States Launch Review of Disqualification Standards for Elected Judges
Last week, the Supreme Court ruled that elected judges should not hear cases when the support they received from campaign backers creates an appearance of bias. In the wake of this ruling, a number of states have announced plans to review their rules on judicial disqualification. Michigan, for instance, has requested public comment by August 1 on a series of proposals. Ohio and Wisconsin are preparing to conduct similar reviews. West Virginia has announced the formation of a Commission on judicial reform to be headed by former Justice Sandra Day O’Connor.
The Supreme Court ruling allows states to adopt stricter rules than may be constitutionally required. The ruling also opens the door for states to consider the impact of money spent in judicial races other than through direct contributions to a candidate. In fact, the case before the Supreme Court involved little in the way of campaign contributions, with the bulk of the challenged spending coming through large independent expenditures and donations to a 527 group that favored one of the judicial candidates. A dissenting opinion in the case also raises the possibility that disqualification may be required if large expenditures are made by an industry association, trade union, physicians’ group, or the plaintiffs’ bar.
Another issue to watch is whether states leave disqualification decisions in the sole discretion of the deciding judge. Michigan Supreme Court Justice Stephen J. Markman asks a series of questions for public comment, including whether decisions to disqualify a judge should be made by the judge who is the object of the disqualification request or by another judge. And if it should be heard by another judge, what if that judge campaigned against the judge whose disqualification is sought? Or what if the judge hearing the disqualification request received political support from groups that might be advantaged by another judge’s nonparticipation in a case?
The possible questions are endless. The Supreme Court ruling ensures that for many states, there will soon be answers.
SIXTH-LARGEST PUBLIC PENSION FUND ADOPTS PAY-TO-PLAY RULES
The $80 billion retirement system for Texas teachers, the sixth-largest public pension fund in the country, adopted pay-to-play rules for firms seeking to manage the fund’s investments. As of July 1, 2009, money managers seeking contracts with the fund will have to disclose whether in the preceding three years they have lobbied or communicated with pension board members or elected officials, and whether they have made political contributions to any Texas official. No pension fund investment will be made if an authorized officer of the board determines that a disclosed contact or political contribution "has created an unacceptable risk to the integrity and reputation" of the pension fund.
The announcement by the Texas retirement fund comes as the Securities and Exchange Commission is considering releasing proposed rules to restrict campaign contributions by firms that manage investments for state pension funds. The New York Attorney General has also proposed model rules for limiting contributions to candidates involved in pension fund oversight.
FEC ACRIMONY OVER RELEASE OF RECORDS; HEARINGS, NEW APPOINTMENT MAY BE NEAR
We have chronicled recently a rising number of 3-3 splits on the six-member Federal Election Commission, all along partisan lines. The deadlocks, as we have noted, span a wide range of issues, including political activity by 501(c) and 527 organizations, rules for candidates’ testing the waters, coercion of campaign contributions, and liability for false reports stemming from embezzlement. This week, two of the three Democratic Commissioners admonished their Republican colleagues, who released documents that were being sought through a Freedom of Information Act request. In a written statement, Commissioners, Ellen L. Weintraub and Cynthia L. Bauerly said,
"At a time when we have so many legitimate disagreements over the precise contours of the law, we had hoped this matter could have been resolved by the full Commission according to established procedures, rather than by a group of three Commissioners choosing to preempt those procedures."
Amid rumblings that the Senate Rules and Administration Committee may hold hearings on the reason for so many 3-3 splits, Congress appears poised to confirm labor attorney, John Sullivan, to replace Commissioner Weintraub. The terms of two other Commissioners - Chairman Steven T. Walther and Commissioner Donald F. McGahn II - expired at the end of April, but the law permits them to remain on the panel until a replacement is confirmed.
"NEVER MIND" - HILL REVERSES ITSELF ON TERMINATING LOBBYISTS
One of the surprises in last week's new Lobbying Disclosure Act guidance (Political GPS, 6/12/09) issued by the Secretary of the Senate and the Clerk of the House concerns the circumstances when a lobbyist can be removed from a registrant’s list of lobbyists. The guidance said this was permissible when either: (1) the individual’s lobbying activities do not constitute 20% of his time for the client in the current quarter and are not expected to meet this level in the upcoming quarter; or (2) the individual did not in the current quarter and does not reasonably expect in the upcoming quarter to make more than one lobbying contact per quarter.
While the first requirement presented few surprises, the second seemed to contradict the LDA which does not put any time constraint on lobbying contacts. In fact, another section of the same guidance memorandum states that registration obligations arise if the 20% rule is satisfied and the individual makes more than one lobbying contact "even if the second contact occurs in a later quarterly period." The new guidance raised the real possibility that lobbyists could go in and out of registered status, or avoid future registration altogether, by timing lobbying contacts.
Alarm bells sounded! Political lawyers scrambled! What did it all mean? What was the justification for this new interpretation? On June 16, the Secretary and the Clerk addressed the uproar. Now a lobbyist can be removed from the registrant's list when that individual does not "reasonably expect to make further lobbying contacts." Gone is the "per quarter" qualification.
Backtracking no doubt, but the latest revision is not a complete about-face. The prevailing interpretation has been that once a lobbyist has made two lobbying contacts, he may only be "delisted" by falling below the 20% rule in the current or succeeding quarter. Now a lobbyist's reasonable expectation that he will make no further "lobbying contacts," even though he may engage in further "lobbying activities," will allow him to come off the lobbying rolls. For sure, this is a much smaller exception than last week’s guidance would have allowed, but it would appear to be consistent with the wording and structure of the LDA.
On another point, the latest guidance instructs that retroactively terminating a lobbyist by amending a prior quarterly report (LD-2) does not relieve the lobbyist of the obligation to file a personal contribution report (LD-203) for the period in which he remained (albeit temporarily) in active status. This contradicts oral advice that the Secretary's and Clerk's offices have given and which many lobbyists have relied on in determining whether they have LD-203 filing obligations.
These evolving interpretations underscore the difficulty of LDA compliance for the lobbying community and the need for vigilance in reviewing Congressional guidance. Even the Secretary and the Clerk acknowledge on the very first page of the guidance that they do not have authority under the LDA to issue "definitive opinions" on the interpretation of the law. Our advice – tread carefully.
NEXT WEEK: PAY-TO-PLAY WEBINAR – JUNE 25
We will be presenting a webinar on pay-to-play laws on Thursday, June 25 from 12 Noon to 1 PM. You can find more information about the webinar and register at this link. Our next edition of Political GPS will be published the week of June 29.