Today, the Supreme Court of the United States agreed to hear McCutcheon v. FEC, which as we discussed here, addresses the constitutionality of the federal aggregate contribution limits. These limits restrict how much an individual can give to federal candidate and party committees in a two-year period. This will be the first case the Court hears on campaign contribution limits after its landmark ruling three years ago in Citizens United.
Today, during its conference, the Supreme Court will consider whether to issue certiorari on two campaign finance cases: Danielczyk v. United States and McCutcheon v FEC.
In Danielczyk v. United States, which we’ve previously discussed here, the Court will consider whether to accept a case that challenges the constitutionality of the ban on campaign contributions by corporations in the Federal Election Campaign Act and whether restrictions or bans on the right to make campaign contributions should be reviewed under strict scrutiny, as other restrictions on political expression are, or instead under a less stringent standard.
In McCutcheon v. FEC, the Court will consider whether to accept a case that challenges the constitutionality of 2 U.S.C. section 441a(a)(3)(A), which limits individual contributions to federal candidates to $46,000 over the course of a two-year election cycle (i.e. the biennial limit).
If either of these cases will be accepted, that will be noted among the regular orders due out at 9:30 a.m. on Tuesday. Stay tuned.
The Federal Election Commission (“FEC”) released an updated reporting threshold for the 2013 calendar year for lobbyist bundling reporting. The threshold, indexed for inflation, increased to $17,100 for the 2013 calendar year from $16,700 for the 2012 calendar year. Reporting committees, authorized committees of Federal candidates, leadership PACs, and political party committees, must file Form 3L, a bundling disclosure report, if the reporting committee received two or more “bundled contributions” exceeding the reporting threshold during the reporting period. Reporting periods run from January 1-June 30 and July 1-December 31 of each calendar year. A “bundled contribution” is any contribution that is either (1) forwarded to a reporting committee by a lobbyist/registrant or lobbyist/registrant PAC, or (2) received by the reporting committee and credited to a lobbyist/registrant or lobbyist/registrant PAC through “records, designations, or other means of recognizing that a certain amount of money has been raised.”
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.
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.
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:
- Political or lobbying contributions of more than $500 must be disclosed within 48 hours.
- 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.
- 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
- Lower contribution limits, including aggregate party committee and individual limits
- Close corporate subsidiary loophole
- Increase disclosure of independent expenditures, including clarifying distinction between political advocacy and issue advocacy
- Strong enforcement regime
- Public financing system modeled after the New York City Campaign Finance Program.
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:
- Become familiar with upcoming changes to local pay-to-play ordinances (such as the adoption of the increasingly stringent Jersey City Ordinance).
- Re-familiarize yourself with changes to county pay-to-play ordinances that occurred within the past year (i.e., adoption of the Bergen County Ordinance and rescission of the Monmouth County Ordinance ).
- Obtain a working knowledge of New Jersey’s statewide Executive Branch pay-to-play restrictions as the 2013 gubernatorial election season kicks into high gear.
- Remain apprised of ELEC’s efforts for pay-to-play reform.
- Become aware of increases to New Jersey contribution limits in anticipation of the upcoming 2013 elections.
- Adopt a company political activity compliance policy and train relevant employees on the scope of that policy.
- Resolve to live by compliance in every aspect of political contribution review and decision-making, for neglect of compliance almost inevitably leads to corporate disaster.
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.
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.
A priceless lesson from NYC Mayor Bloomberg.
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.”