NATIONWIDE: An Introduction to Political Law

POLITICAL LAW AND THE PANDEMIC 

Like many disciplines and legal practices, Political Law has adapted but not necessarily transformed during the COVID-19 pandemic. Just as business activity persisted, so too did the regulation of politics.

Political Law Overview 

On the most basic level, Political Laws govern the interaction of the private and public sectors. Any contact with a government official or candidate for public office is potentially a political act, regulated in one of three ways. First, the contact may be an attempt to influence an election – resulting in the application of campaign finance laws. Second, the purpose of the contact may be to influence official action – commonly requiring disclosure under lobbying laws. Third, something of value may be passing between the private and public sectors – implicating gift or other government ethics statutes. Laws differ at the federal, state and local levels in the USA.

We provide this overview of Political Law through the prism of the pandemic and the perspective of attorneys advising the “regulated community” of businesses, unions, nonprofits and individuals who must comply with campaign finance, lobby disclosure and government ethics laws.

Campaign Finance 

Elections continued to occur during the pandemic, albeit with controversy concerning voting rights and changed methods. While these election law issues are closely related to Political Law, the finance of elections remained surprisingly consistent.

When making a contribution to a political campaign, a donor must consider at least five layers of law: Does the law prohibit the contributor from making a campaign contribution? Does the jurisdiction impose monetary limits? Will the contribution need to abide by “time, place and person” restrictions impacting the way the contribution may be made? Does the donor’s status as a government contractor, party in a government proceeding or grant recipient restrict the ability to contribute under “pay to play” provisions? Must the contributor provide information to the recipient for disclosure purposes?

For example, a contributor to a federal election campaign first must understand that federal law prohibits direct corporate and union contributions to federal candidates and committees making contributions to those candidates. The Federal Election Campaign Act, or FECA, also prohibits contributions from foreign nationals and other sources nationally. Next, they must consult the inflation-adjusted limits per donor per election. While federal law does not restrict contributions to any particular time period, federal lobbyists and bundlers of contributions must be aware of special disclosure. Like at all levels of government, contributions cannot be made through intermediaries to hide their “true source” – as a so-called “straw person contribution.”

Importantly, this analysis must be conducted depending on the jurisdictional surroundings. States like Illinois, New Jersey and Connecticut have some of the most restrictive “pay to play” restrictions in the country, while others have none. A minority of jurisdictions – California, Tennessee and Hawaii notable among them – require “major donors” to file their own disclosure reports, potentially within 24 hours.

Most states chose to keep intact prohibitions against campaign fundraising that applied during legislative sessions, even though lawmakers were sent home to wait out the pandemic. Campaign report filers hoping for reprieve were disappointed. Agencies such as California’s Fair Political Practices Commission warned it would fully enforce deadlines, although it would consider the pandemic “a strong mitigating factor in determining whether an enforcement action” would be appropriate.

Controversy continues to swirl around so-called “dark money” groups formed under nonprofit laws to either conceal the identity of donors or otherwise evade limits and requirements. The United States Supreme Court opined in July 2021 on when donors could remain anonymous to certain state regulators but did not eliminate the basic structure of campaign finance law.

Lobby Disclosure 

When not influencing an election, those outside of the government may wish to influence official decisions – laws, regulations, policies, proceedings, ordinances, appointments or other actions by government.

“Lobbying” is generally an attempt to influence a covered official regarding a covered government action. Lobby laws vary by jurisdiction but, unlike campaign finance laws, focus on disclosure more than limits. Lobbying laws can trigger registration and ongoing disclosure obligations for individuals and employers as often as weekly, but typically quarterly. Registered lobbyists and employers may be subject to limits on gifts and campaign contributions, among other restrictions. Failure to register and disclose activity can carry serious penalties. Violations of lobby laws can trigger monetary and criminal penalties, the reversal of certain government decisions and debarment from future contracting and lobbying opportunities.

The lobbying profession faces multiple challenges during the pandemic, notably navigating “shelter in place” and social distancing orders for themselves and their clients, understanding the torrent of subsidies and stimulus provided to the private sector, and influencing emergency procurement decisions that could be “make or break” to vendors and producers. Similar to campaign finance regulation, lobbying remained disclosed and in fact increased in the context.

Government Ethics 

The pandemic may have limited direct interaction between individuals, lessening the potential for corruption through travel and entertainment. Even so, other forms of gifts from the private sector actually increased. The “revolving door” between public and private sector employment and the potential for conflicts of interest remained unabated.

At the center of government ethics laws lie restrictions on “gifting” anything of value to public officials that may improperly influence a government decision or create the appearance of impropriety. Generally, anything of value can be a gift. Federal, state and local governments place different restrictions on gifts – and include many varieties of exceptions. Some jurisdictions, for example, recognize exception for products, services or funding provided as part of an emergency or disaster-relief effort.

Many jurisdictions allow private sector donors to provide products, services or funding to government entities to assist with government functions, even when made at the request of an elected official. The Governor of California notably solicited nearly $250 million in private sector gifts, including PPE, medical equipment and medicine, from the regulated community in 2020. At the start of the pandemic, New York and Connecticut issued orders loosening restrictions on gifting by the regulated community. By contrast, the Florida Commission on Ethics rejected a plea to relax the state’s gift ban on free advertising to permit public service advertisements featuring public officials. Never assume a gift is without consequences.

Gifts, like campaign contributions and lobbying, can trigger disclosure by the donor and recipient, even if a gift falls within an applicable monetary limit or exception. Gifts can create the appearance of impropriety. Even when a gift is permissible and properly disclosed, if the donor has a matter pending before the recipient or their government entity, it may appear the donation and decision are related. Criminal laws prohibit bribery through gifts.

Government ethics laws are not confined to gifting. For example, Governors, mayors and the federal government asked private sector leaders for their expertise during the pandemic. Employees appointed to government boards or commissions can result in those individuals becoming government officials, triggering disclosure and recusal requirements. “Revolving door” laws restrict interactions by former government officials when recruited and hired by private sector firms.

In short, while public perception may be that politics is insufficiently regulated, Political Law persists as a complex, multi-jurisdictional practice requiring the attention of anyone who interacts with government.