On December 4, the DC Council unanimously approved its omnibus campaign finance reform legislation, which—among other things—seeks to reduce “pay-to-play” contracting, address improper coordination of independent expenditures, and enhance disclosure requirements. Individuals and entities that are politically active in the District of Columbia (the District) should take note, as absent a veto from Mayor Muriel Bowser, this legislation is sure to impact future political activities in our nation’s capital.
In the pay-to-play context—as in many other states and other jurisdictions—the Campaign Finance Reform Amendment Act of 2018 (B22-0107) would contain both general conduct prohibitions and disclosure obligations. Specifically, the bill would:
- Prevent agencies and instrumentalities of the District from entering into a contract with a “covered contractor” (i.e., those holding or seeking to enter into a contract with the District worth at least $250,000) if it (or its principals/top executives) has made contributions to applicable “prohibited recipients” (i.e., officials/candidates involved in the award of the contract, Political Action Committees (PACs) affiliated with such officials/candidates, etc.) surrounding the date of the contract
- Prohibit campaign contributions to such prohibited recipients from a covered contractor (and its principals/top executives) during certain periods surrounding the date of the contract
- Require contracting authorities to (1) maintain a publicly-available list of all covered contractors and their principals for the contracts they have with that contracting authority; (2) notify covered contractors of the prohibited recipients of each contract; and (3) evaluate the covered contractor’s contribution history to ensure compliance
- Add certain information regarding covered contractors, prohibited recipients, and contribution timeframes to the website required to be maintained by the Chief Procurement Officer
Application of these prohibitions and attendant provisions would be delayed until 2020.
With respect to campaign finance reforms, many of the measures would primarily focus on further oversight, increased transparency and disclosure, and treatment of coordinated and independent expenditures. Specifically, B22-0107 would:
- Create a standalone, independent Campaign Finance Board—in lieu of the existing Office of Campaign Finance overseen and organized within the Board of Elections—to administer, enforce, and implement the District’s campaign finance laws and associated regulations
- Prohibit lobbyists from bundling contributions to principal campaign committees and exploratory committees, among others
- Amend the schedule (and content required) for filing reports of receipts and expenditures for political committees, PACs, and independent expenditure committees
- Aim to prevent coordination between candidates, PACs, and independent expenditure committees by clarifying definitions and establishing a rebuttable presumption of coordination in certain circumstances
- Require PACs making independent expenditures to establish segregated “non-contribution accounts” for the purpose of making such expenditures
- Enhance disclosure requirements for independent expenditures (e.g., certifications, expansion of certain reporting requirements, disclosures on political ads, etc.)
Enactment and implementation of these provisions follows an increasing trend in state and local jurisdictions to regulate business activities under pay-to-play regimes and to increase campaign finance related disclosure obligations. Running afoul of these new requirements could result in termination of your contracts and—perhaps more critically—could jeopardize your eligibility to do business with the District in the future, including with any DC government related pension plans and any other government contracting-related activities.