Political Law
Congress has recently enacted major overhauls to the federal campaign finance laws, lobbying disclosure laws, and Congressional gift and travel rules. In addition, Congress and the Internal Revenue Service (IRS) are scrutinizing the lobbying and political activities of tax exempt organizations. In this environment, any organization active in lobbying or campaign activity must thoroughly understand the rules and have a robust compliance program in place.
Holland & Knight's Political Law Group consists of attorneys with experience in the regulation of lobbying, ethics, campaign finance, and related tax laws. We can help your organization create and maintain an internal compliance program to help prevent violations of the law.
Documents
Lobbying
The Honest Leadership and Open Government Act of 2007 increases penalties for violations of the Lobbying Disclosure Act of 1995 (LDA) from $50,000 to $200,000 and now includes the possibility of prison time for "knowingly and corruptly" failing to comply. Now, for the first time, registered lobbyists and the entities that employ them can be punished for inducing a Member, officer, or employee of the House or Senate to accept a gift or travel that violates House or Senate rules.
In addition, each entity registered under the LDA and each individual listed on an LDA filing must now submit a statement certifying the entity or individual is familiar with the House and Senate gift and travel rules and has not caused anyone to violate the rules. Accordingly, each individual required to submit this certification should ensure they understand the rules and each entity required to submit this certification should implement a comprehensive compliance program.
Campaign Finance
The Bipartisan Campaign Reform Act of 2002 increased civil and criminal penalties for campaign finance violations. During 2006 and 2007 the Federal Election Commission (FEC) levied over $10.7 million in fines for violations – including a single $3.8 million fine. In addition, the Department of Justice (DOJ) Public Integrity Section has identified campaign finance violations as a top enforcement priority.
Potential problem areas include illegal corporate contributions, reimbursing for campaign contributions, and omitting required disclaimers. Any entity that operates a political action committee (PAC), makes state or local corporate campaign contributions, or has individual employees involved in political activity should implement a comprehensive compliance program to prevent violations of campaign finance laws.
Tax
For all organizations, regardless of tax status, an understanding of the definition of lobbying and political campaign activities is critical. Tax exempt organizations must take care to comply with IRS restrictions on political and lobbying activity by understanding the operative definitions, limits and restrictions in this area and how they are applied to particular types of 501(c) organizations. Taxable businesses are precluded from taking a business expenses deduction for most lobbying and political expenses. Further, trade association must notify their members that the portion of their dues allocable to lobbying by the association is not deductible. Political organizations such as PACs, political parties, and issue advocacy groups must comply with Section 527 of the Internal Revenue Code and IRS disclaimer requirements.
Political Law Group Services
The Holland & Knight Political Law Group provides services in the following areas:
- Federal, state, and local lobbying compliance:
- Preparation and review of LDA registrations and filings;
- Calculating lobbying expenses using either the LDA or IRS method;
- Consultation regarding planned events including receptions, meals, and travel;
- Advising on post-employment restrictions for former government employees; and
- Implementing internal lobbying compliance programs to avoid violations of the House and Senate rules, the LDA, and related state or local laws and regulations.
- Federal, state, and local campaign finance compliance:
- PAC creation and maintenance;
- Preparation and review of FEC and state filings;
- Advising on corporate political activities;
- Reviewing political advertising;
- Tracking individual contributions for purposes of the FEC biennial contribution limit; and
- Implementing internal compliance programs to avoid violations of the Federal Election Campaign Act, FEC regulations, and related state or local laws and regulations.
- IRS compliance related to lobbying and political campaign activities:
- Lobbying and campaign restrictions for 501(c) organizations;
- IRS (and federal, state, and local campaign finance) compliance for "527” organizations;
- IRS filing requirements for state or local political committees;
- Creation and maintenance of affiliated organizations (including PACs and 501(c)(4) entities); and
- Implementing internal compliance programs to avoid violations of the Internal Revenue Code and IRS regulations.