Kahl & Norton Quoted in NY Times on Hillary's Campaign Debt

From the New York Times: Vendors still owed money from Senator Hillary Rodham Clinton's presidential campaign could be out of luck for years should she become secretary of state. Mrs. Clinton still had about $7.9 million in outstanding bills from her presidential campaign at the end of September, according to Federal Election Commission records. Philippe Reines, a spokesman for Mrs. Clinton, said she has since whittled it to $7.6 million, not including the $13.2 million she loaned her campaign out of her own pocket, which officials have said she does not expect to be repaid.

Jim and Larry comment on Hillary Clinton's campaign debt within the article.

Click here to read the article (NY Times)...

Political GPS: WITH MCCAIN GONE, RNC AIMS TO OVERTURN LAW BEARING HIS NAME

There is no nostalgia for the losing candidate of a Presidential general election. In the days and weeks preceding the election, the country is consumed with the candidate’s every speech and gesture; on the day after, we couldn’t care less. This year, the RNC has brought new zeal to this American tradition, filing suit just nine days after the election to overturn a central provision of the landmark campaign finance law bearing the name of their candidate.

The provision under fire is the McCain-Feingold law’s “soft money” ban, which bars national party committees from soliciting or receiving funds from individuals in excess of federal limits and from sources prohibited from making contributions under federal law (namely, corporations and unions). Prior to the passage of McCain-Feingold, these soft money contributions were ostensibly used for activity unrelated to federal elections, such as issue advocacy, voter mobilization, and litigation.

A “corrupt soft money shakedown” is the blunt way that Warren Buffett, Paul Volcker, and about 250 other business leaders characterized soft money fundraising prior to the law’s passage. Indeed, it may surprise some to look back at the hard-hitting brief they filed in the Supreme Court in support of the soft money ban:

[T]hese contributions - often made in response to high-pressure solicitation by
Members of Congress, party leaders, and others - are motivated by stark
political pragmatism, not by ideological support for either party or their
candidates. Because the stakes are potentially so high for solicited businesses,
the reality is that soft money payments are ‘voluntary’ only in the narrowest
sense of that term. In truth, they are commonly made out of fear of the
consequences of refusing to give – or refusing to give enough.

While a facial challenge to the soft money ban was rejected by the Supreme Court, recent turnover on the Court could lead to a different result - if the case proceeds that far. Such an outcome would complete the Republican Party’s repudiation of the candidate who until just a couple of weeks ago carried its banner. And it will potentially revive pressures on corporations and unions to serve as patrons of the national parties.

And if that’s not enough to dishearten the former Republican standard bearer. . .
The RNC’s soft money challenge comes in the same week that the Supreme Court decided to hear Citizens United v. FEC, a case questioning the McCain-Feingold law’s regulation of so-called electioneering communications – ads that mention federal candidates and are run in the days preceding primaries and general elections. At issue is the required disclosure of contributors who help pay for these political messages. Last year, the Supreme Court in another matter, Wisconsin Right to Life v. FEC, significantly undermined the restriction on corporate and union financing of electioneering communications.

We’ll have more to say on both of these cases as they progress.

A ROUNDUP OF STATE LAW DEVELOPMENTS

Colorado: Colorado voters passed Amendment 54 with 51.4% of the votes. This measure bars contributions to campaigns and ballot committees by recipients of no-bid state and local government contracts totaling $100,000 or more. The contribution prohibition applies not just to companies, but also to their officers, directors, trustees and 10% owners. The measure also applies to unions that enter into collective bargaining agreements with government agencies.

Florida: A federal district judge in Tallahassee issued a preliminary injunction, barring the State from enforcing a law patterned on the federal “electioneering communications” provision. The Florida law regulates ads that refer to or depict a clearly identified candidate, or refer to an issue to be voted on at an election, and that reach 1000 or more people in the relevant electorate. It calls for organizations that fund such communications to register with the government, file periodic reports, place “disclaimers” on their communications, refuse contributions from 527s and 501(c)(4)s that are not themselves registered, and disclose all donors, even those who never intended their donations to go toward political speech.

North Carolina: The Supreme Court declined to review a ruling of the U.S. Fourth Circuit Court of Appeals that upheld North Carolina’s public financing system. The North Carolina law, which took effect in 2004, provides public financing for appellate judicial candidates. It is funded by a tax check-off and voluntary contributions from lawyers.

South Dakota: Voters handily defeated a ballot measure that would have barred holders of no-bid contracts (and their officer and employees) from making political contributions, and prohibited persons who employ legislators from obtaining government contracts.

Oregon: Voters in Oregon narrowly defeated Ballot Measure 64 which would have prohibited individuals and organizations from using money for political purposes if public resources are used to collect such funds. Among other things, the ballot measure would have prevented public unions from using payroll deduction systems to raise PAC funds.

Washington: The Washington Public Disclosure Commission is debating how to regulate Internet-based lobbying activity, such as sending e-mails to influence legislation or rulemakings, using websites to promote grassroots lobbying, and blogging. Among other issues, the Commission is considering what activity, if any, should be publicly reported. These issues will next be discussed at a meeting on December 4.

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).

Womble Carlyle's Political Law Team Presents a Webinar

Lobbying in the Nation’s Capital: Understanding the Rules and Surviving an Audit

With new leaders arriving soon in Washington, D.C. and many important issues on the table, companies and trade associations are launching lobbying initiatives and ramping up their in-house government relations capabilities.

Remember that the rules of engagement have changed dramatically over the past year. The Honest Leadership and Open Government Act - a signature achievement of Senator Barack Obama - imposes expanded reporting obligations on the lobbying community and more rigid ethics rules. The law also subjects lobbyist-employers to random audits, fines and criminal prosecution.

January 2009 is a critical month. Organizations employing federal lobbyists and their lobbyist-employees must certify compliance with Congressional ethics rules for the last six months of 2008. Each organization and each lobbyist also will have to disclose political contributions and donations to organizations with ties to Congressional and other officials. Also, filers are permitted to change the method they use to calculate the cost of employee time and other expenses relating to lobbying, but can only do so once a year.

More than ever, an effective lobbying program must include systems for effective compliance with lobbying and gift rules. And political fundraising - through a PAC or by company executives - requires careful attention to complex federal rules. New FEC bundling rules are expected early in the new year.

Why should you attend?

• If you are just coming to understand your obligations under this new law, or if you are concerned about whether you are in a position to survive a random audit of your lobbying disclosure reports, learn the steps you can take NOW to protect your company.
• Violations of this law can lead to fines, criminal prosecution, and a bruised reputation. Reports filed under the federal lobbying law are scrutinized by the press, watchdog groups and your competitors. A little planning and preparation can go a long way in preventing unwanted attention.
• The second certification and contributions report under the new law is due in January. The first filing last July was fraught with uncertainty, and problems were compounded by a confusing last-minute change in guidance by the Clerk of the House and Secretary of the Senate. As you prepare for the next filing, get up-to-date insight as to how this new law is being interpreted and applied.
• Because the new law imposes a gift ban on lobbyists and their employers, it’s essential that your certification of compliance be based on appropriate due diligence and training.
• The law now requires quarterly estimates of lobbying expenses, which cover activity well beyond the actual contacts with covered officials. To respond to random audits, every filer must maintain appropriate records for tracking employee hours and other covered expenses.
• Learn whether it makes sense for your organization to change its method of reporting lobbying expenses. The choice can have consequences in terms of your compliance obligations and the picture of your lobbying activity that’s made publicly available. Find out which works best for your organization.

About the speakers

Larry Norton and Jim Kahl head Womble Carlyle's Political Law Practice. They represent corporations, trade associations, non-profit organizations, and others in connection with campaign finance, lobbying, and gift laws. Prior to joining Womble Carlyle, Larry and Jim served as General Counsel and Deputy General Counsel, respectively, of the Federal Election Commission from 2001-2007.

When: Wednesday, December 10, 2008

Time: 12:00 p.m. - 1:00 p.m. (ET)

To register, click here.

All registrants will receive a confirmation email including all Web-conferencing log-in information prior to the program.

For information or questions about the current compliance requirements, contact:

Larry Norton - LNorton@wcsr.com, (202) 857-4429
Jim Kahl - JKahl@wcsr.com, (202) 857-4417

Welcome to the first post-election edition of "Political GPS: Your Quick Route Through Law and Politics."

Change. It was the rallying cry of an historic campaign, and now an historic presidency. It has enveloped the financial services industry, where the government now has ownership stakes in major banks and insurance companies. With so many other urgent needs – two ongoing wars, energy independence, healthcare – more fundamental change is on the way.

What do these historic times portend for the regulation of political activity, especially lobbying and government ethics? Here’s what we expect:

• In spite of the campaign rhetoric, we believe there will be more lobbying, not less. Why? There’s a new Administration, a new agenda, and a lot at stake for many important industries. The Obama administration will likely add more seats at the table, creating opportunities for businesses and advocacy groups to make their case. There will also be fewer earmarks, which may necessitate more advocacy. Jeff Birnbaum of the Washington Times, in a talk before the ASAE & Center for Association Leadership, called the prospect of growth in lobbying activity “an absolute certainty.” We agree.
• Lobbying and ethics laws may be changed again. Don’t assume this will be a back-burner issue because the country faces more pressing problems. The McCain-Feingold law was passed just six months after 9/11. Besides, reform in this area fits with the President-elect’s emphasis on a new kind of politics and greater transparency in government.
• What might the changes be? Expect calls for more disclosure of interactions between lobbyists and government officials. There will also be efforts to subject executive agencies to the same ethics restrictions that apply to Congress.
• Will lobbyists find jobs in government? In this area, campaign rhetoric will likely yield to reality. The lobbying community has too much expertise and understanding of how government works to cross off lobbyists as potential hires. Yesterday, the Politico’s Jeanne Cummings told a conference hosted by the Greater Washington Board of Trade that the new Administration will bring on former lobbyists, but will keep them away from the same issues on which they’ve lobbied and will impose lengthier cooling-off periods.
• The public financing system is in the political ICU. Major candidates routinely decline $45 million in funding for the primaries – money that isn’t available until January 1st of the election year, which is too late to compete in Iowa and New Hampshire. Watchdog groups want to see the system fixed and expect help from President-elect Obama, who supported reform legislation (S. 436) unveiled last year by Senator Feingold. But as the first major party candidate to reject public financing and instead tap the vast potential of the Internet to reach small donors, Senator Obama may have lost his enthusiasm for this issue. Obama wound up raising around $630 million – well in excess of the $84 million he could have received in taxpayer funding.
• The law may be changed to require greater disclosure of campaign contributions. Federal law requires campaigns and other PACs to identify donors who contribute over $200. Contributions under that amount are merely reported as a lump sum. In the pre-Internet age, no one could have conceived of raising tens of millions of dollars in such small contributions. Now someone has, and a vast amount of money went unreported.
• There may be an effort for more regulation of political spending by outside groups, especially 501(c) organizations. Millions of dollars were spent by these groups in key Congressional races. Members of Congress tend to notice this sort of thing.
• While the FEC is generally immune to the shock of regime change - the result of a politically divided six-member Commission and a rotating Chairman with weak powers - all signals are that the FEC will be active in the coming months. The Commission is poised to adopt new bundling rules and has been ordered by the courts to re-write its rules governing coordination with candidates and parties. A backlog remains in the enforcement docket. Political committees may face new obligations to screen contributions from small donors and those made by pre-paid credit cards. Audits of some of the Presidential campaigns are also on the horizon. The law requires an audit of the McCain campaign because it accepted public funding. On the other hand, the Obama campaign, which did not take public money, will only be audited if at least four of the six FEC Commissioners vote to authorize it.

The Who said "the change, it had to come." Well, it certainly has in a dramatic manner, and the rules-of-the-road for political activity, lobbying, and ethics rules will change too.

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).

From the Politico: What, for you, was the most memorable moment of this long race for the presidency?

Larry Norton's response:

I'll remember a conversation I had this weekend with my six-year-old daughter. As we drove past house after house flecked with campaign yard signs, a small voice from the backseat asked, "Hillary Clinton is out of it now, right?" "Yes," I confirmed. "What do you think about that?," she asked. "Well," I said, searching for the right words, "I would like to see a woman as President of the United States." After a long silence came her question, suffused with disbelief: "Do you mean she would have been the first?"

See the full discussion on the Politico.

Larry Norton on NPR: Illegal Campaign Donations Spur Calls For Change

From NPR.org, Election 2008: Money, Media & Influence:

Peter Overby discusses The New Frontier of Online Political Fundraising in this edition of All Things Considered on October 31, 2008.

As Barack Obama's fundraising machine leaves the old milestones for political money in the dust, some mysterious would-be donors have turned up among the 3.1 million contributors. The oddities raise questions about both the campaign's vetting procedures and the archaic state of campaign finance laws.

Almost all of the strange contributions came over the Internet — a fundraising tool that Obama has used far more effectively than any other politician.

Yet at this point in the campaign, there's no great legal incentive for the Obama campaign to ramp up its vetting process and divert workers from urgent pre-election jobs.

Campaign finance lawyer Larry Norton should know; he's a former chief counsel to the Federal Election Commission. "Look, they can deal with the FEC after he's elected president," he says. "The system is very deliberately set up so all this is worked out after the elections are over."

To read and listen to the entire interview click here.