Compliance Notes - Vol. 3, Issue 47

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.

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Campaign Finance & Lobbying Compliance

A former senior aide to Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. Rand Paul (R-Ky.) was convicted for his role in funneling illegal campaign contributions from a Russian foreign national to former President Trump's 2016 campaign. A jury found Jessie Benton guilty of conspiring to solicit and cause an illegal contribution by a foreign national, effecting a conduit contribution and causing false records to be filed with the Federal Election Commission (FEC). Federal prosecutors say Benton arranged for the Russian national to attend Trump's political fundraising event and take a photo with the former president; Benton purchased a $25,000 ticket to the event and gave it to the Russian national, who wired $100,000 to Benton's political consulting firm. Benton then falsely identified himself as the donor. Neither Trump nor his campaign was aware of the Russian donor's nationality. (Shawna Chen, Axios)

Following the collapse of the digital currency exchange platform FTX, lawmakers are returning campaign contributions from FTX's top executives. Rep. Chuy García's (D-Ill.) campaign donated $2,900 to a local Chicago charity, matching the amount that FTX's former CEO contributed to his campaign. Rep. Kevin Hern's (R-Okla.) campaign gave $5,000 to a foodbank in Oklahoma, matching the amount he received from another FTX executive. (Sam Sutton, Politico

California: Earlier this year, California expanded its "pay-to-play" restrictions when SB 1439 was signed into law but left unanswered the question of whether the changes apply to contributions received in 2022, even though the bill's effective date is January 1, 2023. Last week, the California Fair Political Practices Commission (FPPC) voted unanimously to direct staff to draft an opinion that SB 1439 does not apply retroactively to contributions received in 2022. For more insight about SB 1439's expanded pay-to-play rules, safe harbor provision and what to expect going forward, see our recent eAlert, "California Expands Pay to Play to Cover Local Elected Officials." (Nossaman eAlert)

California: The California FPPC approved adjustments to contribution and gift limits for the 2023-2024 cycle. Under the new limits, an individual, business entity or PAC may contribute, per election, $36,400 to gubernatorial candidates and $5,500 to candidates for state legislature and local office if there is no locally enacted limit. The new limit for contributions to PACs that contribute to candidates is $9,100. The gift limit was increased from $520 to $590 per calendar year. The new limits take effect on January 1, 2023. (FPPC Hearing Summary, November 17, 2022) (FPPC Staff Memo, November 7, 2022)

California: The FPPC approved a package of lobbying regulations addressing the nature and scope of prohibitions on lobbyists and lobbying firms. The adopted regulations clarify when a lobbyist "arranges" for the making of a gift, a lobbyist or lobbying firm's obligations to comply with the ban on placing an official under personal obligation and the ban on contingency fees. (FPPC Hearing Summary, November 17, 2022) (FPPC Notice and Agenda, Meeting on November 17, 2022)

Government Ethics & Transparency

The Committee on Ethics of the United States House of Representatives is investigating whether Rep. Carolyn Maloney (D-N.Y.) improperly solicited invitations to the Met Gala. According to a report from the Office of Congressional Ethics (OCE), after Maloney was left off the 2016 Met Gala's invitation list, she called an unidentified former president of the Metropolitan Museum of Art requesting an invitation, according to the OCE report. The report also cites evidence suggesting that Maloney may have requested an invite to the event in 2020, which was ultimately canceled due to COVID-19. Efforts to gain free attendance may implicate federal law and House rules prohibiting the solicitation of gifts. Maloney's attorneys denied that she explicitly requested an invitation, explaining that she only expressed her displeasure and confusion at not being invited. (Andrew Solender, Axios)

Washington: The Washington Public Disclosure Commission (PDC) ruled that the Spokane County Sheriff violated state laws prohibiting the use of public office for electioneering, and of public funds for indirect lobbying, when he produced a YouTube video attacking Democratic lawmakers for their stance on crime. The sheriff argued that he produced the video for a public information campaign about increased violence in the community. He said he was not advocating for the election of any candidate and that the law allows communications that are "part of the normal and regular conduct of the office or agency." The PDC, however, said the video's content was neither legal nor regular and imposed a $300 fine. (Kip Hill, The Spokesman-Review)

Elections & Voting

Georgia: A judge for the Fulton County Superior Court ruled that Georgia law allows counties to offer voting on Saturday, November 26, the only Saturday before the Senate runoff election between Democratic Senator Raphael Warnock and Republican candidate Herschel Walker. The Georgia special election will be held on Tuesday, December 6. The Secretary of State previously issued guidance explaining state law prohibits holding early voting on November 26 since there is a state holiday on the Thursday or Friday before. Warnock's campaign, along with the Democratic Party of Georgia and the Democratic Senatorial Campaign Committee, filed a lawsuit arguing that the state law prohibiting early voting after a holiday did not apply to runoff elections. The court's order asserts that state law does not specifically prohibit counties from conducting voting on that Saturday for a runoff election. Additionally, the order prohibits the state from interfering with any efforts to hold early voting or prevent counting any votes cast that Saturday. After the state appealed the ruling arguing that the runoff election is a continuation of the general election, not a separate type of election, the appeals court left in place the lower court’s ruling. (Kate Brumback, AP News) and (Tierney Sneed, Eva McKend and Brian Rokus, CNN)

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