Archives: Enforcement

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Covington Updates Investigations Manual for House and Senate Chiefs of Staff

Covington today released an updated version of its manual for Chiefs of Staff to Members of Congress concerning best practices for responding to government investigations of Members and their staff.  Titled “A How-To Guide for Chiefs of Staff,” the manual describes how government investigations unfold and the steps that Chiefs of Staff need to take … Continue Reading

The Supreme Court Redraws the Lines for Corruption Prosecutions

The Ferrari carrying former Virginia Governor Bob McDonnell appears to have made a U-turn this week on its way to the federal penitentiary.  Covington released today a Client Alert on the Supreme Court’s decision in McDonnell v. United States, a decision which vacated Governor McDonnell’s conviction and redraws the lines for corruption prosecutions.   The Court held a public … Continue Reading

“When One Door Closes . . .”: McCain-Feingold Opens “Soft Money” Loophole In the States

A recent settlement between the Massachusetts Office of Campaign and Political Finance (OCPF) and Massachusetts Republican Party may highlight an emerging trend: state parties using federal preemption to avoid strict state campaign finance laws.  At issue was whether the Massachusetts Republican Party could use funds from its federal campaign account to pay for staff and … Continue Reading

Enforcement, Clarity Delayed for FINRA Pay-to-Play and Third Party Solicitation Rules

The Securities and Exchange Commission announced Tuesday that it will allow further comment on a pay-to-play rule proposed by the Financial Industry Regulatory Authority (FINRA). As we discussed previously, if the SEC approves FINRA’s pay-to-play rule, it would clarify that investment advisers are allowed to hire third party solicitors if they are subject to FINRA … Continue Reading

Annual GAO Report on Federal Lobbying Compliance Shows Mixed Enforcement Bag: Fewer Audits, More and Larger Enforcement Penalties

On Friday, the Government Accountability Office (GAO) issued its ninth annual report on compliance with the federal Lobbying Disclosure Act (LDA), covering from mid-2014 through mid-2015.  As in the past, the report is based on random audits of lobbyists’ filings and analysis of enforcement by the U.S. Attorney’s Office for the District of Columbia.  We … Continue Reading

FCC Releases TCPA Enforcement Advisory Directed to Political Campaigns

Yesterday, the FCC released an Enforcement Advisory to remind political campaigns about their obligations under the Telephone Consumer Protection Act (“TCPA”).  The Advisory did not set forth any new rules for calls and texts; rather, it confirmed existing rules and reminded political campaigns that they are subject to them. The Advisory first confirmed that prerecorded … Continue Reading

SEC Issues Fines for Pay-to-Play Violations That Predate Its Pay-to-Play Rule

A $12 million settlement announced last week by the Securities & Exchange Commission suggests that the SEC will aggressively pursue alleged schemes connecting political contributions to government contracts even if the political contributions do not violate its 2010 pay-to-play rule.  According to the settlement order, in 2010, the head of Public Funds at State Street … Continue Reading

SEC Fines Should Prompt Firms Engaged in Political Intelligence To Revisit Insider Trading Policies

In a rare move, the Securities & Exchange Commission has assessed penalties against a political intelligence firm for failing to adopt adequate policies to prevent the flow of inside governmental information to the firm’s clients.  The enforcement action is particularly noteworthy because all the factual allegations took place in 2010, before Congress passed the STOCK … Continue Reading

California Penalizes Campaign, Committee for Coordination Violation

As Super PACs and campaigns continue to edge closer to the legal line between “independence” and “coordination,” it has become common to hear calls for the FEC to take a stricter role in enforcing the law. Yet as recently reported by BNA, the FEC has not found a single violation of its coordination rules in … Continue Reading

Highlights from Wagner; D.C. Circuit Upholds Contributions Restrictions But Limits Ruling

The Wagner case, decided today by the D.C. Circuit, is important because of its analysis of the constitutionality of federal campaign contribution restrictions and, by extension, of pay-to-play laws generally. Covington has been monitoring this case since the district court decision in 2012, to the argument before the D.C. Circuit in 2013, and the decision … Continue Reading

The SEC & Big Data

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 … Continue Reading

Ethics Enforcement in the 114th Congress

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, … Continue Reading

FEC Issues Zero Tolerance Decision on Foreign National Contributions

In a little noticed decision earlier this month, the FEC announced the settlement of an enforcement case that sets a compliance standard that few companies may currently meet.  FEC ADR Case 708 (Marsh & McLennan Companies, Inc. PAC).  The outcome is even more surprising because the case involved a single errant donor the company brought … Continue Reading

FCC Issues “Enforcement Advisory” Warning Political Campaigns and Promoters Against Robocall Abuse

Yesterday, the Federal Communications Commission’s Enforcement Bureau issued an advisory reminding political campaigns about the restrictions placed on the use of autodialed calls, prerecorded calls, and text messages by the Telephone Consumer Protection Act (“TCPA”) and the FCC’s corresponding rules.  The Enforcement Bureau warns that it is “closely monitoring this space” and will “rigorously enforce … Continue Reading

Congressional Ethics Office Refers Alleged Unregistered Lobbyist to DOJ

For several years, we have been warning clients and others that it was only a matter of time before we would see criminal referrals against lobbyists who fail to register under the federal Lobbying Disclosure Act (“LDA”).  Until now, the U.S. Attorney’s Office for the District of Columbia has focused exclusively — and rarely — on … Continue Reading

FEC Dismisses Challenge to Use of Trade Association Dues for Independent Expenditures

An FEC enforcement action recently made public may be of interest to organizations that use members’ dues for political activities.  In a complaint to the FEC, a Massachusetts realtor claimed the National Association of Realtors and its state and local affiliates were forcing her into paying for their political activities.   The realtor’s local affiliate required … Continue Reading

Two More Public Relations Firms Trip Over the Foreign Agents Registration Act

Two public relations firms have filed documents with the Department of Justice revealing that they provided public relations and media services in the United States for the government of Ecuador without being registered under the Foreign Agents Registration Act (FARA), as that law requires.  These firms are the latest in a long string of law … Continue Reading

SEC Announces Major Fines In First Pay-to-Play Enforcement Case

The Securities & Exchange Commission hit a Philadelphia-area private equity firm today with a major penalty, in the SEC’s first case involving alleged violations of its 2010 “pay-to-play” rules.  More enforcement actions may be coming. The SEC pay-to-play rules were adopted to prevent, among other things, executives of investment firms from making political contributions in … Continue Reading

2013 GAO Lobbying Disclosure Report Shows Challenges in Compliance, Recordkeeping

Last week, the Government Accountability Office (GAO) released its 2013 report on compliance with the Lobbying Disclosure Act of 1995 (LDA), summarizing the audits of 104 lobbyist reports and information from the U.S. Attorney’s Office for the District of Columbia. We see several trends in this year’s report.  First, registrants are reporting more difficulties complying … Continue Reading

FCC Fines Company $2.9 Million for Political Robocalls to Cell Phones

Last week, the Federal Communications Commission announced plans to fine Dialing Services, LLC, nearly $3 million for making illegal “robocalls” to cell phones.  The FCC has specific rules for automatic telephone dialing systems, also known as “autodialers,” that have the capacity to produce, store, and dial telephone numbers using a random or sequential number generator.  … Continue Reading

Federal Judge Finally Tosses Aside Limits on Contributions to New York Super PACs

Super PACs in the Empire State and in the Big Apple are about to become more “super.”  Today, a New York federal court finally (albeit begrudgingly) struck down a state law that effectively capped contributions to state Super PACs at no more than $150,000.  Prior to today’s ruling, New York had been one of a … Continue Reading

In Chevron Case, FEC Brings Clarity to the Federal Contractor Ban and Super PACs

The rules on corporate contributions to Super PACs were made clearer today when the Federal Election Commission (FEC) released its finding that Chevron Corporation’s $2.5 million contribution in 2012 to the Congressional Leadership Fund (a Super PAC) had not violated the bar on government contractors making contributions in federal elections. Public Citizen and several environmental … Continue Reading

FEC has said little about earmarking rule discussed in McCutcheon

While McCutcheon concluded the government’s anti-circumvention rationale was too speculative and attenuated to justify the biennial aggregate limits, the Court did discuss “multiple alternatives available” to the government that would serve this interest while still satisfying the First Amendment.  One such suggestion involved “earmarking” rules—which bar donors from trying to circumvent the base limits by … Continue Reading

Will States Ignore the Supreme Court’s Coming McCutcheon Decision?

The Supreme Court is expected to rule soon, in McCutcheon v. FEC, on whether the Federal Election Campaign Act’s biennial aggregate limits on individual political contributions are constitutionality permissible.  Many have argued that, if the Supreme Court strikes down the federal limits, aggregate limits imposed by state law will likewise be tossed aside.  That may … Continue Reading
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