In 2018, the District of Columbia Council adopted a “pay-to-play” law banning political contributions from contractors and their senior officers that was scheduled to take effect on November 4, 2020. But like many other things in 2020, the rollout of the law did not go as planned. Because of funding shortfalls, the effective date of the new law has been postponed indefinitely, and contractors and their officers may continue making political contributions to District officials.
In the original version of the Campaign Finance Reform Amendment Act, contracts valued at $250,000 or more that are sought, entered into, or executed on or after November 4, 2020 would trigger the contribution restrictions. The law had passed the DC Council unanimously, so all seemed to be in order.
Interestingly, the bill’s fiscal impact statement included a note from the District’s Chief Financial Officer saying that implementation would require additional personnel and database resources for campaign finance and procurement regulators, totaling an estimated $4.2 million over the four-year financial plan period. This total included the estimated cost of restructuring the Office of Campaign Finance into a new independent Campaign Finance Board. The CFO explained that there wasn’t enough money to cover these costs. Despite funding shortfalls, the budget for fiscal year 2020 still set the effective date of the pay-to-play law as November 4, 2020, even while pushing back the effective date of creating the Campaign Finance Board.
The fiscal year 2021 budget, however, postponed implementation indefinitely. The budget amends the Campaign Finance Reform Amendment Act such that the pay-to-play provisions apply only when the implementation costs are included in an approved budget and financial plan. Once approved, the District Council’s Budget Director will publish notice in the District of Columbia Register. Contracts sought, entered into, or executed before the implementation date will not trigger the prohibitions. Therefore, entities seeking and holding contracts with the District and their senior officers may continue to make political contributions to District officials until the bill is funded.
We will monitor appropriations for the pay-to-play law, including any proposed rules and regulations. Please contact us if you have questions about establishing a pay-to-play compliance program. Venable’s Political Law Group has helped numerous clients assess their risks in this area and develop a tailored compliance plan. For more information on developments in federal and state campaign finance, lobbying, and ethics laws, please visit Venable’s political law blog at www.PoliticalLawBriefing.com.