Wednesday, October 1, 2008, 8:35 AM

Political GPS: Welcome to the World of Tomorrow – And We Don’t Mean A Tourist Spot in Orlando

As we write this week’s Political GPS, Congress is considering the massive financial bail-out plan known as the Emergency Economic Stabilization Act. Whatever form of that bill passes, we are likely to leave the days of deregulation behind, and enter a new, more regulated world of tomorrow. In that brave new world, decisions made here in Washington – by Congress and the new Administration – will have an even greater impact on businesses in America and elsewhere.

A robust government relations program is more essential than ever to business success. Keep in mind, however, that as a result of last year’s lobbying reform legislation, the government relations world has also been through a regulatory sea change, with new reporting requirements, random audits, and stepped-up penalties. Additionally, the increased oversight and transparency can lead to damaging news stories and harm to business reputation. Political GPS will follow these developments and keep you up to date as the world changes around us.

Millionaire’s Amendment Reprieve – Finders Keepers

In the August 1 Political GPS, we reported that the FEC will no longer enforce the so-called Millionaire’s Amendment, a provision of the McCain-Feingold law. This change stems from the Supreme Court’s June 26 decision in Davis v. FEC that found certain parts of the Amendment unconstitutional. Last week, the FEC took the next logical step and announced that it will not require candidates who received increased contributions in accordance with the Millionaire’s provision to return those funds, so long as the funds are spent in a proper manner. Similarly, the Commission said that political parties that have made increased coordinated expenditures consistent with the Millionaire’s provision will not have to take any remedial steps.

Plan Early When Funding Travel for Members

As a result of last year’s lobbying and ethics reform legislation, there are fewer circumstances in which a Member of Congress can have travel paid for by a private source, and pre-approval is required for such payments. The House Committee on Standards of Official Conduct (more commonly known as the House ethics committee), last week told House Members that such requests must be submitted to the committee at least 14 days in advance of the travel. Previously, the committee had required requests to be submitted 30 days before the travel, but Members were having trouble meeting that deadline.

This makes the travel approval process marginally easier for Members and event sponsors. But while the approval period has been shortened, the House ethics committee says that the deadline will no longer be waived for emergencies. Organizations seeking to pay for officially-connected Member travel would be wise to provide Members with all necessary information, including documentation and sponsor certifications, well in advance of the date of travel.

New Jersey Governor Plugs “Pay-to-Play” Loopholes

On September 24, 2008, New Jersey Governor Jon S. Corzine signed a series of Executive Orders designed to close loopholes in a state law banning large political contributions from companies doing business with the State. The Governor’s orders were effective immediately and do the following:

  • Ban large campaign contributions to municipal party committees and legislative leadership committees. The ban previously applied only to a contractor’s contributions to candidates, and state and county party committees.
  • Ban large campaign contributions by “redevelopment” contractors, and lawyers or lobbyists who make contributions at their request.
  • Close the loophole that allowed lawyers, engineers, and architects to make campaign contributions without risking lucrative state contracts. The Executive Order extends the contribution ban to partners of professional service firms regardless of their percentage of ownership. The ban previously applied only to individuals with at least a 10% equity interest in the firm.

New Jersey’s “pay-to-play” law is one of the strictest laws of its kind in the country. It prohibits businesses with government contracts in excess of $17,500 from contributing amounts to covered officials or committees in excess of $300. In addition, businesses that receive over $50,000 in a calendar year through state or local contracts must file an annual disclosure report with the New Jersey Election Law Enforcement Commission, listing political contributions during the prior calendar year.

If you have any questions or would like more information, please feel free to contact Larry (LNorton@wcsr.com, (202) 857-4429) or Jim (JKahl@wcsr.com, (202) 857-4417).
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