Compliance Notes - Vol. 3, Issue 13

Nossaman eAlert

We read the news, cut through the noise and provide you the notes.

Welcome to Compliance Notes from Nossaman’s Government Relations & Regulation Group – a periodic digest of the headlines, statutory and regulatory changes and court cases involving campaign finance, lobbying compliance, election law and government ethics issues at the federal, state and local level.

Our attorneys, policy advisors and compliance consultants are available to discuss any questions or how specific issues may impact your business.

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Campaign Finance & Lobbying Compliance

The Federal Elections Committee (FEC) issued an advisory opinion ruling that a candidate may use personal assets to reward contributors for their donations because candidates can make unlimited expenditures using personal funds, including making in-kind contributions from their own assets. Although the Federal Election Campaign Act prohibits individuals from making contributions exceeding $2,900 to any federal candidate or committee in an election, FEC regulations allow candidates for federal office to use their personal funds to make unlimited expenditures. Therefore, a candidate running for U.S. Senate can distribute books they authored to contributors as rewards for their donations as an in-kind contribution of assets. (FEC RECORD: AO 2022-01)

California: The San Jose City Council passed a draft proposal prohibiting foreign-influenced corporations from making political contributions to any city elections in San Jose. The draft legislation would proscribe corporations from making political expenditures in city elections when a single foreign national owns one percent or more of the corporation or when multiple foreign nationals own five percent or more of the company. In San Jose, this ban would effectively bar contributions from Alphabet (Google), Apple and Meta (Facebook). Councilmembers argue that the draft proposal maintains election integrity and holds lawmakers accountable to taxpayers, not corporations. If enacted, San Jose would join cities like Seattle and St. Petersburg, Florida, that have passed similar ordinances over the past few years. (Evan Symon, California Globe)

Illinois: Chicago City Council members are calling for new ethics reforms to tighten restrictions on elected officials and lobbyists. Alderwoman Silvana Tabares is sponsoring an ordinance to ban elected city officials' family members from receiving compensation for lobbying any city leader or government agency. The ordinance reaches beyond modifying lobbying disclosure regimes by outright banning elected officials' spouses and domestic partners from lobbying. (Shia Kapos, POLITICO)

Government Ethics & Transparency

New Jersey: Legislation proceeding through New Jersey's General Assembly would prohibit public officials from accepting non-fungible tokens (NFTs) or virtual currency as gifts related to their roles. The bill would enhance long-standing rules preventing bribery and corruption. Although the Science, Innovation Technology Committee approved the legislation, it has not yet been scheduled for a vote. The Committee also approved a separate bill establishing a framework for New Jersey's crypto industry, which aims to increase transparency and consumer protections for New Jersey residents engaging with cryptocurrency. To engage in a digital asset business activity with or on behalf of a resident, business operators would have to get a license from the New Jersey Department of Banking and Insurance. (Catarina Moura, The Block)

Elections & Voting

Georgia: A group of registered Georgia voters, represented by Free Speech for People, filed a legal challenge arguing that Rep. Marjorie Taylor Green (R-Ga.) is constitutionally disqualified from holding federal office for her involvement in the January 6 Capitol riot. The group of voters argue that Rep. Green violated the 14th Amendment, which states no person who has taken an oath as a member of Congress shall engage in insurrection by repeatedly advocating for political violence, including encouraging insurrectionists. The group of voters filed the legal challenge with Georgia Secretary of State Brad Raffensperger, who is required to request a hearing before an administrative law judge to evaluate whether Rep. Green is qualified for office under Georgia law. (Erin Doherty, Axios) (Georgia Complaint 2022-03-24)

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