At the start of a new Congress, the House and Senate, and their committees, adopt internal rules that govern their operations, including rules that affect congressional investigations. These rules are often revised from Congress to Congress. To assist our clients responding to congressional investigations, this alert summarizes the rules for the 118th Congress of the House, Senate, and key investigative committees related to congressional investigations, with a particular focus on the rules related to subpoena authority, depositions, and, where applicable, confidentiality.
Covington annually publishes a detailed survey of state campaign finance, lobbying, and gift rules. Now, for the first time, Covington is releasing an updated survey that details federal campaign finance, lobbying, and gift rules, in addition to those of the 50 states and the District of Columbia. Corporations, trade associations, non-profits, other organizations, and individuals face significant penalties and reputational harm if they violate federal or state laws governing corporate and personal political activities, the registration of lobbyists, lobbying reporting, or the giving of gifts or items of value to government officials or employees. To help organizations and individuals comply with these rules, this detailed survey—now 327 pages—summarizes the campaign finance, lobbying, and gift rules adopted by the federal government, all 50 states, and the District of Columbia.
Newly added federal sections cover the Lobbying Disclosure Act, the Foreign Agents Registration Act, Congressional gift rules, executive branch gift rules, and the Federal Election Campaign Act. Information is provided in a table question and answer format intended to address common questions with practical guidance.
The lobbying section addresses questions such as who is required to register and file reports, which activities trigger registration, and common exceptions; whether federal or state law covers procurement lobbying, grassroots, and/or goodwill lobbying; whether state law regulates local lobbying; and the timing for registration. It also covers common post-registration questions such as reporting deadlines and training requirements.
The gift section addresses whether federal or state law imposes a general restriction on gifts to government employees regardless of source and whether special restrictions apply to gifts from lobbyists or lobbyist principals. Common exceptions, including for meals and travel, and dollar thresholds, are addressed.
The campaign finance section addresses corporate contribution prohibitions and restrictions, corporate contributor registration and reporting requirements, and federal PAC registration and reporting requirements, among other topics.
Covington is pleased to be able to offer the survey for purchase in its entirety. Alternatively, groups of states may be made available at discounted rates. For questions or to purchase the survey, please contact firstname.lastname@example.org.
The contentious 2020 election cycle, debate over hot-button issues, including the Supreme Court’s 2022 decision in Dobbs v. Jackson Women’s Health Organization, and increased investor focus on ESG matters (as well as criticism of such focus) have led to an increased focus on shareholder proposals requesting disclosure of corporate political expenditures. This Covington Alert discusses how public companies can effectively respond to these proposals.
What happens in Arkansas does not stay in Arkansas. Or at least not when federal prosecutors from the Department of Justice’s Public Integrity Section get involved.
A recent sentencing from Arkansas highlights the many options in DOJ’s toolkit to pursue “state-level” misconduct involving public officials. In the case of former state senator Jeremy Hutchinson, DOJ obtained a “global” guilty plea for misconduct charged in three separate district courts. The court sentenced Hutchinson to 46 months incarceration.
According to the Government’s sentencing memorandum, Hutchinson accepted over $157,500 from the owner of an orthodontic clinic in exchange for advancing favorable legislation to deregulate the state dental industry. The bribes masqueraded as payment for legal retainers, according to the Plea Agreement. In addition, Hutchinson:
commingled campaign contributions and donations with his own personal funds and misappropriated and converted campaign funds for his own personal use, including, but not limited to, using campaign funds for a vacation, hotel stay, travel expenses, groceries, a gym membership, and jewelry.
Then, having misappropriated nearly $67,000 of state campaign funds, Hutchinson “materially underreported his gross receipts on his tax returns” for several years. For these offenses, Hutchinson pleaded guilty to conspiracy to commit bribery and willfully filing a false tax return.
As these charges illustrate, even where a defendant’s wrongdoing occurs at the state-level, implicates state officials, or involves state campaign finance issues, federal prosecutors nevertheless possess several statutory options to aggressively pursue misconduct. Although not a new trend, federal enforcement actions involving state or local wrongdoing present significant risks for entities and individuals involved in state-level campaign giving, lobbying, and other political activity.
Hutchinson’s conduct extended beyond the facts described above. In another, separate case pending sentencing in the Western District of Missouri, Hutchinson pleaded guilty to participating in what DOJ has described as “a multimillion-dollar public corruption scheme that involved embezzlement, bribes, and illegal campaign contributions for elected public officials.” As in the other case, this scheme apparently also involved bribes that Hutchinson and others disguised (unsuccessfully) as lawfully provided legal services. Furthermore, the defendants used a state-registered nonprofit organization to engage in “lobbying and political advocacy, political campaign contributions, and offering and giving money and other things of value to public officials for unauthorized, unjustifiable, and wrongful purposes” in violation of state law. DOJ has obtained guilty pleas from several defendants and a Non-Prosecution Agreement from a state nonprofit that agreed to pay $8 million in forfeiture and restitution to the federal government.
Both prosecutions exemplify how DOJ can and often will enter the scene even when state criminal charges are available to address corrupt conduct, where certain factors are present, such as unethical behavior involving public officials. Although in Hutchinson’s case the government described his behavior as “egregious,” the unwitting and the unwary can easily be swept up in an investigation or prosecution. For this reason, companies, organizations, and people engaging in politics at the state level should proceed with an understanding of applicable laws and regulations, and obtain legal advice for any questions that arise.
Political committees, advertisers, and advertising platforms have operated under a cloud of uncertainty regarding which disclaimers, if any, must appear on internet-based advertisements. Existing Federal Election Commission (“FEC”) regulations and guidance left many unanswered questions about the disclaimers required for these increasingly important internet ads. The FEC has finally offered some clarity in this area, though some tough questions remain.
In December, the FEC voted to expand the agency’s political advertising disclaimer requirements to explicitly address internet-based ads, capping a winding rulemaking process that began over 11 years ago. These new rules go into effect on March 1, 2023. This client alert discusses how the disclaimer rules have changed, what ambiguities still exist, and what political committees, advertisers, and advertising platforms should expect going forward.
For over a decade, Covington has published a detailed survey of the “pay-to-play” laws of all 50 states. Now, for the first time, Covington is updating the survey with a new section covering federal pay-to-play rules, in addition to those of the 50 states and many cities and counties. This new section details the federal government contractor contribution ban and pay-to-play rules adopted by the Securities & Exchange Commission (SEC Rule 206(4)-5 and SEC Rule 15Fh-6), the Municipal Securities Rulemaking Board (MSRB Rule G-37), Commodity Futures Trading Commission (CFTC Rule 23.451), and Financial Industry Regulatory Authority (FINRA Rule 2030).
To help in-house lawyers and compliance professionals with reviewing proposed contributions, Covington publishes a detailed survey of the pay-to-play laws of the federal government, all 50 states, and all major cities and counties. This almost 460-page survey:
- Details all federal and statewide pay-to-play rules.
- Describes over one hundred “specialty” pay-to-play rules that apply to contractors doing business with certain agencies or companies operating in certain regulated industries, including those that apply to investment firms that manage state or local public funds, lottery and gaming companies, public utilities, redevelopment contractors, and insurance companies.
- Includes pay-to-play laws for major cities and counties across the country.
The survey also includes user-friendly charts and legal citations answering questions such as:
- Which donors are affected?
- Which contributions are restricted?
- Is there a de minimis exception? What are the other exceptions?
- Which types of contracts are covered?
- How long after a contribution does the restriction run?
- Does the rule restrict political fundraising and other solicitations?
- Are there reporting and disclosure requirements?
- What are the penalties?
Covington is pleased to be able to offer the survey for purchase in its entirety. Alternatively, groups of states may be made available at discounted rates. For questions or to purchase the survey, please contact email@example.com.
The Federal Election Commission has announced contribution limits for 2023-2024. The new “per election” limits are effective for the 2023-2024 election cycle (November 9, 2022 – November 5, 2024), and the calendar year limits are effective January 1, 2023. The new limits represent the largest election cycle increase since the limits started being indexed for inflation in the 2003-2004 election cycle.
The FEC increased the amount an individual can contribute to a candidate to $3,300 per election, up from $2,900. Because the primary and general count as separate elections, individuals may give $6,600 per candidate per cycle.
The limit on contributions from individuals to national party committees also increased from $36,500 to $41,300 per year. This increase also affects the limit on contributions to additional specialized accounts of the party committees, which were first allowed through legislation passed in 2014. Each of these accounts can receive contributions that are triple the amount that can be given to the main party account, or $123,900 per account per year. These accounts can be used to pay for expenses related to presidential nominating conventions, headquarters buildings of the party, and election recounts, contests, and other legal proceedings.
The following chart shows more details on the limits for individuals in 2023 and 2024:
|An individual may contribute to …
|National party committees — main account
|National party committees — convention account (RNC and DNC only)
|National party committees — party building account
|National party committees — legal fund account
|State or local party committees’ federal accounts
In 2018, Covington published the original version of its widely read primer on the Foreign Agents Registration Act, “FARA: A Guide for the Perplexed.” We have updated this primer periodically. Today, the firm released the latest edition of the primer, featuring new analysis of recent Department of Justice guidance regarding the scope of agency under FARA, the political consultant trigger, the commercial exemption, the academic exemption, and the lawyers’ exemption. The new material is highlighted, for ease of reference.
The House of Representatives formally established the new “Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party,” with a bipartisan vote of 365-65. The Select Committee, to be chaired by Rep. Mike Gallagher (R-WI), a former military intelligence officer who also serves on the House Intelligence Committee, has been in the works for some time. The Select Committee will be heavily focused on oversight and investigations and is expected to scrutinize, among other things, U.S. businesses operating in China, businesses in China on which the United States is perceived to depend, and other areas where Congress sees opportunities for private industry to bolster America’s competitive position against China. The Select Committee’s objectives are clear—companies, entities, and individuals with significant cross-border business with China should get ready for expected oversight now.
We outline key knowns and unknowns about the Select Committee, and offer suggestions to prepare for its expected activities, in this client alert.
There is near universal agreement among policymakers, lawyers, and lobbyists that the Foreign Agents Registration Act (“FARA”) is deeply in need of legislative reforms to update the statute and bring it in line with modern practices. Agreeing on specific amendments, however, has been challenging, and several prior efforts ended with no new enactments, as we have chronicled. In recent weeks, there has been an increase in legislative activity, and one provision nearly became law. These recent actions are summarized in this client alert.