POLITICAL LAW DIGEST NO. 4

POLITICAL LAW DIGEST NO. 4:
Week of April 11, 2016

Saving Bob McDonnell | Paying GOP Delegates | Stopping Trump | Skipping Cleveland

SAVING BOB McDONNELL.  With the filing of a reply brief on behalf of former Virginia Governor Bob McDonnell, McDonnell v. United States is ready for oral argument before the United States Supreme Court in two weeks.  At issue in the case is the trial court’s stunningly broad definition of “official act,” which encompassed not only powers deriving from the Constitution and laws of Virginia, but also those which by practice and custom have come to be regarded as part of the office.  Recent developments–including the death of Justice Scalia and the Court’s recent denial of cert in former Illinois Governor Rod Blagojevich’s appeal–have been viewed as blows to McDonnell’s prospects.  But the Court has not been narrowly divided along partisan lines in recent high-profile corruption cases–see the Court’s 9-0 decision in Skilling, as well as its subsequent orders in Black and Weyrauch–and Blagojevich’s corrupt act, the attempted auction of a seat in the United States Senate, was squarely within the powers of the Governor of Illinois as established by law, not practice or custom.  I believe (and hope) that the Court will exonerate Governor McDonnell.

PAYING GOP DELEGATES No one is suggesting that candidates and their supporters could bribe delegates to the Republican National Convention, but that’s not stopping the media from asking if they could.  The resulting debate is worthwhile. however, to the extent that it illuminates the line between out and out bribery on the one hand, and political wheeling and dealing on the other.

+ How far can campaigns go to win support from a Republican delegate? | The Washington Post – Matea Gold and Ed O’Keefe

+ Could Republican Convention delegates be bought? Legally, maybe | CNN – Tal Kopan and Gregory Kreig

+ Cincinnati-inspired bribery law could affect Republican convention | Cincinnati.com – Jeremy Fugleberg

It’s also worth re-upping this analysis from our Digest No. 2:

+ Bribery and the brokered GOP Convention | In the Arena: Law and Politics Update – Brian Svoboda and David Lazarus

STOPPING TRUMP.  Unless something changes, it appears most likely that Donald Trump will not arrive in Cleveland with 1,237 delegates.  The Cruz campaign has been playing the delegate game before anyone else knew there was a delegate game to be played–and as a result, Cruz is now running circles around Trump in the chase for delegates.  Unless Trump is willing to unload many millions of dollars on paid advertising against Cruz in the remaining primary states, we predict it will be Cruz–not Trump–who arrives in Cleveland with 1,237 pledged delegates, and that he only will have to wait for the second ballot before all of them will be freed from their binding and able to vote for him.

+ Donald Trump, losing ground, tries to blame the system | The New York Times – Jeremy W. Peters and Jonathan Martin

+ Despite complaints, delegate system has given Trump a 22% bonus | NBC – Ari Melber

+ RNC tells Trump: Delegate process “easy to understand for those willing to learn it” | The Washington Post – Ed O’Keefe

+ Trump’s delay in building a delegate operation may cost him the nomination | The Guardian – Ben Jacobs

+ Is GOP headed for its own Bush v. Gore? | Washington Examiner – Byron York

SKIPPING CLEVELAND.  GOP candidates in swing states apparently don’t want to be anywhere near the GOP Convention in Cleveland.  Corporations are under pressure from activist groups to skip out, as well.

+ Top Republicans may skip Convention in Cleveland | The Hill – Rebecca Savransky

+ Corporations grow nervous about participating in Republican Convention | The New York Times – Jonathan Martin and Maggie Haberman

+ Companies worry Trump-led Convention could hurt brands | POLITICO – Anna Palmer

+ The GOP Convention will be so messy, corporate America may want nothing to do with it | Slate – Josh Voorhees

+ Great news! The GOP Convention will be a disaster | CNBC – Jake Novak

+ Many GOP lobbyists will go to Cleveland but the thrill is gone | The Washington Post – Catherine Ho

However, as this article highlights, the RNC Convention’s host committee is raising more funds, and faster, than in prior years.  It may be the DNC Convention in Philadelphia that corporate America, feeling The Bern, ultimately decides to skip:

+ Sanders, not Trump, scaring Democratic Convention donors | Bloomberg BNA (paywall – excerpt available here)


About the Political Law Digest

The Political Law Digest is a weekly review of important stories and significant developments in campaign finance, election law, lobbyist regulation and government ethics – compiled by Chris Ashby and the political activity lawyers at Ashby Law.  To subscribe, or to submit a story, email Info@Ashby-Law.com.

POLITICAL LAW DIGEST NO. 3

POLITICAL LAW DIGEST NO. 3:
Week of March 28, 2016

Foreigners United? | How to Hack an Election | Rules are Rules | It’s the Most Wonderful Time of the Year

FOREIGNERS UNITED?  FEC Commissioner Ellen Weintraub thinks she has discovered the antidote to Citizens United–the foreign money ban.  While CU opened the doors to unlimited independent spending by corporations, the prohibition against spending foreign money in U.S. elections remains in tact–and, unlike the corporate prohibition, it applies to all U.S. elections, not just federal ones.  Commissioner Weintraub would have the FEC use the foreign money ban to police corporate-funded independent expenditure spending, searching for even a dollar’s worth of foreign capital in the company’s treasury.  Her proposal was wildly cheered in the progressive reform echo chamber on Twitter, but thoughtful takes from the left and the right have cast doubt on its constitutionality and viability.

+ Taking on Citizens United | The New York Times – Ellen Weintraub

+ No, Commissioner Weintraub, the FEC can’t circumvent Citizens United | The Huffington Post – Allen Dickerson

+ One FEC Commissioner’s answer to Citizens United | More Soft Money Hard Law – Robert Bauer

+ Foreign money is flowing into U.S. elections, Alito’s lying lips notwithstanding | The Intercept – Jon Schwartz

HOW TO HACK AN ELECTION You think there’s no way this could happen here.  Then, this happens.

+ How to hack an election | Bloomberg Businessweek – Jordan Robertson, Michael Riley & Andrew Willis | “Andrés Sepúlveda rigged elections throughout Latin America for almost a decade. On the question of whether the U.S. presidential campaign is being tampered with, he is unequivocal. ‘I’m 100 percent sure it is,’ he says.”

+ Arizona Secretary of State confirms election fraud happened in Arizona primary | U.S. Uncut – Amanda Girard

RULES ARE RULES.  Donald Trump is learning the hard way that winning primaries is not enough.  You also have to win delegates–and keep them–in order to win the nomination.  Trump narrowly won Louisiana’s presidential preference vote, but Ted Cruz appears to have emerged from Louisiana with more pledged delegates.  (Trump threatened to sue.)  Then, after Trump stated that he no longer intends to honor his pledge to support the eventual Republican nominee, his claim to South Carolina’s 50 delegates is in jeopardy.

+ Welcome to politics, Mr. Trump: You won Louisiana’s battle but lost the war | The Washington Times – Kelly Riddell

+ The Trump-Cruz Louisiana delegate fight could be first sign of turmoil to come | Talking Points Memo – Tierney Sneed

+ Trump threatens lawsuit over lost Louisiana delegates | Washington Examiner – Kelly Cohen

+ Trump camp will file RNC complaint over delegates, not a lawsuit | Talking Points Memo – Caitlin MacNeal

+ Trump’s threat on pledge could cost him South Carolina delegates | Time – Zeke J. Miller

IT’S THE MOST WONDERFUL TIME OF THE YEAR.  For LDA nerds, that is.  The Government Accountability Office has released its annual report on Lobbying Disclosure Act compliance.  Once each year, the GAO randomly audits several dozen LDA registrants’ reports, attempting to determine if the registrants’ records line up with their reports.  Of note, over 85% of audited lobbyists responded that they thought it was easy to understand and comply with the LDA–and yet, over 30% failed to comply with one of the LDA’s easiest directives, to report lobbying expenditures rounded to the nearest $10,000.  More importantly, after a period of years in which it seemed regulators had no interest in enforcing the LDA, the report notes a continued uptick in DOJ referrals and criminal prosecutions for registration and reporting failures.

+ Observations on Lobbyists’ Compliance with Disclosure Requirements | Government Accountability Office – March 2016


About the Political Law Digest

The Political Law Digest is a weekly review of important stories and significant developments in campaign finance, election law, lobbyist regulation and government ethics – compiled by Chris Ashby and the political activity lawyers at Ashby Law.  To subscribe, or to submit a story, email Info@Ashby-Law.com.

POLITICAL LAW DIGEST NO. 2

POLITICAL LAW DIGEST NO. 2:
Week of March 14, 2016

Super PACs, Not So Super Anymore | Unofficially Official Nonprofit Organizations | Anyone But Trump, Continued | No More Free Rides for “Ride Along” Lobbyists | More Anonymous Giving from LLCs

SUPER PACs, NOT SO SUPER ANYMORE.  Earlier this cycle, as pundits were celebrating the Great Super PAC flameout of 2016, I half-wrote but didn’t finish a blog post titled, “Just Wait.”  My thesis was that the real power of Super PACs would become evident in March and April, when the political playing field would expand beyond the initial run from Iowa to New Hampshire, South Carolina and Florida, and paid advertising could begin to move the needle in large, winner-take-all states.  Now it’s clear–despite what $30M in negative Super PAC ads might have done to Marco Rubio–that Donald Trump is Super PAC kryptonite.  (At least until the General Election, when the national media will withdraw its unprecedented in-kind support from his campaign and subject him to the same rules it applies to all other candidates.)

+ Super PACs built a wall around Florida, and Trump destroyed it | The Center for Public Integrity – John Dunbar & Caty Zuvich

+ Trump, Sanders deflate Super PACs in unpredictable 2016 race | AP – Julie Bykowicz

UNOFFICIALLY OFFICIAL NONPROFIT ORGANIZATIONS.  Elected officials sometimes form non-profit organizations to advance their policy agendas–and by extension, their political interests–a practice that is equal parts controversial and effective.  This week, faced with claims of conflicts-of-interests and calls for investigations, New York Mayor Bill de Blasio became the latest politician to shut down his “official” non-profit–which had received over $1 million in donations to support the Mayor’s universal pre-Kindergarten and afforable housing proposals–claiming, “The work is done.”

+ Facing criticism, NYC mayor to shutter nonprofit group | AP – Jonathan Lemire

+ The mayor’s nonprofit that’s not really the mayor’s nonprofit | Voice of San Diego – Liam Dillon

ANYONE BUT TRUMP, CONTINUED.  As we noted in last week’s digest, the GOP is in the midst of an extended, national brainstorm over how to keep Donald Trump from leaving the Republican National Convention in Cleveland as the party’s nominee–or, if he does, how to block him from winning 270 electoral votes in November.

+ The Party still decides | The New York Times – Ross Douthat

+ GOP Official: The party chooses the nominee, not the voters | The Hill – Harper Neidig

+ How to steal a nomination from Donald Trump | Bloomberg Politics – Sasha Issenberg

+ RNC Rules: Insiders speak out on contested convention | NBC News – Ari Melber

+ How an obscure committee could decide the GOP nomination | Politico – Kyle Cheney

+ GOP effort to block Trump may lead to a morass | The New York Times – Al Hunt

+ Top conservatives gather to plot third-party run against Trump | Politico – Shane Goldmacher

+ The Electoral College could still stop Trump, even if he wins the popular vote | The Washington Post – Derek Muller

(Also, an interesting debate is unfolding about whether – and with what – RNC convention delegates can be bribed.  See here and here.)

I SEE YOU, UNREGISTERED LOBBYIST, AND I KNOW WHAT YOU’RE DOING.  One of the great urban legends in lobbying regulation is the so-called “lobbyist shield” doctrine.  In-house government affairs employees often think that, as long as a registered lobbyist accompanies them to meetings with elected officials, they don’t have to register as lobbyists themselves and report their compensation, expenditures and activities.  In fact, that is rarely the case.  This week, California–one of the few states that permitted “ride along” lobbying–changed its law to prohibit it.

Ethics agency changes loophole allowing advocates to avoid registering as lobbyists | Los Angeles Times – Patrick McGreevy

YOU STILL CAN’T SEE ME.  Updating last week’s digest, a new Washington Post investigation finds growing use of limited liability companies to make large political contributions–a practice which shields the identity of the donor or donors who capitalized the LLC.  Even still, a New York judge this week dismissed a lawsuit challenging a provision of that state’s campaign finance law that expressly permits LLCs to make political contributions, and to do so at higher individual limits (up to $150,000 per year, versus $5,000 per year for corporate contributions) and without disclosing their funding sources.

(I still think it’s only a matter of time until a state regulator tags one of these LLCs as a political committee–and penalizes it for failing to register as a PAC, failing to report, and making excessive contributions.)

 


About the Political Law Digest

The Political Law Digest is a weekly review of important stories and significant developments in campaign finance, election law, lobbyist regulation and government ethics – compiled by Chris Ashby and the political activity lawyers at Ashby Law.  To subscribe, or to submit a story, email Kaitlin@Ashby-Law.com.

POLITICAL LAW DIGEST NO. 1

POLITICAL LAW DIGEST NO. 1:
Week of March 7, 2016

FEC deadlocks on LLC donor disclosure | As Trump approaches 1237, Republicans examining convention rules, independent bids | NY seeks to require public affairs strategists to register as lobbyists | A war over voting laws rages in North Carolina

 

YOU CAN’T SEE ME.  The FEC deadlocked on the question of whether an individual may make, and whether a super PAC may accept, a contribution through a limited liability company without disclosing the donor’s identity. The controversial technique is used – perhaps with increasing frequency – effectively to anonymize a donor on the super PAC’s FEC report – the PAC reports a contribution from the LLC, but doesn’t reveal who funded the LLC in the first instance. Critics complain that this is an illegal “contribution in the name of another” – a.k.a. a “straw donor.” I have argued that using an LLC to hide donors is so 2012, that the FEC that deadlocked on this issue this week may not be the same FEC that receives the same complaint a year or two from now, and that the far better use of an LLC is as an exclusive vendor to a single client, or to a very small group of clients sharing common interests.

+ The FEC just made it easier for super PAC donors to hide their identities | The Washington Post – Matea Gold

 

ANYONE BUT TRUMP.  The Republican Party continues to scheme up ways to nominate anyone but Trump, but as Trump marches closer and closer to the magic number of 1237 delegates, anything and everything is open for discussion, including denying him victory in the General Election. How about an independent bid by Condoleeza Rice? Maybe a deadlocked House allowing House Speaker Paul Ryan to succeed to the presidency? (The latter scenario became even less plausible when Michael Bloomberg pulled the plug on his pre-campaign.) Now, delegate selection and sore loser laws are where the action is.

+ Major GOP donors are turning their hopes toward a contested convention | BuzzFeed – Tarini Parti

+ Seeing Trump as vulnerable, GOP elites now eye a contested convention | The Washington Post – Phillip Rucker & Robert Costa

+ How Trump could be blocked at a contested Republican convention | The New York Times – Larry Buchanan & Alicia Parlapiano

+ GOP pollster: Independent candidate unlikely to win | Politico – Daniel Lipman

 

WHEN LOBBYING ISN’T LOBBYING.  Five public relations firms this week filed a lawsuit challenging a new New York Joint Commission on Public Ethics rule defining lobbying to include such activities as issuing press releases or other public statements on behalf of a client, pitching op-eds for publication, and other traditional forms of media and public relations, if the communication takes a position on an issue, attempts to influence a public official’s decision, or results in the introduction, passage or defeat of legislation.  The move by JCOPE opens a new front in a nationwide push that is seeking to expand lobbyist registration requirements to cover non-lobbying activities such as sales of goods and services to government agencies and political intelligence gathering.

A Solution in Search of a Problem: New York Defines PR Consultants as Lobbyists | PR Week – Michael Lasky

 

AT WAR OVER VOTING.  “States around the nation are embroiled in legal battles over voting requirements, district lines and the rules governing elections. But North Carolina feels like the center. It is a place where hyperpartisanship, the focus on voting rules after the disputed election of President George W. Bush in 2000 and the Supreme Court’s dismantling of a crucial section of the Voting Rights Act have created an incessant state of combat over the way elections are conducted.”

+ North Carolina exemplifies national battles over voting laws | The New York Times – Richard Fausset

 


 

About the Political Law Digest

The Political Law Digest is a weekly review of important stories and significant developments in campaign finance, election law, lobbyist regulation and government ethics – compiled by Chris Ashby and the political activity lawyers at Ashby Law.  To subscribe, or to submit a story, email Kaitlin@Ashby-Law.com.

 

Size Matters

A while back, I had lunch with another election lawyer. Ashby Law was two or three years old at the time, and he was checking in to see how I was doing as a solo lawyer. “When we got your launch announcement,” he said, “we all thought, ‘Wow, it will be interesting to see how this goes.'”

Ashby Law will turn five in August. I’m still going. And with the addition of two new attorneys and one full-time professional staff member, the firm is growing.

This Winter, Jon Waclawski joined the firm as a partner. Last Fall, Kate Rennolds joined the firm as an associate. Kaitlin Murphy is our Director of Operations.

Together, we have deep experience on the business side of politics. We worked on campaigns and for politically-active nonprofit organizations before entering the legal field, so we’ve been the client before and we understand the environment in which our advice will play out. That experience and understanding is the foundation of our approach to the practice of political law—strategic, creative, practical.  And as a team of four, we are better leveraged, which means that we can serve our clients more efficiently and effectively.

When I began the firm in 2011, I had two anchor clients. Today, our clients include top tier presidential candidates and some of the most important statewide officeholders in America, the PACs and lobbyists of Fortune 500 companies and multi-national corporations, one of the largest Super PACs in the country, nonprofit organizations that are registering voters and making independent expenditures, impact donors to candidates, parties, PACs and causes, and innovative companies that are changing the way campaigns are run and won.

We are grateful for the trust and confidence of our clients, and for the support of our friends and referral sources. We will keep working hard and smart to justify it. And we are grateful for the continued opportunity to help our clients win elections, change law and policy and move the needle of public opinion during this exciting and important era of American politics.

The Five Most Important Political Law Developments of 2015

With 365 days in the year and a seemingly infinite amount of space on the Internet to be filled with content, it’s easy to lose perspective.  No one ever picked up many Twitter followers downplaying the importance of a news story.  Lawyers, reporters, bloggers and other commentators tend to make each day’s new development seem like the most important development since, well, yesterday’s new development.

But the end of any year – especially the one before a presidential election year – is a good opportunity to look back and try to identify the most impactful developments in law and practice.  Some developments changed politics immediately and obviously.  The impact of others will be realized fully only in the coming year and in years that follow.  Here is my list of the five most important political law developments of 2015.

5.  DOJ Enters the Fray

With its prosecution of a Virginia-based operative for violating the anti-coordination provisions of federal campaign finance law, and its settlement with a well-regarded lobbying firm for violating the Lobbying Disclosure Act, the Department of Justice signaled that it will enforce federal lobbying laws, and that it will not cede enforcement of the thorniest campaign finance laws to the Federal Election Commission.

On the lobbying front, for several years following the post-Abramoff reforms to federal lobbying and ethics laws, some in the industry suspected that DOJ lacked the interest or resources  necessary to enforce the LDA.  Coming on the heels of a handful of LDA prosecutions in 2013 and 2014 involving little known defendants that resulted in one $200,000 default judgment and settlements ranging from $30,000 to $50,000, the Justice Department’s $125,000 settlement this year with the blue chip firm The Carmen Group should put any such notions to rest.

Perhaps more importantly, the Carmen Group case appears to be the first to involve issues other than registration and reporting failures.  Indeed, the failure to disclose issues lobbied with sufficient specificity is one of the most prevalent LDA reporting mistakes, and it might be the one that first drew Justice’s attention to The Carmen Group.

On the campaign finance front, DOJ prosecutions in recent years seemed to have centered on relatively straightforward issues like corporate contributions and straw donor schemes.  But with the prosecution of Tyler Harber for illegally coordinating expenditures between a Virginia congressional candidate and a Super PAC he controlled, the Justice Department took on an issue as to which the FEC itself has been unable to reach much if any agreement this decade.

One additional aspect to this development:  Over the years, “watchdog” and other political reform groups have filed many dozens if not hundreds of largely unsuccessful civil complaints against candidates, campaign committees and other political players.  Frustrated in recent years by what they perceive as a lack of enforcement by the FEC, these groups now seem to have been emboldened by the uptick in DOJ enforcement, and have begun requesting criminal investigations of candidates and their campaigns.  Expect continued use of this tactic in 2016 and beyond.

4.  “Independent” Redistricting

Since our nation’s founding, one of the greatest perks of incumbency has been the constitutional authority to redraw legislative district lines.  In the most recent redistricting rounds, Republicans — aided by developments in computers and technology — have wielded redistricting power with incredible effect.  Today, some people even believe that gerrymandering is the root of all political evil — particularly when combined with unacceptably low voter registration rates and barely-there turnout by voters in party primaries.

Against this background, there have been attempts in states across the country to make redistricting more “independent” by insulating it from raw political considerations.  Many of these efforts center on involving unelected citizens as influencers or decision-makers in the redistricting process.  (I have expressed skepticism about these efforts.)

Voters in Arizona actually stripped the Arizona state legislature of its redistricting authority via a constitutional amendment, and vested the power instead in an independent commission.  The Arizona legislature sued to recover its authority, but in June, the Supreme Court upheld the constitutional amendment and the independent commission it established.  The legislature argued that the independent commission violates the Elections Clause of the federal constitution, which states that the time, place and manner of holding elections are to be established by the legislature in each state.  However, the Court reasoned that, because the legislative power derives from the people, the people of a state are its legislature — and thus they can act directly through a constitutional amendment, instead of indirectly through their elected representatives, to change the manner in which legislative districts are drawn.

We are now more than halfway to the next round of redistricting.  As technology advances, gerrymandering becomes even more effective, and the electorate continues to polarize, expect voters to continue to devise ways to weaken — or, following Arizona’s lead, to strip altogether — state legislative redistricting power.

3.  Super PACs Do Grassroots

There are two ways to look at Super PACs.  The first is the traditional way.  A Super PAC raises money in unlimited amounts from individuals, corporations and other PACs and non-profit organizations, and spends the money on paid media.  The new way takes stock of the amount of funds that are potentially available to be raised and spent in support of a candidate, and then attempts to raise those funds into the entity that can spend them most effectively and efficiently relative to the other entities supporting that candidate.

There are some things that a Super PAC never is going to be able to do — such as scheduling the candidate, moving him or her from A to B, prepping for debates and writing speeches.  There are other things that Super PACs have begun doing this cycle — retail events, research, rapid response — and have done pretty effectively.  Still, there remain a few things that Super PACs conceivably could do but, for the most part, have not been doing.  Chief among them has been grassroots organizing.

Just this week, Right to Rise USA, the leading Super PAC supporting Jeb Bush, mailed blank correspondence cards and envelopes to its backers, requesting that they write handwritten notes to undecided voters in early primary states.  Throughout the past year, Super PACs supporting Carly Fiorina and Bobby Jindal have held town hall meetings — featuring appearances by the candidates the candidates themselves — at which the Super PACs collected the names and contact information of potential supporters.  And for the past several years, Ready for Hillary engaged in a multi-million dollar campaign to create a national database of Clinton supporters.

I don’t think anyone has figured this out yet.  Ready for Hillary built what by all accounts was a huge national list, but the Clinton presidential campaign has it now.  It is unclear what the Fiorina and Jindal Super PACs are doing or might in the future do with the relatively fewer signups they have collected.  (Some suspect the signups were just a ruse to facilitate a Super PAC-funded campaign event for the candidates.)  But someone is going to figure this out — the opportunity is just too big not to — and when that happens, it will be a game changer.  In addition to making for a more efficient use of the total dollars behind a candidate, it will further strengthen Super PACs and the consultants who run them.  At the end of the cycle, instead of being left with an empty bank account, the PACs will have very valuable lists and data — and that will make those PACs players in future cycles.  (See #2, below, regarding the institutionalization of valuable information in LLCs to be used across organizations and cycles.)

2.  Political LLCs

Using an LLC to hide the source of political contributions is so 2012.  The far more cutting edge use of an LLC and other corporate forms is as a highly specialized vendor to a very specific type of political client, or a limited number of clients.

Of course, for many years, the LLC has been the corporate form of choice for political consultants and vendors who need to invoice clients, pay themselves and one or more employees, and protect themselves against contract and tort liability.   What’s different about the emerging model is the placement of the LLC at the very heart of a movement, campaign or project, where it functions as a servicing company to an array of aligned entities — for example, a 501(c)(3), a (c)(4), a non-connected PAC and a Super PAC.

Instead of being spread out across multiple entities, strategy, data, other valuable information — as well as talent — is institutionalized in the LLC.  The payment of fair market value by the LLC’s clients for the services and products they use insulates the clients against most (but not all) campaign finance violations.  And the LLC’s for profit tax status and private ownership mean that there is very little if any transparency over its financing and operations.

This model of product and service delivery is not for amateurs.  There is real potential for excessive contributions, corporate contributions and coordination that must be anticipated and protected against.  But for well-funded, sophisticated operatives and projects, it is a powerful new approach.

1. The Pre-Candidacy Phase

No surprise here, and no shortage of controversy.  The most important political law development of 2015 was the emergence of a “pre-candidacy” phase.  During this phase — which ends when an individual begins to “test the waters” or declares a candidacy and thus comes within the scope of the FEC’s regulatory jurisdiction — potential candidates work closely on political projects with an array of operatives and organizations, some of whom they would be barred from coordinating with if they were testing the waters or running for office.  Potential candidates also raise funds for such organizations during this time, including in some cases funds that are in amounts or from sources that the Federal Election Campaign Act would prohibit if they were exploring or running.

Jeb Bush exploited this phase fully and aggressively, helping Right to Rise USA raise over $100 million, strategizing with it, and sitting for interviews and participating in the shooting of other footage that the Super PAC later could use in support of his candidacy.  Now languishing in low single digits in most  polls, the success of Bush’s pre-candidacy phase is a — if not the — primary factor keeping him in the race.

Much has been written, and much more will be written, on this subject.  The FEC recently issued an advisory opinion.  Multiple complaints are pending at the FEC.  Watchdog groups have demanded a criminal investigation.  And in the event of an enforcement action, litigation could ensue over whether the FEC’s regulatory jurisdiction — which, to the extent that it encompasses exploratory activities by potential candidates, already is stretched beyond the limits of the FECA — covers activities and expenditures by individuals who, despite what the press, watchdogs and political opponents say, maintain that they are neither exploring nor running for office.  We are likely years away from clarity on this issue, but in the meantime, it has fundamentally altered the presidential campaign playbook, and the impact already is trickling down the ballot.