated for an ambassadorship in the past administration, is being investigated by a federal grand jury in Washington, D.C. for a possible pay-to-play scheme. Previous reports revealed emails that “implied the San Diego developer would make additional contributions after winning confirmation.” The new report discloses that a grand jury “has begun issuing subpoenas in a criminal investigation into the nomination.”

WEEK OF May 14, 2021

Latest Developments:

  • The Federal Election Commission unanimously adopted legislative recommendations that it will send to Congress for consideration. The New York Times notes that the proposal, among other things, would “ban political campaigns from guiding donors by default into recurring contributions through prechecked boxes,” a practice that has been controversial.
  • The Governor of Georgia signed SB 221, which authorizes leadership committees to “accept contributions or make expenditures for the purpose of affecting the outcome of any election or advocating for the election or defeat of any candidate…” The Atlanta Constitution describes the bill as “allowing state leaders to set up committees that could raise money during General Assembly sessions while lobbyists are trying to get legislation passed.” The article notes that it circumvents current contribution limits. The bill takes effect July 1.
  • The Oregon Secretary of State, Oregon Audits Division, issued Report 2021-14 concerning the Oregon Ethics Commission. The “report includes 14 recommendations to OGEC intended to enhance independence, the complaint process, training, and public outreach.” Most of those recommendations require legislation. The report also lauds the state for having the second lowest corruption rate per capita among U.S. states.
  • The Seattle Ethics Commission, in the Matter of Kshama Sawant, fined a City Council Member for using public resources to promote a ballot measure. She was fined “two times the amount of City funds improperly expended…”

In Case You Missed It:

  • Business PACs Encouraged to Restart: According to Business Insider, the “National Association of Business PACs (NABPAC) has encouraged its members to ‘move beyond’ the siege by restarting donations… The group’s membership includes more than 250 corporate PACs…”
  • Big Payback in Corruption Probe: The San Francisco Chronicle reports that a key consultant in the investigation of corruption at City Hall has agreed to pay over a million dollars that “he secured through noncompetitive grants and contracts with the city’s Public Works and Public Utilities Commission…” He “also agreed to pay $317,650 in penalties and fees.”
  • Nonprofit Disclosure Shield: The Los Angeles Times reveals that, since his initial election, the Mayor of Los Angeles has “reported raising more than $60 million from corporations, foundations, and individuals for the nonprofit Mayor’s Fund for Los Angeles… The Times identified $3.8 million given to the Mayor’s Fund on behalf of Garcetti from donor-advised funds where the identity of the person or company was withheld.” We reported last week on the use of the same device to obscure donations made at the behest of the Governor of California.

WEEK OF May 7, 2021

Latest Developments:

  • The Supreme Court of Montana issued a decision in COPP v. Montana Republican Party. In response to a complaint by the Montana Democratic Party, the Commissioner of Political Practices had sought campaign finance documents from the Republicans. The Republicans refused to provide anything other than their previously filed campaign documents. The court held the statute does not authorize the Commissioner to subpoena documents.
  • The Montana Legislature approved SB 319, which authorizes the use of joint fundraising committees, regulates public college student political activity, and disqualifies a judge if the judge has accepted more than half the maximum campaign contribution from a lawyer in the case. The measure goes to the Governor and would take effect July 1 if approved.
  • The California Fair Political Practices Commission published its monthly collection of new formal and informal advisory opinions, subject to the Commission’s approval at its next meeting. One opinion, A-21-032, is of interest to firms that manage public funds for state and local agencies in California. The advisory opinion confirms that certain outside consultants who manage public investment funds are classified as public officials who must disclose their personal financial assets in public filings.

In Case You Missed It:

  • Behested Payments Obscured: The Los Angeles Times reports that a million dollar charitable donation made at the behest of the Governor of California was dutifully reported to the Fair Political Practices Commission, yet no one knows the source of the donation. The contribution came from a “donor-advised fund,” which provides anonymity to the actual donor. The fund gave the money through the Silicon Valley Community Foundation. The same article notes that the Kaiser Foundation and Facebook were top contributors at the Governor’s request, providing $34 million and $27 million in donations, respectively, during 2020.
  • Feds Focus on Indirect Bribes in LA: According to the Los Angeles Times, the federal investigation into corruption in Los Angeles City Hall has turned its focus to “indirect bribes.” Prosecutors allege that “a deputy mayor-turned-real estate consultant worked to arrange ‘indirect bribes’ for city officials by routing the money through those officials’ family members.”
  • Illinois’ “Very Vibrant Culture of Corruption” Debated: The Chicago Tribune reports that “Two years into a federal corruption investigation …, legislators are scrambling to strengthen Illinois’ government ethics laws.” The article is skeptical that the effort will be successful. “The bipartisan push to pass an ethics overhaul… fits a pattern that has played out over and over again in Springfield: a scandal arises and lawmakers promise to address the problems that are exposed, then in most cases stop short of the most robust recommendations for rooting out wrongdoing.”
  • Guilty Plea for Bribe: The Detroit News reports that a Detroit Councilmember pleaded guilty in state court to accepting “$15,000 in cash and free car repairs from a Detroit businessman in exchange for his vote on a controversial land deal.” He “was indicted by a federal grand jury in October 2018 on bribery conspiracy and two counts of bribery stemming from the allegations.” The federal charges will be dismissed following the plea in state court.

WEEK OF April 30, 2021

Latest Developments:

  • The California Fair Political Practices Commission’s transparency portal displays a graph showing an extraordinary spike in charitable contributions made at the behest of public officials in 2020. The spike is due to contributions made at the behest of one person: The Governor. The Los Angeles Times reports that the Governor raised $226 million for various charities last year; his own office received $43 million of the largesse. Payments made at the behest of the Governor are permissible, although the Times notes that the practice “creates the appearance of a pay-to-play system.”
  • The New York City Conflict of Interest Board [COIB] reviews activity of city officials and requires public disclosure of their financial activity, including the Brooklyn Borough President. Politico reports that this official used a charity to enhance his profile in advance of a likely bid for Mayor. The official “has steered hundreds of thousands of [nonprofit] dollars into an ethical gray area where charity and self-aggrandizement intermingle — with fundraising practices that have drawn the scrutiny of investigators and government watchdog groups.” But the article points out that “all of the organization’s activities are legal and have been authorized by the city’s ethics agency [COIB].”
  • The New York Joint Commission on Public Ethics met and adopted revisions to its resolution delegating authority to its Executive Director and staff to provide informal advice upon which a person may rely.

Reminders:  

The Practising Law Institute presents Advanced Topics in Ethics and Compliance 2021: State and Local Government Contracts on Thursday, May 6 at 1:30 p.m. Eastern (10:30 a.m. Pacific). The half-day program covers eligibility requirements, compliance obligations, and perils and pitfalls of state and local contracts. Topics include pay-to-play laws, lobbying restrictions, blackout periods, and scrutiny from ethics agencies. The Chair of the program is Nielsen Merksamer’s Elli Abdoli. Panelists include Jason Kaune of Nielsen Merksamer. Register here.

In Case You Missed It:

  • Strange Bedfellows in Supreme Court CaseTime Magazine analyzes the Americans for Prosperity Foundation v. Rodriquez case, which is being heard this week before the Supreme Court. Time notes that action to block the California Attorney General from requiring disclosure of contributors to political nonprofit organizations was brought by the “conservative nonprofit Americans for Prosperity Foundation—which has the backing of Republican mega-donor Charles Koch,” but its position is supported by briefs filed by the “American Civil Liberties Union (ACLU), the NAACP Legal Defense and Education Fund, The Knight First Amendment Institute at Columbia University, the Human Rights Campaign and PEN America.” The League of Women Voters and the Campaign Legal Center are “urging the court to uphold the policy.”
  • FARA in Play: A CNN opinion piece asserts that the crimes being investigated that led to the recent raid on Rudy Giuliani’s home and office “relate to whether Giuliani acted as an unregistered foreign agent.” The inference is that the former Mayor violated the Foreign Agents Registration Act. The article points out that, “Pursuant to the Foreign Agents Registration Act (FARA), trying to influence US policy at the direction of a foreign actor without registering as an ‘agent of a foreign principal’ is illegal.” 
  • Ohio Campaign Treasurer ChargedWCPO Cincinnati reports that a U.S. Congressman’s “de facto treasurer” was charged with embezzling $1.4 million from the congressman’s campaign. The “political consultant and longtime campaign aide to Rep. Steve Chabot faces federal wire fraud and falsification of records charges…”
  • Pension Pay-to-Play: A Philadelphia Inquirer investigation reveals that “Pennsylvania’s largest pension fund made a hush-hush investment. It secretly sunk $100 million into a business backed by Pittsburgh tycoon Thomas Tull, a co-owner of the Steelers …. Two days later, campaign records show, Tull showered money on politicians — making nearly $1.5 million in donations spread among national Democrats and Republican alike.” The article notes that “For 25 years, reformers have been trying to stamp out pay to-play in pension-fund investments and the bond business. But critics say the problem has only grown worse.”
  • Pay-to Play Plea: The Los Angeles Times reports that the former Mayor of Palmdale, California “ pleaded guilty to a single count of perjury Thursday, ending a years-long probe of a pay-to-play scandal where he was accused of raking in $500,000 from consultants who he then helped attain lucrative contracts.” Under the agreement, he will serve a period of probation and “pay roughly $189,000 in restitution.”

WEEK OF April 23, 2021

Latest Developments:

  • The Federal Election Commission met and, as part of its agenda, discussed a proposal to address so-called “Scam PACs.” According to the proposal, “These proposed changes would not label committees as scam PACs, nor would they require any changes in how committees report their information to the Commission. Rather, the proposed updates would aim to improve how existing data is displayed so that potential contributors could be better informed about the activities of political committees to which they may contribute.” Generally, the proposal would require the Commission’s website to disclose how much of a PAC’s spending goes to direct candidate support. The Commission did not take formal action on the proposal.
  • The California Fair Political Practices Commission, at its recent meeting, listened to a presentation from staff about the commission’s enforcement process, priorities, and case processing statistics. The FPPC’s caseload remains high, but the recent expansion of the Streamline Enforcement Program is expected to help resolve cases faster and allow staff to focus on higher priority violations. The FPPC concluded, in one of the enforcement matters considered at the meeting, that funds from private corporations deposited into a community college foundation’s account were not donations because they comprised consideration for contracts. They were also sufficient to fund ballot measure contributions made by the Foundation and thereby avoided the prohibited use of public funds for campaign purposes.

Reminders:  

The Practising Law Institute presents Advanced Topics in Ethics and Compliance 2021: State and Local Government Contracts on Thursday, May 6 at 1:30 p.m. Eastern (10:30 a.m. Pacific). The half-day program covers eligibility requirements, compliance obligations, and perils and pitfalls of state and local contracts. Topics include pay-to-play laws, lobbying restrictions, blackout periods, and scrutiny from ethics agencies. The Chair of the program is Nielsen Merksamer’s Elli Abdoli. Panelists include Jason Kaune of Nielsen Merksamer. Register here.

In Case You Missed It:

  • Massachusetts Mulls Lobbyist Prohibition: The former Speaker of the Massachusetts House of Representatives, who was convicted of federal corruption charges in 2011, sought to register to lobby the legislature in 2019, but was rejected based on his conviction. MSN carries a Boston Globe article that explains the issue is now in the hands of the state’s Supreme Court. After a superior court overturned the Secretary of State’s rejection, the Supreme court “is expected to rule on whether [the former Speaker] and others guilty of federal corruption charges should be barred from lobbying state lawmakers, the governor, and other Massachusetts officials for 10 years after their conviction, even if their crimes aren’t directly cited in the state law.”
  • FEC Reboot Under Review: The New York Times reports the Democrats in congress plan to revise the make-up of the Federal Election Commission. The proposal, in R. 1, would “reconfigure the panel from being evenly divided to having a 3-to-2 split, making stalemates far less likely, giving more power to its presidentially appointed chairman and building in stronger enforcement mechanisms.” The Times notes that under the present configuration in which partisanship is split evenly “the F.E.C. has been an idle bystander, a ‘zombie’ watchdog in the view of many in the campaign finance world from both political parties.”
  • FEC Opinion Implemented in a Big Way: Following the Federal Election Commission’s adoption of Advisory Opinion 2021-03, which allows officials and candidates to spend campaign funds on security, recently filed campaign reports indicate that “Members of Congress spent hundreds of thousands in campaign funds on security in the first three months of this year.” Politico reports that “Congressional spending on private security has surged among members of both parties since the deadly riot on Jan. 6.”
  • Shareholders Target LobbyingPolitico describes how “Hundreds of American companies have promised to cut greenhouse gas emissions, but their lobbying hasn’t always jibed with their public promises.” As a result, “Investors have filed a record 13 shareholder proposals targeting climate lobbying this year, up from four filed last year.”
  • Support “from Amazon to Uber” for Inaugural Committee: Politico describes fundraising by the Biden Inaugural Committee among corporate America. “Biden barred his inaugural committee from taking money from lobbyists and foreign agents as well as fossil fuel companies, but he accepted corporate contributions of up to $1 million and checks of up to $500,000 from individuals.”

WEEK OF April 16, 2021

Latest Developments:

  • The Governor of Wyoming approved B. 148, which increases various state fees. The measure raises the lobbyist registration fee from $25 to $75 for lobbyists who receive reimbursement or compensation in excess of $500 in a reporting period. It raises the fee for other lobbyists from $5 to $10. The bill takes effect July 1, 2021. Although lobbying is protected speech, jurisdictions are permitted to impose fees to cover their cost of regulation. 
  • The California Fair Political Practices Commission overruled its staff’s view and issued an opinion (Sanders, No. O-21-001 (4/15/21)) that the state’s new limits on contributions to local candidates in jurisdictions that otherwise do not have a limit are not aggregated with contributions made before the limit took effect. The new law, established by AB 571, limits contributions per election, thus applicable to periods beyond a single calendar year. Accordingly, many donors questioned whether their contributions to candidates made before January 1,2021 would restrict contribution activity after that date for current election cycles.

In Case You Missed It:

  • California SOS ListCal Matters reports that the California Secretary of State has a growing list of unpaid fines levied on California politicians, including judges and legislators. The Secretary of State’s office has “allowed some of the largest fines to languish for many years with no consequences to those who are supposed to pay up.” Some are small, the “political equivalent of a parking ticket.” Some are still contested; the Assembly Speaker’s campaign, which has a pending fine on this list, defended itself by noting that, “‘While it’s in dispute, we are not going to pay it.’”
  • Massachusetts Investigates Laundered Contributions: The Massachusetts Office of Campaign and Political Finance has referred to the state’s Attorney General allegations that a State Senator laundered contributions to his wife’s campaign. MSN carries a Boston Globe article detailing how the Senator “made a series of rapid-fire and hefty donations to the Massachusetts Republican Party, totaling $137,000. And in nearly every instance, the GOP quickly spent similar — if not identical — amounts helping another candidate: the senator’s wife.” The Senator and his wife “have denied they violated any campaign finance laws.” 
  • Big Win for Alderman in Campaign Finance: The Chicago Board of Ethics, which imposed a fine of $145,000 against a Chicago Alderman for campaign finance violations, reversed course and dropped the fine to $5,000WTTW reports that the new fine amount is equal to the fine imposed on the corporation that made the excessive contribution. The Alderman must still return the excess contribution to the corporation, which is a city contractor with 80 city contracts over the past 3 decades, including four worth over $90 million.
  • First Plea in Hawaii Corruption Case: According to the Honolulu Civil Beat, a city employee “pleaded guilty to honest services wire fraud in connection with her acceptance of at least $28,000 from architect William Wong.” She faces up to 20 years in prison.
  • Family Pay-to-Play: A Cleveland Councilwoman running for a U.S. House seat vacated by the recently confirmed HUD Secretary has been criticized for taking money from a city contractor. The Intercept reports, that when she first ran for city office, she promised “to “recuse herself from county contracts with ties to [her fiancé] Mark Perkins as necessary.’” According to the article, she later “deemed recusal unnecessary and voted with her colleagues to give a nearly $7 million contract to [a company that subcontracts with her fiancé’s company]… Ten weeks later, one of the firm’s owners helped organize a fundraiser that bankrolled a significant portion of her reelection campaign.” She has voted to approve several other contracts with family ties and received a number of contributions from related parties.

WEEK OF April 9, 2021

Latest Developments:

  • The United States Department of Justice announced that a “New Jersey woman was sentenced [this week] to two years in prison for engaging in a bribery and procurement fraud scheme while she served as a contracting officer for the Broadcasting Board of Governors (BBG).” Diane D. Sturgis was accused of having “sold out her position by receiving bribe payments in exchange for providing preferential treatment to a contracting firm that received millions of dollars in taxpayer money.” The DOJ contended that Diane D. Sturgis arranged with the firm’s owner “to fill several contracting positions in Sturgis’ office in exchange for initial payments totaling at least $330,000…[and] that the firm would nominally hire Sturgis’ relative to fill one of these positions in exchange for preferential treatment and the performance of official acts benefitting the firm.”
  • The New Mexico Ethics Commission, the Santa Fe New Mexican reports, dismissed two complaints against the former state House speaker Brian Egolf related to his support for a bill that would allow civil rights violations against state government agencies. Egolf is an attorney in Santa Fe and the complaints claimed he “stood to benefit from the law because it originally included a provision guaranteeing defendants who lose their cases will have to pay the plaintiff’s attorney’s fees.” The Commission claimed that it had no jurisdiction against the claims Egolf “used his legislative office for personal gain and that he failed to discharge his legislative duties in an ethical manner,., A third charge—that Egolf failed to communicate a potential conflict of interest — is still under review by the commission’s general counsel, the panel said.”

In Case You Missed It:

  • Limits off for Illinois Governor’s Race: The Chicago Sun-Times reports that Illinois Governor’s race next year will have no campaign contribution limits. Both the Governor and a challenger have contributed significant amounts to their own campaigns, amounting to enough “to lift all fundraising caps on the race.” A University of Illinois professor explained, “The caps that do exist are easy to break, and then candidates can just loan their own campaign whatever the limit is for that particular office, and they break the cap, and then they can get as much money from big donors as they want.”.
  • Corporate Donations Pause, Individual Donations Surge: As multiple items in these pages covered in the past weeks, corporate PACs have widely paused or slowed candidate contributions in the wake of the January Capitol Hill riots. Now, an analysis by the Wall Street Journal of first quarter fundraising reports for US House and Senatorial committees show staggering fundraising numbers propelled by individual donors with small contributions. For example, House Republican Leader Kevin McCarthy reports that he “raised $27.1 million during the first quarter of 2021… the most money any Republican representative has ever raised in a quarter.” Most staggering is that “it was done almost entirely without big-business support. Only about $450,000, or less than 2%, came from corporate political-action committees.” In response, the Journal asserts that “some firms are now quietly ‘unpausing’ donations.”
  • White House Welcomes (Some) LobbyistsThe Hill reports that the White house has been hiring former lobbyists to work in the administration. The article notes that “Five registered lobbyists or people who were registered within the last year were on the Biden transition team…. They all came from unions and received waivers to work in the administration. Had they come from corporate America, watchdogs say it would’ve been a different story.”

WEEK OF April 2, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF March 26, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF March 19, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF March 12, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF March 5, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF February 26, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF February 19, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF February 12, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF February 5, 2021

Reminders:

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

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 29, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 22, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 15, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 8, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF December 25, 2020

Latest Developments:

  • The North Dakota Attorney General issued an opinion approving regulations of the state’s Ethics Commission. The regulations expand the definition of who qualifies as a lobbyist for purposes of gift rules to include all public officials. The opinion found “that the Ethics Commission is constitutionally authorized to promulgate a rule defining “lobby” and “lobbyist” … which expands the statutory definition of “lobby” and “lobbyist” in order to fulfill its constitutional mandate…”
  • COVID-19 Update: Government officials, agencies, and courts continue to respond to the COVID-19 emergency. Each week we will add the latest information. For more information about filing deadlines, contact our Political Reporting Unit. Among the more notable developments this week:
  • The Chicago Board of Ethics announced that it will, due to the pandemic, again delay application of the City’s new lobby registration requirements for nonprofits. The requirements were scheduled to be enforced January 1, 2021, but according to the notice, “the delay in implementation of the City’s non-profit lobbying laws until such time as the City and Board deem appropriate continues until at least April 1.”
  • The Federal Election Commission announced that “Shana M. Broussard, Sean J. Cooksey and Allen Dickerson have been sworn in as members of the Federal Election Commission, returning a quorum to the agency charged with administering and enforcing federal campaign finance law.” The Commission also announced that Shana Broussard will serve as Chair for the coming year and Allen Dickerson will be Vice Chair.
  • The Los Angeles City Ethics Commission is seeking comment on proposed amendments to the city’s lobbying laws. The proposal would redefine “who qualifies as a ‘lobbyist’ by moving from a time-based standard to a compensation-based standard.” It also includes “faster registration” and “more meaningful and frequent disclosure.” The Commission’s policy portal indicates that the commission will take comments and hold a meeting on the matter in January 2021.

In Case You Missed It:

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

WEEK OF December 18, 2020

Latest Developments:

  • A Superior Court in Los Angeles issued an order turning down a suit to invalidate a California Fair Political Practices Commission (FPPC) regulation. That regulation requires disclosure of public money spent by public entities on election campaigns, an activity that is generally prohibited in the absence of a specific authorization by the Legislature. The Chair of the FPPC said in a release, that “‘This illegal and increasingly-used tactic by local government officials will continue to be a focus and priority for the FPPC.’”
  • The Seattle City Council approved an ordinance to require registration for grassroots lobbying. Registration and reporting are required whenever expenditures are made “exceeding $1,500 in the aggregate within any three-month period or exceeding $750 in the aggregate within any one-month period in presenting a program to the public, a substantial portion of which is intended, designed, or calculated primarily to influence legislation…” The measure takes effect 180 days following approval by the Mayor, which occurred on December 15.
  • The Governor of California issued an internal memo concerning ethics in his office. The Sacramento Bee explains that the Governor is “barring any paid campaign or political consultant from directly communicating on behalf of a client with the governor, members of his staff, or the agencies under his control for the purpose of influencing legislative or administrative action. He is also barring any registered lobbyists from serving as paid campaign or political consultants.” However, the San Francisco Chronicle points out that the memo does not bar revolving-door activity by some of the Governor’s closest friends who are lobbyists.
  • COVID-19 Update: Government officials, agencies, and courts continue to respond to the COVID-19 emergency. Each week we will add the latest information. For more information about filing deadlines, contact our Political Reporting Unit. Among the more notable developments this week:
  • The Governor of Ohio signed HB 404 which extends many state licenses. The bill is an extension of a previous COVID-related emergency measure. The Ohio Joint Legislative Ethics Committee explains that the net effect of the bill on lobbyists is that all current lobbyist registrations will remain in effect until July 1, 2021. “A new renewal registration window will open in late spring 2021.” However, activity reports are still due by February 1, 2021. 
  • The Oklahoma Ethics Commission met and adopted a new rule that requires candidate committees formed before 2015 dissolve by the end of 2021. The commission considered and amended a proposal to revise lobbyist gift rules to create an exception for informational materials provided by a lobbyist or lobbyist employer. That rule will be considered for adoption at a future hearing. Oklahoma rules have the force of statutes unless rejected by the legislature in the next session. New rules take effect at the end of May 2021, when the legislature adjourns. 
  • The California State Controller announced the appointment of Catharine B. Baker to the Fair Political Practices CommissionBaker is an attorney in the East Bay area of California and replaces Allison Hayward on the Commission. 
  • The New York Joint Commission on Public Ethics met and considered proposed amendments to its regulation governing access to public records. The Commission also issued an announcement that all registrations and reports due in January 2021 will be considered timely filed if filed by January 29, 2021, due to changes made to the Comprehensive Lobby Regulation and changes to the online filing system.

 Reminder:

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

 In Case You Missed It:

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

WEEK OF December 11, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF December 4, 2020

Latest Developments:

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

Reminders: 

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

In Case You Missed It:

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

WEEK OF November 20, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF November 13, 2020

Latest Developments:

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

 In Case You Missed It:

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

WEEK OF November 6, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF October 31, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF October 23, 2020

Latest Developments:

  • The Michigan Secretary of State released inflation-adjusted lobby reporting thresholds, fees, and penalties for 2021. The changes include an increase in the threshold that requires registration from expenditures of more than $2,535 in a 12-month period to $2575 and an increase in the monthly food and beverage limit from $63 to $64.
  • The Government of Yukon announced that “(a)ll lobbyists in Yukon are now required to report their activities. The Lobbyists Registration Act came into effect on October 15, 2020, making registration mandatory for those who meet the criteria set out in the Act.” Anyone who qualifies as a lobbyist should register at the Yukon Lobbyist Registry.  
  • The United States Department of Education issued a report that raises the specter of foreign influence and access to sensitive information at institutions of higher learning. Not unlike the Foreign Agents Registration Act (FARA), which requires disclosure of foreign agents attempting to influence the government, “Congress requires U.S. colleges and universities (‘institutions’) publicly to report foreign gifts and contracts to the U.S. Department of Education.” Last week we reported on the State Department’s effort to figure out the extent to which “think tanks” that provide it with information are funded by foreign sources. The Department of Education report found that only a few institutions self-report foreign money received and “many (institutions) appear to have inadequately, or in some cases failed entirely, to report as required by law.”
  • COVID-19 Update: Government officials, agencies, and courts continue to respond to the COVID-19 emergency. Each week we will add the latest information. For more information about filing deadlines, contact our Political Reporting Unit. Among the more notable developments this week:
    • The Louisiana Legislature, in an extraordinary session, approved several election-related measures. Pertinent to political activity by individuals, corporations, and non-profits, HB 51 bans state and local officials from soliciting or accepting private donations to conduct elections during a state of emergency. The law specifically exempts the solicitation or use of in-kind contributions related to expenses related to seeking office. The bill goes to the Governor for his approval. 

In Case You Missed It:

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

WEEK OF October 16, 2020

Latest Developments: 

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

In Case You Missed It:

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

WEEK OF October 9, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF October 2, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF September 25, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF September 18, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF September 11, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF September 4, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF August 28, 2020

Latest Developments:

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

Reminders: 

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

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

In Case You Missed It:

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

WEEK OF August 21, 2020

Latest Developments:

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

Reminders: 

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

In Case You Missed It:

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

WEEK OF August 14, 2020

Latest Developments:

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

Reminders: 

 Interested in issues of gender and elections?  As part of a year-long celebration of the Nineteenth Amendment, the American Bar Association is sponsoring a series of programs for lawyers about the progeny of women’s suffrage.   You can earn CLE credit and help the ABA formulate proposals to update election, campaign, and government ethics laws for the Twenty-First Century.   Join the conversation about Gender Parity in the Electoral Process on Monday, August 24.   Register here.  (Free for Members.)

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

In Case You Missed It:

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

WEEK OF August 7, 2020

Latest Developments:

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

Reminders: 

Interested in issues of gender and elections?  As part of a year-long celebration of the Nineteenth Amendment, the American Bar Association is sponsoring a series of programs for lawyers about the progeny of women’s suffrage.   You can earn CLE credit and help the ABA formulate proposals to update election, campaign, and government ethics laws for the Twenty-First Century.   Join the conversation about Gender Parity in the Electoral Process on Monday, August 24.   Register here.  (Free Members.)

In Case You Missed It:

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

WEEK OF July 31, 2020

Latest Developments:

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

Reminders

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

In Case You Missed It:

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

WEEK OF July 24, 2020

Latest Developments:

  • The Federal Bureau of Investigation announced the indictment of the Speaker of the Ohio House of Representatives, in addition to indicting a nonprofit 501(c)(4) organization and four other individuals, including three lobbyists.   The announcement alleges that an energy company funneled $60 Million to the nonprofit, which was created by the legislator.  The Columbus Dispatch reports that the nonprofit supported the legislator’s candidates and supported a bill “that included ‘a monthly charge on all Ohioans’ energy bills’ to subsidize the company’s two failing nuclear power plants, according to court documents.”  The FBI’s press release notes that the legislator allegedly received over $400,000 in personal benefits, “including funds to settle a personal lawsuit, to pay for costs associated with his residence in Florida, and to pay off thousands of dollars of credit card debt.”
  • COVID-19 Update:  Government officials, agencies, and courts continue to respond to the COVID-19 emergency.  Each week we will add the latest information.  For more information about filing deadlines, contact our Political Reporting Unit.  Among the more notable developments this week:
    • The California Legislature will resume its regular session next week after delaying it by two weeks due to the pandemic.  The legislature will permit Members to vote remotely or by proxy.  The Sacramento Bee reports that Members need approval in advance to stay home and those who stay home will lose their per diem expense payments.  The session status of every state legislature may be found on the website of the National Conference of State Legislatures.

Reminders:

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

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

In Case You Missed It:

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

WEEK OF July 17, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF July 10, 2020

Latest Developments:

  • The United States Supreme Court, in Barr v. American Assn. of Political Consultants, upheld most of the Telephone Consumer Protection Act of 1991, which banned most robocalls.  Political consultants and others challenged the law based on the theory that an exception added to the law for debt collectors was impermissible as content-based.  CNN reports that the court upheld the ban on political robocalls to both landlines and cellphones, “rejecting a bid … to open the floodgates for campaign ads and other communications.”
  • COVID-19 Update:  Government officials, agencies, and courts continue to respond to the COVID-19 emergency.  Each week we will add the latest information.  For more information about filing deadlines, contact our Political Reporting Unit.  Among the more notable developments this week:
    • The Nevada Legislative Counsel Bureau announced that lobbyists will not be required to register for the upcoming special legislative session.  The legislative building will be closed to the public due to the pandemic.The Nevada Legislative Counsel
    • The Texas Ethics Commission issued an advisory opinion regarding whether a lobbyist is “present” at an event via video technology, such as a Zoom meeting, for purposes of providing food and beverage under a gift exception.  (Ethics Advisory Opinion 556).
  • The Texas Ethics Commission also issued two other advisory opinions, including one addressing whether a contribution from a federal PAC to a federal Super PAC is an expenditure on a Texas election (Ethics Advisory Opinion 554).  The opinion is relevant to federal PACs active in the state which must measure the portion of expenditures made in the state to determine whether they remain an “out of state” committee or must instead file as a state PAC.
  • The Louisiana Board of Ethics adopted a regulation to increase the limit on the amount a lobbyist may spend for food, drink, or refreshments for a covered official to $63 at any single event, effective July 1, 2020.
  • The Oakland Public Ethics Commission launched a new online lobbyist registration and reporting system.  The system is available from the OakApps platform.  According to the Commission, “Going forward, all registration and report documents will be filed electronically.”

In Case You Missed It:

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

WEEK OF July 3, 2020

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF June 26, 2020

Latest Developments:

  • The Federal Election Commission is losing its quorum, again.  Commissioner Caroline Hunter tendered her resignation to the President, effective July 3, 2020.  Politico reports that she will join the legal team of a nonprofit that works on criminal justice reform.  The Commission has a 300-case enforcement backlog and only regained its quorum last month after a 9-month hiatus.
  • The Federal Bureau of Investigation issued a release announcing that Jack Abramoff  has been charged in an information that alleges, among other things, that “he knowingly and corruptly failed to register as a lobbyist, as required by the Lobbying Disclosure Act, after being retained for lobbying efforts that would involve one or more lobbying communications with a federal official.  This is the first ever known prosecution of a lobbyist for a criminal violation of the Lobbying Disclosure Act.”
  • The New York Joint Commission on Public Ethics met and voted to send revisions to the Comprehensive Lobby Regulations and the Source of Funding (for lobbyists) to the formal rulemaking process.  The regulations will be formally published, and a 60-day public comment period will commence.
  • The Hawaii State Ethics Commission adopted amended administrative rules relating to lobbying and gifts.  The regulations are designed to eliminate double reporting by lobbyists and lobbyist employers, clarify grassroots lobbying, clarify the valuation of gifts, and provide exceptions for permissible gifts.  The rules must be approved by the Attorney General and the Governor before taking effect.
  • COVID-19 Update:  Government officials, agencies, and courts continue to respond to the COVID-19 emergency.  Each week we will add the latest information.  For more information about filing deadlines, contact our Political Reporting Unit.  Among the more notable developments this week:
    • The New Mexico Supreme Court denied a writ, in Pritle v. Legislative Council (video link, decision at end), to overturn a decision of the legislative Council to bar lobbyists and the general public from sessions of the New Mexico State Legislature, for the duration of the pandemic.  A written court decision will follow.  According the Albuquerque Journal, members of the media will be granted access to the capitol building.
    • The California Fair Political Practices Commission announced that it will resume operating its telephone advice line on July 1, 2020.
  • The Federal Bureau of Investigation announced that it has “arrested Jose Huizar, an elected member of the Los Angeles City Council, on a federal racketeering charge that alleges he led a criminal enterprise that used his powerful position at City Hall to solicit and accept lucrative bribes and other financial benefits to enrich himself and his close associates in exchange for Huizar taking official actions favorable to the developers and others who financed and facilitated the bribes.”  The FBI’s press release alleges that the council member took at least $1.5 million in benefits in a “‘pay-to-play’ scheme.”

In Case You Missed It:

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

WEEK OF June 19, 2020

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF June 12, 2020

Latest Developments:

  • James E. Trainor III was formally sworn in as a member of the Federal Election Commission, according to an announcement by the Commission.  The Commission now has a quorum.  The Commission’s first public meeting is scheduled for June 18, 2020.
  • The Washington State Attorney General publicized a stipulated judgment against the Freedom Foundation in which the foundation agreed to pay $80,000 as a result of its failure to report in-kind contributions of assistance with proposed local ballot measures related to collective bargaining.
  • COVID-19 Update:  Government officials, agencies, and courts continue to respond to the COVID-19 emergency.  Each week we will add the latest information.  For more information about filing deadlines, contact our Political Reporting Unit.  Among the more notable developments this week:
    • California ContractsCalMatters discusses its review of some $3 billion worth of no-bid contracts that California handed out during the COVID-19