November 1, 2012 •
Ask the Experts – In-Kind Contribution, or Lobbying Expenditure?
Here is your chance to “Ask the Experts” at State and Federal Communications, Inc.
Q. I am a registered lobbyist who was asked to make an in-kind contribution on behalf of my company for an event to be held by a state political party. Is this permissible?
A. As a registered lobbyist, your contributions may be governed by two sets of laws: campaign finance and lobbying.
First, you must determine whether the state would consider the in-kind payment to be a contribution or a lobbying expenditure.
If the in-kind payment is determined by the state’s governing body to be a contribution, then this contribution must be compliant with the campaign finance laws. You must first determine if the amount and source of funding are permissible. Assuming permissibility of the contribution, potential restrictions on contributions facilitated by lobbyists and the reportability of contributions facilitated by lobbyists will need to be reviewed. In some states, once the in-kind contribution is made, the lobbyist and the lobbyist’s principal may not have additional involvement with the planning of the event, but will be permitted to attend.
Where the state considers the in-kind payment to be a lobbying expenditure and not a political contribution, you must ensure that the expenditure will not exceed the state’s gift limit. The pro-rata share of the expenditure attributable to all public officials who attend the event may be reportable on a disclosure report.
While this analysis will vary from state to state, it is important to be cautious when making in-kind payments.
You can directly submit questions for this feature, and we will select those most appropriate and answer them here. Send your questions to: firstname.lastname@example.org.
(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.
State and Federal Communications, Inc. provides research and consulting services for government relations professionals on lobbying laws, procurement lobbying laws, political contribution laws in the United States and Canada. Learn more by visiting stateandfed.com.