FEC Contribution Limits for 2013-2014

The Federal Election Commission has released increased contribution limits for the 2013-2014 cycle.  These figures are indexed for inflation and generally increase with every election cycle.

Individual contributors can now contribute up to $2,600 per election to a candidate and $32,400 per calendar year to national party committees. The total amount of federal contributions that an individual can give during a two-year cycle also increased to $123,200, including $48,600 to candidates and $74,600 to parties and PACs.

New Momentum for Campaign Finance Changes in New York?

Last week, philanthropists and government officials met with advocates for the overhaul of New York State campaign finance laws.  The meeting, organized by the Piper Fund, featured remarks from New York Attorney General Eric Schneiderman and State Senate Democratic Leader Andrea Stewart-Cousins.  Advocacy for State election campaign reform, along the lines of New York City’s public campaign financing law, is expected to reach a higher level in this year’s legislative session.  But will it succeed?

In the meantime, New York City’s law continues its evolution.  Last week, the City Council voted by an veto-proof margin of 47-1 to exempt member organizations and corporations from disclosing member-to-member communications regarding candidates and ballot issues as “independent expenditures.” This bill passed over the opposition of the NYC Campaign Finance Board, a reminder that the legislature often has the last word on the scope of the campaign finance laws to which its members – as candidates – are subject.

Governor Cuomo’s State of the State: Campaign Finance Reform

In his State of the State today, Governor Cuomo laid out his vision for campaign finance reform in New York.  Here are some of the highlights:

  1. Political or lobbying contributions of more than $500 must be disclosed within 48 hours.
  2. Any and all covered contributions to a PAC, “lobbying 501(c)(3)”, other 501(c) organization, political committee, or political party over $500 should be disclosed within 48 hours, and within 24 hours near Election Day.
  3. Expand and clarify the types of political communications that must be reported to and filed with the Board of Elections by candidates, labor organizations, corporations political committees, and other entities as well as the contributions made to the entities that paid for such communications
  4. Lower contribution limits, including aggregate party committee and individual limits
  5. Close corporate subsidiary loophole
  6. Increase disclosure of independent expenditures, including clarifying distinction between political advocacy and issue advocacy
  7. Strong enforcement regime
  8. Public financing system modeled after the New York City Campaign Finance Program.

 

Pay-to-Play Resolutions for 2013

Out with the old, in with the new. Here are a few practical tips government vendors in New Jersey should add to their list of resolutions:

As a final resolution, be proactive. Don’t wait for problems to arise before you give attention to your compliance plan. The pennies you invest today in prevention will avert draining your dollars in hope of a cure tomorrow.

Jersey City Adopts Increasingly Stringent Pay-to-Play Ordinance

Since 2008, Jersey City’s pay-to-play Ordinance has remained one of the most stringent in the State of New Jersey. In fact, the Jersey City Ordinance served as a model for the transitional aid pay-to-play ordinances, which many municipalities and cities have been required to adopt in recent years.

On December 19, 2012, the Jersey City Council adopted an increasingly restrictive pay-to-play Ordinance.  Adopted by a vote of 5-4, the new provisions of the Ordinance restrict vendors from entering into contracts with the City if, within one calendar year prior to award, the vendor or certain persons and entities associated with the vendor made a contribution in excess of $200 per calendar year to:

  • A candidate  for Jersey City municipal office
  • A candidate for Jersey City Board of Education
  • A candidate for Assembly or Senate whose district encompasses Jersey City (currently District 31) and has contributed any funds to any Jersey City elective municipal office in the twelve months prior to award of the contract
  • Every county political party committee
  • Every state political party committee
  • Every legislative leadership committee
  • Any political committee  or continuing political committee (“CPC”) that is registered with ELEC and has, in the twelve (12) months prior to the award of the contract: (1) contributed in excess of $200 to any candidate committee for Jersey City municipal election; (2) transferred more than 5% of its assets to a candidate committee for a Jersey City municipal election; (3) advertised express support or advocacy for the election of any candidate committee for Jersey City municipal election; (4) engaged in voter identification initiatives within the City of Jersey City; or (5) engaged in voter registration or get-out-the-vote activities within the City of Jersey City.

Although the list of covered recipient committees is very broad and includes “every” state party committee, county party committee and legislative leadership committee, the Ordinance does contain a clarification, which seems to suggest that these recipient committee are covered only where, in the past calendar year, they have provided financial or in-kind support in excess of $200 to certain Jersey City or Hudson County recipients.

The Ordinance also contains a $2,500 aggregate annual limit, which covers all contributions by the vendor itself and certain persons and entities associated with the vendor that fall within the Ordinance’s definition of a “business entity”.  For example, the Ordinance covers any person that received compensation or income in excess of $100,000 from the vendor within the past calendar year.  Thus, an employee who does not own an interest in the vendor company, but has an annual salary of more than $100,000, appears to be covered by the Jersey City Ordinance.

The Ordinance contains three key deviations from statewide pay-to-play restrictions.  First, it covers subcontractors. Second, it reduces the contribution limit to $200 per calendar year, which is a deviation from the $300 reportable threshold under New Jersey campaign finance law. Third, it subjects joint candidate committees to a single $200 per calendar year limit regardless of how many candidates are participating.

Once a contract has been awarded, a vendor is prohibited from making a contribution, in any amount, to a recipient covered by the Jersey City Ordinance.

The intricacies of this Ordinance should not be taken lightly.  Whether a recipient committee is covered may depend almost entirely on the activities in which that recipient committee engages. For example, before writing a check greater than $200 to a county political party committee outside of Hudson County, a vendor may need to review that party’s ELEC reports for the past twelve (12) months to determine whether the county party committee engaged in any support of Jersey City recipients.

The Ordinance is prospective only. If signed by the Mayor, the Ordinance will take effect twenty (20) days thereafter.

Update: On December 28, Mayor Healy vetoed the pay-to-play ordinance passed by the Jersey City Council on December 19 citing legal and constitutional concerns. The Council may override the Mayor’s veto with six votes but the Ordinance only passed with five votes. If the Council does not override the Mayor’s veto, the original ordinance, enacted in 2008, will remain in effect.

In Search of a Safe Harbor for Member Communications

The contest over In-Kind Contribution Standards in New York City has taken a new turn.  NYC Campaign Finance Board (CFB) Executive Director Amy Loprest announced today that the CFB would address a new advisory opinion request, which seeks to create space for a narrow band of communications between a candidate’s campaign and a prospective Independent Spender to ensure that such communications will not cause the ultimate expenditure to be treated as an in-kind contribution to that candidate.  Ms. Loprest expressed the hope that the prospect of this advisory opinion might head off the push for legislation (Intro. 978).

The advisory opinion request describes the current motivation for new legislation as arising from a footnote 8 in an opinion the CFB released earlier this year.  That footnote 8 suggested that any communication betwixt candidate and spender “would suffice” to give rise to an in-kind contribution.  Where did we hear that concern first?

Interestingly, the AO request concerns “coordination” and not member communications per se.  Thus, it invites a CFB opinion that would have applicability to both communications to members and to the general public since, unlike the proposed legislation, the current law makes no distinction as to what constitutes coordination based on the intended recipients of the communication.  Indeed, it’s hard to see how the CFB can do a special carve-out for member communications by opinion alone since, as the CFB has previously noted in an earlier footnote 8, current law does not classify communications to members separately from communications to non-members.  On this one, the CFB may find itself caught behind a proverbial “Footnote 8-Ball.”

But in focusing strictly on coordination, perhaps the CFB might find a resolution through the dictionary.  The law’s standard for Independent Expenditures consists of a negative answer to each of five verbs: “authorize, request, suggest, foster or cooperate in” the “activity” at issue.  A safe harbor may be built through a literal understanding of the verbiage that is actually used and a clearly-stated description of what is meant by “activity.”

Year End Review: NJ Pay-to-Play Developments and Non-Developments

In April 2012 the New Jersey Election Law Enforcement Commission’s annual report, made seven priority recommendations for changes in pay-to-play laws.  These proposals included: (1) increased disclosure for Super PAC 527 and 501(c) organization activity; (2) simplifying and standardizing the numerous local pay-to-play laws by prohibiting business entities from entering county or municipal contracts above $17,500 if they make certain political contributions; and (3) discouraging the proliferation of affiliated PACs.

To date, none of these proposals have been adopted into law.  Instead, the active efforts to achieve pay-to-play refinements are currently local.

In one instance, the failure to adopt amendments to a local ordinance is instructive.  In early October, Bergen County Executive Kathleen Donovan vetoed the Bergen County Freeholders’ attempt at scaling back the current pay-to-play ordinance, which took effect January 1, 2012.  See here for our previous discussion on Bergen County’s ordinance. The vetoed amendments would have reduced the classes of covered recipients and permitted suspension of the ordinance at the Freeholders’ discretion.

Success is also instructive.  On November 6, voters in Gloucester Township (Camden County) voted by an overwhelming majority (over 75% in favor) to approve a pay-to-play ordinance for the Township. Because the ordinance was approved as a ballot question, municipal law statute requires that it remain in effect for three years unless overturned by voters in a subsequent election.  Similar to the City of Camden pay-to-play ordinance (which is a transitional aid ordinance), the Gloucester Township ordinance covers contributions by employees of the business entity who were paid over  $100,000 in the twelve months prior to the contract award. It additionally bars a business entity from using a subcontractor who is not in compliance with the reduced limits specified in the ordinance.  In contrast, subcontractors are not covered by New Jersey’s statewide pay-to-play restrictions. The Gloucester Township ordinance may be the first of its kind in that it limits contributions to and requires disclosure of contributions to “SuperPACs.” But the ordinance does not define SuperPACs.   

Finally, last week, the Township of Upper Committee approved a new pay-to-play ordinance that prohibits all contributions—in any amount—by municipal contractors to municipal candidates.  This revision to the Township of Upper pay-to-play ordinance is more stringent than restrictions under New Jersey State pay-to-play law and the previous version of the Township of Upper pay-to-play ordinance as it does not allow municipal contractors to make small contributions—a feature of many other local pay-to-play ordinances.

If the future of pay-to-play in New Jersey will be the product of a tug of war between local innovation and state-imposed uniform standards, it would appear that currently only one side is holding the rope.

Once Again, Be Careful What You Wish For

The NYC Campaign Finance Board (CFB) is strongly attacking proposed legislation just introduced in the City Council.  The bill (now Intro. 978) creates a limited exemption from the contribution definition for labor union, trade association, and corporate communications to a restricted class of recipients (members, executive and administrative personnel, and shareholders).  This dispute follows a recent CFB advisory opinion that broadly suggested that any communication between a candidate’s campaign and a spending entity could undermine the independence of an expenditure it makes in connection with that candidate, resulting in its treatment as an in-kind contribution.

Rather than recount here the long history leading to the current kerfuffle, which even encompasses events prior to the 1988 enactment of the NYC Campaign Finance Act, let’s skip to 2010.  That year a Charter Revision Commission proposed an amendment to require public disclosure by individuals, companies, and labor unions making independent expenditures in NYC elections.  Those Charter changes were advocated by the CFB, in part as an aid to enforcing preexisting limitations on coordinated communications.  The amendment was adopted by the electorate.  The City Council had no formal participation in the Charter revision.

The CFB issued implementing rules earlier this year.  Those rules did not pull back on the coverage of member organization communications to the extent advocated by Council Speaker Quinn, among many others.

We also testified on the CFB rules as originally proposed.  We pointed out that the CFB’s acquisition of new powers could have unintended consequences.  That certainly appears to be the case.

Governor Cuomo Lists Campaign Finance Reform Issue as Litmus Test

Yesterday,  Republicans in the New York State Senate and five Democrats known as the Independent Democratic Caucus agreed to a power-sharing deal.  In an op-ed that will be published in tomorrow’s Times Union, Governor Andrew Cuomo weighs in on the deal and lays out a “litmus test” of 10 issues lawmakers must embrace in order to receive his support.  Number 2 on the list?  Campaign finance reform.

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