Not Homeward Bound: California Lobbyists Barred from Hosting Fundraisers in their Homes

California’s ethics watchdog, the Fair Political Practices Commission, adopted a new rule that prohibits lobbyists from hosting fundraisers in their homes. This rule implements legislation passed after a lobbyist was fined for hosting what the LA Times called “lavish fundraisers” featuring “wine, liquor, and cigars,” in his home. Lobbyists in California are prohibited from making campaign contributions, but the statute previously exempted from the definition of a “contribution” the use of one’s home for a campaign event, along with$500 for food and drink. The legislation eliminated this exemption, providing that any “payment made by a lobbyist or a cohabitant of a lobbyist for costs related to a fundraising event held at the home of the lobbyist, including the value of the use of the home as a fundraising event venue,” is now a contribution.

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Justice Department Brings First Criminal Case for Campaign, Super PAC Coordination

HandcuffsThe U.S. Department of Justice has announced the first criminal prosecution for a violation of federal laws prohibiting outside groups from coordinating their activities with the candidates and campaigns they support.

The six-member Federal Election Commission, which is primarily responsible for interpreting and enforcing federal campaign finance laws, has deadlocked repeatedly over whether to investigate complaints of coordination. But with this announcement, the Justice Department, which may pursue knowing and willful violations of the same laws, has stepped into the breach.

In the plea agreement, a Virginia-based political consultant admitted serving as campaign manager for a U.S. candidate for Congress, while at the same time operating a Super PAC that spent $325,000 on ads attacking that candidate’s opponent. No one else has been charged in the case. Interestingly, there is no indication in the charging documents that the candidate knew about the work the consultant was doing for the Super PAC. However, the coordination rules apply not just to candidates, but also to their staff, and in some circumstances, their volunteers.  Violations may be established even if the candidate is unaware of a representative’s unlawful activity.  Continue Reading

Naming Your PAC

mynameisThe Washington Examiner recently wrote about the art of naming a PAC, pointing out that the name must “balance patriotic with practical considerations.” The Examiner talked about making sure the name is not too long if the PAC will have to include “paid for by” statements on its ads. But there are some other legal considerations as well. Let’s look at some of the FEC’s naming rules.

If the PAC is a connected PAC, meaning it is supported by a company, union, nonprofit, or trade or professional association, then it must include the full name of the connected organization. We have seen registrations rejected by the FEC for failing to include “Inc.” or “Company” if that full legal name of the entity includes those signifiers. Thus, Widget Manufacturing Company of Our Town, Inc. must include all of those words in the name of the PAC. That name must appear in all legal disclaimers.

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Oh What a Tangled Web Maryland Weaves: Updates on the Pay-to-Play Disclosure Process Before February 5 Report is Due

SpiderWebAs we have discussed, Maryland amended its pay-to-play rules to impose new reporting requirements on entities that do business with state or local governments. The first report under the new system is due on February 5, and if the roundtable hosted yesterday by the State Board of Elections is any indication, confusion abounds regarding the law’s core requirements.

This post highlights a few of the issues discussed at that roundtable.   Continue Reading

More to Give: FEC Raises Contribution Limits

As it has done every two years since the Bipartisan Campaign Reform Act indexed contribution limits for inflation, the FEC has announced revised contribution limits for the 2016 election cycle. In addition to the traditional limits for candidates, PACs, and parties, the FEC also set the indexed limit for the new special accounts created at the end of 2014 for the national political parties. This first chart shows the limits for individual and PAC contributions to candidates, PACs, and state and local party committees:

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This next chart shows the amounts that an individual may give to the national party committees. The general fund is the account that has always existed, while the other funds are the new accounts Congress created in 2014 to help the parties to defray certain costs: Continue Reading

New Maryland Law Shines Light on Political Contributions by Government Contractors and their Principals, Also Hikes Contribution Limits and Regulates Nonprofits

The Maryland legislature overhauled the state’s campaign finance law almost two years ago, but many of the key provisions did not take effect until January 1, 2015. These changes significantly affect state government contractors by introducing a new electronic registration system overseen by the State Board of Elections, and requiring electronic reporting of contributions made by the contractor, as well as by its PAC and subsidiaries, and its officers, directors, and partners.

The new law also increases the limits on contributions by individuals and business entities, and compels politically active nonprofits to register and disclose their donors. Stiff penalties may be imposed on nonprofits that knowingly and willfully fail to file registration notices or reports. Also, the State Board of Elections now has the power to issue civil citations for strict liability offenses, such as failing to keep accurate books and records.

To read the full article, please continue reading on our website.

Welcoming the Trojan Horse: Arkansas Voters Approve Term Limits, While Banning Corporate Contributions and Lobbyist Gifts

CoffeeCupWhen Arkansas legislators gave voters a chance to approve a constitutional amendment banning corporate contributions and gifts from lobbyists, even the referendum’s sponsor thought it was doomed.  Why?  Because coupled with these reforms was a provision extending legislators’ term limits, a measure so unpopular that voters had previously rejected it by a 40-point margin.  Indeed, a committee opposing the referendum brought a 10-foot wooden horse to campaign events to help convince voters that the only real intention of the referendum was to get rid of term limits.

Whatever the motivations – which at times were hard to discern as the Republican legislature that placed the referendum on the ballot later passed a resolution to oppose it – the referendum passed last week with 53% of the vote.  It makes a number of important changes in Arkansas law, including:  Continue Reading

LD-203 Compliance Tips

The LD-203 obviously includes a number of different disclosures. In practice, many reports show very little activity because the categories to be disclosed are fairly narrow. However, the report is filed under penalties of making false statements, so organizations have to know that they did not make any covered payments.

The Whole Company

ChartAs our previous posts have explained, many of the contributions that must be disclosed are not necessarily in the purview of the government affairs department. For example, a corporate philanthropy department might make a contribution to a charity that focuses on hunger relief. But, if a Member of Congress established that charity, it has to be disclosed on the LD-203. Similarly, an executive might ask the company to contribute to a charity active in a community where the company is located. But, again, if the executive were responding to a request from the Congressman’s district director, and that DD serves on the board of the charity, it is a contribution “designated” by a covered official. Continue Reading

Other LD-203 Categories

Yesterday, we focused on the honoring and recognizing categories of expenses that have to be reported. There are also three other categories that have to be disclosed on the LD-203 report.

  • Political Contributions: Contributions made by registered lobbyists, the connected PAC of a registrant, or a PAC controlled by a lobbyist must be disclosed on the LD-203 if:
  1. the aggregate contributions to an entity equal or exceed $200 during the six-month reporting period; AND
  2. the recipient is a federal candidate, leadership PAC, or federal political party.

Contributions to other PACs (e.g., a trade association PAC or a company’s connected PAC) from a lobbyist do not have to be disclosed. State contributions also do not have to be                 disclosed.

  • Presidential Library Foundations: If contributions to a presidential library foundation aggregate to $200 or more during the six-month reporting period, they must be disclosed.
  • Presidential Inaugural Committees: Contributions that equal or exceed $200 during the six-month reporting period must be disclosed. The Guidance makes clear that this includes payments to the official Presidential Transition Organization. It also would include payments to the official inaugural committees for tickets to inaugural events, but would not include payments to other entities that host inaugural events (e.g., a state society).

Honoring and Recognizing

The LD-203 requires registrants and lobbyists to disclose a variety of payments made for the purpose of honoring and recognizing covered officials. Guidance issued by the House and Senate includes some very helpful examples.

Payments that need to be disclosed fall in four different categories.

  1. The cost of an event to honor or recognize a covered legislative branch official or covered executive branch official;
  2. Payments to an entity that is named for a covered legislative branch official, or to a person or entity in recognition of such official;
  3. Payments to an entity established, financed, maintained, or controlled by a covered legislative branch official or covered executive branch official, or an entity designated by such official; or
  4. The costs of a meeting, retreat, conference, or other similar event held by, or in the name of, one or more covered legislative branch officials or covered executive branch officials. Continue Reading
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