Several provisions added last week to the House Financial Services appropriations bill would alter some federal campaign laws.

The legislation would prevent some charitable 501(c)(3) organizations such as churches from losing their tax-exempt status for making contributions to candidates. The bill would also allow corporations greater latitude in soliciting employees to contribute to political action committees.

The riders to the bill also include provisions prohibiting the IRS from enacting rules governing political activity and prohibiting the SEC from implementing rules requiring corporations to report to its shareholders a corporation’s political campaign activities.

A further change to campaign finance law in the appropriation bill would bar the use of funds to recommend or require any entity submitting an offer for a federal contract to disclose specified political contributions as a condition of submitting the offer.

The appropriations and other finance bills are expected to be debated this and next week in the House.

On September 7, President Donald J. Trump nominated Matthew Spencer Petersen, a commissioner with the Federal Election Commission (FEC), to serve as a District Judge on the U.S. District Court for the District of Columbia. Petersen, a Republican, is one of the five remaining FEC commissioners.

Without Peterson, the FEC will have only four of the six required commissioners serving, all with expired terms. With Petersen’s absence from the FEC there will remain two registered members of the Republican Party, one registered member of the Democratic Party, and one Independent, Chairman Steven T. Walther.

The FEC requires at least four commissioners to agree for any official action. A replacement for Petersen will be selected by the president and then confirmed by the U.S. Senate. No more than three members of the FEC may be registered with the same political party.

On September 5, the Libertarian National Committee (LNC) filed a lawsuit arguing federal contribution limits of bequests are unconstitutional.

In Libertarian National Committee v. Federal Election Commission, filed in the U.S. District Court for the District of Columbia, the LNC argues federal political contribution limits applied to bequests, in the absence of any evidence of corruption, violate the First Amendment of the U.S. Constitution. The LNC also claims Congress cannot regulate “the content of a political party’s expression under the guise of combating corruption.”

In 2014, the LNC was bequeathed $235,575 by a party contributor when he died. The Federal Election Commission’s position is the money must be dispersed in the amount of $33,900 a year. The LNC is asking its proposed facts and questions be certified to the en banc D.C. Circuit.

On August 3, a federal campaign finance constitutional amendment with public financing authority was referred to the House Committee on the Judiciary’s Subcommittee on the Constitution and Civil Justice.

House Joint Resolution 113, introduced in the U.S. House of Representatives on July 20, 2017, proposes an amendment to the Constitution of the United States granting explicit authority to Congress and to the states to regulate contributions and expenditures in political campaigns and to enact public financing systems for such campaigns.

Rep. Adam Schiff introduced the legislation with the intent to increase regulation of campaign contributions and spending.

“The regulatory process is at a standstill as we watch billions of dark money pour into elections,” Schiff said in a press release.

On July 31, a bill was introduced in the U.S. Senate to strengthen the federal lobbying laws concerning the representation of foreign interests.

Senate Bill 1679, the Foreign Agent Lobbying Transparency Enforcement Act, introduced by Sens. Tammy Duckworth, Dick Durbin, and Richard Blumenthal, amends the Foreign Agents Registration Act of 1938 (FARA) to increase enforcement of certain violations and strengthen certain transparency requirements. Specifically, the bill would authorize the U.S. Department of Justice (DOJ) to levy civil fines to punish offenders who fail to properly label FARA filings, file late, do not file at all, or fail to register. The legislation also clarifies what required statements must be filed with the DOJ and mandates registrants file certain informational materials currently excluded from reporting.

The bill has been referred to the Senate Committee on Foreign Relations.

On July 28, Rep. David E. Price introduced a 252-page bill which would reform campaign finance laws, amend the current federal lobbying laws, and address integrity and transparency problems in the Executive Branch.

House Resolution 3537, We the People Act of 2017, is a comprehensive attempt to address issues such as federal lobbying, campaign finance, redistricting imbalances, and voter eligibility in order to focus on “major structural problems facing our democracy,” according to Price’s press release.

The law would change lobbying registration requirements and no longer exempt an individual who spends less than 20 percent of his or her time serving as a lobbyist for a particular client if he or she meets the other thresholds for registration. In addition, the legislation would require U.S. presidents to divest assets with potential conflicts of interest, require states to allow eligible individuals to register to vote on the same day of a federal election, and replace the Federal Election Commission with a new enforcement agency.

In the bill, other pending legislation currently in Congress dealing with ethics and transparency are referenced and incorporated. The bill also provides suggested solutions to be used in state and local legislative reform efforts.

On July 27, a bill was introduced into the U.S. House of Representatives to prevent the firing of a director of the U.S. Office of Government Ethics (OGE) without cause.

House Resolution 3462, The Office of Government Ethics Independence Act, would amend federal law by clarifying that the director of the OGE may only be removed for the neglect of duty or instances of wrongdoing. It would also require the president to provide Congress with 30 days advanced notice of his or her intent to fire the director and to inform Congress as to the reasons for the action taken.

On July 19, Walter Shaub Jr. resigned as director from the OGE. Shaub, in his position as the director, had repeatedly questioned various possible conflicts of interests of President Trump and of members of the president’s White House staff. The current acting director of the OGE is David Apol, who was selected by President Trump to replace Shaub until a permanent director is announced and subsequently confirmed by the U.S. Senate.

On July 17, the National Institute for Lobbying and Ethics (NILE) called on the U.S. Congress and the U.S. Government Accountability Office to review current lobbying laws with the aim of strengthening any deficiencies in the rules. NILE is a professional organization for governmental affairs professionals working at the federal, state, and local level.

“Continued news reports about the deregistering of lobbyists and ‘shadow lobbying’ to skirt past Obama and Trump Administration rules has greatly concerned the government relations profession,” NILE President Paul A. Miller stated in the organization’s press release. Miller continued, “Changes do need to be made to the current [Lobbying Disclosure Act] if we are to keep pace with how ‘lobbying’ is conducted today.”

Earlier this year, NILE issued wide-ranging recommendations for lobbying law reform on the federal level.

Today, Director Walter Shaub Jr. submitted his resignation from the U.S. Office of Government Ethics (OGE). Shaub, in his position at the OGE, has repeatedly questioned various possible conflicts of interests of President Trump and of members of the president’s White House staff.

Shaub will leave his position on July 19 and begin working at the Campaign Legal Center, a nonpartisan organization of election-law experts based in Washington, D.C. “At the Campaign Legal Center, I’ll have more freedom to push for reform. I’ll also be broadening my focus to include ethics issues at all levels of government,” Shaub told NPR.

In June, Rep. Louise McIntosh Slaughter introduced a bill to regulate political intelligence activities.

House Bill 2819, the Political Intelligence Transparency Act of 2017, defines the term ‘political intelligence activities’ to mean political intelligence contacts and efforts in support of such contacts, including preparation and planning activities, research, and other background work that is intended, at the time it is performed, for use in contacts, and coordination with such contacts and efforts of others. The bill amends the Lobbying Disclosure Act of 1995 to require the disclosure of political intelligence activities, amends title 18, United States Code, to provide for restrictions on former officers, employees, and elected officials of the executive and legislative branches regarding political intelligence contacts, and makes other related changes.

The House Committee on the Judiciary currently has the bill under consideration.

Q. We file our federal LD-2 quarterly lobbying reports under the IRC definitions.  Does the IRC 5 percent de minimus rule apply to capturing reportable expenditures on our quarterly LD-2 disclosure?

A. In short, yes, but with a caveat.  If your organization has opted to compile lobbying expenditures using Method B or Method C, the 5 percent de minimus rule applies.  As a frame of reference, the IRC allows taxpayers an exception for including the time of individuals who spend less than 5 percent of their time engaged in lobbying activities as defined by the IRS…

Click here to read this and all Ask The Experts articles

Click here for subscription information

Here is your chance to “Ask the Experts” at State and Federal Communications, Inc. 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 email with questions about your particular company or organization. As always, we will confidentially and directly provide answers and information. Our replies are not legal advice, rather analysis of laws, rules, and regulations.

Members of Congress could be banned from being lobbyists for life if legislation introduced this month becomes law.

Senate Bill 1189, Close the Revolving Door Act of 2017, places a lifetime ban on current members of Congress from becoming lobbyists. Senators Michael Bennet, Cory Gardner, and Al Franken introduced the legislation, which also increases the statutory staff restrictions on lobbying from one year to six years.

Additionally, the bill bans lobbyists from joining Congressional staffs or committee staffs they lobbied for six years and increases the maximum penalty for violating the Lobbying Disclosure Act.

“Our legislation would put in place much-needed reforms-by not only banning members of Congress from becoming lobbyists, but also by making the industry become more accountable and transparent,” Franken said in a press release.

Among the amendments in the 2017 Consolidated Appropriations Act that passed into law on May 5 are two provisions affecting campaign financing.

House Resolution 244 explicitly prohibits the Internal Revenue Service from making new rules concerning the political speech or activity of 501(c)(4) organizations. The legislation also prohibits the Securities and Exchange Commission from finalizing, issuing, or implementing any rule, regulation, or order regarding the disclosure of political contributions, contributions to tax exempt organizations, or dues paid to trade associations.

The 708 page omnibus spending bill, passed by Congress on May 4 and signed by the president on May 5, funds the U.S. government through September 30.

President Trump signed an executive order today for the purpose of allowing religious institutions to engage more directly in political activity without losing their tax-exempt status.

Federal law prohibits tax-exempt religious and charitable institutions from specifically supporting, opposing, or endorsing political candidates or risk losing their tax-exempt status. Today’s order, named the Presidential Executive Order Promoting Free Speech and Religious Liberty, does not address charitable institutions covered under the same federal law.

The executive order directs the Department of the Treasury to “not take any adverse action against any individual, house of worship, or other religious organization on the basis that such individual or organization speaks or has spoken about moral or political issues from a religious perspective, where speech of similar character has, consistent with law, not ordinarily been treated as participation or intervention in a political campaign on behalf of (or in opposition to) a candidate for public office by the Department of the Treasury.” The order defines “adverse action” as “the imposition of any tax or tax penalty; the delay or denial of tax-exempt status; the disallowance of tax deductions for contributions made to entities exempted from taxation under section 501(c)(3) of title 26, United States Code; or any other action that makes unavailable or denies any tax deduction, exemption, credit, or benefit.”

Additionally, the order directs the Secretary of the Treasury, the Secretary of Labor, and the Secretary of Health and Human Services to “consider issuing amended regulations, consistent with applicable law, to address conscience-based objections to the preventive-care mandate promulgated under” the Affordable Care Act.