Compliance Notes - Vol. 5, Issue 30
Campaign Finance & Lobbying Compliance
The U.S. Court of Appeals for the Sixth Circuit sided against U.S. Sen. JD Vance and other Republicans in their attempt to overturn federal limits on political parties’ ability to coordinate spending with candidates. Vance joined ex-U.S. Rep. Steve Chabot of Cincinnati, as well as the Republican U.S. House and U.S. Senate campaign arms, in challenging caps on the amount political parties can spend on behalf of a federal candidate in consultation with that candidate. They argued that such limits should be struck down on First Amendment grounds and because of Supreme Court rulings stating that campaign-finance restrictions can only be imposed to prevent corruption or the appearance of it. Chief Judge Jeffrey S. Sutton wrote that the Court said the limits were constitutional in 2001, and until that precedent is overturned, the judges on the Cincinnati-based appeals court are bound by it. (Jeremy Pelzer, cleveland.com)
Tax-exempt nonprofits that receive funding from foreign nationals would be prohibited from making donations to political committees under H.R. 8314. Federal law prohibits foreign nationals from influencing U.S. elections, including by making political donations. Under the No Foreign Election Interference Act, starting Jan. 1, 2025, tax-exempt nonprofits could not make donations to political committees if they received funding from a foreign national at any point during the previous eight years. The ban would apply to any tax-exempt 501(c) organization — such as foundations, charities, social welfare organizations, labor groups and chambers of commerce — with gross receipts of $200,000 or more in the given taxable year or $500,000 or more in assets. Violators would have to pay a fine equal to twice the amount of their prohibited donations to political committees. Organizations that make more than two prohibited political contributions would have their tax-exempt status revoked. House leaders listed H.R. 8314 for possible consideration under suspension of the rules the week of Sept. 9, 2024. A two-thirds majority would be required for passage. (Karl Evers-Hillstrom, Bloomberg Law News) (H.R.8314 - No Foreign Election Interference Act)
Government Ethics & Transparency
Former Atlanta CFO Jim Beard has been sentenced to three years behind bars for allegedly embezzling money and falsifying tax records. Beard served as chief financial officer during former Atlanta mayor Kasim Reed’s administration from 2011 to 2018. He is one of the highest-ranking officials caught up in the city hall corruption probe. Beard pleaded guilty to federal tax program theft and tax obstruction in April, 2024. Beard previously admitted to the judge misusing taxpayer money and using unauthorized tax deductions. (Jonathan O’Brien & Miles Montgomery, WSB Radio)
Ballot Measures & Elections
Colorado: An initiative that would bring major change to Colorado’s election system will be on the ballot this November, 2024. Initiative 310 is a sweeping election reform measure that would fundamentally change primary and general elections in Colorado for most state and federal races. It would create “all-candidate” primaries and switch many general elections to ranked-choice voting. The proposal’s changes are meant to take effect in 2026, but state lawmakers passed a law this spring that would delay or entirely block implementation. Still, Gov. Jared Polis said that if the measure passes, he will work to ensure it is implemented by 2028. The ballot measure will go into effect if it gets the approval of at least 50 percent of voters this November. (Andrew Kenney, Colorado Public Radio News) (Proposed Initiative #310)
Compliance Notes is 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. Our attorneys, policy advisors and compliance consultants are available to discuss any questions or how specific issues may impact your business. If there is a particular subject or jurisdiction you’d like to see covered, please let us know.
