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Inside Political Law

Updates on developments in campaign finance, lobbying & government ethics law

CPA-Zicklin Index for 2015 Expected To Rank Entire S&P 500

Posted in Corporate Political Spending Disclosure

Covington has recently learned that, for the first time ever, the CPA-Zicklin Index, which ranks companies’ political disclosure practices, plans to issue rankings for all 500 companies in the S&P 500 Index.  This is a significant expansion of the Index, which will impact many public companies that have not previously been subject to intense scrutiny by political disclosure activists.

The annual CPA-Zicklin index is a report jointly issued by the Center for Political Accountability—a non-profit group promoting corporate political spending disclosure—and the Zicklin Center for Business Ethics Research at the Wharton School of the University of Pennsylvania.  The report ranks companies based on political spending scores, according to a metric created by CPA and the Zicklin Center.  Companies receive up to 70 “points” for disclosing, on their corporate websites, their political spending practices and itemizing political expenditures, such as payments to trade associations and 501(c)(4) social welfare organizations.  Companies with low scores on the CPA-Zicklin Index have found themselves the targets of shareholder resolutions, lawsuits, and media scrutiny.  The jump from 300 companies surveyed in 2014 to the full S&P 500 will sweep in 200 new companies, many of which may have given little thought to corporate political disclosures that are not mandated by law.

As described in our recent guide for in-house counsel, now updated to account for the expected expansion of the Index, companies should carefully weigh how they respond to these and other disclosure initiatives.  Companies can receive points on the CPA-Zicklin Index scoring indicators in many different ways, and some are less intrusive and less invasive than others.  Covington, which maintains a database cataloguing the different approaches companies have taken to earn points, regularly advises public companies regarding corporate political disclosure issues, including strategies for responding to shareholder groups and other corporate political disclosure activists.

The SEC & Big Data

Posted in Campaign Finance, Enforcement, Pay-to-Play, SEC Pay-to-Play

In our discussion of the Securities & Exchange Commission’s (SEC) actions over the past year, we described how the SEC is ramping up enforcement of its pay-to-play restrictions.  We also pointed out an acknowledgment by an agency enforcement official that the agency is “actively looking” for violations and that the agency does its own “surveillance.”

What kind of surveillance?  We previously noted that data analytics or “big data” are likely being used by Department of Justice and the Federal Bureau of Investigation to identify potential illegal campaign finance activity.

Now the SEC has confirmed that it uses data analytics for its own enforcement purposes.  In an announcement of its 2015 examination priorities, the SEC trumpets its ability to “analyze large amounts of data efficiently and effectively” and promises that big data will be used “to focus on registrants and registered representatives that appear to be engaged in illegal activity.”

It is likely the SEC is using, in one form or another, similar data analytics to identify potential violations of its “pay-to-play” rule, which regulates political contributions and fundraising by registered investment advisers.  We are entering a world in which an errant contribution is increasingly likely to be caught by regulators using big data.

New Campaign Finance, Lobbying, and Ethics Laws Take Effect

Posted in Campaign Finance, Government Ethics, Lobbying Compliance, State Law

The New Year brings with it new laws governing campaign finance, lobbying, and ethics. Below we highlight some of the major state and federal laws that took effect on or around January 1. This is not intended to be an exhaustive list, but highlights some of the most significant changes that are new for 2015.  In addition to the new laws outlined below, many state legislative sessions are starting up. Some states prohibit campaign finance activity during the session, so proceed with caution.

  • Federal:
    • The FEC will increase the federal individual contribution limits to candidates and party committees for the 2015-2016 election cycle, but has not yet set those new limits.
    • In December, Congress created new accounts controlled by party committees that may accept large contributions from individual and PAC donors.
  • Arkansas: In November, Arkansas banned corporate and union contributions to candidates and prohibited most lobbyist gifts to officials, among other changes.
  • Arizona: On December 5, 2014, a federal court ruled Arizona’s definition of “political committee” unconstitutional.  The state is seeking to stay this ruling pending appeal.  If the court does not stay its ruling, the state’s campaign finance laws will be thrown into disarray.
  • California:
    • Holding fundraisers at the home of a lobbyist is prohibited if the lobbyist is registered to lobby the candidate or office the candidate seeks.  Cal. Gov’t Code §§ 82015, 85702.
    • Contribution and gift limits are increased for inflation.  2 Cal. Code Regs. §§ 18545(a), 18940.2.  Corporations, PACs, and individuals may now contribute up to $4,200 per election to legislative candidates, $28,200 per election to gubernatorial candidates, and $7,000 per election to other statewide candidates.
    • A committee that pays a spokesperson $5,000 or more to appear in advertising regarding a ballot measure, or makes any payment to a spokesperson if that person is held up as having a specialized occupation, must file special disclosures with the state.  Cal. Gov’t Code § 84511.
  • Delaware:
    • Corporations and other entities that give more than $100 in the aggregate per election period to a political committee must disclose the name of a “responsible party.”  Del. Code Ann. tit. 115, § 8012(e).  This includes an officer, director, partner, or other individual with control over the donor’s activities.  Id.
    • Lobbyists who file their financial reports late now must pay a fine of $25 plus $10 for each additional day late, up to $100 maximum.  Id. tit. 29, § 5838.
  • DC:  Effective January 31, many new changes take effect.
    • Disclosure by PACs and independent expenditure committees is increased, and must include the identity of significant “bundlers.”
    • Persons making independent expenditures must make new disclosures.
    • Committee treasurers must take a training course.
    • Affiliated entities will be treated as a single unit under the contribution limits, closing the so-called “LLC loophole.”
  • Florida:
    • Online lobbyist registration is now available.
    • Lobbyists before water management districts must follow new, specialized rules.  Fla. Stat. § 112.3261.
  • Illinois:
    • Contribution limits are increased for inflation.  An individual may now contribute $5,400, a corporation $10,800, and a PAC $53,900 per candidate per election cycle.
    • A new executive order, which we blogged about here, makes changes to the state’s gift and lobbying laws.
  • Louisiana: Candidate and political committees must make more detailed explanations of their expenditures.  La. Rev. Stat. Ann. §§ 18:1491.7, :1495.5.
  • Maine:  Beginning with this legislature, legislators must wait for a one year “cooling-off period” after the end of their term before registering as a lobbyist.  Me. Rev. Stat. tit. 1, § 1024.
  • Maryland:
    • “Contribution” now explicitly includes coordinated expenditures.  Md. Code Ann., Elec. Law § 1-101.
    • Contribution limits to a campaign finance entity from individuals and most other entities are increased from $4,000 to $6,000 per election cycle.  Id. § 13-226.
    • Contributions from affiliated entities are aggregated for the purpose of the contribution limits, closing the “LLC loophole.”  Id.
    • PACs organized in states other than Maryland must follow special registration and reporting requirements if they transfer $6,000 or more into state campaign finance entities.  Id. § 13-301.
    • Persons making independent expenditures or electioneering communications of $5,000 or more in an election cycle must file special registrations and reports of their activities.  Id. § 13-306, -307, -309.1.
    • An IRS § 501(c)(4) and (c)(6) organization that makes contributions or donations  of $6,000 or more in an election cycle with the express purpose of causing the recipient to make a disbursement in Maryland must register and make reports  of the five donors who gave it the most money to influence an election in the one year period before the report.  Id. § 13-309.2.
  • Massachusetts:
    • Contribution limits for individuals are increased to $1,000 per candidate per year.  Mass. Gen. Laws Ann. ch. 55 § 7A.
    • The state Office of Campaign & Political Finance now has jurisdiction over all municipal campaign finance activity in the state.  Id. § 18.
    • PACs must adhere to a new, stricter filing system that requires more frequent and more detailed reporting.  Id. § 19.
    • Committee treasurers must take an online training course within 30 days of accepting the position and every two years thereafter.  Id. § 5C.
  • New York State: Lobbyist training mandated in 2011 is now available and must be completed by all lobbyists once every three years according to this schedule.
  • North CarolinaContribution limits from individuals, political committees, and other entities to candidates or other committees are increased for inflation to $5,100 for the 2015-2016 cycle.
  • Oklahoma:
    • Oklahoma significantly revised both its lobbying and campaign finance rules, with highlights below.
    • Federal PACs making contributions to candidates in Oklahoma do not need to register.  Okla. Ethics Comm’n r. 2.98.  They may meet their obligations by listing contributions on FEC reports.  Id.
    • There are now three new types of PACs:
      • Unlimited committees, which are somewhat similar to Super PACs and which support independent expenditures, electioneering communications, or ballot measures;
      • limited committees, which is what the standard PAC is now called; and
      • new or small limited committees, which have lower contribution limits than regular committees.  Okla. Stat. tit. 21, § 187.
    • Defines private sector lobbyists as an “executive” lobbyist, a “legislative” lobbyist, or both, depending on who they lobby.  Okla. Stat. tit. 74, § 4249.
    • Lobbyists and lobbyist principals may generally provide state officials nothing of value.  Okla. Ethics Comm’n r. 5.6.  There are some exceptions, but fewer than before, and most permissible gifts must be reported.  Id. rr. 5.7-5.18.
  • Vermont: Contribution limits are increased.  Vt. Stat. Ann. tit. 17, § 2941.
    • Limits to candidates for State Representative are increased to $1,000 per individual, entity, or political committee per election cycle.
    • Limits to candidates for State Senator are increased to $1,500 per individual, entity, or political committee per election cycle.
    • Limits to candidates for statewide office are increased to $4,000 per individual, entity, or political committee per election cycle.
    • Limits to political committees are increased to $4,000 per individual, entity, or political committee per election cycle.
    • Limits to political parties are increased to $10,000 per individual, entity, or political committee per election cycle.
  • Wyoming:
    • Contribution limits  from individuals to statewide candidates increased to $2,500 per election and for non-statewide candidates to $1,500 per election.  Wyo. Stat. Ann. § 22-25-102.
    • PACs may not contribute more than $7,500 per statewide candidate per election or $3,000 per non-statewide candidate per election.  Id.
    • Contributions to a PAC that are earmarked for a particular candidate are treated as a contribution to that candidate and subject to the candidate limits.  Id.
    • Contributions for the general election may not be given or received before the primary.  Id.
    • Donors making automatic contributions, such as via payroll deduction, no longer need to reauthorize the deduction ever year.  Id.
  • Washington:  Legislators may only accept 12 meals from lobbyists per year that do not fall within some other exception to the gift rules.  Wash. Leg. Ethics Bd. r. 5.

Illinois Governor Signs Executive Order on Ethics

Posted in Government Ethics, State Law

Companies and individuals doing business in Illinois should be aware of an executive order – Executive Order 15-09 – signed this week by Governor Bruce Rauner that, among other things, imposes new limitations on the acceptance of gifts by state employees.  Illinois state employees are generally prohibited by statute from accepting any gift from a “prohibited source.”  5 Ill. Comp. Stat. Ann. 430/10-10.

“Prohibited sources” include entities that or individuals who are seeking official action from the applicable state agency, are conducting or seeking to do business with the applicable state agency, are regulated by the applicable state agency, are Illinois lobbyists, or who are immediate family members of any individuals falling into the preceding categories.  Id. 430/1-5.   The statute, however, contains exemptions that allow prohibited sources to provide state employees with $75 worth of food and refreshments, per day, that are catered or consumed where they were purchased or prepared, gifts worth less than $100 in the aggregate per year, and travel for certain educational purposes and to discuss state business.   Id. 430/10-15.  Governor Rauner’s executive order provides that state employees may not rely on these exceptions to accept gifts.

Executive Order 15-09 also imposes restrictions on the ability of state employees to become lobbyists after leaving state employments, expands financial disclosure requirements for certain state employees, and adds new procedures for the review of state employment contracts.

Covington Releases How-To Guide For Responding To Corporate Political Disclosure Initiatives

Posted in Corporate Political Spending Disclosure

Covington today released a client advisory providing best practices to assist in-house counsel of publicly-traded companies in responding to corporate political disclosure initiatives.  These initiatives aim to force companies to post to their websites more information regarding corporate political activities, such as details regarding corporate contributions to trade associations and 501(c)(4) social welfare organizations.  Despite recent setbacks, these corporate political disclosure efforts are not going away.  As these groups become increasingly sophisticated, 2015 looks to be their most active year to date.  The advisory highlights recent developments in the area, looks ahead to what companies can expect in the near future, and provides strategies and tips for those grappling with disclosure issues.

Ethics Enforcement in the 114th Congress

Posted in Congressional Investigations, Enforcement, Government Ethics

The notion that the House and Senate Ethics Committees are inactive bodies, often implied in media coverage, is far from the truth.

During the previous Congress, the House Ethics Committee issued more than 900 formal advisory opinions and addressed more than 40,000 informal requests for guidance.  In the first half of the 113th Congress alone, the House Ethics Committee initiated 23 new investigations and carried over 35 matters from the prior Congress.  In 2013, the House Ethics Committee completed 27 investigations and issued four Committee reports (which addressed the activities of 11 Members and 3 employees).  Although the House Ethics Committee has not yet released a full report detailing its activities in 2014, it appears that the Committee was busier in the second half of the last Congress, with six reports issued, a 50% increase over 2013.

Although the Senate Select Committee on Ethics has different rules regarding disclosure, in 2013 alone, the Committee wrote about 755 advisory letters and responses, handled approximately 10,000 inquiries, and issued 3,246 letters regarding financial disclosure filings.  In 2013, the Committee also received 26 alleged violations (plus two from the prior Congress), which resulted in two preliminary inquiries and no violations.

As the 114th Congress begins, Members and staff will receive ethics training, and many will also seek guidance from the committees regarding specific questions.  Some will be the subject of allegations of wrongdoing that the House or Senate Ethics Committee will investigate.  Most of those allegations will likely turn out to be meritless, but that fact should serve as a caution not a comfort.  And being the subject of an ethics investigation is unpleasant, to put it mildly.

Given that many Members and staff will interact with the House and Senate Ethics Committees, what changes can we expect in the new Congress?  With the Senate now under Republican control, Senators Barbara Boxer and Johnny Isakson have switched roles, with Senator Isakson taking the reins as Chairman of the Senate Select Committee on Ethics, with Senator Boxer as Vice Chairman.  At the staff level, Deborah Mayer was selected in mid-December to be the new Staff Director and Chief Counsel.  Until recently, Ms. Mayer was the House Ethics Committee’s Director of Investigations.  She previously investigated and prosecuted public corruption cases as a trial attorney in the Department of Justice, and has also served as an Assistant U.S. Attorney for the Eastern District of New York and in the Navy JAG Corps.

Control of the House has not changed, but control of the House Ethics Committee has, with Representative Charlie Dent replacing Representative Mike Conaway as the chairman.  Representative Linda Sánchez will continue as the Ranking Member.  At the staff level, the House Ethics Committee is led by Tom Rust, who has been the Chief Counsel and Staff Director since March 2014.  Unlike the Senate Ethics Committee, the House Ethics Committee takes referrals from the Office of Congressional Ethics (OCE), an independent entity established by the House, which continues to be led at the staff level by Omar Ashmawy, a former officer in the Air Force JAG Corps who has been the OCE’s Staff Director and Chief Counsel since 2011.

The House also clarified that neither the House Ethics Committee nor the OCE may take any action to deny persons of their constitutional rights and, relatedly, that the OCE must inform those being investigated that they have the right to be represented by counsel and that retaining counsel will not be held against them.  Why adopt such language?  Isn’t it obvious that Members and staff have constitutional rights?  One would think so, but congressional investigations have a different dynamic than, for example, a Department of Justice investigation, and congressional bodies have been known to interpret their powers expansively.  At its core, what this language probably calls for is for the Committee and the OCE to review their rules to ensure that all the basic constitutional rights are afforded to those being investigated.  It’s unlikely that any changes to the rules to bolster constitutional protections would prevent the Committee and the OCE from carrying out their duties.  If the Committee or the OCE concludes, however, that no changes whatsoever are necessary, we may see additional legislation in the future.

As the 114th Congress continues, stay tuned for updates from Covington regarding House and Senate ethics.

The SEC Pay-to-Play Rule Year in Review

Posted in Pay-to-Play, SEC Pay-to-Play

When the history of the Securities & Exchange Commission’s pay-to-play rule is written, 2014 could be the inflection point.  Developments this year suggest two dramatically different paths for the rule in the years to come: either the rule will unravel from court challenges or it will become an increasingly prominent enforcement weapon in the SEC’s arsenal.

In August, two state Republican party committees sued the SEC, alleging that that the pay-to-play rule unlawfully restricted the ability of Republicans in those states to contribute to some federal candidates and unlawfully limited the ability of some federal Republican candidates to receive contributions to which they were otherwise entitled.  The complaint alleged that the pay-to-play rule exceeded the SEC’s authority under the Adviser’s Act, conflicted with the Federal Election Campaign Act, and violated the First Amendment of the United States Constitution.  In September, a federal district court in Washington, D.C. dismissed the case on procedural grounds, arguing that it had been filed in the wrong court and expressed skepticism as to whether the political parties had standing to bring the lawsuit in the first place.  That case is now on appeal before the federal appeals court in Washington, D.C.  Despite the setback, if litigation is ultimately successful, the constitutionally dubious rule would be dealt a major blow.

At around the same time the state parties were attempting to chip away at the rule, the SEC was ramping up enforcement.  In June, the SEC hit a Philadelphia-area private equity firm with a major penalty in the first case involving alleged violations of the pay-to-play rule.  In that enforcement action, two political contributions from an employee of the private equity firm totaling less than $5,000 helped lead to an order requiring the firm to pay a $35,000 penalty and disgorge almost $260,000 in profits, plus interest.   The immediate aftermath of the case was even more significant because it became clear that the SEC is ramping up enforcement in this area.  In the press release that accompanied the SEC’s order, the director of the SEC’s Enforcement Division stated: “We will use all available enforcement tools to ensure that public pension funds are protected from any potential corrupting influences. … [W]e will hold investment advisers strictly liable for pay-to-play violations.”  And, a few days later, the director told Dow Jones & Company: “Our concern is that [these types of violations] could be prevalent, but it’s hard to say how prevalent.  We are actively looking for it.  We rely on tips and whistleblowers, and we do our own surveillance.”

With pressure mounting to find cases to justify the draconian rule in the face of court challenge, it is clear that the SEC is making a real effort to flush out pay-to-play enforcement cases.  It has a number of tools at its disposal to do this including soliciting tips from whistleblowers, its own surveillance and data analysis using publicly available campaign finance reports, and inspections of existing investment advisers.  Because these matters fall at the intersection of election and securities laws, Covington’s cross-disciplinary team of political and SEC lawyers is uniquely situated to help clients navigate pay-to-play enforcement matters and investigations to a successful resolution.

POGO Report on FARA Misses the Larger Point

Posted in Foreign Agents Registration Act

Last week, the Project on Government Oversight (POGO) released a report on the Foreign Agents Registration Act with an attention-grabbing title:  “Loopholes, Filing Failures, and Lax Enforcement: How the Foreign Agents Registration Act Falls Short.”  The tone of the title was echoed in several news reports, including in The Hill (“Foreign lobbying enforcement ‘lax’”) and Legal Times (“Watchdog’s Foreign Lobbying Audit Finds ‘Lax Enforcement’”).  In our view, however, the POGO report and the resulting news coverage missed a larger, more significant point.

In fact, FARA enforcement and awareness are at an all-time high.  In each year since 2008, for example, the Department of Justice has conducted more than a dozen audits of FARA registrants.  (In contrast, it conducted no audits from 2004 through 2007.)  In several high-profile cases, consulting firms and public relations firms have registered retroactively under FARA following media scrutiny or inquiries from the DOJ FARA Unit.  And FARA was the subject of a front-page story in the New York Times a few months ago.

In this environment, the issues raised by the POGO report are important not because they indicate lax enforcement.  Rather, they demonstrate that the FARA statute is badly in need of a rewrite to bring the law in line with modern technology and advocacy practices in Washington.

The POGO report focused on late or incomplete public disclosure of “informational materials,” including letters sent by a former Congressman and e-mails sent by a lobbyist for Taiwan.  Under the statute, FARA registrants are required to file with DOJ within 48 hours materials that are sent on behalf of clients “in the form of prints” or in a form that can be “adapted [to be] disseminated or circulated among two or more persons.”  The definition of “print” is a laundry list of every conceivable form of printed materials – even capturing “visiting cards” and “patterns to be cut.”  The antiquated definition, however, excludes materials made by “the copying press, stamps with movable or immovable type, and the typewriter.”

It was difficult to apply this extraordinary definition in the 1940s, when FARA was new, and it is nearly impossible to apply it in the modern era of e-mail and Twitter.  Generally, FARA lawyers and registrants often draw a distinction between materials that are created for individualized communications (an e-mail, letter, or draft text shared with a congressional office) and materials that are designed for broader dissemination (a brochure, book, or website).  Because typewritten letters were not informational materials in the last century, similar individualized communications like e-mail are not informational materials today, they conclude.  But ambiguities abound.  Can an e-mail be “adapted [to be] circulated among two or more persons” because someone can forward it easily and widely?

The varying interpretations of the statute’s “informational materials” requirement thus more likely reflect registrants’ good faith attempts to apply a definition that is thoroughly disconnected from modern technology than evidence of loopholes, filing failures, or lax DOJ enforcement.

POGO also appeared to criticize DOJ for not requiring more detailed disclosures of lobbyists’ contacts with public officials, observing (incorrectly) that registrants are “not explicitly required to provide specific information about their meetings or contacts with policymakers, such as who they met with or what they discussed, though some registrants choose to provide these details.”  Under guidance issued by DOJ, however, FARA registrants are required to provide a “description of all activities undertaken on behalf of, and all services rendered to, each foreign principal.”  When “reporting contacts with U.S. Government officials,” registrants must provide “the date of the contact; the name and title of the U.S. Government official contacted,” along with “the manner in which the contact was made . . . and a description of the subject matter discussed.”

POGO may not have been aware of this guidance because it is not published by the Department and is instead distributed directly to FARA registrants.  It would be helpful if the Department simply posted this guidance on its website.  Similarly, the Department over the years has issued written guidance in response to advisory opinion requests from registrants, which has been helpful in clarifying FARA’s reporting requirements.  Those opinions are not publicly available, however.  Publishing them on the Department’s website might help clarify the agency’s interpretation of the statute’s more ambiguous provisions.

In the last few years, POGO has been one of the few public interest groups to focus on FARA, and it has increased transparency and accountability in useful ways.  Its recent report, however, incorrectly focused on several symptoms of FARA’s inadequacy, while overlooking the fundamental cause of the statute’s inconsistent application – it is simply badly outdated.  To correct these problems and to improve disclosure, Congress should update the statute so that it makes more practical sense in the 21st century.

Covington Releases Congressional Investigations Overview for 114th Congress

Posted in Congressional Investigations

Covington today issued a client advisory providing an overview of expected congressional investigation activity in the new Congress.  The advisory describes the new leadership and priorities for the major congressional oversight and investigation committees.  While Republicans, who now control both houses, are expected to focus their investigations on the Obama Administration, those investigations inevitably draw in corporations and individuals who are caught in the cross-fire.  For most corporations, congressional investigations are a rare event.  But when they do happen, they threaten to trigger major legal, public relations, and business consequences. Congressional investigations are part litigation, part political theater.  There are very few rules that govern them, and much of the due process present in courtroom litigation is absent in a congressional investigation.  Today’s advisory offers a glimpse of what the congressional investigation committees may have in store for 2015.

Ethics Rules and Transition Teams: Maryland Weighs In

Posted in Government Ethics, State Law

A recent advisory letter by the Maryland State Ethics Commission should remind those asked to serve on transition teams to be aware of the various state laws that might be triggered by their service.  In the advisory letter, written to a government contractor, the State Ethics Commission concluded that members of the Maryland Governor-Elect’s Transition Team are not “public officials” subject to the requirements imposed by the Maryland Public Ethics Law.

The Commission’s determination makes sense given Maryland law.  The most nearly-relevant provision in the Maryland definition of “public officials” generally applies to individuals in Maryland “executive units.”  Md. Code, Gen. Prov., § 5-103(b).   An “executive unit” is “a department, agency, commission, board, council, or other body of State government that. . . is established by law.”  Id. § 5-101.   Although Maryland law provides for staff, Md. Code, State Gov’t § 3-206, and office space, id. § 3-207, for the Governor-Elect’s transition, the Transition Team itself is not “established by law.”

Although members of the Transition Team are not subject to the Public Ethics Law, other restrictions still apply.  As the Ethics Commission’s letter alludes to, Transition Team members are still subject to the rule that an “individual who assists an executive unit in the drafting of specifications, an invitation for bids, a request for proposals for a procurement, or the selection or award made in response to an invitation for bids or request for proposals, or a person that employs the individual, may not … submit a bid or proposal for that procurement” or “assist or represent another person, directly or indirectly, who is submitting a bid or proposal for that procurement.”  Md. Code, Gen. Prov., § 5-508.  And the Maryland Governor-Elect is considered a “state official” even before inauguration, Md. Code, Gen. Prov., § 5-101(ll)(1), so Maryland’s gift rules apply.

Other states have different laws, of course.  Depending on the state, service on a transition team could implicate ethics codes, lobbying regulations, and government contracting restrictions.  Those asked to volunteer their time to assist state officials in transitions to elected office would be well-advised to understand how state laws might affect them.