July 15, 2014 - ET

"Campaign Finance and Political Activities" for Lawline

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Supporting candidates is often a necessary component to a government affairs program, or just to ensure a more favorable regulatory climate for a business or association. Supporting candidates, however, is a highly regulated area, requiring a clear understanding of the laws governing political activity. What is legal in one state may not be legal in the neighboring state, and campaign finance violations can lead to expensive investigations, high fines, and negative publicity that can destroy an organization’s reputation.
This program, presented by Ronald Jacobs, co-chair of Venable’s Political Law Group, discusses the federal rules that apply to making campaign contributions. It explores simple solutions for an organization, such as creating a federal political action committee (PAC), as well as more complicated options like hosting fundraisers, conducting get-out-the vote activities, and communicating with employees. It also examines how company executives can engage in fundraising activities as volunteers without causing the company to make an impermissible in-kind contribution.
In addition, the program explores the state laws and how they differ from the federal model. Many states do allow corporate contributions. Other states allow federal PACs to contribute to state candidates with minimal extra filing. Unfortunately, a handful of states have very restrictive rules that effectively require a company to create a state-specific PAC. Moreover, a number of states have “pay-to-play” laws that restrict company and executive giving if the organization has state or local contracts. Although there is a separate program on state sales activities that includes a full discussion of pay-to-play, this session provides an overview so that counsel can learn about the need for a compliance program.

Learning Objectives:

  • Understand the federal restrictions on corporate political activity
  • Learn how to create a federal PAC and understand the compliance obligations that go along with it
  • Differentiate the state laws that restrict or permit corporate support of state and local candidates
  • Summarize how to use a federal PAC in state elections or how to create a state-specific PAC
  • Identify what pay-to-play laws are and how they apply to state and local government contractors