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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 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 crisis under some very questionable circumstances.  The article points out that, “in a few instances, readily available public records and some Googling should have raised potential red flags.”
    • Hawaii Contracts:  The Honolulu Civil Beat reports that a company owned by a major donor, who has “given more than $118,000 to about 40 campaigns since 2014,” was awarded a $1.4 million emergency, no-bid contract to clean municipal buses during the pandemic.  According to the article, “the company was hired before a contract was even sent to them.”  The owner counters, “‘We always abide by fair practices and provisions and with accountability’… I operate knowing there will be an audit, I just assume that.'”

Reminder:

 Washington State Senate Bill 6152 took effect June 11 along with the Washington Public Disclosure Commission’s emergency regulations.  The bill concerns “foreign involvement and financing in campaign activities.”  The regulations define “prohibited financing by foreign nationals” and “prohibited decision-making involvement by foreign nationals.” The regulations also set forth the information donors must provide to certify their contributions are not derived from foreign funds or involve foreign nationals.  Political committees are required to obtain this certification from donors and must return contributions that are not certified. We recommend that a certification be included with any contribution made in Washington State.

In Case You Missed It:

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

WEEK OF June 5, 2020

Latest Developments:  

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

Reminder:

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

 In Case You Missed It:

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

WEEK OF May 29, 2020

Latest Developments:

  • The Internal Revenue Service published final amended regulations that revise rules governing when a nonprofit organization must disclose its donors on Schedule B.  The Hill explains that “only charities that are tax-exempt under Section 501(c)(3) of the code and political organization(s) that are tax-exempt under Section 527 will still have to report contributor names and addresses.”  The IRS also declared as “obsolete” its prior Revenue Procedure 2018-38, which sought to achieve the same result but was blocked by the courts.  Many states have required copies of the donor information that formerly was submitted to the IRS.  The result of the federal change, as Bloomberg Tax put it, is that the burden is “now on states to seek more information about nonprofit donors if they want it.”
  • COVID-19 Update:  Government officials, agencies, and courts continue to respond to the COVID-19 emergency.  Each week we will add the latest information.  For more information about filing deadlines, contact our Political Reporting Unit.  Among the more notable developments this week:
    • California COVID-19 Contracts are available online.  But CalMatters reminds us that California does not require disclosure of lobbying for these procurement contracts.  A 2016 bill would have required disclosure, but the former Governor vetoed it because public contract bidding procedures “contain ample opportunity for public scrutiny.”  However, as the article points out, “all those rules are scrapped during an official state of emergency, which [Governor] Newsom declared on March 4 due to the pandemic.”  The state has engaged in sole-source contracts worth hundreds of millions of dollars without much public scrutiny or legislative oversight.  The contracts may be disclosed, but any lobbying connected to the contracts is not disclosed.
    • The United States Court of Appeals for the District of Columbia turned down an effort by the American Association of Political Consultants to include registered lobbyists among the kinds of businesses that are eligible under the Paycheck Protection Act.  The Hill reports that “the panel rejected the group’s argument that excluding lobbyists and political consultants from the loans violated the First Amendment.”
  • The Washington Public Disclosure Commission met this week and, among other things, approved emergency regulations to implement SB 6152, which takes effect June 11.  That bill concerns “foreign involvement and financing in campaign activities.”  The regulations define “prohibited financing by foreign nationals” and “prohibited decision-making involvement by foreign nationals.” The regulations also set forth the form that committees must complete when a contribution is accepted to certify that the contribution is not from a foreign national.  Staff promised that additional guidance will be issued in the future to supplement the regulations.
  • The United States Court of Appeals for the District of Columbia issued an opinion in Freedom Watch, Inc. v. Google, in which the court reminds us that “the First Amendment ‘prohibits only governmental abridgment of speech.'”  The plaintiffs alleged that several social media platforms conspired to suppress their speech.   But the court noted that “‘a private entity who provides a forum for speech is not transformed by that fact alone into a state actor.'”
  • The Governor of Oklahoma approved HB 3613, the “Personal Privacy Protection Act.”  The measure bans state and local agencies from asking about “personal affiliation information,” which includes financial donor information.  The Chickasaw Express-Times reports that the Governor’s approval of the measure “could result in the state’s electronic campaign reporting system being taken offline, according to Ashley Kemp, executive director of the state Ethics Commission.”  The bill takes effect November 1, 2020.

Reminder:

New Subscribers:  This email provides a summary of commentary, developments, and media reports for the current week.  For the archive of weekly updates since February 2018 visit our website at: www.nmgovlaw.com/ee.

In Case You Missed It:

  • Guess Who’s Coming to Dinner? – Your CEO:  The Wall Street Journal reports on the U.S. Secretary of State’s dinner parties at taxpayer expense, which are under scrutiny by Congressional Democrats.  Former diplomats told the Journal that “they were held to stricter standards regarding the use of taxpayer funds.”  One former diplomat cautioned, “Simply to have celebrities or CEOs over to the State Department-and especially those that are almost entirely domestically focused-is quite questionable.”
  • Lobbyist Gift Disparity:  The St. Louis Post-Dispatch reviewed reports filed with the Missouri Ethics Commission now that the Missouri State Constitution bans lobbyist gifts to state officials.  “Although Missouri lawmakers are banned from accepting all but the smallest gifts from lobbyists, local officials continue to rake in freebies from companies doing business with cities and counties.”  Local gift bans have been proposed but not enacted by the legislature, according to the article.
  • Spending Intent Disputed:  According to the Associated Press, the Maine Commission on Governmental Ethics and Election Practices is seeking disclosure of donors by Stop the Corridor, a committee that spent over $1 million on television and social media ads to oppose a 145 mile transmission line.  Approval of the transmission line will appear on the November ballot.  The Commission’s action follows a staff investigation, which sought to determine if the organization must register as a political action committee or ballot question committee.  According to the article, “Stop the Corridor said it did not have to disclose donors because it intended to influence the permitting process, not the referendum vote.”
  • Troubled Trade Association LobbyistsPolitico reports that “K Street is in cutback mode.”  One of the major problems is that trade associations rely on revenue from events they host.  According to the article, “trade groups estimated they would lose at least a quarter of their revenue because of canceled events and conferences.”  As a result, several associations have “laid off staffers since the pandemic hit.

WEEK OF May 22, 2020

Latest Developments

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

Reminder:

New Subscribers:  This email provides a summary of commentary, developments, and media reports for the current week.  For the archive of weekly updates since February 2018 visit our website at: www.nmgovlaw.com/ee.

In Case You Missed It:

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

WEEK OF May 15, 2020

Latest Developments

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

Reminders:

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

In Case You Missed It:

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

WEEK OF May 8, 2020

Latest Developments

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

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

Reminders:

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

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

In Case You Missed It:

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

WEEK OF May 1, 2020

Latest Developments

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

Reminders:

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

In Case You Missed It:

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

WEEK OF April 24, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF April 17, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF April 10, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

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

WEEK OF April 3, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF March 27, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF March 20, 2020

Latest Developments:

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

Reminders:

Nielsen Merksamer

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

In Case You Missed It:

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

WEEK OF March 13, 2020

Latest Developments:

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

Reminders:

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

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

In Case You Missed It:

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

WEEK OF March 6, 2020

Latest Developments:

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

Reminders:

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

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

In Case You Missed It:

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

WEEK OF February 28, 2020

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF February 21, 2020

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF February 14, 2020

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF February 7, 2020

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 31, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF January 24, 2020

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF January 17, 2020

Latest Developments:

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

Reminders:

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

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

In Case You Missed It:

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

WEEK OF January 10, 2020

Latest Developments:

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

Reminders:

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

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

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

In Case You Missed It:

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

WEEK OF January 3, 2020

Latest Developments:

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

Reminders:

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

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

In Case You Missed It:

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

WEEK OF December 20, 2019

Latest Developments:

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

In Case You Missed It:  

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

WEEK OF December 13, 2019

Latest Developments:

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

In Case You Missed It:  

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

WEEK OF December 6, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF November 29, 2019

Latest Developments:

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

In Case You Missed It:

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

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

WEEK OF November 22, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF November 15, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF November 8, 2019

Latest Developments:

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

In Case You Missed It:

  • They were merely freshman:  In the wake of first-term Rep. Katie Hill’s abrupt resignation last week, another freshman Democrat is being probed for misbehavior, this time for alleged campaign finance violations.  The Hill reports that “the House Ethics Committee announced…that it is extending a review of Rep. Lori Trahan related to how she made personal loans to her campaign during a contested primary last year.”  The article notes that candidates may make unlimited contributions and loans to themselves and that the Federal Election Commission permits these loans and contributions from accounts jointly held with spouses.  However, Trahan’s case has the added wrinkle of a prenuptial agreement with her husband and questions remain about how her family “moved money around” in order to finance her campaign.  Additionally, “Trahan also acknowledged that her campaign made errors in personal financial disclos