[co-author: Charlotte Alberts]
Welcome to the January 2022 edition of the Political Law Playbook. Of particular note in this month’s edition is the issuance of an Advance Notice of Proposed Rulemaking (“ANPRM”) by the Department of Justice (“DOJ”) requesting public comment and input into potential clarification and modernization of the implementing regulations for the Foreign Agents Registration Act (“FARA”).The issuance of the ANPRM indicates that the DOJ is considering whether to update and amend the regulatory framework associated with the dated statute, including provisions related to FARA’s attorney and commercial exemptions, as well as other changes to modernize how the regulations deal with matters of electronic disclosure and the use of social media in regulated conduct. The ANPRM contains nineteen specific questions for public comment, covering topics such as the definition of agency, the scope of relevant exemptions, labeling of informational materials, online filing, and agent contact information requirements. If the DOJ proceeds with the FARA regulatory revision, it will be the first time since 2007 that the statute’s administrative structure has been updated.
2021 CPA-Zicklin Index of Corporate Political Spending Released – According to the annual report released by the Center for Political Accountability and the Zicklin Center for Business Ethics Research at the University of Pennsylvania’s Wharton School, corporations are expanding their voluntary public disclosure of organizational political spending and advocacy activities in the wake of increased public and shareholder scrutiny of governance and social engagement matters. Overall, the average score for political disclosure and accountability rose to 54.1 percent from last year’s average of 50.1 percent. The report champions the importance of voluntary disclosure practices while acknowledging the prospect that Congress may soon eliminate the rider that has barred the U.S. Securities and Exchange Commission from considering a rule mandating disclosure of political spending by public companies.
President Biden Plans Push for Voting Rights in 2022 – President Biden announced last month that he will be prioritizing election reform legislation in early 2022, as his social spending priorities, for the time being, appear stalled in Congress. It is likely that any success for the President and Democratic legislators in this effort will require a change to the Senate filibuster rule requiring 60 votes. Sens. Manchin (D-WV) and Sinema (D-AZ) have voiced opposition to such a move as it relates to election reform matters.
Senate Republicans May Be Open to Electoral Count Act Reform – Senate Minority Leader Mitch McConnell (R-KY) recently signaled that he may open to a set of narrow election reform initiatives that differ from those being proposed by Senate Democrats. Both he and Sen. John Thune (R-SD), the second-highest ranking Republican in the Senate, have indicated at least tacit interest in reforming the Electoral Count Act – the 1877 law that lays out the procedures for certifying and casting Electoral College votes. The law has come under some scrutiny and calls for update in the wake of the certification of President Joe Biden’s 2020 victory.
State Redistricting Commissions Get Mixed Reviews – With control of Congress at stake in next year’s federal elections, political observers and stakeholders across the country have a keen eye cast on the newly-adopted House redistricting maps trickling out of state capitals across the country. While state legislatures still oversee the redistricting process in a majority of U.S. states, an increasing number of jurisdictions have established redistricting commissions of varying structure and independence with partial or full line-drawing authority. While redistricting reform advocates expected the creation of such commissions to lead to more competitive electoral districts and lower partisan tensions in the mapmaking process, the results appear to be quite mixed. Certain commissions have failed to reach an actionable consensus due to administrative disputes and partisan squabbling – leaving maps to be drawn, instead, by courts and special masters. Other commissions have completed new maps, but generated anger among political stakeholders in various parties and voting constituencies. Who would have ever thought that political line drawing was such an inherently political process?
A New Lawsuit Is Seeking A Much Deeper Investigation Of Russia’s ‘Coordination’ with the 2016 Trump Campaign – Two separate nonprofit groups – the Campaign for Accountability and Free Speech for People – recently filed suit against the Federal Election Commission (FEC), arguing that the Commission violated campaign finance laws by failing to take action on a complaint filed five years ago alleging Russian government coordination with the 2016 Trump campaign. While the lawsuit references the Mueller investigation, it argues that critical information about how Russian money was spent in 2016 is still unknown.
House Passes Bill to Expedite Financial Disclosures from Federal Judges – The U.S. House of Representatives passed the Courthouse Ethics and Transparency Act last month, with just four Republicans voting against the legislation. By adjusting the Ethics in Government Act of 1978, the bill would increase transparency in the judicial branch by requiring federal judges to report securities transactions that are worth over $1,000 within 45 days of their occurrence. In addition, the bill would instruct the Administrative Office of the U.S. Courts to create an online database where the financial disclosure forms of federal judges would be posted within 90 days of submission. The path forward for this piece of legislation will be interesting to monitor, as many jurists and legal scholars, including U.S. Supreme Court Chief Justice John Roberts, have asserted that judicial ethics reform should come from within the federal courts themselves and not from Congress.
Congressional Democrats Unveil Bill to Disclose Amicus Brief Funders – Congressional Democrats, including Sen. Sheldon Whitehouse (D-RI) and Rep. Hank Johnson (D-GA) introduced the AMICUS Act last month that, if passed, would lead to more transparency regarding the funding of amicus curiae (“friend of the court”) briefs filed in certain federal court cases. The bill seeks to block amicus filers from giving gifts or providing travel to U.S. Supreme Court justices or federal appellate judges, and would establish a public disclosure regime for organizations who fund amicus brief drafting and submission efforts.
Justice Department Solicits Public Comments on Possible Regulatory Modifications to Foreign Agents Registration Act – On December 13, 2021, the DOJ issued an ANPRM to solicit suggestions for any potential amendments to, or clarifications of, the current FARA implementing regulations. The proposed rulemaking comes after Congress has failed in passing myriad FARA statutory reform plans since the last regulatory amendment in 2007. Based upon the range of the questions posed in the ANPRM, the scope of the potential changes to the FARA regulations will certainly influence DOJ enforcement of the statute’s registration and reporting obligations. Stakeholders take heed.
Colorado Dark Money Nonprofit Ordered to Disclose its Donors – The Colorado Secretary of State’s office recently ordered a Section 501(c)(4) nonprofit entity to reveal its organizational donors and pay a $40,000 fine, saying it violated Colorado law by contributing millions of dollars to conservative causes and failing to register as a political issue committee. A complaint filed in August 2020 argued that the group, Unite for Colorado, was focused so heavily on political matters and spending that it should have registered as a political issue committee under CO law and publicly reported more details concerning its organizational financial activities.
New York City Becomes Largest City to Grant Vote to Noncitizens – The New York City Council passed a bill last month that would allow nearly a million noncitizens to vote in municipal elections, making New York the largest city in the country to approve such a measure. The bill does not apply to state or federal elections held in New York, but provides legal immigrants the ability to register with the New York City Board of Elections as early as December 9, 2022. Stay tuned for the inevitable legal and political battle over the Council’s decision throughout 2022.
State Ethics Panel Orders Former Gov. Cuomo to Repay $5m from Book Deal – The New York Joint Commission on Public Ethics (“JCOPE”) issued an order last month demanding former Gov. Andrew M. Cuomo repay the $5.1 million he was paid by a publisher to write the book, American Crisis: Leadership Lessons from the COVID-19 Pandemic. The order rescinds JCOPE’s previous approval for Cuomo to write the book, and alleges that Cuomo made materially false statements regarding the use of government personnel to produce the book in seeking approval to write the book. A recent New York State Assembly Judiciary Committee report noted that members of the former governor’s staff were deeply involved in helping to produce the book, including during normal work hours.
Retired Missouri Lawmaker Challenges State’s Revolving Door Restrictions – A former member of the Missouri General Assembly is suing the state’s ethics commission to overturn a voter-approved ban on former lawmakers becoming lobbyists, alleging it violates his right to free political speech. A 2018 amendment to the state’s constitution lengthened the "cooling off" time between leaving office and registering as a lobbyist from six months to two years for former state lawmakers. The ban also prohibits the former elected officials from soliciting lobbying clients during those two years, and applies equally to lawmakers’ staff. Former State Rep. Rocky Miller said in a lawsuit filed last month in the U.S. District Court for the Western District of Missouri that a company should be able to hire him to advocate before the state legislative and executive branches before his cooling off period is finished.
Delaware County Council Votes to Require Contractors to Reveal Political Contributions – As we noted in our Pay to Play Law Blog, the Delaware County, PA County Council voted last month to approve an ordinance requiring contractors to disclose certain political contributions. Starting April 2022, contractors wanting to conduct business in excess of $50,000 with Delaware County must disclose political contributions made within the past 24 months to Delaware County candidates, as well as certain Pennsylvania state candidates and political committees. Failure to comply with the newly-established reporting obligations could result in termination of existing municipal contracts and up to a three-year ban on doing business with the county.
San Francisco Supervisors Vote to Restrict Charitable Solicitation Activities by Public Officials – Almost two years after a public works scandal, the San Francisco Board of Supervisors unanimously voted last month to restrict how public officials can solicit donations for their favorite charitable causes through what are commonly known as “behested payment” transactions. This legislation would prohibit elected officials and city department heads from requesting donations to charities from “interested parties,” including lobbyists, and those seeking contracts and permits from the City.
Jan. 6 Committee to Reveal Findings Publicly In 2022 – In the coming months, members of the U.S. House of Representatives Select Committee investigating the January 6, 2021 attack on the Capitol will reportedly start to reveal their findings in a series of public hearings. As of the start of 2022, the Committee claims to have collected over 35,000 pages of records from a wide range of sources, conducted over 300 interviews, issued dozens of subpoenas, and dedicated thousands of hours of personnel time to assessing and evaluating the happenings of January 6, 2021.
This edition of Practice Pointers focuses on the upcoming LD-203 filings due for federal lobbying registrants and lobbyists. LD-203 reports are filed semiannually in January and July, and contain disclosures regarding certain political contributions and expenditures made by registrants and lobbyists in the previous six month period, and certifications concerning registrant and lobbyist knowledge of, and compliance with, House and Senate gift rules.
For the LD-203s due January 30 covering the period between July 1, 2021 and December 31, 2021, lobbyists and lobbying registrants must: list all political committees established or controlled by them; disclose certain federal campaign contributions of $200 or more made by both the filer and any connected committees; and report contributions to events that honor or are hosted by entities named for or controlled by Congressional or executive branch officials. Filers must also certify that they have read and are familiar with the House and Senate travel and gift rules, and have not violated those provisions. Failure to meet these reporting and certification obligations can result in large civil fines of up to $200,000 per violation, and even criminal liability – of up to five years – for knowing failure to comply. The Dentons Political Law Team regularly advises a host of federal lobbyists and lobbying registrants on navigating the compliance hurdles associated with the submission of semiannual LD-203s under the Lobbying Disclosure Act. If your organization or client has questions regarding its LD-203 reporting obligations or any other federal lobbying compliance needs, please reach out to us for assistance.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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