Regulatory Compliance Watch Quotes Ken Gross on ‘Pay-to-Play’ Campaign Donation Rules

For its article “’Pay-to-play’ rules complicate 2024 races,” Regulatory Compliance Watch quoted Akin senior political law counsel and consultant Ken Gross. The article looks at federal campaign rules regarding campaign donations such as the Securities and Exchange Commission’s (SEC) and the Commodity Futures Trading Commission’s (CFTC) “pay-to-play” rules preventing donations to politicians by companies looking to win state or local contracts.

On the topic of the severity of the rules, Ken, who served as a Federal Election Commission Associate General Counsel, noted that if you hire or promote an employee who has previously given a political donation this year, you’re importing the ban with them. He characterized the rules as “draconian—subject to strict liability with no proportionality. If you write a check for $400, the implication is the same if you wrote a check for $40,000—a ban may still occur. In almost every case, it’s an inadvertent error. No one purposely writes a check for $1,000 and bans your company from business for two years.”

Ken said that regulators can grant waivers, however “they’re complicated…it’s a cumbersome, difficult process to go through and you’re guilty until proven innocent.”

Ken also shared a few steps that firms should consider as elections approach nearer:

1. Go through your firm’s roster to make sure you know which employees are covered.
2. Ensure everyone is trained and that they have signed off on the training.
3. Consider expanding the “covered” pool to be sure you’re catching everyone.
4. Clear any donations in advance.

The article references an alert on pay-to-play rules written by Ken and fellow Akin lawyers earlier this month. Click here to read “Pay-To-Play Laws May Complicate Governor DeSantis’ Presidential Fundraising” and here to read “North Dakota Governor Seeks GOP Presidential Nomination: Pay-to-Play Considerations.”