This ethics overhaul was a top priority for Nixon and legislative leaders this year. Among the major changes, the new law requires elected officials and candidates to report larger campaign donations within 48 hours. It also gives the bipartisan Missouri Ethics Commission the power to begin investigations on its own, without waiting for a complaint. The law also expands reporting requirements for lobbyists who invite groups of state officials to events. Under this new law, campaign disclosure reports must be filed electronically beginning in January, 2011 and the fines for late reports are increased significantly.

The Election Law Enforcement Commission (ELEC) will have a meeting at 11:00 a.m. on Tuesday, July 20, 2010 at the Commission’s office located at 28 West State Street, 12th floor, in Trenton. Executive Director Jeff Brindle will be on hand to chair the meeting. The agenda is expected to include recent staff activities, campaign financing, and other matters of concern and interest to the Commission. There will be an opportunity for public comment.

U.S. Sen. Scott Brown (R-Mass.) announced he would oppose the DISCLOSE Act, depriving Democrats of an important swing vote on the legislation. For more insight on the future of the campaign finance bill, here are three articles:

Sen. Brown to oppose Disclose Act, by Susan Crabtree in The Hill.

Brown’s opposition dims chances for campaign finance overhaul, by Matt Viser in the Boston Globe.

ELEC recommends four Pay-to-Play reform steps it would like to see passed into law. First, ELEC recommends any reform of Pay-to-Play regulations should address the patchwork quilt of local Pay-to-Play laws which have developed over time. Current state law allows municipalities and counties to adopt their own ordinances provided they are consistent with the theme of “Pay-to-Play”. The lack of a standardized Pay-to-Play theme across jurisdictions has led to a myriad collection of laws which vary from place to place throughout the state.

Second, ELEC would like to see the confusing “Fair and Open” loophole as it is known, closed at the local level. “Fair and Open” allows local governments to forego the Pay-to-Play rules where bids are publicly advertised. In such a case, the $300 campaign contribution limit imposed by state law does not apply if a local jurisdiction has its own procedures for bidding and awarding contracts.

Third, ELEC asks for every public contract over $17,500 to be subject to disclosure requirements which are now reserved for vendors whose contracts exceed $50,000 statewide. Finally, ELEC would like to see the campaign contribution limit raised above $300. Citing the high cost of media advertising in New Jersey, ELEC states that the present limits provided by law are comparatively low.

The commission explains it is mindful of public concerns regarding the presence of money in politics. That said, ELEC feels its recommendations regarding contribution limits would be offset by corresponding enhancements to disclosure requirements. The ELEC newsletter may be found at: www.elec.state.nj.us .

Among the recommendations submitted to the council is a proposal to remove campaign finance reform from the City Charter. The commission found, with one exception, campaign finance reform was not contained in the city charter of any other major Ohio city. Citing the need for periodic amendments to campaign finance legislation and the need to adjust campaign contribution limits from time to time to account for inflation, the commission recommended the city adopt future campaign finance regulations by means of ordinances rather than charter amendments. Given the potential complexity of the issues involved, commissioners concluded campaign finance regulations require a level of detail inappropriate for a charter. The Commission’s recommendations also include a mandatory review of campaign finance legislation every two years going forward. The review would include a public hearing to obtain public comment on any proposed changes to campaign finance ordinances. The proposal must now be passed by council and then submitted to Akron voters for final adoption.

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: marketing@stateandfed.com. (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.

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.

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.

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

From The New York Times – “Supreme Court Affirms a Ban on Soft Money,” by Adam Liptak  6-29-2010
photo from CC-BY-SA-3.0/UpstateNYer at Wikipedia.

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.