Nielsen Merksamer, a leader in national political law compliance, hosts briefings, workshops and communications to share best practices and recent developments in campaign finance, lobby disclosure and government ethics laws across the nation.  For the latest from our research team, read on…

WEEK OF SEPTEMBER 14, 2018

Latest Developments:

  • The Federal Ninth Circuit Court of Appeals reversed a lower court’s decision and upheld the California Attorney General’s requirement that nonprofit organizations that engage in political spending must disclose their donors to the state, as reported on an IRS Form, “Schedule B.”   According to Politico, “The Americans for Prosperity Foundation had argued that the state’s rules requiring filing of the donor list violate the First Amendment by discouraging individuals from giving and by exposing them to threats and harassment.” Politico reports that in Americans for Prosperity Foundation v. Becerra, the court held that “the state had a legitimate need for the data and that the Koch-founded group had not shown a significant burden on donors.”  As we previously reported, the U.S. Treasury Department has announced, in Revenue Procedure 2018-38, that the IRS will no longer require that the names and address of donors be disclosed on Schedule B for tax years starting with those that end December 31, 2018.
  • The Federal Eighth Circuit Court Appeals affirmed a lower court ruling holding that the provisions of Missouri Constitutional Amendment 2, approved by voters in November 2016, which impose a ban on PAC to PAC transfers, violates the First Amendment.  In Free and Fair Election Fund v. Missouri Ethics Commissionthe court noted that the Eleventh Circuit has upheld a ban on PAC to PAC contributions in Alabama, but distinguished the circumstances of that ban.
  • The New York Joint Commission on Public Ethics met Wednesday, September 12.
  • The Commission discussed a proposal to amend state law to permit the Commission Chair or designated staff to publicly disclose that a matter is under investigation, has been closed, or has been deferred at the request of law enforcement.  Commissioners, by consensus, asked that the measure be posted online with a request for public comment.  The matter will come back before the Commission next month with those public comments.
  • On Thursday, September 20 at 1:30 p.m. EDT, the Commission will hold a training on the new lobby regulations.  Over 500 people have signed up for the training, and as a result, the training will be live-streamed on the Internet.  A video of the training will be subsequently posted on the Commission’s website
  • The Oklahoma Ethics Commission meets Friday, September 14.  The Commission’s agenda includes a discussion of three amendments to Rules, including campaign finance rules regarding coordination, lobbyist rules concerning disclosures, and revolving door provisions for elected officers and chief administrative officers.
  • The California Fair Political Practices Commission meets next Thursday, September 20.  The agendaincludes a report from the Enforcement Review Task Force, a continuing discussion on Bitcoin and crypto currency contributions, and a discussion of Citizens for Responsibility & Ethics v. F.E.C, which staff finds inapplicable to the FPPC.
  • The California FPPC has also given notice of review of the following regulations:

October 18, 2018:

  • Top contributor disclosure requirements under Assembly Bill 249 (the Disclose Act) (Prenotice) – The Commission may consider the potential adoption of regulations identifying top contributor disclosure requirements when contributions may not legally be used for the advertisement at issue or have been earmarked for other purposes.
  • Regulation 18756. Electronic Filing System Certification (Prenotice) – The Commission may consider additional certification requirements for Form 700 Electronic Filing System Certification under Section 87500.2 to ensure systems can exchange data with the Commission’s electronic filing system.

November 15, 2018:

  • Cost of Living Adjustment (Adoption) – The Commission will consider a cost of living adjustment to Contribution Limits, Voluntary Expenditure Ceilings, and the Gift Limit Sections 83124, 85316(b)(4), and 89503(f).
  • Regulation 18702.2. (Prenotice) – Discussion of materiality thresholds under the Act’s conflict of interest provisions for real property interests including clarification of the 500- foot property rule.

Scheduling to be Determined:

  • Discussion of the definition of nondonor funds for purposes of Section 84222.
  • Discussion of campaigning by governmental agencies under Commission Regulations 18420.1 and 18901.1.
  • The Oakland Public Ethics Commission met on Tuesday, September 11, 2018, and took up the matter of alleged improper gifts of sports tickets to the Mayor and to City Council Member McElhaney.   The staff report (as detailed here last week) cleared them of any wrongdoing with regard to use of city tickets.  Apparently, seven more cases of city officials’ allegedly improper use of tickets are pending; the Commission sent the matters back to staff for further consideration.  The Commission expressed that, in the future, a “public purpose” must be provided to support the personal use of city tickets for exempt official businessand referred the policy question regarding tickets to a subcommittee to clarify the Commission’s position.  In addition, the San Francisco Chronicle reports that Council Member McElhaney faced a proposed penalty of $8,625 for taking improper gifts from a developer; the Commission reduced that penalty to $2,550.

In case you missed it:

  • Free Stuff for Campaigns: The Federal Election Commission issued a ruling permitting Microsoft to provide “enhanced online account security services at no additional charge on a nonpartisan basis to its election-sensitive customers, including federal candidates and national party committees.”  The commission found that the provision of the services is not a prohibited in-kind donation as the services provided are commercial in nature and not political.
  • More Light on Dark Money:  Issue One has issued a report entitled Dark Money Illuminated, which discusses the top 15 spenders of dark money, from the U.S. Chamber of Commerce (No. 1) to Planned Parenthood (No. 15).  Issue One created a database of donors to those 15 entities.
  • Judicial Campaign Settlement in the Land of Lincoln:  State Farm settled a case in which it was accused of funneling campaign contributions through entities that are not required to disclose contributors.  The Insurance Journal reports that the contributions were intended for an Illinois Supreme Court Justice who won and ultimately voted to wipe out a billion-dollar verdict against the company.  The company denied wrong-doing, but agreed to pay a $250 million dollar fine.
  • Not a Day at the Beach: Taxpayers May be Stuck for Ethics Violations:  The Los Angeles Times reports that five current and former members of the California Coastal Commission were found to have violated ethics/disclosure laws and fined.  In addition, Spotlight on Coastal Corruption, which brought the suit, has been awarded $959,000 in attorney’s fees.  The Times speculates that taxpayers, rather than the commissioners, may end up footing that bill for these fees, which is in addition to the $650,000 spent on the Attorney General’s legal expenses to defend the commissioners.  The Attorney General has appealed.

WEEK OF SEPTEMBER 7, 2018

Latest Developments:

  • The Federal Election Commission is touting a campaign safety information program established by the Federal Bureau of Investigation.  The FBI program, called “Protected Voices,” is intended to raise awareness among campaigns of the risk of cyber influence operations.  The FBI urges each “campaign to enhance its own cyber hygiene, the technological equivalent of locking your doors and windows.”
  • The New York Joint Commission on Public Ethics meets next Wednesday, September 12.  The agendaincludes a discussion of a proposal to amend state law to permit the Commission Chair or designated staff to publicly disclose that a matter is under investigation, has been closed, or has been deferred at the request of law enforcement.

In case you missed it:

  • National Champion Golden State Warriors present a Municipal Ethics Challenge:  The San Francisco Chronicle reports that the Mayor of Oakland has been cleared of any wrongdoing for personally using $54,000 worth of sports tickets she received.  Another council member personally used $320,000 in sports tickets.  Generally, the City of Oakland limits gifts from a single source to $250 in value per year.  But the law has exceptions, including for “personal oversight” of the municipally-owned sports arena and stadium.  The Mayor and council member both used the personal oversight exception for their acceptance of sports tickets, which included the Golden State Warriors NBA playoffs and finals tickets that had face values of $5,000 and $10,000 per ticket, respectively.  Those post-season games required lots of personal oversight; no word on whether there has been any interest whatsoever in personal oversight of the Oakland Athletics’ stadium.  Maybe later this year, if the Athletics make it to the playoffs as a wildcard?
  • Alaska puts Drinks on Ice:  Alaska has a new ethics reform measure that would make Carrie Nation proud.  The Cordova Times indicates that the Governor approved House Bill 44 which, among other things, adds additional limitations on gifts from lobbyists to legislators.  The exception that permits gifts of food or beverages for immediate consumption is now limited to food or nonalcoholic beverages and also is limited to a value of $15 or less, unless it is provided as part of an event that is open to all legislators or legislative employees.
  • Payday Lending may have Paid Off Too Well:  Federal Authorities are building a corruption case against Ohio Ex-Speaker Cliff Rosenberger that relates to an effort to stall payday lending reform legislation.  The Dayton Daily News reports that in a response to media requests, the government released a copy of the search warrant and subpoena served in the case.  Those documents show the government sought records relating to “payday lending legislation; evidence of payments, kickbacks, bribes or other benefits such as payment of travel-related expenses…”  The ex-speaker is alleged to have received travel and other benefits in exchange for holding up the legislation.
  • How Much does it Take?:  The Kansas City Star reports on the effect of lobbyists’ gifts and campaign contributions on legislative policy.  The Star interviewed a variety of interested people on whether small gifts, large contributions, or dark money can buy a Missouri legislator’s vote.
  • Now Earn 5% Cash Back or Miles on Fines for Ethics Violations: The California Fair Political Practices Commission announced this week that it would finally start accepting credit and debit cards for payments of enforcement fines.  No more need to get a cashier’s check or money order, according to the press release; the Commission is finally stepping into the twenty-first century.
  • Disclose as I say, not as I do:  The FPPC’s press release promoting its new payment mechanism, as described and linked immediately above, fails to disclose one tiny detail.  Before you start earning that cash back or those miles, read the (8.5-point Helvetica) fine print in the lower right hand corner of the actual payment form:  A convenience fee of 3.0 % will be charged by a third party processor for this transaction. Yes, we believe that is a “disclosure,” although it is neither “the same size as the majority” of the form, nor is it “14-point, bold, sans serif type in contrasting print color.”  (Those font size requirements are among the ones that the Commission imposes on others with regard to various political advertising disclosures.)

WEEK OF AUGUST 31, 2018

Latest Developments:

Among the recollections of the late Sen. John McCain’s legislative achievements, NPR ran a segment on the Senator’s impact on Campaign Finance, including his essential role in the so-called Bipartisan Campaign Reform Act of 2002, better known as McCain-Feingold. Unmentioned was McCain’s past as a member of the “Keating Five” corruption scandal, which took place amidst the larger Savings and Loans collapse of the late 1980s. McCain himself cited the scandal as an impetus for his often-Quixotic undertakings for reform.

Nosce te Ipsum: The LA Times reports on Gov. Jerry Brown’s Monday veto of a bill that would have prevented politicians from paying family members an amount greater than fair-market value for goods and services. Sponsored by Assemblyman Marc Steinorth (R-Rancho Cucamonga), the bill sought to ban politicians from making excessive payments to parents, children and siblings working on their campaigns.

Reminder:  

Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 p.m.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

In case you missed it:

  • Ongoing North Carolina litigation, taking place amidst the invalidation of its Congressional districts, has led to an order to halt the printing of ballots pending review of the NACCP’s challenge of the language of two Constitutional amendments set for the November ballot. Analysts claim that these developments threaten chaos for the upcoming general elections.
  • Tallahassee Mayor Andrew Gillum’s stunning upset in Tuesday’s Democratic gubernatorial primary has brought attention to the ongoing FBI corruption investigation that appears to be focused on Tallahassee City government. Since Gillum’s victory, both Slate and Fox News have covered the investigation and its nexus to the mayor.
  • Ex-Pa. Mayor Convicted In Pay-To-Play Scheme:  Law 360 reports that a Pennsylvania federal jury on Thursday found ex-Reading Mayor Vaughn Spencer guilty on charges of bribery and wire fraud in connection with a scheme in which he solicited campaign donations from city vendors in exchange for lucrative contracts.

WEEK OF AUGUST 24, 2018

Latest Developments:

 The Governor of New York signed SB 4761, which bans the use of placement agents, including registered lobbyists, who seek to obtain investments by the New York State Common Retirement Fund.  The bill takes effect immediately.

 The Los Angeles City Ethics Commission met Tuesday, August 21.  The Commission’s agenda included possible action on various proposed campaign finance changes.  The result, according to the Los Angeles Times, is that the Commission tabled a proposal to ban contributions from real estate developers.  However, the Commission approved increased public financing provisions (matching funds) and sent that proposal to the City Council for consideration.

 The Kansas Governmental Ethics Commission voted this week to permit the use of campaign funds to pay for child care, according to KCUR.  The intent is to make it easier for parents to run for office.  The move follows a similar decision by the Federal Election Commission earlier this year, as reported by NPR.

 The Kentucky Legislative Ethics Commission asked the Legislature to amend the state’s ethics provisions.  According to WPFL, the Commission is seeking authority to dismiss politically motivated charges when the complainant makes public statements about the case.  The commission also proposed provisions requiring additional gift disclosure and clarifying that the Commission has jurisdiction over those who have left office.

The Baltimore City Council gave initial approval to an ordinance that would require quarterly lobbyist disclosure reports instead of annual reports.  A final vote on the Transparency in Lobbying Act is scheduled for September 17, 2018.

 Reminder:  

 Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 p.m.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

In case you missed it:

  • First Amendment Lawsuit Filed:  Courthouse News Services reports that a coalition of press entities, including the Washington Post, has filed suit to block Maryland’s new online political ad disclosure law.  The plaintiffs contend that the law is unconstitutional for its regulation of newspapers, including the threat of criminal prosecution for non-compliance, and that its provisions are unconstitutionally vague and overbroad.  They also assert that the law is impossible to follow and conflicts with the Communications Decency Act of 1996.  As we reported earlier, Google announced that it could not comply with the law and therefore would no longer accept political ads in Maryland, but Facebook is on board with the law.
  • More Money, eh?  The Richland Standard reports that Canada’s Lobby Czar is seeking a budget increase to modernize the office and respond to growing demands.  Her budget has not been increased in 10 years, despite an increase in the number of lobbyists.  The office is seeking money to fund a new website and updates to the lobby registry.
  • Looking for a Drain in the Swamp:  Elizabeth Warren has proposed “sweeping anti-corruption legislation”according to Politico.  The Anti-Corruption and Integrity Act proposes a lifetime ban on lobbying by the President, members of Congress, and cabinet officials.  It would also impose a six-year revolving-door restriction on other federal officials and ban lobbying by foreign governments and companies.  The measure would ban lobbyist campaign contributions, contingency fees, and gifts to members of Congress.
  • Please, No Green from Grass:   According to the New York Times, Wells Fargo noticed a candidate for Florida Agriculture Commissioner was “advocating for expanded patient access to medical marijuana.”  The bank asked the campaign if it would accept contributions from lobbyists and others in the medical marijuana industry. After the campaign replied affirmatively, the bank closed the campaign’s account.  Bank of America, Citigroup and JPMorgan Chase said their banks did not have policies that would prevent them from offering services to a candidate who accepts money from that industry.

WEEK OF AUGUST 17, 2018

Latest Developments:

 A United States District Court Judge in Wyoming found the state’s ban on campaign robocalls to be unconstitutional.  According to Government.com, the ban on political calls was far more restrictive than the limits on commercial robocalls.  In Victory Processing LLC. v. Wyoming Attorney General, the plaintiffs asserted that the robocalls ban violated their right to free speech under the First Amendment.

 The California Fair Political Practices Commission met on Thursday, August 16.  The Commission announced that its phone lines would be open longer hours beginning September 1, and running through Election Day. (Temporary hours: Mon.-Tue. 9 – 12; Wed.-Thurs. 1 – 4 [Usual hours are Mon.-Thurs. 9-11:30 a.m.])  The Commission also adopted updated campaign manuals and forms, with changes reflecting new legislation.

The Los Angeles City Ethics Commission meets next Tuesday, August 21.  The Commission’s agenda includes possible action on proposed campaign finance changes.

 Reminder:  

 Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 p.m.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

In case you missed it:

  • New “Disclosure” Subterfuges:  Politico reports that the newest method to avoid donor disclosure is timing formation of committees so close to an election that the first donor disclosure reports are due after the election.  Another method is to borrow the money to make expenditures and collect donations later to avoid donor disclosure on pre-election reports.
  • “It’s an election year, and California’s campaign watchdogs are busy fighting among themselves,” according to the Sacramento Bee.  The Bee has a review of the various commissioners’ shenanigans over the past year, from their successful efforts to increase their pay to “self-indulgent” review and revision of internal operations.
  • Atlanta Lobby Ordinance Introduced:  The Atlanta Daily World reports that the City of Atlanta is considering requiring all lobbyists to register.  The proposal would cover lobbying pertaining to legislation, contracts, and zoning matters.  The move follows a widening corruption investigation by federal prosecutors who are looking into payments to city employees who steered contracts to vendors who paid them, as reported by the Charlotte Observer.
  • Trump Discounts Raise Ethics Issues: Politico reports that President Trump’s Bedminster, New Jersey golf club is offering merchandise discounts to individuals who sport Secret Service pins that identify them as administration staffers.  Unless the discount is available to all employees, it would appear to be a gift, subject to federal gift limitations, according to sources quoted in the article.

WEEK OF AUGUST 10, 2018

Latest Developments:

A federal District Court Judge in Washington, D.C. issued a 113-page opinion invalidating a 38-year old Federal Election Commission regulation that required any person’s federal Independent Expenditure Report to only disclose contributors to the ad addressed by that report.  The Court instead held that the makers of an IE must disclose all of its contributors.  The decision’s implications for trade associations and nonprofits making any independent expenditures, and their donors, could be significant, and the Court stated that the FEC could enforce this requirement retroactively.  Pro-regulation groups hailed the decision as a blow to “dark money groups,” according to Politico.

The Wisconsin Ethics Commission has appointed another interim Ethics Administrator:  The Commission has appointed Florida attorney Daniel Carlton, Jr. as its new interim administrator.  The Wisconsin Law Journalreports that Carlton previously worked for the Florida Ethics Commission.  Wisconsin has struggled to find an acceptable leader since the demise of the old Government Accountability Board which occurred as a result of that board’s investigation of Gov. Scott Walker.

The California Fair Political Practices Commission meets next Thursday, August 16.  The Agenda, includes discussions about newly revised manuals and the use of Bitcoin for contributions.  The Commission will consider potential regulations about the use of Bitcoin at its September meeting and regulations for top donor disclosure under the Disclose Act at its October meeting.  Curiously, following appointment of a new Chair, none of the upstart subcommittees met in the past month.  Perhaps peace has returned to the Commission.

 

In case you missed it:

  • CNN reports that Special Counsel Robert Mueller has referred several possible violations of FARA to federal prosecutors in New York. The article infers that individuals who worked for the Podesta Group, Mercury Public Affairs, and Skadden Arps failed to register under the Foreign Agent Registration Act (FARA) while doing work for groups associated with Ukraine.
  • The New York Joint Commission on Public Ethics has been called “a puppet controlled by the Governor.”City & State New York reports that since JCOPE has been in existence, it has found only two legislators guilty of misconduct, while prosecutors have convicted 15 legislators of crimes.  Cuomo’s opponents are calling for a new ethics structure; the article notes that both Cuomo and his predecessor, Eliott Spitzer, created new ethics commissions upon taking office.
  • Up North, there is a different approach:  CNBC reports that Mario Dion, Canada’s new Conflict of Interest and Ethics Commissioner says that “My dream is that I will never be called (a lapdog).”  He says he would rather be criticized for being too harsh than for being too lenient.
  • NBC News asserts that the Trump Hotel in Washington, D.C. may be a “5-star conflict of interest.” Using public filings and social media sites, NBC analyzed spending at the hotel by the Republican Party, foreign governments, and federal agencies.  The report indicates that the hotel “continues to serve as a clubhouse for the (Trump) administration and its supporters.”

Reminder:  

Our annual Essential Ethics Workshop will be held on Wednesday, September 5 at the University Club in Washington, D.C. from 12:30 – 2 pm.  We’ll be discussing new developments in political law, sharing experiences and best practices for responding to lobby audits, and discussing the potential changes to the Supreme Court’s campaign finance precedent in light of the upcoming appointment of a new Justice.   This event is free and open to all clients.  Contact Donna Flanagan for more information.

WEEK OF AUGUST 3, 2018

Latest Developments:

The New York Joint Commission on Public Ethics (JCOPE) met on July 31.  The Commission highlighted its efforts to educate the public on the new lobby regulations that take effect on July 1.  The Commission will hold an educational program in Albany on September 20 for lobbyists and others to learn about the new regulations.  That program will be posted later on the Commission’s website.  The Commission has also issued a “Key Features” document that is an effort to put highlights of the new regulations in plain English.  In addition, the Commission will host an educational seminar on the First Amendment and lobbying in October.

A North Dakota Ethics constitutional amendment is the first measure to qualify for the November Ballot.  The West Fargo Pioneer reports that the initiative measure would “prevent lobbyists from giving gifts to public officials and would establish an ethics commission that could investigate public officials, candidates, and lobbyists.”

 

In case you missed it:

  • In Oklahoma, it’s the Legislature vs. the Ethics Commission:  NewsOK reports on the continuing battle between the state’s legislature and the Oklahoma Ethics Commission over budget appropriations for the new fiscal year.  The Commission requested $4.5 million but received only $710,000 from the legislature.  The matter is before the State Supreme Court.  The Commission’s counsel suggested the agency was underfunded because it has imposed new restrictions on legislators, including limiting gifts from lobbyists.
  • Dems and GOP agree on something: How to use PACs to fund luxury lifestyles.  NBC News takes a look at a new report by the Campaign Legal Center, which documents incredible amounts of leadership PAC money spent to support federal officeholders’ over-the-top lifestyles.
  • Soda Tax Proponents Failed to Report Lobby Activity:  Philadelphians for Fair Future, which raised over $2 million to promote a tax on soda, was fined more than $8,000 for multiple ethics violations, including failure to register and report its lobby activities.  The Philadelphia Business Journal reports the group hired five different firms and individuals who lobbied on its behalf, but all failed to register as lobbyists and neither the lobbyists nor PFF reported any of the activity.  PFF characterized the matter as “simple filing errors” that were inadvertent.
  • Liberals have Dark Money too:  The Sixteen Thirty Fund has been identified as the source of funding for a myriad of liberal causes.  Politico characterizes the group as a secret organization using the type of structure developed by the Koch brothers.  The group has engaged in advocacy in about a dozen congressional races in 2018.
  • Pay-to-Play in New York State:  Chief Investment Officer reports that a New York State Common Retirement Fund portfolio manager was sentenced to 21 months in prison for taking bribes in the form of “prostitutes, narcotics, travel, lavish meals, tickets to sporting events, luxury gifts, and cash payments.”  A managing director for Sterne Agee and a Vice President of FTN Financial also pled guilty to providing the bribes.
  • Reform of the Foreign Agents Registration Act appears to be supported by both sides of the aisle.  But Rollcall reports that congressional efforts to update FARA have stalled just as Paul Manafort goes to trial on a wide variety of charges, including the allegation that he failed to register as required under FARA.  Although a dozen or more bills have been introduced, no single bill has emerged with any momentum.

WEEK OF JULY 27, 2018

Latest Developments:

The Governor of Montana has filed suit against the U.S. Treasury Department and Internal Revenue Service seeking to block the revenue procedure that eliminates the reporting of the identity of contributors to politically active nonprofits that make political expenditures.  Reuters reports that Governor Steve Bullock believes the loss of reporting will lead to foreign money in U.S. elections. The changes were made by the U.S. Treasury Department in Revenue Procedure 2018-38, as we reported last week.

The New York Joint Commission on Public Ethics (JCOPE) meets next Tuesday, July 31, but does not list anything particularly remarkable on its agenda.

The Georgia Government Transparency and Campaign Finance Commission has posted the General Assembly’s sexual harassment policy.  As we told you in our May 18, 2018 edition, the Governor of Georgia signed H.B. 973 on May 10, 2018.  That bill requires all lobbyists to agree to abide by the sexual harassment policy.  The policy applies to lobbyists, “during the period in which they either have legislative business at the state capitol or are doing legislative business with the Senate, the House of Representatives, or a joint office(‘third parties’).”  Lobbyists are required to acknowledge that they have read the policy each time they register.

Reminder:  

August 1 is the PLI One-Hour Briefing on the “Basics of the Federal Election Campaign Act 2018.”  You can sign up at the Practising Law Institute.

In case you missed it:

  • A jury in Alabama convicted an attorney and a coal executive of bribing a state legislator.  The Lexington Ledger reports that an attorney from Balch and Bingham along with a Vice President of Drummond Co. were found guilty of conspiracy, bribery, three counts of honest services wire fraud and money laundering.  The defendants asked the legislator to oppose expansion of an EPA Superfund site and prioritization of the cleanup.
  • The Los Angeles Times reports that the California Secretary of State’s efforts to update the state’s website for disclosure of campaign contributions and lobby activity is nearly a year behind schedule and its budget has doubled.
  • Sunshine in the Orange County, CA Ethics Commission is hard to find:  The Voice of OC tells us that Orange County Campaign Finance and Ethics Commission officials have declined to identify persons who were caught violating county campaign finance laws.  Notwithstanding the California Public Records Act, The Voice reports that the “enforcement process was set up to be handled mostly in secret so violations wouldn’t be used in political campaigns.”
  • Congressional Leadership PACs under Scrutiny:  Roll Call reports that a bipartisan group of retired congressmen have sent a letter to the FEC asking it to re-examine the use of contributions to congressional leadership PACs for expenses such as “country club fees, clothing purchases, and trips to Disneyworld.”  A report indicated that only 45% of the money contributed actually went to candidates or political committees.
  • Calmatters describes some of the recent turmoil at the California Fair Political Practices Commission.  Through it all, the commission has settled a record number of cases and imposed more than a million dollars in fines in the last year.  However, it also has an enormous backlog of cases.

WEEK OF JULY 20, 2018

Latest Developments:

The United States Treasury Department announced that it will no longer require the names and addresses of donors to be included on Schedule B, which is filed with IRS Form 990, for any nonprofit other than a charity (501(c)(3) organization) or PAC (527 organization).  For example, nonprofit social organizations that engage in political speech and register under IRC Section 501(c)(4), such as ballot measure committees, will no longer disclose the names and addresses of their donors.  Filers will still disclose each contribution of $5,000 or more received without names and addresses.  The changes are contained in Revenue Procedure 2018-38 and will apply to tax years ending on or after December 31, 2018.

The California Fair Political Practices Commission met Thursday, July 19, 2018, with the following results:

  • New Chair Alice Germond expressed three goals: (1) to hold more meetings around the state, outside of Sacramento; (2) to partner with educational institutions and public groups with interest in the Commission; and (3) to continue the streamlining process, making things simple and clear for individuals who want to run for office.
  • The Commission voted to withdraw the Andrews advice letter, which required charities who have contributed restricted funds to nevertheless be listed as a top donor, and instead create a regulation on this point as to when a top donor may be omitted.
  • The Commission announced the appointment of a chair for its task force concerning enforcement.
  • The Commission voted to support AB 2689, which prohibits legislative contributions by appointees subject to legislative confirmation.  It deadlocked on support for AB 84, a bill about legislative caucus committees (see below).

The San Francisco Ethics Commission meets Friday, July 20.  The Commission’s agenda includes a discussion of staff proposals for regulations regarding requests for opinions.

Reminder:   August 1 is the PLI One-Hour Briefing on the “Basics of the Federal Election Campaign Act 2018.”  You can sign up at the Practising Law Institute.

In case you missed it:

  • Politico reports that the Treasury Department is on the defensive over its decision to stop collecting donor information.  (See above.)  The department says it doesn’t use the information, the collection of which dates to the Nixon administration.  Critics say it eliminates transparency and the ability to follow the money.
  • Rollcall has reactions to the Treasury’s new Revenue Procedure from both sides.  On one side, Sen. Mitch McConnell said that the existing government collection of data can “chill political speech and invite harassment of citizens.”  At the other end of the spectrum, Sen. Jon Tester called the move, “the swampiest, darkest, dirtiest decision.”
  • The Campaign Legal Center issued a summary of Supreme Court Nominee Brett Kavanaugh’s stance on campaign finance issues.  “(H)e would expand the power of big money in politics,” according to the article.  The Institute for Free Speech responded with its own analysis castigating the CLC, and noting that Judge Kavanaugh’s opinions, “generally gave the First Amendment a robust interpretation protective of individual rights.”
  • New Ways to Give:  California Assembly Bill 84 was gutted on July 5, and new provisions were inserted.  The newly amended bill would permit each party in each house of the legislature to establish a “caucus committee” with the same contribution limits as a political party committee.  Politico reports that state Democratic Party officials fear the move will dilute their power, saying that the bill would “untether some campaign cash from the party endorsement system.”  The bill would permit legislative leaders to control more campaign cash.
  • Ouch:  The Security and Exchange Commission fined Sofinnova Ventures, a bioscience investment firm, $120,000 for a $2,500 contribution made by one of its employees that violated the SEC’s pay-to-play rule.  Pensions & Investments reports that the Illinois Teachers’ Retirement System had invested some $45 million in Sofinnova funds and the firm had a contract to provide investment services to the System when one of its employees made the contribution to a candidate for Governor, who subsequently won.

WEEK OF JULY 13, 2018

Latest Developments:

Sexual Harassment Developments: In Maine, SB 695 was enacted. It requires Legislators, legislative staff and lobbyists to attend and complete a course of in- person education and training regarding harassment, including sexual harassment, at the beginning of each regular session of the Legislature. It requires the Legislative Council to develop and implement the course. Rules and further instructions are pending.

The California Fair Political Practices Commission meets July 19. The commission is slated to further discuss appropriate questions for an AG Opinion regarding the Bagley-Keene Open Meeting Act that they agreed to request at the January 2018 meeting. Further, in keeping with a February 18th agreement, a task force is meeting to conduct a holistic review of the Enforcement Division’s practices and procedures. One of its purposes is to create a procedures manual that provides an overview of how an enforcement complaint is filed, opened, investigated and resolved. Our firm, among others, is represented on the task force.

In case you missed it:

  • What’s good for the goose…USA TODAY published a story in which they calculate that so-called “secret money” (or perhaps the more ominous and ubiquitous pejorative label “dark money”) has thus far funded more than 40% of outside congressional ads. The supposedly objective story appeared to convey a bias against this form of campaign finance, taking to task what are considered Republican friendly groups as being on the offensive while portraying Democratic friendly groups as merely spending this “secret money” as defensive measures.
  • Free Speech Can’t Catch a Break:  Only July 12, NPR reviewed “A Riveting Documentary [that] Sheds Light on ‘Dark Money.’” The similarly titled Dark Money film focuses on the ongoing campaign finance litigation in Montana and is directed by Kimberly Reed, a native of that state. The review agreed entirely with the film’s premise, that “invisible corporate shenanigans…threatens to sink our democracy outright,” employing dramatic language throughout, labeling the campaign finance issues an “assault on the American electoral and judicial process by corporations whose agenda is nothing less than the dismantling of government itself.” The melodrama reaches an apex when the reviewer describes Dark Money as “a hair-raisingly specific American tale of illicit power.”

WEEK OF JULY 6, 2018

Latest Developments:

The California Fair Political Practices Enforcement Review Task Force meets next Wednesday, June 11.  The Commission created the task force to obtain input from the regulated community and other interested parties regarding creating/revising the commission’s enforcement manual.  The agenda includes organizational activities such as selecting a leader and establishing goals.

The Missouri Ethics Commission issued two new regulations that contain (1) clarifications on when an out-of-state committee, including a federal PAC, must register and (2) related definitions. The regulations take effect on August 8, 2018, in time for the General Election Cycle.

In case you missed it:

  • The New York Times traces the Supreme Court’s view of the First Amendment over the last few decades, from the days of Earl Warren to the Roberts court.  The most recent incarnation of the court is skeptical about any government effort to regulate speech.  Decisions from Buckley v. Valeo to Citizen’s United to this year’s decisions regarding speech about abortion and union dues show the court’s evolving view of the First Amendment.
  • Not even Google is that tech savvy:  Google says it lacks the capability to comply with new Maryland requirements for disclosure of online advertisements, according to the Baltimore Sun.  The new law requires disclosure of who is paying for political ads and how much they are paying.  In the absence of the ability to comply, Google indicates that it will stop selling political ads for Maryland state and local races.