U.S. Representative Adam B. Schiff has introduced a constitutional amendment to reverse the resulting outcomes of the U.S. Supreme Court’s decisions in Citizens United and Arizona Free Enterprise Club’s Freedom Club PAC V. Bennett, an Arizona public financing law struck down by the Court.

The amendment, proposed in House Joint Resolution 111, reads as follows: “Nothing in this Constitution shall be construed to forbid Congress or the states from imposing content-neutral limitations on private campaign contributions or independent political campaign expenditures. Nor shall this Constitution prevent Congress or the states from enacting systems of public campaign financing, including those designed to restrict the influence of private wealth by offsetting campaign spending or independent expenditures with increased public funding.”

In his press release, Congressman Schiff said: “I have always been loath to amend the constitution, but this tragic line of reasoning by the Supreme Court has so threatened the health of our democracy that I am moved to introduce today’s amendment.”

The Securities and Exchange Commission has extended the date advisers and third-party solicitors must comply with new pay-to-play rules until April 2013.

The Commission is extending the compliance date for the ban on third-party solicitation under rule 206(4)-5 of the Investment Advisers Act of 1940 in order to ensure an orderly transition for third-party solicitors and advisers and as well as to provide additional time to adjust compliance policies and procedures after the transition.

Rule 206(4)-5, the “Pay to Play Rule,” prohibits an investment adviser from providing advisory services for compensation to a government client for two years after the adviser or certain of its executives or covered associates make a contribution to elected officials or candidates.

The rule also prohibits an adviser and its covered associates from providing or agreeing to provide, directly or indirectly, payment to any third-party for a solicitation of advisory business from any government entity on behalf of such adviser, unless such third-party was an SEC-registered investment adviser or a registered broker or dealer subject to pay to play restrictions adopted by a registered national securities association.

More information can be found here.

The Federal Election Commission (FEC) has issued an advisory opinion approving text messaging of political contributions in federal elections.

Political and media consulting firms Red Blue T LLC and AnnourMedia, Inc., along with m-Qube, Inc, a merchant billing service provider, requested approval from the Federal Election Commission (FEC) to use text messaging to raise funds for political committees.

In AO 2012-17, the commission concluded the proposed plan made to use the merchant billing service as intended is consistent with reporting requirements, conforms to the prohibition on corporate contributions, complies with forwarding requirements when making factored payments, and satisfies the segregation requirement for commercial vendors processing the contributions.

The proposal envisions two methods for the use of text messaging to make contributions:

In the first method, a wireless user would text a pre-determined message to a common short code registered to a political committee. A text message response sent by the merchant to the user would then require the user to respond with his or her own text message to confirm the user’s intent to engage in the transaction and certify the user’s eligibility to make a contribution.

With the second method, a user would enter his or her mobile phone number on a political committee’s website. Before submitting the phone number, the user will be required to certify his or her eligibility to make a contribution. After the user makes the certification and submits the phone number, the user will receive a text message from the merchant that includes a PIN. The user will enter the PIN on the political committee’s website to confirm the transaction.

No mobile phone number can be billed more than $50 per month for contributions to any one political committee.

Ontario Integrity Commissioner Lynn Morrison has called for changes to the province’s Lobbyists Registration Act.

Commissioner Morrison, who is also the Lobbyist Registrar, recommends eliminating the “significant part of duties” threshold for registration of lobbyists. Currently, lobbyists must register only if they spend 20 percent or more of their time on lobbying activities. Ms. Morrison recommends all paid lobbyists register regardless of the time spent lobbying.

She also recommends the Lobbyists Registrar have the power to issue administrative monetary penalties and to introduce and require new categories of information reporting for lobbyists. Additionally, the commissioner recommends the different distinctions between the two types of in-house lobbyists be eliminated.

In an Office of the Integrity Commissioner press release, Commissioner Morrison said, “The registration system has worked well since it was introduced in 1999, but times have changed. The roles of lobbyists and public officials have evolved, making it even more important that a registry provide clear, accessible information on who is lobbying whom, and about what.”

Photo of the Toronto skyline by John Vetterli on Wikipedia.

Nevada Assemblyman Pat Hickey has called for campaign finance, lobbying, and ethic reforms.

Assemblyman Hickey’s recommendations include expanding the reporting of lobbyists’ expenditures to include those made when the legislature is not in session, limiting political contributions to PACs, and creating a ‘cooling off’ period before an ex-legislator may become a lobbyist.

As reported in the Las Vegas Sun, the Assemblyman is also suggesting there be ‘real time’ reporting of political contributions.

Assemblyman Hickey made these recommendations at a news conference and has not yet requested a draft bill for these proposed changes. The Nevada Legislature currently is not in session and not scheduled to meet again until 2013.

More information from the Las Vegas Sun can be found here and here.

Photo of Assemblyman Pat Hickey courtesy of the Nevada Legislature Website.

The 18 month time-limit prohibiting political contributions under New Jersey’s pay-to-play law starts from the time when bids for a request for proposals (RFP) are submitted, a court has ruled.

The Appellate Division of the Superior Court of New Jersey affirmed a decision prohibiting Langan Engineering & Environmental Services, Inc. from contracting with the New Jersey Schools Development Authority because of a political contribution given prior to Langan’s submission of its bid. Langan had submitted its bid on the due date for the RFP.

The Court examined the language in N.J.S.A. §19:44A-20.14, which describes the prohibition period as “within the 18 months immediately preceding the commencement of negotiations for the contract or agreement.”

The Court reasoned, “[W]e deem the point at which bids are submitted to be the time when ‘negotiations’ occur. Stated differently, because the submission of the bid is the triggering event culminating in the eventual award of a contract, and because the term ‘negotiations’ suggests a point in time at the beginning of the contracting process … the term ‘negotiations’ describes the point in time when bids are submitted. Consequently, we conclude that the agency’s receipt of bids constitutes the ‘commencement of negotiations’.” It rejected the appellant’s contention that a disqualification period begins on the day a political contribution is made, and continues for the next eighteen months.

The Federal Election Commission (FEC) unanimously approved five legislative recommendations to be submitted to the U.S. Congress.

One proposed change would require all Senate candidates and their committees to use electronic filing.

The FEC also recommends the Commission have permanent authority to assess administrative fines, Congress expand the prohibitions on fraudulent misrepresentation of campaign authority, and the personal use restrictions to all political committees be extended. Additionally, the FEC is advocating Congress amend the law to allow the FEC to create Senior Executive Service positions under the Civil Service Reform Act of 1978 in line with other comparable federal agencies.

New Jersey Senate Republican Leader Tom Kean, Jr. is introducing legislation applying the state’s pay-to-play laws to labor unions.

According to the Senator’s press release, his bill applies the same restrictions on campaign contributions and activities to labor unions under contract with state, county, and municipal governmental entities as are currently applied to government service providers.

“Pay to play reform was passed to limit the influence of big spending contractors over the public officials from whom they are trying to obtain work. That law missed one of the biggest recipients of public dollars and thus, must be fixed in the interest of fairness and honesty,” argues Senator Kean.

Photo of New Jersey Senator Tom Kean, Jr. courtesy of Wikimedia Commons.

The Bergen County, New Jersey Board of Chosen Freeholders issued a memorandum clarifying its pay-to-play ordinance adopted last year.

In the section of the ordinance concerning the prohibition on awarding contracts to certain contributors, the phrase “any candidate for elective office in the County of Bergen or holder of elective office in the County of Bergen” is used.

The Board’s memorandum states the phrase is limited to persons “who run for, or are elected to” county offices. The phrase does not include candidates for a municipal office held in the county, statewide candidates for the Assembly or Senate, or federal candidates whose district includes Bergen County.

More information can be found at the Corporate Political Activity Law Blog.

On April 30, 2012, the Lobbyists Registration Act came into force in the Canadian province of Manitoba. The act requires lobbyists to file returns using an electronic registry system. Although the act was originally passed in 2008, it came into force only this year upon proclamation, allowing the lobbyist registrar the opportunity to create the system with its online component.

The act categorizes lobbyists as either consultant lobbyists or in-house lobbyists. Consultant lobbyists are individuals who, for pay or other benefit, undertake to lobby on behalf of a client. An in-house lobbyist is defined as an employee, partner, or sole proprietor of an organization who lobbies, or has a duty to lobby, on behalf of the organization. However, to be designated as an in-house lobbyist, an individual’s lobbying or duty to lobby has to constitute a significant part of his or her activities, which the regulations define as meeting or exceeding 100 hours annually. Additionally, if an individual’s lobbying, together with lobbying by others in the organization, meets or exceeds 100 hours annually, the senior officer of the organization must file a return.

The act defines lobby to mean communicating with a public official in an attempt to influence the development of a legislative proposal; introducing a bill or resolution before the assembly; making or amending a regulation; developing, amending, or terminating a program or policy; or awarding a financial benefit. For consultant lobbyists the definition of lobby also includes arranging a meeting with a public official or communicating with a public official in an attempt to influence the award of a contract.

Consultant lobbyists already lobbying before April 30th have 30 days to begin filing. If lobbying begins after April 30th, consultant lobbyists have 10 days to file. A senior officer filing on behalf of an organization with in-house lobbyists has two months in which to file, regardless of whether lobbying begins before or after April 30th. Additionally, the officer must file returns within two months after the end of each six-month period after filing the previous return.

The Federal Election Commission (FEC) approved several advisory opinions on a variety of issues.

In AO 2012-12, the FEC allowed a corporation to solicit contributions from its non-corporate franchisees and licensees’ executive and administrative personnel. The FEC found the personnel were part of Dunkin Brands, Inc. restricted class because of the degree of control it maintained on the franchisees and licensees.

In another opinion, the FEC concluded an association of physician-owned hospitals are not federal contractors although they provided services to patients in government-sponsored healthcare programs such as Medicaid. Therefore, the association is not prohibited from making contributions to independent expenditure-only political committees.

Additionally, the FEC found a New Hampshire campaign finance statute requiring disclaimers for telephone surveys was preempted by federal statutes and FEC regulations because the calls in question were only related to federal candidates.

The FEC also let stand the $46,200 aggregate limit for contributions to federal candidates over a request to contribute amounts over this limit.

The FEC press release concerning these and other decisions can be found here.

A Federal District Court denied a preliminary injunction request demanding the Federal Election Commission (FEC) not enforce a law prohibiting individuals with federal contracts from making political contributions to federal candidates or political parties.

In Wagner v. Federal Election Commission, filed in the United States District Court for the District of Columbia, the Court rejected challenges to the constitutionality of section 441c of Title 2 of the U.S. Code, which prohibits any vendors with contracts with the federal government from making such contributions.

The case, brought by the ACLU, asked the Court to declare the law unconstitutional as applied to individuals who have personal services contracts with federal agencies. Because federal workers who are not contractors may make federal political contributions, while contractors performing the same work may not, the suit argued section 441c violates both the Equal Protection Clause of the Constitution and the First Amendment.

In denying the preliminary injunction request, the Court concluded the plaintiffs do not have a likelihood of success on the merits of their claims.

Jeff Brindle, Executive Director of the New Jersey Election Law Enforcement Commission (ELEC), has renewed efforts calling for campaign finance reform, specifically concerning political contributions from contractors.

In a press release detailing public contractors’ political contributions for 2011, ELEC’s analysis concludes that while contractors are making fewer contributions directly to candidates, they are making substantially more contributions to PACs.

Director Brindle states, “In some cases, contractors may be evading the intent of pay-to-play restrictions and contribution limits by giving indirectly through these PACs. That is why the Commission has recommended making it harder for one candidate or group to establish multiple, affiliated PACs.”

Director Brindle also reiterates the Commission’s recommendation to adopt a single statewide pay-to-play law. Previous LobbyComply blog posts discusses the earlier recommendations can be found here and here.

Electronic filing of returns will be required by all consultant and in-house lobbyists in the Canadian province of Manitoba beginning April 30. The Lobbyists Registration Act, originally passed in 2008, comes into force only this year upon proclamation.

The Act outlines the registration and reporting requirements for individuals undertaking efforts to lobby the province, defines lobbyists as consultant or in-house lobbyists, establishes deadlines for filing returns, and lists which officials of the Manitoba government are covered.

User IDs and passwords will be required to file returns electronically, but will not be available for lobbyists to set up until April 30. There will be no fees for filing returns.

Penalties for violating the act can include a fine of up to $25,000.