Q. To streamline LDA tracking and reporting, our company includes 100 percent of our in-house lobbyists’ compensation as lobbying on our quarterly report.  Is this a reasonable approach?

A. The LDA does not contain any special tracking requirements for reporting expenditures.  Registrants employing in-house lobbyists are required to provide a “good faith estimate of the total expenses” of their lobbying activities.  With the “good faith” standard as the back drop, an organization should determine whether including 100 percent of their lobbyists’ compensation meets that standard.  Aside from the tax implications of including 100percent of compensation, typically, there is some time that is spent during the course of a quarter that is not defined as lobbying and varies from month to month depending on what issues are being addressed.  Therefore, providing a good faith estimate, in most cases, will require a registrant to implement some sort of tracking process to meet the standard.  In the event of an audit, the ability to demonstrate reasonable efforts to track and capture lobbying activity, and only lobbying activity, is an additional benefit.

You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: marketing@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.

Lobbying

“Which federal agencies do lobbyists target most?” by Elizabeth Shell in PBS Newshour.

“Unemployment Extension Cause Has Invisible Lobby | K Street Files” by Kate Ackley in Roll Call.

“Former Rep. Dan Lungren returns to lobbying” by Megan R. Wilson in The Hill.

Canada: “Number of federal lobbyists up 24 per cent” by Jason Fekete in The Star Phoenix.

Florida: “Lobbyists, lawyers jostle for pot business” by Dara Kam in The News Herald.

Kentucky: “Lobbyist hosts RPK fundraiser with top GOP senators” by Tom Loftus in the Courier-Journal.

Oklahoma: “Wind energy felt at the state Capitol” by Kurtis Killman in the Tulsa World.

Pennsylvania: “Improvements seen in Phila. lobbying Web site” by Alisha Green (Sunlight Foundation) in The Philadelphia Inquirer.

Campaign Finance

“What if your cell phone buzzed every time someone gave your congressman a ton of money?” by Emily Badger in The Washington Post.

“What America Can Learn From Norway’s Success in Regulating Campaign Finance” by Emmett Rensin in PolicyMic.

Ethics

Georgia: “Georgia settles with 3 former ethics commission employees for more than $1.8 million” by Christina A. Cassidy (Associated Press) in The Republic.

Ohio: “Lawmaker might face charges over gifts” by Randy Ludlow in The Columbus Dispatch.

Rhode Island: “Issues to watch at end of General Assembly session” by Erika Niedowski (Associated Press) in the San Francisco Chronicle.

Rhode Island: “R.I. Senate OKs bill for Ethics Commission jurisdiction over state lawmakers” by Mike McKinney in the Providence Journal.

West Virginia: “Ethics Commission to hire interim director” by Phil Kabler in The Charleston Gazette.

Congress

“What Happens in the Senate When No One’s Looking? A Lot” by Humberto Sanchez in Roll Call.

State Legislatures

California: “California Legislature passes $156.4-billion 2014-15 budget” by Chris Megerian and Melanie Mason in the Los Angeles Times.

Minnesota: “Minnesota legislators swap Capitol careers for lucrative county paychecks” by Patrick Condon in the Star Tribune.

New York: “Albany lawmakers leaving unfinished business” by Michael Randall in Times Herald-Record.

Government Tech and Social Media

“Pols have a #fakefollower problem” by Darren Samuelsohn in Politico.

The ethics commission has agreed to settle three retaliation claims for over $1.8 million. The claims are each related to an investigation of Gov. Nathan Deal involving 2010 campaign and personal finance reports.

Under the terms, the commission’s former deputy, Sherry Streicker, will receive $1 million, former IT specialist John Hair will receive $410,000, and former staff attorney Elisabeth Murray-Obertein will receive $477,500. The settlements follow an April jury verdict awarding $700,000 plus fees to the commission’s former executive secretary, Stacey Kalberman, who argued her pay was slashed and her deputy’s position eliminated as they were preparing subpoenas in the Deal case.

Murray-Obertein, who arrived after the departures of Kalberman and Streicker, testified she was under pressure to get the Deal case resolved. Hair claimed LaBerge ordered him to alter, hide, and destroy documents related to the Deal investigation.

The commission has denied any wrongdoing and Deal has said he was not involved in any of the commission’s decisions or actions.

 

National:

What Corrupt States Spend Their Money On

Government Technology – Liz Farmer and Kevin Tidmarch (Governing Magazine) | Published: 6/6/2014

According to research published in Public Administration Review, states with higher levels of public corruption spend more money on highways and construction. The study found those projects and police programs provide the most opportunities for lawmakers to enrich themselves, and are positively correlated with state levels of corruption. Meanwhile, highly corrupt states also spend relatively less on health, education, and welfare, categories that were less susceptible to graft and bribery, found the report.

Federal:

Four Years Later, FEC May Finally Update Its Books with Citizens United Ruling

National Journal – Shane Goldmacher | Published: 6/8/2014

Sources said a bipartisan coalition of FEC commissioners is finally moving to update its regulations in the wake of the Supreme Court’s Citizens United ruling after years of stalemate. The proposed rules under consideration by commissioners are narrow in scope, mostly seeking to strip unconstitutional provisions from the books; the revisions would not include the stricter disclosure requirements that some Democrats have sought, said people involved in the matter. But the very fact the FEC is undertaking the effort at all is a significant development for an agency that has become synonymous with Washington gridlock and dysfunction.

From the States and Municipalities:

California – Calif. Senate Adopts New Ethics Standards, Rejects Others

Los Angeles Times – Patrick McGreevy | Published: 6/9/2014

The California Senate passed new rules that will create an ethics ombudsman, update the chamber’s code of conduct, and ban senators from collecting campaign checks during the last four weeks of the legislative session. But the Senate also shot down a bill that sought a broader campaign fundraising ban, and passed a watered-down ethics bill striking out an attempt to limit the value of travel that officials may take at the expense of interest groups who lobby them.

Colorado – Colorado Secretary of State Denies Citizens United’s Press Pass

Denver Post – Joey Bunch | Published: 6/5/2014

A request by conservative political group Citizens United to be treated as a media organization under Colorado election law was denied. The secretary of state’s office ruled an upcoming documentary featuring state politicians “is an electioneering communication” and does not fall under any of the exemptions to state laws requiring political groups to disclose financial donors when running ads that mention candidates within 60 days of an election.

Connecticut – Judge Rules for State’s Campaign Finance Law

Hartford Courant – Edmund Mahony | Published: 6/10/2014

A federal judge dismissed part of a Democratic Governors’ Association (DGA) lawsuit and denied the group’s bid for a preliminary injunction against Connecticut’s campaign finance laws that it said limit the ability of political groups to buy independent ads backing candidates. The DGA maintained that under laws adopted in 2013, the state unfairly treats independent money spent on ads and other political messages by the national group as contributions to particular candidates, and thus subject to donation limits.

Idaho – Ethics Proposal Would Stop Lobbyists from Lying to Lawmakers

Utah Policy – Brian Schott | Published: 6/10/2014

Idaho law prohibits lobbyists from intentionally giving false information to officials. The punishment is up to $100 fine and a one-year suspension of their lobbying license. But the law is basically unenforceable because it is nearly impossible to prove whether a lobbyist provided false information on purpose. State Sen. Daniel Thatcher wants to put more teeth into the statute.

Illinois – State Rep. Derrick Smith Found Guilty in Bribery Trial

Chicago Sun-Times – Kim Jansson | Published: 6/10/2014

A federal jury found Rep. Derrick Smith guilty of taking a $7,000 bribe to support a state grant for a day-care center. He was charged following an FBI undercover investigation that caught him talking about the payoff on tape. Smith was expelled by the Illinois House in 2012 after he was charged with taking the bribe. He won his seat back the same year, but lost the Democratic primary in March.

Maryland – City Chides Developer for Listing Campaign Contributions as Project Cost

Baltimore Sun – Luke Broadwater | Published: 6/11/2014

Baltimore officials approved a deal to sell a pier for the development of a luxury hotel after reprimanding a developer for trying to include campaign contributions to local politicians as part of the project’s costs. Recreation Pier Developers listed donations to city Councilperson James Kraft and state Del. Peter Hammen as part of the more than $3 million it has spent on the project. “The developers believe campaign contributions buys access and helps build a relationship …,” said Maryland Common Cause Director Jennifer Bevan-Dangel.

Maryland – Hershey v. Hershey: Chocolate company sues state senator over campaign signs

Baltimore Sun – Ian Duncan | Published: 6/9/2014

In a federal lawsuit, the Hershey Company asked a judge to stop Maryland Sen. Stephen Hershey, Jr. from using campaign materials that it believes are too similar to its own logo and packaging. The senator’s name, in block capital letters over a brown Maryland flag, looks strikingly similar to the wrapper of a certain confection, the chocolate maker says, an impermissible use of what it calls its “trade dress.”

Nevada – In Nevada, Nobody Wins (Sort-Of)

Politico – Steven Shepard | Published: 6/11/2014

More Democratic primary voters cast ballots for “None of these candidates” than for any actual candidates for governor in Nevada, a testament to a weak field looking to challenge popular Gov. Brian Sandoval and a unique state election law that allows voters the none-of-the-above option. “None” led the way with 30 percent of the vote. Finishing second was former state economic development director Robert Goodman, who won 25 percent of the vote.

North Carolina – N.C. Investigating Donations by Sweepstakes Industry

The Virginian-Pilot – Michael Biesecker (Associated Press) | Published: 6/11/2014

The State Bureau of Investigation is conducting a criminal probe into campaign contributions from the video sweepstakes industry to some of North Carolina’s top elected officials. The Associated Press reported last year that donations from gaming software magnate Chase Burns, who was pushing for legalization of his industry in North Carolina, may have violated state laws prohibiting corporate money from “directly or indirectly” funding political campaigns.

Pennsylvania – A Bad Bet: GOP Governors Assn. crossed state law with donation

Philadelphia Daily News – Chris Brennan | Published: 6/11/2014

The Republican Governors Association transferred nearly $1 million to its Pennsylvania PAC – the largest donor to Gov. Tom Corbett’s re-election bid – from casino magnate Sheldon Adelson, a blunder that appears to breach the state’s gaming act. State law bars casino owners and executives from giving to candidates, political parties, or committees. Adelson chairs the Las Vegas Sands Corp., which owns a casino in Bethlehem.

South Carolina – South Carolina Senate Postpones Vote on Ethics Compromise after House Grudgingly Passes

Columbus Republic – Andrew Coffman Smith (Associated Press) | Published: 6/5/2014

The South Carolina General Assembly was on the cusp of passing its first attempt at ethics reform in 20 years when Sen. Lee Bright filibustered a vote on the bill. The House had passed the legislation but the Senate chose to wait until June 17 to consider the measure. The reform bill raises the annual lobbyist registration fee from $100 to $200, and super PACs would be required to disclose their top five donors and any donor who gives more than $10,000, among other provisions.

Virginia – Cantor Loss Throws Congress into Disarray

Washington Post – Paul Kane | Published: 6/10/2014

In one of the most stunning primary election upsets in congressional history, House Majority Leader Eric Cantor was soundly defeated by a tea party-backed economics professor who had hammered him for being insufficiently conservative. The result delivered a major jolt to the Republican Party as Cantor had widely been considered the top candidate to succeed Speaker John Boehner, and it has the potential to change both the debate in Washington on immigration and, possibly, the midterm elections.

Virginia – GOP Has Claimed Control of Va. Senate, Forced Democrats to Cave over Medicaid Impasse

Washington Post – Laura Vozzella and Michael Laris | Published: 6/9/2014

The resignation of a Democratic senator in Virginia that flipped control of the chamber to Republicans set off charges of an unseemly deal and threatened Gov. Terry McAuliffe’s chances of expanding Medicaid under the president’s health care law. State Sen. Phillip Puckett’s sudden decision to step down from his seat may tip a stalemate in favor of Republicans opposed to expanding Medicaid to 400,000 poor and disabled residents. Democrats accused Republicans of masterminding Puckett’s resignation by promising him a plum job and speeding the appointment of his daughter to a state judgeship.

State and Federal Communications produces a weekly summary of national news, offering more than 80 articles per week focused on ethics, lobbying, and campaign finance.

News You Can Use is a news service provided at no charge only to clients of our online Executive Source Guides, or ALERTS™ consulting clients.

 

On June 11, the Toronto, Canada City Council appointed Valerie L. Jepson as the city’s new integrity commissioner. According to the city’s press release, Jepson was counsel for the Office of the Ontario Integrity Commissioner since 2007. Jepson replaces Janet Leiper, the commissioner since 1999.

Earlier this year, the Committee to Restore Michigan’s Part-time Legislature circulated a statewide petition to amend the Michigan Constitution. The proposed amendment aimed to institute a part-time state Legislature and limit legislative sessions to 60 days, lawmaker salaries to $35,000, and total legislative staffers to 250.

The committee announced on June 12, 2014, it is suspending its campaign due to failure to collect enough signatures by the June deadline. The committee needed at least 322,609 signatures in order to get the amendment on the ballot in November.

Although the campaign is suspended for the 2014 election, the committee plans to resurrect the effort in 2016.

Lobbying

“Lobby groups hunker down for storm” by Bernie Becker and Benjamin Goad in The Hill.

“Cantor’s K Street value: Off the charts” by Megan R. Wilson in The Hill.

Campaign Finance

“Tech firm looks to bring bitcoins to campaigns” by Julian Hattem in The Hill.

“Got bitcoins to spend? Here are some options” by Laura Lorenzetti in Fortune.

Alaska: “Campaign-Finance Challenge in Alaska Senate Race” by Jeremy W. Peters in The New York Times.

Florida: “Campaign Cash Offers Picture of Legislative Races” by Jim Saunders in the Sunshine State News.

Ethics

Illinois: “Jurors Have Some Trouble Convicting Illinois Legislator of Bribery” by Jason Meisner in Governing.

Rhode Island: “R.I. Senate delays vote on ethics bill to consider possible changes” by Randal Edgar in the Providence Journal.

State Legislatures

Michigan: “Michigan petition drive for part-time Legislature falls short but organizers look to 2016” by Jonathan Oosting on Michigan Live.

New York: “Cuomo ‘not overly optimistic’ about end of legislative session” by Jimmy Vielkind in Capital New York.

Virginia: “Lawmakers return to pass budget” by Michael Marts in The Roanoke Times.

Washington: “Slew of state laws take effect” by Lauren Dake in The Columbian.

U.S. District Judge Janet Hall has denied an injunction request by the Democratic Governors Association (DGA) to enjoin the state’s campaign finance laws.

DGA argued Connecticut’s campaign finance law limits the ability of political groups to buy independent ads supporting candidates by treating such spending as a contribution to the candidates supported, thus making it subject to campaign finance limits.

In denying the injunction, Judge Hall found the DGA did not establish a likelihood it would prevail in its challenge of the law.

House Majority Leader Eric Cantor suffered a bruising primary defeat by tea party challenger Dave Brat on June 10.

Strategists say Cantor’s 11 percentage point loss was due to a lack of field effort, fueled by overconfidence in his path to victory. Many Republicans felt Cantor had become too removed from his district, mired in Washington infighting and too focused on the national stage.

According to historians, no House leader of Cantor’s rank has ever been defeated in a primary.

Lobbying

“Lobbying World” in The Hill.

“Sallie Mae spin-off registers to lobby” by Megan R. Wilson in The Hill.

“Amplifyd: Crowd-Sourced Lobbying Launches Website” by Annie Spiegelman in The Huffington Post.

“Politico: Wall Street Loses an Ally With Cantor’s Defeat” by Drew MacKenzie in Newsmax.

North Carolina: “Senate honors longtime lawmaker, lobbyist Alley” by Tara Jeffries in WRAL.

Campaign Finance

“Campaign Finance Hearings Showcase Extremes | Rules of the Game” by Eliza Newlin Carney in Roll Call.

“A Reporter Crashes the Super PAC Party” by Walter Shapiro in the Brennan Center for Justice Blog.

“Bitcoin bulks up lobbying power” by Julian Hattem in The Hill.

Connecticut: “Democratic governors lose challenge to Connecticut campaign finance law” by Nate Raymond in Reuters.

Kansas: “Panel looking into ethics of Facebook post seeking contributions to Schodorf campaign” by Brian Lowry in The Wichita Eagle.

North Carolina: “Legislators call for constitutional convention” in The Times-News.

Ohio: “Former executive testifies in campaign finance trial of northeast Ohio businessman” by The Associated Press in The Republic.

Elections

“5 takeaways from Eric Cantor shocker” by James Hohmann in Politico.

In the monthly State and Federal Communications staff meetings, each department provides an update of what’s new so the entire staff can get a picture of what each department is up to. One of the things the Research Department likes to share with the staff is statistics that provide some insight as to the volume of information we track and update.

The information on our website is contained in a database, which contains 223 individual questions that need to be addressed in each of the more than 300 jurisdictions available on our website. In round numbers, this means there are roughly 70,000 individual “chunks” of data in our database, which may be as short as one word or as long as the approximately 3,900 words it takes to explain California’s complex campaign finance reporting system. One interesting statistic we like to share in each meeting is the number of these individual questions “touched” since the last staff meeting, as a rough measure of how many pieces of information were updated on the website. Between our April 21and May 29 staff meetings, the Research Department updated 15,245 questions in our database, either as part of the normal review process or as part of updates made to the website due to changed information, such as the passage of a new bill or a new phone number for a contact. Mind you, not every question processed through the system gets changed, as it is sometimes necessary to look at a question just to verify the information, but this statistic gives a good idea of the volume of information being looked at during the period in question.

Another interesting statistic involves the number of what we call “supplemental documents,” that is, the documents you can find in under the “Statutes, Regulations, Forms…” link on our website. These are the statutes, opinions, guides, and forms we keep on our website as both a quick reference and a ready source of forms to assist with registration and reporting. As of our May 29 meeting, we had 5,814 such documents available on our website. In the 12 months preceding the meeting, 2,022 of those documents had been updated.

The Senate has passed resolutions to tighten ethics laws by creating a new position of ethics ombudsman, installing protections for whistleblowers, and banning the raising of campaign funds during August, the last month of the legislative year. A bill to extend the fundraising blackout period to the Assembly fell four votes short of the two-thirds needed for approval.

The Senate also approved an amended bill to regulate travel gifts and the use of campaign funds. Senate Bill 831 initially would have barred acceptance of gifts of travel worth more than $8,000, but was amended to only require nonprofit groups paying for legislators’ travel to disclose donor information.

At its June 18 meeting, the Hawaii State Ethics Commission will consider whether to issue guidance to state legislators regarding the use of their annual legislative allowance. The state Constitution provides the allowance for each legislator to cover incidental expenses connected with legislative duties. The funds may not be used for any personal expenses including, but not limited to, gifts, campaign contributions, or food and beverages related to social activities and events.

Several legislators filed complaints with the commission accusing colleagues of using the annual allowance for personal reasons. After reviewing information provided by Senate and House clerks, commission staff identified several disbursements appearing unrelated to a legislator’s official duties.

Congressional leadership argues the responsibility for monitoring the use of the legislative allowance rests with the Legislature. Commission staff, on the other hand, believes monitoring the use and sanctioning the misuse of the allowance falls within the reach of the State Ethics Code.

A detailed list of recommendations for discussion can be found on the Ethics Commission website. Because legislative allowance funds are public funds, the Commission will accept public comments and testimony concerning the use of said funds.

Lobbying

“Bottom Line” in The Hill.

“Koch brothers add to K Street force” by Megan R. Wilson in The Hill.

“Washington Redskins Improve Defense With K Street Lobbying” by Kent Cooper in Roll Call.

Campaign Finance

California: “Fremont nonprofit group fined $25,000 for laundering contributions in 2008 mayoral race” by Chris De Benedetti in the San Jose Mercury News.

Maine: “Ethics commission fines LePage for missing campaign finance deadlines” by Mario Moretto in the Bangor Daily News.

Maine: “Political donors in Maine’s gubernatorial race most often work for [blank]” by Darren Fishell in the Bangor Daily News.

Ohio: “Suarez relatives testify about campaign donations” by Ed Meyer in the Akron Beacon Journal.

Ethics

California: “Senate approves tighter gift bans, ethics rules” by Judy Lin (Associated Press) in The Modesto Bee.

Washington: “Ethics board looks at lawmakers’ free food” by Brad Shannon in The News Tribune.

Washington: “Moving state primary election left 1992 ethics reform behind” by Peter Callaghan in the Union-Bulletin.

Elections

Nevada: “It’s been a slow primary season, but there’s still much at stake” by Laura Myers in the Las Vegas Review-Journal.

North Dakota: “Few statewide issues, races to be decided” by Nick Smith in the Bismarck Tribune.

South Carolina: “Voters Guide: Famous names dot GOP primary for SC lieutenant governor” by Andrew Shain in The State.

State Legislatures

Maine: “Democrats balk at LePage’s renewed push for special legislative session” by Mario Moretto in the Bangor Daily News.