October 20, 2010 •
City Council to Consider Pay to Play Restrictions
The Los Angeles City Ethics Commission voted in favor of a planned ballot measure to bar city contractors from making campaign contributions to candidates running for mayor and city council. Los Angeles City Council will decide by the end of November whether to place this law on the ballot for the March 8 municipal election.
Under the proposal, those who do not abide by the new restrictions risk being barred from winning a city contract for four years. This type of ban has been under consideration several times since 2005 but has stalled at various stages of the legislative process each time.
Photo of Los Angeles City Hall by Brion VIBBER on Wikipedia.
October 5, 2010 •
Measure now in Senate
The U.S. House of Representatives has passed the State Ethics Law Protection Act. H.R. 3427 would preclude the Federal Highway Administration from interpreting a state’s Pay-to-Play laws as conflicting with federal contract bidding requirements for federal-aid highway projects.
The measure has now passed to the Senate Committee on Environment and Public Works.
September 15, 2010 •
New York City campaign finance reforms alter nature of political contributions.
NEW YORK: A recent examination by New York City’s Campaign Finance Board shows that changes enacted before the 2009 mayoral election encouraged 34,000 New Yorkers to make campaign donations for the first time; drastically curtailed the role of businesses, political committees and lobbyists in campaigns; and caused a major drop in donations from those doing business with the city.
The Campaign Finance Board report found that New York City’s newly promulgated rules diminished the role of businesses, political committees and unions in campaign fund-raising. They now account for 7.2 percent of all funds available to candidates. In the last election for State Assembly and Senate candidates, such contributions accounted for 66.6 percent of all the money raised. New York City’s system has become a model for campaign finance reform based upon these results.
Photo of the New York City Hall by Momos on Wikipedia.
September 14, 2010 •
A lawsuit has been filed in federal court alleging Hawaii’s ban on political contributions by state and county contractors is in violation of the First Amendment.
Key to the suit is the state’s prohibition on contributions by contractors until completion of the contract. The suit, filed by A-1 A-Lectrician Inc., an electrical and construction firm in Hawaii, alleges the prohibition is an unconstitutional restriction on free speech, as well as in violation of the 14th Amendment’s citizenship protection of corporations and individuals.
Citizen advocacy groups, including Common Cause Hawaii and the League of Women Voters of Hawaii, have already voiced their opposition to the suit.
Satellite photo of Hawaii by NASA, posted on Wikipedia.
July 16, 2010 •
The United States Court of Appeals for the Second Circuit issued two separate decisions in regards to the case of Green Party of Connecticut v. Garfield on July 13, 2010, one decision affecting the Connecticut Campaign Finance Reform Act (CFRA) and another affecting the state’s Citizens Election Program (CEP).
In the first decision, the court affirmed the U.S. District Court’s decision upholding the CFRA’s ban on contributions by state contractors, prospective state contractors, and the principals of contractors and prospective state contractors, as well as the spouse and dependent children of these individuals. However, in a reversal of the lower court’s decision, the Second Circuit struck down the ban on contributions from lobbyists and their families.
In the second decision, the court overturned a prior U.S. District Court decision which had declared the Citizens Election Program’s public financing for qualifying candidates as unconstitutional on the basis it discriminated against minor parties and their candidates. The court, however, agreed with the earlier decision in finding the CEP to unconstitutionally infringe upon the First Amendment rights to free speech of privately funded wealthy candidates when the state’s program required extra public funds be distributed to publicly funded candidates when certain financing “triggers” had been achieved. The Connecticut State Elections Enforcement Commission is expected to meet with the attorney general to determine the next course of action.
(Image from the National Atlas of the United States)
July 14, 2010 •
The Election Law Enforcement Commission (ELEC) discusses its Pay-to-Play priority recommendation to the state legislature in its July, 2010 newsletter which is now available on-line.
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 .
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.