The FEC explained it was simply following the logic of court rulings in Citizens United v. FEC  and SpeechNow.org. v. FEC. Because “‘independent expenditures do not lead to, or create the appearance of, quid pro quo corruption’”, the FEC found no basis to limit contributions to these independent expenditure PACs, including contributions by corporations and labor unions.

Here is the power of Citizens United at full throttle. While the Supreme Court disclaimed application of its holding to the statutory prohibition on direct corporate contributions to federal political committees and SpeechNow did not purport to address contributions by corporations at all, the FEC nevertheless rather readily conceded that statutory prohibitions could not be constitutionally sustained in case of corporate and union giving to independent expenditure PACs.

And there’s no reason to think that only federal dominoes will fall. For example, in 1994 the New York State Board of Elections reached a very different conclusion. Its formal opinion No. 1994-3 applied New York’s statutory contribution limits to contributions made to an “independent committee.” That hallowed decision now appears to be on rather shaky ground.

Especially in light of the difficulties encountered in the legislative pushback, it appears that campaign finance regulators may find themselves opening new vistas to campaign spending in response to court rulings for some time to come.

• Prohibit investment advisers from receiving compensation for advisory services to a government client for two years if they make a political contribution to certain elected officials or candidates.
• Prohibit an adviser from providing payment to any third party for a solicitation of advisory business from any government entity on behalf of such adviser unless the third-party is registered with the SEC or FINRA.
• Prohibit an adviser from soliciting or coordinating contributions (i.e. bundling) to officials or candidates or payments to political parties where the adviser is providing or seeking government business.
• Require a registered adviser to maintain records of the political contributions made by the adviser or covered executives and employees.

UPDATE:  While the rules generally go into effect 60 days after publication in the Federal Register, the effective dates for some of the rules are extended to provide time for compliance:

• The prohibition on providing advisory services for compensation within two years of a contribution and the prohibition on soliciting or coordinating contributions will first be triggered by contributions made six months after the effective date.  Notably, this means that contributions given for the November 2010 elections are not covered.
• The prohibition on making payments to third parties goes into effect one year after the effective date.
• The record retention rule goes into effect six months after the effective date

Covered “officials” include an incumbent, candidate or successful candidate for elective office of a government entity if the office is directly or indirectly responsible for, or can influence the outcome of, the selection of an investment adviser or has authority to appoint any person who is directly or indirectly responsible for or can influence the outcome of the selection of an investment adviser.

“Covered Associates” include the adviser’s general partners, managing members, executive officers, or other individual with a similar status or function. Any employee of the adviser who solicits government entity clients for the investment adviser and any supervisor of any such employee are covered associates.  Additionally, any PAC controlled by the investment adviser or any of the adviser’s covered associates are included in the definition of “covered associates.”

The rule also contains a de minimis exception that would permit each covered associate who is an individual to make aggregate contributions of $350 or less, per election, to an elected official or candidate if the person making the contribution is entitled to vote for the official or candidate and $150 if the person is not entitled to vote for the official or candidate.

The bill aims to reach “stealth PACs” which seek to influence the outcome of elections but do not fit within the definition of political committee.  Specifically, an issue advocacy organization would be a not-for-profit organization organized under Internal Revenue Code sections 527 (political organization), 501(c)(3) (charitable organization) or 501(c)(4) (civic league or social welfare organization) “that engages in influencing or attempting to influence the outcome of any election . . . to any State or local elective public office, or the passage or defeat of any public question, or in providing political information on any candidate or public question.”

Much like the federal legislative response to the Citizens United holding, which has now been passed by the House, A-2595 seeks to ensure that the financing and source of any expenditures designed to influence elections should not evade public scrutiny.

• Prohibiting campaign-related expenditures (independent expenditures and electioneering communications) by government contractors in federal elections.
• Extending the ban against campaign contributions and expenditures by foreign nationals to corporations in which (i) a foreign national directly or indirectly owns 20 percent or more of voting shares, or (ii) a majority of the board of directors are foreign nationals, or (iii) a foreign national has the power to direct corporate decision-making, or to direct the making of a political contribution or expenditure or the administration of the corporation’s PAC.  The CEO would certify compliance with the Federal Election Commission in advance of making a contribution or expenditure.
• Expanding the definition of contribution to include any communication made in cooperation with a candidate or political party committee that refers to a clearly identified candidate for federal office and is publicly distributed in the candidate’s jurisdiction within a specified time period ending on the date of the general election (beginning 120 days before the first Presidential primary or caucus for Presidential candidates, and beginning 90 days before the candidate’s primary for Congressional candidates).
• Allowing political party-paid advertising on behalf of party affiliated candidates without limitation, provided that the ads are not controlled by or made at the direction of the candidate.
• Subjecting corporations, unions, section 501(c)(4), (5), and (6) organizations and section 527 organizations (”covered organizations”) that make federal campaign-related expenditures (independent expenditures and electioneering communications) to new disclosure requirements, including information about donors.  Various disclosures would be required to be made to the FEC, to shareholders, and on the organization’s website.  Additional disclosures and disclaimers apply to radio and television communications paid for by persons other than political committees (such as a “stand by your ad” statement by the CEO and a similar statement by a “significant funder” of the covered organization).
• Requiring federally registered lobbyists to disclose any election spending of more than $1,000, and the name of candidate or campaign supported or opposed.

The order allows Appellants to file a supplemental brief specifically addressing the “importance” of Citizens United and gives the City the opportunity to respond.

The NYC Campaign Finance Board made its position clear in a press release issued on the day that Citizens United was decided.

In light of the Supreme Court’s rationale in Citizens United that “restrictions distinguishing among different speakers, allowing speech by some but not others” are prohibited, this case may test whether Citizens United has any applicability to speaker-based contribution limits.

The general consensus was that New Jersey’s existing campaign finance laws are not directly affected by the Supreme Court holding unconstitutional campaign expenditure limitations for corporations.    Mr. Genova cautioned, however, that the logic underpinning the decision could ultimately impact current restrictions on political participation that are keyed to the identity of the speaker, such as the ban on contributions from regulated industries and pay-to-play restrictions.  At this early stage, in the wake of Citizens United, it remains to be seen whether the presumptive corrupting influence of money will stand as a justification for such identity-based restrictions.

Associate Bonnie B. Fire contributed to this post.

The Court lifted the ban on independent expenditures concluding that corporate and union issue ads do not give rise to corruption or the appearance thereof – thus, there is no longer a justification for the ban. The Court further explained that the Government may not impose restrictions on certain “disfavored” speakers. Although corporations and unions can now spend freely on federal elections, they are still subject to disclosure and disclaimer requirements on the issue ads that they run. The Court upheld the disclaimer and disclosure requirements because they help avoid confusion and “insure that voters are fully informed about who is speaking.”

The Citizens United decision will have an immediate and huge impact on upcoming federal elections. Corporations and unions may now spend freely to support or oppose the candidates of their choice. The decision will also affect state campaign finance laws in those states which currently restrict corporate and union expenditures.

The Citizens United decision does not directly affect the federal prohibition on direct contributions by corporations and unions. Corporations and unions still may not make direct contributions in connection with federal elections. They may, however, establish PACs.

Stay tuned for additional analysis in coming days.

The House of Representatives and Senate rules governing the acceptance of gifts and other benefits cover their Members, officers and employees.  A Member, officer or employee may accept a gift worth less than $50, subject to an annual limit from any one source of $99.99.

There are exceptions to the gift restrictions under both the House and Senate rules as well, including gifts based on personal friendship and items of nominal value.  The House and Senate rules define nominal value to be $10.

Registered lobbyists and entities that retain or employ lobbyists are banned from giving gifts of any value to Members of Congress and Congressional staff, and the acceptance of such gifts is also banned.

Executive branch employees are subject to restriction on the gifts that they may accept as well.  Generally they may not accept gifts that are given because of their official positions or that come from certain interested sources (“prohibited sources”) such as persons who:

• Are seeking official action by the employee’s agency;
• Are doing or seeking to do business with the employee’s agency;
• Are regulated by the employee’s agency; or
• Have interests that may be substantially affected by performance or non-performance of the employee’s official duties.

Again, there are a number of exceptions to the ban on gifts.  These exceptions would allow the acceptance of gifts such as gifts having an aggregate value of $20.00 or less per source per occasion, subject to an annual limit of $50.00 from a single source and gifts based on a personal relationship.

Executive branch full-time, non-career appointees – typically appointed by the President or Vice-President – are prohibited from accepting any gifts from federally-registered lobbyists pursuant to the Executive Order on Ethics Commitments by Executive Branch Personnel, issued by President Obama.