ARTICLE
3 September 2024

Compliance Notes - Vol. 5, Issue 29

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Nossaman LLP

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RECENT LOBBYING, ETHICS & CAMPAIGN FINANCE UPDATES

We read the news, cut through the noise and provide you the notes.

Welcome to Compliance Notes from Nossaman's  Government Relations & Regulation Group – a periodic digest of the headlines, statutory and regulatory changes and court cases involving campaign finance, lobbying compliance, election law and government ethics issues at the federal, state and local level.

Our attorneys, policy advisors and compliance consultants are available to  discuss any questions or how specific issues may impact your business.

If there is a particular subject or jurisdiction you'd like to see covered, please let us know.

Until then, please enjoy this installment of Compliance Notes. If you would like to have these updates delivered directly to your in-box, please click below to subscribe to our Government Relations & Regulation mailing list.

Campaign Finance & Lobbying Compliance

The Securities and Exchange Commission (SEC) has censured and fined a large, registered investment advisor, Obra Capital Management (Obra), $95,000 after learning an associate of the firm had donated money to a government official who helped oversee a pension fund that was an investor in an Obra fund. The SEC alleges that Obra violated its pay-to-play rule, which prohibits advisors from working with government clients for two years after any of the firm's representatives have donated to a campaign of an elected official who could influence the hiring of an advisor. The firm settled the pay-to-play allegations without admitting or denying misconduct. ( Kenneth Corbin, Barron's Advisor  via MSN)

Crypto lobbyist Michelle Bond, who ran for Congress in 2022, has been charged with illegally financing her congressional campaign with money from defunct crypto exchange F.T.X. via Ryan Salame, a former executive at F.T.X., under a “sham consulting agreement,” the U.S. Attorney's Office for the Southern District of New York said Thursday. The unsealed indictment alleges Salame “arranged for a sham $400,000 payment from the Exchange to Bond, which Bond then used almost entirely to fund her campaign illegally.” According to the indictment, Bond's campaign falsely reported in the FEC Form 3 that a $300,000 transfer to the campaign's bank account was a loan from Bond to the campaign. The said figures turned out to be “an illegal contribution from the Exchange to the campaign.” Bond is facing up to 20 years in prison. ( Marvie Basilan, International Business Times)

New Jersey: The New Jersey Election Law Enforcement Commission (ELEC) proposed amendments and new rules to implement statutory changes to independent expenditure committees consistent with the Elections Transparency Act (ETA). The ETA created a new type of reporting entity, the independent expenditure committee (IEC). The ELEC's rulemaking implements the registration and reporting requirements for IECs, which includes amendments, new definitions and new rules detailing the establishment and reporting obligations of an I.E.C. and clarifying limitations and restrictions on an IEC's activity. ( 56 N.J.R. 1684, August 19, 2024)

Government Ethics & Transparency

Former U.S. Representative George Santos (R-N.Y.) pleaded guilty on Monday to fabricating fundraising figures, cementing the downfall of a novice politician who was expelled from Congress last year after a brief, scandal-plagued tenure. Santos pleaded guilty to one count of wire fraud and one count of aggravated identity theft, the latter carrying a mandatory two-year prison sentence. The charges stemmed from inflating fundraising numbers and faking donor names to qualify for financial and logistical support from the Republican party during the 2022 election cycle, when the political newcomer was elected to represent a slice of New York City and its eastern suburbs. Santos is set to be sentenced on February 7, 2025. He could face as many as 22 years in prison and waived his right to appeal any sentence less than 95 months – just under eight years – as part of a plea deal with federal prosecutors. ( Jack Queen and Luc Cohen, Reuters)

Ballot Measures & Elections

Alaska: The Alaska Supreme Court confirmed that a ballot measure that could repeal Alaska's ranked-choice election system is headed to a vote in November, 2024. In a brief order, the court's five members upheld a lower court decision that certified Ballot Measure 2, which would repeal the laws that created the state's ranked-choice general election and open primary election. The order came shortly after justices heard oral arguments in an appeal claiming that the Alaska Division of Elections improperly certified the measure. ( James Brooks, Alaska Beacon)

Utah: The Utah legislature voted to add to the November ballot a constitutional amendment that would overturn a Utah Supreme Court ruling and assert the lawmakers' right to amend or repeal citizen-led ballot initiatives. The measure will now go on the November 5, 2024 general election ballot, which would need a majority of support from voters to take effect. If that happens, it would apply retroactively to make clear that the change would apply to the anti-gerrymandering initiative. ( Robert Gehrke, Salt Lake Tribune)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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