Compliance Notes - Vol. 3, Issue 2
RECENT LOBBYING, ETHICS & CAMPAIGN FINANCE UPDATES
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.
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Campaign Finance
Various candidates for state and federal offices are offering nonfungible tokens (NFTs) as part of their campaign fundraising, including promising donors exclusivity. For example, a Senate candidate in Arizona launched an NFT, offering 99 tokens worth $5,800 each, a House candidate in California is offering 2,022 tokens and a gubernatorial candidate in Minnesota offered two batches of 25,000 tokens valued at $5 each. Further, a group of Democratic fundraisers teamed up to launch politically-themed NFTs to raise money for Texas Democrats. Federal regulatory agencies are grappling with the dangers posed by NFTs, including money laundering, tax evasion and other crimes enabled by the anonymity cryptocurrencies offer. To avoid violating campaign finance rules or getting trapped in money laundering schemes, candidates offering NFTs spell out campaign finance limitations restricting donations to $2,900 from U.S. citizens and use platforms that conduct anti-money laundering checks. (Gopal Ratnam, Roll Call)
Pay-to-Play
Delaware: The Delaware County Council approved an ordinance requiring contractors wanting to do business with the Delaware County government to disclose political contributions made to county officials. The ordinance takes effect in April and applies to any contractor anticipating to receive $50,000 or more from a county contract for goods, materials, professional services or property provided or leased to the county, among others. Failure to disclose contributions could result in the contract’s termination and a three-year ban from doing business with the county. (Kathleen E. Carey, The Delaware County Daily Times)
Government Ethics & Transparency
New Mexico: The State Ethics Commission is calling for stricter disclosure laws for New Mexico's citizen legislators, as proposed changes to state law would require the release of more information about business relationships and personal income sources. Separately, the commission recommends additional transparency requirements for lobbyists, including disclosing the bills they are working on and the provisions they are opposing or supporting. The recommended proposals, taken together, are designed to shed more light on legislators' potential conflicts and lobbyists' role in shaping legislation. (Dan McKay, Albuquerque Journal)
New York: Governor Kathy Hochul has called on the New York Legislature to replace the Joint Commission on Public Ethics (JCOPE) with a new ethics enforcement agency to prioritize transparency. Governor Hochul proposes replacing the current selection process for JCOPE board members, where legislative leaders and the governor tap future members, with a rotating five-member panel of law school deans selected from fifteen of New York’s state-accredited law schools. Further, Governor Hochul’s proposal seeks to end the special voting system that allows a minority of members to kill an investigation and to require the new ethics agency’s board to make decisions by majority vote. Finally, the Freedom of Information Law and the open meetings law would apply to the new ethics agency, which would give the public more access to meetings. (Tom Precious, The Buffalo News)
Ballot Measures
South Dakota: Constitutional Amendment D, an initiative to expand Medicaid, has qualified to appear on South Dakota’s ballot in November. The measure would amend the constitution to require the state to provide Medicaid benefits to adults age 18 to 65 whose income is 133% below the federal poverty level. Additionally, as a result of the Affordable Care Act’s 5% income disregard, if successful, this measure would effectively expand Medicaid to all adults with incomes at or below 138% of the federal poverty level. (Jackie Mitchell, The Center Square)
Washington: For the third year in a row, the Washington Legislature convenes without any ballot initiatives to review. The last successful signature drive to push an initiative to the legislature was in 2018. Even though the COVID-19 pandemic has had a chilling effect on Washington’s typically robust culture of direct democracy, common problems like a lack of deep-pocket funders doomed some initiatives in 2021. Meanwhile, 2018 was the last time a campaign to put an initiative directly on the ballot has qualified. (Paul Queary, Washington State Wire)