We are sending out the 2016 State and Federal Communications, Inc. Executive Source Guidebooks today! For all of our clients who receive them, they will arrive in early January.

If you would like to know more about the Executive Source Guidebook and our compliance services, send a request to marketing@stateandfed.com.

Lobbying

Arizona: “Embattled Arizona Utility Regulator Decides to Quit” by Howard Fischer (Capitol Media Services) for Arizona Daily Star

Missouri: “Andrew Blunt’s Lobbying Work Faces Scrutiny as He Manages Father’s Re-Election Bid” by Deirdre Shesgreen (USA Today) for Springfield News-Leader

Pennsylvania: “Lobbyist Reform Bills in Pa. Senate” by Greg Gross for York Dispatch

Texas: “Austin Officials to Create New Lobbying Registration, Reporting Rules” by Lilly Rockwell for Austin American-Statesman

Campaign Finance

“‘Dark Money’ Biggest Campaign Finance Challenge Facing States” by Geoff Mullvihill (Associated Press) for Denver Post

“New FEC Chairman Aims to Calm Agency at War with Itself” by Dave Levinthal for Center for Public Integrity

California: “Critics Decry Contributions to Councilman Englander from Taser Execs Seeking LAPD Camera Contract” by David Zahniser for Los Angeles Times

New York: “Albany Trials Exposed the Power of a Real Estate Firm” by William Rashbaum for New York Times

Ethics

Missouri: “Missouri Legislative Staffers Earn Big Money as Political Consultants” by Jason Hancock for Kansas City Star

New Mexico: “Can New Mexico Break Its Cycle of Corruption?” by Alan Greenblatt for Governing

Pennsylvania: “Scandal’s Web Trips Pennsylvania Attorney General Kathleen Kane” by Michael Wines for New York Times

Elections

“Sanders Data Controversy Spotlights Powerful Gatekeeper” by Nancy Scola for Politico

“Lindsey Graham Suspends His Presidential Campaign” by David Weigel and Robert Costa for Washington Post

California: “When Legislator Resigns, Costs Can Be High to Voters, Party” by Laurel Rosenhall (CALmatters) for San Francisco Chronicle

On December 17, the Austin, Texas City Council voted to reform the city’s lobbying and campaign finance laws.

The council approved a lobbyist reform proposal, which includes initiating changes to city ordinances relating to the regulation of lobbyists and to the duties and functions of the Ethics Review Commission. The council also approved a resolution regarding mandating disclosure of campaign contributions and expenditures by non-profits and other entities not currently required to disclose their funding. The city manager has been directed by the council to write these ordinances, which will then be put to a vote by the council sometime in 2016.

Lobbying

“Ethics Commission Supports New, Stricter Policy for Officials Receiving Jaguars Tickets” by Sebastian Kitchen for Florida Times-Union

Campaign Finance

“Political Groups Spend a Lot, See Scant Results in U.S. Race” by Grant Smith and Emily Flitter for Reuters

New York: “Court Hears Arguments in High-Stakes ‘LLC Loophole’ Case” by Bill Mahoney for Capital New York

New York: “Reforms to City Campaign Finance System Advance Ahead of 2017 Election Cycle” by Samar Khurshid for Gotham Gazette

Ethics

“Defense Secretary Conducted Some Official Business on a Personal Email Account” by Michael Schmidt for New York Times

Alabama: “Alabama Mayor, Councilman Fight at City Hall” by Phillip Lucas (Associated Press) for ABC News

Legislative Issues

Vermont: “Senate Panel Votes to Seek Suspension of McAllister” by Neal Goswami for Rutland Herald

After questions arose regarding certain contributions, state Senator David Sanders admitted to a mistake of contributing $5,000 of his 2014 campaign’s surplus funds to his political action committee.  After admitting the mistake and consulting with the Arkansas Ethics Commission, Sanders returned the contributions to 12 campaign contributors.

Sanders also admitted to failing to file required reports for his political action committee, which have since been filed to remedy the problem. Sanders chalked up his mistakes as “simply an oversight,” and there are no penalties expected to be handed down by the Arkansas Ethics Commission.

National:

State Integrity Investigation Brings Calls for Reform as Legislative Sessions Approach
Center for Public Integrity – Nicholas Kusnetz | Published: 12/16/2015

The State Integrity Investigation is yielding calls for change from lawmakers, good-government advocates, and editorial boards across the country. The investigation, published in November, is a data-driven ranking and assessment of each state’s transparency and anti-corruption measures conducted by the Center for Public Integrity and Global Integrity. No state earned better than a “C” grade. In several states, publication of poor grades coincided with ethics scandals that have prompted a growing number of political leaders to call for a transformation in how business is done in state capitals.

Why State Legislatures Are Still Pretty White
Governing – Teresa Wiltz | Published: 12/9/2015

The nation’s growing diversity is not reflected in state Legislatures. Nationwide, African-Americans, who make up 13 percent of the U.S. population, account for nine percent of state lawmakers. Latinos, who are 17 percent of the population, only account for five percent of legislators. Asian-Americans account for five percent of the population but only one percent of lawmakers. Research shows in local elections, voters tend to vote for candidates who look like them. That is a problem when a large proportion of minority voters are lumped together in a handful of districts. Such clustering increases the chances of there being at least a few minority lawmakers, but makes it less likely there will be very many of them. Another factor is few first- and second-generation immigrants can afford to get by on a part-time legislator’s salary, or have the kind of careers that will afford them the flexibility to serve in office.

Federal:

E.P.A. Broke Law with Social Media Push for Water Rule, Auditor Finds
New York Times – Eric Lipton and Michael Shea | Published: 12/14/2015

Congressional auditors say the Environmental Protection Agency (EPA) broke the law on multiple occasions with “covert propaganda” in support of a controversial regulation that gives the agency power over smaller streams of water. The Government Accountability Office (GAO) said a pair of social media campaigns by the EPA in support of its “waters of the United States” rule broke laws that prohibit federal agencies from promoting or lobbying for their own actions. GAO faulted the EPA for using Thunderclap, a social media amplification tool, to recruit hundreds of Twitter users to tweet in support of the rule. It also said the EPA broke the law with a blog post that linked to two environmental groups’ pages urging readers to contact members of Congress to oppose legislation.

Spending Bill Bars IRS and Others from Forcing Political Disclosure
USA Today – Fredreka Schouten | Published: 12/16/2015

The omnibus spending bill passed by Congress would bar the IRS from completing regulations to define and potentially crack down on the political activities of nonprofit groups. The bill also would prohibit the Securities and Exchange Commission from trying to force public companies to disclose their political activities to shareholders and the public. If the spending measure becomes law, any new disclosure rules from either the IRS or federal securities regulators probably could not be completed before the end of President Obama’s term in office. As a practical matter, that appears to bar any new agency rules from taking effect before either the 2016 presidential election or the 2018 midterm elections.

From the States and Municipalities:

California – San Jose Council Votes to Tighten Lobbying Rules
San Jose Mercury News – Ramona Giwargis | Published: 12/15/2015

The San Jose City Council voted to approve a host of changes to strengthen the lobbying ordinance. San Jose nearly a decade ago adopted transparency laws amid public scrutiny over costly backroom deals at City Hall. The rules required lobbyists to register with the city, pay fees, and file quarterly reports showing who they are meeting with and why. Another policy required elected officials to publish their calendars online to show how they spend their time. But a review found hundreds of contacts reported by lobbyists did not show up on the politicians’ calendars. Mayor Sam Liccardo recommended that lobbyists file online weekly reports and specify whether an interaction with an elected official is in-person, by phone, or email.

Florida – Broward Commission Rewrites its Ethics Code, Allows $5 Gifts
South Florida Sun Sentinel – Brittany Wallman | Published: 12/9/2015

Broward County commissioners loosening a zero-tolerance gift ban to allow a five-dollar limit. The no gift rule had been criticized by city and county officials as too strict, a rule that kept them from accepting a free bottle of water at an event. Under the changes, gifts from lobbyists or vendors of non-alcoholic beverages are allowed. And gifts of any type from those sources are legal, if they are not worth more than five dollars. In addition, loopholes were added to allow elected officials to accept gifts given to express sympathy, offers of free training, and tickets to charitable events, if the official pays for any meal served there.

Missouri – How This Missouri Mega-Donor Is Making His Pet Projects Part of the 2016 Elections
Huffington Post – Paul Blumenthal | Published: 12/16/2015

Taking advantage of a campaign finance system that greatly empowers wealth, Rex Sinquefield has been able to become the most dominant single political force in the state. Since 2008, he has contributed at least $35 million to candidates, political parties, PACs, and ballot initiative campaigns. The contributions have helped to create an unprecedented Republican Party supermajority in the Legislature. Sinquefield’s donations to ballot initiative campaigns have succeeded in putting significant restrictions on taxes at the local level. But with Democrat Jay Nixon in control of the governor’s mansion, Sinquefield’s main agenda items of eliminating the state’s income tax, expanding charter schools and private school vouchers, and crushing labor union power by passing so-called right-to-work legislation have remained just out of reach.

Nevada – Sheldon Adelson Said to Be Buyer of Las Vegas Review-Journal
New York Times – Ravi Somaiya and Sydney Ember | Published: 12/16/2015

Sheldon Adelson, a billionaire casino magnate and Republican power broker, is behind the secret purchase of The Las Vegas Review-Journal, according to the newspaper.  Speculation has mounted for days that Adelson was the primary backer of News + Media Capital Group, a secret group that acquired The Review-Journal and several local papers for $140 million. In the last presidential campaign, Adelson and his wife spent about $100 million, and the couple are expected to generously help whomever they endorse for president in 2016. Speculation turned to the political influence that Adelson could exert in his home state, a major presidential battleground in November 2016, and host to early Democratic and Republican nominating contests as well as a highly competitive U.S. Senate race.

New Mexico – Former New Mexico Secretary of State Prepares for Jail
Minneapolis Star Tribune – Morgan Lee (Associated Press) | Published: 12/16/2015

Former New Mexico Secretary of State Dianna Duran greed to a 30-day jail sentence after pleading guilty to charges involving the siphoning of money from her election account to fuel a gambling addiction. Under a plea agreement, Duran had the choice to withdraw her pleas but did not. She must pay a $14,000 fine, make restitution of nearly $14,000 to campaign donors, serve five years of probation, and perform 2,000 hours of community service. The sentence also involves in-person apologies to campaign donors and appearances before school children across the state.

New York – Cash Flows Freely in Albany: Laws lax on political fundraising
Poughkeepsie Journal – Jon Campbell | Published: 12/15/2015

Critics contend New York’s wealthy political donors pour money into the campaign accounts of high-powered government officials and are rewarded with access and influence in Albany. As part of a yearlong series, Gannett’s Albany Bureau has explored the intersection of politics and money in New York, examining its impact on public policy, from the $285.5 million spent on education lobbying since 2006 to the rise of public-relations firms working on elections and advocacy campaigns. But it is the state’s laws and limits on political fundraising that critics have long characterized as lax and insufficient. And reformers are hoping the back-to-back convictions of former Dean Skelos and Sheldon Silver may finally force Albany to act.

New York – Dean Skelos, Ex-New York Senate Leader, and His Son Are Convicted of Corruption
New York Times – William Rashbaum and Susanne Craig | Published: 12/11/2015

Former New York Sen. Dean Skelos and his son were convicted of charges they used the father’s position as majority leader to pressure companies to provide Adam Skelos with roughly $300,000 via consulting work, a no-show job, and a direct payment of $20,000. Dean Skelos had been one of the most powerful men in state government until his arrest this year, and his conviction – along with that of Assembly Speaker Sheldon Silver – will have repercussions beyond the courtroom. As in Silver’s case, the verdict resulted in Dean Skelos’s expulsion from the Legislature, where both men had served for more than three decades.

South Carolina – S.C. Attorney General’s Office Weighs in on Ethics Law, Possible Window into Prosecutors’ Public Corruption Probe
Charleston Post & Courier – David Slade, Doug Pardue, and Tony Bartelme | Published: 12/16/2015

Amid an ongoing public corruption probe, South Carolina Attorney General Alan Wilson’s office issued an opinion that may hinder prosecutors’ efforts to crack down on ethics violators. The document argued courts would likely rule it is legal under the state’s ethics laws for lawmakers to steer lucrative campaign work to their own companies or those run by family members. The nonbinding opinion delves into the often ethical gray areas of how lawmakers spend campaign money and wield influence, a system that dispensed nearly $100 million since 2009, according to a recent investigation.

Utah – SLC Council Slashes Campaign Contribution Limits
Salt Lake Tribune – Christopher Smart | Published: 12/9/2015

The Salt Lake City Council cut the maximum contribution to a mayoral candidate from $7,500 to $3,500. It also reduced maximum donations to council candidates from $1,500 to $750. Those limits apply to individuals, corporations, nonprofits, and unions. The caps apply only to Salt Lake City. Utah state law contains no limits on campaign contributions.

Washington – Ethics Board Looks at Lawmakers’ Meal Limit
Seattle Times – Joseph O’Sullivan | Published: 12/3/2015

The Legislative Ethics Board (LEB) discussed how to proceed on the trickier elements of a rule that imposed a hard limit on how many free meals that state lawmakers may take from lobbyists. LEB members approved a motion stating there is no special exemption for industry groups such as the Washington Bankers Association, which may feed lawmakers attending functions such as a luncheon or forum. But that motion also stressed such forums likely fall within an existing exemption for lawmakers, and so probably would not count as one of the 12 meals. The rules and discussion follow a review by The Associated Press that found the state’s most active lobbyists had lavished hundreds of meals upon lawmakers, estimated at more than $65,000 in value, in the first four months of 2013.

Wisconsin – Scott Walker Signs Bills on Splitting GAB, Campaign Finance
Milwaukee Journal Sentinel – Patrick Marley and Jason Stein | Published: 12/16/2015

Gov. Scott Walker signed into law a bill that rewrites Wisconsin’s campaign finance statutes. He also approved legislation that eliminates the state Government Accountability Board and hands its duties over to two new agencies, the Elections Commission and the Ethics Commission. Those new bodies will take over July 1. The campaign finance changes include doubling the limit for individual contributions and eliminating a requirement that donors giving more than $100 identify their employer. It also allows, for the first time, corporate donations to political parties and legislative campaign committees.

State and Federal Communications produces a weekly summary of national news, offering more than 60 articles per week focused on ethics, lobbying, and campaign finance.

Q. What are the key components for a successful government affairs compliance program?

A. We collaborate closely with our clients to create comprehensive and effective compliance programs. During this process, our clients often request guidance on best internal practices and procedures. Certainly, there is no one-size-fits-all approach—a successful compliance program will adapt seamlessly into the fabric of the corporate structure, making every program unique. Notwithstanding, here are five common components for successful government affairs compliance programs:

1. Centralized Oversight: Great compliance programs have a strong organizational structure with oversight and review vested in one dedicated team of government affairs professionals. All requests for corporate contributions, gifts, and events should be approved by the central team. There should be   one employer signatory for all state and local filings—one person who is responsible for oversight and who can attest to the accuracy of registrations and reports. This person typically has oversight of internal team activity, which affords an opportunity for a big picture overview of state and local responsibilities. The responsibility for all company reports should stay within the company—contract lobbyists typically should not be responsible for filing a company’s employer reports. Often, non-lobbyist employee activity, corporate contributions, and/or in-house corporate expenses need to be disclosed on employer reports. Contract lobbyists are not always privy to the necessary reporting information. We recommend working closely with your contract lobbyists to identify necessary reporting information (percentage of retainer dedicated to lobbying efforts, subject matter, etc.) and reviewing draft disclosure reports against company invoices to ensure accuracy in reporting.

2. Recurring Training Opportunities & Assessments: Providing adequate training opportunities for your team is necessary to ensure compliance. Ideally, this should be done on an annual basis, and completion should be required and documented. State and local requirements change quickly, as do team members. This is especially true for sales and procurement executives. We recommend a general training session or refresher course and individual follow-up to assess registration and/or reporting needs.

3. Broad Outreach Across Lines of Business and Departments: Contact with state and local government officials is usually not isolated to only the government affairs team—it can happen anywhere in your corporation, from the executive level to sales. A strong compliance program allows you to reach across lines of business and departments to ensure anyone engaging officials on behalf of your company is staying compliant with relevant rules and restrictions.

4. Clear Policies for Employee Engagement: Can you identify clear internal gift and contribution policies? Your compliance program should utilize and strengthen your existing gift, ethics, and corporate contribution policies. Ensure these policies are specific. For example, what employee activity triggers the policy? What activities are prohibited? What activities require pre-approval by your team? A well-structured compliance program will disseminate these policies companywide, and include a clear roadmap for employee compliance.

5. Open Door Policies and Procedures: In sum, you must make it easy to comply. If it’s too difficult to access information or request approval, your employees simply won’t do it. Is there an intranet, form, or a ticket system you can utilize to ensure your employees can easily access guidance? What resources do you provide to your employees?   Is there a company contact employees can reach to discuss questions or concerns? Further, there must be a fast turn-around time for questions and guidance. The longer something sits in a queue, the higher the risk for noncompliance.

In 2016, it will be more important than ever to keep a close watch on your compliance program.  Having a solid program in place will help when questions arise from the media, stockholders, and activists.

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.

Lobbying

California: “San Jose Council Votes to Tighten Lobbying Rules” by Ramona Giwargis for San Jose Mercury News

Maine: “Maine Ethics Commission Fines Lobbyist Joel Allumbaugh” by Michael Shepherd (Bangor Daily News) for Maine Sun Journal

Campaign Finance

“Inside the 2016 Black Market for Donor Emails” by Shane Goldmacher for Politico

“Spending Bill Bars IRS and Others from Forcing Political Disclosure” by Fredreka Schouten for USA Today

“How This Missouri Mega-Donor Is Making His Pet Projects Part of the 2016 Elections” by Paul Blumenthal for Huffington Post

New York: “Cash Flows Freely in Albany: Laws lax on political fundraising” by Jon Campbell for Poughkeepsie Journal

Ethics

“State Integrity Investigation Brings Calls for Reform as Legislative Sessions Approach” by Nicholas Kusnetz for Center for Public Integrity

Florida: “Broward’s First Corruption Watchdog Helps Keep Elected Officials Honest, Onlookers Say” by Brittany Wallman for South Florida Sun Sentinel

Pennsylvania: “State Rep. Louise Bishop Resigns, Pleads No Contest in Sting Case” by Angela Couloumbis and Craig McCoy for Philadelphia Inquirer

Washington: “Following the Money: Ethics concerns muddy state’s clean-energy grant program” by Jim Brunner for Seattle Times

Wisconsin: “Scott Walker Signs Bills on Splitting GAB, Campaign Finance” by Patrick Marley and Jason Stein for Milwaukee Journal Sentinel

On December 16, Gov. Scott Walker signed two bills amending campaign finance rules, increasing political contribution limits, and replacing the state’s Government Accountability Board (GAB) with two new agencies, one overseeing elections and the other overseeing ethics.

Other changes include resuming the practice of allowing lawmakers to determine funding for investigations of public officials, which had been halted when GAB was formed, and in changing the commission members from nonpartisan judges to appointees chosen by the governor and legislative leaders.

Kevin Kennedy, chief administrator of GAB, said there are still many questions to be answered regarding the transition. He said his agency would work with the governor’s administration to ensure a smooth transition.

The campaign finance bill is effective January 1, 2016. The new commissions replace GAB on July 1, 2016.

The San Jose City Council approved an ordinance modifying the city’s campaign finance law.

Ordinance No. 29642 allows separate contribution limits for both the special municipal election and the special runoff election. The ordinance also changed the campaign contribution period to end at 11:59 p.m. on the day before the election.

The new law took effect December 14, 2015.

The Maine Ethics Commission handed down two penalties today for lobbying and campaign finance law violations.  Joel Allumbaugh, a lobbyist for a Florida-based think tank, was fined $50 for failing to disclose his status as a paid lobbyist to a legislative committee.  Allumbaugh faced up to a $5,000 fine, and is the first lobbyist to be punished under a 2006 state lobbying disclosure law.

State Representative Diane Russell was also fined by the Maine Ethics Commission after she omitted over $1,200 in expenditures from her political action committee.  Russell faced a potential $10,000 fine, but members of the Commission decided on a reduction to $2,000.

Lobbying

“E.P.A. Broke Law with Social Media Push for Water Rule, Auditor Finds” by Eric Lipton and Michael Shear for New York Times

“A Revolving Door Helps Big Banks’ Quiet Campaign to Muscle out Fannie and Freddie” by Gretchen Morgenson for New York Times

California: “As Hospital Lobbyist, Ex-County Employee Pushes Limits of Ethics Policy” by Tracy Wood for Voice of OC

Florida: “Broward Commission Rewrites its Ethics Code, Allows $5 Gifts” by Brittany Wallman for South Florida Sun Sentinel

Washington: “Ethics Board Looks at Lawmakers’ Meal Limit” by Joseph O’Sullivan for Seattle Times

Campaign Finance

“Stumbo Proposes Doubling Campaign Contribution Limit” by Ryland Barton for WFPL

Ethics

EU: “Commission Agrees to Boost Revolving-Door” by James Panichi for Politico

“Sen. Bob Corker Earned Millions More Than First Reported” by Mary Troyan for USA Today

New York: “Dean Skelos, Ex-New York Senate Leader, and His Son Are Convicted of Corruption” by William Rashbaum and Susanne Craig for New York Times

New York: “To Judge, Lawyer’s Cooperation Doesn’t Offset Corruption” by Benjamin Weiser for New York Times

Elections

“Cruz Campaign Credits Psychological Data and Analytics for Its Rising Success” by Tom Hamburger for Washington Post

On December 14, testimony was heard in a case in U.S. District Court challenging the city of Austin’s campaign finance ordinances. City councilman Don Zimmerman originally brought the lawsuit last summer alleging the city’s blackout period for fundraising and the political contribution limits are unconstitutional violations of free speech. The trial being conducted before U.S. District Judge Lee Yeakel is expected to conclude this week.

Photo of Austin, Texas skyline at night by Argash on Wikimedia Commons.

Lobbying

California: “Stricter Rules Proposed For Reporting ‘Payments To Influence’” by Ben Bradford on Capital Public Radio

Campaign Finance

“Campaign Finance Reform Explained With Cartoons” by Rio Tazewell in The Huffington Post

“Romney super PAC fined” by Theodoric Meyer in Politico.

Oregon: “Campaign finance reform still unresolved” by Gordon Friedman in the Statesman Journal

Ethics

New York: “Governor Cuomo Promises More Ethics Reforms” on WNYC

New York: “Cuomo previews ethics reform plans and closing LLC loophole” by Matthew Hamilton in the Albany Times Union

New York: “Facing Criticism, Assemblyman Says He Is Declining Consulting Job” by MICHAEL M. GRYNBAUM in The New York Times

Elections

Iowa: “Terry Branstad Breaks Record for Longest-Serving U.S. Governor” by Alan Greenblatt in Governing

Texas: “In Close Race, Houston Elects Democratic Mayor Sylvester Turner” by Mike Morris and Rebecca Elliott in Governing