The Department of Justice Inspector General’s (IG) office recently released a highly critical audit of DOJ’s Foreign Agents Registration Act of 1938 (FARA) enforcement program. The audit, combined with recent news stories potentially involving FARA, may foreshadow an increased awareness of this sometimes overlooked registration requirement. But increased attention likely does not mean an increase
The FEC Levels Fines on Nonprofits over Donor Disclosure
The question of when a politically-active, nonprofit 501(c)(4) group must publicly disclose its donors has been on the front burner in various states—most, like New York and California, have called for greater regulation, while others like Arizona have loosened the reins. At the federal level, silence has been the norm because the statute is generally read as only requiring disclosure by a 501(c)(4) (or other nonprofit such as a 501(c)(6)) if a donor contributes for the purposes of funding a particular ad. The FEC has consistently deadlocked on complaints alleging either that a donor gave for the purpose of supporting an ad or that a 501(c)(4) should be treated as a political committee and disclose all of its donors.
Last week, however, details were released from an FEC enforcement matter that met this stringent test and, as a result, the Commission levied fines totaling $233,000 against three nonprofit groups for failing to identify donors behind specific advertisements. These three settlement agreements, released as a group, provide significant guidance to nonprofit 501(c)(4)s and other actors as to what type of conduct will trigger donor disclosure at the federal level.
Continue Reading The FEC Levels Fines on Nonprofits over Donor Disclosure
Revisions to the Lobbying Disclosure Act Guidance: What These Changes Mean for You
The Lobbying Disclosure Act Guidance (Guidance) issued by the Clerk of the House of Representatives and the Secretary of the Senate was updated on June 15. The updates clarify currently existing provisions of the LDA, add additional examples, replace references to the LDA with hyperlinked citations to the U.S. Code, and remove references to Line numbers (the online reporting platform does not have Line numbers for drafting reports, but the final version of the reports available on the House and Senate websites still have Line numbers). The Guidance is available here. A brief discussion of the changes to the Guidance is below:
Continue Reading Revisions to the Lobbying Disclosure Act Guidance: What These Changes Mean for You
Ballot Initiative Disclosure
Long before Citizens United allowed corporations to fund independent expenditures to support candidates, the Supreme Court allowed corporations to contribute to ballot measure committees. Until recently, disclosure was a fairly straightforward matter: give to the official committees supporting or opposing the measure and the contribution would be disclosed; give to other entities (like a nonprofit) that give to the official committees, and the corporation’s contribution would not be disclosed. After Citizens United, however, states’ fear of corporate involvement in candidate races led many states to require disclosure of “upstream” contributions. Those changes often applied not only to contributions for candidate independent expenditures, but also to contributions for ballot measures.
We have written about California before. Recently, Washington State has focused on the intermediary issue of when a nonprofit must disclose its donors. A trial court in Washington State ruled that a trade association should have registered itself as a ballot measure committee based on a special project it undertook to challenge state initiatives about food labeling. The result of this decision is that member companies had to disclose their contributions to the association for the special project.
Continue Reading Ballot Initiative Disclosure
Maryland Changes Rules Again on Political Contribution Disclosure by Government Contractors; Lobbyist-Employers Also Affected
Following a major rewrite last year of its “pay-to-play” disclosure rules, Maryland has made further changes that expand the obligations of state and local government contractors to report their political contributions, and those of their subsidiaries, officers, directors, partners, and PACs. Now, in addition to reporting direct contributions to candidates, contractors will also have to
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
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
As 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 LD-203 Compliance Tips
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
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.
- The cost of an event to honor or recognize a covered legislative branch official or covered executive branch official;
- Payments to an entity that is named for a covered legislative branch official, or to a person or entity in recognition of such official;
- 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
- 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 Honoring and Recognizing
To be a Lobbyist or not to be a Lobbyist
The end of the second quarter is a good time to terminate individuals who will no longer serve as lobbyists because they can end their LD-203 obligations with this mid-year report. If the individuals do not have a reasonable expectation of being a lobbyist in the current or next quarter, then the Guidance says that the individual may be terminated. A lobbyist is someone who has made more than one lobbying contact (ever) and spends more than 20 percent of his or her time on lobbying activity in a three-month period. Thus, if an individual is changing roles, or the organization has determined that the person does not (and will not in the next quarter) spend 20 percent of his or her time on lobbying activity, then termination is appropriate. Remember, an organization can always re-list the person if things change.
Continue Reading To be a Lobbyist or not to be a Lobbyist