The Federal Election Commission (FEC) has announced new contribution limits for the 2023-2024 election cycle. The FEC indexes certain contribution limits for inflation every two years. In recent cycles, limits have increased by $100 each cycle, but following high rates of inflation over the past two years, the FEC substantially increased several contribution limits this cycle.

Individuals may now give each federal candidate $3,300 per election, up from the previous limit of $2,900. The primary and general elections are considered separate elections, so an individual may now give a total of $6,600 per candidate, per cycle. Per-election limits are in effect for the two-year cycle beginning the day after the general election and ending the day of the next general election (November 9, 2022 to November 5, 2024).Continue Reading Federal Election Commission Announces Significant Increases to Contribution Limits Adjusted for Inflation for 2023-2024 Cycle

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

A new law took effect in the city of Los Angeles on June 8 that prohibits developers, property owners, and their respective principals from making local political contributions while certain planning applications are pending with the City and for 12 months thereafter.

Who does the law apply to?

Any applicant or property owner associated with a “significant planning entitlement” filing in the city of Los Angeles qualifies as a “restricted developer” and is subject to the new restriction. “Significant planning entitlement” is defined broadly, capturing many discretionary applications filed with the Los Angeles Department of City Planning, including zoning issues and general plan amendments.Continue Reading Los Angeles Bans Political Contributions by Developers and Property Owners

New York recently adopted regulations impacting charitable organizations that are registered and required to file annual financial reports (the CHAR 500) with the New York Attorney General’s Charities Bureau.[1] These regulations, which became effective March 16, 2022, clarify that the names and street addresses of donors to public charities are no longer required to be disclosed to the Charities Bureau with the CHAR 500.

The regulations were proposed in response to the U.S. Supreme Court’s 2021 decision in Americans for Prosperity Foundation v. Bonta, which found California’s donor disclosure law requiring charities to submit an unredacted copy of IRS Form 990 Schedule B to be unconstitutional under the First Amendment. Following the Court’s decision, California, New York, and New Jersey suspended collection of Schedule B donor information, which is typically filed on a confidential basis with the IRS as part of the otherwise public Form 990. Six months later, the New York Attorney General’s Office proposed regulations to eliminate the requirement that charitable organizations provide the state with the names and addresses of donors on Schedule B. The final regulations remain unchanged from those proposed by the AG’s Office.[2]Continue Reading New York Adopts Regulations Amending Its Donor Disclosure Rules

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

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

The Federal Election Commission (FEC) recently announced a $16,000 civil penalty against a political campaign, to settle allegations that the campaign had inappropriately used FEC contributor data in an algorithm used to aid its fundraising. The settlement is the latest in a series of decisions this year cracking down on the practice of using the FEC’s public contribution data to facilitate fundraising operations.

Contributor Data Disclosure

Federal campaign finance laws require all federal political committees to disclose the name, address, occupation, employer, and contribution amounts from donors who have given more than $200 per cycle. When the law was first written in the mid-1970s, there was no internet, so access to the records was very limited. Moreover, $200 then was worth nearly $1,000 in current dollars (so in fact it was a much larger contribution than it may first appear). Today, the FEC makes these disclosures public in a searchable online database, a tempting trove in an age when data has become integral to improving the efficiency of organizations’ public outreach.Continue Reading FEC Cracks Down on Use of Contributor Data

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

On July 1, the U.S. Supreme Court decided the consolidated case Americans for Prosperity Foundation v. Bonta in favor of the nonprofit organizations that brought the suits, holding California’s donor disclosure law to be unconstitutional because it violates the First Amendment protection of freedom of association. The immediate effect of the Court’s ruling is that the Court invalidated California’s rule requiring charities registered to fundraise in the state to file with the state Attorney General an unredacted copy of IRS Form 990 Schedule B, which discloses the names and addresses of their major donors.

As we previously wrote when the Court decided to hear the case and later heard oral arguments, the case focused on two main issues: (1) the standard of review that must be applied to laws involving compelled disclosure that are challenged on First Amendment grounds, and (2) whether the law should be held unconstitutional only as applied to the two nonprofits that brought the cases, or if the law should be struck down on its face.Continue Reading U.S. Supreme Court Finds California Donor Disclosure Law Unconstitutional