On August 31, 2016, the Commission on Governmental Ethics and Election Practices adopted a rule clarifying the “house party” exception from the definition of contribution. Following complaints the exception amounted to undisclosed contributions, the commission adopted a rule stating the costs of food and beverages are exempt only if they relate to the personal services provided by the volunteer and only if paid for by a single volunteer.

The rule will be effective following certification from the secretary of state.

We had an amazing experience at the 2016 NCSL Legislative Summit. Our team offered immediate, up-to-date knowledge to clients throughout the week.

You can benefit from the same expertise. We are always available to answer questions. Contact us today at info@stateandfed.com.

Each month at our staff meeting, Elizabeth acknowledges the employment anniversaries of the staff.

In August we celebrated the following:

These employees are essential members of the staff.  Congratulations to each of you!

Q. My company has registered lobbyists and is a member of local and regional associations in numerous states. Are there any unique disclosure requirements due to these circumstances?

A. You should always consider a couple of different aspects of reporting with this type of relationship. First and most obvious, the dues you pay to a trade association may have to be disclosed on your lobbying disclosure report.  A trade association can engage in lobbying on behalf of its members, making a portion of your dues reportable as a lobbying expense.

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You can directly submit questions for this feature, and we will select those most appropriate and answer them here. 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 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.

Here is our September/October calendar. If you are attending any of these events, please say hello!

September 8-9   Practising Law Institute, Corporate Political Activities Seminar, Washington, DC

September 15   Akron Roundtable, Akron, OH

September 26-28   PAC State and Local Government Relations Conference, Alexandria, VA

October 3   Akron Roundtable 40th Anniversary Celebration Dinner, Akron, Ohio

October 19-21   Public Affairs Council Fall Board Meeting, Laguna Beach, California

October 20   Akron Roundtable, Akron, Ohio

See what’s happening in government relations this week with our Video Digest. Enjoy!

Missouri State Auditor Nicole Galloway issued a report Monday revealing a potentially illegal checking account used by legislators to collect contributions from lobbying firms.

The account is purportedly used by the Senate to fund late-night meals during the legislative session. According to Galloway’s report, actively soliciting contributions from lobbyists is a conflict of interest.

Since the audit, Senate officials have vowed to find other ways to purchase meals as necessary.

Photo of State Auditor Nicole Galloway by Nicole Galloway for Missouri on Wikimedia Commons.

Federal:

Addicted to Making Campaign Contributions?
The Atlantic – Russell Berman | Published: 8/30/2016

U.S. Sen. Bernie Sanders raised $231 million from more than 2.7 million donors in his campaign for president, depending on grassroots support rather than on wealthy bundlers. A benefit of relying on small donations from a large number of backers is that a campaign can go back to them repeatedly before they hit the $2,700 limit for individual contributions. And the Sanders campaign, like most campaigns in the modern era, did so, sending a barrage of urgent pleas for donations in email blasts. The excessive donations point to flaws in how the Sanders campaign managed and communicated with his most passionate supporters. Many of his donors were simply unaware of the federal limits, or if they were aware, they assumed the campaign would prevent them from contributing too much. It did not.

Breitbart Rises from Outlier to Potent Voice in Campaign
New York Times – Michael Grynbaum and John Herrman | Published: 8/28/2016

Breitbart News, once a curiosity of the fringe right wing, is now an increasingly powerful voice, and virtual rallying spot, for millions of disaffected conservatives who propelled Donald Trump to the Republican nomination. Known for bashing the GOP establishment, Breitbart now finds itself at the center of the party’s presidential campaign. Its longtime chairperson, Stephen Bannon, was named campaign chief by Trump, whose nationalist, conspiracy-minded message routinely mirrors the Breitbart worldview. The site received its biggest billing yet in the form of a scathing condemnation. In a nationally televised speech, Hillary Clinton identified Breitbart  as the Democratic Party’s leading media enemy, warning about a “de facto merger” between the Trump campaign and a news outlet that she described as racist, radical, and offensive.

Experts Poke Holes in Clinton Foundation’s Promised Donor Ban
The Hill – Jonathan Swan | Published: 9/1/2016

Ethics experts question the Clinton Foundation’s plan to avoid conflicts-of-interest during a Hillary Clinton presidency. The charity pledged not to accept foreign or corporate donations if she is elected. But watchdogs say it would be relatively easy for foreign governments or individuals to funnel cash to the foundation without the public being aware. It is not clear whether Chelsea Clinton would still raise money for the charity if her mother were to win the election. Bill Clinton has promised to step down from its board and stop fundraising if that happens. Assertions that donors to the charity got special access to Hillary Clinton while she was secretary of state have dogged her campaign.

How One Donor Is Profiting Off the Trump and Sanders Campaigns
The Atlantic – Russell Berman | Published: 8/28/2016

Entrepreneur Randy Treibel has contributed about $25,000 in total to Donald Trump and Bernie Sanders, more than any other person has given to both campaigns combined. But Treibel is not donating all this money out of devotion to these unlikely political insurgents – he is just trying to make a profit. He has been buying Trump and Sanders campaign merchandise in bulk and reselling it through his retail company on Amazon at a considerable markup. A Trump sign that costs $10 on his campaign website, for example, will sell for $35 on Amazon, Treibel said. And it is all completely legal under campaign rules. When asked why he did not bother to buy up Hillary Clinton stickers and signs, Treibel responded, “That stuff just doesn’t sell; nobody buys it.”

From the States and Municipalities:

Alabama – More Lawmakers (and Two Ethics Commissioners) Who Got Free Trips on Alabama Lenders’ Dime
AL.com – Kyle Whitmire (Alabama Media Group) | Published: 8/31/2016

The Alabama Lenders Association has amended its last two years’ of lobbying activity reports to include two trips where the organization paid for lodging, meals, and entertainment for numerous state lawmakers and other public officials. Records show the association hosted similar events in earlier years. But it did not disclose those earlier trips because it had not registered as a principal. Because the association had not registered and did not submit lobbying reports, it is impossible to tell which lawmakers it invited on those trips and how much it spent on them.

Alabama – Pro-Marijuana Group Challenges Alabama Lobbying Law
AL.com – Mike Cason | Published: 9/1/2016

The Institute for Justice filed a federal lawsuit challenging the Alabama law that requires all registered lobbyists to attend an ethics training class in Montgomery. The suit was filed on behalf of Maggie Ellinger-Locke and the Marijuana Policy Project (MPP). It contends that the requirement unduly burdens Ellinger-Locke because she lives in Arlington, Virginia and works at the MPP headquarters in Washington, DC. The Alabama Ethics Commission denied Ellinger-Locke’s request to take the class remotely. “If a person wants to talk to an elected official about a matter of public policy, they shouldn’t have to take a government-mandated class; instead, the only thing they should need is an opinion,” said Paul Sherman, a lawyer for the institute.

Connecticut – Inside the Political Fundraising Game
CT Post – Ken Dixon, Angela Carella, and Neil Vigdor | Published: 8/28/2016

A dozen contractors barred from contributing to state political candidates in Connecticut gave almost $1 million to the Democratic Governors Association, which in turn funneled $3.9 million to a PAC supporting Gov. Dannel Malloy’s 2014 re-election campaign. The transfer of money, though apparently legal, effectively circumvented Connecticut’s clean election laws, which are intended to limit the influence of wealthy special interests on state government. Michael Brandi, executive director of the State Elections Enforcement Commission, said it is hard to ferret out the source of campaign cash if donors want to remain anonymous.

Illinois – Chicago Insider Who Took $2 Million in Bribes in Red Light Camera Scandal Gets 10 Years in Prison
Los Angeles Times – David Kidwell (Chicago Tribune) | Published: 8/29/2016

A former Chicago transportation official embroiled in a corruption scandal over the award of a lucrative contract for red-light cameras was sentenced to 10 years in prison. John Bills, who served as assistant commissioner at the Department of Transportation, was convicted on 20 counts, including fraud, bribery, conspiracy, and tax fraud for taking up to $2 million in bribes and gifts in return for awarding $100 million in red lights camera contracts. The contracts went to Redflex Traffic Systems in 2003. Bills was also ordered to pay the city $2 million in restitution.

Maine – Paul LePage, Maine Governor, Now Says He’s Not Quitting
New York Times – Jess Bidgood | Published: 8/31/2016

Facing pressure to resign after comments many called racist and a profanity-laced voicemail left for state Rep. Drew Gattine, Maine Gov. Paul LePage told reporters he will not be stepping down and will seek spiritual guidance. LePage had hinted that he would not finish his current term after facing intense criticism for his latest actions. His six years in office have been marked by controversy. Even as he fueled outrage among Democrats and angst among many moderate Republicans, his well of support, fed by voters who are drawn to his unfiltered political style, never seemed to run dry. But the events of the past week have led to a rupture in his own Republican Party.

Missouri – Audit Finds Senate Slush Fund for Lobbyist-Financed Meals
St. Louis Post-Dispatch – Kurt Erickson | Published: 8/29/2016

Missouri lawmakers overall do a good job managing taxpayer funds, but are too generous with time off for staff and too willing to accept lobbyist money for meals, according to a pair of audits that also criticize legislators for secrecy. State Auditor Nicole Galloway said the Senate should close a bank account used to solicit lobbyist donations to buy meals for lawmakers. The audit says a House interim committee asked lobbyists for contributions to pay for a tour bus. The Senate says it will look for other ways to pay for meals, but it does not see a solution that will work. The House noted representatives failed this year to ban lobbyist-financed travel for lawmakers.

Nebraska – Panel Tells Embattled Nebraska Senator to Resign by Friday
ABC News – Grant Schulte (Associated Press) | Published: 8/29/2016

State Sen. Bill Kintner, who is ensnared in a cybersex scandal, was given another opportunity to resign before the Nebraska Legislature’s Executive Board determines possible action against him. Kintner was fined $1,000 by the state Accountability and Disclosure Commission after admitting to the online sexual encounter on a state-owned laptop with a woman. The woman, who is believed to have ties to an Ivory Coast crime syndicate, later threatened to expose the encounter unless Kintner paid her $4,500.

New York – Judge: Citizens United must disclose donor information to NY
ABC News – Larry Neumeister (Associated Press) | Published: 8/29/2016

A federal judge dismissed a lawsuit in which Citizens United sought to block New York Attorney General Eric Schneiderman from enforcing rules requiring the conservative group to disclose more information about its donors. U.S. District Court Judge Sidney Stein said the attorney general did not violate Citizens United’s First Amendment rights by requiring registered charitable organizations to disclose names, addresses, and contributions of big donors before soliciting funds in the state. Citizens United is best known as the plaintiff in the landmark U.S. Supreme Court case that allowed unlimited independent spending by corporations and labor unions in election campaigns.

North Carolina – North Carolina Republicans Accused of Dodging Order to Fix Election Rules
New York Times – Michael Wines | Published: 8/30/2016

When a federal appeals court overturned much of North Carolina’s 2013 election law in July, saying it had been deliberately intended to discourage African-Americans from voting, it also tossed out the ground rules for this year’s elections in a critical swing state. In each of the state’s 100 counties, local elections boards filed new election rules with the state. Now, critics are accusing some of the boards, all of which are controlled by Republicans, of staging an end run around a court ruling they are supposed to carry out. Like the law that was struck down, say voting rights advocacy groups and some Democrats who are contesting the rewritten election plans, many election plans have been intentionally written to suppress the black vote.

Pennsylvania – State Not Tracking Lobbying by Marijuana Companies
Allentown Morning Call – Scott Kraus | Published: 8/25/2016

It is very difficult find out how much has been spent trying to tilt the playing field for a potentially lucrative but also controversial medical marijuana industry that is in its infancy in Pennsylvania. That is because there is no category for lobbyists or the principals they represent to report marijuana lobbying, and state officials have no immediate plans to add one. The lobbying detected in the state’s search for The Allentown Morning Call was reported under the “other” category, where filers wrote in medical marijuana. Many states’ lobbying disclosure laws are weak and fail to track lobbying by subject at all, according to the Center for Public Integrity.

Virginia – The Money Floods in When the General Assembly Gathers
The Daily Press – Dave Ress | Published: 8/28/2016

Virginia lawmakers received more than $227,000 in campaign contributions over the past five years during the days they were actively considering bills, many of which affected donors, a review of more than 100,000 contributions found. State law bans legislators and statewide officials from accepting political donations “on and after the first day of a regular session of the General Assembly through adjournment.” Senate Minority Leader Dick Saslaw accepted $5,000 from Anderson Financial on the first day of the 2016 session. Saslaw said he believes it is legal to receive donations on the morning of the first day of the session, since the Legislature formally convenes at noon.

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.

On August 18, the city of Tempe, Arizona passed an ordinance creating a lobbying law.

Ordinance No. O2016.46 creates a lobbyist registration program requiring an individual to file a registration statement with the city clerk within 10 calendar days. Lobbying is defined as a communication with any public official for the purpose of influencing official action. Lobbyists are required to file annual expenditure reports covering a calendar year no later than January 31 following the reportable year.

The ordinance provides exceptions to registration, definitions, and other information relating to lobbyist disclosure and becomes effective on January 1, 2017.

Photo of the Tempe skyline by Schwnj on Wikimedia Commons.

On August 30, 2016, Gov. Asa Hutchinson announced state Rep. Bill Gossage as his deputy chief of staff for external operations. As a result, Gossage is resigning as the House District 82 representative.

Hutchinson will not call a special election to fill the remainder of Gossage’s term because the vacancy will be filled within 150 days, as required by law. The state Republican party will be responsible for selecting a nominee to run in Gossage’s place.

Gossage was running unopposed in the November 8 general election, and other political parties will be unable to run a candidate in this race as the filing deadline has already passed.

Photo of Bill Gossage courtesy of the Arkansas House of Representatives website.

On August 31, the California Legislature adjourned its regular session.

Before adjourning, the Legislature sent several ethics bills to Gov. Jerry Brown, including Senate Bill 215, which contains provisions requiring those seeking to influence actions taken by the Public Utilities Commission to register as a lobbyists.

Brown has until September 30 to sign or veto legislation.

On September 1, new provisions in the city of Austin’s campaign finance laws take effect.

Ordinance No. 20160623-020 increases disclosure requirements for nonprofits and independent groups making political contributions or expenditures in excess of $500. These organizations are required to report the identities of who contributed to them unless the donation was directed to not be used for political purposes. Contributions for investments and commercial transactions also do not require disclosure of the contributor.

Another part of the ordinance, not effective until February 1, 2017, requires intermediaries transferring more than $500 for political campaign purposes to disclose details of the transfers, including the occupation and employer of the person making the transfer and the purpose and description of each transfer.

The coat of arms of Austin, Texas by Glasshouse on Wikimedia Commons.

Today marks 69 days until Election Day 2016. The end to this year’s election is almost here and we can talk about 2017 after November 8th.

In the meantime, State and Federal Communications is starting its own grassroots movement to Keep US Strong and we have thousands of pins to deliver to you. Just send an e-mail to ebartz@stateandfed.com and we will deliver a box of our VOTE pins to you…And, be on the lookout for our bi-annual VOTE card.

I cannot express how important it is for everyone to VOTE this year. I may be preaching to the choir, but we all know people who are thinking about not voting. Let’s get this movement started to make sure everyone knows how important it is to VOTE.

Does anyone have any question about how I feel about voting? How else can you help?

Glad you asked.

Take senior citizens or anyone with difficulties to your local Board of Elections to VOTE before November 8th. I have taken my parents directly to the Summit County Board of Elections and the staff has noticed and even thanked me for helping.

Work at your Board of Elections on November 8th. I keep wanting to do this and need to stop making excuses about not doing so. Those octogenarians who are currently staffing the voting places aren’t getting younger and we are decades away from on-line voting.

Get out the VOTE pin. We started these in 2012 and it definitely takes time for them to go viral…We have plenty to spare.

Until next month, clear your calendar so you can VOTE on November 8th or make plans to vote early—either at your local Board of Elections or by absentee ballot.

#KeepUSstrong.

Elizabeth Z. Bartz

President and CEO
@elizabethbartz

Lobbying

Alabama: “Lawsuit Challenges Alabama Law Requiring Ethics Training for Lobbyists” by Joe Crowe for Newsmax

Alabama: “More Lawmakers (and Two Ethics Commissioners) Who Got Free Trips on Alabama Lenders’ Dime” by Kyle Whitmire (Alabama Media Group) for AL.com

Campaign Finance

“FINRA, MSRB Pay-to-Play Rules on SEC Approval Path” by Antoinette Gartrell for Bloomberg BNA

Louisiana: “Dave Peralta Freed from Last of 30 Criminal Charges” by Wilborn Nobles III for New Orleans Times Picayune

New York: “De Blasio Donor Violated City Rules, Conflicts Board Says” by J. David Goodman for New York Times

Ethics

Maine: “Paul LePage, Maine Governor, Now Says He’s Not Quitting” by Jess Bidgood for New York Times

Elections

“Embattled Corrine Brown Ousted in Primary” by Staff for Roll Call

“Harry Reid and Koch Brothers Wage Proxy War for a Nevada Senate Seat” by Carl Hulse for New York Times

North Carolina: “North Carolina Republicans Accused of Dodging Order to Fix Election Rules” by Michael Wines for New York Times

Procurement

“Obama Order on Contractor Workplace Violations Takes Effect Soon, Despite Objections” by Joe Davidson for Washington Post