FEC Increases Contribution Limits to Party Committees, Leaves Candidate Limits the Same

The Federal Election Commission has announced contribution limits for the 2017-2018 election cycle.  The new limits are effective January 1, 2017.

The FEC did not change the limit on the amount an individual can contribution to a candidate, leaving the limit at $2700 per election.  Because the primary and general count as separate elections, individuals may give $5,400 per candidate per cycle.

The limit on contributions from individuals to national party committees has increased from $33,400 to $33,900.  This increase also affects the limit on contributions to additional specialized accounts of the party committees, which were first allowed through legislation passed at the beginning of the last election cycle.  Each of these accounts can receive contributions that are triple the amount that can be given to the main party account, or $101,700 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 2017 and 2018:

An individual may contribute to …
Federal Candidates $2,700 per election
National party committees — main account $33,900 per year
National party committees — convention account (RNC and DNC only) $101,700 per year
National party committees — party building account $101,700 per year
National party committees — legal fund account $101,700 per year
State or local party committees’ federal accounts $10,000 per year
Federal PACs $5,000 per year

Covington Publishes Comprehensive Advisory Comparing Trump and Obama Executive Orders on Ethics

President Donald Trump this weekend signed his promised “drain the swamp” Executive Order, which imposes ethics restrictions on incoming and outgoing Trump Administration appointees. Incoming appointees would, of course, do well to carefully review the provisions of the Executive Order. But companies that deal with the Administration—whether by lobbying the executive branch, by seeing a former executive take a Presidentially appointed position, or by hiring a former Administration appointee—must also be mindful of these, in some cases, extremely restrictive provisions, lest they unwittingly get caught up in an ethics scandal.

While some in the media are claiming that the order is a significant weakening of a similar Obama-era Executive Order, the new Trump order is, in several subtle but key respects, much more restrictive than the Obama order.  Today, Covington has published a comprehensive advisory discussing these restrictions in more detail and comparing them to those imposed by President Obama when he assumed office.

Trump Administration Executive Order on Ethics Breaks New Ground

President Trump signed an executive order on ethics this weekend that is similar in key respects to the Obama Administration’s executive order governing ethical conduct by presidential appointees. But in one key respect it is significantly broader in scope than the previous Obama executive order. The Trump executive order incorporates the concept of “lobbying activities,” a defined term that it imports from the federal Lobbying Disclosure Act.

Presidential appointees are required to agree that they will not engage in “lobbying activities” with respect to their agency for five years after the end of their term of office. Lobbying activities is a broad and amorphous term that covers not just actual lobbying contacts that may trigger lobbyist registration but also behind-the-scenes strategic advice and other work related to the lobbying contacts of others. In other words, whereas the restrictions in the Obama executive order applied to individuals who engaged in activities requiring lobbyist registration, the Trump executive order reaches even activity by non-registered lobbyists. This closes one of the major loopholes that President Obama had included in his administration’s executive order on ethics.

The Trump executive order also bars appointees from engaging in “lobbying activities” with respect to any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration.  This provision applies not just to the appointee’s former agency but to the entire executive branch. And again, because it applies to “lobbying activities,” as that term is defined in the LDA, it applies to behind-the-scenes strategic advice that supports someone else’s lobbying contacts.

Incorporating the term “lobbying activities” will have very significant consequences for Trump administration appointees, subjecting them to much broader post-employment restrictions than was so for Obama administration appointees. It would be difficult for Trump appointees who sign the pledge to pursue employment as strategic advisors, much less lobbyists, for a period of time after leaving the administration.

The change in language is quite subtle, probably understood only by Lobbying Disclosure Act aficionados at this point. But it is likely to draw considerable attention as appointees begin to focus on the consequences of signing the pledge.

New Executive Order on Ethics in Missouri Includes Lobbyist Gift Ban, Revolving-Door Provision; Legislature Considering Additional Restrictions

Earlier this month, newly-installed Missouri Gov. Eric Greitens issued Executive Order 2, applying strict ethics rules to executive branch employees in that state.  The order includes a ban on gifts from lobbyists, conflicts of interest rules, and a “revolving door” provision that prohibits employees who leave Greitens’ office from later lobbying his administration.  The state House of Representatives overwhelmingly passed a similar bill, HB 60, banning gifts from lobbyists to legislators and other elected officials.  That bill now awaits action in the State Senate.

The gift rule in the executive order prohibits any employee of the executive branch, except those reporting to separately-elected officials, from soliciting or accepting any gift from a lobbyist.  A gift includes anything of value, but there are some exceptions.  The gift ban does not prohibit:

  • unsolicited tokens or awards of appreciation; honorary degrees; and plaques and similar items, so long as they cannot be converted easily to cash;
  • samples, promotional items, and similar tokens routinely given in the usual course of business to customers and suppliers;
  • gifts from family members;
  • gifts from other state employees;
  • gifts from personal friends not motivated by the employee’s position; or
  • benefits arising from the business or employment of the employee’s spouse, if not enhanced because of the employee’s position.

However, other state laws may limit these gifts.

The order also prohibits employees working directly in the Office of the Governor (not for an agency) who leave government from later lobbying the Greitens administration.  Finally, state employees may not participate in matters where they may have a financial relationship with a participant that would raise questions about their partiality, or receive any benefit from a state contract that is inconsistent with “conscientious performance” of their official job.

The order comes as an important reminder that gift rules are not solely found in state bribery laws or ethics statutes.  More and more states are enacting executive orders on gifts similar to this one.  We have previously blogged on executive orders in Illinois and Virginia, to name just two examples.

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 during the initial stages of any investigation.

New Executive Branch Ethics Rules on Gifts and Procedures for New Hires, Appointees, and the Presidential Transition

The start of 2017 brings two changes to the federal Office of Government Ethics (“OGE”) rules for executive branch officers and employees.

First, important changes to the executive branch gift rules went into effect this week.  We detailed those changes in this alert.

Second, OGE’s overhaul of the Executive Branch Ethics Program regulations (5 C.F.R. Part 2638) also took effect at the start of the year.  Most of these rules address the operation of ethics programs at federal agencies and their relationship with OGE.  There are several rules that should be of interest to prospective or incoming agency officials.  Some highlights:

  • Certain high-level appointees must participate in a briefing on their “immediate ethics obligations,” usually within fifteen days of their appointment, including the individual’s financial conflicts and recusal obligations, and a plan to comply with the requirements of their ethics agreement.
  • Agency written job offers must now include a notice of the ethics rules and laws that will apply should the offeree accept employment, instructions on how to get more information on ethics, and any applicable timeframes for receiving training or completing a financial disclosure.
  • Employees who become supervisors will receive written information about agency ethics, in addition to the normal training requirements.
  • A year before the Presidential election, each agency must assess whether it has sufficient ethics staff to support the presidential transition. The regulation also explains that OGE will offer training on counseling incoming and outgoing employees and officials, and assist the transition with preparing for nominations and any new ethics initiatives.

These requirements are especially relevant as Inauguration Day approaches and the incoming administration begins the hiring and appointment process.  Individuals considering entering the administration should also consider our guidance on financial disclosures, interacting with the transition, and the appointee vetting process.

Presidential Appointees Can Take Advantage of 2014 OGE Guidance on Hedge Funds

As the President-elect begins to nominate individuals for Senate-confirmed positions in his administration, one of the major hurdles these individuals face is the statutory requirement that the Director of the Office of Government Ethics (“OGE”) review and certify a public disclosure of each source of income exceeding $200 and each property interest exceeding $1,000 in value.  While for many classes of assets, identifying and disclosing the relevant assets is relatively straightforward, it is often much more difficult to file a compliant report for pooled investment fund assets, such as hedge funds, since the details of the underlying assets are often undisclosed to the investor by the fund manager or subject to a confidentiality agreement between the investor and the fund manager.  This alert explains the most recent OGE guidance applicable to hedge funds and other pooled investment fund holdings.

Prior to 2014, OGE maintained a strict “disclose or divest” policy, requiring a nominee to divest their undisclosed assets—regardless of whether or not the filer had access to information about the fund’s underlying holdings—unless the fund qualified as an “excepted investment fund.”  This strict policy, OGE recognized, “can conflict, for no substantive reason, with the goal of attracting and placing talented professionals in public service.”  Thus, in 2014, OGE issued revised guidance clarifying that the investor may not be required to “disclose or divest” if either (1) a fund is an “excepted investment fund” or (2) if the investor has no access to information on certain underlying assets, which allows OGE to certify that the investor may report only what is known about the fund.

The advisory linked above provides additional details on this disclosure requirement, the potential exemptions, and other relevant considerations for potential nominees.

New Year, New Gift Rules for the Federal Executive Branch

Corporations, trade associations, and others who interact with federal executive branch employees should be aware of the Office of Government Ethics’ (OGE) recent amendments to the executive branch gift rules, which go into effect on January 1, 2017. Seeking to encourage transparency and advance public confidence in the integrity of federal officials, OGE redefined some of the gifts executive branch employees can receive from outside sources and suggested when permissible gifts should be declined because they may create an appearance of impropriety. The new amendments include some of the most detailed changes to the executive branch gift rules in many years.  This alert outlines the most significant changes.

The 2017 Presidential Inauguration: Ethics and Compliance Issues

With Election Day 2016 in the books, the political world turns to the transition of power and the January 20, 2017 Inauguration of President-elect Donald Trump and Vice President-elect Mike Pence. With the swearing in of the new President and Vice President will come the traditional balls, parties, and receptions. The inauguration and related events are costly, and paid for largely with private funds. Individuals, businesses, and other organizations donating to the inauguration, hosting related events, or giving out tickets to either should remember that they are operating in a highly regulated space. In this alert, we profile three common compliance issues.

Persons interested in this alert may also wish to review our alerts on the Presidential Transition and the political appointee vetting process.

Guidelines for Interacting with President-Elect Trump’s Transition Team

Over the next nine weeks, the Trump Presidential Transition team will formulate policy and staffing recommendations for the new administration. This alert gives a broad overview of the Transition and the laws that regulate interactions with Transition team members on issues related to appointments and policy recommendations. Persons interested in this topic may also wish to view our alert on the presidential appointee vetting process.

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