National:

Wave of Ethics Complaints Hits Top Races

National Journal – Sarah Mimms | Published: 10/8/2014

With Election Day approaching, the closest races in the country have become magnets for ethics complaints. Watchdog groups and political parties have filed dozens of complaints against Republicans and Democrats in tough contests, questioning fundraising tactics and accusing campaigns of improper coordination, among other allegations, just as voters begin to tune in to the election-year fight. Regardless of their merits, the likelihood that any of these ethics complaints will be acted on before Election Day is slim. But for many of these groups, the result of a complaint is not nearly as important as filing the complaint itself.

Who is Donating to Political Campaigns Now? Big Pot.

Raleigh News & Observer – Kristen Wyatt (Associated Press) | Published: 10/6/2014

The U.S. marijuana industry is making campaign contributions to support cannabis-friendly candidates and ballot questions that could bring legal pot to more states. Medical marijuana businesses have been giving to candidates since the late 1990s. With the arrival of recreational pot in Colorado and Washington, the industry and its political influence are expanding rapidly. Marijuana measures will be on the November ballot in Oregon, Florida, Alaska, and Washington, D.C, so many donations are being funneled into those campaigns and the candidates who support them.

Federal:

A Campaign Dollar’s Power Is More Valuable to a Challenger

New York Times – Lynn Vavreck | Published: 10/7/2014

Political scientists have found the relationship between campaign spending and election results is problematic. The difficulty stems from a general pattern in U.S. House and Senate elections. In congressional elections from 1992 to 2012, challengers who spent more money won more often than those who spent less. The opposite was true for incumbents, but correlation does not always imply causation. The question is not just whether spending affects election outcomes, but how spending might affect different kinds of candidates differently.

FEC Votes to Relax Campaign Finance Rules

The Hill – Benjamin Goad | Published: 10/9/2014

The FEC moved to formally relax campaign finance restrictions in response to a pair of U.S. Supreme Court decisions. The commission agreed on language that will amend its rules to conform to the Citizens United ruling, which struck down restrictions that previously barred corporations and unions from spending money from their general treasury funds to support or oppose candidates. The agency also approved of a second set of regulations in the form of an interim final rule responding to the ruling in McCutcheon v. FEC. The decision eliminated aggregate contribution limits for individual donors in a single election cycle.

Nationals are Champs for Fundraisers

Politico – Byron Tau and Kevin Robillard | Published: 10/3/2014

Candidates, parties, and PACs have spent at least $245,000 on Washington Nationals tickets, gear, and seats during this election cycle. Most of that money went to hosting fundraising events at Nationals Park or buying tickets for donors, constituents, and lobbyists. Even more political cash goes to the Major League Baseball team in the form of corporate skybox rentals that often used to host members of Congress for fundraising events, money that is not always identified in campaign finance reports. The Nationals are in a league of their own when it comes to collecting political dollars; according to CQ Moneyline, the other seven teams in this year’s playoffs barely merit a mention as venues to collect political money or host wealthy donors.

From the States and Municipalities:

Alaska – As Energy Boom Ends, a Political Identity Crisis in Alaska

New York Times – Kirk Johnson | Published: 10/8/2014

Economic anxiety in Alaska is roiling an already sharp-edged political season, focused on one of the most competitive U.S. Senate races in the country: an endangered Democratic incumbent, Mark Begich, against Republican challenger, Dan Sullivan, a former state attorney general and natural resources commissioner. Alaska might appear politically conservative, and measured by election results, especially on the presidential level, it is. But many Alaskans say ideology is in fact a shallow measure of the political climate, and hard-nosed practicality – what does Alaska need from Washington and who is best at getting it – can often hold as much sway.

Colorado – Republicans Win Super PAC Lawsuit

Law Week Colorado – Hannah Garcia | Published: 10/2/2014

A District Court judge sided with the Colorado Republican Party in its efforts to establish its own Super PAC, while a local watchdog group is decrying the ruling as an erasure of state law surrounding political contributions. The GOP argued it was entitled to form the PAC because independent expenditures made by any person is permissible under the state constitution, and those expenditures are not subject to contribution limits and are permissible as long as there is no coordination with the party. Colorado Ethics Watch argued the committee is controlled and coordinates with the Republican Party, and because of that, is subject to the same contribution limits as political parties.

Illinois – When Interests Overlap for Durbin, Lobbyist Wife

Insurance News Net – Katherine Skiba and Kim Geiger (Chicago Tribune) | Published: 10/5/2014

A Chicago Tribune investigation found instances in which Loretta Durbin’s lobbying clients have received federal funding promoted by her husband, U.S. Sen. Richard Durbin, raising questions about whether the power couple have done enough to avoid inherent conflicts-of-interest as they go about their jobs. Sen. Durbin acknowledged occasional “overlap” in which his wife’s clients received his help, but both insisted she limited her lobbying to Illinois and never sought federal funds. The couple said once the decision had been made not to lobby the federal government, Sen. Durbin was not consulted when she considered new clients.

Missouri – Gifts to Missouri Lawmakers Are Not Always Easy to Track

Kansas City Star – Jason Hancock | Published: 10/6/2014

Seven lobbyists, representing businesses ranging from Hallmark to Peabody Energy, paid the lion’s share of the $3,000 cost of an evening for Missouri lawmakers at an expensive Dallas steakhouse this summer and reported the gifts as going to “the entire General Assembly.” The dinner was part of the American Legislative Exchange Council’s annual convention. Critics of Missouri’s ethics laws have long complained that reporting gifts to groups instead of individuals violates the spirit of the disclosure requirements by making it difficult, and in some cases impossible, to tell who is getting gifts from whom.

Nevada – Judicial Candidate Resigns from Nevada Ethics Commission

Reno Gazette-Journal – Emerson Marcus | Published: 10/6/2014

The executive director of the Nevada Commission on Ethics has resigned amid a complaint that she used her office to advance her campaign to become a Washoe County Family Court judge. Caren Cafferata-Jenkins stepped down on October 9. Former commission investigator Michael Lawrence filed a complaint against her in June, saying she turned the commission office “into her own personal Kinko’s” for her campaign. Cafferata-Jenkins has denied the allegations and said Lawrence is bitter after losing his job in April. She said she is resigning because the complaint is bringing negative attention on the commission.

New Jersey – N.J. Lawmaker Tries to Limit New Bills … by Introducing a New Bill

Newark Star Ledger – Matt Friedman | Published: 10/6/2014

New Jersey Assemblyperson Anthony Bucco, who has looked on as his colleagues have introduced thousands of bills, sometimes on seemingly frivolous subjects and usually with little chance of passage, says he has had enough. And to come up with a solution, Bucco introduced a bill. Bucco, proposed legislation that would limit state senators to being the top prime sponsor on just 25 bills or resolutions per two-year session, and keep Assembly members to just 15 bills. At the end of the term, each bill would have to include an estimate by the Office of Legislative Services of how much it cost to draft it, process it, and consider it.

Pennsylvania – Fattah Nonprofits Paid Millions to Ex-Staffers

Philadelphia Daily News – William Bender | Published: 10/7/2014

Between 2001 and 2012, nonprofits founded or supported by U.S. Rep. Chaka Fattah have paid out at least $5.8 million to his associates, including political operatives, ex-staffers, and their relatives, according to The Philadelphia Daily News. Three people who had ties to the organizations were later convicted of federal crimes. For the past seven years, criminal investigators have been looking at Fattah and the cottage industry of mostly taxpayer-funded nonprofits run by his political allies.

Pennsylvania – Pittsburgh’s Campaign Finance Law Called Flawed

Pittsburgh Post-Gazette – Chris Potter | Published: 10/5/2014

One of the key enforcement mechanisms of Pittsburgh’s campaign finance ordinance is defunct; other provisions are contradictory. In an apparent oversight, the law omits mayoral and city controller races from the definition of races it covers. “The law is completely meaningless; this is what you tend to get when you approach public policy from the position of public relations,” said city Controller Michael Lamb. Across the state, efforts to rein in political spending appear to have met with more success.

South Carolina – State and Federal Investigation Focuses on Political Action Committee Money, State Contracts

Charleston Post & Courier – Jeremy Borden | Published: 10/8/2014

Investigators from the State Law Enforcement Division and federal agencies have launched a broad inquiry into the actions of several members of the South Carolina House, focused at least in part on some members of the Ways and Means Committee. Sources in a position to know about the investigation said the probe revolves around allegations that lawmakers sold their votes, funneled money from the state budget into their own pockets, and misused money from a PAC.

Virginia – McAuliffe Aide Suggested Job for Senator’s Daughter If He Remained in His Seat

Washington Post – Laura Vozzella | Published: 10/2/2014

Virginia Sen. Phillip Puckett abrupt exit from the Legislature, which flipped control of the chamber to the GOP and thwarted Gov. Terry McAuliffe’s goal of expanding health coverage, came amid accusations that Republicans had enticed him to leave with job offers for himself and his daughter, triggering an ongoing federal investigation. Now, a voice-mail message suggests Puckett fielded a similar overture from Paul Reagan, McAuliffe’s chief of staff, if he stayed in the Senate.

State and Federal Communications produces a weekly summary of national news, offering more than 80 articles per week focused on ethics, lobbying, and campaign finance.

Today, the Federal Election Commission (FEC) issued an advisory opinion allowing national convention committees to accept contributions separate from national party committees. The decision was supported by Democratic commissioner Ann Ravel and the three Republican commissioners, Lee Goodman, Caroline Hunter, and Matthew S. Petersen. The immediate effect is individuals may now contribute an additional $32,400 per calendar year to a convention committee beyond the $32,400 limit permitted to be given to committees of national political parties. The opinion holds that both the National Democratic Committee and the National Republic Committee, who requested the opinion, may each establish convention committees to raise and spend federal funds for convention expenses under separate contribution limits. The FEC found such convention committees qualify as “national committees” subject to their own contribution limits.

Additionally, in a 4-2 decision, the Federal Election Commission (FEC) approved final rules concerning independent expenditures and electioneering communications by corporations and labor organizations. Ravel again joined the three Republican commissioners to pass the rules, which were created in response to the 2010 Citizens United v. FEC U.S. Supreme Court decision. They will be effective once they have been transmitted to Congress for a 30-legislative-day review period.

The FEC also approved rule-making and interim final rule responses to McCutcheon v. FEC.

The Delaware Senate adjourned its brief special session on October 8, 2014.

Senators unanimously confirmed James Vaughn Jr. to the state Supreme Court.

Vaughn has served the past 15 years as a Superior Court judge.

Today, the Federal Election Commission (FEC) is considering final rules concerning independent expenditures and electioneering communications by corporations and labor organizations. In response to the 2010 Citizens United v. FEC U.S. Supreme Court decision, the commission has written rules expected to be approved at today’s meeting. The rules will be effective once they have been transmitted to Congress for a 30-legislative-day review period. The FEC will also consider proposed rule-making and interim final rule responses to McCutcheon v. FEC.

Republican attorney general candidate Shane McCormack is calling for tougher campaign finance rules for those holding the office. McCormack’s proposal would ban current service providers from contributing to a sitting attorney general and would prevent a donor from becoming a contractor after a successful campaign.

During a debate on Vermont Public Radio, McCormack revealed current attorney general Bill Sorrell accepted $8,000 from Dallas-based Baron & Budd, a law firm later hired as counsel. Sorrell defended the contribution by stating it was properly disclosed and the law firm was hired due to its expertise in the area being litigated.

Baron & Budd was hired following a recommendation from the Agency of Natural Resources to litigate a contaminated groundwater case against the fuel industry. Sorrell claims the agency was unaware of the contribution prior to making the recommendation.

On October 8, 2014, the Delaware Senate convened a special legislative session.

Gov. Jack Markell called the special session to confirm a new state Supreme Court justice.

On Monday, October 8, 2014, the Metropolitan King County Council passed an ordinance establishing a living wage. Ordinance 2014-0299 applies to all county employees and to county contractors with contracts totaling more than $100,000.

Beginning April 1, 2015, Schedule I employers, which are companies with more than 500 employees in the U.S., must pay their employees $11 per hour. The hourly living wage rate will increase on January 1, 2016, to $13 per hour or $12.50 if the employer contributes to its employees’ health plan. The hourly wage will increase yearly as provided in the ordinance until 2018, when all further increases will be tied to the national inflation rate. Beginning January 1, 2019, payment by the employer of health benefits will no longer affect the hourly rate.

Schedule II employers, which are companies with 500 or fewer employees in the U.S., must pay their employees $10 per hour. Beginning January 1, 2016, the hourly rate increases yearly to reach $17.25 by 2024. Beginning January 1, 2025, Schedule II employers must pay their employees a living wage equal to that of Schedule I employers.

The living wage ordinance applies to any contract over $100,000 entered into on or after April 1, 2015, the effective date of the ordinance.

The Legislative Assembly of British Columbia resumes today at noon for the prorogation of the second session of the 40th Parliament. The third session of the 40th Parliament will then open at 1:30 p.m. The third session is scheduled to adjourn on November 27, 2014.

Photo of the British Columbia Legislature Building by Ryan Bushby on Wikimedia Commons.

On October 2, the U.S. Supreme Court agreed to hear a case concerning whether a state commission created to craft federal congressional districts violates the Elections Clause of the U.S. Constitution. In Arizona State Legislature v. Arizona Independent Redistricting Commission, a voter initiative amended the state constitution to give the authority of redistricting to a commission rather than the state Legislature.

In February, a District Court held the Elections Clause does not prohibit Arizona from using a voter initiative to give congressional redistricting authority to a redistricting committee.

The Colorado Republican Party has been given permission to form an independent expenditure committee, or super PAC, because state law includes political parties under the definition of “persons.” A district court judge granted the party’s motion for summary judgment and will allow the group to raise and spend unlimited funds to aid in electing Republican candidates.

Earlier this year, the party asked Republican Secretary of State Scott Gessler for permission to form the committee. Gessler said he did not have authority to issue permission but encouraged the party to sue the state to clear up the matter. Republican Attorney General John Suthers appears to have followed Gessler’s lead and essentially did not fight the suit.

Nonprofit campaign finance watchdog Ethics Watch intervened in the case and argued a political party should not be able to set up a super PAC – as the huge influx in campaign spending might make candidates, who need a party’s endorsement to get their name on the ballot, beholden to the super PAC’s contributors.

Colorado voters passed a constitutional amendment in 2002 prohibiting corporations and labor unions from directly supporting candidates or political parties. In his decision, Second District Court Judge Robert McGahey avoided the constitutional conflict and maintains it is legal to establish the super PAC as long as it is truly independent of the party.

 

Q. I am a registered lobbyist, and I receive a contingency fee as part of my compensation.  Should I be worried?

A. In a majority of jurisdictions, there are express provisions prohibiting registered lobbyists from receiving a contingency-based fee.  Every jurisdiction treats this issue differently, and there is a wide range of statutory oversight.  This issue becomes especially problematic for in-house employees who wear dual hats—you may be required to register as a lobbyist because of your interactions with government officials on behalf of your company, but you may additionally be involved in sales work.

In some jurisdictions, including Louisiana, New Hampshire, and Wyoming, there are no prohibitions whatsoever. Other jurisdictions, such as Nevada, only narrowly prohibit contingency fees for influencing the outcome of legislative action. However, there are even more restrictive bans in other jurisdictions, including Florida and Arkansas, that not only prohibit registered lobbyists from receiving a contingency-based fee, but prohibit this for anyone involved in government procurement, absent meeting a limited exception for salespersons or sales agents.

New York is one example of a jurisdiction banning lobbyists from receiving contingency fees, although the state does have a well-defined registration exception for individuals who qualify as commissioned salespersons. To qualify, the primary purpose of employment must be sales, other lobbying activity must be limited, and the individual must meet specific requirements regarding the percentage of the commission. Another example is North Carolina, where the contingency fee ban is not applicable to an individual doing business with the state whose regular remuneration includes commissions based on these types of sales.

Bottom line, if you are required to register as a lobbyist, you must be aware of the laws applicable in your jurisdiction if you receive a contingency-based fee for your work.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: experts@stateandfed.com.

(We are always available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or e-mail us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies to your questions are not legal advice. Instead, these replies represent our analysis of laws, rules, and regulations.

Who can turn the world on with her smile?
Who can take a nothing day, and suddenly make it all seem worthwhile?
Well it’s you girl, and you should know it
With each glance and every little movement you show it

Love is all around, no need to waste it
You can have a town, why don’t you take it
You’re gonna make it after all
You’re gonna make it after all

I am definitely going to date myself with this column, but it must be written. I totally forgot all about Mary Tyler Moore until someone posted the Minneapolis statue on Facebook during the National Conference of State Legislatures. It had me thinking and remembering the influence Mary Richards had on me becoming a professional business woman.

Think of it…what did we have before Mary Richards? Not many. Mary had her own apartment, job, budget, and friends. And, she had the great “a” and “z” bookends, which I attempted to create in ceramics class. [Yes, I still have them.]

National:

Mostly Black Cities, Mostly White City Halls

New York Times – Richard Fausset | Published: 9/28/2014

Disparities between the percentage of black residents and the number of black elected officials are facts of life in scores of American cities, particularly in the South. The unrest that followed the shooting death of 18-year-old Michael Brown in Ferguson, Missouri has emphasized how much local elections can matter, and prompted a push there for increased black voter participation. The disparities result from many factors, but Ferguson has become a vivid example of the way a history of political disengagement and underrepresentation can finally turn toxic.

Federal:

Court Reviews Contractor Political Donations

BusinessWeek – Pete Yost (Associated Press) | Published: 9/30/2014

In a dispute over a ban on political contributions by individual federal contractors, U.S. Court of Appeals for the District of Columbia Circuit grappled with reconciling the restrictions and their purpose of preventing corruption with the First Amendment and the various ways contractors could get around the ban. There is no such prohibition for corporate federal contractors that set up political committees or individuals who serve as corporate officers. The challengers filing the lawsuit say the different treatment violates the equal protection clause of the Constitution because similarly situated groups of people are not subject to the ban.

Left Embraces Boycott Politics

The Hill – Julian Hattem | Published: 10/2/2014

From gun control to climate change to same-sex marriage, a number of Fortune 500 companies are succumbing to pressure campaigns and boycotts and are falling in line with liberal positions on issues that Democrats have been unable to move through Congress. The Internet has made corporations a more alluring target to Web-fluent activists trying to change the country’s culture. It has also made companies more responsive. Conservative activists have mounted pressure efforts of their own, but their campaigns are often reacting, staged in support of businesses that are under fire from the left.

U.S. Judge Dismisses Republican Challenge to SEC Pay-to-Play Rule

Reuters – Sarah Lynch and Jonathan Stempel | Published: 9/30/2014

The U.S. Securities and Exchange Commission won dismissal of a lawsuit by state Republican parties in New York and Tennessee claiming its limits on some investment firm campaign contributions violate free-speech rights. U.S. District Court Judge Beryl Howell said her court lacks jurisdiction over the matter and ordered her clerk to close the case. The SEC’s rule bars an investment firm from managing a state’s assets for two years if the company, or certain of its executives, make more than a nominal campaign donation to a state official with power over state contracts with investment advisers.

From the States and Municipalities:

California – Jerry Brown Vetoes California Political Ethics Bills

Fresno Bee – David Siders (Sacramento Bee) | Published: 10/1/2014

California Gov. Jerry Brown vetoed key bills that were passed in response to a series of scandals at the Capitol, saying they would further complicate gift and campaign rules without sufficient benefit to the public. Senate Bill 1443 would have reduced to $200 the value of gifts an official can receive from a single source each year, and banned all gifts from lobbyists. Senate Bill 1442 would have required campaign committees to file finance reports four times a year, doubling the current requirement of twice a year. One measure Brown signed was Senate Bill 1441, which bans campaign fundraisers at lobbyists’ homes.

Florida – U.S. Supreme Court to Hear Former Hillsborough Judicial Candidate’s Fundraising Issue

Tampa Bay Times – Jim Saunders (News Service of Florida) | Published: 10/2/2014

The U.S. Supreme Court will take up a Florida case that focuses on whether judicial candidates should be allowed to personally solicit campaign contributions. The Florida Supreme Court this year upheld a ban on such solicitations, reiterating an earlier position that the prohibition helps in “preserving the integrity of the judiciary and maintaining the public’s confidence in an impartial judiciary.” But attorneys for a former Hillsborough County judicial candidate, Lanell Williams-Yulee, asked the U.S. Supreme Court to take up the issue, contending the ban violates First Amendment rights.

Hawaii – Cachola Fined a Record $50,000 for City Ethics Violations

Hawaii Reporter – Malia Zimmerman | Published: 9/27/2014

The Honolulu Ethics Commission fined state Rep. Romy Cachola, a former member of the city council, $50,000 for multiple alleged violations of city ethics laws, including accepting expensive meals and golf outings from lobbyists. The penalty is the largest civil fine ever approved by the commission, which said it was influenced by persistent violations occurring monthly during several years, as well as Cachola’s repeated disregard of a 2003 directive ordering him to not accept gifts from lobbyists in excess of $200.

Missouri – Ferguson Demands High Fees to Turn over City Files

Philadelphia Inquirer – Jack Gillum (Associated Press) | Published: 9/29/2014

The city of Ferguson has demanded high fees to produce copies of records related to the fatal shooting of 18-year-old Michael Brown that, under Missouri law, it could give away free if it determined the material was in the public’s interest to see. Instead, in some cases, the city has demanded high fees with little explanation or cost breakdown. It billed The Associated Press $135 an hour – for nearly a day’s work – merely to retrieve a handful of email accounts since the shooting. Price-gouging for government files is one way that local, state, and federal agencies have responded to requests for potentially embarrassing information they may not want released.

New York – Lobbyist Ethics Training Is Up and Running

Albany Times Union – Rick Karlin | Published: 9/27/2014

Lobbyists in New York are now able to take an online ethics training course that was mandated in a 2011 law. Registered lobbyists are supposed to complete the course by the end of December. While there is not a clear-cut penalty for failing to do so, the Joint Committee on Public Ethics said it will monitor compliance.

Ohio – Panel Refers Rep. Mallory for Ethics Prosecution

Columbus Dispatch – Jim Siegel | Published: 10/1/2014

The Ohio Joint Legislative Ethics Commission recommended state Rep. Dale Mallory face charges for accepting Cincinnati Bengals tickets from lobbyists and failing to disclose the gifts. The commission found Mallory wrongfully accepted a $77 ticket in 2009 and nearly $284 worth of tickets in 2013. Two lobbyists have already pleaded guilty to not reporting that they gave Mallory the tickets. John Rabenold was fined $2,000 for not disclosing gifts to state lawmakers, including a ticket he gave Mallory for a Bengals game in December 2009. George Glover was fined $500 after he did not disclose or keep receipts for a 2013 Bengals ticket he gave to Mallory.

Pennsylvania – Allegheny Authority Bends Limits on Free Tickets for Pro Sporting Events

Pittsburgh Tribune-Review – Aaron Aupperlee | Published: 9/29/2014

The Pittsburgh Tribune-Tribune said the municipal authority that oversees public sports and entertainment venues in Allegheny County routinely violates its policy to limit the number of free tickets it gives to public officials, and it often does not record who uses its seats or luxury suites at games. “People call and they need them for goodwill; I’ll get them and give them to them,” state Sen. Wayne Fontana, board chairperson of the Sports & Exhibition Authority.

Texas – DeLay’s Decade-Long Legal Fight Comes to an End

Houston Chronicle – Lauren McGaughy | Published: 10/1/2014

Texas’ highest criminal court upheld a lower court’s ruling overturning former U.S. House Majority Leader Tom DeLay’s 2010 conviction for money laundering. DeLay had been found guilty of channeling $190,000 in corporate political donations to Republicans running for the Texas Legislature in 2002 as part of a push to redraw congressional district lines in the state. Texas election law prohibits corporate campaign contributions to state candidates. The Court of Criminal Appeals ruled DeLay was not guilty because Travis County prosecutors could not prove he believed the corporate funds he was funneling to state candidates were “criminal proceeds.”

State and Federal Communications produces a weekly summary of national news, offering more than 80 articles per week focused on ethics, lobbying, and campaign finance.