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Political Law Playbook – August 2022 | dentons

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Welcome to a second abridged summer edition of the Political Law Playbook. Of particular note in this edition is recent activity in the US Senate regarding a proposed measure to reform the Electoral Count Act. As reported in one of our earlier editions from this year, there has been increasing momentum forming around bipartisan efforts to reform the existing statute that governs the process for casting and counting Electoral College votes. Those legislative efforts are gaining steam, and the current proposal being considered would set forth a process to identify a single slate of electors, as well as address the threshold needed to challenge a state’s slate of electors. While the current bipartisan group of Senators supporting the reform legislation includes nine Republicans, the measure would likely need to attract one more Republican to break a filibuster and pass the Senate. In this edition, we also highlight a number of other election-related news items, including the recent decision in California to permit campaign contributions using cryptocurrency, as well as the Wisconsin Supreme Court’s ruling that absentee ballot drop boxes are impermissible within the state.

Federal Elections & Campaign Finance

Bipartisan Senate Group Announces Deal on Reforming the Electoral Count Act Last month, a bipartisan group of senators announced agreement on a proposal to reform the Electoral Count Act of 1887. The group of senators, led by Sens. Joe Manchin (D-WV) and Susan Collins (R-ME), confirmed that they currently have 16 co-sponsors for the proposed legislation, including nine Republicans. Any effort to reform the law would require 60 votes to break a filibuster and pass the Senate. The new proposal includes statutory language that would increase the threshold for challenging a state’s set of electors, replacing the current standard that grants any single Member of Congress the authority to question a state’s roster of electors to a new standard that requires 20% of the members of each legislative chamber to raise such a challenge. The proposal would also enact a few measures aimed at ensuring that Congress can identify a single, conclusive slate of electors from each state, and would also specify that the constitutional role of the Vice President – as the presiding officer of the joint meeting of Congress to count the Electoral College votes – is solely ministerial. The bipartisan supporters of the legislative proposal also announced a measure aimed at increasing criminal penalties for individuals who threaten or intimidate election officials, poll watchers, voters or candidates, or who steal or alter election records or tamper with voting systems.

Candidates Say High Inflation Will Drive Higher Contribution Limits in 2024 High inflation can affect every aspect of political campaigning, from travel and event costs to staff pay – ultimately influencing the way in which candidate committees interact with voters and the decisions they make on fundraising activities and events. As the federal contribution limits set by the Federal Election Commission (FEC) are indexed to the rate of inflation, it is likely that the current limit of $2,900 per person per election will increase for the 2024 cycle, perhaps to above $3,000. The new limits will be set in early 2023.

Foreign Agents Registration Act (FARA)

Russian National Charged With US Political Influence Operation Federal authorities recently charged a Russian citizen, Aleksandr Viktorovich Ionov, with conspiring to defraud citizens of the US by encouraging them to act as legal agents of the Russian government. The federal indictment of Mr. Ionov alleges that he worked for nearly 8 years to fund and direct advocacy groups based in Florida, Georgia and California to sow political discord and push pro-Russia propaganda within the US. Media reports claim that federal officials believe Ionov is the founder and president of the Anti-Globalization Movement of Russia, which is an advocacy and influence operation purportedly tied to the Russian Federal Security Service and funded by the Russian government. FBI and Department of Justice spokespersons decried the activities of Mr. Ionov as “egregious” and “blatant” efforts to influence US politics and described the indictment as the first in a serious of steps targeting the activities of his organization and its affiliates.

Non-Federal Elections & Campaign Finance

Texas AG Ken Paxton Declines to Sue Candidates, Officials Who Owe $700K in Unpaid Campaign Violation Fines Texas Attorney General Ken Paxton is coming under some scrutiny for declining to sue hundreds of candidates and elected officials who collectively owe over $700,000 to the state in unpaid fines for campaign reporting violations. The Texas Ethics Commission, which currently has limited resources at its disposal to pursue violators of state campaign finance rules, is requesting that Paxton take action to enforce its administrative rulings and seek outstanding administrative penalties. The Attorney General’s office argues that their decisions on whether or not to pursue enforcement suits are guided by the particular circumstances of each case and the need to defend the constitutional rights of the parties involved in each matter – a clear articulation of the AG Office’s continued battle with the Ethics Commission over the proper scope of the Commission’s statutory authority to regulate political speech and engagement under Texas law.

California to Allow Cryptocurrency Campaign Donations The California Fair Political Practices Commission voted last month to approve new rules allowing cryptocurrency donations through digital currencies like Bitcoin. The new rules allow candidates to accept these cryptocurrency donations as long as they immediately convert the digital currency into US dollars. California’s new rules will take effect within the next couple months, making California one of the now 13 states, plus Washington DC, that allow cryptocurrency contributions in some form.

Wisconsin Supreme Court Says Absentee Voter Drop Boxes Are Illegal Wisconsin’s Supreme Court ruled last month that absentee voter drop boxes are illegal under the state’s constitution. Despite the expansion of absentee voting and ballot drop boxes in many jurisdictions during the pandemic, the court’s ruling means that Wisconsin voters will now be required to mail or return completed absentee ballots in person to designated election officials.

Non-Federal Lobbying & Ethics

Alabama Ethics Commission Rules That It Is Not Required to Share Exculpatory Information With the Accused On July 13, the Alabama Ethics Commission issued an advisory opinion asserting that it did not have to disclose exculpatory evidence to persons accused of violating state ethics laws during an investigation. The unanimous vote came in the wake of a debate with the Alabama Attorney General’s Office, which argued that the accused had the right to access such material. The Ethics Commission’s ruling noted that it should be the purview of either a district attorney or the attorney general to assess and disclose exculpatory information in such settings.

Alabama SOS Says Federal PACs Must Register With State The Alabama Secretary of State’s office recently issued new guidance regarding the regulatory obligations of federal PACs and political organizations that seek to contribute to nonfederal campaigns in the state. In an advisory document and associated media statement, Secretary of State John Merrill confirmed that federal organizations contributing to state campaigns must register as state PACs and file regular campaign finance reports with the state in the same manner as state organizations. This affirmative guidance comes after years of controversy over the scope and application of Alabama’s ban on money transfers between PACs under state law.

Chicago City Council Unanimously Passes Ethics Overhaul, Boosts Fines to $20K The Chicago City Council recently approved a significant overhaul of Chicago’s Governmental Ethics Ordinance, with the intention to root out a long history of corruption evidenced by the conviction of 37 members of the Chicago City Council since 1969. The legislative package increases the maximum fine for violating the city’s ethics ordinance from $5,000 to $20,000, and applies the $1,500 annual contribution limit to companies that do business with all of the city’s sister agencies, including Chicago Public Schools.

Pay to play

Former St. Louis Alderman Reaches Plea Deal on Corruption Charges Last month, former City of St. Louis (MO) Alderman John Collins-Muhammad was indicted by a federal grand jury on bribery charges and now intends to plead guilty after a previous not guilty plea. Collins-Muhammad, along with two other former aldermen, were accused of accepting cash bribes from a local businessman in exchange for helping to shepherd through legislation granting unwarranted tax abatements.

Former HI State Lawmaker English Sentenced To More Than Three Years In Federal Prison Last month, former Hawaii lawmaker J. Kalani English was sentenced to more than three years in prison for taking over $18,000 dollars in bribes to influence wastewater legislation in the state. English was charged in February along with another former state lawmaker in the scheme to influence bills dealing with wastewater.

Political Law Practice Pointers

As we are about to enter the “final stretch” before the 2022 midterm elections, we want to stress how important it is for all businesses and organizations to have a robust compliance framework that addresses political engagement and candidate contributions at the federal, state, and local levels across the country. At the federal level, we have previously addressed the compliance challenges associated with special pre-primary reports that often arise for quarterly PAC filers, but such registrants should also be mindful of the upcoming FEC deadlines for October quarterly submissions, covering committee activity in the third quarter, and for the pre-general and post-general reports covering contributions and expenditures made just before the general election.

At the state and local levels, organizations making contributions to nonfederal candidates and committees will need to adhere to a web of reporting requirements based on the unique elements of jurisdictional law. Some jurisdictions, like Nevada for example, maintain a standard quarterly reporting schedule throughout the rest of this election year. Other states, like California, require entities making contributions in excess of $1,000 during the 90 days before the general election to file special disclosure submissions with the state within 24 hours of a donation. The various reporting thresholds and dates can easily cause confusion and compliance concerns for political organizations that are active across the nation.

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