Political Law Notes

In a PPP Frequently Asked Questions release, the SBA stated that for purposes of determining the eligibility of section 501(c)(6) organizations for First Draw and Second Draw PPP Loans, “lobbying activities” is defined by the Lobbying Disclosure Act, rather than the Internal Revenue Code.

Under the Economic Aid Act, trade associations, chambers of commerce and other 501(c)(6) organizations are now eligible to receive PPP loans provided that lobbying is not more than 15% of an applicant’s activities and the cost of its lobbying did not exceed $1 million in the most recent tax year prior to February 15, 2020.

The Federal Election Commission has adjusted some of the individual and PAC contribution limits for the 2021-2022 election cycle.

The amount that individuals and non-multicandidate PACs can give to federal candidates has been increased by $100 to $2900 per election to each federal candidate.  Since primary and general election contests are viewed as separate “elections,” an individual or a non-multicandidate PAC may now contribute a total of $5800 to a federal candidate. 

On his first day in office, President Biden signed an Executive Order that imposes ethics obligations on appointees to his Administration.  While the Order has some similarities with the ethics Executive Orders issued by Presidents Trump and Obama, there are several new provisions of importance to individuals that go to work for the new Administration as well as to organizations that interact with Biden Administration appointees.

Originally published in Associations Now

The Foreign Agents Registration Act has attracted significant attention in recent years as the Department of Justice (DOJ) has secured high-profile convictions of people associated with the Trump administration, including Paul Manafort and Richard Gates. FARA is a disclosure law aimed at uncovering the activities of “foreign agents” working for “foreign principals” to influence U.S. officials or the American public. FARA was enacted in 1938 to shed light on Nazi propagandists and was later used to counter communist activities.

This 30-minute webinar highlights key political law compliance considerations for corporations and associations as we head into the end of a busy 2020 election season and as organizations assess their legislative priorities in Congress and state legislatures in the New Year.

On August 21, 2020, the US Court of Appeals for the District of Columbia affirmed a 2018 US District Court decision holding that the FEC’s independent expenditure (“IE”) disclosure rule was contrary to law.

The article lists five top compliance tips for association PACs this election year.

The same political activity may involve federal, state and local laws. Understand the rules to identify opportunities and avoid risks and adverse publicity.

Another election year is upon us, and once again federal and state candidates are on track to raise and spend unprecedented sums for their election efforts.  That means corporations, trade associations, 501(c)(4) advocacy organization, and their leaders, members and donors will be inundated with political contribution requests.  They may also be asked to help candidates and political parties in other ways, such as hosting fundraisers or providing in-kind contributions of goods or services.
 
For many organizations, political engagement is not an option – decisions by federal, state and local officials may be critical to their success.  Any organization engaged in political activity must understand the basic rules of the road in order to avoid common pitfalls.  Here are our Top 5 compliance tips for addressing the political law risks facing your organization this election year.

As we previously reported, this past summer a U.S. District Court judge in Montana invalidated the IRS’s 2018 rule that had eliminated the need for most 501(c) organizations to report the names and addresses of their large donors to the IRS.   In response to that ruling, the IRS issued proposed regulations in September to address the Administrative Procedure Act rulemaking defect in the prior rule that was the focus of the District Court ruling.  

On July 30, a U.S. District Court judge in Montana invalidated the IRS’s 2018 rule that had eliminated the need for most 501(c) organizations to report the names of their large donors to the IRS.    
 
In July 2018, the IRS adopted Rev. Proc. 2018-38, in which it relieved Section 501(c) organizations, other than Section 501(c)(3) organizations, of the obligation to report the names and addresses of donors giving $5,000 or more during the year on IRS Form 990, Schedule B, beginning with tax year 2018 (due on or after May 15, 2019 unless an extension is elected).  Under the revenue procedure, organizations were still required to collect and preserve this information, as well as to provide it upon request to the IRS. As before, all donor information, whether or not reported to the IRS, remained strictly confidential and not subject to public disclosure.

On July 16, 2018, the IRS announced that it has eliminated the requirement for most nonprofit organizations to provide confidential donor information to the IRS on Schedule B to their annual IRS Form 990.  Although limited in scope and with no impact on public transparency, the change has significant political ramifications and has ignited a firestorm of support and condemnation across the political spectrum.  This includes a partisan Senate Finance Committee vote and delay in the Senate confirmation vote on the new IRS Commissioner.

In an opinion released on August 3rd, US District Court Judge Beryl Howell greatly expanded the FEC donor disclosure reporting requirements for independent groups – like Section 501(4) and 501(c)(6) organizations – that sponsor independent expenditures and other candidate advocacy communications.  The court delayed the implementation of its ruling for 45 days to give the FEC time to draft interim rules.

DC Partner Jim Kahl and Nancy Bukar, Sodexo Vice President of Government Affairs & Assistant General Counsel, co-presented to The Association of Corporate Counsel (National Capital Region) in a webcast last Tuesday on “Election Year Corporate Political Activity: Understanding the Legal Risks and Strategic Opportunities.” Click here to see