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 & Lobbying Compliance
The U.S. Court of Appeals for the Sixth Circuit will determine whether changes in the political landscape allow it to overrule Supreme Court precedent regarding limits on coordinated party spending in federal elections after arguments June 12, 2024. The plaintiffs—which include the National Republican Senatorial Committee, the National Republican Congressional Committee, Sen. J.D. Vance (R-Ohio) and former Rep. Steve Chabot (R-Ohio)—sued the Federal Election Commission (FEC) in 2022. The plaintiffs seek to invalidate portions of the Federal Election Campaign Act of 1971 (Act) that "limit a party committees' campaign expenditures made in coordination with political candidates who are associated with the political party" because these spending limits violate the First Amendment. The FEC argues that the Act's spending limits are foreclosed by existing Supreme Court precedent upholding the constitutionality of restrictions on coordinated expenditures. No timetable has been set for the court's decision. (Kevin Koeninger, Courthouse News Service)
A federal appeals court threw out the Department of Justice's (DOJ) foreign agent case against Steve Wynn, the former Wynn Resorts CEO and finance chair of the Republican National Committee, on Friday, June 14, 2024. The DOJ filed a civil suit against Wynn in May 2022, trying to compel him to register under the Foreign Agents Registration Act for briefly acting as an agent of the Chinese government. Wynn denied acting as a foreign agent for China, and a lower court dismissed the case in fall 2022. A three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit affirmed the lower court's decision, writing "even accepting the government's allegations as true, Wynn long ago ceased acting as a foreign agent, he has no present obligation to register." (Taylor Giorno, The Hill)
North Carolina: The Republican-controlled legislature approved a campaign finance proposal that changes how funds flow to state parties and the reporting requirements attached to that money. Democrats, however, are crying foul, saying the GOP rushed through surprise changes to state law that would allow donors to back gubernatorial candidate Mark Robinson (R) without having to attach their names to his candidacy directly. Under current state law, corporations and labor groups are banned from donating directly to political candidates. The bill would enable national political groups to give unlimited amounts to state parties and affiliated political committees and circumvent campaign finance reporting requirements. These national groups, called 527 organizations, collect donations from individuals, corporations and labor interests and route some of those funds to state political committees, who then give to preferred candidates. In addition to obscuring disclosure requirements, the bill would also make it harder for the State Board of Elections to provide oversight of contributions. Governor Cooper's (D) likely veto will tee up a potential override from the Republican-controlled legislature. (Liz Crampton, POLITICO)
Government Ethics & Transparency
The U.S. House of Representatives Committee on Ethics (Committee) found that Rep. Bill Huizenga (R-MI) violated House rules around campaign finance recordkeeping but elected to close an inquiry into the Republican, citing a need for better guidance for all lawmakers, according to a report released on June 5, 2024. The report states that poor recordkeeping by Huizenga's campaign did constitute a breach of the House's conduct code, however, the committee did not recommend any reprimand of the representative. Questionable campaign expenses that "fell within unclear areas" of federal regulations were ultimately found to have an "established campaign purpose," according to the report. (Justin Papp, Roll Call & Report)
Florida: A federal judge has issued an injunction blocking enforcement of a state law that requires extensive financial disclosure by Florida's mayors and city council members. U.S. District Court Judge Melissa Damian's ruling comes in a federal lawsuit filed by city and town officials, claiming the disclosure rule violates the First Amendment. For the past 50 years, municipal elected officials have been required each year to file a Form 1 financial disclosure, that lists the officials' employers, primary sources of income and major assets. Last year, the Florida Legislature enacted a new law, Senate Bill 774, requiring municipal elected officials to file a Form 6, a significantly more detailed form that state legislators and county elected official's file. Form 6 also requires disclosure of the amount of their net worth, the amount of their income, including from their primary jobs, the value of each of their assets and the amounts of each liability. In granting the injunction, the judge wrote that it was not apparent in the court filings why the more stringent requirement for local officials was in the state's interest. (Dave Berman, Florida Today)
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