A judge in Tennessee’s Davidson County Chancery Court ruled against the state today, striking down a law prohibiting political action committees from making contributions to candidates after the 10^th day before an election. Under the law, only political party committees can contribute to candidates in the 10-day window.

Chancellor Ellen Hobbs Lyle ruled in favor of plaintiff Tennesseans for Sensible Election Laws based on insufficient facts from the state to overcome the plaintiff’s argument.

In asserting the prohibition was an overbroad speech restriction, the plaintiff argued elected officials and political parties were “reserving special treatment in the political process for themselves.”

Attorneys for the state announced their intention to file an appeal immediately.

On September 24, U.S. Senators Jon Tester and Ron Wyden introduced a resolution to reverse a U.S. Treasury Department’s decision limiting IRS disclosure requirements of certain tax-exempt organizations engaging in political activities.

On July 16, the U.S. Treasury Department and the IRS announced certain tax-exempt organizations are no longer required to report the names and addresses of contributors on their annual reports.

This exemption from reporting applies to tax-exempt organizations generally not receiving tax-deductible contributions, such as the National Rifle Association, labor unions, volunteer fire departments, issue-advocacy groups, local chambers of commerce, veterans’ groups, and community service clubs. These organizations are still required to continue to collect and keep the donor information and to make it available to the IRS upon its request.

This exemption does not affect the information required to be reported by charities primarily receiving tax-deductible contributions, such as 501(c)(3) organizations, certain nonexempt private foundations, or 527 political organizations.

Senate Joint Resolution 64, The Spotlight Act, would overturn the exemption and require disclosure to the IRS of the names and information of donors who contribute more than $5,000.

Campaign Finance

Illinois: “Cook County OK to Restrict Campaign Cash from Lawyers, Others Seeking ‘Official Action,’ Appeals Court Says” by Jason Bilyk for Cook County Report

Elections

Florida: “Will Florida’s Ex-Felons Finally Regain the Right to Vote?” by Emily Bazelon for New York Times Magazine

Ethics

National: “State Supreme Courts Increasingly Face Partisan Impeachment Threats” by Alan Greenblatt for Governing

National: “Feds Turn Focus to UAW Presidents: Did they misspend union dues?” by Tresa Baldas for Detroit Free Press

National: “Rep. Keith Ellison Calls for U.S. House to Investigate Abuse Allegation Against Him” by Jessie Van Berkel for Minneapolis Star Tribune

California: “Drunken Threat to Lobbyist Draws Reprimand for California Lawmaker” by Alexei Koseff for Sacramento Bee

Missouri: “Greitens’ Staff Used Secret Texting App with Allies Outside Governor’s Office” by Jason Hancock for Kansas City Star

New York: “Crystal Run Did Raise a Red Flag” by Chris Bragg (Albany Times Union) for WRAL

North Dakota: “Groups Speak Out Against N.D.’s Measure 1, Call Anti-Corruption Amendment Poorly Written” by Tracy Briggs (Forum News Service) for Bismarck Tribune

Lobbying

Oklahoma: “Oklahoma Ethics Commission Hit with Federal Lawsuit Over Gift Rules” by Nolan Clay for The Oklahoman

Campaign Finance

National: “Dems Offer Resolution to Force Vote to Overturn IRS Guidance Limiting Donor Disclosure” by Naomi Jagoda for The Hill

Canada: “Vancouver Shows B.C. Is Still the Wild West of Election Advertising” by Frances Bula for The Globe and Mail

Montana: “State Auditor Rosendale Dropped Fines Against Top Campaign Donor” by John Adams (Montana Free Press) for Missoula Current

Ethics

National: “Justice Department Issues Indictment for 2013 Congressional Trip to Azerbaijan” by Katharine Tully-McManus for Roll Call

Missouri: “Clean Missouri Will Be on November Ballot After High Court Refuses to Hear Challenge” by Alison Kite for Kansas City Star

North Carolina: “NC House Speaker Tim Moore’s Legal Contract with Start-Up Raises Questions” by Dan Kane for Raleigh News and Observer

Oklahoma: “Oklahoma Supreme Court Rejects Ethics Commission Request for More Money” by Nolan Clay for The Oklahoman

Legislative Issues

Missouri: “Term Limits Have Been ‘a Disaster’ for Missouri, Say Many State Leaders” by Jason Hancock for Kansas City Star

Campaign Finance

National: “Why Are Corporations Pouring Millions into Shoo-In Governor Races?” by Sanya Mansoor, Liz Essley Whyte, and Joe Yerardi for Center for Public Integrity

Elections

National: “For Women on the 2018 Campaign Trail, ‘Sexism’ Is No Longer a Forbidden Word” by Avi Selk (Washington Post) for Connecticut Post

Ethics

National: “DHS Secretary Says FEMA Head Won’t Lose Job Over Travel Investigation” by Associated Press for USA Today

National: “Rod Rosenstein Will Meet with Trump to Discuss His Fate” by Michael Shear, Julie Hirschfeld Davis, and Maggie Haberman (New York Times) for MSN

Minnesota: “MN Rep. Jim Knoblach Ends Campaign Ahead of MPR Abuse Allegations Story” by Nina Moini and Briana Bierschbach for Minnesota Public Radio

Lobbying

National: “Obama White House Counsel Gregory Craig Under Scrutiny by Prosecutors in Offshoot of Mueller Probe” by Tom Hamburger for Washington Post

Florida: “NRA Sway: For Florida officials, it’s always Hammer time” by Steve Contorno for Tampa Bay Times

Missouri: “St. Louis Aldermen Will Again Consider Banning Lobbyists from the Floor of Their Chambers” by Celeste Bott for St. Louis Post-Dispatch

On September 20, the Fair Political Practices Commission prohibited the use of cryptocurrency in political contributions in California.

The FPPC stated the anonymity of these donations would make it difficult to discern who is attempting to influence elections.

This is contrary to the position the Federal Election Commission took in 2014, which said cryptocurrencies are in-kind property and federal candidates could accept them as a form of contribution under certain conditions.

Campaign Finance

National: Political Nonprofits Seek Answers After Court Decision Targeting ‘Dark Money’ by Michelle Ye Hee Lee for Washington Post

Ethics

National: Senate Judiciary Panel’s Top Democrat Calls for Delay in Kavanaugh Hearing After New Allegation by Karoun Demirjian, Amy Gardner, and Seung Min Kim (Washington Post) for MSN

National: Rod Rosenstein Suggested Secretly Recording Trump and Discussed 25th Amendment by Adam Goldman and Michael Schmidt (New York Times) for MSN

Iowa: Gov. Kim Reynolds’ Flights on Private Jets Not Improper, Ethics Panel Rules by David Pitt (Associated Press) for Des Moines Register

Missouri: Missouri Proposal to Reform Ethics Laws Is Back on the Ballot After Court Ruling by Alison Kite for Kansas City Star

New York: Percoco Sentenced to Six Years for Corruption by Robert Gavin for Albany Times Union

Lobbying

Canada: Ethics Committee Launches Review of Federal Lobbying and Conflict-of-Interest Laws by Bill Curry for The Globe and Mail

Alabama: Reform Panel to Vote on Changes to Alabama Ethics Law by Mike Cason for AL.com

National:

These State Lawmakers Are Running Unopposed, but Still Rake in Campaign Cash
Center for Public Integrity – Sanya Mansoor, Liz Essley Whyte, and Joe Yerardi | Published: 9/19/2018

There are at least 26 legislative leaders in statehouses across America who are collecting campaign donations despite running unopposed this year. The safe lawmakers represent an attractive prospect for lobbyists and power-seekers: the sure bet. Contributions to these influential politicians can buy face time and favor with those who set state legislative agendas, experts say. The money also compounds their power. Legislative leaders use their accounts to buy presents to thank supporters, for example, or give to fellow lawmakers’ campaigns to reward them for voting with their party.

Federal:

Foreign Lobbying Overhaul Loses Steam in Congress
Politico – Marianne Levine and Josh Gerstein | Published: 9/17/2018

Amid partisan clashes and pushback from foreign-owned companies, the push to strengthen the Foreign Agents Registration Act (FARA) appears to be going nowhere as multiple bills have stalled. Foreign companies with American subsidiaries feared the changes would force their lobbyists to register as foreign agents, which would require them to disclose every meeting and phone call they made on behalf of overseas clients rather than under the less-restrictive disclosure rules for domestic lobbyists. “There’s these very fierce efforts to maintain the status quo,” said U.S. Rep. Mike Johnson, one of the lawmakers pushing to overhaul FARA.

Manafort Plea Deal Casts New Scrutiny on Lobbyists He Recruited
WRAL – Kenneth Vogel (New York Times) | Published: 9/14/2018

Paul Manafort recruited the Podesta Group and Mercury Public Affairs to aide a pro-Russian nonprofit in Ukraine, an arrangement intended to obscure the identity of the ultimate beneficiary of the lobbying, Ukrainian President Viktor Yanukovych. Relying on the word of the Ukrainian group, the firms initially registered their representation under congressional lobbying disclosure rules. Now, that work, and the decision not to disclose it under the Foreign Agents Registration Act, has turned the Podesta Group and Mercury, along with Skadden, Arps, Slate, Meagher & Flom, into subjects of interest in a series of probes. The new evidence was included in updated charges filed against Manafort in connection with his guilty plea. The evidence Robert Mueller’s team unveiled could help prosecutors in New York build cases against the firms.

Political Nonprofits Must Now Name Many of Their Donors Under Federal Court Ruling after Supreme Court Declines to Intervene
Chicago Tribune – Michelle Ye Hee Lee and Robert Barnes (Washington Post) | Published: 9/18/2018

The U.S. Supreme Court denied a request from a conservative political group to temporarily block a lower court ruling which would force it to disclose its donors. The request for a stay had initially been entered by Chief Justice John Roberts after Crossroads GPS disputed an earlier ruling that invalidated an FEC regulation allowing donors to remain anonymous. In the order from the full court, the justices refused to further delay the U.S. District Court for the District of Columbia’s decision to invalidate the regulation. The original decision required “dark-money” groups that spend at least $250 in independent expenditures to report every donor who gave at least $200 in the past year.

Senate Candidates to Start Electronically Filing Campaign Finance Reports, Pending President Approval
Center for Responsive Politics – Kaitlin Washburn | Published: 9/19/2018

Federal lawmakers passed a bill that would require U.S. Senate candidates to file their campaign finance disclosures directly to the FEC, rather than on paper with the secretary of the Senate. The provision is part of a larger appropriations bill that now awaits President Trump’s signature. House of Representatives and presidential candidates have been electronically filing their disclosure reports since 2001. The Center for Public Integrity found numerous mistakes produced by the Senate’s archaic system. The investigation found errors in more than 5,900 candidate disclosures and were all traced back to the conversion of paper filings to electronic data.

Ted Cruz’s Campaign Marked a Fund-Raising Letter an Official ‘Summons.’ It Wasn’t Against the Rules.
WRAL – Liam Stack (New York Times) | Published: 9/17/2018

The FEC said U.S. Sen. Ted Cruz’s re-election campaign did not violate any regulations when it sent out a fundraising letter designed to look like a legal summons. “SUMMONS ENCLOSED –OPEN IMMEDIATELY,” is written across the front in capital letters. The envelope does state the letter is from a campaign and includes a return address for the Cruz campaign’s Houston post office box. FEC spokesperson Myles Martin said the relevant question was whether a mailing contains a disclaimer saying it came from a political campaign. Aside from that, Martin said, “the FEC’s regulations don’t speak to how candidates may choose to word particular solicitations to potential contributors.” Cruz is locked in an unexpectedly tight race against U.S. Rep. Beto O’Rourke.

From the States and Municipalities:

Georgia: Court Declines to End Paperless Voting in Georgia Before Midterms
Politico – Eric Geller | Published: 9/18/2018

U.S. District Court Judge Amy Totenberg ruled Georgia need not replace paperless voting machines before the midterm elections, dealing a blow to security activists even as the judge acknowledged the machines are not secure and continuing to use them may infringe on voters’ constitutional right to a free and fair election. Switching to paper at this late date, state and county officials argued, would throw the election into chaos and cause voter confusion. The case will now proceed and deal with the plaintiffs’ constitutional arguments, and Totenberg warned Secretary of State Brian Kemp that his concerns about a chaotic election s will “hold much less sway in the future.”

Illinois: U.S. Appeals Court Upholds Illinois Campaign Finance Limits
State Journal-Register (Associated Press) | Published: 9/13/2018

A federal appeals court upheld Illinois’ campaign contribution limits. The Seventh Circuit U.S. Court of Appeals ruled the caps set in a 2009 law do not violate First Amendment free-speech rights. Illinois Liberty PAC had argued limits on individuals’ contributions should not be lower than those for corporations or unions.

Missouri: In Latest Legal Twist, Ethics Reform Question Back on Missouri Ballot
St. Louis Post-Dispatch – Kurt Erickson | Published: 9/18/2018

A state appeals court put an ethics reform package back on the November ballot. The Missouri Western District Court of Appeals ruled that Amendment 1 can stay on the ballot pending future court decisions. The referendum asks whether voters want to tighten campaign contribution limits, ban lobbyist gifts, institute a two-year waiting period for lawmakers-turned-lobbyists, start a new redistricting system in 2020, and require lawmakers to adhere to the Sunshine Law.

Nevada: Las Vegas Judge Nullifies Results of Republican Election
Las Vegas Review-Journal – Ramona Giwargis | Published: 9/18/2018

Jason Burke defeated Mack Miller by 122 votes in the June 12 primary for a seat in the Nevada Assembly, but Clark County District Judge Jim Crockett signed an order that nullified the election, saying Burke did not file campaign finance reports on time. State law states an election may be contested if the winner was not eligible for office, illegal votes were cast, or valid votes were not counted. The secretary of state’s office said the failure to file campaign finance reports is not an automatic disqualifier.

New York: Watchdog’s Bark Silent for Cuomo
WRAL – Chris Bragg (Albany Times Union) | Published: 9/18/2018

When a sworn complaint is filed with New York Joint Commission on Public Ethics (JCOPE), the law requires the agency to send any subject of such an ethics complaint a letter outlining possible legal violations and giving them 15 days to respond. Sworn complaints have been submitted requesting that JCOPE launch investigations Joseph Percoco’s possible use of government resources while he was managing Gov. Andrew Cuomo’s 2014 campaign, as well as the governor’s potential knowledge of those activities. But the Cuomo administration and campaign have not received a 15-day letter from JCOPE. David Grandeau, the state’s former top lobbying official, said that means there is “now no doubt that JCOPE is not following the law.”

Pennsylvania: Pennsylvania’s Ban on Gambling Contributions Struck Down
PennLive.com – Marc Levy (Associated Press) | Published: 9/19/2018

U.S. District Court Judge Sylvia Rambo overturned Pennsylvania’s ban on political contributions from people involved in the gaming industry, ruling the law aimed at curbing the influence of casino interests was too broad. But the judge did not close the door on lawmakers reviving a similar prohibition that is narrower in scope and tailored to the purpose of fighting corruption. The U.S. Supreme Court, Rambo wrote, has ruled that preventing corruption, or the appearance of corruption, is the only appropriate reason to justify restrictions on political donations. The Pennsylvania Supreme Court threw out the ban in 2009, which initially outlawed large campaign contributions from key parties in the gaming industry. Lawmakers responded by banning all donations.

The U.S. District Court for the Middle District of Pennsylvania overturned the Commonwealth’s prohibition on political contributions from gaming-license applicants, licensees, and principals of licensees.

Judge Sylvia Rambo concluded Section 1513 of the Gaming Act is an unconstitutional limit on the First Amendment right of political association. Rambo stated the prohibition furthers a substantially important interest in preventing corruption, but is not closely drawn to achieve that interest.

The judgment opens the possibility for the Legislature to rewrite the statute to be narrowly tailored to achieve its purpose.

The Gaming Control Board is also reviewing the option to appeal the decision to the U.S. Third Circuit Court of Appeals.

Campaign Finance

National: “Ted Cruz’s Campaign Marked a Fund-Raising Letter an Official ‘Summons.’ It Wasn’t Against the Rules.” by Liam Stack (New York Times) for WRAL

Elections

National: “Indicted Congressman Chris Collins Reverses Himself, Will Remain on November Ballot” by Mike DeBonis for Washington Post

Georgia: “Federal Judge Denies Motion to Force Georgia to Adopt Paper Ballots in Midterm Election” by Ellen Nakashima for Washington Post

Ethics

National: “Embattled FEMA Chief Brock Long Facing Possible Criminal Investigation” by Nick Niroff and William Wan for Washington Post

National: “Trump’s Growing Legal Team Has a Problem: It’s operating partly in the dark” by Maggie Haberman and Michaek Schmidt for New York Times

National: “Hearing Set for Monday to Hear Kavanaugh and His Accuser” by Sheryl Gay Stolberg and Julie Hirschfeld Davis (New York Times) for WRAL

Florida: “City Attorney Sues Blogger for Libel. Is It ‘a Threat Designed to Silence?’” by Sarah Blaskey for Miami Herald

Lobbying

National: “Foreign Lobbying Overhaul Loses Steam in Congress” by Marianne Levine and Josh Gerstein for Politico

Maryland: “Anne Arundel County Executive Steve Schuh Introduces New Ethics Reforms” by Chase Cook for Capital Gazette

The Oakland Public Ethics Commission and OpenOakland, a civic technology group, have jointly released a new version of their web tool, Open Disclosure, to track political contributions in Oakland elections.

The corresponding app, to be released on September 25, will show the source and spending of campaign funds for both Oakland city candidates and ballot measure committees.

In addition to displaying sources of contributions, the new release will also include data on spending by independent expenditures.

Campaign Finance

Canada: “Federal Liberals Violated Own Fundraising Rules” by Bill Curry and Tom Cardoso for The Globe and Mail

Hawaii: “Following Campaign Cash in Hawaii Just Got Easier” by Nathan Eagle for Honolulu Civil Beat

Illinois: “U.S. Appeals Court Upholds Illinois Campaign Finance Limits” by Associated Press for State Journal-Register

Montana: “Montana Green Party’s Ballot Benefactor May Remain Unknown” by Mary Beth Hanson (Associated Press) for Seattle Times

Ethics

National: “Alarm Grows Inside FEMA as Administrator Brock Long Fights for His Job” by William Wan and Nick Miroff for Washington Post

National: “Sen. Sasse Proposes Legislation to Address Congress’ Ethical Lapses” by Brent Martin for Hastings Tribune

Lobbying

National: “‘Robert Mueller’s Real Quest Here Is for the Truth’: How Paul Manafort’s plea brings the special counsel probe closer to its endgame” by Matt Zapotosky, Carol Leonnig, and Ashley Parker (Washington Post) for MSN

National: “Manafort Plea Deal Casts New Scrutiny on Lobbyists He Recruited” by Kenneth Vogel (New York Times) for WRAL

Oklahoma: “Oklahoma Ethics Commission Adopts Rule Barring Legislators from Becoming Paid Lobbyists for Two Years” by Nolan Clay for The Oklahoman

On September 12, California Gov. Jerry Brown was presented with a bill concerning political advertising in social media.

Assembly Bill 2188, the “Social Media DISCLOSE Act”, requires disclosure for advertisements made “via a form of electronic media that allows users to engage in discourse and post content, or any other type of social media”, and is paid for by a political party or a candidate-controlled committee. The disclosure obligations fall on both the registered political parties and committees and on the “online platforms.”

The online platform must maintain and make available for online public inspection a digital copy of a political advertisement, the number of impressions generated from the ad, information regarding the total amount spent on the advertisements, and other relevant information.

The bill defines an online platform as a “public-facing Internet Web site, web application, or digital application, including a social network, ad network, or search engine, that sells advertisements directly to advertisers. A public-facing Internet Web site, web application, or digital application is not an online platform for purposes of this [Act] to the extent that it displays advertisements that are sold directly to advertisers through another online platform.” The online platforms will be required to include with each political advertisement a disclosure of who funded the ad or a hyperlink to a website containing the required disclosures.

If signed by the governor, the bill takes effect on January 1, 2020.

On September 15th, Chief Justice of the United States John G. Roberts, Jr. issued an order staying a lower federal district court’s order invalidating a Federal Election Commission (FEC) campaign finance disclosure regulation. Robert’s stay was decided on Saturday after the U.S. Court of Appeals for the District of Columbia Circuit denied an emergency motion for the stay made earlier the same day.

On August 3, a federal district court had ruled a campaign finance disclosure regulation, followed for decades by the FEC, failed to uphold disclosure requirements required by a federal statute. Chief Judge Beryl A. Howell of the United States District Court for The District of Columbia issued an order, in CREW v. FEC, vacating 11 C.F.R. §109.10(e)(1)(vi), but stayed the vacatur for 45 days to give time for the FEC to issue interim regulations comporting with the statutory disclosure requirements of 52 U.S.C. §30104(c). The court also has allowed the FEC 30 days to change an earlier FEC dismissal to conform with the court’s ruling.

The case originated because of independent expenditures made in a 2012 Ohio senate race by the non-political social-welfare nonprofit Crossroads Grassroots Policy Strategies (Crossroads GPS), an affiliate of the American Crossroads Super PAC. Crossroads GPS did not report donors when reporting its independent expenditures, while it acknowledged receiving contributions over $200, arguing the donors did not donate funds directly tied to any specific reported expenditure, as the FEC interpreted 11 C.F.R. §109.10(e)(1)(vi) to require. Non-political committees making independent expenditures over $250 in a calendar year must comply with disclosure obligations closely analogous to those imposed on political committees.

The vacated regulation required the identification of each person who made a contribution in excess of $200 to the person filing a disclosure report, including for non-political 501(c)(4) non-profit entities making independent expenditures, if the contribution was made for the purpose of furthering the reported independent expenditure. The district court found the regulation, as construed and applied by the FEC, did not require the disclosure of donors, absent the donor’s express agreement that the funds be used for the specific expenditures reported to the FEC, even though the donor may otherwise support and in fact contribute for the purpose of funding those expenditures.

The district court found the regulation impermissibly narrows the mandated disclosure in 52 U.S.C. §30104(c)(2)(C), which requires the identification of such donors contributing for the purpose of furthering the non-political committee’s own express advocacy for or against the election of a federal candidate, even when the donor has not expressly directed that the funds be used in the precise manner reported.