The Ohio Joint Legislative Ethics Committee (JLEC) issued an opinion this week prohibiting legislators and legislative employees from accepting travel expenses from a lobbyist in the form of transportation in a ride-sharing vehicle, unless such travel expenses are incurred for participation in a panel, seminar, or speaking engagement; or were incurred at a meeting or convention of a national organization of which any state agency or state institution of higher education is a dues paying member.

The opinion also states legislators and legislative employees may ride with a lobbyist in a ride-sharing vehicle for personal travel, if the legislator or employee reimburses the lobbyist for the legislator or employee’s portion of the total fare within seven days of accepting the ride or directly pays the ride-sharing service for the legislator or employee’s portion of the fare.

This advisory opinion stemmed from an ongoing federal investigation into former Ohio House Speaker Cliff Rosenberger and his ties to payday lending lobbyists.

Campaign Finance

National: “Dem Super PACs Keep Getting Bigger as Candidates Turn on PAC Money” by Maggie Severns for Politico

California: “How Eight Elite San Francisco Families Funded Gavin Newsom’s Political Ascent” by Seema Mehta, Ryan Menenzes, and Maloy Moore for Los Angeles Times

Florida: “Bank Closes Candidate’s Campaign Account Because of Medical Marijuana Ties – Again” by Samantha Gross for Miami Herald

Missouri: “Court Affirms Major Blow to Missouri Amendment Restricting Campaign Donations” by Jason Rosenbaum for St. Louis Public Radio

Elections

National: “Republicans Running for Governor Look for Success in Unlikely Places: Blue states” by Tim Craig for Washington Post

National: Democrats Embrace Liberal Insurgents, Demanding New Face for Party” by Alexander Burns (New York Times) for MSN

Ethics

Nevada: “LVCVA Gift Card Scandal Attracts Nevada Ethics Scrutiny” by Jeff German for Las Vegas Review-Journal

New York: “Cuomo Often Takes Taxpayer-Funded Planes and Helicopters, Far More Than Other Big State Governors” by Shane Goldmacher for New York Times

Can I use my company’s federal PAC to make contributions to candidates for state office?

With the exception of Massachusetts, contributions from a federal PAC to non-federal state candidates are permissible.  However, the challenging aspect of making these types of contributions is that every jurisdiction has different rules regarding how to register and report such contributions.  To make this a little easier to digest, we have broken down the states into five categories.  Please note:  regardless of the registration and reporting process, in all jurisdictions the federal PAC is subject to the contribution limits according to the law of that jurisdiction.

Category #1:  You do not have to do anything.  Simply make the contribution to the state candidate as you would any other contribution from your federal PAC.  This option is usually only available if your FEC filings are current and complete.  Examples of these jurisdictions include Alabama, Delaware, South Dakota, and West Virginia.

Category #2:  You must register and report as a state PAC.  In these instances, your federal PAC is treated no differently than any other out-of-state PAC.  You must register your federal PAC using that jurisdiction’s registration forms.  You must report your contributions using state forms and file your reports according to that jurisdiction’s filing deadlines.  Examples of these jurisdictions include Connecticut, Georgia, and Tennessee.

Category #3:  You may file your FEC registration and reports in lieu of state registrations and reports. The tricky thing about these jurisdictions is keeping track of whether you file your reports according to the jurisdiction’s reporting schedule or the FEC’s reporting schedule.  Examples of these jurisdictions include Kentucky, New Mexico, and North Dakota.

Category #4:  You have to register using state form and report using your FEC filings, or vice versa. Examples of these jurisdictions include Illinois, South Carolina, and Virginia.

Category #5:  You have a choice regarding how to register and report.  These two jurisdictions include Iowa and Kansas.

As was mentioned, in Massachusetts, federal PACs may not contribute to campaigns in that state.  Federal PACs must establish a separate segregated fund for contributions in Massachusetts and comply with the same requirements as in-state committees.  The separate segregated fund must be established as a depository account in a financial institution authorized to transact business in Massachusetts and having its main office, or a branch office, in Massachusetts.

We have not listed PAC rules for all the states, only examples of some states. If you have a question on a state not listed here, please contact us at 330-761-9960

Campaign Finance

California: “Banning Man Wins $220,000 from State Political Watchdog Panel” by Craig Schultz for Riverside Press-Enterprise

Washington: “Washington AG to Press for $18 Million Fine Against Foodmakers” by Don Jenkins for Capital Press

Ethics

National: “Papadopoulos Sentenced to 14 Days in Jail” by Kyle Cheney and Josh Gerstein for Politico

Arkansas: “Accomplice in Kickback Scheme Involving State Grants Gets 6 Years in Prison; House Arrest Plea Rejected” by Doug Thompson for Arkansas Democrat Gazette

Maryland: “Baltimore Ethics Board Rejects Mayor Pugh’s Request for Sweeping Exemption from Fundraising Rules” by Ian Duncan for Baltimore Sun

New Mexico: “Rio Arriba Official Is Facing 4 Felony Charges” by Edmundo Carrillo for Albuquerque Journal

South Carolina: “Statehouse Probe Offered Fixes to SC Ethics Laws. But a Judge Needs to Unseal Them.” by Andy Shain for Charleston Post and Courier

Lobbying

Arizona: “‘Women … Were Warned About Him:’ Phoenix lobbyist resigns after harassment complaints” by Jessica Boehm for Arizona Republic

The Massachusetts Supreme Judicial Court ruled unanimously to uphold the state’s prohibition on corporate contributions this week.

Rick Green, the republican nominee for the state’s 3rd Congressional District seat, owns 1A Auto Inc., one of the companies asserting the ban discriminated against businesses’ right to free speech.

In upholding the ban, the Court stated allowing corporate contributions would create “a serious threat of quid pro quo corruption.”

The Massachusetts contribution ban applies to corporations and business entities but does not extend to unions or nonprofits.

Attorneys for Green and 1A have stated their intention to petition the US Supreme Court to hear the case.

The Colorado Secretary of State’s Office cleared and certified Initiative 173 for the November 6 general election ballot.

The ballot measure proposes amending the state constitution regarding campaign contribution limits.

If passed, candidates in a race may accept contributions from individuals that are five times the rate authorized in the state constitution if at least one candidate loans or contributes $1 million to his or her own campaign, to a committee to support or oppose any candidate in the same election, or to any committee to influence the candidate’s own election.

National:

Cities Take Aim at the Spiraling Costs of Local Elections
CityLab – Sarah Holder | Published: 9/4/2018

Several of the nation’s largest cities – including Portland, Denver, and Baltimore – are attempting to overhaul their campaign finance systems by reducing contribution limits or establishing public financing projects that make each donated dollar go further, or both. Candidates, especially those running for the first time against incumbents, are hopeful the measures will level the playing field. Jo Ann Hardesty, who is running for the Portland City Council this November, said the reforms would help her and others focus on running, not campaigning: “It will force me not to spend so much time on the phone trying to raise money, and it means that regular people can run and serve.”

Twitter Will Begin Labeling Political Ads About Issues Such as Immigration
Chicago Tribune – Tony Romm (Washington Post) | Published: 8/30/2018

Twitter announced it would begin labeling political advertisements as part of a new effort to increase transparency on its platform. The company said it will move to identify electioneering ads, which the FEC defines as ads promoting a specific candidate or a party within 30 days of a primary election and 60 days of a general election. Such labeling would include some kind of signifier, like a purple dot noting the tweet is prompted by a political account, according to a potential mockup the company included in a post announcing the changes.

Federal:

Company Using Foreign Workers Botches U.S. Senate Campaign Finance Records
Center for Public Integrity – Rosa Cima | Published: 9/5/2018

Unlike those running for the presidency and House, U.S. Senate candidates do not file campaign finance reports electronically. They file on paper, which must then be converted to electronic documents in a process that involves two government agencies, three private companies, and countless low-paid workers, many of them overseas, and some who may be hostile toward American interests. This document conversion process often spits out bogus, yet official public records that mislead the public and obscure who is funding Senate campaigns. An investigation found errors in more than 5,900 candidate disclosures representing over $70 million, all of them traceable to the U.S. government’s conversion of paper into electronic data.

Former Manafort Associate Reveals Illegal Foreign Payment to Trump’s Inauguration
Politico – Kyle Cheney and John Meyer | Published: 9/1/2018

W. Samuel Patten pleaded guilty to failing to register as a foreign agent for a Ukrainian political party. He also admitted to lying to the U.S. Senate intelligence committee during its investigation into Russian election interference and of participating in a scheme to circumvent the ban on foreign donations to President Trump’s inaugural committee by lining up a straw purchaser to pay $50,000 for tickets to the inauguration. This is the first time the Justice Department has publicly charged a person for helping a foreigner secretly funnel money into a Trump political event. The case was referred by special counsel Robert Mueller to the U.S. attorney in Washington, D.C. Patten’s plea agreement requires him to cooperate with the special counsel’s probe.

From the States and Municipalities:

Arkansas: Former Sen. Woods Sentenced to More Than 18 Years in Prison
talkbusiness.net – Jeff Della Rosa | Published: 9/5/2018

Former Arkansas Sen. Jon Woods was sentenced to more than 18 years in federal prison forhis involvement in a widespread kickback and bribery scheme. He also was ordered to pay $1.6 million in restitution. Woods was convicted in schemes involving Ecclesia College and AmeriWorks, a nonprofit company. He received kickbacks on $350,000 in state General Improvement Fund grants he directed to Ecclesia and $275,000 in grants he sent to AmeriWorks. Prosecutors did not specify how much money Woods received in kickbacks because all but a $40,000 wire transfer was paid in cash.

California: As the Legislative Year Ends, the #MeToo Movement Shows Its Influence
Los Angeles Times – Melanie Mason | Published: 9/3/2018

The #MeToo campaign launched a discussion about a culture of fear and retaliation at the Capitol in Sacramento, which women said had discouraged them from reporting pervasive harassment and allowed it to go unpunished. When the Legislature reconvened in January, two members had already resigned amid accusations of sexual misconduct and complaints had been lodged against three others. Lawmakers passed more than a dozen bills addressing workplace sexual harassment by the close of the two-year session. Experts said these measures could make California a national leader on the issue. The Legislature also spent months developing a new process for handling its own investigations of inappropriate behavior.

Illinois: State Farm Pays $250 Million, Ducks Trial Over Allegations It Tried to Rig Illinois Justice System
Chicago Tribune – Tim Bross, Margaret Cronin Fisk, and Jef Feeley (Bloomberg) | Published: 9/5/2018

State Farm reached a $250 million preliminary settlement in a class-action lawsuit claiming the insurance company funneled money to the campaign of Illinois Supreme Court Justice Lloyd Karmeier in 2004. In the 2005 case of Avery v. State Farm, Karmeier cast the deciding vote to reverse a $1 billion judgment against State Farm for its use of aftermarket car parts in repairs. The class-action lawsuit sought nearly $10 billion from State Farm. The plaintiffs alleged the company covertly supported Karmeier’s campaign to secure his win and reversal of the Avery decision. The suit claimed millions of dollars were funneled through donations to the U.S. Chamber of Commerce, which then sent the money to a PAC and the Illinois Republican Party for use in Karmeier’s campaign.

Kentucky: Father of Alison Lundergan Grimes Indicted in Campaign Finance Conspiracy
McClatchy DC – Daniel Desrochers and Bill Estep (Lexington Herald-Leader) | Published: 8/31/2018

The father of Kentucky Secretary of State Alison Lundergan Grimes was indicted for illegally funneling nearly $200,000 to his daughter’s 2014 U.S. Senate campaign to pay for various services. Gerald Lundergan used funds from his own company to pay for “audio-video production, lighting, recorded telephone calls, and campaign consulting between July 2013 and December 2015,” the Justice Department said in a press release. Lundergan and the campaign vendor to whom he made the payments, who was also indicted, concealed their arrangement from officials on the campaign, causing it to file financial records to the FEC, according to the indictment.

Massachusetts: SJC Upholds Massachusetts’ Ban on Corporate Campaign Contributions
MassLive.com – Shira Schoenberg | Published: 9/6/2018

The Supreme Judicial Court upheld Massachusetts’ ban on corporate campaign donations, finding the prohibition does not violate First Amendment rights and can help prevent actual and perceived corruption. The law bans corporations from giving directly to candidates or establishing PACs but allows them to make unlimited independent expenditures, with certain disclosure requirements. The plaintiffs argued the law violates their right to free speech and unfairly applies to corporations but not to other entities like unions and nonprofits. Chief Justice Ralph Gants wrote it would be “unrealistic for a court to require the Legislature to wait for evidence of widespread quid pro quo corruption resulting from corporate contributions before taking steps to prevent such corruption.”

New York: Mayoral Charter Revision Commission Puts Three Questions on November Ballot
Gotham Gazette – Samar Khurshid | Published: 9/5/2018

The charter revision commission created by New York City Mayor Bill de Blasio voted to put three questions on the ballot in November. If approved by voters, the proposals would significantly reduce campaign contribution limits in city elections, create a new agency to civically engage the public, and apply term limits and appointment reforms to community boards. One proposal would reduce contribution limits for public financing participants as well for those who do not join the program. It would also increase the matching ratio to eight-to-one for the first $250 raised by a citywide candidate and for the first $175 raised for all other seats.

North Carolina: Court Won’t Force North Carolina Redistricting This Year
Politico – Josh Gerstein | Published: 9/4/2018

A panel of three federal judges ruled North Carolina’s current congressional map can be used in the 2018 midterms, despite previously ruling the map is a partisan gerrymander. The judges said there was “insufficient time” for the court to approve a new map in time for the elections that are two months away. Both the plaintiffs and the defendants in the case had asked that a new map not be imposed on the state for the current election cycle.

North Carolina: Justice Dept. Demands Millions of North Carolina Voter Records, Confounding Elections Officials
New York Times – Richard Fausset and Michael Wines | Published: 9/5/2018

Federal prosecutors issued subpoenas demanding that millions of North Carolina voter records be turned over to immigration authorities by September 25. The subpoenas threatened to sow chaos in the state’s election machinery, while renewing the Trump administration’s discredited claims of widespread voting by illegal immigrants. The subpoenas were issued a week after federal officials announced that 19 noncitizens in North Carolina had been charged with casting illegal votes in the 2016 election. Critics say those arrests hardly constitute a wave of voter fraud worthy of such a broad demand for documents. And they raised concerns about privacy: among the prosecutors’ demands are millions of secret ballots cast by absentee and early voters whose identities could be easily traced.

Pennsylvania: Ex-Reading Mayor Vaughn Spencer Guilty on All Counts
Allentown Morning Call – Peter Hall | Published: 8/30/2018

A jury convicted former Reading Mayor Vaughn Spencer on 11 counts related to a “pay-to-play” scheme in which federal prosecutors said he traded public works contracts for campaign contributions and bribed the city council president to repeal a law limiting how much campaign money he could accept. The jury heard witnesses testify that Spencer and his campaign staff tied the award of public works contracts to donations from engineering firm executives to Spencer’s re-election campaign. His former chief of staff and campaign fundraiser also testified about Spencer’s role in making a “forgivable loan” to the wife of council President Francisco Acosta to ensure he followed through on legislation to repeal or suspend the city’s campaign reporting law.

Texas: Beto O’Rourke Dreams of One Texas. Ted Cruz Sees Another Clearly.
WRAL – Matt Flegenheimer (New York Times) | Published: 8/31/2018

A blue Texas has seemed both inevitable and impossible, the central political contradiction in a state defined by them. Any breakthrough, Democrats have long believed, would be borne of demographics and triangulation: focus on the cities, with their surging Hispanic populations and creeping cosmopolitanism. Edge to the middle a bit to bring in wary moderates. And impress upon voters just how extreme the incumbents had become. U.S. Rep. Beto O’Rourke has resolved to ignore basically all of this in his campaign to unseat U.S. Sen. Ted Cruz. O’Rourke has defined the philosophy with a line borrowed from Jim Hightower, a prominent activist who was once Texas agriculture commissioner: “The only thing you’ll find in the middle of the road are yellow lines and dead armadillos,” O’Rourke said.

Virginia: Citing Fraud, Judge Orders Candidate Off the Ballot in Virginia Congressional Race
Danbury News Times – Gregory Schneider (Washington Post) | Published: 9/5/2018

A judge ordered an independent candidate in a key congressional contest in Virginia removed from November’s ballot, citing invalid signatures gathered with assistance from staffers for the incumbent Republican. The effort to put Shaun Brown on the ballot as an independent candidate, which could have siphoned votes from the Democratic nominee, Elaine Luria, was boosted by U.S. Rep. Scott Taylor’s campaign staffers. Taylor had said he knew staff members were collecting signatures for Brown, but he did not direct the effort.

Campaign Finance

New York: “Mayoral Charter Revision Commission Puts Three Questions on November Ballot” by Samar Khurshid for Gotham Gazette

Elections

National: “Once Bipartisan, an Election Security Bill Collapses in Rancor” by Catie Edmonson for New York Times

Massachusetts: “Ayanna Pressley Upsets Capuano in Massachusetts House Race” by Katharine Seelye for New York Times

North Carolina: “Court Won’t Force North Carolina Redistricting This Year” by Josh Gerstein for Politico

Ethics

National: “A Broken Relationship and Accusations of Emotional Abuse: The case of Keith Ellison” by Julie Turkewitz and Farah Stockman for New York Times

Colorado: “Colorado Lawmakers Who Don’t Attend Sexual Harassment Training Could Be Publicly Shamed” by John Herrick for Colorado Independent

Florida: “Andrew Gillum’s Receipts for New York and Costa Rica Trips Leave Unanswered Questions” by Jeff Burlew and Jeffrey Schweers for Tallahassee Democrat

Maryland: “Ex-Maryland Lawmaker Sentenced to 48 Months in Liquor Board Bribery Scheme” by Lyn Bui (Washington Post) for Danbury News Times

Procurement

Texas: “Texas Schools Agency Botched Award of Huge No-Bid Contract on Special Ed Student Data, Audit Finds” by Robert Garrett for Dallas News

The New York City Council passed legislation establishing a Charter Revision Commission (Commission) to draft a new or revised City Charter in April 2018.

On September 4, the Commission approved three ballot questions to be approved by voters in November.

One ballot measure would reduce contribution limits for all candidates and amend public matching funds for candidates participating in the public financing program.

The other ballot measures involve civic engagement and community boards.

Gov. Phil Bryant announced a special election for November 6, to fill a seat in House District 85.

The special election will fill the seat vacated by Rep. America Middleton.

The winner will complete the last year of Middleton’s term.

Campaign Finance

National: “Cities Take Aim at the Spiraling Costs of Local Elections” by Sarah Holder for CityLab

Kansas: “Feds: Sen. Hutchinson stole campaign funds; spent money on cruises, jewelry and Netflix fees” by Wesley Brown for talkbusiness.net

Kentucky: “Father of Alison Lundergan Grimes Indicted in Campaign Finance Conspiracy” by Daniel Desrochers and Bill Estep (Lexington Herald-Leader) for McClatchy DC

Wisconsin: “Secret Cash Aided Politicians Who Rewrote Wisconsin Law to Block Claims of Lead-Poisoned Children” by Pawan Naidu (Wisconsin Center for Investigative Journalism) for Wisconsin Public Radio

Elections

Illinois: “Chicago Mayor Rahm Emanuel Says He Won’t Run for Re-Election Next Year” by Bill Ruthhart for Chicago Tribune

Ethics

National: “Democrats, Eyeing a Majority, Prepare an Investigative Onslaught” by Nicholas Fandos (New York Times) for MSN

National: “As the Legislative Year Ends, the #MeToo Movement Shows Its Influence” by Melanie Mason for Los Angeles Times

New York: “How a Cuomo Donor Spent $25M in Public Funds It Didn’t Need” by Chris Bragg for Albany Times Union

Legislative Issues

National: “Former U.S. Sen. Jon Kyl Will be John McCain’s Successor in the U.S. Senate” by Yvonne Wingett Sanchez and Maria Polletta (Arizona Republic) for USA Today

Gov. Doug Ducey has named Sen. Jon Kyl to fill the late Sen. John McCain’s seat in the Senate.

Sen. Kyl represented Arizona in the Senate for close to 20 years before reaching retirement in 2013. Kyl has committed to serving until the end of 2018, and possibly until a 2020 special election to fill the seat more permanently.

Gov. Ducey’s office reportedly considered several replacements since Sen. McCain’s diagnosis 13 months ago, including his wife Cindy McCain.

Gov. Ducey is the first governor in Arizona’s 106-year history to fill a U.S. Senate seat by appointment.

Gov. Michael Parson has called a special session to begin on September 10, 2018.

The special session will focus on an education initiative and expanding treatment courts in Missouri.

The special session will run concurrently with the veto session, set to begin on September 12.

Campaign Finance

National: “Twitter Will Begin Labeling Political Ads About Issues Such as Immigration” by Tony Romm (Washington Post) for Chicago Tribune

Elections

National: “Ex-CIA Officer’s Full Personnel File Released in ‘Human Error,’ Postal Service Admits” by Laura Vozzella (Washington Post) for Chicago Tribune

Texas: “Beto O’Rourke Dreams of One Texas. Ted Cruz Sees Another Clearly.” by Matt Flegenheimer (New York Times) for WRAL

Ethics

Georgia: “Auditor: Ex-Atlanta mayor wasn’t authorized to give bonuses” by Associated Press for WSB

Pennsylvania: “Ex-Reading Mayor Vaughn Spencer Guilty on All Counts” by Peter Hall for Allentown Morning Call

Lobbying

National: “Washington Consultant for Ukraine Party Pleads Guilty to Violating Lobbyist Disclosure Law” by Spencer Hsu and Rosalind Helderman (Washington Post) for The News Times

California: “AT&T’s Top California Lobbyist Dodges Gift Ban and Ethics Requirements” by Donald Shaw for Sludge

Texas: “Amid Manafort Scandal, Texas Lawmakers Seek to Require Foreign Lobbying Disclosure” by Edgar Walters for Texas Tribune