Posts Tagged ‘Campaign Finance’

Study finds companies are independently limiting political spending

Friday, November 4th, 2011 by Vbhotla

The L.A. Times reported last week on a study that suggests that in this post-Citizens United world, companies are regulating their own spending in political campaigns.  The study, conducted by the Center for Political Accountability and the University of Pennsylvania’s Zicklin Center for Business Ethics Research, evaluated companies based on board oversight of political giving, disclosure practices and company restrictions on political spending.

The study found that “voluntary disclosure of political spending is becoming a mainstream corporate practice, and [a] growing number of companies are putting restrictions on the political use of their money.”  According to its research, 57 of the S&P 100 index companies voluntarily disclose their political spending and have adopted board oversight over spending.  Just under half, 43, of the companies voluntarily disclose some of their independent spending through associations and nonprofits.

One in six do not allow funds to be spent directly on candidates or political committees.  It also found two companies, Colgate-Palmolive and  IBM, prohibit spending entirely.  Nearly one-third (30) of companies “place some Levitra prohibitions on using corporate funds for political activity.”

“Our findings are striking. They offer hope for increasing corporate political transparency and accountability at a time when everyone expects massive hidden spending to influence elections,” CPA President Bruce Freed said in a statement.

Twenty-four of the companies have explicit statements on their websites letting Super PAC committees know that they will not spend on independent expenditures.  The study ranked the top-ten companies based on political transparency:

  1. Colgate-Palmolive Co.
  2. Exelon Corp.
  3. International Business Machines
  4. Merck & Co. Inc.
  5. Johnson & Johnson
  6. Pfizer Inc.
  7. United Parcel Service Inc.
  8. Dell Inc.
  9. Wells Fargo & Co.
  10. EMC Corp.

In 2003, the Center for Political Accountability started a campaign to urge corporations to voluntarily disclose political spending and exercise greater oversight in this area.  “Few, if any, companies disclosed their political spending then,” the report says, going on to note that the results of this study “[reflect] significant progress. [They] also [reflect] troubling gaps that leave many shareholders, and citizens, in the dark.”

Freshman Senators Start Tea Party-Leaning Leadership PACs

Monday, August 8th, 2011 by Vbhotla

Last week, Sen. Marco Rubio (R-Fla.) filed paperwork to create Reclaim America PAC, but the PAC does not yet have a website, and representatives have declined to comment to the press.  The PAC will benefit like-minded candidates as the 2012 election season gets underway, and is projected to position Rubio for the national stage.  Rubio is the second freshman Tea Party senator to establish a leadership PAC this year.  Sen. Mike Lee (R-Utah) founded the Constitutional Conservatives Fund,  “dedicated to the cause of finding, funding, and supporting conservative candidates who are committed to the cause of restoring constitutionally limited government,” according to its website.

Sens electronic cigarette sales. Lee and Rubio join Sens. Rand Paul (R- Ky.) and Jim DeMint (R-S.C.) in creating PACs to help further the Tea Party agenda.

According to the FEC definition, a Leadership PAC is “a political committee that is directly or indirectly established, financed, maintained or controlled by a candidate or an individual holding federal office, but is not an authorized committee of the candidate or officeholder and is not affiliated with an authorized committee of a candidate or officeholder (so is not campaigning on behalf of that person’s election).”  Individuals, including lobbyists, can still contribute up to $5,000 per year to federal PACs.



Campaign Finance Compliance

Thursday, April 21st, 2011 by Vbhotla

Sarah Palin this week launched Sarah Pac‘s new website, an indication that she may be seriously considering a run for the GOP candidacy for president in 2012.  While the former vice presidential candidate does have quite a following, she does not have one key thing she needs to begin organizing for a 2012 election: contact info for these supporters.  The page also serves as a landing ground for would-be donors to contribute to Sarah Palin’s campaign efforts, stating that Sarah PAC can accept up to $5,000 annually from individuals.  According to FEC guidance, this is still considered a solicitation, despite the fact that the PAC is not directly asking for contributions.

The bundling rules for lobbyist contributions to PACs (including leadership PACs, of which Sarah PAC is one) state that the PAC must reveal the name of lobbyists who bundle two or more contributions totaling more than $16,000 during a reporting period.  While it does not impose any specific obligation on the lobbyist, it is important to note that the PACs may expect lobbyists who bundle contributions to cooperate with their efforts to report contributions.

Forwarded contributions are defined as any contribution delivered physically or electronically to the candidate by the lobbyist (or non-lobbyist employee of a registered lobbying entity).  Credited contributions are less concrete, and presuppose that committees know who is raising funds for the committee.  Contributions must be credited and received by the campaign committee to be subject to disclosure.  Written records, designated titles, event invitations, and mementos can all determine “credit,” and they do not have to be documented to be applied.

Finance Reformers Seek Regulatory Help

Monday, March 28th, 2011 by Vbhotla

Absent intervention into campaign finance reform by the judicial branch, those hoping to put limits on what has been referred to as a”floodgate” of campaign funding made possible by last year’s Citizens United ruling have sought help from the Federal Communications Commission.

Media Access Project senior vice president and policy director Andrew Schwartzman argued last week that the FCC has long had the power to require political groups to disclose donors when running political ads.  In a petition filed March 22, he calls on the agency “to amend and strengthen its rules to require on-air identification of persons paying” ‘25% or more of the cost of an ad, according to the organization’s official press release.

Schwartzman said, “The FCC has repeatedly said that members of the public are entitled to know by whom they are being persuaded, and it has stressed that this is especially important in the case of political messages. This petition simply seeks to update the FCC’s rules to fulfill its Congressional mandate.”

The petition points out what it believes to be “a fundamental policy…that ‘listeners are entitled to know by whom they are being persuaded.”

This effort by the Media Access Project is the latest attempt by campaign finance reformers seeking to narrow the reach of theCitizens United decision.  Several attempts have been made to urge the Supreme Court to re-define the judgement’s implications, but the Court has declined to hear these appeals.

Financing Campaign Events: Corporations v. PACs v. Individuals

Thursday, March 3rd, 2011 by Vbhotla

So you’re the owner of a corporation that controls a PAC and you want to host a campaign event for one of the many potential 2012 presidential candidates — let’s just say Tim Pawlenty for giggles.  Should you pay for the event with your own checkbook? Expense it to the company? Maybe use PAC funds?  Here’s a quick breakdown of the rules governing campaign event financing:


If the audience is limited to the “restricted class” then the corporation may pay for the event and:

•The corporation may, during the event, endorse or otherwise expressly advocate for the candidate’s election.

•The corporation may solicit contributions on behalf of the candidate; and

•The candidate may accept contributions during the event; but

•The corporation may not facilitate the contributions by collecting them or providing envelopes or stamps.

If the audience includes other employees, then:

•The corporation must allow opposing candidates for the same office to address a similar audience in a like manner;

•The corporation must refrain from endorsing the candidate or soliciting contributions to the candidate’s campaign; and

•Though the candidate may solicit contributions, the candidate is not permitted to accept contributions during the event.


A PAC may pay for campaign events if:

•The PAC pays for the use of any corporate resources, including employee time (in most cases, payment must be in advance);

Use of Meeting Rooms – A corporation that customarily makes its meeting rooms available to clubs, civic or community organizations, or other groups at a discount or for free, may also make those rooms available to a campaign on VigRX the same terms.

•The PAC notifies the campaign of all payments made on behalf of the campaign and reports them as in-kind contributions to the campaign; and

•The payments do not exceed the PAC’s $5,000 candidate contribution limit.


An individual may pay for campaign events if:

•The individual pays for the use of any corporate resources, including employee time (in most cases, payment must be in advance);

Volunteer Safe Harbor – An individual may use corporate facilities for personal volunteer campaign activity without paying for them provided that the individual’s use does not exceed one hour per week or four hours per month and does not result in any increase to the operating costs or overhead of the corporation.

Use of Meeting Rooms – As previously discussed, a corporation that customarily makes its meeting rooms available to clubs, civic or community organizations, or other groups at a discount or for free, may also make those rooms available to a campaign on the same terms.

•The individual notifies the campaign of all payments made on behalf of the campaign; and •All payments by the individual do not exceed the individual’s $2,500 candidate contribution limit.

Residential Fundraising – If the event is held at an individual’s personal residence, then the individual may pay up to an additional $1,000 for food, drink, and invitations without having to report the costs to the campaign or applying them to the $2,500 contribution limit.

For more information on PACs and campaign finance, join the us for the intensive “PACs & Campaign Finance Lobbying Certificate Program” Monday.

2010 Election Cycle “Most Negative”

Monday, January 17th, 2011 by Vbhotla

The Wesleyan Media Project released two studies last week detailing its findings on campaign ads and spending.   The group found that 2.8 million ads ran in the midterm campaign cycle, amassing over $1.4 billion in spending between January and November 2010.  It also deemed the most recent campaign cycle the “most negative,” noting that 87.2% of ads run by independent expenditure groups, made more powerful by the Citizens United ruling, were negative, versus just over 37% of ads run by candidates’ campaign committees.

In the House, where significant Republican gains were projected, the group found that the number of ads by interest groups increased 168%, compared to just a 44% increase in Senate races.  In the first study, the authors concluded “with the increase in competitive races in 2010, the volume of advertising rose too, as did its negativity.”  They also mentioned that “Republicans [took] up some unusual themes, like health care and ‘change.’”

The second study, which analyzed the impact of the Citizens United ruling, found that “while interest groups were aggressive players in the air war, their impact may not have been as negative or as large as initially predicted.”

The group admonishes that “knowing what campaign themes brought [the 112th Congress] to power is an important prerequisite of holding government accountable.”

How not to land yourself in jail

Tuesday, January 11th, 2011 by Vbhotla

You have probably heard by now that Paul Magliocchetti, the founder of the now-defunct PMA Group, was sentenced to 27 months behind bars for his role in organizing a campaign finance scheme.  In addition to the prison sentence, which will be served at a North Carolina federal prison hospital, the former House Appropriations Committee staffer was fined $75,000.

The sitting judge, the Honorable T.S. Ellis, issued the sentence as a warning to other lobbyists, and simultaneously expressed his displeasure with prosecutors who seek only fines in similar cases.  He did not grant the 57 month prison term and $629,000 fine the prosecutors sought initially, and told Magliocchetti that his good works were not obliterated, he was not responsible for a PMA Group-favorite donor’s suicide in light of the investigations, and said he should make amends with his son, who plead guilty to charges related to the case.

So what can be drawn from the Magliocchetti case?  First, people are seeking to make examples of lobbyists, so tread lightly.  Make sure you are in compliance with HLOGA and all of its developments, and be sure to carefully review your LD-203 filings for errors, remembering that your signature is “under penalty of perjury.”

Make sure that you disclose any campaign donations, be they to PACs, independent expenditure groups, political parties, or candidates and their election committees, on the form.

Bundle with care.  You will need to be aware of the limits and follow them closely.  Citizens United opened the door for unlimited giving, but did not take away the reporting requirements.

A good rule of thumb: if you can’t report it, don’t give it.  Recent cases have shown that prosecutors are looking and will find any missteps.  Repercussions may not be immediate, but they are coming.  US News & World Report found that only 20% of companies properly disclose their political donations, and only 14% actually have indirect disclosure policies.

If you find yourself overwhelmed by the LD-203’s reporting requirements, it is not too late to join today’s LD-203 bootcamp, which will be held at 2p.

Campaign Finance in 2010

Thursday, November 11th, 2010 by Vbhotla

This election saw record campaign spending from outside groups.  What changed to enable such astonishing third-party contributions?

  • Citizens United – for the first time in over 60 years, unions and corporations were permitted to spend treasury funds on ads calling for the election or defeat of certain candidates.  Prior to the ruling, these organizations were only permitted to advertise around particular issues, not in favor or opposition to particular candidates.  Corporate executives can donate business funds to nonprofits to advertise on behalf of the corporation anonymously — without anyone ever knowing where the money originated — providing incentive for CEOs reluctant to have a company openly endorse candidates in the past.
  • New FEC interpretation – The FEC has not required as much disclosure about advertising as it has in previous years, releasing a rule revision requiring only funds specifically donated for advertisements be disclosed.  This made it possible for contributors to avoid disclosure by simply not specifying where their money should be spent.   Half of the commissioners narrowed the margin for disclosure requirements even more, allowing funds to be designated for advertising and still avoid disclosure, as long as the contributors didn’t specify for which ad the money would be spent.  This drastically decreases the donation disclosure.
  • Super-PACs and the Speechnow aftermath – Citizens United opened the door for unlimited spending, which may have been the Pandora’s Box that led to the verdict in v. FEC. Thanks to the D.C. Circuit Court of Appeals (and the U.S. Supreme Court who later refused to hear the case to overturn the verdict), groups can now identify as “independent expenditure committees,” allowing unlimited contributions from unlimited sources, though they must register as PACs.

To recap: thanks to two anti-regulatory court rulings, now groups can receive unlimited contributions fro

m unlimited sources, then spend in unlimited amounts with fewer restrictions, as long as they continue to register with the FEC.  The changing of the guard in the Capitol when the newly-elected Congressmen are seated should afford more changes, and less regulation, thanks to small-government favoring Republicans. Stay tuned!

Weekly News Round-up

Friday, October 29th, 2010 by Vbhotla

Citizens for Responsibility and Ethics in Washington is seeking information regarding why Jack Abramoff was prevented from talking to the media about his role in what the organization’s executive director, Melanie Sloan calls “one of the largest congressional corruption scandals in history.”  The full complaint filed in a suit against the Department of Justice can be found here.

Following up with a story posted earlier this week, “Campaign Finance Reformers see a tough road ahead,” the FEC has again come under fire for its lax regulation heading into the mid-term elections.  Huffington Post reported, “according to campaign finance experts, it’s unlikely” that the FEC will punish campaign finance law violators any time soon. The article goes on to refer to the FEC as ” a toothless tiger made up of six members that usually deadlocks on the important decisions.”

Lobbyists and organizations may be given a "get out of jail free" card by the FEC and the Obama administration, at least for a little while.

This snowballs into another issue: President Obama’s demonstrated lack of commitment to advance his campaign reform platform.  So far, despite having the opportunity (and perhaps responsibility, since the terms have ended) to replace three commissioners whose aversions to the regulatory laws reportedly prevent them from voting in favor of committee action against potential violators, the FEC’s make-up remains unchanged.

Donald McGhan, who remains a commissioner pending appointment of a successor, once said “[The FEC is] ‘not like other agencies because you have the charge of the fox guarding the hen-house. You gonna appoint your guys to make sure you are taken care of. The original intent was for it to be a glorified Congressional committee. That’s the way I see it,'” according to a column written by Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington.

The president is reportedly waiting on members of the Senate to recommend new FEC commissioners for him to appoint before replacing any members.

The Veterans’ Alliance for Security and Democracy (VetPAC) is one of several organizations griping about the Chamber of Commerce election spendings.  The group filed suit against the Chamber Oct. 18, alleging its receipt of foreign funds may in some way damage the purity of its campaign contributions.  VetPAC is surely banking on FEC regulation (no pun intended).

Campaign finance reformers see a tough road ahead

Monday, October 25th, 2010 by Vbhotla

The Federal Election Commission does not intend to publish a rulemaking on the Citizens United decision until after the November mid-terms, despite having had almost ten months to do so. Democrats have urged the FEC to utilize their rulemaking power to blunt what they see as overwhelming corporate money in federal elections.

Sen. Al Franken (D-Minn.) led the charge of 15 senators requesting greater regulation of foreign campaign contributions, penning a letter to the FEC saying “while Congress will need to act, the Commission must immediately do its part to protect our elections from foreign influence,” and calling for strengthened policies and less ambiguous interpretations of the ruling.

After the failure of this summer’s DISCLOSE Act in the Senate, campaign finance reformers are not seeing action on the controversial judicial decision in the immediate future. Craig Holman, Public Citizen’s campaign finance lobbyist, told Politico, “This is a low point for the campaign finance reform movement — I’ve never seen it lower.”

Indeed, the 2002 Bipartisan Campaign Reform Act has suffered tremendous blows at the hands of the Supreme Court and FEC regulation. The agency has said it will alter its enforcement to be in compliance with the ruling, but has failed to implement any actual policies to do so thus far. Lobbyists who manage PACs or contribute to federal campaigns should be aware of the massive amount of maneuvering going on behind the scenes with campaign finance reform and potential implementation.

Campaign Finance in the News

Thursday, September 2nd, 2010 by Vbhotla

The Federal Election Commission published two new final rules on August 27, and also issued two advisory opinions.

First is a final rule pertaining to coordination of political communications by outside groups with campaigns. The rule now:

add[s] a new standard to the content prong of the coordination rules to cover public communications that are the functional equivalent of express advocacy. The final rules do not alter the conduct prong of the coordination rules, but provide further justification for retaining the 120-day time period in the common vendor and former employee conduct standards. The final rules adopt a new safe harbor for certain commercial and business communications.

Second is a change to several federal election activity definitions:

The final rules revise the definitions of “voter registration activity” and “get-out-the-vote activity” (GOTV) to cover activities that urge, encourage or assist potential voters to register to vote, regardless of whether the message is delivered individually or to a group of people via mass communication. Brief, incidental exhortations to register to vote are exempt from the new definitions. The final rules clarify that certain voter identification and GOTV activities conducted solely in connection with a non-Federal election are not subject to the Commission’s Federal election activity regulations and provide that certain de minimis activities are not subject to the Federal election activity funding restrictions.

The rules do not take effect until December 2010.

View the FEC’s press release here: FEC Adopts Final Rules on Coordinated Communications and Federal Election Activity, Approves Two Advisory Opinions. (Link included on page to final rules and two published advisory opinions).

Washington Post reports on reactions by campaign finance reformers, “FEC Answers a Nagging Question – Sort Of”.

The FEC’s newsletter, the RECORD, is now online as well.

Failure to DISCLOSE

Monday, August 9th, 2010 by Vbhotla

The Democrats’ signature campaign finance bill failed in the Senate on a cloture vote on July 27. After a contentious road to final passage in the House on July 24, the act needed a supermajority of 60 affirmative votes to invoke cloture, leading to passage, but was only able to gain 57 votes.

The vote broke down on party lines, with no Republicans crossing the aisle, Sen. Joe Lieberman (I-CT) absent, and Senate Majority Leader Harry Reid (D-NV), voting no in order to preserve the majority’s right of cloture. The Act provoked strong reactions – supporters hyped the bill’s ability to “overturn” the Supreme Court’s Citizens United campaign finance decision, while opponents decried the legislation’s stifling of First Amendment political speech rights.

To pass the contentious legislation in the House earlier this summer, Democrats created an exemption that allowed a few large advocacy nonprofits to bypass the bill’s disclosure requirements. In order to qualify, the groups had to have at least 500,000 members, among other things; qualifying groups included the National Rifle Association (for which the “carve out” was patched together), AARP and Sierra Club.

Sierra spokesman David Willett said that despite falling under the exemption, the organization is against the bill. “We opposed the idea of a two-tier system. The irony is, the bigger groups like NRA and Sierra Club have the resources to … handle the additional disclosure requirements” found in the bill, he said. “We just feel the rule should apply to everybody, so we remained opposed. [The exemption] is not in line with the spirit and goals of the bill.”

When the bill was first introduced, the NRA stated its opposition and announced its intention fight vigorously for its First Amendment rights. Shortly after the organization’s stance on the bill became known, House Democrats crafted the initial exemption. When the exemption became public, the outcry caused Democrats to revise the original language to include other qualifiers, widening slightly the applicable-organization pool.

Senate Majority Leader Harry Reid (D-NM) vowed to continue the push on the DISCLOSE Act; however, with lawmakers leaving DC for August recess, new action is delayed until at least September.

Weekly Lobbying News Round-Up

Friday, July 23rd, 2010 by Vbhotla

DISCLOSE: The Sequel. Sen. Chuck Schumer (D-N.Y.) has introduced a new version of the DISCLOSE Act in the Senate that reportedly tones down some of the more objectionable portions to make it more acceptable to the waffling moderates. Politico has the story, here. Sen. Harry Reid (D-NV) pegged next Tuesday for a vote.

Rangel’s woes get a little bit deeper. Rep. Charlie Rangel (D-N.Y.) has been plagued by continuous stories regarding potential ethics violations for the past two years. Thursday, the House Committee on Standards of Official Conduct (Ethics Committee) voted to instigate a panel to examine the issues further.  Eric Brown does a nice round-up of preliminary stories from various sources. The Ethics Committee’s public report on the matter is here.

In Campaign Finance news, the FEC approved several soft money expenditures. Commonsense Ten and Club for Growth were both approved for unlimited “soft money” expenditures in 2010. Roll Call (subscription) has more on the issue.

Salazar disapproves of the Revolving Door. The Washington Post had reported that oil and gas lobbyists were overwhelmingly swinging through the House/Senate/Executive branch revolving door. In a meeting with lawmakers tasked with oversight, Salazar expressed his disapproval of the practice of special interest groups.

Quote of the Week:

“There’s chatter out there that they’re saying there is not going to be disclosure … Anybody that comes away from here saying that [FEC allowing soft money expenditures] is going to undercut disclosure is just not reading what is going on.” – Republican FEC Commissioner Donald McGahn, Roll Call, 7/23/2010

If you’re not attending the Disclose Act mark-up…

Thursday, May 20th, 2010 by Vbhotla

You can watch it live at the House Committee on Administration’s website.

The mark-up will also be archived, and you can watch the hearings the Committee has held on the issue, at the same site.

PACs and Campaign Finance Training Event Monday

Thursday, May 20th, 2010 by Vbhotla and the American League of Lobbyists are hosting our second Lobbying Certificate Program session this year on PACs & Campaign Finance this coming Monday, May 24, from 8:45am-1:15pm.

Our sessions include a detailed presentation on rules, reporting, and thinking through an ethics situation in regard to a PAC; legal implications of LD-203 filings and other campaign finance laws; a look at the different types of PACs and Q&A with PAC experts.

In attendance to talk about registering, reporting, fundraising, staying on the right side of the FEC, and all things PAC, we’ll have:

  • Officials from the FEC
  • Caleb Burns, Wiley Rein LLP
  • Gregg Knopp, American Council of Engineering Companies
  • Wade Williams, PAC Outsourcing LLC
  • Latasha Kindrick, PAC Outsourcing LLC
  • Gordon Reel, Enterprise Holdings

Join us for a great session! Register here. More information on the Lobbying Certificate Program is here at the American League of Lobbyists’ site.