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Ron Jacobs focuses his practice on political law, nonprofit organizations, and crisis management, including congressional investigations, class actions, and regulatory investigations. Ron founded and co-chairs the firm's nationally recognized Political Law practice. He advises clients on all aspects of state and federal political law, including campaign finance, lobbying disclosure, gift and ethics rules, pay-to-play laws, and tax implications of political activities.

The Federal Election Commission last week approved a final rule establishing requirements for sponsorship disclaimers on political ads. The Commission’s internet disclaimer rule has been unchanged since 2006, at times leaving advertisers and platforms for political ads uncertain about how the rule applies to evolving technologies. The FEC’s review is ongoing, and the public is invited to comment on whether additional rules are necessary to regulate social media influencers, boosted ads, and other forms of digital advertising.

What’s New?

Technological Modernization. The rule approved this week incorporates proposed changes we first wrote about in 2018. To start with, the new rule makes clear that the current disclaimer requirements for ads placed for a fee on websites also apply to paid advertising through other digital platforms, such as social media, mobile apps, and streaming sites. This modernizes the rule to accommodate emerging technologies and is consistent with what has become common practice on major social media platforms and online advertising networks.Continue Reading FEC Adopts New Disclosure Rule for Digital Political Ads

California recently expanded its pay-to-play law to prohibit a company seeking a license, permit, or non-competitively bid contract, along with certain of the company’s affiliates, agents, and employees, from contributing more than $250 to a local elected official of the agency in question. This will include city councils and county boards of supervisors, and their

U.S. companies are allowed to make contributions to super PACs, which is exactly what Wheatland Tube, LLC did in this case. However, the decision to contribute involved conversations with a foreign national, and that led to a $975,000 fine to settle charges that the contribution by a U.S. company violated the ban on contributions made by foreign nationals. The fine is the third-largest in the agency’s history and provides an important lesson about the limits of foreign national involvement in decisions by U.S. companies to be involved in the political process.

The complaint concerned contributions totaling $1.75 million to a federal super PAC by U.S. company Wheatland Tube, LLC. Wheatland Tube is wholly owned by a U.S. corporation, Zekelman Industries, Inc. Canadian citizen, Barry Zekelman, is the CEO (as well as an owner) of Zekelman Industries.

Mr. Zekelman acknowledged that he discussed the contributions with Wheatland Tube’s president, a U.S. citizen who also served as general counsel of Zekelman Industries. But Wheatland’s president said that he exercised independent judgment in making the decision to contribute. The FEC rejected this defense, concluding that even if a U.S. citizen has “final decision-making authority or final say” over the making of a contribution, a foreign national – an individual who is not a U.S. citizen or lawfully admitted for permanent residence – may not participate, directly or indirectly, in a decision-making process regarding U.S. election-related spending. The FEC made clear that none of the funds involved appeared to have come from non-U.S. sources; the only violation was Mr. Zekelman’s involvement in the decision to contribute. To that end, the settlement also involved Zekelman Industries, because, even though it is a U.S. company, its executives were involved in the decision to contribute, and they were acting at Mr. Zekelman’s direction.Continue Reading FEC Imposes Record Fine for Foreign Individual’s Role in U.S. Company’s Otherwise Lawful Contribution to a Super PAC

Pay-to-play laws present a minefield for compliance because they can be found not only at the state level, but also the local level. As one of the most recent examples, beginning on April 1, 2022, Delaware County Pennsylvania, just outside of Philadelphia, will require disclosure of certain political contributions by county contractors and subcontractors anticipating receiving $50,000 or more under a covered contract required to be approved by the county council. Contributions made by the contractor’s and subcontractor’s corporate affiliates, officers, directors, partners, and their spouses are also subject to disclosure. Violations may result in the loss of contracts and a contract ban.

What contributions must be disclosed

Contributions of any amount made in the 24 months prior to the date the county council will consider the contract:Continue Reading Remember Local Pay-to-Play Laws: Delaware County, Pennsylvania Imposes New Disclosure Requirements

The District of Columbia’s pay-to-play law will go into effect on November 9, 2022. The law was originally scheduled to take effect on November 4, 2020, but was postponed because of a lack of funding.

The law prohibits businesses seeking or holding contracts with the District government valued at $250,000 or more, and the business’s senior officers (e.g., president, executive director, chief executive officer, chief operating officer, or chief financial officer), from contributing to “covered officials.” Who is a covered official depends on who oversees the contract in question. For example, if a contractor is seeking or holding a contract overseen by a District agency that reports to the mayor, the prohibited recipients would be:

  • The mayor
  • Candidates for mayor
  • Political committees affiliated with the mayor and candidates
  • Constituent services fund of the mayor

Continue Reading DC Pay-to-Play Law Back on Track

A federal government contractor has agreed to pay a civil penalty of $125,000 for making prohibited contributions to super PACs. The penalty is the largest the Federal Election Commission has obtained for violating the ban on federal contractor contributions.

According to settlement documents made public earlier this month, a Florida-based disaster response firm made contributions

Every two years, the FEC indexes certain contribution limits to inflation. New contribution limits for the 2021-2022 election cycle were announced on Tuesday.

Individuals may now give $2,900 per candidate, per election (with the primary and general elections considered separate elections), up from the previous limit of $2,800. Between primary and general election giving, an individual may now give a total of $5,800 per candidate, per election cycle. The new limits are in effect for the two-year election cycle beginning the day after the most recent general election and ending on the date of the next general election (November 4, 2020 to November 8, 2022).

The FEC also raised the limits on individual contributions to national party committees. Individuals may now give up to $36,500 per recipient, per year to the main account of the national party committees, up from the previous limit of $35,500. Individuals may also give up to $109,500 per account, per year, to each of the additional national party committee accounts maintained for presidential nominating conventions; election recounts, contests, and other legal proceedings; and national party headquarters buildings (up from the previous limit of $106,500). These new limits are in effect for the two-calendar-year period beginning January 1, 2021 and ending December 31, 2022.Continue Reading Federal Election Commission Announces New Contribution Limits for 2021-2022 Cycle

The ethics rules that apply to presidential appointees have undergone significant changes this month, with wide-ranging implications for incoming Biden appointees and their former employers, as well as for outgoing Trump officials and their prospective employers.

President Biden issued an executive order just hours after being sworn in as president, requiring certain members of his administration to sign an ethics pledge outlining incoming and outgoing employment, gift, and lobbying restrictions. The pledge requires presidential appointees throughout the federal government to commit to the following:Continue Reading Biden Requires Ethics Pledge from Executive Branch Appointees, While Trump Appointees Are Released from Theirs

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.Continue Reading DC Pay-to-Play Law on Pause