“It’s déjà vu all over again”
With the announcement last week that Commissioner Caroline Hunter (R) plans to resign her seat on the Federal Election Commission (FEC), effective July 3, 2020, the agency finds itself yet again without the minimum four Commissioners necessary to open investigations, defend new lawsuits, and issue advisory opinions. As we
The Senate today confirmed James E. “Trey” Trainor III as a member of the Federal Election Commission, reestablishing a quorum just months ahead of the 2020 general election. Since August 2019, when one of the commissioners resigned, the Commission has lacked a quorum, and as a result has been unable to investigate complaints, collect fines,
Federal and state regulators continue to modify their lobbying and campaign finance reporting and enforcement practices and requirements in response to the ongoing upheaval caused by the COVID-19 pandemic.
As states postpone primaries to prevent the spread of coronavirus, agencies have revised reporting deadlines for election-sensitive campaign finance reports. The Federal Election Commission (FEC) announced
The coronavirus (COVID-19) presents many new challenges for political campaigns, committees, and related actors. These challenges include the possibility that treasurers and staff will be unavailable to timely prepare and submit campaign finance reports. Today, the Federal Election Commission (FEC) provided an update on Commission operations, including on the upcoming deadlines for filing campaign finance reports.
The FEC has confirmed that filers should continue to file their reports on time because the Commission does not believe it has the statutory authority to extend these filing deadlines. The Commission has, however, advised that it may exercise its discretion “not to pursue administrative fines against filers prevented from filing by reasonably unforeseen circumstances beyond their control.”Continue Reading FEC Unable to Extend Filing Deadlines During Coronavirus Pandemic
Every two years, after an election, the FEC indexes certain contribution limits to inflation. After returning from the shutdown, the FEC issued the revised limits for this year, a few days later than usual. As has been the case the past few cycles, the individual limit has gone up by $100. For candidates up for election in 2020, individuals may now give $2,800 per election or $5,600 per candidate per election cycle (with the primary and general considered separate elections). This means that individual contributors who had previously maxed out to candidates for 2020 primary and general elections at $2,700 per election can now give those candidates another $100 per election.
The FEC also raised the limits on individual contributions to party committees and non-multicandidate PACs:Continue Reading Federal Election Commission Announces New Contribution Limits for 2019-2020 Cycle
The U.S. Supreme Court this week left in place a lower court ruling that expands donor disclosure for advocacy groups that fund independent expenditures. While the full effect of the ruling may not be known for some time, groups in the throes of an election season suddenly have to reconsider their electoral spending plans and fundraising practices, and donors to politically active 501(c)(4) social welfare organizations or 501(c)(6) business leagues have to account for an increased risk that their donations will be publicly disclosed.
What Does the Ruling Do?
Groups that are not registered with the Federal Election Commission (FEC) as campaign committees, party committees, or PACs are nonetheless required to file reports if they make an expenditure of more than $250 that expressly supports or opposes a federal candidate. These “independent expenditure” reports must itemize disbursements to each vendor involved in the creation and distribution of an ad (or other public communication), and identify the election involved and whether the organization supports or opposes the featured candidate.
In addition, a long-standing FEC rule requires that these reports identify donors who gave more than $200 to the organization in the calendar year for the purpose of funding the particular ad that is being reported. As a practical matter, donors seldom know that their funds will be used to pay for a specific ad, and thus donors have rarely been disclosed.
The district court struck down the FEC donor-disclosure rule, concluding that it applied the statutory disclosure requirement too narrowly. The court concluded that independent expenditure reports filed by groups that are not registered political committees must identify all donors who (1) give to the organization for the purpose of influencing a federal election, or (2) give for the purpose of funding the group’s independent expenditures, whether tied to a specific ad or not. The court stressed, however, that contributors to an organization’s “general programs” need not be identified.
The court deferred the effective date of the ruling for 45 days, giving the FEC time to adopt a new donor disclosure rule. That period came and went with no new rule or interpretive guidance. Crossroads GPS, which intervened in the case, has appealed the ruling to the D.C. Circuit.Continue Reading U.S. Supreme Court Allows Expanded Donor Disclosure Rules to Take Effect
The Federal Election Commission (FEC) this week issued a Notice of Proposed Rulemaking, asking for public comment on proposals for requiring “disclaimers” on online ads and fundraising. Under each of two similar proposals, paid Internet ads that expressly advocate for candidates or that solicit political donations must state who paid for the ad and
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
Interested in what it takes to set up a federal Super PAC? Take a look at Venable’s recently released white paper summarizing the key rules of the road, including:
For those interested in Maryland elections, please
Over the last few years, the courts have loosened campaign finance laws and the agency charged with enforcing them is frequently gridlocked. However, one campaign finance violation that can still get you in big trouble is reimbursing contributions, particularly when the reimbursing is done by a corporation.
In settling a recent enforcement matter involving the Fiesta Bowl, the Federal Election Commission (FEC) obtained fines of nearly $100,000 from the corporation and the CEO and restitution by the CEO of over $60,000. A parallel criminal case resulted in guilty pleas that landed the former CEO in jail for eight months, community service for one executive, and two years of probation for another (who would have also faced a $15,000 penalty from the FEC, but she was able to demonstrate an inability to pay).
The case is not really new – the settlements occurred in 2012 and 2013 – and the FEC has yet to release the documents on its website, but the organization that filed the complaint with the FEC made them available to the public. The documents show a scheme that the FEC says included:Continue Reading The Big No: Reimbursing Contributions