Welcome to the April 2022 edition of the Political Law Playbook. Of particular note in this month’s edition is the ongoing legal uncertainty of redistricting efforts around the country in anticipation of the 2022 election. In the past month, the U.S. Supreme Court has heard a number of challenges to various states’ redistricting efforts following the 2020 census, including in Wisconsin, Alabama, Pennsylvania, and North Carolina. Court battles over redistricting are also still pending in at least 15 states.
In Wisconsin, the U.S. Supreme Court recently rejected a Democrat-drawn and state Supreme Court adopted redistricting plan for state assembly districts, but let stand a Democrat-drawn map for the Badger State’s congressional districts. Elsewhere in the Midwest, the Ohio Supreme Court has thrice rejected the Ohio Redistricting Commission’s congressional and state legislative maps, but also recently refused to fast track a legal review of the fourth Republican-adopted congressional redistricting plan until after the upcoming May primary – effectively pushing the federal redistricting fight to the 2024 election. Closer to our nation’s capital, Maryland’s Democrat-drafted congressional redistricting plan was recently struck down by a state court judge as violating the state constitution. The decision lead the state legislature to adopt a revised congressional district map more favorable to Republicans, which was signed into law by Governor Larry Hogan just prior to this newsletter’s publication. Meanwhile, in New York State, three different sets of Democrat redistricting maps for the state’s congressional and state legislative districts were recently struck down by a state trial court judge as unconstitutional gerrymanders, and set for appellate argument later this week.
The legal uncertainty seen in these states and others across the country causes practical campaign headaches for candidates, who need to qualify as candidates by prescribed deadlines, but who may not know the makeup of the district in which they seek election. It also strains state and local election officials seeking to prepare for primary and general elections on hyper-expedited timelines. The uncertainty also causes confusion among voters seeking to learn more about the candidates running to represent them at the federal and state levels. One thing is for certain, however – this year’s primary and general elections will be here before we know it, and the outcomes of ongoing litigation across the country will have a profound impact on the tilt of the partisan playing field for Congress and state legislatures in 2022 and beyond.
Federal Elections & Campaign Finance
FEC Fines Hillary Clinton Campaign and DNC Over Funding and Disclosure for “Steele Dossier” – Last month, the Federal Election Commission (FEC) fined Hillary Clinton’s 2016 campaign $8,000 and the Democratic National Committee (DNC) $105,000 for their reporting of the funding associated with the “Steele Dossier” on FEC reports. The FEC also dismissed a complaint against Christopher Steele, the author of the dossier. The FEC concluded that the Clinton campaign and the DNC incorrectly identified Steele’s work as “legal services” and “legal and compliance consulting,” in an effort to obscure the true nature of the work.
FEC Settles With Marathon Petroleum Corporation After Illegal Contribution – Last month, the FEC fined the Marathon Petroleum Company $85,000 after the company made separate $500,000 contributions to two Republican supported Super PACs – the Senate Leadership Fund and the Congressional Leadership Fund. Marathon has contracts with the federal government, and as a result is prohibited from making any political contributions while negotiating or performing federal contracts. The $1 million in political spending constituted the largest federal contractor contributions to an outside spending group that the FEC has considered in an enforcement matter.
White House Releases Report on Native American Voting Rights – Last year, President Biden signed an executive order promoting voting rights and establishing a steering committee to look at particular barriers to voting in Indigenous communities. The Interagency Steering Group on Native American Voting Rights released a report last month, concluding that Native Americans and Alaska Natives vote at lower rates than the national average, but have been a key constituency in tight races and in states with large Native populations. The report encourages local, state, and federal officials to do more to ensure Native Americans do not face barriers to voting, including offering language assistance, boosting USPS personnel in Indian Country, and ramping up voter education efforts.
Nebraska Congressman Jeff Fortenberry Convicted For Lying to FBI About Foreign Campaign Contribution – Representative Jeff Fortenberry (R-NE) was convicted by a federal jury in Los Angeles last month on three felony counts related to making false statements to and concealing information from the FBI during a 2016 investigation into a foreign campaign contribution to the congressman’s campaign committee. Fortenberry, who has since announced his resignation from Congress, argued at trial that he was unaware of being notified about the receipt of an illegal foreign contribution during a 2018 phone call despite indications to the contrary. Sentencing in the case is scheduled for June 28.
Russian Oligarch Charged With Making Illegal Political Contributions – Last month, the Department of Justice unsealed an indictment against Russian billionaire Andrey Muraviev that charged him with conspiring to fund $1 million in illegal foreign political donations with the goal of influencing the 2018 elections. Muraviev was already publicly known to have been the source of political donations made on his behalf by former Rudy Giuliani associates Lev Parnas and Igor Fruman, who have also been charged with making illegal political contributions. Federal prosecutors say the contributions at issue in the case were made for the purpose of currying favor with public officials to aid Muraviev and his co-conspirators’ quest to procure various cannabis-oriented business licenses.
MIT’s Election Performance Index Shows Improvement – MIT released its 2020 Election Performance Index (EPI) last month, concluding that national election administration continues to improve despite a record volume of early voting and voting by mail. The EPI showed several improvements across the country, including increased voter turnout in every state, and significant progress in overall data quality and reporting for state election offices.
Federal Lobbying & Ethics
Ahead of Release of SEC Climate Rule, Democrat Senators Pushed for Increased Climate Lobbying Disclosure Requirements – In advance of the recent release of the Securities and Exchange Commission’s proposed rule that would require companies to disclose climate-related risks, several Democrat Senators sent a letter to the SEC requesting the inclusion of a disclosure requirement for lobbying activities related to climate change matters. In their correspondence, the Democrat Senators sought to persuade the SEC’s Commissioners that lobbying for or against measures that impact climate change should be considered material information investors need access to for the purpose of gauging exposure to market risk.
Ethics Advocates Say Senate Staffers Could Be Breaking Rules on Stock Ownership – While some in the Senate and House are currently debating legislation that would ban Members of Congress from trading individual stocks, the Campaign Legal Center (CLC), an ethics and transparency watchdog, is probing whether some senior Senate staffers are currently violating an existing ban on certain stock ownership. Under existing Senate rules, committee staffers are required to divest stock holdings they possess in industries related to the jurisdiction of their committee of employment. After discovering that Senate Select Committee on Ethics gave stock ownership waivers to five senior Senate committee staffers whose disclosure filings list holdings in industries under the jurisdiction of their panels, CLC is investigating the justification for those exemptions.
Non-Federal Elections & Campaign Finance
Supreme Court Blocks Revised Legislative Map for Wisconsin That Created a New Majority-Minority District – The U.S. Supreme Court recently blocked a revised plan for state assembly districts in Wisconsin that endeavored to create a new majority-minority district in the state House of Representatives. Republicans in the state opposed the plan and urged the court to respect the legislative boundaries drawn by the GOP-controlled state legislature. While the state assembly districts remain up in the air for the foreseeable future, the high court declined to block new maps for the state’s congressional districts, ordering election officials to follow the map drawn by Democrat Governor Tony Evers.
With Ohio’s Primary Nearing, Many Voting Districts Still Have Not Been Decided – With only a few weeks left until Ohio’s primary election scheduled for May 3, the voting districts for the state’s legislative seats have yet to be determined. The Republican-drawn state legislative maps have been delayed as a result of three disapproving rulings from the state Supreme Court. Ohio Secretary of State Frank LaRose, a Republican, told lawmakers and election officials that it would be extremely difficult under the current circumstances for state House and state Senate races to appear as planned on the May 3 ballot. With the Ohio Supreme Court refusing to expedite a Democrat challenge to the state’s congressional map before the primary date, it is looking extremely likely that Ohio will hold two separate primaries – the May 3 primary for federal races, statewide offices, ballot measures and local races, and a later primary for state legislative races.
Democrat Gubernatorial Candidate Abrams Files Lawsuit Over New Georgia Leadership PAC Law – Stacey Abrams, a Democratic gubernatorial candidate in the State of Georgia, recently filed a federal lawsuit challenging her inability to leverage a new state law allowing the governor, the opposing party’s gubernatorial nominee and other leaders of both major parties to set up new leadership committees permitted to raise and spend unlimited funds throughout the campaign cycle, including during legislative sessions (we profiled the new law in 2021). The language of this law – Senate Bill 221 – prohibits the leadership committee associated with the non-incumbent party’s gubernatorial nominee from utilizing funds until the party nomination is official. Abrams’ lawyers have argued that she should be treated as the Democratic nominee in advance of the upcoming statewide primary because she is running unopposed for the nomination. Former U.S. Sen. David Perdue, Governor Brian Kemp’s opponent in the Republican gubernatorial primary, has also challenged the law in court, framing it as an unfair law designed to help incumbent candidates.
NY State Board of Elections Begins Enforcing LLC Disclosure Law – After the New York State Board of Election’s lack of enforcement of a 2019 reform law meant to limit corporate “dark money” in NY elections, the Board has ramped up its enforcement by informing thousands of LLCs through letters and emails of purported disclosure violations. The Board has identified around 3,400 LLCs that donated to political campaigns in the state, but failed to file a “statement of interest” form disclosing ownership interests among their members, as required by the 2019 law. For the sake of public transparency and to deter future violations of the new rule, the Board is considering the creation of a publicly-available list of delinquent LLCs for its website.
Wyoming Bill Signed Into Law Attempts to Close “Dark Money” Loopholes – Wyoming Governor Mark Gordon (R) recently signed into law a bill attempting to close a so-called dark money loophole in state campaign finance disclosure laws. The new law requires all campaigns, political action committees, and other politically-active organizations to file an itemized statement of contributions and expenditures with the WY Secretary of State’s Office that will be subject to a new civil penalty regime. Previously, non-filing campaigns and organizations were at risk of receiving only a small one-time fee of $500 for non-compliance. The new law, however, allows regulators to impose an uncapped daily penalty fee of $500 for non-compliance.
IA Ethics Board Rules That Politicians Are Allowed to Accept Crypto Donations – The Iowa Ethics and Campaign Disclosure Board voted unanimously to classify political donations in cryptocurrencies as in-kind contributions. State candidates will now be able to accept such payments as campaign donations, but have to report the cash value and the donor’s name, and must report when a cryptocurrency is sold and to whom. The Board’s new advisory opinion on the issue states that campaigns cannot spend cryptocurrency directly because all campaign expenditures must come from money deposited into an Iowa financial institution.
Chicago Board of Ethics Issues Opinion on Coordinated PACs – The Chicago Board of Ethics recently issued an advisory opinion listing 15 factors it will analyze to determine whether a political fundraising committee will also constitute a candidate or official committee for purposes of aggregating contribution limits. Factors identified by the Board include: joint fundraising efforts; shared email or mailing addresses for fundraising; and common vendors. The opinion states that if such a finding is made, both the PAC or other non-official candidate political committee, as well as its contributors, become subject to the contribution limitations in the Chicago Governmental Ethics Ordinance.
Recent State Regulatory Decision Lifts Certain Contribution Limits in Alaska – The Alaska Public Offices Commission issued a regulatory decision earlier this month that declined to revive the state’s previous contribution limit structure in spite of a recommendation to do so from its internal staff. While the Commission’s decision “implored” Alaska state legislators to consider the reimplementation of state contribution limits through the legislative process, the ruling by the Commission confirms that permissible donors may now contribute unlimited amounts to candidates and to non-party groups in AK. Contribution limits of $1,000 per year still remain in place, however, for non-party group contributions to candidates or to other non-party groups.
Non-Federal Lobbying & Ethics
Ex-Chicago Alderman Sentenced to 13 Months in Prison – A federal district judge recently sentenced Former City of Chicago Alderman Ricardo Muñoz to 13 months in prison for stealing tens of thousands of dollars from a political campaign fund he controlled and spending it on personal items. The indictment alleged that Muñoz tried to hide the theft of funds by lying to the Illinois State Board of Elections and its staff members about the legitimacy of the expenditures, and by cutting off third-party oversight of the campaign fund to conceal his financial misappropriation of fund resources. Last year, Muñoz plead guilty to wire fraud and money laundering in conjunction with this conduct.
Former San Diego Councilman’s Work for Gas Company Could Have Violated Ethics Law – Former San Diego Councilman David Alvarez may have violated the city’s “revolving door” ethics rule when he helped San Diego Gas & Electric (SDG&E) push an energy infrastructure project in the city. The rule imposes a two-year “cooling off period” on outgoing elected officials in which they are prohibited from influencing city officials with regard to city decisions. According to present allegations, Alvarez purportedly held a meeting with former San Diego City Council President Georgette Gómez on behalf of SDG&E to discuss building an energy substation only one year after he left office. While Alvarez argued that the meeting was not considered lobbying, SDG&E’s parent company disclosed the meeting on its quarterly lobbying report, suggesting the organization considered the meeting a lobbying contact on a municipal decision.
Pay-to-Play
Ex-Illinois House Speaker Michael Madigan Indicted on Federal Racketeering Charges – Former Illinois House Speaker Michael Madigan was indicted last month on federal racketeering charges purporting that Madigan participated in a series of bribery and extortion schemes during the period between 2011 and 2019. Both Madigan and his attorneys denied the allegations in written statements, asserting that they intended to fight them in court. Michael McClain, a former state legislator, lobbyist and friend of Madigan’s, is also facing separate charges alleging he orchestrated a bribery scheme by the utility giant Commonwealth Edison. In addition to the noted criminal charges, the indictments also contain forfeiture allegations against both Madigan and McClain seeking $2.8 million in alleged “ill-gotten gains.”
The Courts and Free Speech
Federal Judge Finds Wyoming’s Campaign Disclosure and Disclaimer Requirements Violate First Amendment – A federal judge recently ruled in favor of a Second Amendment advocacy group – Wyoming Gun Owners (WyGO) – in declaring unconstitutional a Wyoming law requiring the group to share a list of people who helped pay for an independent expenditure campaign advertisement it sponsored. The lawsuit stems from a radio ad paid for by WyGO in 2020. The Wyoming Secretary of State’s office believed that WyGO was required to file public campaign finance reports, including a list of contributions and expenditures, because the ad constituted more than $500 in spending on “political activity” in the state. U.S. District Court Judge Skavdahl disagreed with this view, however, and struck down the statute as unconstitutionally vague because it would require WyGO to determine which contributions it had received that would be used specifically for political advertising and which would be used for other activities. The law thus failed to satisfy the exacting scrutiny standard that the U.S. Supreme Court imposed on such First Amendment challenges in the Americans for Prosperity v. Bonta decision, which we wrote about last year.
Colorado Campaign Donation Limits Currently Stand After Federal Court Ruling – Last month, a federal judge rejected a request for a preliminary injunction that would have immediately suspended Colorado’s 20-year-old campaign donation limits. Currently, individual donors are limited to giving $400 to state legislative candidates and $1,250 to candidates for statewide office – among the lowest limits in the nation. In rejecting the injunction request, the federal judge opined that while there is no right to give or receive unlimited political contributions under the First Amendment, he did view the current donation limits as unreasonably low and left open the possibility that they could be overturned at trial.
Political Law Practice Pointers
Now that primary season is upon us, this edition of Practice Pointers focuses on additional pre-primary reports that certain federal PACs registered with the FEC must file when making contributions to congressional candidates. Pre-primary reports are only required for those PACs that file on a quarterly basis (i.e., they file in January, April, July, and October during a federal campaign year). These reports are triggered when a PAC makes a contribution to a candidate appearing in a state’s congressional primary between the close of books for the previously-filed quarterly report and the 20th day before a state’s primary election. For instance, a quarterly-filing PAC that gives a contribution to a California congressional candidate between April 1 and May 18 for the June 7 primary will be required to file a pre-primary report with the FEC by May 26. Critically, pre-primary reports disclose all activity for the PAC, including all receipts taken in and expenditures made, during a pre-primary period. The FEC has issued a helpful bulletin setting forth the pre-primary dates for all upcoming primary elections in 2022, but PACs should be wary when making contributions in advance of a congressional primary so as to not inadvertently miss a reporting deadline.
This is also a good opportunity to remind quarterly filing federal PACs that there is a Q1 disclosure deadline approaching on April 15, covering committee financial activity between January 1 and March 31. The Dentons Political Law Team regularly advises a wide range of federal connected PACs (separate segregated funds), nonconnected PACs, leadership PACs and other political organizations with regard to the intricacies of FEC disclosure rules, including the above-mentioned reporting obligations. If your organization has questions regarding the FEC filing process or compliance requirements, please reach out to our authors for assistance.
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