With summer vacation season well under way across the country, welcome to an abridged version of the Political Law Playbook. This edition highlights the recent decision by the US Supreme Court to grant certiorari on a case that could have significant ramifications for the nation’s electoral processes and election laws moving forward. The matter set for argument during the Court’s 2023 term arises out of a recent decision by the North Carolina Supreme Court striking down a federal redistricting map that it found to be in violation of the North Carolina state constitution. The case raises a number of interesting constitutional questions, including whether the federal election oversight powers granted to state legislatures in Articles I and II of the US Constitution permit state judicial consideration of electoral questions that some say are reserved to the legislative branch. In this edition, we also examine a policy statement issued by three of the current FEC Commissioners regarding disclosure requirements for donations made to non-committee entities that make independent expenditures and highlight the increased role that state lobbying is having in our country’s policymaking arena.
Federal Elections & Campaign Finance
Supreme Court to Review State Legislatures’ Power in Federal Elections – The United States Supreme Court recently announced that it will agree to hear oral arguments during its 2023 term concerning an important election law matter that could have a profound impact on how state governments nationwide view the scope of their state legislative power over federal elections. The case, arising out of a challenge raised by the Republican-controlled North Carolina legislature to a recent redistricting decision from the Democrat-controlled North Carolina Supreme Court, could well have broad ranging implications for the interplay between state courts and state legislatures in redistricting, election litigation and election administration matters.
Nonprofit Files Complaint Over Donation to Anti-Cheney Super PAC – In a recent complaint filed with the Federal Election Commission, a nonprofit government watchdog organization alleged that a Wyoming-based limited liability company, Snow Goose LLC, donated to a pro-Harriet Hageman Super PAC that was in violation of the so-called “straw donor” rule. This statutory prohibition forbids companies and individuals from giving money to another person for the purpose of donating on their behalf. While most LLCs are legally allowed to donate to Super PACs even if the true source of their LLC funding is unknown, Campaign Legal Center argued that the LLC at the center of this complaint was created for the sole purpose of making a political donation to the Wyoming Values Super PAC and served no other discernible legal purpose.
New CREW v. FEC Interpretive Guidance from 3 Republican FEC Commissioners – The three sitting Republican FEC Commissioners recently issued interpretive guidance concerning their views on Commission enforcement of independent expenditure (IE) reporting rules in the wake of the 2018 D.C. Circuit decision in Citizens for Responsibility and Ethics in Washington v. FEC (“CREW”), which revoked the longstanding regulation governing disclosure of contributions received by non-committee organizations that make IEs. In this policy statement, Commissioners Dickerson, Cooksey and Trainor assert that the FEC must formulate a regulatory standard for reporting contributions earmarked for political purposes that is consistent not only with the terms of the CREW decision, but also with the First Amendment and Supreme Court precedent. Until it does so, the Commissioners stated that they will favor the interpretation of the Second Circuit in FEC v. Survival Education Fund, Inc., which held that a donation is reportable as earmarked for political purposes if it is designated or solicited for, or restricted to, activities or communications that expressly advocate the election or defeat of a clearly identified candidate for federal office.
FEC Releases Advisory Opinion on Web Platform Services for SSFs – The FEC recently released an advisory opinion in response to a request by Democracy Engine, a web platform that would enable corporate PACs to solicit the general public for contributions to candidate and other political committees, and receive real-time data about the resulting contributions. The FEC blessed the proposal for corporate PACs (separate segregated funds), but was unable to garner the necessary votes to approve the use of the platform by corporations themselves. In its opinion, the FEC opined that Democracy Engine would need to contain requisite political disclaimers on the platform for each corporate PAC.
Foreign Agents Registration Act (FARA)
Bipartisan Lawmakers Propose Legislation to Combat Foreign Influence in Washington – On June 16, a bipartisan group of lawmakers in the House introduced the Fighting Foreign Influence Act. If passed into law, this legislation would set new disclosure requirements and limitations for tax exempt organizations affiliated with foreign interests, create a lifetime ban on certain former government officials lobbying for foreign principals, and require that political campaigns verify that the online donations they receive are connected to a valid US address.
Non-Federal Elections & Campaign Finance
Connecticut Candidates Can Now Start Spending Campaign Money on Child Care – A new election rule allowing Connecticut state candidates to spend public campaign money on child care while they’re campaigning was finalized this month. The State Elections Enforcement Commission (SEEC) will soon start to send out forms to campaign treasurers, which will allow candidates who are the parent or legal guardian of children under thirteen years old to receive reimbursements for child care that is necessary as a direct result of campaign activity. In light of the implementation of the new rule, some Connecticut lawmakers predict that more parents in the state will seek political office.
Judge Says NYC Can’t Let Noncitizens Vote in City Elections – A New York state court judge recently ruled that New York City cannot let noncitizens vote in city elections, challenging the law enacted this past January that made New York the first major US city to grant widespread municipal voting rights to noncitizens. Supporters of the law argued that it gave an electoral voice to many people who have made a home in the city and pay taxes to it but face tough paths to citizenship. Opponents said the law violated provisions in the state’s constitution and state election law that specifically confer voting rights on citizens.
Non-Federal Lobbying & Ethics
American Influence Has a New Address on State Street – According to a recent report from the campaign finance website OpenSecrets, interest groups spent a record $1.8 billion on state lobbying in 2021. With increased polarization holding key federal legislation gridlocked, stakeholders have switched their attention and efforts away from Washington and toward state capitals. This transition has made state legislators and executive officials the most influential they have ever been with regards to leading the national discussion on public policy.
Ethics Commission Considers How to Tighten Lobbying Rules in Long Beach – The Long Beach (CA) Ethics Commission recently discussed the possibility of making the city’s lobbying ordinance more stringent by requiring increased transparency and adjusting the lobbyist registration threshold and frequency of filings. The ordinance has historically been criticized by transparency advocates for containing loopholes and exemptions allowing certain special interest groups to lobby city officials without having to document their activity. Recommended changes discussed by the Commission include increasing reporting frequency to a quarterly basis, requiring nonprofits to register their advocacy activity without having to register as lobbying entities, lowering the lobbyist registration threshold from the current 50-hour level, and potentially adding a separate registration trigger based on a specific number of lobbying contacts with city officials.
Florida’s Former Democratic Gubernatorial Candidate Andrew Gillum Indicted on Campaign Fraud Charges – A federal grand jury recently returned a 21-count indictment against former Florida gubernatorial candidate Andrew Gillum and one of his former campaign advisors, Sharon Lettman-Hicks. The indictment alleges that between 2016 and 2019, Gillum and Lettman-Hicks unlawfully channeled campaign funds to a company owned by Lettman-Hicks, then forwarded the funds, disguised as payroll payments, to Gillum for his personal use. Gillum, the former mayor of Tallahassee, had also been under criminal investigations for trips paid for by lobbyists and special interests.
Pay-to-Play
P.G. Sittenfeld Trial May Expose Political Corruption in Campaign Fundraising – In November 2020, FBI agents arrested Cincinnati City Councilman P.G. Sittenfeld in conjunction with criminal charges alleging six different instances of political corruption. Nearly two years later, his trial begins in Cincinnati’s US District Court. While the heart of the trial will focus on whether Sittenfeld traded “official acts” facilitating the development of a local economic development project in exchange for $40,000 in donations to an affiliated PAC, many ethics advocates in Ohio and beyond believe the trial may more broadly highlight the corrupting influence of pay to play politics in local government. While the FBI has cast a wide net in their public corruption probe in Cincinnati, is has yet to be determined what the trial will reveal about the scope of the surrounding investigation.
Political Law Practice Pointers
As July represents one of the two busiest months of the year from a federal, state, and local political law compliance reporting perspective, we want to underscore the importance of maintaining robust recordkeeping and disclosure systems for those engaged in the political process. Our last edition of the Playbook touched on the federal lobbying registrant reporting obligations, but July is also a very busy month for state and local lobbying filings. The reporting requirements are disparate among jurisdictions in terms of timing (e.g., first of the month; middle of the month; end of the month) and disclosable information. As such, those businesses and organizations that are engaged in lobbying across the country at various levels need to have robust compliance programs to handle the litany of reporting obligations.
July is also a busy month for campaign finance reports at the federal, state, and local levels. For the purposes of FEC filers, quarterly reports are due on July 15, unless a filer has chosen to file reports on a monthly basis. There is also the potential for pre-primary reporting obligations with the FEC, given that we are in the heart of the federal primary election season. For state filers, reporting dates vary based upon jurisdiction, with some reports being due in the middle of the month and some at the end. Regardless of the precise timing, the bottom line is that July is chock full of campaign finance disclosure deadlines for organizations and individuals influencing federal and nonfederal politics across the country.
The Dentons Political Law Team regularly advises a wide array of clients on all of these filings, so if your organization or client has questions regarding federal, state, or local lobbying or campaign finance reporting obligations, please reach out to us for assistance.
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