Biden-Harris Transition & Inaugural Committee Raise Specific Compliance Issues
The formal process for selecting the next President of the United States involves multiple steps, but regardless of the route taken, it will conclude with the inauguration of the President at noon on January 20, 2021. Before then, government affairs professionals may want to examine the unique compliance issues related to interacting with the Transition Team and the Presidential Inaugural Committee. Like many aspects of ethics rules, some remain consistent, while others will change along with the occupant of the White House.
Transition Team Rules
Before Inauguration Day, the newly elected president’s administration-in-waiting operates pursuant to the Presidential Transition Act of 1963, as amended (“PTA”). The so-called Transition Team can operate informally before the election, but the Team does not have access to federal resources or executive agency personnel until, per statute, the GSA Administrator “ascertains” who is the “apparent successful candidate . . . for President.” On November 23, 2020, the GSA Administrator notified the Biden campaign that she had “ascertained” him to be the apparent winner of the election, which has now given the Biden Transition Team access to formal federal resources, including funding.
The Transition Team is funded by appropriations to the General Services Administration and is supplemented by private donations. Under the PTA, private donations are limited to $5,000 from any person, organization or other entity. Further, under its current Ethics Plan, the Biden Transition Team only permits donations from individuals. Further, per its ethics rules, the Biden Transition Team does not permit lobbyists to donate or solicit donations to its efforts.
In addition, the Transition Team reports its donors within 30 days after an inauguration. By point of reference, according to a GAO report, the Trump Transition Team reported raising $6.5 million in private funding and spending almost $4.7 million.
The Biden Transition Team Ethics Plan generally excludes lobbyists and agents of foreign governments or political parties from serving as transition officials, unless the individual receives a waiver from the Team’s general counsel. The Ethics Plan also limits Transition Team members from being involved in a decision for which they may have engaged in lobbying activities during the prior 12 months, even if such activities did not trigger LDA registration requirements. The Ethics Plan also prohibits those involved with the Transition Team from lobbying agencies which they were involved with for the 12 months following their service, as well as from serving as a foreign agent during the next 12 months.
As for lobbyists who interact with the Transition Team, they should be mindful of the Lobbying Disclosure Act (LDA) rules. If the contacted Transition Team member is also a current federal official or employee, then contacts with them may constitute lobbying for purposes of the LDA and could also lead to registration and reporting requirements. However, to be a lobbying contact that is potentially reportable under the LDA, the subject matter or content of the communication must also fit the definition (e.g., any policy or program of the U.S. government). A private individual serving on the Transition Team is not deemed to be a federal official simply by virtue of serving on the Team, so it is important to understand who is being contacted and what their current status is to the federal government.
Nonetheless, the Transition Team may be considered part of the government for other purposes, most notably under the Foreign Agents Registration Act (“FARA”). Therefore, if you are interacting with the Team, you should be clear about the ethics and transparency laws that may be at issue before engaging.
Federal gift rules also do not apply to individuals on the Transition Team by virtue of serving in that role. However, if such individuals are also current federal officials or employees, the gift rules do apply. Similarly, if a Transition Team member is a current state or local official or employee, they may be subject to their jurisdictions’ gift rules as well.
Presidential Inaugural Committees
Donations to a Presidential Inaugural Committee are subject to federal law and to other restrictions that affect the amount potential donors may give, whether the donation is publicly disclosed and whether it is labeled as "bundled." In addition, donations made by certain entities that retain federal lobbyists may be subject to further reporting.
The Presidential Inaugural Committee (“Inaugural Committee) is appointed by the President-elect to be in charge of the Presidential inaugural ceremony and the functions and activities connected with the ceremony. President-elect Biden has appointed PIC 2021, Inc. (“Biden Inaugural Committee”) to fill this role. The Inaugural Committee plans and finances all inaugural events except the swearing-in ceremony at the West front of the Capitol and the luncheon honoring the President and Vice-President. However, this year the in-person events are expected to be limited due to the ongoing COVID-19 pandemic. Accordingly, the Inaugural Committee accepts donations to cover the costs associated with all other inaugural events, including opening ceremonies, the parade, galas and balls, whatever form these activities may take.
Permissible Sources and Amounts of Donations
The Bipartisan Campaign Reform Act of 2002 (‘‘BCRA'') prohibits foreign nationals from making donations to the Inaugural Committee. FEC regulations further explain that “a foreign national shall not, directly or indirectly, make a donation to an inaugural committee.” See 11 C.F.R. § 110.20(j). Although the regulation does not expressly prohibit pass-through or so-called straw-person donations, the Department of Justice has prosecuted such donations in the past when used to conceal the identity of a foreign entity or national.
Beyond the foreign national restriction, Inaugural Committees may accept unlimited donations from individuals, corporations and other entities, such as limited liability companies and labor unions. However, some inaugural committees chose to impose further restrictions on the source and the amount of donations. The Biden Inaugural Committee has adopted the following self-imposed rules:
Self-Imposed Source Restrictions
Per its website, the Biden Inaugural Committee accepts donations from U.S. citizens, lawfully admitted permanent residents (i.e., green card holders) and American corporate entities and associations. It does not accept donations from lobbyists registered under the LDA, foreign agents under FARA or “fossil fuel companies” (i.e., companies whose primary business is the extraction, processing, distribution or sale of oil, gas or coal), executives or their PACs.
Self-Imposed Amount Limitations
As mentioned, federal law imposes no dollar limit on donations to Inaugural Committees. The Biden Inaugural Committee, however, has a self-imposed limit of $1 million for donations from corporate entities and $500,000 for donations from individuals. By comparison, President Trump’s Inaugural Committee had no limits, while President Obama’s Inaugural Committees limited donations to $50,000 per individual.
Donations Subject to Restrictions
Under federal law, a "donation" includes any payment, gift, loan, advance or anything of value given to the Inaugural Committee. See 11 CFR §§ 104.21(a)(2), 300.2(e). Neither President Trump’s 2017 Inaugural Committee nor the Obama Inaugural Committee departed from the federal definition of "donation" for purposes of any self-imposed restrictions, and the same appears true for the Biden Inaugural Committee.
For each donation of money or anything of value aggregating $200 or more, federal law requires the Inaugural Committee to publicly disclose the donor's name, mailing address, amount of each donation, date of receipt and the aggregate total of donations accepted from that donor. The Federal Election Commission must receive this information (FEC Form 13) no later than 11:59 p.m. Eastern Time on the 90th day following the date on which the Presidential inaugural ceremony is held.
In addition, some past Inaugural Committees have opted to make available their own publicly accessible database of donors, which includes the name, employer, city, state, zip code and amount of donation to the Inaugural Committee.
Finally, if a lobbyist or entity registered under the LDA contributes to an Inaugural Committee, any donations in excess of $200 must be reported on the relevant LD-203 form.
Public Disclosure of Bundled Donations
President Trump’s Inaugural Committee did not self-identify “bundlers,” although the Obama Inaugural Committee did and also self-imposed a cap of $300,000 for bundled donations. Based on the Biden campaign’s self-identification of bundlers, we anticipate some type of bundler disclosure. Those interested in doing so should closely monitor the situation closely, as we are.
As the post-election landscape begins to solidify, knowing the rules that may apply and developing a plan for such interactions in advance can help get your advocacy goals started on the right foot in 2021.