July 8, 2010 •
State and Federal Communications’ Experts Answer Your Questions.
Here is your chance to “Ask the Experts” at State and Federal Communications, Inc. You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: firstname.lastname@example.org. (Of course, we have always been 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.
Q. My employer makes corporate contributions in California. We have not yet exceeded $10,000 in calendar year 2010. The primary election and special elections are taking place, along with the general election in the fall. If we decide to make contributions, when do we have a late contribution report due?
A. The California “Late Contribution Report” [Form 497], sometimes referred to as the “24-hour report” is due during the 16-day period preceding any election if all of the following criteria are met:
- The contribution is $1,000 or more. This includes non-monetary and in-kind contributions.
- The corporation making the contribution must have already qualified as a major donor, or the contribution made during the 16-day period before the election puts them over the $10,000 threshold and they become a major donor.
- The recipient candidate or ballot committee must appear on the ballot at the election for which the 16-day period applies.
- Contributions to political parties made during the 16-day period are also included.
The filing requirements for Form 497 are:
- The report is due within 24 hours of making the contribution.
- No signature is required.
- The report must be filed electronically with the California Secretary of State, Political Reform Division, and then followed up by paper filing via facsimile to the following:
- California Secretary of State, Political Reform Division
- Los Angeles County Registrar/Recorder
- San Francisco City and County Registrar
If the contribution is non-monetary or in-kind, the contributor must notify the recipient of the value of the contribution within 24 hours of making the contribution. The notice of value does not need to be filed with the state or any of the other filing offices listed above.
There is no standardized form. The notice should be sent to the recipient by personal delivery, fax, or guaranteed overnight delivery.
As a reminder, the late contribution must still be reported on the next major donor report that is due. In 2010, major donor reports are due July 31, 2010, for the period covering January 1 to June 30; and January 31, 2011, for the period covering July 1 to December 31.
July 7, 2010 •
Greg McNeilly is filing suit in federal court.
A former top Michigan Republican Party official has filed suit in federal court to strike down limits on campaign contributions to state candidates. Greg McNeilly, who served as executive director of the state GOP, says caps on donations to legislative candidates have not been adjusted for inflation since their enactment in 1976, and impose an unconstitutional restraint on his right to back candidates of his choice. McNeilly’s attorney claims Michigan’s contribution limits of $500 for state House candidates and $1,000 for state Senate candidates have lost nearly 75% of their value since 1976, and the result has been to limit the ability of outsiders to mount a credible challenge to incumbent politicians.
July 7, 2010 •
A bill amending the Federal Election Campaign Act of 1971 and the Lobbying Disclosure Act of 1995 has passed the House of Representatives.
H.R. 5609, which passed on a vote of 408-4, prohibits any registered lobbyist whose clients include foreign governments which are found to be sponsors of international terrorism or include other foreign nationals from making contributions and other campaign-related disbursements in elections for public office. The bill moves to the Senate.
June 30, 2010 •
News from the Supreme Court ruling.
The U.S. Supreme Court affirmed without comment a lower court ruling upholding a ban on soft-money contributions to political parties.
From The Hill – “Supreme Court affirms ban on soft money,” by Russell Berman 6-29-2010
June 30, 2010 •
The SEC is expected to vote on proposed rules June 30, 2010.
The Securities and Exchange Commission (SEC) is poised to consider new regulations prohibiting hedge funds and private equity firms from making political contributions to public officials who award public pension fund management contracts. The SEC initially considered an outright ban on what had become known as placement agents: middlemen who solicited government pension funds on behalf of securities firms looking to tap into the $2.4 trillion public retirement fund industry.
After pushback from industry and Congress over the proposed elimination of placement agents, the SEC is instead considering rules regulating improper pay-to-play practices connected to public pension funds. One proposed rule will limit direct and indirect political contributions by investment advisers seeking pension fund contracts.
New penalties for violators for pay-to-play violators are also under consideration. For instance, advisers who make political contributions to an elected official in a position to influence the selection of the adviser would face a two year bar from providing advisory services to a fund. The SEC is expected to vote on the proposed rules June 30, 2010.
State and Federal Communications, Inc. provides research and consulting services for government relations professionals on lobbying laws, procurement lobbying laws, political contribution laws in the United States and Canada. Learn more by visiting stateandfed.com.