LobbyComply Blog

Organizers behind The Montana Plan have revealed they have collected nearly 50,000 signatures for the Ballot Issue known as I-194. The measure needed more than 30,000 verified signatures to qualify for the November general election. The measure limits the power of artificial persons to those powers necessary or convenient as provided by law. These powers exclude contributing anything of value to candidate elections, supporting or opposing political parties, or supporting or opposing state or local ballot issues. Artificial persons include non-profits, trusts, partnerships, corporations, trade associations, or unincorporated associations and includes all such entities doing business in Montana. The goal of I-194 is to restrict dark money and corporate influence in Montana elections. Issue 194 is currently awaiting certification by the Office of Secretary of State.

Stay up to date with all state and federal lobbying laws. Sign up for our online guidebooks and never miss a compliance law change. 

On June 30, the U.S. Supreme Court decided political party coordinated-expenditure limits violate the First Amendment. The case, National Republican Senatorial Committee v. FEC, presented to the Court the issue of whether the limits on coordinated party expenditures in 52 U.S.C. §30116 violate the First Amendment, either on their face or as applied to party spending in connection with ‘party coordinated communications’ as defined in 11 C.F.R. §109.37. The definition of political party communication includes when the communication is paid for by a political party committee. The National Republican Senatorial Committee argued the Federal Election Campaign Act of 1971 (FECA) unconstitutionally restricted their ability to coordinate campaign advertising with their own candidates. Here the plaintiffs contended spending money independently on advertising to get Republican Party candidates elected, without the ability to coordinate with the candidates and create a unified  and integrated political  message, was financially inefficient and a burden to First Amendment electoral speech. The case was appealed to the U.S. Supreme Court from the U.S. Court of Appeals for the Sixth Circuit. The Sixth Circuit Court, sitting en banc, had previously held that the FECA’s limits on coordinated campaign expenditures did not violate the First Amendment. In Justice Kagan’s dissent, joined by Justice Sotomayor and Justice Jackson, Kagan maintained a party’s unlimited coordinated expenditures undermine contribution limits imposed on individual candidates.

Stay up to date with all state and federal lobbying laws. Sign up for our online guidebooks and never miss a compliance law change. 

The Maine Commission on Governmental Ethics and Elections Practices proposed routine technical changes to update the commission’s rules after the passage of two campaign finance bills this session. Proposed updates include guidance on the disclosure required for paid communications containing misleading manipulated media of a candidate and a threshold increase for filing independent expenditure disclosure reports. The commission will hold a hearing on June 24 and will accept comments through July 8.

Make sure you understand pay-to-play regulations in your state. See all 50 states and nearly 300 jurisdictions in our online guidebooks. Check them out here.

Question: Every six months we survey our officers and directors asking whether they have made personal political contributions. Is this sufficient for purposes of pay-to-play reporting?

Answer: Unfortunately, an after-the-fact survey is insufficient in protecting your company from running afoul of pay-to-play laws.
Surveys provide information about personal contributions after the contribution has already been made. When you sit down to complete a pay-to-play report and you consult the survey responses, the damage has already been done if the contribution was made in violation of the pay-to-play law. Furthermore, the time for corrective measures (seeking reimbursement of the contribution) has more than likely passed.
Developing an internal program whereby employees (and in some instances their immediate family members) must seek pre-approval before making a personal political contribution is the gold standard. It is the best practice to ensure compliance with the varied pay-to-play laws.
The most compelling reasons to implement a pre-clearance program are to avoid debarment, fines, and negative publicity. Moreover, having a contract rescinded because of a pay-to-play violation can result in the loss of millions of dollars in revenue.
The success of any program is directly proportional to the education provided to employees. Educating them on the need for a pre-clearance strategy results in increased participation, which in turn results in decreased risk to the company.
At its core, a thorough program must let employees know the company is not prying into their personal spending habits and requiring permission is not an attempt to invade their privacy. The message must be conveyed that the company has legitimate business reasons for requiring pre-approval. Such reasons include: maintaining the company’s ability to effectively conduct business with states and municipalities; ensuring the conduct of the company’s employees does not jeopardize the company’s reputation; and shielding the company’s employees and their family members from personal liability.
There is no one-size-fits-all compliance program, but if a pre-clearance strategy is not used, a violation of a jurisdiction’s pay-to-play law is more likely to occur.

For more information, be sure to check out the “Pay-to-Play” section for each state and local jurisdiction in the U.S. Procurement Lobbying Compliance Laws online publication. Please feel free to contact us if you have any questions. – https://stateandfed.com/contact-us/

Campaign Finance

Oregon: “The City’s Public Campaign Financing Program Allowed Candidates with Little Support to Snag Taxpayer Dollars” by Sophie Peel for Willamette Week

Ethics

California: “Assessor Reports $1M Behested Payment, Biggest Charitable Donation Made at a Local Elected Official’s Request” by Jeff McDonald (San Diego Union-Tribune) for MSN

National: “Trump Transition Team Ethics Pledge Appears to Exclude President-Elect” by Betsy Klein, Steve Contorno, and Arlette Saenz (CNN) for MSN

Florida: “Tickets to Master’s Tournament Trigger Feud in Hillsborough County Politics” by Jack Evans and Justin Garcia (Tampa Bay Times) for MSN

Indiana: “Nonprofit Braun Transition Group Follows Former Governors’ Model” by Leslie Bonilla Muñiz (Indiana Capital Chronicle) for Yahoo News

Legislative Issues

National: “Supreme Court to Examine Power of Congress to Delegate Authority” by Justin Jouvenal (Washington Post) for MSN

Lobbying

National: “As His Power Grows, D.C. Wonders: How do you lobby a man like Elon Musk?” by Cat Zakrzewski, Faiz Siddiqui, and Pranshu Verma (Washington Post) for MSN

New York: “N.Y. Ethics Commission Faces New Constitutional Challenge” by Brendan Lyons for Albany Times Union

Campaign Finance

National: “Trump Is Running His Transition Team on Secret Money” by Ken Bensinger and David Fahrenthold (New York Times) for Seattle Times

New York: “F.B.I. Agents Investigate Use of Fake Donors in N.Y. Assembly Race” by Jay Root, Bianca Pallaro, and William Rashbaum (New York Times) for DNyuz

Texas: “Harris County Education Board May Censure Trustee Eric Dick for $40K in Unpaid Ethics Fines” by Elizabeth Sander (Houston Chronicle) for MSN

Ethics

Arizona: “Former Treasurer in Arizona Admits to Embezzling $38M Over a Decade” by Maham Javaid (Washington Post) for MSN

National: “Special Counsel Jack Smith Moves to Drop Both Trump’s Federal Cases” by Perry Stein and Spencer Hsu (Washington Post) for MSN

Lobbying

California: “Lawmakers Jet Set to Maui and Asia to Discuss Energy, Transportation for California” by Anabel Sosa (Los Angeles Times) for MSN

National: “‘It’s Trump 5.0’: Lobbyists reveal how Trump is changing the influence game” by Dave Levinthal (Business Insider) for MSN

Georgia: “Legislative Policy Watchdog Sues Georgia Conservative Nonprofit in Lobbyist Filing Dispute” by Ross Williams (Georgia Recorder) for Yahoo News

Campaign Finance

National: “Gaetz Campaign’s Reports of Vast Spending on Fees Are Scrutinized” by David Ingold and Ted Mann (Bloomberg) for MSN

Missouri: “Missouri State Pension Board Bans Use of Fund for Political Donations” by Rudi Keller (Missouri Independent) for Yahoo News

Ethics

Arizona: “Arizona Tourism Director Resigns Amid Conflict of Interest Claims” by Howard Fischer (Capitol Media Services) for Arizona Daily Star

National: “Intelligence Watchdog Departures Raise Red Flags in Congress” by John Donnelly (Roll Call) for MSN

New Mexico: “State Ethics Commission Launches Investigation into University’s ‘Wasteful Spending'” by Daniel Chacón for Santa Fe New Mexican

New York: “New York Judge Calls Off Trump Hush Money Sentencing” by Zach Schonfeld (The Hill) for MSN

Legislative Issues

National: “The First Transgender Member of Congress, a Bathroom Ban and Much Angst” by Emily Wax-Thibodeaux (Washington Post) for MSN

Lobbying

Ohio: “Third Ex-FirstEnergy Lobbyist Stonewalls Hundreds of Questions in Bribery Probe” by Jake Zuckerman (Cleveland Plain Dealer) for MSN

The Tennessee Bureau of Ethics and Campaign Finance (BECF) published revised contribution limits for 2023 and 2024.

The per person limit to candidates for statewide office increased from $4,300 to $4,900 per election.

The per person limit for the Senate, House, and all other state and local offices increased from $1,600 to $1,800.

PAC limits to candidates for statewide office and for the House increased from $12,700 to $14,400 per election.

PAC limits to candidates for Senate increased from $25,400 to $28,800.

All other state and local office candidates receiving contributions from a PAC increased from $8,300 to $9,400 per election.

BECF adjusts contribution limits in January of each odd-numbered year based on the consumer price index.

On September 6, the Internal Revenue Service (IRS) issued a notice of a proposed rulemaking for allowing certain tax-exempt organizations to no longer be required to report the names and addresses of contributors on their annual reports.

Previously, the IRS had issued a guidance to this effect, but on July 30, the IRS guidance limiting these disclosure requirements was set aside by a federal judge.

In Bullock v. IRS, the U.S. District Court District of Montana (Great Falls) found the IRS violated the Administrative Procedure Act by not providing notice and allowing a public comment period before the guidance was issued. It predicated this decision by finding the guidance was a legislative rule.

On July 16, 2018, the U.S. Treasury Department and the IRS had announced certain tax-exempt organizations would no longer be required to report the names and addresses of contributors on their annual reports. This exemption from reporting applies to tax-exempt organizations generally not receiving tax-deductible contributions, such as labor unions, volunteer fire departments, issue-advocacy groups, local chambers of commerce, veterans’ groups, and community service clubs, according to the department’s press release.

These organizations are still required to continue to collect and keep the donor information and to make it available to the IRS upon its request.

This change did not affect the information required to be reported by charities primarily receiving tax-deductible contributions, such as 501(c)(3) organizations, certain nonexempt private foundations, or 527 political organizations. The Treasury Department and IRS had given three primary reasons for the change:

1. 1. The IRS makes no systematic use of this information collected by these organizations
   2. The policy reduces the risk of inadvertent disclosure or misuse of confidential information
   3. The policy saves both private and government resources

Comments on the proposed rule will be accepted for 90 days after the notice’s publication in the Federal Register.

U.S. District Judge Charles Kornmann struck down a ban on out-of-state contributions to ballot question committees recently passed by voters.

Kornmann found Initiated Measure 24 unconstitutional because it violates First Amendment rights to engage in political speech.

Additionally, Kornmann said the measure violates the Commerce Clause by interfering with the free flow of money between persons from another state and South Dakota committees.

The ruling is a permanent injunction that stops the planned implementation on July 1.

The state must now determine if it will appeal the decision to the U.S. Eighth Circuit Court of Appeals.

My employer makes corporate contributions in California.  We have not yet exceeded $10,000 in calendar year 2018.  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?

The California “Late Contribution Report” [Form 497], sometimes referred to as the “24-hour report” is due during the 90-day period preceding any election if all of the following criteria are met:

• The contribution is $1,000 or more, or multiple contributions aggregating $1,000 or more, to a single candidate, ballot measure committee, or political party.  This includes non-monetary and in-kind contributions…Read the full article

For more information, be sure to check out the “Registration and Reports Required” section of the U.S. Political Contributions Compliance Laws online publication for California. Please feel free to contact us if you have any questions.

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The 2018 elections are approaching quickly. Have you reviewed the restrictions on political contributions from your company’s lobbyists?

It is important to know what restrictions are placed on lobbyists, such as when, how, or how much a lobbyist may contribute.

Knowing state and federal restrictions will help your company remain compliant and could save you a lot of headaches.

State and Federal Communications is here to help you. Our newest Tip Sheet “Restrictions on Political Contributions from Lobbyists” will inform you on sessional restrictions, lobbyist contribution limits, and restrictions on activities beyond making direct contributions.

This new Tip Sheet will provide you with the key information to keep in mind as you continue your government affairs program.

Click here to get this FREE Tip Sheet today – and ensure you and your team can say “I Comply!”

National:

How Anna Nicole Smith’s Billionaire In Laws Secretly Lobbied the Courts
Bloomberg.com – Zachary Mider | Published: 9/13/2017

When the heirs of billionaire J. Howard Marshall II, famous for his May-December romance with Playboy centerfold Anna Nicole Smith, went to court in a $75 million tax dispute, they got help from an unlikely ally: Barber-Scotia College, the nation’s first institution of higher learning for black women. Barber-Scotia’s name, along with those of four other historically black colleges and universities, was on a friend-of-the-court brief submitted to the U.S. Court of Appeals for the Fifth Circuit. The brief was part of a campaign by the Marshall family, orchestrated by a Washington, D.C. consulting firm, to influence two of the nation’s highest courts. The campaign shows how it is possible for well-funded litigants to stack the deck by generating phony friends of the court, or by paying advocates who present themselves as independent but are really lobbyists in disguise.

On Facebook and Twitter, a Hunt for Russia’s Meddling Hand
New York Times – Scott Shane | Published: 9/7/2017

The Russian information attack on the election did not stop with the hacking and leaking of Democratic emails. Far less splashy, and far more difficult to trace, was Russia’s experimentation on Facebook and Twitter, the American companies that essentially invented the tools of social media and, in this case, did not stop them from being turned into engines of deception and propaganda. An investigation reveals some of the mechanisms by which suspected Russian operators used Twitter and Facebook to spread anti-Hillary Clinton messages and promote the hacked material they had leaked. Given the powerful role of social media in political contests, understanding the Russian efforts will be crucial in preventing or blunting similar, or more sophisticated, attacks in upcoming elections.

Federal:

Russian Network RT Must Register as Foreign Agent in US
The Hill – Megan Wilson | Published: 9/12/2017

The company that runs the U.S. version of RT, the Russian state-owned outlet originally known as Russia Today, must register with the Justice Department as a foreign agent, signaling that all of their content would be labeled as propaganda from Moscow. Media organizations have been exempted from the Foreign Agents Registration Act, which is wide-ranging in its disclosure requirements and generally applies to political consultants and those working in lobbying or public relations. It would be a felony if RT is found to have willfully failed to register as a foreign agent, however.

From the States and Municipalities:

Colorado
Denver City Council Approves New Rules Requiring Reports of Dark-Money Spending in Elections
Denver Post – Jon Murray | Published: 9/11/2017

The Denver City Council approved a bill that will require the reporting of at least $1,000 in independent spending by individuals, companies, or other organizations to support candidates or ballot issues. Those independent expenditures include any activity aiming to aid or hurt a candidate, including “electioneering communications” such as mailers, broadcast ads, or other advertising. The initial report to the Denver Elections Division, disclosing all expenses and donors above $25, will be required within two days after cumulative spending reaches $1,000.

Illinois
Weighing Third Term, Emanuel Relies on Campaign Donors Who Get City Hall Benefits
Chicago Tribune – Jeff Coen and Bill Ruthhart | Published: 9/8/2017

As Chicago Mayor Rahm Emanuel ramps up his campaign fundraising toward a possible third term, he continues to rely on donors who have received City Hall benefits, ranging from contracts and zoning approvals to appointments and personal endorsements from the mayor. With the mayoral election still a year and a half away, Emanuel has collected $3.1 million in high-dollar contributions. And more than $2.1 million of it, nearly 70 percent, has come from 83 donors who have benefited from actions at City Hall.

Massachusetts
Pro-Charter School Group Pays State’s Largest Campaign Finance Penalty
Boston Globe – Michael Levenson | Published: 9/11/2017

A group that backed last year’s charter school ballot question in Massachusetts paid $426,466 as part of a campaign finance settlement. The payment by Families for Excellent Schools-Advocacy is the largest civil forfeiture in the history of the Office of Campaign and Political Finance. Investigators say the organization violated the law by raising money from individuals and then contributing that money, more than $15 million, to the Great Schools Massachusetts Ballot Question Committee in a manner intended to disguise the source of the money. The group agreed with the IRS to dissolve itself, and Families for Excellent Schools, its umbrella group, agreed not to fundraise or engage in any election-related activity in Massachusetts for four years.

Minnesota
Scott County Attorney Declines Charges in Dai Thao Bribery-Solicitation Case
St. Paul Pioneer Press – Frederick Melo | Published: 9/12/2017

St. Paul City Councilperson Dai Thao will not face criminal charges over an allegation he attempted to solicit a bribe. The Scott County attorney’s office declined to prosecute the claims made against Thao and his former campaign manager, Angela Marlow. The allegations stemmed from a meeting between Thao, lobbyist Sarah Clarke, and some of Clarke’s clients. Clarke said that Thao told the group during the meeting that he needs “resources to spread his message.” She said it seemed clear he was asking for a bribe.

New Mexico
New Campaign Spending Rules to Take Effect
Albuquerque Journal – Dan Boyd | Published: 9/8/2017

Nonprofit advocacy organizations that spend unlimited amount of money to influence elections in New Mexico will have to disclose the names of contributors under rules adopted by state elections officials. The new requirements are set to go into effect on October 10, in time for 2018 primary and general elections, for so-called dark money groups that spend at least $2,500 on a statewide election or ballot measure. New Mexico Secretary of State Maggie Toulouse Oliver said vague and confusing rules are being cleaned up and the changes will “help shine a light on the dark money that has been plaguing our state’s campaigns.”

New York
Firm Uses Loophole to Secretly Donate $60G to de Blasio Campaign, Lobbying Records Show
New York Daily News – James Fanelli | Published: 9/9/2017

Constantinople & Vallone has a reputation as a powerful lobbying firm that gets its clients access to New York City Hall, but what is not so well known is it has helped steer $60,900 in campaign donations to Mayor Bill de Blasio. A loophole in the city’s campaign finance law has allowed the firm to stay under the radar as a fundraiser for the mayor. The only way to know Constantinople & Vallone has raised so much money for de Blasio is through obscure filings with the city clerk’s lobbying bureau.

Oregon
Legislators Consolidate Power, Cash, in Partially Invisible Cycle of Giving to Each Other
Salem Statesman-Journal – Cooper Green | Published: 9/9/2017

If a candidate passes contributions to another candidate, or to a re-election fund for fellow party members, the public can no longer see the money’s original donor. These transactions are known as pass-throughs. Transactions between Oregon legislators, or between lawmakers and re-election funds, are commonplace and have been for decades. An analysis shows legislative officeholders and candidates have utilized this system of pass-throughs more than 2,800 times in the last three election cycles alone, transferring $18.7 million dollars between themselves. Based on the total amount contributed to legislators during that time, this means more than a quarter of all money involved in legislative campaigns has seen more than one lawmaker as it moves through the system.

Pennsylvania
Elect Them, Then Lobby Them: Two firms blur the worlds of policy and politics in Harrisburg
Philadelphia Inquirer – Angela Couloumbis and Liz Navratil | Published: 9/11/2017

For years, lobbying in Pennsylvania was a secretive business, and more recently attracted scrutiny from federal investigators. A decade-old law strengthened registration and reporting requirements for lobbyists and their clients, but the state still lags behind others in transparency and accountability, according to the National Conference of State Legislatures. Among Harrisburg’s high-powered partnerships, only two have well-established campaign arms that, for the last decade, have dominated the market on both electing and lobbying Republicans who drive public policy.

Tennessee
Lobbyists Courted Lawmakers with Free Food, Baseball Tickets at Conferences
The Tennessean – Joel Ebert | Published: 9/11/2017

Under state law, Tennessee lawmakers can accept gifts like dinner and sports tickets at out-of-state conferences, provided they are related to the conference itself. Lobbyists can even pay for events labeled “state night” for lawmakers. And little disclosure is required, unlike the rules in place for how lobbyists interact with lawmakers at the Capitol. The practice at out-of-state conferences is increasingly widespread, including at conferences this year in Boston and Denver, according to interviews with lobbyists, lawmakers, and legislative staff.

Virginia
Virginia Lawmakers Attend Fewest Lobbyist-Paid Entertainment Events Since McDonnell Case
The Virginian-Pilot – Will Houp | Published: 9/7/2017

Virginia lawmakers continue to shrink away from meals, galas, and other entertainment occasions paid for by lobbyists as they attended less than half such events in 2016 and 2017 as they did three years ago. Data from the Virginia Conflict of Interest and Ethics Advisory Council shows a stark difference in what delegates and senators felt comfortable accepting before and after the corruption charges against former Gov. Bob McDonnell. At the same time, several law changes related to lobbyist entertainment have muddied the water in terms of comparing year to year.

Washington
Seattle Mayor Ed Murray Resigns After Fifth Child Sex-Abuse Allegation
Seattle Times – Jim Brunner, Daniel Beekman, and Lewis Kamb | Published: 9/12/2017

Seattle Mayor Ed Murray, beset over the past five months by sex abuse allegations, resigned his office. His announcement came after The Seattle Times reported that a fifth man, one of his cousins, had accused Murray of molesting him decades ago. Though he has denied all the accusations against him, Murray had already decided not to seek re-election. City Council President Bruce Harrell will temporarily serve as mayor and will decide within five days whether to take on the role of acting mayor past the November 7 election. If he demurs, the council will pick another of its members to serve until the election results are certified.

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.

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.