arrowSection 3.4 - Government Employees

This topic is monitored by Moritz Law Professor Terri L. Enns

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Lobbyists and Campaign Contributions

Background

Lobbyists enjoy unusually close and continuous access to lawmakers by the very nature of their employment. One might ask, therefore, whether lobbyists' activities during election campaigns, especially their actions as campaign contributors, are subject to special rules in addition to the regulations governing campaign contributions, expenditures, and disclosures that apply to individuals and groups in general. (See Section 3.1)

The short answer is that at the federal level and in Ohio, there are no special rules that regulate lobbyists' involvement in election campaigns. By contrast, a number of states do impose such rules — some prohibit lobbyists from contributing to state candidates or officeholders if they are registered to lobby that individual's present or prospective office, while others bar lobbyists from contributing to or soliciting contributions on behalf of any legislator or candidate during periods when the Legislature is in session. (The regulation of lobbyists, apart from their campaign contributions is addressed separately.)

Federal Regulation

At the federal level, the Lobbying Disclosure Act of 1995 sets forth the major requirements regulating disclosure of lobbying. 1  The law does not seem to apply to lobbyists acting in their individual capacity to make campaign contributions. Because the definition of "lobbying contacts" specifies that the regulated communications be "made on behalf of a client," 2  a lobbyist making a campaign contribution in her personal capacity would appear to fall outside the requirements of the Act, so long as she is not acting "on behalf of" any other party.

Federal election campaign law regulates such personal contributions in terms of permissible amounts and disclosure of the donor's name, address, occupation and employer. 3  There are no additional restrictions on contributions by individuals who are registered as lobbyists at the federal level. 4  The source of any funds contributed by the lobbyist must, of course, be the donor herself. Although one can imagine a situation in which a lobbyist-employee would be expected by her employer to donate large amounts as individual contributions with a corresponding offset in the form of a "bonus" or "expense account", such end runs are a violation of federal law. 5

Ohio Regulation

In Ohio, those lobbying state government are regulated pursuant to Ohio Revised Code §§ 101.70 to 101.79. According to O.R.C. § 101.76(C), the "Exceptions" provision to the law, "nothing in [§§ 101.70 to 101.79] . . . shall require the reporting of, or prohibit a member of the general assembly or the governor from soliciting or accepting, a contribution from or expenditure by any person if the contribution or expenditure is reported in accordance with Chapter 3517 of the Revised Code [regulating campaign finance]." In other words, if a contribution by an individual, including a lobbyist, is reported and in compliance with campaign finance law, no other regulations or additional rules apply to those contributions. Further, elected officials in the legislature or governor's mansion may solicit contributions from lobbyists so long as any subsequent contribution by a given lobbyist is in compliance with the campaign finance law.

One wrinkle to Ohio law is that, although a state statute prohibits labor unions from using their general funds to aid or oppose state office candidates, those restrictions were declared unconstitutional in UAW Local Union 1112 v. Philomena, 121 Ohio App.3d 760, 700 N.E.2d 936 (10th Dist., 1998), a decision the Ohio Supreme Court has declined to hear or reconsider. Accordingly, labor organizations may support candidates for state office by means of direct financial contributions as well as by contributing through political action committees (PACs).

As referenced above, section 101.76(C) of the Ohio lobbying law exempts from general lobbying disclosure requirements any contributions made by a lobbyist in his or her individual capacity, as long as the contributions are in compliance with O.R.C. §3517, the general campaign finance statute. As was true at the federal level, the source of any contributions for which the §101.76(C) exception is asserted must be the donor herself. A lobbyist's employer could attempt to use her as a conduit for additional contributions beyond the state limits, but given the extensive paper trail that inevitably accompanies such attempted maneuvers, such violations are thought to be relatively rare. 6

Ohio lobbying law does allow for the possibility of modest indirect support on behalf of officeholders that need not be reported — through a series of "food-and-beverage" provisions. First, lobbyists do not have to report food-and-beverage expenditures made on behalf of any legislator in a calendar year that are less than $50. Further, if food or beverages are provided in a setting in which the legislator is a panelist, seminar participant, or speaker, those expenditures are wholly exempted from disclosure requirements. Finally, if the entire Ohio legislature or either of its two chambers is invited to a sponsored dinner, party, or other function, expenditures by the sponsoring employer or lobbyist employee do not count toward the accumulated expenditure totals that trigger mandatory reporting. 7 

One other notable provision of Ohio law is O.R.C. §101.74, which requires lobbyists to report on the details of any "financial transactions" (defined as arrangements in which the lobbyist and one of the enumerated persons engage in a transaction for profit, such as a commercial or real estate enterprise) entered into with, or for the benefit of, a range of elected or appointed officials or their staffs, including legislators, department directors, and the governor. The law here does not seem to differentiate between lobbyists acting in their lobbyist role, and lobbyists acting in their private capacity; the result is effectively to require disclosure by any person employed as a lobbyist who engages in a financial transaction with any of the given class of persons.

Regulation in Other States

Although Ohio does not regulate individual contributions by lobbyists more stringently than contributions by others, there are states that single out lobbyists for special campaign finance-related regulation. California's Proposition 34, adopted in 2000, bars individual contributions from lobbyists to state candidates or officeholders if they are registered to lobby the candidate's or officeholder's agency. 8  Thus, lobbyists in California may still contribute in their individual capacity, but not to those with whom they have a "special relationship." Some states prohibit legislative lobbyists from making campaign contributions at all to candidates or incumbents, 9  while others restrict lobbyists' ability to make or solicit contributions when the legislature is in regular session, 10  or even limit such contributions to a short "window period" prior to the general election. 11  A number of states, however, do follow Ohio's approach of having no restrictions on lobbyists' ability to contribute to candidates, provided the contributions are properly reported and otherwise in accordance with generally applicable campaign finance laws. 12

Notes

1. See 2 U.S.C. §§ 1601-07.

2. 2 U.S.C. § 1602(8)(A)

3. A useful web-based text on campaign finance rules can be found at http://www.campaignfinanceguide.org/

4. See Peter C. Christianson, Peter J. Coyle, Edward E. Poliakoff, Jocelyn Y. Dyer, Lobbying, PAC's and Campaign Finance: 50 State Handbook 245 (2004 ed.) (includes text and summary descriptions for applicable federal laws and the laws of all 50 states).

5. See Christianson et. al., supra note 3 at 250 (citing 2 U.S.C. §441f and 11 C.F.R. §§ 110.4(b), 114.5(b)(1)).

6. See e-mail from Tony Bledsoe, Interim Director/Chief Counsel, Joint Legislative Ethics Committee, to Allen L. Bohnert, July 26, 2004.

7. However, the "inclusive invitation" expenditures must be noted on a separate filing, with the amount spent, the date, and the purpose for the expenditures. See O.R.C. § 101.73(D).

8. See Christianson et. al., supra note 3, at 138.

9. Kentucky is one such state. See id. at 481, citing Ky. Rev. Stat. § 6.811(6).

10. See e.g., statutes in North Carolina, Arizona, and Colorado: Christianson, supra note 3, at 832, citing N.C. Gen. Stat. §163—278.13B; id. at 74, citing Ariz. Rev. Stat. §41-1234.01; id. at 157, citing West's C.R.S.A. § 1-45-105(1)(a).

11. Wisconsin is one such state. See id. at 1174-75, citing 1996 Wis. Eth. Bd. 5. Under this ruling, the only time period in which lobbyists may make campaign contributions to Wisconsin legislative candidates or incumbents is from June 1 of the election year to the November date of the general election, provided that the Legislature is not in session on the actual day the contribution is made.

12. See e.g., statutes in Connecticut, Maryland, and Texas: Christianson, supra note 3, at 185. citing Conn. Gen. Stat. §1-91(g) and PA 97-6 of June 18 Special Session; id. at 569, citing Md. Code Ann., State Gov't § 15-714(d)(2); id. at 1053, stating that pursuant to the Texas Elections Code and Texas Ethics Commission Rules, "a lobbyist is permitted to make political contributions as an individual and is also permitted to deliver contributions made by an employer's or client's PAC."