On February 26, legislation aimed at reforming U.S. campaign finance, lobbying, and ethic laws advanced in committee. The House Administration Committee approved of H.R. 1, the For the People Act, by a party-line vote of six to three.

In the sweeping 571-page bill, corporate PACs would be required to make certifications annually with the Federal Election Commission. Those certifications would include affirming under penalty of law no foreign national participated in any way in the decision-making processes of the PAC; corporate board members who are foreign nationals abstained from voting on matters concerning the corporation’s PAC; and the PAC did not solicit or accept recommendations from any foreign national.

The legislation expands the definition of foreign national to include any corporation, limited liability corporation, or partnership that is not a foreign national but is owned or indirectly controlled by foreign nationals meeting statutory thresholds of ownership or voting. The threshold is five percent of voting shares if the foreign national is a foreign country, a foreign government official, or a corporation principally owned or controlled by a foreign country or foreign government official. The threshold is 20 percent if the foreign national is any other type of foreign national. Corporations not considered foreign nationals would fall under the definition when a foreign national has the power to direct, dictate, or control the decision-making process of the corporation with respect to its interests in the United States or with respect to activities in connection with federal, state, or local elections.

Additionally, the bill restructures the Federal Election Commission, amends the federal conflict of interest law, and expands the revolving door provision by prohibiting Members of Congress from serving on corporate boards. Introduced by Rep. John Sarbanes, the bill requires any organization involved in political activity to disclose its largest donors, creates a multiple matching system for small donations for political campaigns, and amends rules governing super PACs.

If passed, the bill also requires presidential candidates to disclose their tax returns, prohibits partisan gerrymandering, increases oversight over election vendors, creates an automatic voter registration across the country, and changes registration requirements for lobbyists and foreign agents.

Happy Monday! Four stories from last week about new lobbying laws, campaign finance limits and gift laws you don’t want to miss!

Today, the Federal Election Commission (FEC) published its price index adjustments for expenditure limitations and the federal lobbyist bundling disclosure threshold.

The lobbyist bundling disclosure threshold has increased for 2019 from $18,200 to $18,700. This threshold amount is adjusted annually.

Federal law requires authorized committees of federal candidates, leadership political action committees (PACs), and political party committees to disclose contributions bundled by lobbyists and lobbyists’ PACs.

Additionally, the FEC published its adjusted Coordinated Party Expenditure Limits for political parties for 2019.

Today, the Federal Election Commission (FEC) published the 2019-2020 election cycle contribution limits, which have been indexed for inflation.

As required by the Bipartisan Campaign Reform Act of 2002, the FEC must adjust certain contribution limits every two years.

The individual and nonmulticandidate PAC contribution limit to federal candidates has increased from $2,700 to $2,800 for both primary and general elections, allowing for a total of $5,600 for a federal candidate.

The limits on contributions by individuals to national party committees has increased from $33,900 to $35,500 per calendar year.

Individuals may now contribute $106,500 per calendar year to committees of a national political party for presidential nominating conventions, to committees of a national political party for preparation for and the conduct of election recounts and contests and other legal proceedings, and to committees of a national political party for the construction, purchase, renovation, operation, and furnishing of one or more buildings for party headquarters.

The Federal Election Commission (FEC) has extended its deadline for seeking public comments on proposals for rules establishing specific time periods for the submission of public comments on drafts of advisory opinions.

The comment period was originally scheduled to end on February 1. Because of the recent partial government shutdown, the FEC chose to extend the comment period for 30 days, ending on March 4.

In 2016, a Petition for Rulemaking was received by the FEC requesting the Commission modify 11 CFR §112.3 and codify procedures establishing specific time periods for public comments on drafts of advisory opinions before the Commission votes on the drafts.

The petition, filed by Make Your Laws PAC, Inc., Make Your Laws Advocacy, Inc., Make Your Laws, Inc., and Dan Backer, Esq., additionally asks the Commission to amend existing regulations to require that, when the Commission makes public multiple drafts of an advisory opinion, the Commission indicate the differences between those drafts.

The FEC also extended the comment deadline to March 4 for the rulemaking concerning the regulatory definition of contribution.

After the comment period is over, the FEC will consider the merits of the petition.

The first piece of legislation introduced into the new U.S. House of Representative was a sweeping 571-page campaign finance bill. Introduced by Rep. John Sarbanes, House Bill 1, the For the People Act, requires any organization involved in political activity to disclose its largest donors, creates a multiple matching system for small donations for political campaigns, and amends rules governing super PACs.

The bill also restructures the Federal Election Commission, amends the federal conflict of interest law, and expands the revolving door provision by prohibiting members of Congress from serving on corporate boards. If passed, the bill also requires presidential candidates to disclose their tax returns, prohibits partisan gerrymandering, increases oversight over election vendors, creates an automatic voter registration across the country, and changes registration requirements for lobbyists and foreign agents.

Sarbanes argued the rational for the bill in his press release, stating, “The bold, transformative set of reforms that we introduced today will strengthen our democracy and return political power to the people by making it easier, not harder, to vote, ending the dominance of big money in our politics and ensuring that public officials actually serve the public.”

On December 13, the Federal Election Commission (FEC) may consider whether allowing an individual volunteering to allow the processing power of his or her internet-enabled device to mine cryptocurrencies for the benefit a political committee would be considered a political contribution.

An advisory opinion request asks the FEC if a federal political committee could allow its individual supporters to volunteer the processing power of their internet-enabled devices to pool the processing power of these devices, which results in the mining of a “block.”

Mining allows transactions between users to be authenticated and generates a new cryptocurrency unit for the miner as a reward for creating the “block” and pays the miner a transaction fee. Creating blocks requires enormous amounts of computing power and can take years to generate a valid “block” by a single miner.

The FEC may consider Draft Advisory Opinion 2018-13 (Draft A) at its open meeting December 13, or hold it over for a future date.

The Federal Election Commission (FEC) is seeking public comments on proposals for rules establishing specific time periods for the submission of public comments on drafts of advisory opinions. These comments must be submitted on or before February 1, 2019.

In 2016, a Petition for Rulemaking was received by the FEC requesting the Commission modify 11 CFR §112.3 and codify procedures establishing specific time periods for public comments on drafts of advisory opinions before the Commission votes on the drafts.

The petition, filed by Make Your Laws PAC, Inc., Make Your Laws Advocacy, Inc., Make Your Laws, Inc., and Dan Backer, Esq., additionally asks the Commission to amend existing regulations to require that, when the Commission makes public multiple drafts of an advisory opinion, the Commission indicate the differences between those drafts.

After the comment period is over, the FEC will consider the merits of the petition. The notice of availability for the submission of public comments was issued in the December 3 Federal Register.

On November 15, the Federal Election Commission (FEC) Office of Inspector General (OIG) released the OIG’s Statement on the FEC’s Management and Performance Challenges for the fiscal year ending September 30, 2018.

An independent audit of the FEC was performed by Leon Snead & Company, P.C. under contract with, and monitored by, the OIG.

The report identifies “a significant deficiency in internal controls related to IT security and contains recommendations to address the deficiencies noted.” The audit “disclosed no instance of noncompliance that is required to be reported under Government Auditing Standards and the OMB audit bulletin.”

The auditing firm also believes corrective action is required “related to control issues dealing with reconciling trading partner transactions.”

Additionally, the audit also attributed low employee morale at the FEC to factors including the commissioners themselves and the commission’s communication.

On October 4, the Federal Election Commission (FEC) issued new guidance on the reporting of political contributions made to nonprofit organizations making certain independent expenditures.

The guidance, released in an FEC press release, was issued in reaction to a federal court’s decision in CREW v FEC, which 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 found the FEC regulation 11 CFR §109.10(e)(1)(vi), did not comport with the statutory disclosure requirements of 52 U.S.C. §30104(c).

The district court found the regulation impermissibly narrowed the mandated disclosure in 52 U.S.C. §30104(c)(2)(C), which requires the identification of 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 the funds be used in the precise manner reported.

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.

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.

On September 18, a ruling invalidating a federal campaign finance regulation limiting the disclosure requirements of organizations making independent expenditures was upheld by the United States Supreme Court.

The Court overruled a stay issued on September 15 by Chief Justice John G. Roberts, Jr., which had blocked a lower federal district court’s order invalidating a Federal Election Commission (FEC) campaign finance disclosure regulation. There were no dissents issued with the order.

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 FEC has not yet replaced the rule.

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.

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.