Time to take off the lobbyist hat

With the political season in full swing and the pressure to raise funds for candidates increasing by the day, corporate lobbyists would be well-served to take a refresher course in fundraising laws.

Corporations are prohibited from making contributions or expenditures in connection with the election of any candidate for federal office. An expenditure includes any services or anything of value provided to a candidate in connection with any election to federal office. Assisting a candidate on company time violates this prohibition; volunteering personal time does not.

The “hat” that the corporate executive is wearing determines whether there is a violation of the law.

For example, the vice president of government affairs of Acme Corp. may not use her corporate letterhead and her title to send out letters to her friends to raise money for Congressman X. She may, however, send such a letter on personal stationery and sign it in her personal capacity. Even if she uses her personal stationery, can she write the letters in her office? Yes, on a limited basis. An exception to the prohibition on corporate expenditures allows a corporate employee to use corporate resources on her own time — but for no more than one hour a week or four hours a month.

Can she ask her secretary to type the letters and to mail them for her? Yes, but only if she reimburses the corporation for the fair market value of those services in advance.

Can she ask her secretary to put stamps purchased by the corporation on those letters? Again, only if she reimburses the corporation for the postage.

Can she use her corporate e-mail account to send communications, including fundraising solicitations, to her friends? Yes, provided that the corporation has a policy that permits employees to use their corporate e-mail accounts for personal purposes. (Although permissible, it is better to use a personal e-mail account.) In sending such communications, the employee should not use a list of the corporation’s clients or customers, unless the corporation is reimbursed in advance for the fair market value of the list.

The executive may want to raise funds from other colleagues in the corporation. May she do so? Yes, she may; a corporation is allowed to use its treasury funds to solicit voluntary contributions — emphasis on voluntary — for a candidate from its restricted class, which includes the corporation’s stockholders, executive and administrative personnel and the families of both groups.

Executives may write, e-mail, call or visit with members of the corporation’s restricted class and encourage them to contribute to a particular candidate. They may not, however, “facilitate” the contribution. Thus, a corporate executive may not, in a letter to the restricted class, say something like, “Please send your contribution to me and I will deliver it and others to the candidate so that we can be sure of having the maximum impact of our combined contributions.” In other words, contributions may be solicited but not collected and delivered.

Employees should be told to send the checks directly to the candidate’s campaign.

Ah, you say, but how will we get the credit that we so deserve with the candidate? This was, no doubt, a common refrain uttered by those unfortunate corporate executives who have been prosecuted in recent years for collecting and delivering a bundle of checks on behalf of their companies. And note that bundling — collecting contribution checks and delivering them to a candidate — is not necessarily a prohibited practice. Again, the hat you are wearing at the time matters. An individual acting in his or her personal rather than corporate capacity may collect checks and deliver them to a candidate. If that individual does not occupy a significant position in the recipient’s campaign, he or she must submit certain information to the Federal Election Commission (FEC) and the campaign for which the checks were collected.

Remember that the Honest Leadership and Open Government Act requires members of Congress to disclose the identity of registered lobbyists who bundle or raise more than $15,000 in a six-month period on their behalf. Lobbyists who bundle must be particularly attentive to FEC rules or face the risk of being identified in a candidate’s report without having first reported their activity.

A few other rules are worth noting. A corporate employee may never be reimbursed through any means whatsoever, such as a bonus, for any contribution that they may have made to a candidate. Corporate employees who want to “take time off” from their job to work for a federal candidate must do just that. If they want to be paid while they are volunteering, they must take earned leave. If they are not entitled to leave, they may take an unpaid leave but must forgo not only their salary but any benefits to which they may be entitled during the period that they are volunteering.

Finally, one must be sure not to solicit contributions from foreign nationals, i.e., individuals who are neither citizens nor permanent residents. It is a crime to knowingly solicit a contribution from a foreign national. Know your prospective donor.

Spulak served as staff director of the House Rules Committee, then as general counsel to the House of Representatives. He is now a partner in the Government Affairs and Public Policy Practice Group at King & Spalding.