Introduction

Welcome to the November Edition of the Political Law Playbook and a Happy Thanksgiving to all! With Washington narrowly avoiding a government shutdown this month and Congress gleefully taking off for holiday recess, plenty of developments in the political law world caught our eye. This edition highlights several interesting legislative efforts that would have far-ranging impacts, including a bill introduced by Senator Josh Hawley (R-MO) that would effectively undo the seminal Citizens United ruling. Lawmakers in Michigan have also unveiled a bipartisan effort to target the use of deepfake artificial intelligence in political ads. And the US Supreme Court looks eager to wade further into the First Amendment arena, as the justices recently agreed to hear oral arguments in Murthy v. Missouri (the case formerly known as Missouri v. Biden), which deals with the crossroads of politics, censorship, and free speech.

Federal Elections & Campaign Finance

Senator Hawley Proposes Bill to Undo Citizens United — Last month, Senator Josh Hawley (R-MO) introduced the Ending Corporate Influence on Elections Act with the goal of lessening the influence of corporate money in American politics and dramatically cutting back on publicly traded corporations' ability to influence elections. If passed into law, Senator Hawley’s bill would target the Supreme Court’s 2010 decision in Citizens United v. FEC and prohibit publicly traded corporations from donating to Super PACs and making independent expenditures. The viability of the bill remains to be seen, but the proposed legislation is likely to draw an interesting cohort of supporters and detractors on both sides of Capitol Hill.

Former Santos Campaign Treasurer Pleads Guilty — Nancy Marks, the former campaign treasurer for Rep. George Santos (R-NY), pled guilty last month to federal felony charges touching on a variety of campaign finance issues. The guilty plea appears to implicate Santos in a scheme to embellish his campaign finance reports with a fake loan and sham donors. According to filings and statements by the US Attorney's Office for the Eastern District of New York, Marks and "the candidate" reported fictional or inflated contributions to Santos' campaign by family members. The pair also allegedly lied about a $500,000 loan that Santos claimed he made to his own political operation. Santos continues to be in the crosshairs on both the legal and congressional ethics fronts despite his recent decision to not seek reelection in New York’s Third Congressional District in 2024.

FEC Adopts New Directive on RTB Investigations — On October 26, the FEC voted to adopt a directive on how the Office of General Counsel (“OGC”) should conduct post-reason to believe (“RTB”) investigations involving political committees and parties subject to its jurisdiction. The directive arises in the wake of recent comments made by several Commissioners expressing concerns about the historical RTB investigative process, particularly with regard to the FEC’s ability to bring more complex or contested matters to a successful conclusion. Relevant changes brought about through the directive include requiring OGC to wait until a respondent submits a formal response to a RTB finding before submitting an Investigative Plan to the Commissioners. Similarly, the new investigative framework streamlines the process for OGC’s consideration of publicly available information related to review matters that may become available after an Investigative Plan has been submitted.

Non-Federal Elections & Campaign Finance

Maryland Political Action Committee Levied Large Fine for Text Message Disclosure Violations — A Maryland state PAC - the 1776 Project PAC – was recently fined $20,250 for failing to include information identifying the sponsor of their political advertising in text messages involving a local school board election. The PAC had sent nearly 14,000 messages to Carroll Country voters during the 2022 school board race without any reference to the financial sponsor of the advertising as required by Maryland state law. The fine levied was much more significant than typical campaign finance penalties levied by the State Administrator of Elections given the large number of violations committed by the PAC and the overt disregard for state disclosure requirements.

Michigan State Bill Targets Deepfake Political Ads — Michigan lawmakers are advancing bipartisan legislation to crack down on AI-generated deepfakes in election materials in the state. If passed, the current legislative package could add Michigan to the handful of states restricting the use of artificial intelligence in political campaigns in response to worries about how the technology empowers bad actors to sway voters. Michigan’s five-bill legislative package would require political messages to include disclosures of AI use and would subject serial violators of the new rules to potential criminal sanctions. If enacted, violators convicted of using illegal deepfakes to sway a state or local election could face imprisonment for up to five years and supplemental criminal financial penalties.

Louisiana Voters Approve Ballot Measure Banning Nonprofit Election Administration Funding — Louisiana voters recently approved a state ballot measure banning (in most circumstances) state and local government from utilizing direct financial support or other in-kind assistance from non-governmental and foreign government sources to administer elections. The passage of the initiative amends the state’s constitution in response to concerns that donations from such sources could be selectively targeted to specific parishes and municipalities based on the partisan leanings of election administrators. The referendum’s passage is yet another prominent example of the growing number of anti- “Zuckerbucks” statutory, regulatory, and constitutional protections being put into place in many conservative-leaning states across the US to bar or limit the acceptance and use of private resources for election administration and operations.

Non-Federal Lobbying & Ethics

Two Lobbyists Sentenced to Prison for Michigan Cannabis Board Bribery Scheme — In Michigan, two state lobbyists were recently sentenced in federal court for conspiring to bribe the head of the state’s former medical marijuana licensing board. Brian Pierce and Vincent Brown, prominent partners and consultants to the licensing board and many stakeholders in the state’s fledgling cannabis industry, were convicted of providing $42,000 in bribes to Rick Johnson, who led the board from 2017 to 2019. The board, which was dissolved in 2020, reviewed applications to grow and sell marijuana for medicinal purposes. Johnson himself was also recently sentenced to more than four years in prison for accepting $110,000 during his tenure on the review body.

Missouri Ethics Committee Begins Inquiry into House Speaker — The Missouri House Ethics Committee recently began an investigation into the state’s House Speaker, Dean Plocher, for potential violations of state ethics rules. Plocher is facing a growing chorus of calls for his resignation following several media reports indicating that he has been allegedly receiving government reimbursements for expenses concurrently paid for by his campaign. Plocher has downplayed the controversy as a series of minor oversights but has nonetheless started to pay back many of the questionable reimbursements after news broke concerning the situation. Despite growing calls for him to step down from Missouri legislators on both sides of the aisle, Plocher has confirmed his desire to remain in his current role and to push ahead with his run for Missouri Lieutenant Governor in 2024.

The Courts & Free Speech

US Supreme Court Temporarily Blocks Order in Missouri Social Media Lawsuit — The US Supreme Court has administratively stayed a September order of the US Circuit Court of Appeals for the Fifth Circuit in the high profile Missouri v. Biden First Amendment case (now known as Murthy v. Missouri) that temporarily restricted contact between the Biden Administration and various social media companies concerning content moderation matters. The stay was issued by the Supreme Court in light of its decision to hear oral arguments on the case this term.  At issue in the matter - which was originally filed by former Missouri Attorney General Eric Schmitt and Louisiana Attorney General Jeff Landry in 2022 - is the question of whether government coordination on the moderation of “misinformation” by social media companies transformed content-moderation decisions concerning targeted political speech into state action in violation of the First Amendment.

Can Public Officials Block You on Social Media? It’s Up to The Supreme Court — Last month, the US Supreme Court heard a pair of cases that focus on the ability of public officials to block political and policy critics from their personal social media pages. In Lindke v. Freed, Kevin Lindke, a resident of Port Huron, MI, sued that municipality’s City Manager, James Freed, because Freed blocked Lindke from his personal social media page after Lindke left critical comments about Freed’s handling of pandemic-related policy matters. In O’Connor-Ratcliff v. Garnier, two school board members in Poway, CA are contending that their public-facing social media pages are an extension of their campaign pages and thus personal (rather than official) in nature. The question that the Court must decide is how lower courts should deal with First Amendment concerns in relation to officials and social media. Leading up to the Court’s consideration of these cases, a majority of federal appeals courts that have ruled on the issue have determined that when public officials create an online page or platform for public comment that the First Amendment's freedom of speech protections prevent those officials from barring people whose comments they do not like.

Foreign Agents Registration Act

US Senator Menendez Pleads Not Guilty to Allegedly Conspiring to Act as a Foreign Agent — Senator Robert Menendez (D-NJ) pled not guilty last month to a new federal indictment charging him with allegedly conspiring to act as an unregistered foreign agent for the Egyptian government for the period between 2018 and 2022. Sen. Menendez and his wife were also recently indicted in September for their alleged participation in a bribery scheme involving a number of New Jersey businessmen with ties to Egypt. The superseding indictment charges Sen. Menendez under a law that bans public officials from undertaking action covered by FARA, which requires those acting on behalf of foreign principals (including governments, companies, and other persons) to register and report as a foreign agent with the US Department of Justice.

Practice Pointers

With November upon us, this month’s edition of the Political Law Playbook reminds our readership about the plethora of federal campaign finance compliance considerations that will accompany the next twelve months before the 2024 general election. The peace and quiet of an off-cycle year, with its minimal filings, comes to an end in January. The election year schedule brings with it the hecticness of quarterly filings, pre- and post-general filings, and the return of 24- and 48-hour independent expenditure reports. Those pesky pre-primary reports will also resurface.

We often hear from our PAC and other federal campaign finance clients that they wished they had spent a bit more time preparing for the slog of federal election years, particularly presidential election years, in the months leading up to their commencement. To this end, the holiday season is generally a great time to ensure that PAC recordkeeping processes are finely tuned and that communication and reporting protocols are accurate and efficient so that applicable disclosure reports can be prepared and filed in a seamless manner. This time of year is also a good opportunity for corporate clients to take stock of their SSF’s fundraising and expenditure plans, so that these connected committees can revise and update their solicitation materials and set their budgets for 2024 giving in alignment with applicable limits.

If your internal political law compliance staff is feeling overwhelmed by what’s on the horizon, the Dentons Political Law Team is well versed in the legal compliance and strategic issues at play. Please do not hesitate to reach out if you have specific questions or concerns.

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