Published By:

It seems like it has been a while since Congress has passed major, substantive legislation. With gun control, immigration, and tax reform all on the front pages, it appears that legislation might be on the move. Thus, as legislation grinds through the process, it is worth remembering the need to keep legislative issues separate from fundraising efforts. The House Ethics Committee has provided some specific advice about this.

Fundraising Around Major Financial Services Legislation

In 2011, the House Ethics Committee issued a report exonerating several Members of Congress for their fundraising practices. Specifically, the Ethics Committee looked at whether fundraisers held in close proximity to the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act were permissible under the House Rules.

Background Rules

The Ethics Committee started with the premise that “the public also has a right to expect that its elected leaders will take official action on the merits of issues and without regard to extraneous factors, such as campaign contributions.” To that end, the Committee explained that “a Member should avoid official conduct that would appear to a reasonable, thoughtful, and well-informed person to be improperly connected to campaign activities.” Specifically, this means:

  • A solicitation for campaign or political contributions may not be linked with an official action taken or to be taken by a House Member or staff, which includes all legislative activities.
  • A House Member or staff may not accept any contribution that is linked with an official action that a Member has taken or is being asked to take.
  • A Member should not sponsor or participate in any solicitation that offers donors any special access to the Member in the Member’s official capacity.
  • Members should not make any solicitation that may create even an appearance that, because of a campaign contribution, a contributor will receive or is entitled to either special treatment or special access to the Member in his or her official capacity.

Organizing Events to Avoid Appearance Issues

In analyzing the fundraisers that were held in close proximity to the vote on the Dodd-Frank legislation, the Ethics Committee considered several factors to determine that the Members had, in fact, lived up to these ethical obligations. Specifically, the Committee found that:

1. There was separation between fundraising activities and legislative activities because the Members had hired professional fundraising consultants to manage all aspects of the fundraising events.

  • The consultants had no interaction with the legislative staff.
  • The events were planned well in advance of the vote and bill consideration.
  • Invitations were sent to broad, cross industry donors (although many who attended were financial services lobbyists). The Committee made clear that industry-specific events are permissible, but that if held in close conjunction with major legislation of interest to that industry, there is a greater risk of appearance issues.
  • Members often did not know about the events until a day before or the day of the fundraisers.

2. Each member had consistent and well-established legislative positions on the bill before and after the fundraising events.

3. Member’s legislative actions were based on significant legislative concerns, which did not stem from requests from donors.

4. The events were brief, without any substantive legislative discussion regarding Dodd Frank between the Members, staff, and attendees. The Committee contrasted this with a multi-day event held by a former Majority Leader at which specific input was sought about energy legislation, which the Committee had found unacceptable.

5. Timing of the Dodd-Frank votes was in flux, and the timing of the events was coincidental.

Thus, as associations, companies, lobbyists, and others plan fundraising events, they should keep these principals in mind to avoid questions—especially if their lobbying efforts turn out to be successful. Remember, lobbyists have been prosecuted for making lawful contributions, when they had an improper intent, so careful planning that separates fundraising from legislative action is important.