Which statements about proposition 54 (the california legislature transparency act) are accurate?

Nielsen Merksamer, a leader in national political law compliance, hosts briefings, workshops and communications to share best practices and recent developments in campaign finance, lobby disclosure and government ethics laws across the nation. For the latest from our research team, read on….

WEEK OF November 4, 2022

Latest Developments:

The District of Columbia’s Pay-to-Play Law Takes Effect November 9, 2022. The law was supposed to take effect November 2020, but it was paused for lack of funding. The District’s Fiscal Year 2022 Budget (at page 207) provides that the law “…shall not apply to … “contract extensions or modifications, sought, entered into, or executed before November 9, 2022,” thus making it applicable to new or extended contracts on and after that date.

The Alaska Public Offices Commission (APOC) issued an order to the Republican Governors Association (RGA) and A Stronger Alaska questioning whether “sufficient separation between the two entities” exists and warning that penalties lie ahead if “the two entities are one in the same.” Alaska Public Media explains a complaint filed with APOC accused RGA of creating “a shell organization called A Stronger Alaska in order to evade state campaign disclosure laws.”

Reminders:

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

In Case You Missed It:

Congressional Candidate Describes the Laundry Process: According to the Vermont Digger, a candidate for Vermont’s lone house seat, in a radio interview, described how he “‘drained’ his wife’s business’s bank account and distributed roughly $25,000 among family members — including his toddler son, June — who then donated the money to his campaign. [The candidate] said he is now recouping the money by collecting a salary from his campaign.” Campaign finance experts agreed that the action “appears to have violated the [Federal Election Commission’s] ban on contributions ‘in the name of another,’ colloquially known as the straw donor ban.”

A Jury in a Federal District Court in Brooklyn acquitted Tom Barrak of charges that he was an unregistered foreign agent lobbying for the United Arab Emirates. CNN explains that “In the last five years the Justice Department revived a criminal statute that laid dormant for decades and brought numerous criminal cases under the Foreign Agents Registration Act, known as FARA, against individuals who were lobbying for foreign governments or companies without disclosing it, as required by law, to the attorney general. … Barrack, who wasn’t charged under the FARA statute, was indicted on charges he acted as an unregistered agent of a foreign government. The statute, known as “espionage lite” by the national security community, is often reserved for cases involving spies.

L.A. City Council Bribery Trial Begins: A foreign-owned hotel company is on trial in Los Angeles for allegedly bribing a city council member for support of a development project. Spectrum News 1 reports that the trial is part of a “July 2020 racketeering indictment against [the council member] and various associates. The 34-count indictment, alleging wide-ranging political corruption, was broken up into three trials in LA federal court.”

Can’t Change Your Mind: A Federal Judge in Colorado, in Archer et al. v. Griswold, rejected a candidate’s efforts to get out of voluntary spending limits in his race for the Colorado House. The Colorado Springs Gazette reports that the candidate “had inadvertently signed up for voluntary spending limits when he registered his candidacy.” The voluntary spending limits permit an opt out; the candidate argued that he did not opt into the limit regime.
Montana Ethics Leadership Change Pending: The Commissioner of Political Practices, Jeff Mangan has announced his impending departure. The Helena Independent Record points out that few of the state’s Commissioners of Political Practice have served out their entire single five-year term, and many have “come under fire for bringing a perceived partisan bias to their work investigating political complaints.”

WEEK OF October 28, 2022

Latest Developments:

A US Federal District Court in Illinois blocked two campaign finance reforms recently enacted in that state. The laws affected judicial elections, with one “prohibiting a judicial candidate from receiving contributions from any ‘out-of-state person’…[while the] second provision prohibits an independent expenditure committee…from accepting contributions from any single person in a cumulative amount that exceeds $500,000.” The judge’s memorandum explained that “[t]he plaintiffs have shown that they have no adequate remedy at law and will suffer irreparable harm” if the restrictions remained in effect for the upcoming elections.

The DC Office of Campaign Finance ruled this week that a City Council candidate misused funds she received from the District’s public election funding program and ordered her to return the money. The issue arose when the candidate paid for poll that surveyed the candidate performance for another City Council race (for which she was not the candidate). The results of the poll were said to have improperly influenced that election when several like-minded candidates dropped out of the race en masse, ostensibly to not split the vote. DCist has more.

A Superior Court in King County, Washington imposed a more than $24 million fine on a major tech company for hundreds of violations of the state’s campaign finance disclosure and transparency laws. The company repeatedly declined to disclose the information state law requires of political ads on its social media platform. NPR has more analysis.

In Case You Missed It:

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

WEEK OF October 21, 2022

Latest Developments:

The Center for Political Accountability announced that its noted “CPA-Zicklin Index of Corporate Political Disclosure and Accountability” would be expanded from “rating S&P 500 companies to evaluating the entire Russell 1000.” In effect, the expansion means the index now “gives attention to large and medium-cap U.S. companies that are not S&P 500 components.” The 2022 Index was released this month, providing its annual ranking of corporate political spending and transparency. JP Supra has more coverage.

The United States Department of Justice announced the sentencing this week of a former Congressional candidate “for wire fraud and falsification of records” related to his failed 2020 Congressional campaign. According to the DOJ, the former candidate received COVID-19 related federal loans for his small business and then “used a significant portion of these funds for…political advertisements.” He also “told employees…that they could continue to be paid their normal wages if they worked on his congressional campaign,” which they did. The candidate’s FEC report “omitted any in-kind contributions…including the thousands of dollars of in-kind contributions to his campaign in the form of employee time and work.”

The Texas Ethics Commission announced this week the posting of a suite of recently issued advisory opinions. The opinions concern campaign finance filings, post government employment restrictions and other procurement issues.

In Case You Missed It:

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

WEEK OF October 14, 2022

Latest Developments:

A US District Court Judge this week dismissed a Department of Justice suit accusing casino magnate Steve Wynn of being “an agent of the People’s Republic of China…[and] seek[ing] an injunction forcing him to register as such under the Foreign Agents Registration Act (FARA).” The suit stems from “conversations with members of the Trump Administration regarding the PRC’s interest in the return of an unnamed Chinese businessperson, who fled China in 2014 and sought political asylum in the United States….[with the DOJ] alleging that Wynn traded these lobbying efforts for favorable treatment of his casino business in Macau.” While the ruling stresses that the decision applies to civil, not criminal action, it concluded that “longstanding court precedent bars the Justice Department from requiring foreign agents to retroactively register once they are no longer doing the work in question.” The Wall Street Journal provides more coverage.

A Texas State Court of Appeals dismissed a lawsuit in Sullivan v. Texas Ethics Commission, affirming the constitutionality of the Commission itself and upholding a political fine levied against Michael Sullivan, the former head of a political non-profit. Importantly, the court “reaffirmed the agency’s authority to enforce election laws, which Sullivan had called into question in the suit, claiming it violated the separation of powers principle because it’s a legislatively appointed office with executive power to discipline.” The Houston Chronicle provides more coverage.

In Case You Missed It:

Undeterred from Campaign Contributions in Anaheim: The Voice of OC reports on the staggering sums spent in this year’s Anaheim municipal elections by the very businesses implicated in recent city-wide corruption and campaign finance scandals. One major entertainment and resort company with a city-focused PAC has already spent at least $1.3 million on its “preferred candidates…[including] hundreds of thousands of dollars for internet ads and direct political mailers to bolster their campaigns. Notably given that the former mayor was at the center of one of the recent Anaheim scandals, the PAC in question and the city chamber of commerce “haven’t spent money on the race.”

Slap on the Wrist for Illegal Campaign Contribution: The Colorado Springs Gazette reports on the imposition of a $1,000 fine by the Secretary of State on Colorado Springs Forward for a nonprofit’s illegal campaign contribution to two El Paso County commissioner candidates. The Gazette notes that state “law prohibits corporations from contributing to candidates or political parties. Additionally, the $5,000 contributions were over the $2,500 campaign donation limit a county candidate may receive under state law.” An affiliated PAC routinely makes campaign contributions, which an agent for that organization claims was the source confusion about who could make the donation. Critics contend that the fine was nominal at best and that the existence of the PAC demonstrates the organization was sufficiently familiar with state campaign finance laws.
Alleged Illegal Coordination in the Last Frontier: The Alaska Public Offices Commission has decided to hold an emergency hearing as to whether the incumbent governor illegally coordinated with a non-profit organization to make political expenditures favoring his current reelection campaign. The Anchorage Daily News reports that government watchdog groups filed a complaint claiming that the governor “schemed ‘to improperly subsidize his campaign’ using public funds and coordinating”. The group points to the fact that the head of the nonprofit was simultaneously listed as the treasurer for the governor’s campaign earlier in the year. The governor’s “campaign responded by asking that the complaint be dismissed” while the complainants want to keep the nonprofit from ”spending the $3 million it has in its account going into the final month before Election Day”.

WEEK OF October 7, 2022

Latest Developments:

The Governor of California signed a suite of bills related to the state Political Reform Act.One of those bills, AB 1798, requiring certain disclosures on electronic advertisements, is inoperative. That bill defers to SB 1360, which “[r]evises requirements for certain political advertisements to identify the top contributors to the campaign committee paying for the advertisement.” Another bill SB 459will require disclaimers on issue advertisements. Most significant for any campaign contributor to local candidates is SB 1439, which expands the state’s limited “pay to play” restrictions from appointed board members to all local officials making decisions involving a “license, permit or other entitlement for use,” extends the prohibited period for contributions from 3 months to 12 months and expands donor disclosure requirements for contributions made 12 months before a covered proceeding. Please contact your Nielsen Merksamer attorney for more updates on how these new laws affect your organization.

A Washington State Superior Court Judge ruled this week that a major social media company “intentionally violated Washington’s longstanding campaign finance law 822 times”. That law “requires ad sellers…to disclose the names and addresses of political ad buyers, the targets of such ads and the total number of views of each ad.” The state Attorney General had previously sued for violations in 2018, for which the company was fined and then agreed not to advertise political ads in the state. According to the ruling, the company “continued to knowingly display Washington Political Advertising on its platform…continued to solicit [these ads]…[and]was aware that its ‘ban’ would not, and did not, stop all such advertising from continuing to be displayed on its platform”. The social media company in question initially filed a challenge to the law, which the same judge dismissed last week. The Seattle Times has more coverage.

Reminder:

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

In Case You Missed It:

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

WEEK OF September 30, 2022

Latest Developments:

The Governor of California signed AB 1783, which, among other things, amends the Political Reform Act of 1974 to expand the definition of lobbyist “administrative action.” According to the legislative summary, while “[e]xisting law requires the Insurance Commissioner and the Director of the Department of Managed Health Care to approve certain transactions involving insurers and health care service plans, respectively…’administrative action’ now includes any decision or approval by the Insurance Commissioner or the Director of the Department of Managed Health Care under these provisions.”

The Securities and Exchange Commission fined four investment firms for violating federal pay-to-play rules, all of which were “five-figure civil penalties against four firms whose personnel made prohibited contributions of $1,000 or less, including a contribution of just $400.” The rule prohibits certain advisors who provide services to a state or local government entity from making a “political contribution to certain state or local government officials in the prior two years.” Notably, one commissioner questioned the public benefit achieved by these enforcement actions, and suggested that the SEC should consider ways of “better tailoring the rule… without hindering political engagement.” Mondaq provides more coverage.

Reminder:

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

In Case You Missed It:

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

WEEK OF September 23, 2022

Latest Developments:

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

Reminder:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF September 15, 2022

Latest Developments:

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

Reminder:

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

The full PLI conference can be viewed on-demand here

In Case You Missed It:

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

WEEK OF September 9, 2022

Latest Developments:

A US Federal District court convicted former Atlanta city official Mitzi Bickers in the latest development of a pay-to-play scandal which also ensnarled two city contractors and the former mayor. The DOJ alleged that “Bickers sold sensitive, non-public information to…[two contractors] that was critical to their ability to obtain certain valuable contracts.” The contractors then funneled money to Bickers by paying her cash “up-front” to secure a contract and also paid “’kick-backs,’ where Bickers instructed…[the contractors] to inflate the cost of their work with the City so that…[they] could then pay Bickers a percentage of what they earned.” The implicated contractors previously pleaded guilty to bribery and money laundering and were sentenced to prison terms

A Washington State Superior Court Judge ruled that a prominent social networking company failed to adequately comply with state political advertisement disclosure law.The law in question “requires campaign advertisers, including entities….that host political ads, to make information about Washington political ads that run on their platforms available for public inspection in a timely manner.” The court agreed that the platform committed hundreds of violations since 2018 and faces fines of up to $10,000 per violation, or up to three times that amount if intentional.
A US District Court in Indiana approved the sentencing for a former Delaware County contractor who entered into plea bargain in June. The contractor bribed a local party officer and funneled money to a sanitary district official “to illegally contribute to [a former mayor’s] campaign”, for favorable consideration for public contracts. The judge “ordered…[the contractor] to pay $104,750 in restitution to the…sanitation district. In lieu of a prison sentence, he’ll spend two years on probation.” Local media provides more details.

Reminder:

In Case You Missed It:

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

WEEK OF September 2, 2022

Latest Developments:

The Attorney General of the United States released a memorandum concerning new restrictions on political activities of non-career department employees. The memo provides these employees with new admonishments, cautioning that they “may not participate in any partisan political event in any capacity…both public and non-public partisan political events.” The rules also rescind exceptions for participation in these events when an employee’s spouse pursues public office or on “the evening of election day.” More in Politico.

A Federal District Court in Puerto Rico proceeded this week with the prosecution of a Venezuelan national and financier who bribed Puerto Rico officials, promising major campaign donations in exchange for public personnel changes. The indictment claims that “from December 2019 through June 2020, then-Governor of Puerto Rico Wanda Vazquez…allegedly engaged in a bribery scheme with [the financier]…to finance [Vazquez’s] 2020 gubernatorial election campaign. Bloomberg provides further details.

Reminder:

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

In Case You Missed It:

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

WEEK OF August 26, 2022

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF August 19, 2022

Latest Developments:

The Federal Elections Commission advised a tech giant with a ubiquitous email platform “that a proposed pilot program allowing political campaigns to evade automated spam detection would not violate federal campaign finance law.” The Washington Post reports that the 6-month trial was proposed after conservative groups complained that their campaign and fundraising emails were disproportionately being sent to Spam folders, according to one public university study. While one Democrat was joined by three Republicans on the Commission in approving the program, one Democrat abstained and another voted against the program, arguing “that such a program would represent a prohibited in-kind contribution.”
The Los Angeles Ethics Commission unanimously imposed an almost $80,000 fine on a former city councilman in yet another Southern California scandal. Some five years ago, according to the Los Angeles Times, then City Councilman Mitchell Englander attended a Las Vegas excursion with businessman and other council staffers, with paid accommodations, free alcohol, and a gratuity of $10,000 in cash. In 2020, Englander previously “agreed to plead guilty to a single felony count of scheming to falsify material facts,” after having been charged with other violations of federal law. Investigators for the committee argued that “[t]he violations are serious because the monetary value of the gifts received significantly exceeded the gift limit, because of the nature of the gifts, and the circumstances in which they were received.”

The Miami-Dade County Commission on Ethics and Public Trust released a notice explaining its lobbyist reporting enforcement in the coming months. In 2021, the county approved changes to its lobbyist registration and reporting requirements that calls for significantly more disclosure for both lobbyists and lobbyist employers. While they simultaneously developed an electronic filing system, “the development of the technology has encountered some issues and has not caught up with the legislative changes.” In light of these technological shortcomings, the Commission’s notice informed the regulated community that it “will be exercising a significant amount of discretion and will be receptive to lobbyists appeals and deferring on enforcement actions”. According to the bulletin, grace periods will be extended and fines for late filing may be waived if appealed by September 1st.

In Case You Missed It:

Citizens United More than a Decade On: The Wall Street Journal opines on predictions of the effects, more than ten years on, that the Citizens United vs. FEC SCOTUS decision would have on government policy and other areas of corporate interest. The Journal incorporates the outcomes derived from a study of three academics affiliated with the University of California and terms those predictions “a canard.” The study focused on the trajectory of state tax policy—recognized as an area of acute interest for the corporations making political contributions. It found that, in the 23 states which had their bans on contributions effectively nullified by the decision, “the study was not able to identify economically or statistically significant effects of corporate independent expenditures on state tax policy, including tax rates, discretionary tax breaks, and tax revenues.” The Journal concludes that “[i]f billionaires were able to buy elections to lower state taxes, you’d think they would have done it by now.”
What’s Going on in SoCal?: The Anaheim City Council voted unanimously (with one abstention) to contract “an outside firm… to investigate any questionable campaign contributions made to former…or current councilmembers in the wake of a federal corruption probe tied to the proposed sale of Angel Stadium.” The Los Angeles Times relates that the investigation, which will be handled by the JL Group and headed by a retired judge, takes place amidst the ongoing federal probe into ethical lapses by multiple officials and with municipal elections only a few months away. As reported, “it was the firm’s lack of ties to the city or officials that seemed to sway the City Council in choosing the JL Group over three other companies bidding to conduct the investigation…Councilmembers said they hoped the investigation would offer residents transparency.”

Age is Just a Number: Mercury News reports on a newly proposed rule change from the California Fair Political Practices Commission regarding the minimum age of campaign treasurers. The proposal stems from a fine the Commission imposed in May on San Jose City Councilman who “hired his teenage [14 year old!] cousin for his 2016 campaign committee…giv[ing] his cousin $43,000 in cash…[which] was later misreported on campaign disclosures.” The rule “would prohibit minors from serving in key positions if they are required by their position to sign campaign finance documents under penalty of perjury…It would apply to all political committees…[including] local councilmember races.” Critics contend that “it sends a chilling effect to young campaigns.”

Central Valley Campaign Crimes: Defeated U.S. Rep. T.J. Cox of California was arrested this week on a serious of federal charges, including campaign finance violations related to his Congressional campaigns. According to CNN, Cox “set up a plan to fund and reimburse donations to his 2018 congressional campaign from friends and family members, according to the indictment…[which]totaled more than $25,000.” He also “allegedly created off-the-book bank accounts and took funds from companies with which he was affiliated…obtain[ing] over $1.7 million.” Cox plead not guilty to “15 counts of wire fraud, 11 counts of money laundering, one count of financial institution fraud and one count of campaign contribution fraud.”

WEEK OF August 12, 2022

Latest Developments:

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

In Case You Missed It:

Lawmakers Want More Federal Contractor Disclosure: Some 65 members of Congress singed a letter to President Joe Biden urging him to tighten reporting and other regulatory burdens for federal contractors. According to FCW, the signatories are “calling for an executive order that would mandate political spending disclosures for large federal contractors, many of which spend millions on political action committees during election cycles to get around federal laws barring contractors from making political expenditures.” In response, the organization which represents many federal contractors retorted that, “[i]n addition to providing no new information, the proposed reporting would slow down a contracting process that is already too slow in meeting government needs today and might actually undermine trust rather than increase it.”

“Gold Clubs” aren’t Just for Flying: Politico reports on the emerging trend of so-called “gold clubs”: elite and expensive places where lobbyists are promised intimate and fancy settings with lawmakers and which carry a corresponding price tag. The so-called clubs are, in fact, access to a “bundle” of campaign events, where attendance is capped in the dozens and facetime with top officials is almost a given, allowing lobbyists “the opportunity to develop almost a familial relationship with him or her over a series of them.” The phenomenon is meant to preference individual donors over PAC donations and lawmakers term their donors with such euphemisms as “kitchen cabinet” or “season pass” holders. Critics contend that, while similar concepts have existed for some time, their current popularity “offer[s] a way for campaigns to lock in significant donations from individuals amid an insatiable need to raise money.”
Who’s Picking up the Tab?: A discreet and undisclosed extravagant soiree between Pennsylvania legislators and lobbyists has garnered attention from local media and is leaving watchdog groups wondering who might be covering the bill. The Pittsburg Post-Gazette provides details on the invitation-only gathering of a group of Keystone state lawmakers to which lobbyists were invited to provide various levels of sponsorship, which, under state law, went unreported. Watchdog groups lament that the event underscores that “Pennsylvania is among a minority of states that places no limits on the value of gifts special interests can give legislators…[and that] the Legislature has blocked nearly every effort to limit the ability of special interests to shower lawmakers with dinners, drinks and travel” or otherwise enhance reporting requirements.

WEEK OF August 5, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF July 29, 2022

Latest Developments:

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

Reminder:

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

In Case You Missed It:

Keeping the Lights on in the Sunshine State: The Orlando Sentinel reports on an unfolding scandal involving Florida Power and Light (FPL), the nation’s largest electricity provider. Regarding one state legislator who proposed a bill that would affect FPL’s profits, a leaked email quoted the CEO directing his vice presidents “to make his life a living hell…. seriously.” Soon after, an affiliated consulting firm recruited a candidate with the same last name to challenge the legislator and split the vote in his primary. The legislator lost and the stealth “candidate later admitted he was bribed to run.” According to the Sentinel, the incident is one of many which “illustrates the political obstacles policymakers and experts face as they attempt to cut climate pollution from the power sector…[and exposes] decades of extensive influence-peddling on behalf of utility clients.”
Public Financing No More on Long Island: Local media reports that the Suffolk County (New York ) legislature overrode the county executive’s veto of that jurisdiction’s public campaign financing system approved last month. The County executive called it “a step backwards,” citing the potential to exclude disadvantaged groups and to create conflicts of interest. Legislatures in favor of repeal claimed that they “would rather use the program’s $2.6 million on public safety” and that potential conflicts with campaign contributors could be resolved by recusals on a case-by-case basis.

Beaver State Updates: The Oregon Government Ethics Commission (OGEC) released its quarterly newsletter, highlighting their conflict of interest and gift policies. Among its pertinent updates is news of the resignation of Robert Johnson, a commissioner who only joined the OGEC in 2021. His departure was precipitated by his election as a judge last month. While “OGEC Commissioners are allowed to serve on multiple boards or agencies…they cannot be a part of both the Judicial and Executive branches of government at the same time.”

WEEK OF July 22, 2022

Latest Developments:

The California Fair Political Practices Commission met on July 21st and decided several pending matters. Notably, the Commission adopted a regulation to “repeal the existing prohibition on cryptocurrency campaign contributions…and [which] permit[s] the making of contributions with cryptocurrency though a payment processor.” The Associated Press notes that “California had been one of nine states that prohibited cryptocurrency contributions. Twelve states, plus Washington D.C., allow cryptocurrency contributions in some form.”

The City of Brentwood, California will enact municipal campaign finance limits. The Press reports that the City Council voted unanimously on two ordinances which would limit contributions to “$500 per contributor per candidate…[and] also use $25,000 of the general fund in order to enforce the proposed limits.” The limits take effect at once under an emergency ordinance. As detailed in previous blogs, a change in California law requires localities to adopt their own limits or default to state limits.

In Case You Missed It:

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

WEEK OF July 15, 2022

Latest Developments:

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

In Case You Missed It:

How Close is Too Close?: Politico covers internal executive branch concerns regarding a recent video in which President Joe Biden gave “a straight-to-camera endorsement…[for businessman Eric] Schmidt’s “Quad Fellowship”— a new scholarship for American, Indian, Japanese and Australian graduate school students that is operated and administered by…the charity arm that Schmidt uses for a variety of initiatives in science and technology.” The endorsement highlights financial ties Schmidt has with Biden administration. Politico previously reported on the allocation of hundreds of billions of dollars in federal high-tech investments.

Election Law Shakeup Further Down the West Coast: In the past, we detailed the changes to Seattle’s campaign finance laws, including its public funding provisions. Now, some 800 miles south in Oakland, local media reports on impending efforts to introduce similar changes in that city. On July 11th, the “City Council voted to place both the council term limits measure and the ‘democracy dollars’ measure on the Nov. 8 general election ballot.” According to the San Francisco Chronicle, “the measure would give every Oakland adult…$100 in vouchers to use in elections supporting a candidate in city or school board elections.” The Seattle program inspired this measure; like that program, the vouchers are available to all adult residents, regardless of voter registration status and city candidates must field a larger base of small donors before becoming eligible for the vouchers.

Hawaii Prosecutors Want Sharper Tools: Following high profile corruption federal level investigations into state and local Hawaii officials, county prosecutors throughout the state suggested harsher penalties for public officials who betray public trust. Honolulu Civil Beat reports that the prosecutors’ recommendation was part of a forum this week before “The Commission to Improve Standards of Conduct, a group tasked with beefing up government standards and ethics…[whose] hours-long forum [was intended] to generate more ideas to crack down on public corruption in Hawaii.”.

WEEK OF July 8, 2022

Latest Developments:

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

In Case You Missed It:

IRS’s Non-Profit Expressway: The New York Times reports on a recently uncovered scam of fraudulent non-profit committees established and run by a convicted criminal. Prosecutors accuse Ian Hosang of embezzling
“about $152,000 in donations that flowed through 23 of his nonprofits. [Most problematically,] Mr. Hosang did not need to do much to promote the groups; the money came in through online giving platforms that let users choose among I.R.S.-approved charities.” That Hosang was sloppy makes the IRS oversights even more problematic. Analysts blame an expedited process the IRS implemented which streamlines approval and was meant to address persistent backlogs and accusations the agency was denying applications based on ideology. Indeed, under this process, “the denial rate for new charities — which had been as high as one in 53 applicants in the old system — fell to one in 2,400 in this one.”
Tart Orange County Cures: In the wake of the scandals plaguing Orange County and neighboring Anaheim, the county seat of Santa Ana is now considering a lobbyist registration and reporting ordinance of its own. The Los Angeles Times reports that the city “council unanimously gave initial approval to an ordinance that requires lobbyists to register with the city or face penalties… [arguing it will] ‘promote public confidence and trust, preserve the integrity of local government decision-making, and provide members of the community with access to information.’” While several steps remain until final passage, the mayor also commented that municipal campaign finance changes may be next.

JCOPE’s Coda: On the eve of its termination, New York’s now non-operational Joint Commission on Public Ethics released a report on the process leading up to its much-criticized approval of the former governor’s $5.1 million book contract. The report, according to local media, finds that the governor’s office exerted extreme pressure on JCOPE and that the agency “failed to assert itself as a watchdog agency against the Governor.” JCOPE revoked its approval for the book deal in November, after the governor left office. According to Politico, “the book deal became a priority in multiple investigations, including the Democratic-led Assembly impeachment inquiry that determined…[the former governor] used government resources to write it.”

Latest Developments:

WEEK OF July 1, 2022

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

In Case You Missed It:

Los Angeles Saga Continues: The Journal Record reports that a Los Angeles developer was found guilty of bribery, obstruction of justice, and wire fraud, gifting $500,000 to a city councilman and his assistant for special preferences. The case involved the developer seeking “help in resolving a labor issue involving [the developer’s] company’s planned construction of a large commercial and condominium complex in the city’s burgeoning downtown district. At the time, [the city councilman] chaired the city’s powerful Planning and Land Use Management Committee.” The developer could face up to 30 years in prison and the company may have a fine imposed as high as $1.5 million.
Anaheim Slammed: An Orange County, California grand jury heavily criticized the City of Anaheim, already ensnarled in a multi-layered scandal centered on its former mayor, for the process by which the Major League Baseball stadium was approved. As the Los Angles Times details, the grand jury said in its report that, “[t]he city council majority’s inappropriate handling of the stadium property transactions betrayed its constituents…demonstrat[ing] a persistent lack of transparency and rushed decision-making … exacerbating distrust by the public, state and local government officials, and even some members of its own city council.” Still, the city manager and mayor pro tem continue to back the stadium deal and maintain that their proceedings were transparent and in good faith, notwithstanding the previous mayor’s alleged improprieties.

Campaign Finance Reform on the Aloha Islands: We reported in recent weeks about state-level efforts to enact tougher government ethics regulations in the wake of high-profile arrests of officials for corruption. Now, the Honolulu Civil Beat details considerations the state is making regarding “a handful of measures aimed at tightening campaign finance laws and reducing the influence of money in politics.” This week, the Campaign Spending Commission proposed several reforms to the Commission to Improve Standards of Conduct. Among the most notable was to close “a loophole in the law still allows employees and officers of those companies [with government contracts] to continue making political donations.” An additional proposal “would put an end to a practice by state lawmakers that exploits a legal loophole allowing them to funnel campaign funds to their colleagues. [in which] some, particularly those with large war chests, often buy tickets to their colleagues’ fundraisers to get around the prohibition.”

WEEK OF June 24th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF June 17th, 2022

Latest Developments:

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

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

WEEK OF June 10th, 2022

The Federal Bureau of Investigation confiscated the digital records of retired Marine General John R. Allen, “who authorities say made false statements and withheld ‘incriminating’ documents about his role in an illegal foreign lobbying campaign on behalf of the wealthy Persian Gulf nation of Qatar.” NPR reports on the details of potential FARA violations. Notably, Qatar was a prominent donor to the Brookings Institute, which Allen headed, until being placed on administrative leave this week

The Governor of Illinois approved HB 716, which limits the amount of outside contributions to a self-funded committee to elect a judicial candidate. The measure also limits the amount that organizations that are not required to disclose their donors may contribute to judicial candidates. The bill takes effect immediately and applies to elections beginning this year.

The Way to San Jose: San Jose Spotlight reports on a complaint claiming that San Jose’s current Mayor may have violated campaign finance regulations by forming a political action committee (PAC) and raising money from the regulated community to support candidates, other than himself, running in local elections. It further alleges that the PAC and sponsoring nonprofit exceeded local limits and skirted local disclosure requirements. Contributors apparently were not directly targeted in the complaint. The mayor’s representatives called the complaint “frivolous” and the City Attorney responded that “the municipal code ‘does not prohibit’ [a sitting mayor not running for reelection] from opening and personally fundraising for a PAC—even ahead of the fundraising period. The mayor is also not subject to the contribution limits in San Jose.” The PAC was operated in reliance on a 2014 trial court decision trial court decision, involving the last mayor, finding that a state law prohibiting independent expenditures by candidate-controlled PACs is unconstitutional. Even so, the current mayor stepped down as head of the PAC after an opinion from the Fair Political Practices Commission earlier this year.

In Case You Missed It:

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

WEEK OF June 3rd, 2022

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

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

WEEK OF May 27th, 2022

Latest Developments:

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

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

WEEK OF May 20th, 2022

Latest Developments:

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

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

WEEK OF May 13th, 2022

Latest Developments:

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

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

WEEK OF May 6th, 2022

Latest Developments:

The United States House of Representatives passed S 3059, which would “require federal judicial officers, bankruptcy judges, and magistrate judges to file periodic transaction reports disclosing certain securities transactions….Specifically, the bill requires federal judicial officers, bankruptcy judges, and magistrate judges to file reports within 45 days after a purchase, sale, or exchange that exceeds $1,000 in stocks, bonds, commodities futures, and other forms of securities.” Having previously passed the Senate, the bill now heads to the President for signature or veto.

The Center for Political Accountability has released their “Practical Stake: Corporations, Political Spending, and Democracy” report on corporate contributions to candidates for approximately the last four years. Analyzing contributions made through business affiliated PACs, 501(c)4 organizations, and trade associations, the Center then correlates these donations with policy positions taken by recipient lawmakers. In “the report, [the Center] then sets out a framework for companies to evaluate their political spending and align it with core company values and core democracy values, mitigating risks to their self-interest and to democracy.”

The Colorado Senate voted to move forward with SB 237, which would “define ‘major purpose’ in campaign finance statutes and the parameters under which it would apply, particularly when it comes to issue committees.” As Colorado Politics reports, the bill has broad bipartisan support and seeks to “establish clear thresholds on spending, above which an organization would qualify as having a ‘major purpose’ of supporting a ballot measure and which would trigger registration as an issue committee, as well as a requirement to file campaign finance reports.”
The City of Cincinnati is moving forward with a ban on campaign contributions from certain developers after the City Manager approved rules which will go into effect later this month. As local media reports, these “rules prohibit sitting council members and the mayor from soliciting or accepting campaign donations from…[developers] with active business at council.” The rules stem from an ethics ordinance passed last year in the wake of 3 City Council members arrested for alleged bribery. Still, critics argue that “the ordinance should be broadened to include more than just developers, because other types of people have a financial interest in decisions made by council.”

Reminders:

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

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

In Case You Missed It:

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

WEEK OF April 29th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 22nd, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 15th, 2022

Latest Developments:

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

Reminder:

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

In Case You Missed It:

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

WEEK OF April 8th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 1st, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF March 25th, 2022

Latest Developments:

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

Reminders:

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

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

In Case You Missed It:

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

WEEK OF March 18th, 2022

Latest Developments:

The Governor of Wyoming signed SB 80, which requires “all campaigns and political action committees to file an itemized statement of contributions and expenditures,” not just those that expend funds during the reporting period, and increases the penalty for failure to file a campaign report from a flat $500 to an open-ended amount of up to $500 per day until the report is filed. The bill takes effect July 1.
NYC Ends Lobbyist Disclosure Policy: New York City’s new mayor “dispensed with a de Blasio-era policy to voluntarily disclose meetings top administration officials take with lobbyists.” Politico explains that “Two City Hall attorneys alerted administration employees of the change in a March 1 memo laying out rules governing communication with lobbyists… ‘Mayor’s Office employees are not required to maintain or file any reports or documents in connection with their meetings with lobbyists,’ the attorneys wrote, effectively undoing a discretionary policy former Mayor Bill de Blasio instituted to mandate routine disclosure of lobbying meetings.”

New York State Crackdown on LLCs: New York Focus reports that the New York State Board of Elections “identified about 3,400 LLCs that had donated to political campaigns but failed to file a ‘statement of interest’ form listing their owners and how much of the company each one owns, as required by… law.” The Board “has begun to enforce the law by notifying thousands of corporate donors that they are violating it.” The report also asserts that “dozens of LLCs also violated annual donation limits, donating as much as eight times the $5,000 cap. [The board’s counsel] said that after the letters, the next step in enforcement will be to investigate those violations.”

The Tennessee Registry of Election Finance voted this week to send a case to prosecutors concerning fraud and kickbacks involving a former state House speaker and other lawmakers, according to the Crossville Chronicle. As we reported last week, one state lawmaker involved in the scheme pleaded guilty to wire fraud and agreed to collaborate with prosecutors, with analysts predicting future indictments. Now, “[f]ederal authorities say…[multiple lawmakers] collaborated on a separate consulting firm…as a way to funnel money to themselves secretively and illegally through both campaign and taxpayer-funded work.” Another PAC and additional collaborators are named in the probe.

Reminders:

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

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

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

In Case You Missed It:

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

WEEK OF March 11th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF March 4th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF February 25th, 2022

Latest Developments:

The Iowa Ethics Commission issued Advisory Opinion 2022-01 permitting campaign contributions in cryptocurrency, and declaring that those contributions are to be reported as “in-kind contributions.” The currency is valued at the time of liquidation. Committees are prohibited from spending cryptocurrency on goods or services, because all expenditures must be made from a bank account in a financial institution located in Iowa.
The United States Department of Justice has published the comments it received in response to its advance notice of rulemaking in connection with the Foreign Agents Registration Act. Reuters explains that “Several large U.S. law firms have made recommendations to the U.S. Justice Department that they said will provide more clarity regarding the public disclosure requirements.”

The United States Tenth Circuit Court of Appeals, in Cowboys for Trump v. Toulouse Oliver, ruled that Cowboys for Trump is a political committee required to register with, and report to, the State of New Mexico. The court affirmed a lower court’s decision not to enjoin the Secretary of State’s efforts to enforce state disclosure laws. Among other things, the court found that the plaintiffs “have not established their donors have suffered or are likely to suffer an injury in fact due to the reporting or disclaimer requirements.”
A California State Senator introduced a B. 1367, which would “prohibit a state agency… from awarding a contract for which the state agency has not secured at least 3 competitive bids or proposals to a company that has made a behested payment at the behest of the Governor in the preceding 12 months.” The Sacramento Bee quotes the author, who said he was “concerned about the increasing use of massive no-bid contracts. I believe a transparent and accountable government is a good government…”

Reminders:

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

In Case You Missed It:

Tennessee Lobbyist Contributions: NewsChannel 5 Nashville continues its coverage of state lobbyist activities with a report on lobbyists’ campaign contributions. “More than a decade ago, lawmakers supposedly tried to outlaw the practice.” The article describes lobbyists’ use of “bundling” contributions from others and passing on contributions from lobbyist employers and affiliated PACs, noting that “it gives them a chance to personally put the checks into the hands of the lawmakers they’re trying to influence.”

A. Fundraiser Limits: Knock LA reports that a commissioner for the Los Angeles Department of Water and Power sent out invitations to a fundraiser at her home for a city councilmember who is running for City Controller. The article points out that “it is prohibited for city commissioners to hold fundraisers for a candidate for office. It is also a violation of city ethics laws for city officials to ask someone else to make a contribution, to put their names on an invitation, to put their name or signature on a fundraising event, to use their home for a fundraising event, or to act as an ‘agent or intermediary in the making of a contribution.’” The fundraiser was held in October 2021; the councilmember “did not respond” to Knock LA.

Russian Effect on Lobbyists: According to The Hill, the Russian Invasion of Ukraine has an impact on D.C.-based lobbyists. ”Lobbying firms have terminated their contracts with the company behind the Nord Stream 2 natural gas pipeline after the U.S. imposed sanctions on the Russian firm in the wake of Moscow’s invasion of Ukraine.” The article points out that lobby firms collected a few million dollars lobbying on behalf of various parties interested in the pipeline.

WEEK OF February 18th, 2022

Latest Developments:

The San Francisco Ethics Commission published a draft measure, which it plans to place on the June 2022 ballot, that would re-write existing ethics provisions. A special meeting to hear from the pubic is scheduled for February 25. The commission also published a 12-page summary of the 126-page measure. Among other things, the measure would expand gift limitations and extend the lobbyist gift ban to permit consultants.

DuPage County, Illinois (suburban Chicago) repealed its lobby ordinance [Item 9H]. The action follows the state’s adoption of a lobby law that requires state registration and reporting for all local lobby activities, except those in the City of Chicago.

Reminders:

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

In Case You Missed It:

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

WEEK OF February 11th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF February 4th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 28th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 21st, 2022

Latest Developments:

The U.S. Senate Republican Leader filed an Amicus brief with U.S. Supreme Court in FEC v. Cruz, which seeks to strike down loan repayment restrictions in the McCain-Feingold Bipartisan Campaign Reform Act of 2002. Senator McConnell’s brief urges that “the Court should strike the entire statute.” However, Politico reports that at the oral argument, “there was little sign that the justices intend to transform the pending case into a broadside at campaign finance law.” USA Today, via MSN, explains the case and the positions taken by all sides.
The Washington State Supreme Court upheld an extraordinary campaign finance fine, in State of Washington v. Grocery Manufacturers Association. The Seattle Times, as posted on the court’s website, reports the court “upheld a record $18 million fine against a national grocery industry group for violating state campaign finance laws during a 2013 battle against a food-labeling initiative… An attorney for the grocery group, which since has renamed itself the Consumer Brands Association, said it was disappointed in Thursday’s ruling and may take its case to the U.S. Supreme Court.”

A Federal Judge struck down Montana’s Clean Campaign Act in Montana Citizens for Right to Work v. Mangan. The Helena Independent Record explains that the judge found “that the 2007 campaign practices law violated a political committee’s free speech and due process rights under the U.S. Constitution.” According to the article, the “Montana Citizens for Right To Work, a political committee that was active during the 2020 elections, in September filed a challenge to the state’s requirement that candidates and political committees give targeted candidates a heads-up on attack ads published or broadcast within 10 days of Election Day.” An attorney for the plaintiff said, “the law places an unconstitutional burden on its right to speak freely.”
The Colorado Court of Appeals , in No Laporte v. Board of County Commissioners, considered “whether campaign contributions can, under the Due Process Clause, disqualify an elected official from serving as a decisionmaker in quasi-judicial proceedings.” Legal Newsline explains that the court, relying on the U.S. Supreme Court decision in Caperton v. A.T. Massey Coal Co, “rejected claims a county commissioner should have recused himself from voting on a concrete plant permit because the company’s shareholders contributed several thousand dollars to his campaign.”
The Washington Public Disclosure Commission released proposed amended rules regarding “how commercial advertisers respond to requests for records of the political advertising and electioneering communication it provides, the format for making such information available, and the content that must be disclosed.”
The Oregon Ethics Commission latest quarterly newsletter, Ethics Matters, reminds us that a slew of amended regulations took effect on December 31, 2021, including revised rules pertaining to lobbying and gifts.

In Case You Missed It:

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

WEEK OF January 14th, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF January 7, 2022

Latest Developments:

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

In Case You Missed It:

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

WEEK OF December 31, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF December 24, 2021

Latest Developments:

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

In Case You Missed It:

Revolving Door Attacked: The Springfield News-Leader reports that a Missouri lawmaker is suing the Missouri Ethics Commission to overturn the state’s revolving door provisions that prevent him from becoming a lobbyist for two years. His federal lawsuit “alleges that his inability to register as a lobbyist to serve a prospective client was denying him income. He also argues that because the two-year restriction ‘bans (him) from saying certain things, backed by the threat of criminal prosecution,’ it is unconstitutional.”
Revolving Door Wide Open: The Oklahoman reports that “Oklahoma is one of seven states with no type of ban on lawmakers or public officials from entering the lobbying profession for a certain amount of time…” The article explains the ease of moving from state legislator or staffer to a lobbyist position. It notes that the Oklahoma “Ethics Commission voted twice in recent years to establish ‘cooling off’ laws that would ban public officials from moving straight into a lobbying job. But each time those rules were voted down by the state Legislature.”

New York State Reforms: According to The City, “Gov. Kathy Hochul plans to overhaul the state government’s ethics agency as she runs for election and tries to distance herself from scandal-wrecked former governor Andrew Cuomo…” The article quotes a spokesperson for Hochul, who said that “the governor ‘is committed to instituting real ethics reforms and restoring trust in government, and we will continue to work with legislators and good government groups to reform JCOPE and improve ethics oversight to better serve New Yorkers.’”
SF Fraud Case: The San Francisco Chronicle reports that the former San Francisco Public Works Director agreed to plead guilty two years after his initial arrest in what prosecutors “called ‘a long-running scheme involving multiple bribes and kickbacks’ during his term as head of Public Works.” In the deal, he admitted to receiving “money, international trips, expensive jewelry, high-end wine and other goods and services from city contractors and developers in exchange for preferential treatment and confidential information about city business.”

WEEK OF December 17, 2021

Latest Developments:

The New York Joint Commission on Public Ethics ordered former Governor Cuomo to repay money he earned from a book deal. NPR explains that the Governor “promised it would have nothing to do with the ins and outs of his role as the state’s leader. He also pledged to write it on his own time and without tapping into any of the state’s vast resources. But New York’s Joint Commission on Public Ethics says that’s not at all what happened…” An attorney for the former Governor said that the commission’s actions “‘exceed its own authority and appear to be driven by political interests rather than the facts and the law…’”
U.S. Representative Jamie Raskin introduced HR 6283, which would “apply the ban on contributions and expenditures by foreign nationals under [the Federal Election Campaign Act of 1971] to foreign-controlled, foreign-influenced, and foreign-owned domestic business entities.” The Hill explains that the reintroduction of the House measure “would block foreign-owned corporations from spending company funds to influence U.S. elections”

The Dallas City Council approved an ordinance in response to corruption issues in city government. The Dallas Morning-News explains that the City Council approved several of the Mayor’s proposals to “strengthen transparency and accountability to residents as well as make reporting ethics violations and rules more clear.” The package creates an Inspector General in the City Attorney’s Office, bolsters ethics training, expands conflict-of-interest rules, bans those seeking public subsidies from lobbying for them, and expands the Ethics Advisory Commission. The ordinance also includes a $300 annual limit on gifts from lobbyists. The measure takes effect immediately, with some exceptions.

The City of Portland Open and Accountable Elections Commission adopted new regulations governing its Small Donor Elections Program. The program caps small contributions at $250, but permits seed money contributions of $500, and allows loans and in-kind contributions of up to $5,000 under certain circumstances.
The Delaware County (adjacent to Philadelphia), Pennsylvania Council approved Ordinance 2021-13, which requires county contractors to disclose campaign contributions with their bid and annually thereafter. The measure applies to contracts that require County Council approval ($50,000 or more) beginning April 1, 2022.

In Case You Missed It:

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

WEEK OF December 10, 2021

Latest Developments:

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

In Case You Missed It:

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

WEEK OF December 3, 2021

Latest Developments:

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

Reminder:

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

In Case You Missed It:

Missouri Money: The Missouri Independent reports that a Missouri lobbyist has drawn scrutiny from his setting up multiple PACs that his corporate clients support. “Corporations are banned from giving directly to candidates in Missouri. And contribution limits cap how much a candidate can take from an individual or PAC. Setting up multiple PACs opens the opportunity to skirt those regulations.” One watchdog opined that “‘This appears to be a way of cleverly exploiting a loophole in campaign finance law…’”
Contribution Ban Debated: According to the Arizona Mirror, the Arizona Corporation Commission has rejected assertions by the Legislative Council that “a provision of the [commission’s] ethics policy limiting commissioners’ ability to vote on matters involving utilities that have provided funding for their campaigns, overstepped the commission’s legal authority by prohibiting its members from participating in their official duties.” The code was “enacted in response to high-profile and controversial campaign spending” by a utility in 2014 and 2016.
North Dakota Rules Debated: The Bismarck Tribune reports on the North Dakota Ethics Commission’s efforts to adopt regulations concerning conflict of interest for quasi-judicial proceedings. Critics voiced objections to excluding campaign contributions from the definition of “significant financial interest,” thereby permitting members of the Industrial Commission and the Public Service Commission to accept contributions from those they regulate.

New Jersey Ponders IE Disclosure: Insider New Jersey describes the concern of the Executive Director of the New Jersey Election Law Enforcement Commission over the explosion of independent expenditures in New Jersey Elections. The article points out that the groups “are required to disclose only their expenditures, not the source of their money.” The commission’s “proposed reforms that would strengthen accountable political parties and bring parity between them and independent groups.”

Pardon Lobbyist Failed to Register: The Daily Beast reports that a former Department of Justice Official “was directly involved in White House clemency negotiations possibly as late as Trump’s last full day in office, but never registered as a lobbyist while advocating for pardons…” The official was listed in a filing as an “advocate” and received “$400,000 last year in unspecified “consulting” fees.” The article quotes a Common Cause spokesperson who opines that “the laws surrounding lobbying for pardons specifically are fuzzy… [however,] a number of Trump lobbyists saw fit to disclose that work.”

Candy does not Influence: The Wisconsin State Journal discloses that the Madison, Wisconsin Ethics Board ruled that when the assessor gave candy to members of the (property tax assessment) Board of Review prior to a hearing on reassessment of two multi-million dollar properties, she “did not violate ethics laws.” City and state ethics laws “prohibit providing “anything of value” to members of a public body if it could reasonably be expected to influence a vote or decision.”
Et Tu, Brute?: The State (Columbia, SC) reports that the South Carolina Ethics Commission found that a candidate “spent thousands of campaign dollars on personal expenses… all while his campaign repeatedly failed to report details about who was contributing to his gubernatorial bid… [T]he S.C. Ethics Commission began investigating the Charleston businessman after one of [his] own campaign aides filed a complaint…”

WEEK OF November 19, 2021

Latest Developments:

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

The Texas Ethics Commission published its proposed changes to a variety of rules, including changes to campaign finance and lobbyist reporting thresholds. The rules also authorize cryptocurrency contributions. The Commission voted to propose the rules in September; the new rules would take effect January 1, 2022.

In Case You Missed It:

New Pennsylvania Lobby Reporting “Useless”: Lancaster Online reports that “Lobbyists and lobbying firms are for the first time disclosing their financial interests in companies for which they lobby…” However, the article characterizes the disclosures as “haphazard and, arguably, useless…” The article points out that “Amid a narrow reporting period and few guidelines, lobbyists interpreted the new requirement in a variety of ways.”

Behested Payments Lead to Indictment: Two more individuals were indicted in the continuing corruption inquiry at San Francisco City Hall. According to the San Francisco Chronicle, one former official “asked his clients to make charitable contributions to San Francisco Golden Gate Rugby Association ‘intending that those donations would influence’ then- San Francisco senior building inspector Bernie Curran ”in the performance of his official duties…”

No Book Deal: The New York Joint Commission on Public Ethics, at its monthly meeting, voted to revoke its staff’s informal advisory opinion that granted approval for former Governor Cuomo to publish a book while in office. Politico explains that the opinion conditioned its approval on the Governor’s promise “not to use state resources or personnel on the lucrative endeavor. News has since emerged that state employees did help with the book…”

Loans as Contributions: According to USA Today, the Federal Election Commission accused a U.S. Senator’s campaign “of accepting millions of dollars of potentially improper loans…” The Senator’s campaign countered that “all the loans and contributions were legal.” The issue, as described by the article, is that “Most of that money came from financial institutions ‘that did not appear to be made in the ordinary course of business’ because the banks were not assured repayment. FEC auditors said that means they appeared to be prohibited contributions from financial institutions.”
Secret Lobbyist Fines: The Albany Times-Union reports that the New York Joint Commission on Public Ethics.
acknowledges that it has collected over $250,000 in fines from lobbyists for late reports. However, “officials will say little else about the program, including which lobbyists have faced penalties, why they’ve been fined – or why their staff chooses to forgive certain fines. The secrecy of the program makes it difficult to know whether the ethics agency is enforcing the rules evenhandedly…”

WEEK OF November 12, 2021

Latest Developments:

Federal Contractor Relieved: A company accused of violating the prohibition against federal contractor contributions can rest more easily. Bloomberg Government reports that, after months of investigation, the Commission essentially came to the same conclusion as in a prior case and declined to find probable cause of a violation under the circumstances. The article questioned whether “a company giving money to a super PAC doesn’t have to be ‘separate and distinct’ from one having government contracts.” However, a detailed statement by the three Republican commissioners offers the reasoning behind the decision, criticizes the test proposed by commission attorneys for determining when a company or its affiliate hold a government contact, and questions whether the prohibition would survive a court challenge in regard to Super PAC contributions. The decision does not immediately impact other recent enforcements against corporations contributing to federal Super PACs.

A Federal Election Commission draft audit report accuses Senator Mike Braun’s 2018 campaign of “receiv[ing] ‘apparent prohibited loans’ and lines of credit totaling $8.5 million. Most of that money came from financial institutions ‘that did not appear to be made in the ordinary course of business’ because the banks were not assured repayment.” As USA Today reports, Braun contends that “it’s not abnormal for ‘creditworthy’ individuals such as Braun to get unsecured lines of credit” and that the banks did not provide the loans “for the purpose of influencing the outcome of the Candidate’s candidacy…[but] in their own commercial interests.”

The Washington Public Disclosure Commission released the text of its proposed amendments to regulations regarding digital political advertising disclosure. The Commission describes the changes as: “Permitting additional time for a commercial advertiser to respond to a request for inspecting records, where the sponsor has not identified an order as political advertising; Requiring the commercial advertiser selling the ad to provide its own identification with the ad if it is published on another platform; and Clarifying the scope of demographic information a digital advertiser is required to maintain for public inspection.” A hearing is set for December 2. Comments are due by November 29, 2021

The San Francisco Ethics Commission released its draft ordinance and regulation amendments in its efforts to restrict gifts to public officials from restricted sources. The proposal is a response to a federal investigation of City Hall and charges that “allege numerous instances in which individuals seeking favorable outcomes from City government provided meals, travel, luxury goods, and other gifts in an attempt to influence the actions of City officers and employees.” A hearing is scheduled for December 2.

In Case You Missed It:

PAC Impersonators: Federal prosecutors indicted PAC administrators for allegedly “us[ing] the name and likeness of Donald Trump and other politicians to ostensibly raise money for a network of political action committees.” Yet, as Politico reports, of the $3.5 million raised leading up to the 2016 election, only $19 was distributed to candidate or any political purpose. The indictment, which was unsealed on Wednesday, “charged [Matt] Tunstall and Robert Reyes with conspiracy to commit wire fraud and to lie to the Federal Election Committee.” Prosecutors also indicted Tunstall with additional “counts of wire fraud and money laundering” and a “third associate…with conspiracy to commit wire fraud and to lie to the FEC and multiple counts of wire fraud.”

Corporate America Coming Back to the GOP: According to Politico, Republican lobbyists say that “big business is warming up to the Republican Party again, less than a year after Jan. 6 but with the 2022 elections in sight.” Recent election results “ignited interest from their corporate clients on making inroads with GOP officials on the Hill.”
Double Barreled Donations: The Milwaukee Independent reports that two PACs affiliated with a prominent second amendment group allegedly made $35 million in coordinated illegal campaign contributions to various candidates for federal office. A suit filed this week in federal court claims that the PACs “and the [federal candidate] campaigns us[ed] the same political messaging firms to disguise coordinated campaign activity as independent advertising.” The lawsuit contends that the firm is actually one company operating under two names and was employed to “coordinate, create and place complementary advertisements — exactly the type of coordination that is not supposed to be allowed between campaigns and outside groups.”

WEEK OF November 5, 2021

Latest Developments:

The Federal Election Commission determined, in MUR 7523, that foreign corporations may contribute to ballot measure campaigns if not otherwise prohibited by state or local law. The facts presented to the Commission indicate that a Canadian subsidiary of an Australian mining corporation contributed to oppose a Montana ballot measure that affected permits for hard rock mines. The analysis states that federal law prohibits foreign nationals from “making a contribution or donation of money or other thing of value, or an expenditure, independent expenditure, or disbursement, in connection with a federal, state, or local election.” However, it points out that the Federal Election Campaign Act of 1971 regulates “‘only candidate elections, not referenda or other issue-based ballot measures.’” The matter, approved on a 4-2 vote, was disclosed by Axios.

The Alaska Public Offices Commission released Advisory Opinion 21-09-CD, which asserts that because the Ninth Circuit Court of Appeals case (Thompson v. Hebdon) case is now final, Alaska should revive the contribution limits in place before the limits struck down by Thompson were enacted. In other words, commission staff believe the case did not result in no limits on contributions, but rather a return to the prior limits, as adjusted for inflation. The new (old) limits are “$1,500 per calendar year for individual-to-candidate and individual-to-group; and $3,000 per calendar year for non-political party group-to-candidate and non-political party group-to-non-political party group.” The commission must approve the opinion; its next meeting is on January 26, 2022.

In Case You Missed It:

Giffords Takes Aim at NRA (and FEC): Politico reports that “the gun control advocacy group founded by former Rep. Gabby Giffords, sued the National Rifle Association” accusing “the NRA of using shell companies to coordinate about $35 million of election spending illegally by running ad buys through what was actually a common vendor, in violation of FEC rules.” The case arose because the Federal Election Commission was not able to comply with a federal court order to take action on the original complaint filed with the commission. “It’s a rare instance of a defendant being authorized to pursue legal action against an alleged violator of campaign finance law directly,” which Giffords observed. A spokesperson piled onto the FEC asserting that there is a “systematic problem” of not enforcing campaign finance laws although, with a quorum, the agency has started acting on backlogged enforcements.

“Loophole” Gifts: Following a recent report by the San Francisco Ethics Commission on city gift laws, KQED reports that San Francisco “officials got free tickets to [the] pricey Outside Lands fest through [an] ethically questionable loophole.” The festival organizer gave the tickets to the city Parks and Recreation Department, which in turn distributed them to officials; current law prohibits the organizer from gifting the tickets directly to officials.“(W)hile the practice follows the letter of the law, it most certainly flouts the spirit of the law, particularly given the sheer number of free tickets doled out. Between 2015 and 2019 — the last year the festival took place — the department distributed some 1,855 free tickets [valued at over $430,000] to public officials across the city, including department staffers and employees in other city departments.”

Straw Donors Lining Up: Following the conviction of Lev Parnas, Open Secrets has a rundown on pending foreign national straw donor cases, noting that “other prosecutions in similar cases are just beginning.” Two groups of cases are working their way through the justice system, one involving contributions from a Lebanese-Nigerian billionaire, and one involving contributions from a “Russian national” and a “Chinese national.”
Pay-to-Play Plea: The Morristown Daily Record (New Jersey) reports that an attorney pleaded guilty to “operating a brazen pay-to-play scheme by recruiting others to donate $250,000 to political players in several counties, all in an effort to nab lucrative taxpayer-funded legal contracts” He “admitted he and ‘another attorney’ used a straw donor scheme, which are set up so individuals or companies barred from giving political contributions can do so without tipping off the authorities. Donors contribute instead and then they get reimbursed, which is illegal.”
Electric Utility Expenditure Generates Skepticism: According to the Washington Free Beacon, a U.S. Senator asked a Virginia electric utility that serves most of the state whether it made the candidate [Terry McAuliffe] aware “of the $250,000 it spent on his behalf, and whether anything was promised in return for the spending blitz.” The action follows a report in Axios that disclosed the spending by Dominion Energy. The Free Beacon reports that “Dominion apologized after the spending effort was revealed by Axios …”

WEEK OF October 29, 2021

Latest Developments:

The U.S. Ninth Circuit Court of Appeals determined that it will not rehear Thompson v. Hebdon, after the request for a new hearing was withdrawn. The action leaves in place the court’s decision this summer overturning certain Alaska campaign contribution limits. The Anchorage Daily News explains that the state did not support a judge’s call for an en banc hearing to review the decision because “further legal action could result in a stricter decision that reduces the Legislature’s ability to pass new limits.”

The Cincinnati City Council unanimously approved two ordinances – one limiting campaign contributions and another creating an ethics manager – following a corruption scandal last year. The first ordinance prohibits “the solicitation or acceptance of campaign contributions from persons having a financial interest in City business while that business is pending before Council.” The second ordinance creates “a new position of ethics and good government counselor within the Department of Law to support ethics, election, and campaign finance efforts.”

In Case You Missed It:

Investing in Politics: CNBC reports that “Private equity and hedge funds accounted for over $625 million in political spending during the cycle leading up to the 2020 election, with the lion’s share going to campaign contributions…” According to the article, the amount “was the most this segment of the financial industry spent on lobbying and campaign contributions in a two-year campaign cycle…”

Contributions Linked to No-Bid Contracts: According to the Denver Gazette, Colorado campaign contributors have benefited from contracts paid for with “custodial funds” controlled by constitutional officers. “A spokesperson for [the Colorado Attorney General] confirmed that $262,000 in no-bid contracts went to firms headed by a handful of attorneys who made large campaign contributions to [the Attorney General’s] campaign.” In addition, the Secretary of State “sent $2.8 million in federal emergency COVID-19 mitigation funds — “almost half of the CARES Act cash allocated to her office — to a politically well-connected, Washington D.C.-based public relations and lobbying firm to produce a set of TV ads…”

Campaign Contribution Conviction: CNN reports that “Lev Parnas was convicted on six counts related to ‘influence buying’ campaign finance schemes… The Ukrainian businessman was also convicted for using money from Igor Fruman – who previously pleaded guilty — and a fake company to funnel hundreds of thousands in political contributions to GOP and pro-Donald Trump committees and then lying about it to the Federal Election Commission.”
Federal Campaign Finance Indictment: The Associated Press reports that a federal grand jury indicted a Tennessee State Senator for violating campaign finance laws. The S. Department of Justice explained the Senator and an associate “conspired with others to violate federal campaign finance laws to secretly and unlawfully funnel ‘soft money’… to his authorized federal campaign committee. [The Senator] and others also caused a national political organization to make illegal, excessive contributions to [his] federal campaign committee by secretly coordinating with the organization on advertisements … and to cause false reports of contributions and expenditures to be filed with the Federal Election Commission.” The lawmaker called “the charges a ‘political witch hunt.’”

WEEK OF October 22, 2021

Latest Developments:

The FBI announced this week the indictment of US Rep. Jeff Fortenberry “on federal charges that he lied to the FBI and concealed information about illegal campaign contributions that he accepted from foreign sources.” Fortenberry denies the charges, stemming from alleged “illegal contributions that his 2016 campaign received from a Nigerian-born billionaire named Gilbert Chagoury who lives in Paris.” According to the Lincoln Journal Star, “Chagoury allegedly arranged for $30,000 in cash to be contributed to Fortenberry’s campaign through other individuals during a fundraising event in Los Angeles.”

The California Fair Political Practices Commission approved, with minor adjustments, staff-proposed regulations concerning so-called behested payments. CalMatters reports that rules come after a one-and-a-half-year debate about the trend of “politicians increasingly us[ing] charitable organizations to raise and spend money outside the limits of the state’s strict campaign finance laws.” The rules clarify when elected officials, and CPUC commissioners, truly “behest” and require increased disclosure of lawmakers’ ties to nonprofits, including when the official has an employment or controlling relationship with the nonprofit, any relationship with a member of their immediate family, or member of their campaign or officeholder staff, and when the payor of a behested payment is involved in a proceeding before the official’s agency. The regulation also seeks to force disclosure of the identity of donors utilizing “donor advised funds.” Overall, the rules require more diligence by officials soliciting payments and do not place new obligations on donors. California has not followed the lead of other states that restrict behested payments by certain sources or in particular circumstances. The Commission made clear that only the Legislature can change the law surrounding these payments.

Pennsylvania Senate Leaders have introduced an ethics reform package “that would impose new requirements for lobbyists and political consultants to avoid conflicts of interest and define the relationship between lawmakers and those who try to influence them.” The package comes nearly a year after the Senate president was exposed for taking a trip to Arizona “organized by…a Harrisburg-based firm that helps fundraise for elected officials…and lobbies officials once they are in office.” Among the changes proposed include “requir[ing] lobbyists to register clients seeking state funding…bar[ing] state agencies from hiring an outside firm or lobbyist to lobby any branch of government…prevent[ing] lobbyists from being registered political consultants and prohibit political consultants from lobbying a state official,” and a one-year revolving door restriction.

In Case You Missed It:

Recalling Campaign Donations: Court filings by the Michigan Secretary of State indicate that Gretchen Whitmer will have to dispose of donations she raised outside of the normal limits in preparation for a potential recall. Detroit News reports that Whitmer raised $3.4 million under a “state policy on recalls…[allowing] contributions, above the normal $7,150 limit on individual donors.” However, since a recall is unlikely to qualify before the last year of Whitmer’s term when it could not legally transpire, the excess funds must be returned or donated. Still, “[a]n important question will be what [she]…eventually does with the excess funds… If they’re donated to a political organization, they could still be used to benefit the governor’s reelection.

Funds for me but not for thee: The Seattle Times editorial board opines on a 2019 campaign finance loophole drafted by City Council President M. Lorena Gonzalez which now directly benefits her as she runs for Seattle mayor. The “ordinance, which restricts business contributions to city political races for being ‘foreign influenced,’” still imposes few corresponding restrictions on contributions from labor unions. The Times contends that the ordinance “threshold for ‘foreign-influenced’ is…low [given that it captures] any foreign person [who] owns 1% of a company’s stock — or if total American ownership falls below 95%.”
Rocky Mountain Campaign Finance Complaints: Boulder (Colorado) residents resubmitted a campaign finance complaint against a City Council member after their initial complaint was dismissed on technical grounds. The residents allege Council Member Steve Rosenblum “exceeded the city’s expenditure limits when he sought legal assistance to research, prepare and file a lawsuit against…a group of community members.” By participating in the municipal matching funds program, Rosenblum agreed to abide by spending limits, yet the citizens contend that “[p]aid work in support of a candidate’s campaign for public relations, investigative work and/or legal fees” must be considered “a campaign expense just as surely as the purchase of yard signs and printing costs are” and, thus, Rosenblum exceeded the legal spending limits.

WEEK OF October 15, 2021

Latest Developments:

The Governor of Illinois signed SB 539. The comprehensive ethics reform bill expands lobbyist registration and reporting to include lobbying local government, and revises provisions relating to procurement, revolving door restrictions, and campaign contributions. The measure takes effect on January 1, 2022.

The Alaska Public Offices Commission imposed a fine of $38,500 against the Mayor of Anchorage’s campaign committee for violations of campaign contribution and disclosure laws. The Midnight Sun explains that the fine was imposed “for a repeated pattern of incomplete and misleading reports that had the result of never giving the public a clear picture of campaign was up to until well after he won office… The final report takes note of the ‘pervasiveness of the violations’ and how ‘despite filing a total of seventeen amendments to the four reports, Bronson for Mayor never fully complied with its reporting obligations.’”

The New Mexico Secretary of State issued its 2020 Campaign Finance Random Examination Report. According to the Associated Press, “After a four-year hiatus, state election regulators have resumed spot-checks on campaign finance disclosures by politicians, election candidates and political committees, with 10 accounts referred to New Mexico’s fledgling State Ethics Commission and state prosecutors for possible enforcement action.”

In Case You Missed It:

SEIU Chief Charged with Embezzling Campaign Funds: The Sacramento Bee reports that the California Attorney General charged the Executive Director of Service Employees International Union California with “multiple counts of tax fraud, embezzlement, perjury and failure to pay unemployment insurance taxes.” The charges stem from an investigation started by the Fair Political Practices Commission into an “allegation that [she] as treasurer for a 2014 state senate campaign directed spending to her husband for campaign services he did not provide.”

Matriculation on the Government Dime: The Associated Press reports on corruption allegations involving a father-son pair of former state legislators. The father, now a Los Angeles City Councilmember and a former Los Angeles County Supervisor, “promised to steer millions of dollars in [Los Angeles County] contracts to the [University of Southern California] if his son got a scholarship and a teaching job.” The Dean of USC’s School of Social Work promised “a full-tuition scholarship and a paid professorship, and concocted a scheme to funnel $100,000 in [the father’s] campaign funds through the university ‘to a non-profit to be operated by the [son]’…” The U.S. Department of Justice statement on the matter notes that the latter kickback scheme “violated multiple university policies regarding the funding of nonprofits”; the DOJ also indicted the now former dean on corruption charges. The DOJ did not charge the son, who resigned from the legislature in 2017 following sexual harassment allegations.

Campaign Finance Trial Begins:Reuters notes that the trial of Lev Parnas began in New York City this week, with the prosecutor alleging that he “used $100,000 from a wealthy Russian businessman to make illegal donations to U.S. politicians.” The New York Times frames the arguments of the two sides with the questions, “Was Lev Parnas a businessman who cared about energy independence and marijuana legalization? Or a conniver who flouted campaign finance laws?”

No Guns, No Government Contracts: The Dallas Morning News reports on the impact on banks of a new Texas law that bans state and local governments from doing business with vendors “that limit business with the firearms industry.” SB 19 requires companies with government contracts of $100,000 or more to certify that they do not discriminate against a “firearm entity or firearm trade association.” The measure took effect September 1, 2021.

Beware Scam PACs: The 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:

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 State. AB 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:

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 Lifestyle: Newsweek 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:

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 Indictments: Politico 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:

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 Disposal: Politico 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:

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 File: WCNC 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 Advantage: S. 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 Replace: Spectrum 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 Form: WBTV 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 Investigation: The 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 Use: Roll 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 Activity: Politico 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 Contribute: OpenSecrets.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 Contracts: Politico 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 Spending: KJZZ 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 State: Local 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 2022: Bloomberg 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 Booming: Roll 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 Up: Roll 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 Up: org 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 Compensation: Roll 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 Contributions: Roll 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 Accepted: The 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 quoi: Examining 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.”

The Portland, Oregon Auditor’s Office adopted amended campaign finance Administrative Rules. Among the revisions are adjusted contribution limits and revised disclosure requirements. According to the Auditor’s summary, the revised disclosure requirement include identifying who is making the communication and requiring a website link in social media communications.

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 Again: Roll 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 Merging: Maryland 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 Pandemic: Spotlight 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 Introduced: The 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 Transparency: MarketWatch 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 Wichita, Kansas City Council adopted a Code of Ethics for City of Wichita Officials, which limits gifts to $150 per source per calendar year, requires public officials to report gifts over $50, establishes an Ethics Advisory Board and the office of Ethics Officer, who is the Chair of the new board. The Wichita Eagle points out that the “City Council now has two ethics codes: a city law, which has been in place since 1958, and a new City Council policy.”

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:

Virtual Lobbying Here to Stay: Politico reports that “87 percent of government affairs execs see the (videoconferencing) trend continuing, according to a survey conducted by the Public Affairs Council.” Respondents said that it was easier to reach officials and is sometimes more effective.

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 Case: Time 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 Charged: WCPO 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:

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 Lobbying: Politico 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 List: Cal 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 $5,000. WTTW 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) Lobbyists: The 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 Gifts: Honolulu 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 Acceptance: The 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 ordinance. Tap 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 Diversity: Politico 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 Quo: NewJersey.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 Violations: Politico 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 Predicted: Politico 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 New York Joint Commission on Public Ethics adopted permanent amendments to its Comprehensive Lobbying Regulation and Source of Funding Regulations. The commission adopted the amendments last month as temporary emergency regulations.

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.

The City of Irvine, California increased campaign contribution limits from $530 to $550 for the two-year election cycle from January 1, 2021 to December 31, 2022.

In Case You Missed It:

Wild West Politics: MSN 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 Obstruction: Politico 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. 1. The 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 ban. Politico 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 Aloha: Honolulu 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 United States Supreme Court agreed to review two cases from California that concern political spending. Americans for Prosperity Foundation v. Becerra and Thomas More Law Center v. Becerra both question whether California may require a nonprofit organization to reveal identifying information about its donors. The Court will review a decision by the Ninth Circuit that consolidated the two cases.

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 Pause: Bloomberg 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 Act: The 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 Tests: The 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 OK: The 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 States: com 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 Commission. Baker 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 it: Fox 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 States’ Inaugural 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 charges. Cleveland.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 New York Joint Commission on Public Ethics approved emergency adoption of amended Comprehensive Lobbying Regulations and the amended Source of Funding Regulations. Formal adoption of these as permanent regulations will occur in the future. The Commission approved the emergency regulations so that they apply to lobbyists who register for the upcoming year.

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 Contributions: Fox 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 Alleged: MSN 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 campaign. Oregon 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 Texts: The 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 MIA: Government 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 Pandemic: Politico 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 Street: The 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 Watchdog: Fox 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 Conflict: CBS 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 violations. USA 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 Challenged: Oregon 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 Beware: West 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 Slowed: Roll 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 disclosed. Politico 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 Act. Courthouse 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 Corruption: WBEZ 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 Questioned: The 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 Nowhere: NBC 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 Governor of Tennessee called the Legislature to a special session due to COVID-19, beginning August 10 “to address liability protections and telehealth.”

- 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:

In Case You Missed It:

Another Energy Company Implicated: MSN 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:

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 Off: Roll 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 Transitions: Politico 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 Fined: The 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 Luster: Roll 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 Future: Roll 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 DA: A 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 Contracts: CalMatters 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 Disclosure: CNN 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 Ethics: The 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 Lobbyists: Politico 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:

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 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 Some: Bloomberg 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 Lobbyists: The 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 19. Oregon 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:

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:

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 Rules: The 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 Killed: NBC 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 officials. Orlando 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” Lobbying: Politico 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 Legislation: Ballotpedia 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 Transparency: Tech 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 Rules: Lexology 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 Relief: The 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 obligations. Ballotpedia 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:

In Case You Missed It:

PAC Checks: Roll 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 Compliance: MSN 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 $50,000. CTPost 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.C. Bloomberg 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 committees. Law.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 Virus: Politico 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:

In Case You Missed It:

New 49ers in the Golden State: Cal 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 Talk: Cal 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 Deal: CNN 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 Charity: Cal 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 Home: Cal 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 Life: WBTV 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 Tuesday: Cal 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 Federal Election Commission announced that the lobbyist bundling disclosure threshold for 2020 is $19,000, an increase from $18,700 last year. The Commission also announced adjusted coordinated party expenditure limits for 2020.

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:

In Case You Missed It:

APPrehensive about Muddled Disclosure: Forbes 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 late. Spotlight 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 Crossfire: The 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 Iowa: Vox 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 Criticized: Complete 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 () 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 PACs: Reuters 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:

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:

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 Reform: WTOP 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 Oregon: Oregon 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:

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.

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 Flow: The 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 Money: Complete 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 state. Oregon 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 Sunshine: Politico reports on a “massive ‘dark money’ group” that spent $141 million during the midterm elections on various causes. The information was gleaned from the IRS Form 990 filed by the group, the Sixteen Thirty Fund. According to the article, the group’s income included a contribution from one donor of $51.7 million, and it spent its money through a series of other nonprofits (listed on Schedule I of the Form 990).

Free Speech doesn’t include Assault: The Associated Press reports that a Florida woman was sentenced to 15 days in federal prison for throwing a sports drink at a Florida congressman. She pled guilty to assaulting a federal official; the incident occurred outside the Brew Ha Ha Bar and Restaurant in Pensacola, Florida, according to the Panama City News Herald.

Political Online Targets: Google announced that it “will restrict how precisely political advertisers can target an audience on its online services,” according to the New York Times. According to the article, “(p)olitical advertisers will be able to aim their messages at people based on their age, gender or location.” But they will not be able to target “audiences based on their public voter records or political affiliations.”

WEEK OF November 15, 2019

Latest Developments:

The House Ethics Committee announced Thursday that it is suspending its investigation of Rep. Ross Spano (FL) at the Justice Department’s request. The Committee announced in September that it was “investigating the circumstances of loans to Spano’s campaign that…may have violated campaign finance laws.” The request indicates that “the Justice Department is apparently conducting a criminal investigation…[given that] committee press releases have used the same language in the past in at least two cases of members of Congress who were investigated and charged with criminal offenses.” Two of Spano’s 2018 election opponents filed complaints that he knowingly diverted to his campaign $180,000 in loans from friends and claimed them as personal funds.

“Sunlight on Dark Money,” San Francisco’s Prop F, passed overwhelmingly last week, which “means [that] campaigns will be forced to more prominently disclose who donates big chunks of money to a cause.” In addition to the banning of contributions from LLCs, LLPs, and those with certain interests in land-use approval matters before the city, “campaign ads now will have to display the names and contribution totals of the top three donors giving $5,000 or more. If any of the top three donors is a committee, the ad must also show the name and the dollar amount contributed by each of the top two major contributors of $5,000 or more to that committee.” The measure received 76% of the vote, though it only needed a simple majority to pass.

Personal lawyer to the President Rudy Giuliani is facing federal probes surrounding his dealings with firms linked to the Ukraine, according to anonymous officials. The investigation concerns “possible campaign finance violations and a failure to register as a foreign agent as part of an active investigation into his financial dealings.” Indeed, the Manhattan US Attorney’s Office has “scrutinize[d] his activities in Ukraine as prosecutors investigated two of his associates…[who] were subsequently charged in the U.S. with illegally funneling hundreds of thousands of dollars to U.S. officials and a political action committee.” Doubts remain as to the implications for Giuliani given the complexity of the matters involved.

In Case You Missed It:

Shining light on Beacon Hill (and Sacramento): Media outlets in Massachusetts and California appear to have a renewed interest in examining and securitizing the influence of state level lobbying activity. A local television station in Boston claims with astonishment that “public records…[reveal] special interests spending about $45 million every year…in Massachusetts to try to influence which bills pass.” With a similar tone, The Los Angeles Times estimates that “interest groups spent an average of about $2 million every day the Legislature was in session this year on lobbying – adding up to almost $33 million a month and a total of $296.4 million from January through September, a period spanning the legislative year for 2019.” Apart from the sums spent, both outlets focus on the industries that are most active and the nexus between lobbyists and former lawmakers.

Ward room revolving doors: In the wake of three Illinois state officials under federal investigation for influence peddling, city officials in Chicago are considering measurers similar to those proposed on the state-level. The Chicago Sun Times reports that, under a proposed measure, “Chicago aldermen would be prohibited from lobbying state and local government – and their counterparts at those other levels would be barred from doing the same at City Hall.” Two of Mayor Lori Lightfoot’s close allies have proposed the measure, including Alderman Matt O’Shea, who commented, “We’ve seen multiple ethical scandals across the state at multiple levels of government…If it continues, it’s not a question of if, but when the City Council is dragged in.”

TikTok races for influence: Amidst the extended national debate over foreign influence in national affairs, Bloomberg reports that the music video app TikTok is rapidly expanding its “advocacy priorities and…growing [its] lobbying operations.” Regulators’ concerns about TikTok are multifaceted as it is owned by the Chinese company ByteDance Inc. There are “concerns… that TikTok could pose a national security threat because of its Chinese ownership and the risk that the government in Beijing could get access to the app’s growing troves of user data.” There also exist concerns about how foreign acquisitions of domestic businesses may “give foreign buyers access to data about U.S. citizens.” While “lawmakers have pushed for a review, saying that TikTok poses a potential counter-intelligence threat,” the company has contracted with lobbying firms closely associated with the technology sector.

WEEK OF November 8, 2019

Latest Developments:

An Alaska superior court judge issued a ruling last week agreeing with the nonprofit group Equal Citizens that the Alaska Public Offices Commission (APOC) “abused its discretion by not revising” its opinion letter deeming that the state’s contribution limits to independent expenditure committees are unconstitutional. The Ninth Circuit Court of Appeals ruled similarly in an analogous 2016 federal case, Thompson vs. Hebdon, yet the “APOC did not revise its enforcement practices,” according to local media. These strict limits, initially passed in 1996, impose an “annual per-person $500 contribution limit to independent expenditure groups.” Equal Citizens noted that its goal “is that the Alaska case makes its way to the U.S. Supreme Court to clarify aspects of Citizens United and how limits are enforced on contributions made to political groups”.

An administrative law judge reversed the imposition of a 2017 $465,000 fine on Jeremy Durham, a former Tennessee lawmaker, “for violating the state’s campaign finance laws hundreds of times, including spending money on sunglasses, suits and spa products. While Durham is still under federal investigation, the judge made clear “that the legislature did not ‘give the registry an unbridled right to dole out civil penalties’.” The Tennessean speculates that the ruling against the record fine “could benefit other lawmakers who use campaign money in similar manners.”

In Case You Missed It:

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

Testing the steel of Pittsburgh’s campaign finance regs: NPR in Pittsburgh details the legal showdown between the Pittsburgh Ethics Hearing Board and outgoing Pittsburgh City Councilor Darlene Harris over the city’s campaign finance reporting requirements. The campaign finance ordinance requires “candidates for city office…to file monthly reports for the three months prior to the primary and general elections… [which is] a more rigorous requirement than in state law.” Harris, who filed according to state requirements, did not file according the city’s reporting schedule and has not paid fines imposed on her for this failure. She contends “that the city has no authority to impose campaign-finance reporting requirements that go beyond those in state law.”

Land of Lincoln channels Honest Abe: Under the cloud of three state legislators currently under federal investigation or indictment, Illinois politicians have released various calls for ethics reform. On Wednesday, minority Republican lawmakers introduced two bills: HB 3956, imposing a stricter revolving door policy, and HB 3958, which prohibits, under penalty of felony, certain close family members of legislators from lobbying. However, with “only three days remaining in the fall veto session, GOP lawmakers are unlikely to be able to advance their proposals before the legislature adjourns for the year.” Meanwhile, the Democratic governor and state house speaker called for further study on how to address conflict of interest issues, especially after Monday’s arrest of “State Rep. Luis Arroyo, [who was] charged Monday with attempting to bribe a state senator to get support for gambling legislation that one of the clients [of the lobbying firm he manages] wanted.”

Countdown to collect cash in New York: The New York Post reports on Governor Andrew Cuomo’s manic fundraising pace only one year after winning a third term. The fundraising frenzy takes place as the new Public Campaign Finance Commission, which Cuomo approved, “considers limiting campaign cash from wealthy donors… from $70,000 for statewide races to $12,000 in exchange for accepting matching public funds.” Critics speculate that the increased activity “could be an attempt by Gov. Cuomo to beat the clock and raise as much as possible before lower contribution limits go into effect.”

WEEK OF November 1, 2019

Latest Developments:

The United States Eighth Circuit Court of Appeals ruled that an individual who is associated with a nonprofit organization but was not paid, spent no money, and made no gifts to public officials in the course of expressing his views to public officials and testifying before the state legislature is not required to register as a lobbyist. In Calzone v. Summers, the court concluded that Missouri cannot require the plaintiff to register for engaging in First Amendment activities. The state’s lobby registration and disclosure requirements – as applied – violate his First Amendment rights.

The Governor of New York signed A. 1641, which requires that all candidates and committees file their reports electronically. The bill removes a $1,000 threshold and thus requires that all state and local candidates and committees file using the State Board of Election’s system. Local paper filings are no longer required. The measure takes effect on December 15.

The Tallahassee City Commission voted to ask the City Attorney’s Office to draft amendments to the city’s existing ethics ordinance, according to Tallahassee Reports. The proposal, as described by the City Attorney in a workshop with the Commission, would generally grant more authority to the city’s Independent Ethics Board and would add procurement employees, among others, as “covered individuals” subject to ethics rules. The proposal would, among other things, make contracts voidable if influenced by a prohibited gift, extend gift rules to all “covered individuals” (not just elected and appointed officials), increase penalties on lobbyists who fail to register, and require that vendors disclose campaign contributions. An initial draft ordinance will be revised and presented back to the City Commission for approval.

In Case You Missed It:

Lobbyist or Victim-Advocate?: The Albany Times-Union reports that an alleged rape victim, who did not register as a lobbyist, has filed suit against the New York Joint Commission on Public Ethics (JCOPE) for “conducting an ‘improper and abusive’ investigation into (the alleged victim) over her efforts to raise awareness about sexual assault and support for passing the Child Victim’s Act in 2018.” Apparently she spent more than the $5,000 (from a settlement with the prep school where she was allegedly raped as a child) on advertisements, including billboards, an amount that exceeds threshold for lobbyist expenditures to require registration. The New York Post notes that the “state’s Joint Commission on Public Ethics is standing by its decision to investigate a rape survivor for violating lobbying laws.” (Editor’s note: New York is in the Second Circuit, not the Eighth Circuit; see Calzone v. Summers, above.)

Taxpayer-Funded Lobbying not Transparent: Leaders in rural Douglas County, Oregon spent “at least $43,000” over a four-year period traveling to Washington, D.C. to lobby federal officials to allow more timber harvesting activity. The Oregonian reports that its questions and requests for information have yielded receipts for $579 worth of spending; the county is asking for $1,900 to pay for the time required to find the rest of the receipts. The paper says that “Douglas County commissioners have used (a federal safety net) program to award themselves $30,000 a year to pay for lobbying trips. It’s unclear exactly how much has been spent.”

Twitter says “No” to Political Ads: Twitter announced that it will no longer carry political advertisements. CNN tells us that Twitter earned less than $3 million from the sale of political advertisements in the 2018 election cycle. Facebook, which will continue to carry political ads, estimates that business will amount to less than 0.5% of its revenues next year.

Facebook and Google said it too, but “No” didn’t mean “No”: Both Facebook and Google announced they would no longer sell state and local political advertisements in the State of Washington, according to the Seattle Times. But since their announcements, both have continued to sell tens of thousands of dollars in political ads in the state. Last week, the Times found at least 15 different ads for Seattle city council candidates on Facebook, noting that “(s)ome of those ads had been seen as many as 200,000 times, according to Facebook’s library of political ads.” Both of those companies agreed to stop selling the ads after they were sued by the state’s Attorney General for failure to comply with the state’s strict campaign-finance disclosure laws and collectively paid $450,000 to settle the suit. According to the Times, “(i)t’s not illegal for campaigns and PACs to advertise on Google and Facebook, it just runs counter to the companies’ self-imposed and self-enforced policies.”

WEEK OF October 25, 2019

Latest Developments:

The 2019 CPA-Zicklin Index of Corporate Political Disclosure and Accountability was published this week by the Center for Political Accountability and the University of Pennsylvania’s Wharton School. According to the report, “(d)ata from the 2019 Index reflect large U.S. public companies increasing overall their acceptance and practice of disclosure and accountability with regard to their election-related spending… In addition, the number of core companies fully disclosing or prohibiting election-related spending has increased since last year for each of the five categories of spending evaluated by the Index.”

The United States Department of Justice issued an announcement that it “filed a criminal case charging Imaad Shah Zuberi, a Southern California campaign fundraiser, with falsifying records to conceal his work as a foreign agent while lobbying high-level U.S. government officials.” According to the Assistant Attorney General in charge of the prosecution, “The Department of Justice treats these crimes with the gravity that they deserve and will continue to aggressively identify, investigate and prosecute FARA violations.” Zuberi agreed to plead guilty to three charges: the FARA violation, tax evasion, and campaign finance violations. The campaign finance violation stems from “making conduit contributions in the names of other people, reimbursing contributions made by others, and being reimbursed for contributions he made.” He faces up to 15 years in federal prison on those three charges. According to Politico, his clients included “citizens of Saudi Arabia, Kuwait, Bahrain and Venezuela, (and)… Sri Lankan government officials.

The Auditor of Portland, Oregon has revised and re-posted proposed changes to the city’s lobbyist regulations. The revisions include changes to proposed grassroots lobbying provisions.

The Los Angeles City Council approved an ordinance that revises the city’s ticket distribution policy to conform to changes mandated by the California Fair Political Practices Commission. The ordinance prohibits disproportionate distribution of tickets to a single city officer. The measure is expected to be signed by the Mayor.

Reminder:

The American Bar Association’s webinar, International Political Influence and Corruption in Elections: Will Recent Events Lead to Stricter U.S. Regulation? is available online. The webinar is a timely overview of the laws regulating foreign influence and corruption, and possible changes to come, was the topic of a well-received American Bar Association panel discussion moderated by Nielsen Merksamer Of Counsel Mike Columbo and featuring a presentation by Federal Elections Commission Chair Ellen Weintraub. The one-hour online CLE is available to ABA members free of charge and to the public for a fee, and may be accessed here: International Political Influence and Corruption in Elections.

In Case You Missed It:

Pennsylvania Campaign Spending Raises Eyebrows: The Philadelphia Inquirer has probed into spending by state lawmakers and found a wide range of uses for campaign funds. The paper notes that “campaign accounts must be used for ‘influencing the outcome of an election.’ But what qualifies is largely open to interpretation.” While some of the spending may be questionable, the paper found that Pennsylvania is the only state with “neither contribution limits nor an explicit ban on spending campaign cash for personal use.” The investigation found “more than 4,800 instances of obscured spending by nearly 300 campaigns.” The paper also found spending that it called “downright bizarre,” including a “$146 promotional photo with `70s trio Tony Orlando and Dawn and (a) $10 ultraviolet dog urine detector.”

Lobby Business is Good: Bloomberg reports, despite a perception of “partisan gridlock” in Congress, the federal lobbying business is booming. “Health care, … battles in the tech sector, spending and authorization bills, the U.S. trade deal with Mexico and Canada and the Trump administration’s regulatory actions are among the areas that have kept lobbyists busy.”

New York Times not the Source of Biden Contributions: In an article from Politico (Item 2), we learn that the Biden Campaign reported a contribution from a journalist for the New York Times. The contribution, in fact, came from a Maryland rare books dealer with the same name as the Times journalist who made his contribution without an address or contact information.” Committee staff apparently filled in the occupation and employer information, but guessed wrong. Although commentary suggested that the error complied with a rule for federal committees to engage in “best efforts,” it is not clear that, in our view, a blind search would be legally compliant without obtaining confirmation from the contributor.

House Continues to Pass Election Reforms: The House of Representatives passed its third bill aimed at preventing foreign interference in U.S. elections, according to The Hill. The bill “would require campaigns to report any illicit offers of assistance by foreign governments or agents and would take steps to ensure that online political advertisements are subject to the same rules as TV and radio ads.” Nevertheless, the article points out that both the ACLU and the Senate Majority leader remain opposed.

Glendale moves to Regulate: The Glendale, California City Council directed the City Attorney to draft a lobbyist ordinance. The Glendale News-Press reports that the Mayor has “taken meetings with individuals he thought were simply concerned residents expressing their thoughts on a local development project or city contract, only to find out down the line that they were paid industry or company representatives. ‘You feel bad. You feel fooled,'” he told the News-Press. A senior assistant city attorney told the council that the ordinance would include a registration fee and quarterly reports.

Doing Time for Fundraising Fraud: According to the Center for Public Integrity, a Washington, D.C. political fundraiser pleaded guilty this week to making a false statement, which included “‘materially false, fictitious and fraudulent statements and representations’ to the FEC.” Although we’ve previously reported on this story, we note one new important observation: “The Department of Justice, which may criminally prosecute people who run PACs, is becoming somewhat more aggressive, especially when it comes to investigating political action committees that allegedly mislead donors,” according to the article.

WEEK OF October 18, 2019

Latest Developments:

Puerto Rico’s Department of Justice introduced its new online registration portal for lobbyists. While the Department’s new website contains a link to the portal, The Weekly Journal reports that the Department still has some technical issues to work out.

Reminder:

In Case You Missed It:

Bundling as a Workaround: The New York Daily News reports on an increasing use of bundling campaign contributions by developers and others who do business with New York City and, thus, are limited to $400 donations to mayoral candidates. The Daily News found that “(d)uring the last wide-open election in 2013, a whopping $1.7 million was bundled and given to candidates for mayor, public advocate, comptroller, borough president and city council from 93 people doing business with the city at the time.” According to the report, “(t)welve people who have city business, prohibiting them from giving more than a few hundred bucks themselves, have already bundled $112,405 in donations for 2021 candidates.”

FEC Struggles: The Federal Election Commission continues to struggle without a quorum. According to The Hill, “in the wake of the campaign finance violation charges leveled against two associates of Rudy Giuliani,” the Chair indicated that “there ‘may well be a lot of money that is slipping into our system that we just don’t know about.'” The Chair lamented that “(w)hen campaign finance issues are on the front pages of the newspaper every single day, this is a particularly bad time for the FEC not to have a quorum.”

Democratic Lobbyists Squeezed: The Hill reports that “Democratic lobbyists find themselves in a tough spot, eager for their party to recapture the White House in 2020 but also bristling at the top-tier candidates’ attacks on K Street.” Lobbyists have pointed out that while candidate’s “proposals may be intended to target K Street’s biggest spenders, they could also silence voices for progressive causes.”

Amazon Prime Election: More than 40 states use one or more of Amazon’s web services for election-related matters. According to Reuters, Amazon Web Services has quietly moved into the state and local election business and it “now runs state and county election websites, stores voter registration rolls and ballot data, facilitates overseas voting by military personnel and helps provide live election-night results, according to company documents and interviews.” The Democratic and Republican parties, Joe Biden, and the Federal Election Commission also use Amazon Web Services. The article points out the various benefits and risks to election users.

Disclosure Dispute: The Legacy Foundation Action Fund is challenging the authority of the Citizens Clean Elections Commission to enforce campaign disclosure laws. Arizona Capitol Times reports that the group is challenging the $96,000 fine that the Commission imposed for the group’s failure to disclose its activity. The group asserted that its advertisements – aimed at the Mayor of Mesa, who was running for Governor – were not intended to influence the election; they were merely educational. A Maricopa County Judge upheld the fine; a Notice of Appeal was filed this week with Arizona Court of Appeals. The group has already been to the Arizona Supreme Court on this matter once, receiving an unfavorable decision.

Quit While You are Ahead: A former county commissioner and senate candidate accused of fairly minor ethics violations settled a dispute with the Florida Ethics Commission by agreeing to pay a $500 fine and correct errors on his disclosure forms. “(N)one of the errors appeared intentional or malicious. Rather, they were the kind of errors candidates for office, especially novice candidates, make because of the somewhat labyrinthine nature of disclosure forms,” according to Flaglerlive.com. He subsequently refused to answer “a series of 27 basic questions seeking clarity about his previous candidacies and the forms he filed. He just had to admit or deny statements.” As a result, the proposed punishment has been increased to a $10,000 fine, along with a gubernatorial censure and reprimand.

Beware Blackout-Period Hazards: The North Carolina Clean Energy Business Alliance, a lobbyist employer prohibited from soliciting contributions for legislators during a legislative session, sent out a solicitation for contributions to a legislator based on a favorable action he had taken just days before on a piece of legislation. WBTV reports that the organization sent an email to members asking for contributions up to the maximum allowed for the member’s opposition to a bill sponsored by Duke Energy. The organization believes it has the right to communicate with its members on any subject; the legislator says he will return any contributions received if the North Carolina Board of Elections rules the solicitation to be illegal.

WEEK OF October 11, 2019

Latest Developments:

The Governor of California signed several campaign and election law bills this week:
- SB 47 requires that a petition for an initiative, referendum, or recall include the name of the committee promoting it, along with the names of the top contributors to the committee on the petition itself.
- SB 71 prohibits the use of a candidate’s or official’s legal defense fund account to pay any penalty, judgment, or settlement of a claim of sexual harassment.
- AB 201 provides an alternate means for campaign advertisement disclosure requirements in the case of a communication that is a text message.
- AB 220 permits the use of campaign funds for child care expenses of a candidate.
- AB 571 extends the state’s contribution limits to local elections, unless the local jurisdiction has established a “different” contribution limit. (Currently, this amount is $4,700 per election.)
- AB 864 revises disclosure requirements for political advertising, including exempting requested emails from mass mailing disclosure requirements, i.e., emails to those who signed up to receive the emails.

Nielsen Merksamer will provide a brief analysis of all the important political law measures to clients after the last day for signing bills.

The Washington Public Disclosure Commission issued a new video “how to” reminder that the requirement that lobbyists report completion of their training takes effect on December 31, 2019. Thus, as lobbyists re-register, they must certify that they have completed the required lobbyist training course.

Reminder:

The Practising Law Institute’s a one-day, focused program on Corporate Political Compliance 2019, which was held in San Francisco, CA on October 3, 2019, is available online, and may be found here: Corporate Political Law Compliance 2019. Nielsen Merksamer co-chairs this program. Highlights of this year’s program included:

FPPC Chair Richard C. Miadich joined the Conference to give an update on the Commission’s Task Force to Study Best Practices for Regulating Campaign Activity on Digital Media.
Michael J. Sullivan, Executive Director of the Massachusetts Office of Campaign and Political Finance, explained the role of a state regulatory agency in the enforcement process.
McGregor W. Scott, U.S. Attorney for the Eastern District of California, discussed criminal prosecutions of political bribery cases.
A panel of Fortune 500 companies discussed their internal political law compliance programs. Participants included Altria, Boeing, Chevron, and General Electric.

In Case You Missed It:

Campaign Finance Violations Hit Ukraine Businessmen: CBS News reports that two men who play key parts in the Ukraine intrigue were arrested at Dulles Airport and charged with campaign finance violations for allegedly funneling foreign money to federal political committees. The two men, who are employed by the President’s personal attorney according to NBC News, “deceived ‘the candidates, campaigns, federal regulators, and the public by entering into secret agreements, laundering foreign money through bank accounts in the name of limited liability corporations, and through the use of straw donors … who purported to make legal campaign contributions'” (quoting the federal indictment). According to CNN, two others were also indicted, one of whom has been arrested.

“No Wonder Good People Don’t Run for Office in California”: The Orange County Register published an opinion that overwhelming disclosure requirements have a deleterious effect on well-meaning citizens who may not understand overly-detailed laws. The article provides an insight into how “citizens who enter politics independently are treated more harshly under the Political Reform Act than players who are on ‘the team.'” Without a “professional political campaign treasurer” and “a specialized political attorney,” candidates are far more likely to face severe penalties from the state’s Fair Political Practices Commission for lapses in compliance.

No Fingerprints on the Contributions: The Center for Responsive Politics tells us that “presidential candidates are still not revealing information about the well-connected donors helping them raise campaign cash. Federal candidates are not required to disclose information about bundlers – elite fundraisers who solicit contributions to a candidate from wealthy friends, business associates and other contacts – unless the bundler is a federal lobbyist. However, previous presidential candidates such as George W. Bush, John McCain, Barack Obama and Hillary Clinton voluntarily disclosed at least some information about their bundlers.”

Go to Jail; Go Directly to Jail; Do not Pass Go: The Mayor of Atlantic City, New Jersey resigned after admitting in federal court that he stole money from a youth basketball team that he founded, according to Fox News. The Mayor raised the money from donors “using his political office,” but spent it on personal expenses over the course of five years. His lawyer indicated that the Mayor “only admitted misusing private funds, not public money, which he argued made the mayor better than many of his predecessors.” The article notes that, “as of 2007, four of the city’s last eight mayors had been arrested on corruption charges and one-third of the nine-member City Council was either in prison or under house arrest.”

Maybe that’s why it’s called “PayPal”: A Maryland legislator resigned after being charged with wire fraud. The Washington Post reports that the delegate is accused of “soliciting donations that were directed to a PayPal account that was not disclosed in state campaign finance filings.” She apparently told supporters the money would go toward her re-election and to maintain her leadership position; instead, she spent the money on personal expenses.

Unlimited Gifts, but only for Elected Officials: The Wichita Eagle compared its city to neighboring cities and found that it is one of the few cities with no gift limits for city council members. The paper found that “city employees can be fired for accepting gifts, travel or meals from anyone doing business with the city, according to the city’s code of ethics. Those rules don’t apply to the mayor and city council.” Under current law, “Wichita’s mayor and city council members are free to take unlimited gifts.”

No more Gifts and Unlimited Travel: The Las Vegas Convention and Visitors Bureau has “approved new ethics rules Tuesday that ban members from accepting gifts and tighten controls over travel,” according to the Las Vegas Review. As a result of an investigation about practices conducted by the Las Vegas Review, the Bureau “remove(d) a $400 limit on accepting gifts and no longer encourage(s) board members to travel abroad on LVCVA business.”

WEEK OF October 4, 2019

Latest Developments:

The U.S. District Court for the Southern District of New York, in Citizens Union of the City of New York v. Attorney General, struck down a New York ethics law that required that nonprofits that engage in certain lobbying or issue advocacy activities disclose their donors. Specifically, the court struck down: (1) a provision that required charities (501(c)(3) organizations) that make contributions to a nonprofit (501(c)(4) organization) that engages in lobbying activity disclose all donors that gave more than $2,500 to the charity and, (2) a provision that requires a nonprofit (501(c)(4)) to disclose donors of $1,000, or more if it spends more than $10,000 in a calendar year on communications to at least 500 people concerning the position of an elected official on potential or pending legislation, unless the donor’s money has been segregated for another purpose. The Albany Times Union reports on the case and notes that “the (Cuomo) administration is considering an appeal of the federal judge’s ruling.”

The U.S. District Court for the District of New Jersey enjoined portions of S. 150, approved by the Governor last June. The New Jersey law requires that certain organizations engaged in making independent expenditures file disclosure reports if they raise or spend in excess of $3,000, including disclosure of the identity of major donors of over $10,000. In Americans for Prosperity v. Grewel, the court enjoined New Jersey from requiring the disclosure of the identities of those donors because the plaintiff is likely to win its case on the merits. The plaintiff asserts that the law would chill First Amendment rights by deterring potential contributors. An article by NJ Spotlight points out that New Jersey has a variety of options to appeal the decision or fix the law.

The Governor of California signed A.B. 730 which prohibits distributing any so-called “deep fake” videos with malice intended to harm a candidate that include a picture of the candidate’s face superimposed on another person within 60 days of an election at which the candidate appears on the ballot. The bill includes exceptions for, among others, satire or parody and certain media outlets.

The Washington, D.C. Metropolitan Area Transit Authority revised its ethics policy following criticism over its investigation of a former chair of the commission who was found to have a conflict of interest in a proceeding that was described as “secretive.” The revised rules, according to the Washington Post, “include expanding and clarifying disclosure requirements, making the transit agency’s inspector general the primary investigator of probes and allowing the public access to written reports of findings and rulings. Board discussions about complaints or subsequent investigations will also be open to the public.”

In Case You Missed It:

No Quorum, but Enough for Headlines: While the Federal Election Commission lacks a quorum to undertake any substantive business, two remaining commissioners engaged in public debate. The Washington Post reports that the Chair was blocked by a fellow Commissioner from including “a draft memo on prohibited foreign national electoral activity” in the agency’s weekly digest that is emailed to interested parties. The Chair nevertheless published it through 57 tweets.

Lobbyist/Corporate Cash Desperately Wanted Regardless of Nominee: Politico reports that organizers of the Democratic National Convention in Milwaukee pandered to corporate lobbyists last week, seeking funding for the convention. “Democratic National Committee officials explained during the meeting how corporations can help foot the bill for the convention, regardless of who the nominee is.” Lobbyists expressed concern that corporate clients could be embarrassed as some of the leading candidates have rejected corporate PAC and lobbyist contributions.

Not Pay-to-Play, just a Software Glitch: The President of the Brooklyn Borough, and a presumptive candidate for Mayor of New York City ran afoul of city ethics rules, for the third time, according to the New York Post. An email blast sent to 23,000 people for a gala fundraiser hosted by Rosie Perez included recipients who have various business relationships with the city. The Post points out that “the missive lacked one key thing: a mandatory disclaimer warning prospective donors that any contribution ‘will not affect any business dealings with the city or provide special access to city officials.‘” A spokesman said “it was unintentional and blamed it on a Borough Hall computer error.”

“There Goes the Neighborhood”: Residents in Washington, D.C. are decrying a trend that is a variation on gentrification: lobbyists, fundraisers, and associations purchasing historical residences near the U.S. Capitol for nonresidential activity. Roll Call reports that the trend has upset neighbors who complain the parties and activities result in additional traffic and noise, including catering trucks that block street access. Also of concern is whether zoning laws have been violated and whether businesses are ducking commercial rate property tax rates and paying much lower residential property taxes.

WEEK OF September 27, 2019

Latest Developments:

The Montana Commissioner of Political Practices announced new campaign contribution limits. Contribution limits are increased for contributions made on or after September 21, 2019.

The Governor of California signed three political law bills this week. Two bills make minor and technical changes and include: AB 902, which codifies several regulations of the Fair Political Practices Commission, including allowing an assistant treasurer to act in place of a treasurer of a committee and requiring that lobby coalitions file reports; and AB 946, which is a technical corrections bill that deletes obsolete and extraneous provisions of the Political Reform Act. In addition, AB 909 requires that committee treasurers acknowledge, on a statement of organization and amendments, that any violation of their duties under the Political Reform Act is a crime.

Reminder:

The Practising Law Institute presents a one-day, focused program on Corporate Political Compliance 2019 in San Francisco, CA on October 3, 2019. Nielsen Merksamer co-chairs this program. Nielsen Merksamer clients who wish to attend in person in San Francisco should contact their political law attorney for complimentary attendance until September 30. Nielsen Merksamer clients also enjoy a 20% discount off the cost of registration for the webcast using the code NFZ9 CPL19. To sign up, use the following link: PLI One-Day Program in San Francisco.

The Nielsen Merksamer Essential Ethics October Sacramento briefing is being rescheduled. Please stay tuned for updates.

In Case You Missed It:

New Sheriff in Town: David Emadi, the recently appointed Executive Secretary of the Georgia Government Transparency and Campaign Finance Commission, filed complaints against 13 current members of the Georgia Legislature for campaign finance violations. According to the Atlanta Constitution, “when he took over earlier this year [Emadi] was told lawmakers weren’t following campaign finance laws.” Emadi is also reportedly “looking into violations by the campaign of Democratic gubernatorial nominee Stacey Abrams and Atlanta mayoral candidates,” according to the article.

Going Dark: The Governor of Maryland has a “new super PAC and a related nonprofit (that) ‘can accept unlimited donations.'” CTPost reports “the governor’s solicitation illustrates a troubling trend that has escalated over the past decade, as public officeholders find methods to raise unlimited money – some from undisclosed donors – in ways often prohibited for traditional candidate committees.”

Any Limits on New Powers?: The newly-created North Dakota Ethics Commission is grappling with the extent of its powers. At the first meeting, the new chair said he had received questions in a wide range of areas, “such as state lawmakers’ use of social media, and investigating ‘oil spills.'” He told the Grand Forks Herald that “‘people think … that we have authority over any kind of ethical question.‘” An outside expert opined that the “Ethics Commission is essentially responsible for investigating complaints perceiving cronyism, favoritism or ‘poor behavior’ among legislators, state officials and lobbyists… This is not a retributive committee. It’s a restorative committee.”

Laid-Back Enforcement: The Oregon State Elections Division is being excoriated for its loose enforcement practices. The Oregonian reports that the gist of the Division’s enforcement investigation practice is to send a letter asking an accused if he or she violated state campaign law. If the person replies “no” to the authorities, the case is closed, even if the accused told the media a different story. As a result of this news, The Oregonian subsequently reports that the Elections Division is discussing changes, including asking for two elections investigators, positions that were cut in 2011 due to the recession.

FARA Flameout: Politico reports, following the acquittal of a former Obama White House Counsel on FARA-related charges, that two others who worked with Paul Manafort are no longer under investigation for violations of the Foreign Agents Registration Act (FARA) relating to their work for Ukraine. Both retroactively registered as foreign agents.

FARA Flameout 2: In another article from Politico, a federal judge has overturned two FARA-related guilty verdicts against a colleague of Michael Flynn, who allegedly worked for Turkish interests. The judge found “‘no substantial evidence that (the defendant) agreed to operate subject to the direction or control of the Turkish government.‘”

WEEK OF September 20, 2019

Latest Developments:

The Puerto Rico Department of Justice announced that it plans to launch its electronic executive lobbying registry this week, according to the Weekly Journal. The former Governor of Puerto Rico issued Executive Order 2019-031 (Spanish) in July to require creation of an executive lobby registration platform, to be operated by the Department of Justice. According to the former Governor’s July Press Release (English), “(a)ny person who is a lobbyist and carries out any lobbying activity before a government agency must register with the Lobbyists Registry.”

Reminder:

The American Conference Institute presents the National Forum on the Foreign Agents Registrations Act on September 25, 2019 at the Washington Hilton in Washington, D.C. Join Jason Kaune of Nielsen Merksamer, who is participating on a panel about “FARA Prosecutions in Practice: How Practitioners are Approaching the Toughest, Most Critical Decisions in the Wake of Recent, High Profile Cases.” Use Code S10-655-655D20.S and receive a 10% discount. To sign up, use the following link: National Forum on FARA.

Nielsen Merksamer presents a briefing concerning California election, government and political law on Essential Ethics: What you Need to Know for 2020, on October 11, 2019, from 10:00 to 11:30 am at the Sutter Club in Sacramento. Join us for a complimentary briefing on the key issues you need to know for the 2020 election cycle. To sign up, use the following link: Essential Ethics 2020.

In Case You Missed It:

Pay-to-Play Restriction Remorse: According to NJ.com, “apparently many of the forces aligned with the “good guys” are finding it difficult to live by the same rules reformers imposed in the past.” Specifically, “(i)n Hoboken, the city council recently received legal advice that its pay to play laws are too strict, and that the city should adopt the less stringent state pay to play laws.”

PAC Scam: A Maryland political consultant who “raised close to $10 million – mostly from small-dollar donors, many of them elderly — while giving out just $48,400 to politicians,” has pleaded guilty to wire fraud, according to Politico. The article describes how he operated several PACs, collected donations, and “used the money to benefit himself and his associates.”

Lobbyists Rule!: The Associated Press reports that in less than three years, the President has “named more former lobbyists to Cabinet-level posts than his most recent predecessors did in eight.” According to the article, “the influence industry has flourished” under the current administration.

Family Funneling: Former Kentucky Democratic Party Chair James Lundergan, was found guilty last week “of illegally funneling…more than $200,000 in corporate contributions…to his daughter’s 2014 campaign against Senate Majority Leader Mitch McConnell.” According to The Washington Post, this conviction takes place amidst ongoing ethics investigations of his daughter, Kentucky Secretary of State Allison Lundergan Grimes, for using state voter information for partisan purposes.

The Ghost of Tammany Hall: Recently concluded federal and state investigations found that developers with business before New York City donated a combined $125,000 to a political non-profit controlled by Mayor Bill DeBlasio. One developer even received a call from the Mayor “soon after a stop-work order had been lifted on a hotel and condominium project in Brooklyn Bridge Park,” soliciting a contribution to his political non-profit, The New York Times reports; the other developers were solicited by the Mayor’s agents. While no criminal charges were brought against the mayor for violating the State’s behested payment prohibition, the developers paid fines totaling $45,000 and the contributions remain the subject of a JCOPE investigation.

Privacy Transparency: Politico reports that the author of a bill in California to revise online privacy laws is married to the COO of Ring.com. According to the article, “(s)tate conflict-of-interest law prohibits lawmakers from engaging in decisions in which they have a financial interest, said Adam Silver, chief counsel to Assembly legislative ethics committee. But, he said, the ‘public generally’ exception applies to cases in which an entire industry, profession or trade group would be affected by a law – rather than a small group of companies.” A spokesman for the Speaker’s office noted that “it is generally up to lawmakers to recuse themselves when appropriate.”

Illegal Lobbying, Chicago Style: The Chicago Board of Ethics levied a $25,000 fine against a “consultant” who engaged in lobby activities and failed to register, according to the Chicago Tribune. The article notes that a 2-year FBI investigation showed that the consultant offered Viagra and prostitutes to a former alderman in the course of his lobby efforts.

WEEK OF September 13, 2019

Latest Developments:

The Internal Revenue Service published a new proposed regulation that would, according to an accompanying news release, “incorporate relief from requirements to report contributor names and addresses on annual returns filed by certain tax-exempt organizations, previously provided in Revenue Procedure 2018-38. A recent court decision (Bullock v. IRS) held that the Treasury Department and the IRS should have followed notice and comment procedures in 2018 when announcing this relief with respect to providing contributor names and addresses, and these regulations provide the opportunity for notice and comment on that relief as well as on other proposed updates to existing regulations.” The regulation will mean that nonprofit organizations that engage in political activity do not report the names and address of donors of $5,000 or more on their annual information returns to the IRS.

The Ninth Circuit Court of Appeals ruled that Montana’s prohibition against robocalls violated First Amendment protections. In Victory Processing v. Fox, the court found that Montana’s statute regulating robocalls by restricting political speech was not narrowly tailored to address compelling governmental interests.

The Portland, Oregon City Auditor announced that certain campaign finance provisions adopted by the voters at the November 2018 election have been validated by the courts and take effect this month. Among other provisions, “(E)ntities making more than $750 in independent expenditures to support or oppose city candidates now must register,” according to the Portland Tribune.

The New North Dakota Ethics Commission met for the first time this week. The Bismarck Tribune reports that the session was mostly organizational and included a discussion of the optimal qualities the Commission desires in staff to be hired.

The New York Joint Commission on Public Ethics, at its September meeting, announced that it continues to enhance its online lobby application. A public search query function is up and running and, in the very near future, the app will add the ability to complete online terminations and extensions, as well as file semi-annual report.

The Commission also turned down a request for exemption from rules requiring disclosure of donors from Smart Approaches to Marijuana – New York; the Albany Times-Union notes that previous requests for exemption that were denied by the Commission were subsequently overturned by a judicial hearing officer.

Reminder:

The American Conference Institute presents the National Forum on the Foreign Agents Registrations Act on September 25, 2019 at the Washington Hilton in Washington, D.C. Join Jason Kaune of Nielsen Merksamer, who is participating on a panel about “FARA Prosecutions in Practice: How Practitioners are Approaching the Toughest, Most Critical Decisions in the Wake of Recent, High Profile Cases.” Use Code S10-655-655D20.S and receive a 10% discount. To sign up, use the following link: National Forum on FARA.

In Case You Missed It:

Everything is Green in Fall River, MA: The FBI charged the Mayor of Fall River, Massachusetts with extortion, alleging that the Mayor sought cash and sometimes product from marijuana vendors in the city, according to Connecticut Public Radio. In a pay-to-play scheme, the Mayor issued city letters, required by prospective marijuana vendors for licensure, in exchange for about $600,000 in cash, loan forgiveness, and campaign contributions, as described by MassLive. The wife of one marijuana vendor was fined for reimbursing others for making contributions to the Mayor. He is also accused of extorting a portion of his Chief of Staff’s salary and shaking down a businessman for a “Batman” Rolex watch, per another MassLive report. The next Mayoral election will be held on September 17.

Should Lobbyist Regulation be Relevant?: The Montana Commissioner of Political Practices notes that Montana statutes regulating lobbyist activity might not be up to date. “You will find the word ‘telegraph’ in the current code as far as what lobbyists should be reporting – telephone and telegraph expenses. You won’t find the word ‘internet’ in there,” as the Bozeman Daily Chronicle quotes the Commissioner. According to the article, his point is that “lawmakers should consider updating state lobbying rules to bring them ‘into the 21st century.'” The Commissioner’s suggestions include electronic filing and regulating grassroots lobbying.

ACLU All in on Dark Money: The American Civil Liberties Union filed suit “seeking to overturn a measure that would require political action organizations that accept so-called ‘dark money’ in New Jersey to disclose their donors,” according to NJ.com. “‘This law discourages people from donating to non-profit organizations that advocate for causes that they believe make people’s lives better,’ said ACLU-NJ Legal Director Jeanne LoCicero.”

Even Pay-to-Play is Bigger in Texas: A Texas State Senator running for the U.S. Senate has disclosed in federal filings that he has substantial income from government contracts with seven Texas cities and districts according to the Texas Tribune. Disclosures for candidates for federal office are much greater than disclosures required of state officeholders. “Voters were never able to get those kinds of basic details from the disclosures the longtime senator – or any other Texas lawmaker – has had to file under lax state ethics laws,” according to the article.

WEEK OF September 6, 2019

Latest Developments:

The Commissioner of Canada Elections announced compliance agreements with two corporations that agreed to pay fines of nearly $450,000, a fine that represents three times the amount of illegal contributions made by these corporations in addition to the cost of the investigation. According to Global News, the corporations, which are prohibited from contributing directly in Canadian elections, asked employees to make contributions and reimbursed them through personal expense claims.

The Governor of Montana is being sued by the Illinois Opportunity Project. The lawsuit seeks to block the Governor’s Executive Order, which requires disclosure of government contractor’s contributions in the case of a “contract value of over $25,000 for services or $50,000 for goods.” According to the Great Falls Tribune, the group believes that “(p)rivacy in advocacy is especially important for people with unpopular and minority views.”

Reminder:

The American Conference Institute presents the National Forum on the Foreign Agents Registrations Act on September 25, 2019 at the Washington Hilton in Washington, D.C. Join Jason Kaune of Nielsen Merksamer, who is participating on a panel about “FARA Prosecutions in Practice: How Practitioners are Approaching the Toughest, Most Critical Decisions in the Wake of Recent, High Profile Cases.” Use Code S10-655-655D20.S and receive a 10% discount. To sign up, use the following link: National Forum on FARA.

In Case You Missed It:

Be Sure to File Your Reports: An unsuccessful 2010 candidate for the Rhode House of Representatives who raised $50 and filed one report “owed a whopping $118,120 in fines for failing to file his campaign finance forms on time,” according to the Boston Globe. Given that he never closed his account and never filed any further reports, the former candidate racked up fines of $2 per day for every report missed since 2010. At a hearing on the matter, the Board of Elections lowered the fine to $610, which represented “the amount the board spent on mailing, labor, and issuing subpoenas.”

Some Lobbyist Money is OK: The Associated Press reports that Joe Biden has attended fundraisers at lobbyist’s homes, despite a pledge to “reject campaign cash from lobbyists.” According to the article, “excluded from Biden’s pledge are lobbyists who work at the state level and those who lobby, or supervise lobbyists, but do not meet the legal threshold requiring them to register.” His ban on lobbyist contributions applies only to registered federal lobbyists; he has accepted contributions from employees of federal lobbying firms who are not registered.

Speaking Fees and Campaign Activities Blurred: Presidential candidate Andrew Yang accepted speaking fees from corporations after announcing his candidacy, according to ABC News. Corporations may not contribute to candidates, but candidates may be permitted to accept fees for speeches independent from their campaign. The network reports that the opening slide on his PowerPoint presentation included his campaign logo, but Yang contends the speech addressed issues discussed in his book.

Married, but not Coordinating: CNN reports that the company of the President’s campaign manager has “received hundreds of thousands of dollars from the President’s flagship political action committee, which is barred from coordinating with the campaign.” His wife says she just does “payroll and invoicing,” but is the only person listed on the incorporation documents of Red State Data and Digital. However, the campaign manager asserts that he is the sole owner. Regardless, the PAC insists that it “strictly complies with FEC rules and regulations and any suggestion otherwise is patently false.”

It Pays to Play in School: A Southern California school board member received more than $16,000 in donations from a PAC whose principal officer and major donors received contracts from the school board, according to the Whittier Daily News. One no-bid contract was narrowly approved on a 3-2 vote, in which the new contract increased by $39,000 over the prior year’s $57,000 contract. Other contracts were also approved by a 3-2 vote with the recipient school board member casting the deciding vote. The article notes that, “Under California state law, (the board member) is not barred from voting on contracts involving companies that donate to a PAC or contracts involving a PAC’s principal officer.”

Memorial Campaign Donations: The Allentown Morning Call reports that a recent obituary asked for campaign contributions for the decedent’s son, “in lieu of flowers.” The son is running for District Attorney. The paper notes that it is not unprecedented and it’s not illegal if properly reported when done in coordination with a campaign.

Not Guilty: According to Politico, former Obama White House Counsel Greg Craig was found not guilty of deceiving federal authorities about his activities representing a foreign government. Craig had prepared a report about the prosecution of a former Ukrainian Prime Minister and provided it to a journalist. The Department of Justice alleged Craig’s distribution of the report was part of a media strategy for his foreign clients that would have required him to register as a foreign agent, disputing Craig’s representations to investigators that the journalist requested the report and that he distributed it to prevent its conclusions from being mischaracterized by the Ukrainians.

WEEK OF August 30, 2019

Latest Developments:

The California Third District Court of Appeal invalidated a measure that purported to allow public financing of elections in California. In Howard Jarvis Taxpayers Assn. v. Newsom, the court found that Proposition 73, passed in 1988, prohibited public funding of political campaigns and that S.B. 1107, passed in 2016, sought to repeal that ban. S.B. 1107 would have allowed public funding of political campaigns if the state or a local government established a dedicated fund for that purpose, but the court found that it conflicted with the voter-approved measure.

The Arizona Secretary of State released new lobbyist filing forms, which do not require notarization and may be filed by email. The Secretary notes that, while her website is being updated, users may experience a delay in filing quarterly expense reports.

The Portland, Oregon Auditor published a draft of revised lobby regulations and asked for public comment on these regulations. The regulations provide that attempts to gain “goodwill” constitute “lobbying” and that grassroots lobbying is “lobbying,” and also clarify who is a “city official” with influence for purposes of the city’s lobby law. Comments are due by September 23.

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

Hibernation at the FEC: The six-member Federal Election Commission will be down to three members at the end of August, according to Roll Call. The lack of a quorum means that the commission cannot meet and take any formal actions until at least one member is added. The staff of 300+ employees will continue to collect information and monitor activity.

Disinformation Hearing: The Chair of the Federal Election Commission has summoned Facebook, Google, and Twitter to a meeting in an effort to “identify effective policy approaches and practical tools that can minimize the disruption and confusion sown by fraudulent news and propaganda in the 2020 campaign,” according to Politico, which quotes the invitation. The meeting is scheduled for September 17.

ID Required for Facebook Politics: Facebook has announced that, beginning in mid-September, it will require that all political advertisers confirm their identities with a tax ID number or other government identification, according to the Associated Press. The verified group will be listed in a “paid for by” disclaimer. “Advertisers who don’t have tax ID numbers, government websites or registrations with the Federal Election Commission will still be able to post ads by providing an address, verifiable phone number, business email and website,” according to the article.

Ethics Dilemma for Government Executive in the Hospitality Business: The Governor of California placed his hospitality business, Plumpjack Group, in a blind trust run by his sister and issued an Executive Order barring state agencies from doing business with his chain of hotels, restaurants, stores, and bars. But, as the Sacramento Bee reports, the Governor is facing the prospect of signing or vetoing bills that would affect the hospitality industry, in which his assets are heavily invested. His actions have drawn comparisons to another government executive in the hotel business.

Nielsen Merksamer Investigates: The California Supreme Court issued an announcement that it selected Art Scotland and Nielsen Merksamer to “spearhead an independent investigation into the partial disclosure related to the July (California State) Bar exam.” Scotland is a retired Justice of the State’s Third District Court of Appeal who joined Nielsen Merksamer in 2012. According to the statement, the court “will ensure that there is a thorough and independent investigation into the circumstances surrounding the disclosure (of topics covered by the exam), and that appropriate steps are taken to protect the integrity of the bar examination and identify and address any consequences.” The American Bar Association Journal reports that many recipients of the email from the California State Bar thought the revelation of question topics five days before the exam was a hoax; the Bar said the first email leak was accidental, but disclosure to all test-takers was made “out of an abundance of caution and fairness.”

WEEK OF August 23, 2019

Latest Developments:

The Mayor of San Diego approved Ordinance 21098, which requires a nexus between a lobbyist’s activity expenses and the city official. Under the changes made by the ordinance, expenses must be disclosed if the lobbyist lobbied the official’s department, agency, or board within the previous 12 months or if it is reasonably foreseeable that the lobbyist will lobby the official’s department, agency, or board within the next 12 months. Employment-related activity expenses, such as a salary or an amount for contract services that is paid to an official or an official’s immediate family member during a reporting period is reported in seven bracketed amounts. The lowest bracket is $10 to $2,500 and the highest captures amounts over $100,000.

The City Council of Aurora, Colorado (part of the Denver metropolitan area) approved an ordinance this week that creates an Ethics Review Panel composed of judges, limits gifts to elected officials from lobbyists and other interested parties, and imposes revolving door restrictions. According to the Colorado Sentinel, the council nixed an ordinance that would have required lobbyists to register and file activity reports.

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

Nice Work if You Can Get It: The Pittsburg Post-Gazette reports that the “large union crowd” for a presidential speech at a Beaver County petrochemical facility was paid to be there. Royal Dutch Shell workers were given the option of being paid to attend the speech or taking the day off without pay. According to a union source, “one day of work might amount to about $700 in pay, benefits and a per diem payment that out-of-town workers receive.”
Nice Work, but You Can’t Do It: The former head of City Planning for Los Angeles is facing a record fine for repeated violations of revolving door provisions, according to the Los Angeles Times. Former high-level officials are banned from lobbying their former employer for 12 months. Michael LoGrande was aware of these restrictions when he violated them and has agreed to pay a $281,250 fine for his repeated violations. The Los Angeles Times subsequently reported that during the same period that he was lobbying, the former official was also receiving more than $18,000 a month in consulting fees from the city’s Planning Department.
Pay $50,000 to Play: The San Jose Mercury News reports that the $300,000-per-year CEO of the Oakland Coliseum Authority, a public joint powers authority, sought a $50,000 “finder’s fee” from the winning bidder for naming rights to the municipally-owned stadium. After negotiating on behalf of the Authority and sending two invoices for his personal fee on Coliseum Authority letterhead to RingCentral, he resigned his position. According to the article, under a state “self-dealing” law (California Government Code Section 1090) the contract may be in jeopardy.
More Perils of Contract Lobbying: The Governor of Rhode Island is under scrutiny for awarding a billion dollar no-bid contract to International Game Technology (IGT) to run the state’s lottery, according to the Washington Free Beacon. Governor Raimondo is also the Chair of the Democratic Governors Association and, it turns out, the Treasurer of that Association is a lobbyist for IGT. The state’s Ethics Commission is now investigating.
Argument in Russian Election Interference Prosecution: “We Weren’t There and We Didn’t Spend Enough”: In a report by the Washington Times, a Russian consulting company, Concord Management and Consulting LLC, allegedly paid $1.25 million per month to the Russian Internet Research Agency to fund a social media campaign to interfere with elections in the U.S. and other countries. Prosecutors allege that the U.S. activity required campaign finance filings with the Federal Election Commission (FEC) and registration with the Department of Justice (DOJ) under the Foreign Agents Registration Act. Concord argues that the DOJ has failed to identify who should have registered with the FEC and DOJ, that it had no person present in the U.S. that could register as a foreign agent, and that it spent only $2,930 on independent expenditure ads and $1,833 on payroll for rallies in the U.S.
Facebook Blocks Political Ad for Targeting “Personal Attributes.” Facebook reportedly pulled an ad by the Trump Campaign for violating its prohibition against “content that asserts or implies personal attributes,” including, among other things, “direct or indirect assertions or implications about a person’s … gender identity,” according to The Hill. The ad featured a crowd of women with the caption, “The Women for Trump Coalition needs the support of strong women like you!”

WEEK OF August 16, 2019

Latest Developments:

The North Dakota Ethics Commission has been appointed. The Governor’s Office announced that the selection panel, which included the Governor and the majority and minority leaders of the State Senate, chose the five members for the newly formed commission. The panel includes a retired general, a community college president, a former teacher and mayor, a retired judge, and a retired general counsel of a medical center. Their terms begin on September 1. The Bismarck Tribune reports that the Governor specifically sought a nonpartisan group and did not want former lobbyists or lawmakers appointed to the Commission.

The Ninth Circuit Court of Appeal upheld Montana’s requirement that nonprofits register as political committees if, within 60 days of an election, they run any type of advertising that refers to a candidate or ballot measure. In National Association for Gun Rights, Inc. v. Mangan, the court found that the state’s requirement that organizations register if they spend more than $250 on a single electioneering communication was substantially related to important governmental interests and did not violate the First Amendment. However, the court struck down the state’s requirement that the organization have a treasurer who is a registered voter in the State of Montana.

The Kentucky Legislative Ethics Commission announced that its Legal Counsel, Laura Hromyak Hendrix, has been selected as its new Executive Director and will assume that position on September 1. She replaces John Schaaf, who is retiring. The State Journal has an article with biographical information about Ms. Hromyak Hendrix.

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

FARA-Related Prosecution Begins: The New York Times reports that, this week, the U.S. Department of Justice initiated a prosecution related to a potential failure to register under the Foreign Agents Registration Act. In a matter arising from the Mueller investigation, Former Obama White House Counsel and prominent Washington lawyer Gregory Craig is charged with misleading federal agents about his activities on behalf of foreign interests.

When the Charitable is Political: The New York Times is reporting on the increasing scrutiny that previously apolitical charities face when their benefactors are revealed as supporting unpopular political causes or candidates. In the wake of the controversy surrounding billionaire Stephen Ross’ political contributions and the ensuing pushback against his businesses and recipient charitable causes, many organizations are concerned that the trend may compromise their largest donors’ support. Many charities have increasingly come to depend on these large donors whose political activity is most at risk of exposure.

Perils of Contract Lobbying: The lobbyist for the Missouri Police Chiefs Association quit “after a state audit blasted his role in a no-bid contract scheme that cost taxpayers $74,000,” according to the Louis Post-Dispatch. According to the article, an appropriation was shifted from the Missouri Highway Patrol to the Department of Public Safety, which was then run by a former President of the Missouri Police Chiefs Association, who steered the contract to the Missouri Police Chiefs Charitable Foundation.

Local Government Coordination Questioned: The California Fair Political Practices Commission is opening an investigation into whether three local transportation agencies conspired to promote an initiative measure to raise Bay Area tolls, according to the San Jose Mercury News. California law prohibits the use of public monies to promote or oppose initiative measures. The increased tolls are estimated to generate $4.5 billion in revenue to the agencies in the next few years, although the funds are now held in escrow due to legal challenges.

WEEK OF August 9, 2019

Latest Developments:

The Governor of Oregon signed two campaign finance disclosure bills this week:
- HB 2716, which requires that communications in support or opposition of a candidate disclose the name of the committee and the top five donors of $10,000 or more.
- HB 2983, which requires organizations that spend $10,000 or more on electioneering communications disclose their donors. The bill also reduces the threshold requiring disclosure reporting for independent expenditures from $750 to $250.

The Federal Election Commission has published a “notification of availability” and is seeking public comment through September 30 on whether the Commission should engage in rulemaking to require disclosure of contributions of “valuable information,” which would include “foreign information” and “compromising information.” The notice is in response to a petition the FEC received in April.

The California Fair Political Practices Commission adopted new regulations on conflict of interest. The commission issued regulation concerning when an interest in a business is material and when an interest in a source of income is material. Each regulation has a list of criteria for determining when the reasonably foreseeable financial effect of a governmental decision on one of these interests of a government official is material.

The Florida Commission on Ethics approved a new regulation defining the term “disproportionate benefit.” Last November, voters approved a state constitutional amendment providing that “A public officer or public employee shall not abuse his or her public position in order to obtain a disproportionate benefit for himself or herself,” but deferred to the Commission to define the term. The new regulation defines “disproportionate benefit” as a “benefit, privilege, exemption, or result arising from an act or omission by a public officer or public employee inconsistent with the proper performance of his or her public duties.” The regulation also includes several criteria to be considered in determining whether something constitutes a disproportionate benefit. The legislature is required to enact penalties for violation of this provision by December 31, 2020.

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast). Nielsen Merksamer clients are invited to a workshop on September 4.

In Case You Missed It:

Special Purpose Accounts are too Dark: The Center for Responsive Politics and the Campaign Legal Center have asked the Federal Election Commission to require that party special purpose accounts, known as “Cromnibus” accounts, be subject to disclosure requirements. The petition requests “that the FEC promulgate rules and forms requiring national party committees to delineate within their reports the individual and aggregate transactions involving their Cromnibus accounts.” CRP’s article points out that “accounts are not required to disclose basic information, and it is nearly impossible to track all contributions to these accounts under the current reporting structure.”

Last Bus Stop: Federal Pen: Courthouse News Services reports that the former head of the Dallas County Schools bus agency was sentenced to seven years in federal prison in a pay-to-play scheme in which he took $3 million in bribes for $70 million in school bus camera contracts awarded. The school bus agency has since gone bankrupt and been dissolved by the voters.

Consulting is not Lobbying: Maplight reports that in 2017, “corporate trade organizations and nonprofits” spent more money in Washington on consulting and advocacy than on lobbying, the latter of which requires disclosure, to influence public policy. The article characterizes these as “vague expenses” and notes that they include grassroots lobbying activities.

Public Disclosure Embarrassment: NPR discusses the fallout from publicizing information that has already been disclosed publicly; specifically, highlighting the list of donors to the President’s campaign. The Los Angeles Times reports on efforts of SoulCycle and Equinox Gyms to distance themselves from contributions made by their owner/investor.

Too Much from One Source: The Oakland Public Ethics Commission fined the Mayor of Oakland for accepting four times the maximum contribution from an individual Oakland developer. The four contributions came from different entities, but all are owned by the same property developer. According to the East Bay Times, the commission voted to impose an increased fine because the Mayor’s campaign received a similar group of four contributions in the 2014 election.

WEEK OF August 2, 2019

Latest Developments:

The United States District Court for the District of Montana overturned IRS Revenue Procedure 2018-38, which applied beginning with the 2018 tax year and ended the requirement that certain nonprofit organizations disclose donors of $5,000 or more to the Internal Revenue Service. In Bullock v. IRS, the court found that the IRS began collecting the information on donors of $5,000 or more to 501(c)(4) organizations following adoption of a regulation in 1970. The regulation took effect after a notice was published and the public had a period in which to comment on the matter. The court found that the 2018 revenue procedure was a legislative rule that failed to follow the Administrative Procedure Act, which requires a notice and period for public comment before the rule can be implemented. Bloomberg reports that the court ruling “upends a change the IRS made last year that permitted so-called Section 501(c)4 groups, known as “social-welfare” organizations, to keep their donor lists private.”

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

FARA Lobbyists using Zombies: The Campaign Legal Center issued a new report on the use of so-called Zombie Campaign Funds, which are leftover congressional campaign funds that former members retain after leaving Congress. The report raises concerns about former members who are now registered under the Foreign Agents Registration Act (FARA) and lobby for foreign governments. These FARA lobbyists are using their zombie accounts to curry favor with current members of congress. Following the release of the report, Roll Call detailed some of the specific instances of concern and potential fixes.
Pay-to-Play at work in New York State: New York State has no restrictions on contributions by state contractors. The New York Times reports that, as a result, a company that received a $23 million MTA contract and had never donated to the Governor, became one of Governor Cuomo’s “largest contributors” in his campaign for a third term. The Times reports that the Governor has received more than $3 million from MTA contractors and industry groups since taking office in 2011.
Contributions as Insurance: California’s newly elected Insurance Commissioner pledged not to take contributions from the insurance industry. Following a San Diego Union-Tribune report that the Commissioner accepted contributions from insurance executives, the Union-Tribune subsequently revealed that he met with those executives about complaints pending in the Commissioner’s office and intervened on their behalf. Cal Matters notes that these events echo a similar pattern of a former Commissioner ousted as a result of scandalous dealings concerning money squeezed from insurance companies.
Tennessee Drops Speaker over Ethics: The Tennessee House of Representatives selected a new Speaker in the wake of questions about the incumbent’s ethics. The Tennessean reports that, among other things, (now former) Speaker Glen Casada faces questions over spending from his PAC and campaign accounts that contain over $500,000. The newspaper reports that state officials are about to open an inquiry into Casada’s campaign spending and outlined four areas of potential problems.
How Fast Does the Revolving Door Spin?: Public Citizen issued a report calling for reform, stating that, at the federal level, the “revolving door continues to spin at an alarming speed.” The report includes a state-by-state analysis of revolving door provisions, naming Iowa and North Dakota as the states with the broadest prohibition on lobbying after serving in state government. Meanwhile, the Associated Press reports on what it’s like in Nebraska, one of seven states with no revolving-door restrictions.

WEEK OF July 26, 2019

Latest Developments:

The Chicago City Council unanimously approved the new Mayor’s ethics reform proposal this week. While much of the ordinance is aimed at bolstering the powers of the Inspector General and tightening rules for city officers and employees, the Chicago Board of Ethics Fact Sheet notes that the measure increases fines for most violations of the city ethics ordinance and shrinks the exemption from lobbyist registration for individuals who lobby on behalf of nonprofit organizations. The changes to the lobby provisions take effect on January 1, 2020.

The Connecticut Office of State Ethics announced a new Executive Director, who succeeds the retiring Carol Carson. Peter Lewandowski, an associate general counsel at the agency, takes over on August 1, according to the Hartford Current.

The United States Department of Justice announced that a former congressional candidate has pleaded guilty to operating fraudulent and unregistered PACs, including a PAC called “Keeping America in Republican Control.” Between 2016 and 2018, the former candidate collected over $1.6 million in contributions for PACs that were never registered and spent over a million dollars on purely personal expenses from those contributions. In addition, he “used the name of a former Ambassador and high-level military officer without the knowledge or permission of the person, even after being instructed not to do so.”

The New York Joint Commission on Public Ethics (JCOPE) met this week and, among other things on the agenda, announced that – due to technical difficulties with its Lobby Application program – the July 15, 2019 deadline to file bi-monthly reports was extended to July 30, to match the previous extension announced for semi-annual Lobbyist Employer reports.

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. A one-hour briefing on the basics of federal campaign finance law will be presented beforehand on August 1. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: One Hour Briefing on August 1 (Online, included in registration below); PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

Ready for Coordination: The Center for Responsive Politics reports that Republican commissioners on the Federal Election Commission have effectively let the Hillary Clinton campaign “off the hook for campaign coordination” with a super PAC. The Commission dismissed a complaint on a party-line vote in which Democrats would have sustained the complaint that the Clinton campaign coordinated with a well-funded super PAC that collected unlimited contributions. The 2-2 tie vote meant that the complaint could not go forward.
Handwringing over Lobbyists’ Contributions: The San Jose Mercury News reports that Democratic presidential candidates are divided over whether to accept campaign contributions from lobbyists and, specifically, from individuals registered to lobby for foreign governments. Leading candidates have eschewed donations from all registered federal lobbyists; other candidates who are “more strapped for funds” have accepted donations from individuals registered to lobby for foreign governments. The matter arises at a time when candidates are “worried about foreign influence in the U.S. political system.” Meanwhile, Politico reports that while many Democratic presidential candidates have refused and returned contributions from registered federal lobbyists, that hasn’t stopped them from accepting contributions from government relations professionals whose lobbying activity is just short of the threshold for registration.
Better than Googling: A Chicago website created by journalists lets citizens type in their address or ward number to see if their alderman has been indicted. The site, com, with a tag line, “Because at this point you’ve gotta ask,” seeks to increase transparency in Chicago government. According to Block Club Chicago, the Website “includes information on the aldermen who lead all 50 of Chicago’s wards, as well as the history of political corruption in each ward.” The article by Block Club quotes one of the founder’s comments about the statistics of indictment and conviction who says, “Chicago aldermen are batting about .300 when it comes to criminality.”
Toothless Ethics Commission: The Austin American-Statesman describes the Austin Ethics Review Commission’s powers as “relatively toothless” compared to other cities’ commissions. The article points out that the commission can’t impose fines and is limited to sending “a mean letter or a meaner letter.” “If it finds a violation, it can issue one of three types of letters or, in extreme cases, offer a recommendation that the person be removed from his or her job. Austin’s board can also refer cases for criminal prosecution by city attorneys, but it has not done so in recent decades,” according to the article.
Pay-to-Play a Good Bet in D.C.: A report from the Washington Post tells us that, as a result of a District of Columbia Council Member who cast a deciding vote on a no-bid sports gambling contract, his cousin will receive a $3 million subcontract from the gambling company. The council member says he has no financial interest in his cousin’s company and is not familiar with it, despite the fact that it has the same street address as the council member’s construction company.
Charity under Fire for Political Activity: According to the Los Angeles Times , the California Attorney General filed a lawsuit against Move America Forward, a charity that sends care packages to troops, alleging “misspending resources from the charity, with some going to for-profit firms and other funds going to promote the Tea Party Express and political candidates.” That activity would be a violation of the prohibition against political campaign activity by charities, according to the suit. The Times quoted a spokesman for the charity who said that “much of the money paid was reimbursement for expenses he incurred in organizing nationwide tours with rallies for the troops that featured entertainers. He said the attorney general investigators mistook the reimbursement of expenses such as renting buses and hotel rooms for rally participants, and ‘fair’ commissions for fundraising.”
Scam PACs on the Rise: Politico tells us that “Conservative Majority Fund has raised nearly $10 million since mid-2012, but has made just $48,400 in political contributions.” The article defines “scam PACs” as “organizations that take advantage of loosened campaign finance laws to reap windfalls for insiders while directing only a small portion of receipts to actual political advocacy.” Politico notes that even President Trump’s campaign has issued a warning that “dishonest fundraising groups” are using the President’s name to raise money.
Bemoaning in Beantown: “A group of lobbyists, businesses, and nonprofits” presented a legal analysis to city officials complaining that Boston’s new lobby ordinance “could create barriers and burdens,” according to the Boston Globe. The analysis expresses concern that “many individuals participating in a single meeting or phone call would be required to register as a lobbyist, submit disclosure reports, and pay a registration fee.”

WEEK OF July 19, 2019

Latest Developments:

The Supreme Court of Washington State upheld the City of Seattle’s taxpayer-funded “Democracy Voucher Program” in which each registered voter receives a voucher that can be given to a qualified candidate to redeem. Two taxpayers challenged the property tax-funded program as a violation of their First Amendment rights. However, in Elster and Pynchon v. City of Seattle, the unanimous court found that the “Democracy Voucher Program does not alter, abridge, restrict, censor, or burden speech” and does not “force association between taxpayers and any message conveyed by the program.”
The Arizona Corporation Commission–which regulates corporations, pipelines, railroads, securities, and public utilities–amended its ethics code this week to prohibit candidates for the Commission from accepting contributions from persons with matters before the Commission. The ban also applies to sitting Commissioners who run for federal, state, or local office, and covers contributions from related or associated parties, owners, and affiliated PACs.
The Governor of California approved AB 903, which, among other things, clarifies that government agencies cannot spend money on campaigns and claim a “media exemption” from regulation. The bill also clarifies that pre-election reports are due for all state primaries and general elections.
The Washington State Public Disclosure Commission reminded interested parties that new disclosure provisions take effect on July 28. Existing law requires the top five contributors be disclosed; the new provisions require that for any committees listed in the top five, contributors to those feeder committees be disclosed until the contributors listed are all individuals or entities that are not committees.

Reminder:

The Practising Law Institute presents the annual Corporate Political Activities Conference on September 6-7, 2019 in Washington, D.C. The program comprehensively covers campaign finance, lobby disclosure and government ethics on the federal state and local level, with a break-out session on foreign political activities. A one-day version of the program will be presented later in San Francisco, CA on October 3. A one-hour briefing on the basics of federal campaign finance law will be presented beforehand on August 1. Nielsen Merksamer co-chairs these programs. To sign up, use the following links: One Hour Briefing on August 1 (Online, included in registration below); PLI Two-Day Conference in Washington D.C.; PLI One-Day Program in San Francisco (also webcast)

In Case You Missed It:

Nielsen-Merksamer Expert on Federal Elections: New York’s The City reports that Mayor Bill de Blasio used his state PAC to pay expenses of his federal campaign for President. According to The City piece, the federal campaign reported that $80,000 in expenses were paid by the state PAC. The article quotes Nielsen Merksamer’s Mike Columbo (a former FEC attorney): “If the de Blasio campaign accepts an $80,000 in-kind contribution from a state PAC, they can expect ‘future correspondence from their FEC reports analyst and, perhaps, a call from the FEC’s Enforcement Division, to discuss federal contribution limits.’”
“Sunlight on Dark Money” is the name of a measure placed on the November ballot in San Francisco. The San Francisco Examiner reports that the proposed ordinance would require disclosure of the top three donors paying for an advertisement and, if one of those is another committee, would require disclosure of the two top donors to that committee. The measure also bans developers from making campaign contributions while a “land use matter” is pending approval and for 12 months following final approval. In addition, it would require that disclosure reports be filed for independent expenditures that pay for a mass mailing.
Going Dark: The Tampa Bay Times reports that Andrew Gillum has moved his campaign money from a political committee to nonprofit in an apparent effort to shield activity from public reports. Donations “will now go to the nonprofit, Forward Florida Action, instead of his political committee, Forward Florida.” A spokesman said the change was because the nonprofit could “spend money on voter registration efforts in ways his political committee could not.”
Lobbyists Save Money in Ethics Reform: St Louis Public Radio reports that since voters adopted a $5 cap on spending by lobbyists on lawmakers in November, lobbyists’ spending has dropped by 94%, based on an analysis of data from the Missouri Ethics Commission. According to the article, “most of the spending is now on larger events that all lawmakers can attend. There is still a $5 limit per lawmaker for those events.”
No Oration without Registration: The Miami-Dade Commission on Ethics and Public Trust ruled that the Mayor of South Miami was not wrong when he told a lobbyist that the lobbyist could not speak at a city council meeting without registering as a lobbyist. According to the Miami Herald, the lobbyist’s case was dismissed with prejudice after determining that the Mayor relied in good faith on advice from the City Attorney.
Pay-to-Play Reimbursement Request: A Chicago developer renovating a Chicago Housing Authority (CHA) project asked the City of Chicago for reimbursement of an unusual expense, “Donation-Alderman $20,000.” The CHA’s Inspector General found the request to be a “red flag.” The Chicago Tribune reports that the developer later dropped the request and “acknowledged to the Tribune that the FBI asked questions about the $20,000 reimbursement request.”
Other Shoe Drops in St. Louis: We previously reported on the St. Louis County Executive who resigned and pleaded guilty to accepting bribes while in office. The Associated Press informs us that a business man who was indicted following the County Executive’s conviction pleaded guilty to three bribery counts in federal court this week. Businessman James Rollo is first person who was not a county employee to plead guilty in the St. Louis pay-to-play scheme that traded campaign contributions for county contracts; two other county employees have pleaded guilty to charges.

WEEK OF July 12, 2019

Latest Developments:

The Oregon Legislature approved Senate Joint Resolution 18, which places a measure on the November 2020 ballot that would permit the state and local governments to enact laws or ordinances to limit campaign contributions, require disclosure of contributions and expenditures, and require disclosure in campaign advertisements.
The Governor of California:
- Signed AB 1043, which permits spending campaign funds on cybersecurity measures for devices of officials, candidates, and campaign workers. The bill cites the Federal Election Commission’s recent Advisory Opinion 2018-15 in its findings and declarations regarding the need for campaign cybersecurity.
- Signed SB 84, which extends the date for the Secretary of State to develop its online reporting process for campaign statements and lobbying information, from December 31, 2019, to February 2021. Had it not been extended, the system would have been implemented during the 90-day reporting period for the March 2020 presidential primary.

The Governor of Hawaii approved SB 144, which provides that penalties for failure to register and failure to file an expenditure report may be imposed by the State Ethics Commission for a negligent failure, rather than a willful failure. Violations are no longer a criminal offense, thus the threshold was lowered. In addition, the bill provides for a settlement process.
Two States announced New Lobby Reporting Systems:
- The Massachusetts Secretary of State reports that his office has transitioned to a new lobby reporting system.
- The Maryland State Ethics Commission announced that it will have a new reporting system, expected to be live by September 1, 2019.
The Federal Election Commission approved three advisory opinions this week. Advisory Opinion 2019-12 permits a company to offer cybersecurity services to federal candidates and political committees for no or a low cost on the same terms and conditions as offered to non-political clients. Advisory Opinion 2019-09 permits a nonconnected PAC to sell T shirts with the names and likenesses of candidates as long as it treats the proceeds as contributions and complies with applicable disclaimer provisions. In addition, Advisory Opinion 2019-08 allows a committee to distribute valueless digital blockchain tokens as an incentive to volunteers, because they are materially indistinguishable from other forms of campaign souvenirs.

Reminder:

The Practising Law Institute presents U.S. Political Activities by Multinational Corporations, with panelists Mike Columbo and Evann Whitelam, moderated by Jason Kaune, all of Nielsen Merksamer, on Tuesday, July 16, at 1:00 P.M. EDT. In light of recent scandals, the hour-long discussion will focus on compliance with U.S. political laws – including the Foreign Agents Registration Act, the Federal Election Campaign Act, and the Lobbying Disclosure Act, among others – as they relate to multinational corporations; a summary of notable investigations and enforcements; and real-world scenarios and best practices for compliance.

In Case You Missed It:

Easing the Contribution Limits: The Board of Supervisors of Santa Cruz County, California, has approved a change to the county’s contribution limits, thus ending its distinction of having the lowest contribution limits in the Golden State. According to the Santa Cruz Sentinel, the limits were increased from $400 to $500 for individual’s contributions to county candidates. The $500 limit is consistent with many other local California jurisdictions. Additionally, the new limit will increase by $25 every two years, starting in 2022.
Ending Contribution Time Restrictions: According to the Arkansas Democrat-Gazette, a federal judge has blocked a state law that prohibits contributions more than two years before an election. In Jones v. Jegley, the “blackout period” prevented Ms. Jones from contributing to the candidate of her choice in the 2022 election. A notice of appeal has been filed.
Forming New Ethics: The Albuquerque Journal reports that the first five members of the New Mexico Ethics Commission were sworn in on July 1 by the Chief Justice of the state’s Supreme Court. The remaining two members will be chosen by those five, in a selection process slated for August. An executive director will be selected after all seven members are in place.
Scranton Mayor Pleads in Pay-to-Play Scandal: The Associated Press reports that the Mayor of Scranton, PA, pleaded guilty in federal court to bribery, extortion, and conspiracy. According to the AP, the Mayor “collected tens of thousands of dollars in bribes by pressuring people who needed city permits or contracts. “
Pay-to-Play Insurance: The San Diego Union-Tribune reports that, shortly after he was elected in 2018, California’s new State Insurance Commissioner began collecting campaign contributions from individuals associated with insurance companies that he regulates. The report indicates that the Insurance Commissioner accepted “more than $50,000 in donations in recent months from insurance company executives and their apparent spouses.” According to the Union-Tribune, the Commissioner announced that he would return the money, following the paper’s exposé.
Show-Me the (Taxpayer’s) Money: Missouri taxpayers paid over a half million dollars in legal fees to attorneys representing two “powerful lobbying groups,” according to the Louis Post-Dispatch. The attorneys successfully sued in federal court to stop a ban on PAC-to-PAC contributions contained in a 2016 Missouri ballot measure. The measure was approved by 70% of the voters, but the federal court found that the ban violated free speech laws. Other parts of the measure took effect, including campaign contribution limits.
No More Dark Money in Phoenix: AZCentral reports that a campaign finance measure passed by voters last November finally took effect after a review by the Governor’s office. Eight months after it passed, the law now requires that any contribution of more than $1,000 to influence an election in Phoenix must be disclosed.

WEEK OF June 28, 2019

Latest Developments:

The New York Joint Commission on Public Ethics (NY JCOPE) met on Tuesday. Commission staff announced that the deadline to file semi-annual lobbyist employer reports is extended to July 31, as a result of changes with the lobby reporting system. The new online app for those lobbyist reports will not be available until the week of July 8, and as a result, the deadline is extended.
For lobbyist employers who also file bimonthly lobbyist reports, the new app will prepopulate pertinent portions of the semi-annual report, saving those lobbyist employers time. However, the staff noted that in accordance with the new lobbyist regulation (§ 943.12(g)), lobbyist employers who use only in-house lobbyists do not have to file a (duplicative) semi-annual report if they file bi-monthly lobbyist reports. Only those lobbyist employers who have an outside, retained lobbyist must file the semi-annual reports.
The Connecticut Citizens’ Ethics Advisory Board is searching for a new leader in the wake of the retirement of longtime Executive Director Carol Carson. The Connecticut Mirror reports that Carson “is credited with returning stability and credibility to the role of ethics watchdog.” She will retire August 1.
The Governor of Nevada signed B. 557, which prohibits use of contributions to pay a candidate a salary, and prohibits the use of unspent contributions for personal use or to pay the candidate a salary.

Reminder:

The Practising Law Institute presents U.S. Political Activities by Multinational Corporations, with panelists Mike Columbo and Evann Whitelam, moderated by Jason Kaune, all of Nielsen Merksamer, on Tuesday, July 16, at 1:00 P.M. EDT. The hour-long discussion will focus on how failure to comply with U.S. political laws – including the Foreign Agents Registration Act, the Federal Election Campaign Act, the Lobbying Disclosure Act, and others – can lead to adverse press and reputational harm, costly civil and criminal investigations, and penalties and prosecutions. The class will examine today’s political climate as it affects regulation of international political activities and political law enforcement and include an overview of applicable U.S. political laws as they relate to multinational corporations; a summary of notable investigations and enforcements; and real-world scenarios and best practices for compliance. Register Here for U.S. Political Activities by Multinational Corporations

In Case You Missed It:

No Lobbyist/FARA Money for Joe: Joe Biden’s campaign has refunded contributions received from a lobbyist for Qatar and Morocco, according to the San Jose Mercury-News. Biden’s website contains a list of restrictions, including that his “campaign does not accept contributions from corporations or their PACs, unions, federal government contractors, national banks, those registered as federal lobbyists or under the Foreign Agents Registration Act, or foreign nationals.”
Tech PAC Dough: A group of Microsoft workers is lobbying their colleagues to stop contributing to the company PAC, according to a report from OneZero. The PAC is supported by donations from more than 4,000 of Microsoft’s 140,000 employees. The critics say “it felt duplicitous for Microsoft’s leaders to speak the language of progressive social causes… and then oversee an employee-funded PAC where roughly 50% of the money would go to conservative candidates who often oppose those same measures on a federal level.”
Pay-to-Play with the FBI: The San Francisco Chronicle reports that the son of an Oakland City Council Member was sentenced to a year in federal prison for accepting bribes from an FBI agent who posed as a developer seeking favorable treatment on contracts.
Federal Contractor Zapped: The Federal Election Commission fined Ring Power Corporation $9,500 for making a $50,000 contribution to support Rick Scott’s Florida U.S. senatorial campaign, according to Rollcall. The contribution from a federal contractor was refunded, but the FEC persisted in imposing the fine for violating the ban on contributions from federal contractors to federal campaigns.
Da Lawyers Weigh In: Last week we reported that the Governor of New Jersey reluctantly signed 150, which requires the disclosure of donors to 501(c)(4) organizations that engage in political spending. NorthJersey.com reports that the first lawsuit has been filed. “Americans for Prosperity, a group founded by megadonor brothers David and Charles Koch, asked a federal judge for the U.S. District Court of New Jersey to prevent New Jersey officials from enforcing the law until the suit is decided and to declare the law unconstitutional,” according to the article. Constitutional concerns have also been raised by the ACLU, the Brennan Center for Justice, and the Governor himself because the law requires nonprofit donor disclosure for organizations that speak to legislation and policy, not just elections, and its requirements are vague. Cleanup legislation to quickly fix the law was promised to secure the Governor’s signature, but has not yet been introduced.

WEEK OF June 21, 2019

Latest Developments:

The U.S. Court of Appeals for the District of Columbia issued a decision upholding the Security and Exchange Commission’s pay-to-play rule, which, among other things, limits the ability of investment advisors and brokers to make campaign contributions within 2 years of providing paid services to a government entity. The court’s decision in Y. Republican State Committee v. S.E.C held that the rule does not violate the First Amendment.
The United States Supreme Court ruled that a government contractor is not a “state actor,” and thus not subject to First Amendment restrictions to which the government itself is subject,” unless performing a traditional and exclusive government function. In Manhattan Community Access Corp. v Halleck, the court pointed out that the Free Speech Clause does not prohibit private abridgement of speech. The case arose when a community access cable TV provider banned a content producer whose program criticized the government contractor cable access provider.
The Governor of New Jersey signed S 150, as he promised last week. New Jersey Spotlight reports that the Governor did not like the bill, but anticipates that there will be a cleanup bill to eliminate objectionable portions of the measure. The measure requires politically active nonprofit 501(c)(4) organizations to disclose their large donors.

In Case You Missed It:

Lobbyists Benefit from Legislature’s Snit: The Oklahoma Ethics Commission, squeezed financially by the legislature, has lowered lobbyist fees rather than see its future revenue taken away. The Oklahoman reports that the legislature voted to cap the amount the Commission could spend from its revolving fund and removed the current surplus. In response, the Commission reduced the amount of money going into the fund by cutting lobbyist registration fees from $250 to $100 for the next year.
Anyone can Apply, but Who will be Chosen?: The Albany Times Union reports that a coalition of “good government groups” has released a letter asking for a process to recruit an independent Executive Director of the state’s ethics commission. The New York Joint Commission on Public Ethics (NYJCOPE) has had three different executive directors since it was created in 2011, all of whom held jobs in Governor Cuomo’s administration. June 28 is the publicly-posted application deadline for candidates seeking the position.
Walmart Rolling Back Bribes: The New York Times reports that prosecutors, acting under the Federal Corrupt Practices Act (FCPA), have secured a guilty plea by the Brazilian subsidiary of Walmart. The company agreed to pay a $282 million fine to settle charges of paying bribes to overseas officials, which is prohibited by the FCPA. According to the article, payments were “often recorded on the company’s books with vague descriptions like ‘professional fees’ and ‘incidental.’” Payments in Brazil included amounts paid to “the sorceress,” who was known “for the ability to obtain government permits quickly.”
Legislative Advocacy is not Lobbying: New Hampshire Public Radio reports that the state’s House Majority Leader, who is a teacher’s union president, “is adamant that he hasn’t broken any ethics rules by engaging in legislative advocacy” on behalf of the union while sitting as a legislator. A complaint pending before the Legislative Ethics Committee will be heard next week. The union’s public reports indicate that the Majority Leader was paid to spend 9 percent of his time on “political activities and lobbying.” The Majority Leader’s predecessor as union president regularly registered as a lobbyist. However, the Majority Leader says he “does not lobby individual legislators on bills of interest” to the union.
Lobbying Success in the Cornhusker State: The number of lobbyists, spending on lobbyists, and the number of entities employing lobbyists has dramatically increased in Nebraska, according to the Lincoln Journal-Star. The article quotes a Common Cause Nebraska report that “it has become generally accepted that if you want something done at the Capitol, you should hire a lobbyist.”

WEEK OF June 14, 2019

Latest Developments:

The Governor of Texas signed HB 2677. The bill, which takes effect September 27, 2019, restricts a person who has made specified contributions and expenditures from political funds from lobbying for two years from the date of the contribution or expenditure was made.
New Jersey legislators have sent the governor 150, which requires that independent expenditure committees report contributions in excess of $10,000 and expenditures in excess of $3,000. The measure specifically applies to IRC § 501(C)(4) and § 527 organizations. The governor vetoed a similar measure in May, but, as reported by New Jersey press, this bill represents a bargain that would “spare him from becoming the first governor in more than 20 years to have their veto overruled.”

In Case You Missed It:

The Russians are (Still) Coming: Senator Chuck Grassley penned an article in the Wall Street Journal announcing that he is introducing a bipartisan effort to beef up enforcement of the Foreign Agents Registration Act (FARA). According the analysis, his bill would give the Attorney General new investigative tools, increase penalties for noncompliance, and require that the General Accounting Office study certain aspects of FARA, including whether the exemption from the Lobby Disclosure Act is appropriate or subject to abuse.
Hatch-ing a Crackdown: According to official records, the Office of Special Counsel has received a torrent of formal Hatch Act complaints since 2014 and is taking investigative action on many of these allegations. Indeed, members of both parties have been found to use their official positions in the Federal government to advocate for explicitly partisan or electoral political positions.
Rearranging the (Behested) Furniture: The California Fair Political Practices Commission has rejected a complaint from the Republican Party that alleged that the recently elected Lieutenant Governor’s receipt of union contributions to furnish her office was a violation of the Political Reform Act, according to the Sacramento Bee. The Governor has raised more than $300,000 in behested payments to a nonprofit formed by her office, the Committee to Support the Office of the Lt. Governor. The behested donations to the nonprofit organization are not subject to state campaign committee or officeholder account contribution limits.
Little Rock, Big Bribes: The Associated Press reports on the ongoing corruption scandal in Arkansas in which a healthcare official has pleaded guilty this week to bribing former State Sen. Jeremy Hutchinson. According to the plea, Hutchinson, who is the son of a former U.S. Senator and the current governor’s nephew, “voted for legislation, held up agency budgets and initiated legislative audits” to divert government funds to the healthcare company in question in exchange for bribes. Hutchison has pleaded not guilty in a related bribery case.

WEEK OF June 7, 2019

Latest Developments:

The United States Sixth Circuit Court of Appeals, in Schickel v. Dilger, upheld Kentucky’s ethics laws, overturning a lower-court ruling. The court upheld a ban on lobbyists’ contributions to legislators, a restriction on contributions to legislators from lobbyist employers during the legislative session, a ban on gifts from lobbyists, and a ban on lobbyists serving as a treasurer for a legislator’s campaign committee. Courthouse News Service notes that the court ruled that the restrictions “serve the legitimate government interest of cutting down on corruption.”
The Kentucky Executive Ethics Commission proposed new emergency regulations, which were published in the Administrative Register of Kentucky this week. The regulations revise the registration process for executive agency lobbyists, lobbyist employers, and real parties in interest, beginning July 1, 2019. The emergency regulations, if approved, will take effect on June 27, 2019.
The Nevada Legislature introduced SB 557 on June 1 and passed the measure overwhelmingly on June 3. Initially, the bill would have required businesses and other organizations that make $10,000 or more in contributions during a calendar year to file an annual report itemizing the organization’s contributions. But on the day of passage, the measure was amended to delete those provisions, leaving the bill’s main focus on restricting the use of campaign contributions by banning certain personal uses of contributions and prohibiting candidates from paying themselves a salary from those contributions.
Nassau County, New York has announced a new Vendors Code of Ethics. Part of the initiative is implementing a “zero-tolerance” policy prohibiting the acceptance of gifts from vendors. According to Newsday, the new rules also require that vendors certify compliance with the new ethics rules. The policy, as summarized by Newsday, prohibits gifts and job offers to county employees and their family members and imposes a two-year revolving door provision in connection with contracted work.
The City of Richmond, Virginia, approved Ordinance 2019-115, which imposes a one-year revolving door restriction on city council members and other city officers and employees. The measure prohibits representing a client for compensation on matters related to any agency or office of the city government in which the former officer or employee served or was employed during the one-year period before termination of employment or service.

In Case You Missed It:

Russia’s U.S. Radio Programing Requires FARA Registration: A media company in Florida was ordered by the United States District Court to register under the Foreign Agents Registration Act after signing a deal to rebroadcast Russian state-owned media radio programming. The Hollywood Reporter notes that this is a first, and speculates that perhaps Al Jazeera and the BBC may have to register.
Zombies Being Chased: The Federal Election Commission has contacted about 50 defunct campaigns that still have bank accounts with questions about spending. The Tampa Bay Times, which originally broke the story about Zombie campaign funds a year ago, reports that the FEC has questioned Mitt Romney’s presidential campaign fund and Michele Bachmann’s campaign fund, among others, about inappropriate “apparent personal use” of those funds.
Attorney to the Rescue: The Tennessee House of Representative named an Ethics Counsel following a scandal that forced the Speaker to resign his post. The Tennessean reports that “the assistant director of the Tennessee Bureau of Ethics and Campaign Finance, was named Friday to the newly-created House legal position.”
Vindication for a Concerned Mom in Colorado: The Governor of Colorado signed B. 232, which revises the procedure for filing a campaign finance complaint, including providing a period to cure a violation. The legislation solves the problem after the courts declared the existing complaint process unconstitutional in Holland v. Williams. That case involved “Tammy Holland of Strasburg, who ran two ads in the local I-70 Scout newspaper urging residents to vote in a local school board race in 2015, though she did not endorse any candidate in the ads,” according to Colorado Politics. Her local school district superintendent filed a formal complaint against her for failure to register as a campaign committee.

WEEK OF May 31, 2019

Latest Developments:

The Governor of Washington signed HB 1195, but vetoed parts of the measure. The bill revises campaign finance statues by changing definitional threshold for an independent expenditure to $1,000 or more, requiring e-filing, allowing commissioners to hold over for up to one year, revising when campaign contribution limits are adjusted (once every two to five years, instead on each even-numbered year), and altering private attorney general enforcement provisions. However, the Governor’s partial veto strikes out a provision that would have prohibited the public posting of officials’ financial disclosure statements.
The United States Ninth Circuit Court of Appeals issued an opinion in Tschida v. Motl, which struck down a provision of Montana’s law that prohibits disclosure of ethics complaints against public officials until certain findings are made by the Commissioner of Political Practices. The court found that the statute violates the First Amendment. According to the Associated Press, the decision “effectively makes all allegations of ethical breaches by elected and unelected state officials public information.”
The Bipartisan Select Committee on the Modernization of Congress made recommendations to “update the lobbying disclosure system.” According to The Hill, the recommendations will “be drafted into legislation,” and “standardize how the disclosure system files and tracks the names of lobbyists, by giving each lobbyist a unique identifier.”
The Governor of Texas approved B. 1785, which requires that lobbyists indicate on their registration form if they are required to register under the federal Foreign Agents Registration Act (FARA).

In Case You Missed It:

New York Ethics Agencies’ Credibility Questioned: The Gotham Gazette has criticized multiple New York State and City ethics agencies for a lack of transparency in their investigatory process, calling them “completely compromised.” According to the article, “By design, many of these agencies are not required to inform the public about the complaints they receive, or are prohibited from doing so to prevent reputational harm against individuals or entities that may be the subject of a complaint. But good government groups say that must change in order to build trust in institutions, and that the public would be better served if agencies provided more transparency about how they handle complaints and report on outcomes of investigations.” The implication is that cronies’ problems are not made public; but see the Ninth Circuit’s decision in Tschida v. Motl, described above, for its view of the issue.
Lobbyists need a Better Lobbyist: Tennessee enacted B. 1262, which removes 15 professions, from athletic agents to veterinarians, from the imposition of an occupational “privilege tax.” Only physicians and osteopaths, investment agents, brokers and advisers, attorneys, and lobbyists remain subject to the tax.
Fundraiser’s Remorse: Last week we told you that the Los Angeles City Council voted 14-0 to ask the City Attorney to draft proposals limiting developer contributions. The Los Angeles Times reports that there are “fresh doubts about how much of the overall plan will survive.” Restrictions on behested payments for charities and limiting contributions to those from individuals (prohibiting contributions from labor unions and businesses) seem particularly difficult for city politicians. The article indicates that one council member “questioned whether fears about donations from real estate developers are merely ‘hysteria.’”

Pay-to-Play in Action:

“One of (New York Governor Andrew) Cuomo‘s most generous campaign donors,” who provided the Governor with free transportation on private jets, was “awarded the lucrative development rights for four of five land parcels at Long Island’s Republic Airport,” according to the Albany Times-Union. The donor’s company was eventually awarded all of the development rights; “the Cuomo administration decided to un-designate the (original) winner” of the competitive bidding process.
Former Arkansas State Senator Jeremy Hutchinson, nephew of current Governor Asa Hutchinson, was indicted in federal court for accepting eight payments of $7,500 each from a subsidiary of Preferred Family Healthcare, Inc., as “a monthly retainer ‘purportedly as the Charity’s attorney’ even though he ‘often performed little, to no, legal work,’” according to the Arkansas Democrat Gazette. The indictment concerns Hutchinson’s amendment of H.B. 1129 in 2014 that affected Medicaid service providers; his amendment stopped regulatory measures opposed by Preferred Family.

WEEK OF May 24, 2019

Latest Developments:

The Federal Election Commission met this week. The agenda included a discussion of pending opinions and an interpretive rule. The Commission issued a final opinion to Defending Digital Campaigns, AO 2018-12, which allows cybersecurity services to be provided to committees for free or at a reduced charge. The Commission also discussed a draft interpretive rule that would allow national parties to use their headquarters building accounts to pay for cybersecurity measures.
The Governor of Colorado approved B. 1248, which requires that lobbyists electronically notify the Secretary of State of new lobby activity, including a new position taken on a bill, within 72 hours. This portion of the bill takes effect on January 1, 2020.
The New York State Joint Committee on Public Ethics announced at the end of its meeting agenda that its Executive Director, Seth Agata, would be leaving at the end of June. The Albany Times-Union reports that Agata, a former aide to Governor Cuomo, is leaving to work for a law firm that does not do business with the state.
The Governor of Washington State signed B. 5861, which requires that each lobbyist attest, at the time of registration, that he or she has completed a training course regarding the Legislative Code of Conduct and related policies.

In Case You Missed It:

1-A Auto is Out of Gas: The United States Supreme Court opted not to hear an appeal in the case of 1-A Auto v. Director of OCPF, which challenged Massachusetts’ ban on corporate contributions to candidates. Bloomberg reports that the court “declined an opportunity to give businesses broader rights to contribute money to political candidates and causes.”
Stop the Money in La Land: The Los Angeles Daily News reports that the Los Angeles City Council requested, by a vote of 14-0, that the City Attorney draft three ordinances that would ban contributions to candidates from “non-individuals” and ban similar behested payments to politician’s charities. Under one of the versions, “developers seeking city approval of projects would be restricted from making political contributions from the date the project application is filed until 12 months following the final resolution of the application.” Another proposal would ban behested payments from “restricted” sources, including developers, lobbyists, lobbying firms, and contractors.
Pay-to Play has its Day in Court: A superior court in Fort Wayne, Indiana heard arguments in a case that challenges the validity of the city’s pay-to-play restrictions, according to WBOI. The law provides that anyone looking to bid on a city project is limited to contributions of no more than $2,000. A ruling is expected next week.

WEEK OF May 17, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF May 10, 2019

Latest Developments:

The United States District Court in South Dakota struck down a 2018 state constitutional amendment that prohibited contributions to ballot question committees from nonresidents, including businesses. In SD Voice v. Noem, the court found that Initiated Measure 24 violated the First Amendment because it was “not even closely drawn to avoid unnecessary abridgment of associational freedoms.” The court also found that it “without question violates the Commerce Clause and is unconstitutional.”
The Federal Election Commission met this week. The primary focus of the meeting was a discussion of pending opinions; no decision was reached on either opinion. The first opinion discussed was regarding Defending Digital Campaigns, a bipartisan group that wants to provide free or reduced-cost cybersecurity services to federal candidates or parties. The second opinion concerns a streaming service, System 73, which wants to pay a political committee a license fee for exclusive rights to stream a political event.
Philadelphia, Pennsylvania has major changes to its campaign finance law that took effect on May 1. According to the city’s Advisory Alert, the changes include revised contribution limits, and enhanced disclosure of electioneering communications.

The United States House of Representatives has a new form to request permission for Members and staff to engage in fundraising for charitable organizations. According to Roll Call, the House Ethics Committee has issued a memo describing a “simplified process for fundraising requests.” According to the Roll Call, “members would find it easier to get written approval from the Ethics panel before making solicitations on an organization’s behalf.”
North Dakota has punted on ethics. Constitutional Amendment 1, enacted by the voters in November 2018, established a state ethics commission. SB 2148, as introduced, was a 24-page bill detailing the power of the ethics commission, including enforcement powers. The Governor signed B. 2148, which is now a one-paragraph bill requiring a study of the implementation of the ethics provisions of the state constitution. The constitutional amendment gives the legislature three years to enact implementation and enforcement legislation.
The Oakland Public Ethics Commission, as part of its agenda, voted to conditionally endorse a proposal by the City Council President to require that recipient committees and independent expenditure committees disclose the identities of those persons who control the committee. The proposal would also require key city employees to file a disclosure notice within 10 days if they solicit contributions from persons who do or seek to do business with the city.

In Case You Missed It:

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

WEEK OF May 3, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 26, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 19, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 12, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF April 5, 2019

Latest Developments:

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

Reminders:

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

In Case You Missed It:

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

WEEK OF MARCH 29, 2019

Latest Developments:

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

The Connecticut State Elections Enforcement Commission issued a notice that it intends to issue a Declaratory Ruling on the extent to which polling expenditures must be disclosed. According to the request, most pollsters do not own call centers and use a third-party contractor. The issue is whether the secondary payee must be disclosed and to what extent a treasurer is required to determine if a pollster uses a subcontractor. The matter will be heard at the Commission’s April meeting; a ruling could be issued as early as at its May meeting.

Reminders:

In Case You Missed It:

“No PAC Money” Pledge a Threat to Bipartisan Corporate PACs: An article by Roll Call describes the issues that corporate PACs confront when they try to split contributions in a bipartisan fashion among Democrats and Republicans and one side chooses to decline the contributions. The article mentions, however, that “even some no-PAC-pledge-takers have suggested corporate donations go instead to the party committees or party leaders, who welcome such cash.”
The Flow of Foreign Money: The Center for Responsive Politics reports that, following Citizens United, “foreign-based corporations or U.S. subsidiaries of foreign-based corporations have contributed millions of dollars to super PACs and hybrid PACs.” However, regarding corporate-affiliated PACs, the Chair of the Federal Election Commission said “contributions from PACs of foreign companies are a ‘red herring issue’ that distracts from real challenges of foreign influence. ‘I don’t have a problem with that at all — those are American citizens and that is their money that they’re using,” she said.’”

Gwyneth Paltrow Project Ok’d: On March 5, 2019, voters in West Hollywood rejected a referendum aimed at rescinding the City Council’s approval of a multi-use development project on Sunset Boulevard. According to the latest report by the Los Angeles County Registrar, 60.3% of West Hollywood voters favored the development. Nielsen Merksamer served as Treasurer and counsel to the campaign, which brought together numerous community and elected leaders, as well as an overwhelming majority of West Hollywood residents, in support of the “Arts Club Project.” Ballotpedia reports that the site was purchased and is being developed by a group that includes actress Gwyneth Paltrow.
Nevada Legislation Roulette: Following the resignation of a former Democratic State Senate leader who left after using campaign funds for personal use, as previously reported here, the Reno Gazette-Journal tells us that reform proposals are beginning to emerge from Republicans. According to the article, the Governor “said he’d recently spoken with legislative leaders about potential campaign finance fixes, but didn’t volunteer specifics on those discussions.”
Seeking Less Sunshine in the Land of the Midnight Sun: The Anchorage Daily News reports that the Alaska Senate is seeking to roll back the ethics law it passed last year. The state Senate approved B. 89 which would delete provisions that prohibit certain conflicts of interest. Lawmakers complained that they couldn’t discuss matters with their spouses who work in fields subject to legislative actions. The bill goes to the House.

WEEK OF MARCH 22, 2019

Latest Developments:

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

In Case You Missed It:

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

Reminders:

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

WEEK OF MARCH 15, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF MARCH 8, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF MARCH 1, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF FEBRUARY 22, 2019

Latest Developments:

The Governor of Wyoming signed Senate File 18 (Chapter 1, 2019 Statutes) which, among other things, increases the frequency of campaign reporting for PACs and candidates, and requires reporting of independent expenditures and electioneering communications. The measure takes effect July 1, 2019.
The United States Supreme Court turned down a petition to hear an appeal of Montanans for Community Development v. Mangan. That case challenged Montana’s 2015 Disclose Act, and specifically the requirement that PACs file reports for activity that exceeds $250 in a calendar year. The Ninth Circuit’s unpublished opinion upholding that law prevails.

The Director of the U.S. Office of Government Ethics (belatedly) issued guidance on what federal employees can and cannot do when furloughed during a government shutdown. The guidance is a reminder that any gift from a donor who is a “prohibited source” will create problems, as will employment of a furloughed federal employee for whom the employment may be a conflict.

In Case You Missed It:

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

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

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

WEEK OF FEBRUARY 15, 2019

Latest Developments:

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

In Case You Missed It:

Problems with Revolving Doors: The latest group of ex-lawmakers who are seeking government relations work without registering as lobbyists are facing growing criticism, according to The Hill. The article notes that “(c)ritics say former lawmakers have been the biggest offenders when it comes to working in the influence world without formally registering.” However, a source told The Hill that, “(t)here’s a difference between being paid to provide clients with insights and advice based on your experience and being paid to pick up the phone and make direct contacts with federal officials and advocate on behalf of clients.”

A Former Regulator seeks to be among the Regulated: Ann Ravel, former Chair of the Federal Election Commission and former Chair of the California Fair Political Practices Commission has filed papers to run for a California State Senate seat, according to the San Jose Mercury News. She joins a crowded field of candidates who are seeking to succeed a termed-out state senator.

Pay-to-Play Laws Generate Lawsuit: Courthouse News reports that an Illinois property management firm has challenged the Illinois pay-to-play laws in federal court. The Habitat Company lost a state management contract when its majority owner and his wife made contributions to gubernatorial candidates. In The Habitat Co. et al v. Illinois Housing Development Authority et al, the plaintiffs challenge the Illinois Procurement Act as violating the First and Fourteenth Amendments to the U.S. Constitution.
Disclosure of Independent Expenditures Lags: The Associated Press reports that following the decision last August in Citizens for Responsibility and Ethics in Washington v. the Federal Election Commission, observers expected more disclosure of independent expenditures. But the Federal Election Commission’s guidance following the decision failed to generate more transparency. Only 8% of groups making independent expenditures revealed their donors, according to the article.
Should the National Inquirer Register under the Foreign Agents Registration Act?: The United States Department of Justice responded to a request for an advisory opinion about whether a media company should register as a foreign agent after publishing a “fawning” report about a foreign leader that coincided with the leader’s visit. NBC News reports that the media company in question is AMI, the parent of the National Enquirer, and the leader was the Crown Prince of Saudi Arabia.
Lobbyists Don’t Wait in the Lobby Anymore: They pay someone to do it for them. According to MSN News, neophyte Rep. Ocasio-Cortez was shocked to learn that there’s a thriving business of people who stand in line for congressional hearings and hold a place for lobbyists. The article quotes Linestanding.com (“a leader in the Congressional line standing business since 1985”) as indicating that the current rate is $48 per hour, with a recommended 24 hours for high profile hearings. Supreme Court line standing has gone for as much as $6,000 for a single oral argument.

WEEK OF FEBRUARY 8, 2019

Latest Developments:

The Federal Election Commission announced revised contribution limits for the 2019-2020 election cycle based on changes to the consumer price index. For example, under the new contribution limits, individuals may contribute up to $2,800 to federal candidates for President, U.S. Senate, or the U.S. House of Representatives.
The Federal Election Commission also met this week for the first time this year. The Chair noted that activity for the 2020 election has begun, but the Commission was closed during a portion of December and January, leading to a significant backlog of work. She indicated that the Commission has 326 pending enforcement cases, of which over 50 are nearing the statute of limitations.

The Governor of Tennessee issued Executive Order No. 2 that revises the prior Governor’s Executive Order No. 20 from 2012. It continues to, among other things, prohibit gifts to executive branch employees from any person who is seeking a contract or other state business, is regulated by the employee’s department, or has interests affected by the employee’s performance of official duties. The order contains some revised exceptions, including dropping the requirement that an official be a speaker at a meeting in order to receive a gift of food, entertainment, or interstate travel. In a related matter, last month, the Tennessee Ethics Commission raised the per-event gift limit to $63 and the annual aggregate limit for gifts from a lobbyist employer to a covered person to $126.

The Governor of New Mexico signed SB 191, which we reported here two weeks ago as being on a fast-track “rocket docket.” The measure requires that lobbyist and lobbyist employer expenditures of under $100 be disclosed in the aggregate on their periodic reports. The bill provides that those aggregate expenditures be listed, in lump sums in three categories: meals and beverages, other entertainment, and other expenditures. The bill takes effect July 1, 2019 and, thus, will not affect expenditures in the current session, which is expected to adjourn in mid-March.
The Massachusetts Office of Campaign and Political Finance released draft regulations to, among other things, lower the limit on contributions that unions can make to a candidate from $15,000 to $1,000. The change follows the case of 1A Auto, Inc. v. Director of the Office of Campaign and Political Finance, in which the Massachusetts Supreme Court upheld the state’s ban on corporate contributions. Mass Live quotes the Executive Director of Common Cause, who favored the change, as believing that the new rule will provide “consistent contribution limits that are applied across the board and without big exceptions.” Currently, corporations can contribute nothing; individuals can contribute $1,000, and unions can contribute $15,000. The new rule would put unions on par with individuals. The rules also require registration and reporting for independent expenditure PACs and for electioneering communications.

In Case You Missed It:

Limits in Oregon: Oregon Public Broadcasting reports that the Oregon Supreme Court has “agreed to fast-track a case that proponents hope will let the state limit campaign contributions.” Multnomah County imposed a $500 limit on contributions to county candidates, despite a 1997 state Supreme Court ruling that contribution limits violate the state’s free speech protections. If the county limits are upheld, the case would “open the door for statewide campaign finance regulations.”

Gifts that Keep on Giving: According to the Tampa Bay Times, an ethics complaint against former Tallahassee Mayor and gubernatorial candidate Andrew Gillum is moving forward after probable cause was found that he accepted gifts from lobbyists in violation of state law. The former mayor allegedly accepted gifts in excess of $100 on trips to Costa Rica and New York City.

More Ethics Reform Proposals: The Hill reports that, in addition to the Democrats’ much heralded ethics bill, so many lawmakers have introduced ethics measures that it is “a sign the topic will dominate into the 2020 campaigns.” These assorted campaign finance, lobby regulation, and anti-corruption bills “allow individual members to highlight specific proposals as well as offer some pieces a chance for bipartisan support,” according to the article.
Careful What You Wish For: An Alaska lawmaker was forced to withdraw a health care reform bill as a result of new ethics reforms, according to the Juneau Empire. Her husband is a health care professional and new rules prohibit legislators from voting on measures that would financially affect a family member. Although the original ethics measure was aimed at “lawmakers who have connections to the oil industry,” it has a much broader application.

WEEK OF FEBRUARY 1, 2019

Latest Developments:

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

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

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

In Case You Missed It:

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

WEEK OF JANUARY 25, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF JANUARY 18, 2019

Latest Developments:

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

Arizona
Illinois
North Carolina
Tennessee

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

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

In Case You Missed It:

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

WEEK OF JANUARY 11, 2019

Latest Developments:

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

In Case You Missed It:

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

WEEK OF JANUARY 4, 2019

Latest Developments:

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

In case you missed it:

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

WEEK OF DECEMBER 21, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF DECEMBER 14, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF DECEMBER 7, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF NOVEMBER 30, 2018

Latest Developments:

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

COGEL Bluebook:

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

In case you missed it:

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

Meeting Notices:

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

WEEK OF NOVEMBER 16, 2018

Latest Developments:

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

In case you missed it:

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

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

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

Maybe not the Alamo, but…: The Texas Tribune reports that the Texas Ethics Commission is under attack! In Empower Texas, Inc. v. Texas Ethics Commission, a Texas appellate court found that the plaintiffs had sufficient grounds to challenge the authority of the Commission. Empower Texas alleges that the Commission’s exercise of statutory authority is unconstitutional – that it does not have the power to regulate campaigns and contributions. A lower court had dismissed the matter in 2016, but the appellate court’s action revives the suit.

WEEK OF NOVEMBER 9, 2018

Latest Developments:

Election Day Results: Several States provided voters with the opportunity on Election Day to vote on ballot measures that covered, gifts, campaign contributions, redistricting commissions, public officials’ conduct, and lobbyist activity. NPR has a discussion of the most important issues contained within these measures. The election results are summarized below:
Arizona Proposition 306 [Passed]: Prohibits statewide and legislative candidates for office from transferring funds from public financing accounts (“clean election accounts”) to either political parties or tax-exempt 501(a) organizations that can engage in activity to influence elections. The measure also removes the Citizens Clean Election Commission’s exemption from rule-making requirements, thus making that commission’s regulations subject to the state’s Administrative Procedures Act. (Yes – 56% with 99% of precincts reporting.)

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

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

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

In case you missed it:

Repackaging PACs: Corporate PACs are rebuilding their image according to Politico, after a midterm election that saw a large number of candidates refuse to accept corporate PAC money. The National Association of Business PACs points out that “the real villain in politics is unchecked spending by super PACs and mystery donors, not the more-regulated fundraising committees attached to businesses and trade groups.” The group is seeking to raise the limit on the amount a PAC can contribute to a single candidate.

Can you Build a Fence to Keep Money Out?: The South Dakota Measure passed Tuesday (see above) that prohibits out-of-state contributions for ballot measures is likely to face a challenge. The Rapid City Journal interviewed sources from Americans for Prosperity, Common Cause, and Ballotpedia, among others, about the measure. Most are skeptical about a state’s ability to restrict out-of-state ballot measure contributions; some are willing to say the measure is “clearly unconstitutional.”

Vacation Time in D.C.: Monday and Tuesday of election week was vacation time for many lobbyists in Washington, D.C., according to Politico. “Members of Congress are getting help before Election Day from a tiny but influential subset of on-the-ground volunteers: Washington lobbyists eager to help their old bosses — and perhaps their own careers.” Many lobbyists took vacation time and spent the past weekend in states across the country knocking on doors to help turn out voters.
Too Many Lobbyists up North?: The CBC reports that Canadian Senators “are being lobbied more than ever — and some are feeling overwhelmed.” One Senator complained that “lobbyists have been given ‘too much time and too much importance.’” A representative of the lobbyists’ trade association countered that “lobbyists also offer politicians practical advice, flag provisions that might be unworkable, point out unintended consequences, and offer recommendations to close loopholes.”

WEEK OF NOVEMBER 2, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 26, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 19, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 12, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF OCTOBER 5, 2018

Latest Developments:

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

Ballot Measures to Watch in November:

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

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

In case you missed it:

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

WEEK OF SEPTEMBER 28, 2018

Latest Developments:

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

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

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

In case you missed it:

Junketeer’s Remorse: Rollcall reports that the U.S. Department of Justice has indicted a man for unlawfully funneling money from an Azerbaijani oil company through a nonprofit to pay for a congressional fact-finding trip to Azerbaijan. Ten lawmakers and more than 30 aides took the trip in 2013. Federal provisions permit members of congress to take educational trips paid by nonprofit organizations, but not by private entities. Kevin Oksuz, who is now a fugitive, is an American citizen who ran the nonprofit organization and took money from an oil company operated by the Azerbaijani government. Congressional members and their staffs were forced to return gifts received during the trip.

Concern about Contributions from Canada: A Canadian company is accused of illegally contributing to Oregon candidates and PACs through a US subsidiary. According to the Bend Bulletin, the company is trying to build a LNG plant in Coos Bay along with a pipeline and says the contributions are from U.S. activity. The Oregon Elections Director says state law doesn’t address subsidiaries of foreign companies, but indicates that federal is applicable. Federal rules require that contributions come from a separate segregated fund.

Meanwhile Canada Aspires to Higher Ethics: Canada’s House of Commons’ Ethics Committee has launched a review of the country’s Lobby Act and the Conflict of Interest Act. The Ottawa Globe and Mail reports that the announcement of the study “comes on the heels of a Globe and Mail analysis of Liberal Party fundraising records, which found more than 200 instances of lobbyists attending Liberal fundraisers since early 2017, when the party said it would be imposing tight restrictions on the attendance of lobbyists.”

Orange is the New Dark: The Voice of OC reports that nearly $3 million in so-called dark money has flowed into hotly contested house races in Orange County, California, with much more expected to flow before the election. Once a bastion of California Republicans, four Republican seats are viewed as battlegrounds. At least 14 different nonprofit organizations or PACs have spent money, most of which are based out-of-state. Some money can be traced to out-of-state billionaires, including Sheldon Adelson and Charles Koch on the Republican side, and George Soros and Michael Bloomberg on the Democrat side.
Bama Reform: The Alabama Code of Ethics Clarification and Reform Commission will vote on proposals to reform state law at its October meeting. com reports that, among other things, the Commission will consider redefining who is a lobbyist employer. The current law defines the term “principal” as a business or person who employs a lobbyist. The Commission will seek to clarify which individual employees and board members of a business that hires a lobbyist are considered principals (lobbyist employers).
Private Jet Travel OK for Hawkeye Governor: The Des Moines Register reports that Governor Reynolds has been cleared by the Iowa Ethics and Campaign Disclosure Board of any wrongdoing in accepting 9 trips on private aircraft. “The board voted to dismiss the complaints against Reynolds, concluding the flights were ‘legitimate in-kind campaign contributions and allowable under Iowa’s gift law.’”
Still No Money for Ethics: The Oklahoma Supreme Court ruled against the Oklahoma Ethics Commission in its effort to force the state legislature to provide more funding to the Commission. NewOK reports that the court indicated that the Commission must follow the same budgetary procedure as other state agencies.

WEEK OF SEPTEMBER 21, 2018

Latest Developments:

The Oklahoma Ethics Commission, at its meeting on Friday, September 14, unanimously adopted Ethics Rule Amendment 2019-03, which consists of revolving door provisions that prohibit elected officials and agency heads from lobbying for two years following their service. The rule change will take effect in 2019, following the adjournment of the legislature, if the legislature does not affirmatively reject the rule.

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

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

In case you missed it:

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

WEEK OF SEPTEMBER 14, 2018

Latest Developments:

The Federal Ninth Circuit Court of Appeals reversed a lower court’s decision and upheld the California Attorney General’s requirement that nonprofit organizations that engage in political spending must disclose their donors to the state, as reported on an IRS Form, “Schedule B.” According to Politico, “The Americans for Prosperity Foundation had argued that the state’s rules requiring filing of the donor list violate the First Amendment by discouraging individuals from giving and by exposing them to threats and harassment.” Politico reports that in Americans for Prosperity Foundation v. Becerra, the court held that “the state had a legitimate need for the data and that the Koch-founded group had not shown a significant burden on donors.” As we previously reported, the U.S. Treasury Department has announced, in Revenue Procedure 2018-38, that the IRS will no longer require that the names and address of donors be disclosed on Schedule B for tax years starting with those that end December 31, 2018.

The Federal Eighth Circuit Court Appeals affirmed a lower court ruling holding that the provisions of Missouri Constitutional Amendment 2, approved by voters in November 2016, which impose a ban on PAC to PAC transfers, violates the First Amendment. In Free and Fair Election Fund v. Missouri Ethics Commission the court noted that the Eleventh Circuit has upheld a ban on PAC to PAC contributions in Alabama, but distinguished the circumstances of that ban.

The Massachusetts Supreme Court upheld the state’s ban on corporate contributions in 1A Auto, Inc. v. Director of the Office of Campaign and Political Finance. The Boston Herald reports that the court pointed out that a business may still spend as much as it likes on independent expenditures.

The New York Joint Commission on Public Ethics met Wednesday, September 12.
The Commission discussed a proposal to amend state law to permit the Commission Chair or designated staff to publicly disclose that a matter is under investigation, has been closed, or has been deferred at the request of law enforcement. Commissioners, by consensus, asked that the measure be posted online with a request for public comment. The matter will come back before the Commission next month with those public comments.

On Thursday, September 20 at 1:30 p.m. EDT, the Commission will hold a training on the new lobby regulations. Over 500 people have signed up for the training, and as a result, the training will be live-streamed on the Internet. A video of the training will be subsequently posted on the Commission’s website

The Oklahoma Ethics Commission meets Friday, September 14. The Commission’s agenda includes a discussion of three amendments to Rules, including campaign finance rules regarding coordination, lobbyist rules concerning disclosures, and revolving door provisions for elected officers and chief administrative officers.

The California Fair Political Practices Commission meets next Thursday, September 20. The agenda includes a report from the Enforcement Review Task Force, a continuing discussion on Bitcoin and crypto currency contributions, and a discussion of Citizens for Responsibility & Ethics v. F.E.C, which staff finds inapplicable to the FPPC.

The Oakland Public Ethics Commission met on Tuesday, September 11, 2018, and took up the matter of alleged improper gifts of sports tickets to the Mayor and to City Council Member McElhaney. The staff report (as detailed here last week) cleared them of any wrongdoing with regard to use of city tickets. Apparently, seven more cases of city officials’ allegedly improper use of tickets are pending; the Commission sent the matters back to staff for further consideration. The Commission expressed that, in the future, a “public purpose” must be provided to support the personal use of city tickets for exempt official business and referred the policy question regarding tickets to a subcommittee to clarify the Commission’s position. In addition, the San Francisco Chronicle reports that Council Member McElhaney faced a proposed penalty of $8,625 for taking improper gifts from a developer; the Commission reduced that penalty to $2,550.

In case you missed it:

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

WEEK OF SEPTEMBER 7, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF AUGUST 31, 2018

Latest Developments:

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

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

Reminder:

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

In case you missed it:

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

WEEK OF AUGUST 24, 2018

Latest Developments:

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

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

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

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

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

Reminder:

In case you missed it:

First Amendment Lawsuit Filed: Courthouse News Services reports that a coalition of press entities, including the Washington Post, has filed suit to block Maryland’s new online political ad disclosure law. The plaintiffs contend that the law is unconstitutional for its regulation of newspapers, including the threat of criminal prosecution for non-compliance, and that its provisions are unconstitutionally vague and overbroad. They also assert that the law is impossible to follow and conflicts with the Communications Decency Act of 1996. As we reported earlier, Google announced that it could not comply with the law and therefore would no longer accept political ads in Maryland, but Facebook is on board with the law.
More Money, eh? The Richland Standard reports that Canada’s Lobby Czar is seeking a budget increase to modernize the office and respond to growing demands. Her budget has not been increased in 10 years, despite an increase in the number of lobbyists. The office is seeking money to fund a new website and updates to the lobby registry.

Looking for a Drain in the Swamp: Elizabeth Warren has proposed “sweeping anti-corruption legislation” according to Politico. The Anti-Corruption and Integrity Act proposes a lifetime ban on lobbying by the President, members of Congress, and cabinet officials. It would also impose a six-year revolving-door restriction on other federal officials and ban lobbying by foreign governments and companies. The measure would ban lobbyist campaign contributions, contingency fees, and gifts to members of Congress.
Please, No Green from Grass: According to the New York Times, Wells Fargo noticed a candidate for Florida Agriculture Commissioner was “advocating for expanded patient access to medical marijuana.” The bank asked the campaign if it would accept contributions from lobbyists and others in the medical marijuana industry. After the campaign replied affirmatively, the bank closed the campaign’s account. Bank of America, Citigroup and JPMorgan Chase said their banks did not have policies that would prevent them from offering services to a candidate who accepts money from that industry.

WEEK OF AUGUST 17, 2018

Latest Developments:

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

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

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

Reminder:

In case you missed it:

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

WEEK OF AUGUST 10, 2018

Latest Developments:

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

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

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

In case you missed it:

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

Reminder:

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

WEEK OF AUGUST 3, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF JULY 27, 2018

Latest Developments:

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

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

Reminder:

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

In case you missed it:

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

WEEK OF JULY 27, 2018

Latest Developments:

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

Reminder:

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

In case you missed it:

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

WEEK OF JULY 20, 2018

Latest Developments:

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

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

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

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

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

In case you missed it:

Politico reports that the Treasury Department is on the defensive over its decision to stop collecting donor information. (See above.) The department says it doesn’t use the information, the collection of which dates to the Nixon administration. Critics say it eliminates transparency and the ability to follow the money.
Rollcall has reactions to the Treasury’s new Revenue Procedure from both sides. On one side, Sen. Mitch McConnell said that the existing government collection of data can “chill political speech and invite harassment of citizens.” At the other end of the spectrum, Sen. Jon Tester called the move, “the swampiest, darkest, dirtiest decision.”

The Campaign Legal Center issued a summary of Supreme Court Nominee Brett Kavanaugh’s stance on campaign finance issues. “(H)e would expand the power of big money in politics,” according to the article. The Institute for Free Speech responded with its own analysis castigating the CLC, and noting that Judge Kavanaugh’s opinions, “generally gave the First Amendment a robust interpretation protective of individual rights.”

New Ways to Give: California Assembly Bill 84 was gutted on July 5, and new provisions were inserted. The newly amended bill would permit each party in each house of the legislature to establish a “caucus committee” with the same contribution limits as a political party committee. Politico reports that state Democratic Party officials fear the move will dilute their power, saying that the bill would “untether some campaign cash from the party endorsement system.” The bill would permit legislative leaders to control more campaign cash.
Ouch: The Security and Exchange Commission fined Sofinnova Ventures, a bioscience investment firm, $120,000 for a $2,500 contribution made by one of its employees that violated the SEC’s pay-to-play rule. Pensions & Investments reports that the Illinois Teachers’ Retirement System had invested some $45 million in Sofinnova funds and the firm had a contract to provide investment services to the System when one of its employees made the contribution to a candidate for Governor, who subsequently won.

WEEK OF JULY 13, 2018

Latest Developments:

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

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

In case you missed it:

What’s good for the goose…USA TODAY published a story in which they calculate that so-called “secret money” (or perhaps the more ominous and ubiquitous pejorative label “dark money”) has thus far funded more than 40% of outside congressional ads. The supposedly objective story appeared to convey a bias against this form of campaign finance, taking to task what are considered Republican friendly groups as being on the offensive while portraying Democratic friendly groups as merely spending this “secret money” as defensive measures.

Free Speech Can’t Catch a Break: Only July 12, NPR reviewed “A Riveting Documentary [that] Sheds Light on ‘Dark Money.’” The similarly titled Dark Money film focuses on the ongoing campaign finance litigation in Montana and is directed by Kimberly Reed, a native of that state. The review agreed entirely with the film’s premise, that “invisible corporate shenanigans…threatens to sink our democracy outright,” employing dramatic language throughout, labeling the campaign finance issues an “assault on the American electoral and judicial process by corporations whose agenda is nothing less than the dismantling of government itself.” The melodrama reaches an apex when the reviewer describes Dark Money as “a hair-raisingly specific American tale of illicit power.”

WEEK OF JULY 6, 2018

Latest Developments:

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

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

In case you missed it:

The New York Times traces the Supreme Court’s view of the First Amendment over the last few decades, from the days of Earl Warren to the Roberts court. The most recent incarnation of the court is skeptical about any government effort to regulate speech. Decisions from Buckley v. Valeo to Citizen’s United to this year’s decisions regarding speech about abortion and union dues show the court’s evolving view of the First Amendment.

Google isn’t that tech savvy: Google says it lacks the capability to comply with new Maryland requirements for disclosure of online advertisements, according to the Baltimore Sun. The new law requires disclosure of who is paying for political ads and how much they are paying. In the absence of the ability to comply, Google indicates that it will stop selling political ads for Maryland state and local races.

Ann Ravel, former Chair of the Federal Election Commission is now on the staff of Maplight, which is known for its online research tools regarding the influence of money on political decisions. According to Maplight, “She will develop a robust, evidence-based policy platform to address deceptive politics and strategically advance solutions that safeguard our political system.”
A reporter for TV Station WRAL Raleigh, in North Carolina tracked down dark money spending on TV ads, Facebook ads, and mailers in North Carolina campaigns. According the report, the common element behind the various groups with different names is a single Democratic political law attorney, Michael Weisel.
The Texas Statesman reports that the Texas Ethics Commission fined a consultant for creating a deceptive website to attack a candidate. Mike Lewis, a candidate for County Chair of the Democratic Party created a website called LewisforChair.com. According to the Commission , the consultant created a website called Lewis4Chair that redirected users to TheRealMikeLewis.com. The consultant violated a Texas statute that prohibits entering into a contract to publish a campaign communication from a source other than its true source with intent to injure a candidate and was fined $1,500.

WEEK OF JUNE 29, 2018

Latest Developments:

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

In case you missed it:

No coordination allowed – but signals permitted: The Federal Election Commission has dismissed a complaint that a candidate’s public posts on his website that were subsequently copied by an independent expenditure committee were “coordinated.” According to Politico, candidates signaled their desires this way during the 2016 elections. The Commission found that similarities in ads were insignificant evidence of private coordination.

Kaiser Health News reports that when a drug company was faced with public pressure over the high cost of its products, it spent more on Washington lobbyists and its PAC spent more money on federal candidates, doubling its contributions over that of the previous year. Facing mounting criticism, including a lawsuit and a dropping stock price, Novo Nordisk, a Danish multinational, doubled what its American employee PAC spent on federal candidates and the company itself increased what it spent on lobbying to $3.2 million.

How do you know if you are a “foreign agent?” Bloomberg Government describes the conflicting advice often given by the federal Justice Department. Bloomberg looked at the advisory opinions recently released by the Justice Department and found a very complex decision-making process as to who is a foreign agent and who is not.

Congressional staffers have first class seats on the gravy train. The Washington Examiner reports that one congressional staffer, Oliver Schwab who is chief of staff to Rep. David Schweikert, managed to spend more than $5,000 from congressional funds on a lavish Super Bowl weekend in 2015, which doesn’t include the many gifts of entertainment received over that weekend. He spent over $800 per night on a hotel room and $660 for a rental car for the weekend. Politico indicates that the House Ethics Committee has launched an investigation into Schweikert and Schwab’s spending of public funds and alleged illegal campaign contributions.
Don’t mess with Montana: The Missoula Current reports that, in a dispute between the Montana Commissioner of Political Practices and the Montana Shooting Sports Association, the association alleges that it has been fined $28,000 for stapling supporting documents to the wrong form. The president of the association states that all forms were placed in one envelope, but that a list of candidates that should have been attached to Form C-2 was instead attached to Form C-7.
An Arkansas State Senator was sentenced to 18 months in federal prison for submitting fraudulent bids through straw men to the Western Arkansas Economic Development District, which was responsible for administering state General Improvement Funds in his district, according to Arkansas Business. The now former Senator pocketed tens of thousands of dollars in state funds; the court ordered restitution.

WEEK OF JUNE 22, 2018

Latest Developments:

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

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

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

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

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

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

In case you missed it:

The New York Times reports on the phenomenon of consultants who peddle influence failing to register as lobbyists. Tightening the rules has resulted in more lobbyists deregistering and becoming shadow lobbyists who purport to be political strategists or consultants rather than lobbyists.

Kansas SB 394 takes effect July 1, 2018. That bill broadens the definition of lobbying to include most lobbying of the executive branch (not just rules and regulations) and administrative matters in the judicial branch. The bill will cover procurement lobbying, with minor exceptions. It also increases the executive branch gift of a meal provision from $25 to $40 to match the general legislative lobbyist gift limit.

The Center for Political Accountability has a new report out about The Risks Companies Face When Their Political Spending and Core Values Conflict and How to Address Them. The center examined political spending since 2010 and outcomes associated with that spending.

Misuse of Expertise: A Justice of the West Virginia Supreme Court, who authored a book on corruption in the state, has been indicted on 22 federal corruption charges. Law and Crime reports that Justice Allen Loughry has been charged with, among other things, using a government credit card for personal use and taking a historical Supreme Court desk to his house for use in a home office.

WEEK OF JUNE 15, 2018

Latest Developments:

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

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

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

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

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

In case you missed it:

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

WEEK OF JUNE 8, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF JUNE 1, 2018

Latest Developments:

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

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

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

In case you missed it:

NPR reports on the deadlocked efforts of the Federal Election Commission to limit foreign influence. The partisan division of the commission remains a roadblock to any solution.

The risks of secret corporate political spending are discussed in an article by The Hill. Following the revelations of AT&T and Novartis’ spending on Michael Cohen, The Hill notes that, “Secrecy blown up by inadvertent disclosure can aggravate the bad optics of a suspicious expenditure on politics.”

A cautionary tale from Rod Blagojevich (remember him?): The Washington Examiner reports on the Wall Street Journal interview in which the former Governor of Illinois philosophizes about his prison time (year 6 of 14) for what he characterizes as “practicing politics” by raising campaign contributions. The U.S. Supreme Court declined to hear his appeal in April of this year.

Is the Federal Election Commission powerful enough to kill Zombies? Bloomberg Government reports that the Campaign Legal Center and others are pushing the FEC to adopt rules to crack down on the perceived personal use of old “zombie” campaign funds. The FEC has announced that it will review campaign funds for former officeholders who have been out of office for more than one term, beginning in July.

WEEK OF MAY 25, 2018

Latest Developments:

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

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

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

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

In case you missed it:

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

WEEK OF MAY 18, 2018

Latest Developments:

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

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

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

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

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

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

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

In case you missed it:

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

WEEK OF MAY 11, 2018

Latest Developments:

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

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

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

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

In case you missed it:

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

WEEK OF MAY 4, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF APRIL 27, 2018

Latest Developments:

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

In case you missed it:

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

WEEK OF APRIL 20, 2018

Latest Developments:

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

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

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

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

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

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

In case you missed it:

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

WEEK OF APRIL 13, 2018

Latest Developments:

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

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

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

In case you missed it:

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

WEEK OF APRIL 6, 2018

Latest Developments:

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

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

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

In case you missed it:

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

WEEK OF MARCH 30, 2018

Latest Developments:

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

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

In case you missed it:

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

WEEK OF MARCH 23, 2018

Latest Developments:

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

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

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

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

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

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

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

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

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

In case you missed it:

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

WEEK OF MARCH 16, 2018

Latest Developments:

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

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

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

In case you missed it:

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

WEEK OF MARCH 9, 2018

Latest Developments:

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

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

In case you missed it:

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

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

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

WEEK OF MARCH 2, 2018

Latest Developments:

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

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

In case you missed it:

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

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

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

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

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

WEEK OF FEBRUARY 23, 2018

Latest Developments:

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

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

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

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

In case you missed it:

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

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

WEEK OF FEBRUARY 16, 2018

Latest Developments:

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

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

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

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

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

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

In case you missed it:

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

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

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

WEEK OF FEBRUARY 9, 2018

Latest Developments:

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

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

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

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

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

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

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

In case you missed it:

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

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

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

Save the dates….

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

Research for clients….

Nielsen Merksamer clients receive updates on changes in the law through the Client Portal.

Which of the following statements about state regulation of lobbyists and interest groups are accurate quizlet?

Which of the following statements about state regulation of lobbyists and interest groups are accurate? There are strict limits on the costs of gifts that can be given by a lobbyist to a state-elected or legislative official.

Which of the following statements is consistent with the concept of pluralism quizlet?

Which of the following statements are consistent with pluralist theory? -The political system is best understood as a marketplace in which multitude of interest compete.

What is one reason it is difficult to lobby the executive branch in California?

- California's seven statewide elected administration offices make it difficult for interest groups to coordinate lobbying activities. - Interest groups find it more difficult to lobby members of the executive branch because state campaign finance laws prohibit contributions to executive branch candidates.

Which of the following is the best definition of pluralism quizlet?

Which of the following is the best definition of pluralism? a multitude of groups compete for and share power at any given time.

Which statements about proposition 54 (the california legislature transparency act) are accurate?

Which of the following statements about state regulation of lobbyists and interest groups are accurate quizlet?

Which of the following statements is consistent with the concept of pluralism quizlet?

What is one reason it is difficult to lobby the executive branch in California?

Which of the following is the best definition of pluralism quizlet?

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