Federal:

All the D.C. Donors, Now Put Your Checks Up

Politico – Byron Tau | Published: 8/3/2013

Campaign fundraising in Washington, D.C. has moved from staid receptions to high-profile concerts and sporting events. Most often, these events take place in a rented skybox at the Verizon Center paid for by a corporate PAC or a congressional campaign. Fundraising professionals say pairing a campaign fundraiser with a big event like a Beyoncé concert helps attract more attention from potential donors and ultimately brings in bigger contributions.

Republican Says E-mails Could Mean FEC-IRS Collusion

CNN – Dana Bash and Alan Silverleib | Published: 8/6/2013

FEC Vice Chairperson Donald McGahn said an investigator from his agency contacted Lois Lerner, the IRS employee at the center of the controversy over the alleged targeting of conservative groups. He said the contact was made to discuss the status of one such political advocacy group. Shortly after Lerner was contacted, the IRS sent a questionnaire to the American Future Fund, said McGahn. He said such contact was “probably out of the ordinary” and FEC members had not given staff permission to reach out to the IRS.

From the States and Municipalities:

California – L.A. County Won’t Sell Bonds to School Bond Campaign Donors

Los Angeles Times – Dan Weikel | Published: 8/6/2013

Los Angeles County Treasurer Mark Saladino said his office will no longer do business with securities brokers that make political contributions to school bond campaigns. The restriction applies to monetary donations, non-monetary contributions, and pre-election services, such as polling, voter outreach, and consulting.

Connecticut – Bills May Die, but Concepts Don’t

CTNewsJunkie.com – Hugh McQuaid | Published: 8/7/2013

Connecticut’s Legislative Research Office found at least 89 provisions that began this year in one bill, only to be signed into law under another. The number comes from an annual bill tracking report the office puts together after each legislative session. It documents instances when a concept became law in a manner other than the traditional legislative process.

Florida – Miami Lakes and Sweetwater Mayors ‘Stung’ by FBI for Taking Alleged Kickbacks

Miami Herald – Jay Weaver, Christina Veiga, and Joey Flecha | Published: 8/6/2013

The FBI arrested Miami Lakes Mayor Michael Pizzi and Sweetwater Mayor Manuel Maroño on bribery-related charges. Prosecutors said Pizzi and lobbyist Richard Candia were involved in a kickback and bribery scheme over federal grants in Miami Lakes and Medley, where Pizzi is town attorney. An indictment claims Maroño and lobbyist Jorge Forte were involved in a kickback and bribery scheme over grants for Sweetwater, where Maroño has been mayor since 2003.

Massachusetts – Galvin Faulted on Rules for Lobbyists

Boston Globe – Michael Levenson | Published: 8/7/2013

Massachusetts Secretary of State William Galvin was ordered to cover more than $100,000 in legal fees for a group of lobbyists who challenged his interpretation of the state’s revamped ethics laws. A judge found Galvin overstepped his authority by trying to force lobbyists to report every time they spoke to a legislator or state official, even casual, chance meetings.

New Hampshire – Ethics Committee: Special E-ZPasses don’t violate gift limits for N.H. lawmakers

Concord Monitor – Ben Leubsdorf | Published: 8/5/2013

E-ZPasses given to New Hampshire lawmakers do not violate ethics rules. Rep. Frank Sapareto had asked the Legislative Ethics Committee if they counted as a perk with a value in excess of the $25 limit on gifts to legislators.

New York – Citing Irregularities, City Board Rejects Public Money for Liu’s Campaign

New York Times – David Chen | Published: 8/5/2013

New York City Comptroller John Liu was denied about $3 million in public matching funds in his bid for the Democratic mayoral nomination after the Campaign Finance Board said it found evidence of possible “serious and pervasive” violations. In May, Liu’s former campaign treasurer and a fundraiser were convicted of trying to subvert the city’s campaign finance system with straw donors to obtain matching funds.

North Carolina – Video Shows Lawmakers Dancing on NC House Floor

WCNC – Ben Thompson | Published: 7/31/2013

A video shows a Republican lawmaker and an aide dancing on the North Carolina House floor near the end of the legislative session. One headline reads “NC House Dances with Joy over its Accomplishments,” and is accompanied by an editorial criticizing lawmakers.” The video shows a man and woman dancing, while another woman plays a fiddle. But some say the headlines and descriptions of the clip are misleading.

Oklahoma – Outdated Software Plagues Oklahoma Ethics Commission

The Oklahoman – Michael McNutt | Published: 8/3/2013

Financial information about campaigns and lobbyist spending posted on the Oklahoma Ethics Commission’s Web site is not accurate because of software glitches. Commission Executive Director Lee Slater said he will be ask lawmakers for funds next year to buy a new software system but until then, visitors to the site will have to put up with a system in which data posted by some candidates and lobbyists randomly does not show up.

South Carolina – Lobbyists Wined, Dined Lawmakers 95 Times

The State – Amanda Coyne | Published: 8/4/2013

During the 2013 legislative session, special interests hosted 95 breakfasts, luncheons, dinners, or receptions for South Carolina legislators and others. The meals and receptions regularly cost nearly $6,000 apiece. At least two held during the last legislative session cost far more, one almost $17,000 and another $20,000.

Tennessee – Nashville Lobbyist Murphy and Associates Faces Ethics Audit

The Tennessean – Chas Sisk | Published: 8/6/2013

An audit said a lobbyist receiving 10 percent of the state funding provided to the Tennessee Disability Coalition – more than $64,000 in one year – may violate a law banning lobbyist contingency fees. An attorney for lobbyist Jennifer Murphy disputes the contention and said even if the contractual arrangement was a contingency fee, it dates from 2002, four years before the prohibition was enacted as part of an ethics reform package.

Virginia – Donor Jonnie Williams, Star Scientific Are Cooperating in Probe of Gov. Robert McDonnell

Washington Post – Carol Leonnig and Rosalind Helderman | Published: 8/5/2013

Sources said Star Scientific Chief Executive Officer Jonnie Williams, Sr. has turned over personal financial records and sat for interviews in which he provided firsthand accounts of gifts and more than $120,000 given to Virginia Gov. Robert McDonnell and his family members since 2011. The cooperation is an ominous sign for McDonnell, suggesting federal prosecutors are focused on trying to build a potential criminal case against him.

West Virginia – Judge Ends Cap on Contributions to Indie PACs

Charleston Gazette – Kate White | Published: 8/7/2013

U.S. District Court Judge Thomas Johnston signed an order that strikes down struck down state laws limiting contributions to independent PACs. The $1,000 limit still applies to donations made directly to candidates and their campaign committees, PACs that contribute directly to candidates, and political parties.

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.

News You Can Use is a news service provided at no charge only to clients of our online Executive Source Guides, or ALERTS™ consulting clients.

Lobbying

“K Street powerhouse lobbies for green energy tax bill” by Ben Geman in The Hill.

Campaign Finance

New York: “Reform advocate spends big money” by Jimmy Vielkind in the Times Union.

New York: “Citing Irregularities, City Board Rejects Public Money for Liu’s Campaign” by David W. Chen in The New York Times.

Ethics

“FEC commissioner: New emails could tie agency to IRS targeting” by Blake Neff in The Hill.

Missouri: “Creator of Missouri Ethics Commission nominated for federal bench” by Jo Mannies in the St. Louis Beacon.

New Hampshire: “Ethics committee: Special E-ZPasses don’t violate gift limits for N.H. lawmakers” by Ben Leubsdorf in the Concord Monitor.

New Jersey: “Appeals court affirms dismissal of ethics complaint against assemblyman” by Matt Friedman in the Star-Ledger.

Utah: “Panel investigating Attorney General John Swallow to hold first meeting” by John Swallow in the Deseret News.

Virginia: “Cuccinelli pushes for special session on ethics rules” by Julian Walker in The Virginian-Pilot.

Redistricting

California: “SoCal Rep. Lowenthal takes a big swing at redistricting with new bill” by Kitty Felde on KPCC News.

Lobbying

“Lobbyists Snag Top Staff Positions on Capitol Hill” by Lee Fang in The Nation.

Tennessee: “Tom Ingram faces possible fine for failing to register as lobbyist” by Tom Humphrey in the Knoxville News.

Texas: “Lobbyist transparency bill sent to Perry” by The Associated Press in the Houston Chronicle.

Campaign Finance

FEC commissioners speak: “Hard truths of campaign finance” opinion piece by Donald F. McGahn, Caroline Hunter and Matthew Petersen in Politico.

“Why Big Money Still Won in 2012” by Jonathan Backer in the Huffington Post.

Alabama: “Bill before House today repeal state limit on corporate campaign contributions; Lawmaker says it’s a ‘pretend’ cap” by Kim Chandler in the Birmingham News.

New Jersey:  “Lawmakers Get Cold Feet About Campaign Finance” by Hank Kalet in NJ Spotlight.

New York: “Carlucci, other senators study plans for campaign finance reform” by Laura Incalcaterra in the Journal News.

Ethics

New York: “Ex-lawmaker to be sentenced in NYC in fraud case” by The Associated Press in the Arizona Daily Star.

Political Advertising

“House Backs Updating Rules on Political Ad Disclosures” by Becca Aaronson in the Texas Tribune.

Government Tech and Social Media

“Ohio City Deploys 2-in-1 Email and Social Media Archiving” by Sarah Rich in Government Technology.

Procurement

“Most Top Contractors Increased Business With Federal Government in 2012” by Eric Katz in Government Executive.

The Federal Election Commission (FEC) issued a unanimous Advisory Opinion concluding same-sex couples married under state law are precluded from making joint federal political contributions from an individual bank account.

A same-sex couple married under Massachusetts law sought to make a political contribution to Dan Winslow, a candidate for the United States Senate.

The contribution check included instructions to attribute the contribution separately and equally between both individuals, even though the check was drawn from one of the individual’s bank account.

11 C.F.R. 110.1(i) provides spouses a legal exception to the prohibition on making a contribution in the name of another person. However, the term “spouse” is not defined in the Federal Election Campaign Act of 1971 or the Commission’s regulations.

The Commission relied the Defense of Marriage Act (DOMA) interpretation of spouse referring “only to a person of the opposite sex who is a husband or a wife”.

In AO 2013-02, the FEC concluded DOMA prohibits applying the exception under 11 C.F.R. 110.1(i). The Commission distinguished a contribution made from a joint account, rather than an individual account, in a footnote to the opinion, noting, “Same-sex couples (whether married under state law or not) may as joint account holders make contributions in a manner similar to that afforded spouses under 11 C.F.R. 110.1(i).”

The Commission concluded its analysis and conclusions “may be affected by subsequent developments in the law including, but not limited to, statutes, regulations, advisory opinions, and case law”.

Leaders of corporations, unions, and other organizations responsible for independent political advertisements may have to be identified if a bill introduced in the U.S. Senate yesterday passes.

Senate Bill 791 was introduced jointly by Senators Ron Wyden (D-Ore.) and Lisa Murkowski (R-Alaska). The bi-partisan bill, called The Follow the Money Act of 2013, requires entities, regardless of tax status, to identity the funders of any political activity in which the entity engages.

An organization involved in political activity not regulated under the Federal Election Campaign Act will also be subject to a separate set of Internal Revenue Service penalties, including the possible loss of its federal tax exemption.

The Federal Election Commission will be required to replace quarterly reporting with a more frequent reporting schedule and will be required to disclose the information to the general public upon receipt.

Senator Wyden’s press release can be found here.

Video courtesy of Sen. Wyden’s YouTube channel.

The United States Supreme Court has decided to hear a case challenging the aggregate federal limits for a person making contributions to candidates, party committees, and PACs. The case, McCutcheon v. Federal Election Commission (FEC), is expected to be argued and decided during the Court’s next term, which begins in October, 2013.

The plaintiff, Shaun McCutcheon, is an Alabama businessman who regularly makes political contributions to Republican candidates and the Republican National Committee (RNC). Mr. McCutcheon wishes to contribute $26,200 more to candidates and committees than the aggregate ceiling would allow. However, he is not challenging the limits on contributions to individual candidates and entities. Mr. McCutcheon wants to give to more candidates and political entities. The RNC is also a plaintiff in the suit.

Federal law imposes two types of limits on individual political contributions, base limits and biennial limits.

Base limits restrict the amount an individual may contribute to:

• A candidate committee;
• A national party committee;
• A state, local, and district party committee; and
• A political action committee.

Biennial limits restrict the aggregate amount an individual may contribute biennially, using the 2011-2012 election cycle limits argued against in the lawsuit, as follows:

• $46,200 to candidate committees; and
• $70,800 to all other committees, of which no more than $46,200 may go to non-national party committees (e.g., state parties and PACs).

The plaintiffs are only challenging the overall limits (the biannual limits) and not the base limits.

The attorneys for McCutcheon and the RNC argue the two-year ceilings federal law sets on what an individual can contribute during a campaign are unconstitutional. Specifically, they assert the limits on contributions violate a contributor’s right to free speech; the limits for biennial contributions are too low; and the distinction between contributions and expenditures articulated in the 1976 US Supreme Court case Buckley v. Valeo are no longer applicable because of the changes in campaign finance laws over the last 30 years. Buckley v. Valeo allowed for government regulation of contributions to prevent political corruption and prohibited government regulation of expenditures because of First Amendment protections.

Unlike Citizens United v FEC, which concerned political expenditures, McCutcheon v. FEC addresses contribution limits. Additionally, this case does not involve the political contributions or expenditures of corporations.

Campaign Finance

“Watchdogs call for new campaign regulator to replace ‘woefully inept’ FEC” by Megan R. Wilson in The Hill.

“Campaign Finance Poll Finds Most Support Donation Limits” by Emily Swanson in the Huffington Post.

Arizona: “2 Arizona bills target campaign finances” by Mary Jo Pitzl in the Arizona Republic.

Montana: “Campaign finance reforms bills pass Montana House vote” by Marnee Banks in KBZK News.

New York: “Conference to tackle lobbying and campaign finance” by Ilene Fleischmann in the UB Reporter.

Lobbying

Alaska: “Alaska: Who’s lobbying Alaska’s lawmakers? And for how much?” by Laurel Andrews in the Alaska Dispatch.

Florida: “Lobbying a lucrative cap for a legislator’s career” by Aaron Deslatte in the Orlando Sentinel.

Georgia: “Lobbying Restrictions Vote Scheduled” by The Associated Press in Georgia Public Broadcasting.

Ethics

Utah: “Ethics bill emerges in wake of probes of Utah Lt. Gov Bell, Swallow” by Robert Gehrke in the Salt Lake Tribune.

Today the United States Supreme Court decided to grant a review to a case challenging the aggregate limits on federal campaign contributions. The case, McCutcheon v. Federal Election Commission, seeks to allow Shaun McCutcheon to make political contributions to several federal candidates exceeding the two-year aggregate limit currently set at $48,600 as provided in 2 U.S.C §441a(a)(3)(A).

Photo of Supreme Court building by UpstateNYer in Wikipedia.

The Federal Election Commission (FEC) has published the 2013-2014 election cycle contribution limits indexed for inflation. As required by the Bipartisan Campaign Reform Act of 2002, the FEC must adjust certain contribution limits every two years.

The individual and non-multicandidate PAC contribution limit to federal candidates has increased from $2,500 to $2,600 for both primary and general elections, allowing for a total of $5,200 for a federal candidate. The overall biennial limit for individuals has increased to $123,200, with a maximum of $48,600 for all candidates and $74,600 for all PACs and parties. Among the other adjustments is the increased contribution limit of $32,400 per year to national parties from individuals and non-multicandidate PACs.

Lobbying

“Newly unemployed lawmakers buzzing about million-dollar lobbying jobs” by Kevin Bogardus in The Hill.

California: “Interactive graphic: Hidden lobbying expenses” by Sharon Okada in the Sacramento Bee.

California: “California’s lobby laws keep many influence-peddling details secret” by Laurel Rosenhall in the Sacramento Bee.

Nevada:  “Lobbyists sit through ethics training in Carson City” by David McGrath in the Las Vegas Sun.

“Two Buerkle staffers land jobs with Washington, D.C., lobbying firms” by Mark Weiner in the Post-Standard.

Campaign Finance

“Money in Politics This Week” by Syed Zaidi in the Brennan Center for Justice Blog.

“FEC Appointments Are Deciding the Future of Campaign Finance” by Alex Gauthier in the Independent Voter Network.

Mississippi:  “Judge sets trial date for campaign finance case” by The Associated Press in the Mississippi Business Journal.

Wisconsin:  “Mike McCabe featured speaker, topic is Campaign Finance Jan. 26 public meeting” in the Bay View Compass.

Ethics

“Harry Reid Disavows Report Linking Him to Bribery Case” by Neils Lesniewski in Roll Call.

Texas:  “Some State Legislators Blur Line Between Public and Private Interests” by Emily Ramshaw in The New York Times.

State Legislatures

“More than Half of State Legislatures Convened this Week” by Angela Andrews in NCSL’s The Thicket blog.

Washington: “Key players to watch in the Washington Legislature, which convenes Monday” in the Seattle Times.

The Presidential Inauguration

“Critics Decry Looser Rules For Inauguration Fundraising” by NPR in Oregon Public Broadcasting.

“Fund-Raising Is Lagging, So Far, for Inaugural Plans” by Nicholas Confessore in The New York Times.

“An inauguration first: Apps” by Steve Freiss in Politico.

The Federal Election Commission issued an Advisory Opinion on December 6, 2012, concluding a federal candidate’s campaign committee may make a contribution to an independent expenditure-only committee from funds raised for the federal candidate’s terminated political campaign.

Friends of Mike H, the principal campaign committee of former candidate Mike Haridopolos, requested an opinion to determine whether it could give $10,000 or more of its excess funds raised for Mr. Haridopolos’s 2012 U.S. Senate primary election campaign in Florida, from which he withdrew, to an independent expenditure-only committee called Freedom PAC. Currently, Mr. Haridopolos does not hold federal office and is not seeking any elected federal office.

Because Friends of Mike H. is not using its funds for personal use or for any unlawful use, the Commission found Mr. Haridopolos’s political committee may make its requested contributions to Freedom PAC. The Commission also noted that “amount limitations are generally unconstitutional as applied to contributions that will be used to finance independent activity.”

A Federal District Court has held Congress may constitutionally bar federal contractors from contributing to candidates, parties, and their committees.

Finding in favor of the Federal Election Committee (FEC), the United States District Court for The District of Columbia granted a summary judgment on Friday, November 2.

In Wagner v. FEC, 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 political contributions to federal candidates or political parties.

The case, initially 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.

The Court found no First Amendment or Equal-Protection violations, noting “the dissimilar roles of contractors and employees, moreover, justify the distinct regulatory schemes that the Government has fashioned.”

Today the FEC posted an article answering some questions about political contributions made and received by text messaging.

The article can be found here.

A federal appellate court has reversed a district court’s electioneering reporting decision, sending the issue back to the FEC.

The significance of today’s decision, pending further possible rule changes or court decisions, is that political contributors giving to an organization making an electioneering communication will not have to be disclosed to the FEC unless the donor specifically earmarks his or her contributions to fund electioneering communications.

This was the rule from 2007 until this spring when a district court ruled that all contributors giving over $1,000, regardless of whether they gave for the specific purpose of electioneering communications, had to be disclosed to the FEC.

In the initial lawsuit, Van Hollen v. FEC, the plaintiff,  U.S. Representative Van Hollen, claimed the FEC regulation 11 C.F.R. §104.20(c)(9), which requires disclosure only of those making contributions over $1,000 to an entity for the purpose of furthering electioneering communications, contradicts the statute requiring disclosure of all donors making contributions over $1,000.

In the spring, a U.S. district court agreed and declared 11 C.F.R. §104.20(c)(9) invalid and vacated the regulation. The court reinstated the FEC’s prior regulation, which was promulgated on December 17, 2002 and was in effect until December 25, 2007. The FEC had formally reiterated the district court’s requirement on July 27, 2012, retroactively applying the disclosure of donors to March 30, 2012.

Today, in Center for Individual Freedom v. Van Hollen, the U.S. Court of Appeals for the District of Columbia Circuit reversed Van Hollen v. FEC, vacated the district court’s prior judgment, and remanded the case to the district court. Presently, under the jurisdiction of the district court, the FEC must pursue rulemaking to address the issues brought by the lawsuit or defend 11 C.F.R. §104.20(c)(9) in court against the parties bringing the action.

This is a signature issue for Representative Van Hollen who will probably continue to vigorously litigate this issue.

The FEC has not publicly declared its next course of action.