Introduction

Welcome to the holiday edition of the Political Law Playbook! As everyone takes time to decompress and enjoy some time with family as we close out 2023, we wanted to provide some light holiday reading concerning recent political law developments of interest in DC and further afield. Of particular note, this edition highlights Meta’s new policy on Artificial Intelligence (“AI”) for political ads, the US Supreme Court’s new Code of Ethics, and a first-of-its-kind law in Michigan related to felon voting rights.

Federal Elections & Campaign Finance

Meta Will Require Political Advertisers to Disclose AI Use — Meta, the parent company of Facebook and Instagram, announced a new policy last month requiring political advertisers to disclose when they have used AI or other digital methods to create advertisements. Starting next year, advertisers on the platform will need to disclose when a social issue, electoral, or political ad contains a "photorealistic image or video, or realistic sounding audio" that was digitally created or altered. Advertisers are not, however, required to disclose changes that are "inconsequential or immaterial" to the claims or issues raised in platform communications, such as changes or adjustments related to image size or sharpness. Meta also plans to incorporate notices into covered ads when sponsors reveal that content has been digitally created or altered.

House Ethics Committee Report on George Santos Finds “Substantial Evidence” Of Wrongdoing and Campaign Finance Impropriety — The House Ethics Committee recently released its report on the alleged misconduct of former Representative George Santos (R-NY), finding that there was substantial evidence the now-expelled former congressman knowingly filed false disclosure reports with the Federal Election Commission (FEC), and misused campaign funds from his 2022 run for Congress. Santos had previously written a letter to the FEC stating that irregularities in his reports were the fault of his campaign treasurer, Nancy Marks, but the Ethics Committee report found that Santos helped her to falsify those records. The report also states that Santos funneled campaign donations to his personal accounts, lied to donors and his political committees, and was wholly unhelpful in the process of the investigation. Santos was expelled from the House of Representatives on December 1st.

Federal Lobbying & Ethics

Senators Warren, Brown Urge SEC to Require Public Company Lobbying Disclosure — Senators Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) recently sent a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler urging him to issue rules requiring public companies to disclose their lobbying expenditures via the securities disclosure process. The senators contend that a company’s lobbying activity is of material importance to its investors such that the SEC should require strong disclosure rules to ensure that investors have access to that information. Specifically, the senators requested that the SEC issue a rule updating Regulation S-K to require registered companies to disclose, as relevant, any lobbying strategy, the aggregate amount of direct or indirect contributions to registered state and federal lobbyists, and any material risks related to or arising from the registrant’s lobbying strategy and expenditures.

US Supreme Court Adopts First Code of Ethics — In the wake of a barrage of criticism from transparency groups and political advocacy groups over the course of the past year, the US Supreme Court recently adopted its first formal Code of Ethics. The policy, agreed to by all nine justices, does not appear to impose any significant new disclosure requirements on the members of the Court, and leaves compliance and enforcement entirely up to each individual justice. The newly adopted code is nearly identical to the Code of Conduct for US Judges that applies to all other federal judges but is tailored to fit the idiosyncrasies of the USSC. Despite the landmark nature of the new code, its lack of enforcement and investigative mechanisms has left many of the Court’s most vocal critics calling for additional action.

Non-Federal Elections & Campaign Finance

FBI Raids Home of NYC Mayor’s Top Fundraiser — Last month, the Federal Bureau of Investigation (FBI) raided the Brooklyn home of NYC Mayor Eric Adams’ chief fundraiser - Brianna Suggs - seeking documents related to the campaign’s ties to Turkish government officials and possible links to potential foreign political contributions barred by law. In response to the raid, Adams released a statement asserting that he has no knowledge of any foreign contributions being made to his campaign and stating that his candidate committee will be conducting a fulsome review of its financial records to identify any potential issues or discrepancies. In conjunction with its seizure of documents from Suggs’ home, FBI agents involved in the case also detained several of the mayor’s electronic devices for further forensic review.

Maine Voters Pass Ban on Foreign Spending in State Referendum Campaigns — Maine voters decided last month to close a loophole in state campaign finance law that allows foreign governments to spend money to influence state and local referendum campaigns. The measure was largely a response to foreign government spending in a referendum campaign two years ago over the future of a planned electricity corridor in western Maine. The measure prohibits foreign governments or companies with a 5% foreign government ownership stake from donating in conjunction with state referendum campaigns. Federal and state election laws already prohibit foreign nationals from contributing to candidates seeking office in Maine, but they do not ban foreign governments or entities from spending money to influence state and local ballot referenda and initiatives.

Kansas Supreme Court Set to Consider Protections for Voting Rights — The Kansas Supreme Court recently heard oral arguments in an appeal brought by Kansas Attorney General Kris Kobach questioning a state court of appeals decision that characterized voting as a fundamental right under the state’s constitution. Under Kansas case law, any action infringing upon any fundamental personal right must be evaluated under “strict scrutiny” analysis whereby government action must further a compelling governmental interest and be narrowly tailored to achieve such interest. Kobach’s office brought the case forward for appeal contending that the lower court’s decision will likely throw current state election regulations into question and likewise make any future alternations to state election laws – even administrative ones – next to impossible to enact. The case arises out of the state’s 2021 election reform law passed by the KS legislature in the wake of election integrity questions during the 2020 election. Existing state law requires KS election officials to evaluate and match voter signatures on all advance mail-in ballots with voter signatures on file with county election officials. KS law likewise limits the number of advance ballots an individual can gather for delivery to an election office to 10.

Michigan Law Would Be First to Automatically Register People to Vote as They Leave Prison — In Michigan, state lawmakers recently adopted House Bill 4983, which if signed by the governor, would be the first law in the country to require a state to automatically register to vote any individual released from prison. Additionally, under the newly proposed law, a system of “back-end” automatic voter registration would be enacted when, for example, an individual gets or updates their MI driver’s license or state ID. This proposed registration mechanism needs to be approved by the federal government, however, before it can go into effect. These proposed legislative changes follow on the heels of a 2018 MI bill that required public agencies to offer to register voters during government-citizen interactions. Voter registration organizations and advocacy groups see the proposed legislation as an exciting step toward greater voter participation. Questions certainly remain, however, as to how the implementation and application of such new laws - if enacted - will interplay with existing state and federal laws and regulations.

Non-Federal Lobbying & Ethics

Cantrell Hit with Ethics Charges Over First-Class Flight Upgrades — New Orleans Mayor LaToya Cantrell was charged by the Louisiana Board of Ethics (LBOE) for violating the state prohibition against public officials receiving anything of value for their official duties. The LBOE found that over the course of two years, Cantrell received nearly $30,000 worth of first-class upgrades across 15 flights she took on behalf of the City of New Orleans. The current municipal travel policy requires that all city employees are required to seek the lowest fares available when conducting official business or otherwise reimburse the city when receiving deluxe accommodations. The charges advanced by the LBOE come nearly a year after Cantrell reimbursed the city $28,856 for the purportedly excessive costs. Despite having already reimbursed the expenses at issue, the LBOE is seeking additional action in this matter before the Louisiana Ethics Adjudicatory Board, which could levy a fine of up to $10,000 or censure Cantrell for her actions.

Practice Pointers

This month’s edition of the Playbook referenced an effort by two U.S. Senators to shine additional light on corporate lobbying spending through the federal securities regulation structures enforced by the SEC and Department of Justice. Such efforts to increase transparency in the corporate advocacy and lobbying space are not new, however, as an array of “good government” and “corporate ethics” groups have for years made calls for government action promoting greater visibility into corporate spending on political and policy matters. Those same groups have also been front and center in encouraging private action – whether through corporate shareholder activity, ESG initiatives, or other tools – designed to promote greater transparency and accountability regarding corporate lobbying activity at the federal, state, and local levels.

As our readership knows, federal lobbying expenses are already subject to public disclosure under the Lobbying Disclosure Act (“LDA”). Increasingly, however, lobbying disclosure compliance is becoming more complicated by the need to consider tangential efforts by governmental and private actors to layer additional transparency and regulatory considerations on top of existing legal frameworks. With another round of quarterly LDA reporting around the corner in January, the end of year provides a convenient time for organizations to take stock of their current lobbying spending levels, to plan for future engagement, and to develop strategies that are mindful of business and public relations goals.

We at the Dentons Political Law Team have advised numerous corporate clients throughout this end of year decision making process. While the demands of the new year are just around the corner, we can help navigate the various competing interests at the intersection of government affairs and corporate transparency. Please do not hesitate to reach out if you have specific questions or concerns.

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