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 E-News from State and Federal Communications, Inc.

   February 2012

 Compliance Dream Team: ONE PERFORMANCE ONLY!

Appearing one time only at the Public Affair Council National PAC Conference is the Compliance Dream Team! I am extremely excited and honored to pair up with The Extra Honorable Ken Gross, The Mighty Honorable Michael Toner, and New Kid on The Block Amol Naik from Google to hear your confessions and questions.

This session will present a series of complicated and pertinent compliance questions to the panel for our expert response. There will also be an opportunity to submit anonymous compliance missteps for us to hear and provide corrective action.

This is bigger than Broadway…Larger than Hollywood. And, it will only happen on Tuesday, February 28th at Portofino Bay, Orlando, Florida. Join us at the Public Affairs Council National PAC Conference.

Looking forward to seeing you out and about!

Elizabeth Z. Bartz
President and CEO

Compliance Dream Team
T - Amol Naik, Google & Elizabeth Z. Bartz
B - Ken Gross, Skadden Arps & Michael Toner, Wiley Rein

Puerto Rico Updates Campaign Finance Provisions

by Sarah Kovit, Esq.

Puerto Rico has passed the Law for the Control of Financing of Political Campaigns in Puerto Rico. This law is a complete overhaul of all previous campaign finance regulations and includes changes to the PAC reporting requirements, campaign contribution limits, and pay-to-play restrictions.

The law created new PAC reporting requirements. PACs must file quarterly reports on the 15th day of the month following the end of a calendar quarter. From July 1st of an election year until December 31st of that year, PACs must file monthly reports by the 15th day of the month following the reporting period. From October 1st of an election year until November 30th, reports must be submitted on the 15th and 30th day of each month. A final report covering transactions after the January 1st following the election must be filed 90 days after the election.

Because 2012 is an election year in Puerto Rico, the law makes provisions regarding contribution limits. A contribution of up to $2,500 may be given by a PAC to a candidate between January 1, 2012 and March 18, 2012. An additional contribution of up to $2,500 may be given to each candidate between March 19, 2012 and November 6, 2012. PACs may not give more than $12,500 in the aggregate per election in 2012.

Puerto Rico has also joined the growing list of jurisdictions with pay-to-play laws. Puerto Rico prohibits contributions while a corporation is in the process of obtaining a permit, franchise, or government contract. Once the process of obtaining the permit, franchise, or government contract is completed, a corporation may make a contribution from their PAC. At the municipal level, contributions to local candidates are prohibited if the corporation is seeking a permit, franchise, or contract with the local jurisdiction.

Summary of Changes UPDATE
Note Recent Changes to Compliance Regulations

by John Cozine, Esq.
Research Manager

MONTANA: The Montana Supreme Court held the state law prohibiting independent political expenditures by a corporation related to a candidate is constitutional. Finding Citizens United v. FEC did not compel invalidating the state’s 1912 Corrupt Practices Act, the majority opinion of the court stated, “The corporate power that can be exerted with unlimited political spending is still a vital interest to the people of Montana.” The court concluded the state, because of its history and the history of the act, has a compelling interest to impose statutory restrictions, emphasizing the Citizens United decision allows restrictions to be upheld if the government demonstrates a sufficiently strong interest.

WASHINGTON: The U.S. Court of Appeals for the 9th Circuit invalidated a Washington state law that prevented individuals from making contributions of more than $5,000 to PACs supporting ballot measures during the three weeks prior to an election. The blackout period on contributions was challenged in a lawsuit filed by Family PAC, a political action committee that was formed to oppose Washington’s domestic partnership law. While Family PAC was successful on the merits in challenging the blackout period, it was unsuccessful in its challenge to laws requiring PACs to report the name and address of anyone who contributes more than $25, and the occupation and employer of those who make contributions in excess of $100.

CALIFORNIA: The Fair Political Practices Commission approved changes to the gift regulations. The changes, which took effect on January 1, 2012, include the ability for public officials to accept gifts from lobbyists without disclosure if a dating relationship exists. Additionally, officials will be able to accept tickets to sporting events if the officials are attending the event to perform a ceremonial duty. In such circumstances, the gifts are to be reported by the agency and not the official.

ALABAMA: A federal judge ruled in favor of the Alabama Democratic Conference in their challenge of the state prohibition on PAC-to-PAC transfers of funds. The Alabama Democratic Conference alleged the law prohibited their PAC from getting money from other PACs to use for voter communication and voter turnout initiatives. Attorney General Luther Strange has appealed the judge’s ruling. While the appeal is pending, the attorney general is prohibited from enforcing the PAC-to-PAC transfer law against the Alabama Democratic Conference.

WISCONSIN: The United States Seventh Circuit Court of Appeals struck down and permanently enjoined enforcement of a Wisconsin law setting limits on contributions to groups that independently spent on political speech. The appeal was brought by the political action committee of Wisconsin Right to Life, which previously won a temporary injunction against enforcement of the law during recall elections in 2011. The court found that after Citizens United v. FEC, W.S. §11.26(4) was unconstitutional to the extent it limited contributions to committees engaged solely in independent spending for political speech.


State and Federal Communications’ Experts Answer Your Questions

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: (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.


Can I change the method by which I am calculating my lobbying expenditures for purposes of filing my Federal  LD-2 reports?



Yes, at the appropriate time.  Under the LDA, registrants have the option of electing the compilation method for quarterly expenditures – that is, whether they use the LDA definitions or the IRC definitions for lobbying.  A change in that method election can only take place, however, in the first quarter of each new year.  Once a report has been filed using one method then all subsequent reports for that reporting year must employ the same method.  That being the case, this is a very good time to consider whether it makes sense to change.  There are advantages and disadvantages to each method, and the decision to change your method should be made after careful consideration.  Here are just a few important differences to keep in mind when considering a new method election for 2012:

  • The IRC method allows an organization to employ only one tracking system for both tax and LDA purposes;

  • The IRC method provides a greatly narrowed definition of communications with executive branch officials;

  • Under the LDA method, neither grassroots nor state and local lobbying expenditures are included.

If you think it may make sense to consider a change in your calculating method, please let us know and we’d be happy to assist in a more thorough analysis.

Wealth of Information at

Want to interact with your fellow government affairs and procurement colleagues? Then jump into the State and Federal Communications, Inc. blog at

Once there, you can join the exchange of ideas and view solutions to common challenges and problems. Also, State and Federal Communications continually adds content to the blog, including ‘hot topics,’ which are summaries of important news items you need to know.

Join the conversation, and make use of this valuable information resource.


State and Federal Scrapbook
from Public Affairs Council Institute, Laguna, California

Introducing the PAC Institute Graduating Class of 2012!
Elizabeth worked with Michael, Trish, and Brian to coordinate bowling shirts for the class. Marta Smith, Lockheed, showing her true colors ... Steelers!
Elizabeth stops for a photo with Mark Battaglini, Cubist. Trish Wexler, VOX Global, and Brian Flaherty, Nestle Water,
pose in their third year bowling shirts at PAC Institute.

Michael O'Connell, Nuclear Energy Council, and Brian Flaherty, Nestle Water, meet up with Elizabeth at the PAC Institute reception in California.

Elizabeth Bartz with long-time colleague,
Pat Hayes, Procter & Gamble.

See Us in Person


Plan to say hello at future events where State and Federal Communications will be attending and/or speaking regarding compliance issues.

January 30 - February 2, 2012 National Grassroots Conference
Miami, Florida
February 7, 2012 NCSL Foundation Bi-Annual Luncheon
Washington, D.C.
February 17, 2012 Innovate to Motivate
Washington, D.C.
February 25 - February 27, 2012 NGA Winter Meeting
Washington, D.C.
February 27 - March 1, 2012 National PAC Conference
Miami, Florida

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