Welcome to the June 2024 edition of the Political Law Playbook. This edition’s federal coverage features recent efforts by Congress and the Federal Communications Commission (“FCC”) to regulate the use of artificial intelligence (“AI”) in political communications and renewed interest by Congress and the Federal Election Commission (“FEC”) in protecting donor privacy. It also covers a pair of House bills seeking to limit former Congressional and executive branch officials from engaging in federal lobbying.
At the state level, more legislatures across the country are pushing to regulate AI in campaign advertisements ahead of the 2024 general election. This edition’s state-level coverage also highlights recently passed legislation in Ohio prohibiting foreign money from entering state campaigns, and a new law in Vermont that creates uniform ethical standards for local government officials.
Federal Elections & Campaign Finance
RFK Jr. Alleges CNN Colluded with Pres. Biden and Former Pres. Trump Regarding Presidential Debate – Presidential candidate Robert F. Kennedy Jr. recently filed a complaint with the FEC over his exclusion from the first presidential debate scheduled to air on CNN later this month. In his letter, Mr. Kennedy alleges that President Biden and former President Trump illegally colluded with CNN to keep him off the stage of the June 27 debate in Atlanta. The Federal Election Campaign Act (“FECA”) generally prohibits corporations from making contributions to federal candidates. However, funds used to stage candidate debates are not considered contributions provided that such debates are conducted in accordance with criteria promulgated by the FEC. FEC guidance provides that a host must be able to show that objective criteria were used to pick the participants, and that the criteria were not designed to result in the selection of certain pre-chosen participants. Mr. Kennedy’s letter asserts that CNN allowed Mr. Biden and Mr. Trump to set the criteria, and therefore selected themselves as the only participants, and that CNN is setting different criteria for him to qualify than the network set for Biden and Trump. CNN denies that its eligibility criteria ran afoul of the law.
Senate Committee Advances Bills Regulating Use of AI in Federal Campaigns – Last month, the Senate Rules and Administration Committee advanced two bills aimed at regulating the use of AI in federal campaigns. If enacted, Senate Bill 2770 would prohibit deceptive AI in campaigns for federal office and Senate Bill 3875 would require disclaimers when AI is used. We reported the introduction of the latter bill, the “AI Transparency in Elections Act,” in the April 2024 Edition of the Playbook. Both bills advanced on 9-2 votes with Republican lawmakers casting the opposing votes. At committee markup of the legislation, the objecting senators espoused support for the measures’ ideals while voting against them, citing the potential limits on free speech. The bills have been placed on the legislative calendar.
FCC Considers Rules for AI-Generated Political Ads – In May, FCC Chairwoman Rosenworcel proposed a new agency plan that would mandate the disclosure of AI-generated content in political advertisements aired on radio and TV in an attempt to increase transparency in on-air political communications. The FCC does not regulate internet-based media such as streaming video services or social media. If adopted, the proposal would require broadcasters to verify with political advertisers whether their content was generated using AI tools including algorithms, text-to-image creators, and voice-cloning software. The proposal follows recent legislative efforts in both Congress and state legislatures regarding the use of AI and is the second time this year that the FCC has weighed in on the use of AI in political communications. We covered the FCC’s declaratory ruling outlawing unwanted robocalls that contain voices generated by AI in the February 2024 Edition of the Playbook. This proposed plan, however, has already faced pushback as FCC Commissioner Carr recently issued a statement calling the plan “misguided” and “unlawful.”
Congress Wrestles with How to Address Foreign Money in US Politics – The leaders of the House Oversight and Accountability Committee have crafted dueling bills to tackle a shared interest: how to address the influence of foreign money in US politics. One bill, introduced by Representative Jamie Raskin (D-MD), seeks to strengthen enforcement of the constitutional limitations on federal officials accepting payments from foreign governments. The other piece of legislation, a bipartisan bill introduced by Representative James Comer (R-KY), would require public disclosure of all foreign earnings by or benefits provided to the President and his or her immediate family. Both bills have been referred to the House Committee on Oversight and Accountability.
Proposed FEC Directive Regarding Requests to Redact Contributor Information Fails to Garner Requisite Votes – The FEC recently voted on a newly proposed directive that would have allowed the Commission to consider certain requests to prevent the disclosure of contributors’ identifying information reported under FECA. Under FEC regulations, political committees must file reports with the FEC disclosing personal information regarding individuals contributing over $200 during the calendar year. While the FEC has granted as-applied exemptions to the reporting requirements where contributors demonstrate a reasonable probability the disclosure would subject them to backlash, the proposed directive would have adopted a standardized process for the FEC to “consider certain requests to withhold, redact, or modify contributors’ identifying information” if the contributor can demonstrate there is a reasonable probability the disclosure “will subject [contributors] to threats, harassment, or reprisals from either Government officials or private parties.” Critics of the proposed directive contend that permitting exceptions to public disclosure allows donors to evade responsibility for their contributions and opens the door to potential corruption. Proponents of the directive maintain there is a constitutional right to donate to political campaigns without fear of being attacked or threatened. The Commission was unable to approve the proposed directive by the required four affirmative votes. It did, however, vote to direct the Office of General Counsel to draft a Notice of Proposed Rulemaking concerning such requests within 75 days.
US Supreme Court Upholds Louisiana’s Redistricting Plan – The February and March 2024 Editions of the Playbook highlighted some of the various legal battles unfolding in the federal courts over the constitutionality of Louisiana’s congressional redistricting maps. In May, the US Supreme Court upheld, at least temporarily, a new congressional redistricting plan in the state that provides for a second majority-Black district. The Court’s decision arose out of a challenge to the redistricting plan from a purported group of conservatives calling themselves “non-African American voters,” who contended that the new map amounted to an unconstitutional racial gerrymander. While a special three-judge panel of federal judges initially agreed with the petitioners, the state promptly appealed to the Supreme Court seeking an emergency stay that would preserve the map for the 2024 election cycle. The Court’s approval of the stay request helps to clarify the legislative playing field for this November, but the ultimate fate of Louisiana’s maps are yet to be determined.
Federal Lobbying & Ethics
House Bills Aim to Restrict Federal Lobbying by Former Members of Congress and Officials in the Executive Branch – Congressman Jared Golden (D-ME) recently introduced a pair of bills aimed at restricting former members of Congress and former executive branch officials from engaging in federal lobbying. The Lifetime Lobbying Ban Act, if enacted, would repeal the current one- or two-year waiting periods for former members of Congress to work as federal lobbyists and replace them with a permanent ban. According to the Congressman’s press release related to the proposed bills, the number of former members working as lobbyists is greater than the number of members of the House of Representatives. The second piece of legislation introduced – the Congressional and Executive Foreign Lobbying Ban Act – would, if enacted, ban retired members of Congress, senior executive branch officials, and high-ranking military officials from lobbying on behalf of foreign interests. Both bills have been referred to the House Committee on the Judiciary for further consideration.
House Ethics Committee Closes Probe on Rep. Huizenga – The House Ethics Committee recently released its investigative report to the full House of Representatives regarding the Committee’s multi-year review into the campaign spending and recordkeeping activities of Representative Bill Huizenga (R-MI). The report indicated that Representative Huizenga and his staff generally acted within the bounds of the law and rules with regard to the expenditure of campaign funds but did determine that he violated House rules by not fully complying with applicable reporting and recordkeeping practices. Despite these shortcomings, the Committee nevertheless unanimously opted to refrain from any further review, levy no penalty against the Congressman, and close the inquiry. The Committee’s report comes years after initial complaints were filed against Representative Huizenga with the Office of Congressional Ethics and the FEC by political opponents in the State of Michigan.
House Ethics Committee Opens Investigation into Rep. Henry Cuellar – We reported in the May 2024 Edition of the Playbook that Representative Henry Cuellar (D-TX) and his wife were federally indicted for allegedly participating in a purported bribery scheme involving the nation of Azerbaijan and a foreign financial institution based in Mexico. In the wake of that indictment, the House Ethics Committee recently announced that it will open an investigation into the surrounding circumstances. The Committee’s inquiry seeks to determine whether Representative Cuellar solicited or accepted bribes, gratuities, or improper gifts; acted as a foreign agent; violated federal money laundering laws; misused his official position for private gain; and/or made false statements or omissions on public disclosure statements filed with the House of Representatives. In response to the announcement of the pending inquiry, Representative Cuellar released a statement denying the allegations, but indicating his respect for the Committee’s responsibilities and duties to investigate the matter.
Non-Federal Elections & Campaign Finance
New Jersey Bill Seeks to Criminalize Certain Political Speech in Campaign Media – Last month, New Jersey state Senator Paul Moriarty introduced legislation that seeks to impose criminal penalties on the distribution of deceptive audio or visual media, commonly known as “deepfakes,” within 90 days of an election. If enacted, anyone found knowingly or recklessly distributing such media with the intent to misinform voters could face charges as a disorderly person. The proposed legislation does, however, provide limited exceptions to the ban on deepfakes for communications that carry disclaimers clearly stating the manipulated nature of the content. Under the provisions of the bill, offenders would be subject to criminal penalties of up to six months in prison, fines of up to $1,000 per violation, or both. The legislation has been referred to the New Jersey Senate’s State Government, Wagering, Tourism & Historic Preservation Committee.
New Colorado Law Requires Campaign Ads to Disclose AI-Generated Content – Colorado has become the latest jurisdiction to enact disclosure requirements for campaign advertisements created using AI. Under the new law, campaign ads with audio, video, or other content generated using AI will need to feature prominent disclosures. The legislation, signed into law by Colorado Governor Jared Polis in May, likens the use of AI to create false depictions of people doing or saying things to forcing the subject to act under duress. The new law requires “clear and conspicuous” disclosures when AI is used to portray Colorado candidates within 60 days of a primary election or 90 days of a general election. Civil penalties will be accessed for violators, and the law takes effect July 1.
Louisiana Bill Would Outlaw the Distribution of Fake Political Media – Louisiana House Bill 154 recently introduced by Representative Mandie Landry aims to outlaw the distribution of political materials and media that were made with any form of manipulated imagery, audio or video, with the intent of deceiving Louisiana voters or otherwise harming a political candidate’s reputation. The bill passed the state House in April and was subsequently ordered to the state Senate. During the Senate’s debate of the legislation, Republican members expressed concerns over its constitutionality, arguing that the outlawing of such media could impact the protective rights of political speech by impeding Americans’ rights under the First Amendment. The bill ultimately passed and is awaiting the governor’s signature.
Cleveland City Council Doubles Campaign Finance Contribution Limits – The Cleveland, Ohio City Council recently passed legislation that doubles campaign finance contribution limits in the municipality ahead of pending Council elections in 2025. Under the new limits, individual donors can now give up to $3,000 per election (as opposed to $1,500 per election), and PAC donors can now give up to $6,000 per election (as opposed to $3,000 per election). According to the public statements of the Council’s President, the limits were raised to keep pace with present inflation. He also stated that the increases were intended to prepare for the loss of two of the City’s 17 wards in the upcoming redistricting process since some candidates will have to campaign over larger areas.
Arizona Legislative Leaders Challenge Campaign Finance Law – Republican Arizona state legislators recently appeared before the AZ State Court of Appeals to challenge a voter-backed campaign finance disclosure law they say violates the state constitution. State Senate President Warren Petersen and House Speaker Ben Toma argued that Proposition 211, also known as the “Voters Right to Know Act,” takes rulemaking authority away from the state’s legislature and over-delegates that authority to the Arizona Citizens Clean Elections Commission, an agency of the executive branch. Proposition 211 requires any person or organization making campaign media expenditures of more than $50,000 to statewide elections or $25,000 to local elections to disclose the original source of any contributions totaling more than $5,000, and the statute places sole rulemaking and enforcement authority in the hands of the Commission. This move by legislative leaders is not the first time the Proposition has been challenged in court. In the March 2024 Edition of the Playbook, we reported that an Arizona court had blocked a different attempt to have the Proposition declared unconstitutional. A three-judge panel recently heard the legislative leaders’ appeal, and a decision is expected in the near future.
Ohio Foreign Money Ban Legislation Signed into Law – Ohio Governor Mike DeWine recently signed into law a new piece of legislation implementing a series of targeted prohibitions on foreign national political engagement in state electoral matters. Although foreign nationals are already barred by federal law from participating in most forms of political engagement regarding federal and state elections, the new Ohio state law seeks to bar non-citizens – including lawful permanent residents (“green card” holders) – from making contributions, expenditures, or independent expenditures in regard to state elections or state ballot referenda, and to bar non-citizens from expending funds for electioneering communications. The newly enacted bill also prohibits individuals from knowingly soliciting or accepting a foreign national’s contribution, implements new criminal penalties for violators, and grants the state’s Attorney General sole authority to investigate and prosecute violators.
Connecticut Supreme Court Finds Portion of State’s Public Financing Law Unconstitutional – In May, the Connecticut Supreme Court ruled that the State Elections Enforcement Commission’s (“SEEC”) restrictions on advertising in publicly financed campaigns were overly broad and violated the free speech rights of two Republican state lawmakers, former state Senator Joe Markley and current state Senator Rob Sampson. The case centered on Markley’s and Sampson’s criticisms of former Governor Daniel Malloy’s policies in their 2014 campaign mailers while the then-candidates received money from Connecticut’s Citizens Election Program (“CEP”). If participating in the CEP, candidates could only use money from the program to campaign against their direct opponent. As a result, the SEEC fined Mr. Markley and Mr. Sampson, who then challenged the fines in court. Connecticut’s highest court unanimously concluded that the SEEC violated Mr. Markley’s and Mr. Sampson’s rights, rejecting the SEEC’s argument that candidates effectively “relinquish” the right to unfettered free speech when they agree to terms of the voluntary public campaign financing system. The ruling cited several decisions by the US Supreme Court and other courts on what limits can be placed on free speech in publicly funded campaigns.
Non-Federal Lobbying & Ethics
Former Honolulu Prosecutor Found Not Guilty in Corruption Case – Honolulu’s former top prosecutor has been found not guilty in an alleged pay-for-prosecution scheme. A federal jury in Honolulu returned not guilty verdicts for former city prosecutor Keith Kaneshiro, as well as businessman Dennis Mitsunaga and four of his employees. The group stood accused of corruption charges stemming from an alleged conspiracy and bribery plot. Specifically, it was alleged that the Mitsunaga group contributed around $50,000 in campaign donations to Mr. Kaneshiro in exchange for him prosecuting a former employee who had filed suit against Mr. Mitsunaga’s company.
Michigan Lawyer Seeks Ruling on Lobbyist-Gifted Tickets – The former general counsel of the Michigan Chamber of Commerce, Bob LaBrant, recently asked the Michigan Secretary of State to determine whether the system state lobbyists have used to provide event tickets to lawmakers is legal. The request came a day after The Detroit News released the findings of an investigation into personal financial disclosures filed by lawmakers and the flow of sports and concert tickets from lobbyists to state officeholders. Michigan law bars registered lobbyists from providing legislators with gifts valued at more than $76, but lobbyists have allegedly found ways around the prohibition. The newspaper claims that one of lobbyists’ main strategies has been to secure tickets to marquee events for lawmakers and then later ask the lawmakers through private letters to reimburse the price of the tickets over $76. It is unclear how often such reimbursements are actually made. In his request, Mr. LaBrant argues that this system does not comply with Michigan law as past court decisions have determined that reimbursements do not cure violations of the state’s campaign finance laws.
Vermont Legislature Passes Bill to Create Uniform Ethical Standards in Local Government – In May, Vermont lawmakers passed a bill that, if enacted, would create new uniform ethical standards for many local government officials. The bill would establish a “municipal code of ethics” that is similar to one that exists for state officials. Specifically, the code would set baseline standards for cities, towns, and villages to adopt covering conflicts of interest, preferential treatment, gifts, and other related issues. Additionally, the bill would authorize the Vermont State Ethics Commission to issue guidance to municipal officials on handling local ethics complaints. If signed into law, the new municipal code of ethics would go into effect on January 1, 2025.
Nonprofit Compliance & Disclosure
New Mexico State Ethics Commission Asserts Nonprofit Must Disclose Donors – In a complaint recently filed with the New Mexico Second Judicial District, the New Mexico State Ethics Commission alleged that in the months leading up to the June 4, 2024 primary election, The New Mexico Project (“TNMP”), a New Mexico domestic nonprofit corporation, made advertisements supporting “pro-moderate” and “pro-business” candidates seeking election for eight House districts and seven Senate districts. These activities, the Ethics Commission asserts, violates the state’s Campaign Reporting Act. According to the complaint, TNMP’s campaign-related activities triggered registration obligations as a political committee under the Act, and therefore, the organization was subject to registration, filing-fee, and disclosure report requirements. These requirements include disclosure of TNMP’s contributions and contributors. The Commission has requested that the court order the group to register as a political committee, or alternatively, that the group be ordered to report the sources of its funds spent on the political advertising.
Senate Bill Seeks to Protect Anonymous Nonprofit Donors – Senators Todd Young (R-IN) and James Lankford (R-OK) recently introduced a bill to amend the Internal Revenue Code of 1986 to modify the penalties relating to the disclosure of tax return information of contributors to certain tax-exempt organizations. If enacted, the bill would increase penalties for revealing anonymous donor information from no more than $5,000 to at least $10,000 and up to $250,000. The legislation also would allow the leak to be prosecuted in the jurisdiction where the affected donor lives. The bill is currently awaiting committee assignment.
Practice Pointers
As the summer warms up, and you and your colleagues warm up to the idea of networking, it can be easy to forget exactly how easy it is to violate government gift and ethics laws. Such laws vary from level of government to level of government and from jurisdiction to jurisdiction, but generally restrict the ability of lobbyists, lobbyist employers, and non-lobbyists to give gifts to elected and non-elected government officials. Compliance with applicable rules is critical not only to minimize legal risk, but to limit any potential negative reputational impacts. The Dentons Political Law Team regularly advises clients on lobbying, pay-to-play, and gift compliance and creates strategies to help minimize the risk of inadvertent noncompliance, so please do not hesitate to reach out if you or your organization has questions.
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