Campaign Finance, Election & Ethics 'Reform' - H.R.1

HR 1, For the People Act . The measure, which Democrats wanted to pass as their first major legislative business in the 116th Congress, includes a wide range of campaign finance, voter access, and ethics provisions intended to help reduce the influence of big money donations in politics, make it easier for Americans to vote, and set higher standards of ethics for politicians and government officials. Among it provisions, it requires various groups, including "dark money" groups, to disclose their political donors; effectively prohibits super PACs from running ads that support or oppose specific candidates; establishes a voluntary public financing system for congressional candidates under which small-dollar donations would be matched six-fold; makes it easier to register to vote, requires states to allow for early voting at least 15 days before an election, and makes election day a federal holiday; and requires states to use independent redistricting commissions when redrawing congressional districts. It also requires the president and vice president to divest any financial interests that may create a conflict of interest, and to release 10 years worth of tax returns. The measure is expected to be considered under a structured rule that makes in order only specified amendments. A House Action Reports Fact Sheet with the arguments being made for and against the bill will be available prior to floor consideration.

BACKGROUND: The House Administration Committee approved its portion of the bill by a 6-3 vote (no written report was available as of press time Friday). None of the other nine House committees with jurisdiction have acted on the bill. Those other committees include Education and Labor, Ethics, Financial Services, Homeland Security, Intelligence, Judiciary, Oversight and Reform, Science-Space and Technology, and Ways and Means.

    In the 2018 elections for Congress, House Democrats and many Democratic challengers for GOP seats ran on a platform that called for lowering the cost of health care (including prescription drugs), rebuilding infrastructure, increasing worker paychecks, and "cleaning up corruption" in Washington.

    Under their "For the People" platform, Democrats proposed a wide-ranging "good government" package intended to address the public cynicism and mistrust of Congress that has built up over the years — in particular by reducing the role of big money in politics and the influence of corporations and large donors over government, tightening government ethics rules, and making it easier for Americans to vote.

    The legislative package was designated as HR 1 to highlight its priority status. House Democrats pledged to consider it as their first order of major legislative business at the start of the 116th Congress to demonstrate to voters that they will be able to develop and consider other major legislation without undue influence by corporations and large donors. However, House consideration of the measure was delayed as the new Democratic majority first had to address the standoff with President Trump over funding for the president’s proposed border wall with Mexico — a standoff that triggered a 35-day partial government shutdown that began in December.

SUMMARY: Following is a brief summary of the modified measure as posted on the Rules Committee website, which is expected to be made in order for the House floor. A House Action Reports Fact Sheet, with a more detailed analysis and the arguments being made for and against the bill, will be available prior to floor consideration.

    This bill includes a wide range of campaign finance, voter access, and ethics provisions intended to help reduce the influence of big money donations in politics, make it easier for Americans to vote, and set higher standards of ethics for politicians and government officials.

    Among it provisions, it requires various groups, including "dark money" groups, to disclose their political donors; effectively prohibits super PACs from running ads that support or oppose specific candidates; establishes a voluntary public financing system for congressional candidates under which small-dollar donations would be matched six-fold; makes it easier to register to vote, including through same-day registration, and restricts the ability of states to "cull" voter rolls; requires all states to allow for early voting at least 15 days before an election and makes election day a federal holiday; requires states to move to paper ballots that are auditable to protect the integrity of the vote while also increasing security for registration and voting systems against cyber threats; requires states to use independent redistricting commissions when redrawing congressional districts; prohibits members of Congress from serving on the board of directors for any for-profit entity or from using taxpayer funds to settle cases of employment discrimination; and tightens restrictions against executive branch officials that leave government to work for corporations with whom they worked as a government official.

    It also requires the president and vice president to divest any financial interests that may create a conflict of interest, and to release 10 years worth of tax returns.

Campaign Finance

    The bill includes numerous campaign finance-related provisions intended to help ensure transparency with regard to campaign donations, including contributions to "dark money" groups, and to prohibit coordinated activity between campaigns and super PACs.

    It also establishes a public financing system under which small donations to congressional candidates would be matched six-fold by the federal government if the candidate limits the size and source of campaign contributions they accept from individuals, in order to reduce the need to rely on big money donations.

Campaign Contributions & Disclosures

    To increase transparency regarding who is funding political campaigns and associated activities, the bill standardizes disclosure requirements for political contributions and expenditures made by corporations, labor organizations, political organizations, and certain tax exempt groups, and it requires such disclosures for so-called "dark money groups" in certain circumstances.

    It also effectively prohibits super PACs from running ads that support or oppose specific candidates, requires online political ads to include certain disclosures and disclaimers, and prohibits political contributions from foreign companies and individuals.

Disclosure Requirements

    Under current law, corporations, limited liability corporations, non-501(c)(3) tax exempt organizations, labor organizations, 527 political organizations and political committees (including super PACs) all operate under different requirements with regard to disclosing political contributions and campaign expenditures.

    The bill standardizes and tightens the requirements for those organizations, requiring that any such entity that spends more than $10,000 in an election reporting cycle must disclose donors who made political contributions of $10,000 or more.

    Such organizations also must disclose every campaign-related expenditure of more than $1,000 as well as the name and address of the recipient and the election campaign with which the expenditure is associated. If the expenditure is made for a public communication such as a television ad, the organization must disclose the name of any candidate identified and whether the communication supports or opposes the candidate. The organization must certify that the expenditure was not made in cooperation, consultation or concert with or at the suggestion of a candidate, political party or their agents.

    To provide transparency for so-called "dark money," the same disclosures must be made for groups that transfer funds to other covered organizations if the funds are to be used for campaign-related expenditures. Under current law, a tax exempt 501(c)(4) organization can transfer money to a super PAC to be used for campaign purposes, and while the super PAC must disclose the contribution from the tax exempt organization, that tax exempt 501(c)(4) organization is not required to disclose who contributed those funds to it (such organizations are sometimes referred to "dark money groups").

    Finally, the measure repeals certain provisions included in recent appropriations laws that restrict the ability of specified federal agencies to require certain disclosures of political contributions and spending by the companies and organizations they oversee.

Super PAC / Candidate Coordination

    The measure strengthens prohibitions on coordination between super PACs and candidates for federal office by defining "coordinated expenditures" and "coordinated spenders," and by specifying the types of communications that do and do not constitute coordination.

    It also effectively prohibits super PACs from financing political ads that support or oppose a specific candidate by defining as a prohibited "coordinated communication" a communication that advocates the election of a candidate or defeat of the candidate's opponent, promotes or supports the election of a candidate, or attacks or opposes the candidate's opponent.

    (Super PACs are independent political action committees that can raise unlimited amounts of money from corporations, unions and individuals but which are not allowed to contribute to, or coordinate directly with, either candidates or political parties.)

Political Advertisements

    Under current law, television and radio advertisements for political campaigns must include certain disclosures and disclaimers to the viewer or listener, including who is sponsoring the ad.

    The bill expands those requirements to be applicable for online or digital political ads. For any TV, radio or online ads that are run by outside entities and are not authorized by the candidate, it expands disclosure requirements to also include naming the group's top five funders (two for radio ads) or the name of (or link to) a website that has that information. Prerecorded telephone calls must make the same disclosures as other audio communications, although the disclosures must be made at the beginning of the call.

    The measure also establishes reporting requirements for online platforms that sell political advertisements, and it requires all broadcast stations, cable and satellite television providers and online platforms to make reasonable efforts to ensure that they don't run political advertisements paid for either directly or indirectly by foreign nationals.

Foreign Entities

    The bill prohibits corporations that are owned or controlled by foreign entities from making contributions to candidates in federal, state or local elections or from making expenditures on behalf of such candidates. It also prohibits any foreign entity, either individual or corporate, from making contributions to super PACs.

    Domestic subsidiaries of foreign corporations would be allowed to establish corporate PACs, however, as long as the foreign parent corporation does not finance the PAC.

    Foreign nationals also would be prohibited from donating to presidential inaugural committees.

Public Financing of Campaigns

    The bill establishes a new public funding mechanism for election campaigns of candidates for Congress (although it does not provide the actual funding for that new system) and it modifies the existing public funding mechanism for presidential elections to encourage its use.

Small Dollar Public Matching System for Congressional Races

    In an effort to move away from reliance on big-dollar campaign donors, the measure creates a new, voluntary public financing system for campaigns for Congress under which small-dollar contributions of up to $200 from individuals would be matched six-fold by federal funding (i.e., a $100 contribution would be matched with $600).

    To participate, candidates could accept campaign donations of no more than $1,000 per individual donor, and could otherwise only receive contributions from state or national political committees and multi-candidate political committees, and could use no more than $50,000 total in personal funds and funding from an immediate family member.

    This small dollar public financing program would become effective for congressional elections in 2026.

Presidential Campaign Public Financing

    Under the existing presidential public financing system, which is financed through the $3 checkoff box on federal tax returns, presidential candidates that agree to limit their spending during the presidential primaries can receive a matching $250 for the first $250 of every primary donation they receive, and the party nominee may receive a lump sum grant for the general election if they agree to limit their spending to the amount of that grant and not accept private contributions to the campaign. The system has largely fallen into disuse, however, as presidential candidates have found they can raise much more from private donors, with the general fund grant not being used since 2008 (when each campaign was eligible for $84 million).

    To encourage presidential candidates to once again use the public financing system, the bill replaces both the one-to-one match for primary contributions and the straight grant for the general election with a with a six-fold match for the first $200 per individual contribution (i.e., up to $1,200 in federal funds) for contributions during both the primary and general election cycles. Campaigns would be eligible to receive up to $250 million in federal funds for the primaries and another $250 million for the general election. To be eligible for these matching funds, however, the campaign could not accept more than $1,000 from an individual contributor.

    The measure also allows the national committee of a political party to spend up to $100 million on a candidate's presidential general election campaign. The modified system would become effective for the 2028 presidential campaign, and the $250 million and $100 million limits would be indexed for inflation for subsequent election years.

Voucher Pilot Program

    The bill also establishes a pilot program to test a public financing voucher program for federal election campaigns, which would run in three states for two election cycles. Under the program, vouchers worth $25 would be provided to all voting age state residents who are not otherwise prohibited from making contributions to candidates running for federal office; individuals could then donate that public funding credit to one or more federal candidates in $5 increments.

Voter Access & Ballot Integrity

    The bill includes numerous provisions intended to make it easier for Americans to register and vote in federal elections — including by making the general election day in November a federal holiday and expressing the sense of Congress that private employers should also give their employees that day off so they can vote.

    It requires that all states allow early voting for federal elections, under which individuals may vote at least 15 days prior to election day at accessible early voting stations that are open at least four hours a day (except on Sundays).

    The measure also establishes a national standard under which any individual, for any reason, may use an absentee ballot to vote by mail. Currently, many states limit the circumstances under which individuals may vote by absentee ballot.

Voter Registration

    Under current law, most aspects of election administration are left to the discretion of state and local governments, resulting in a variety of registration practices across jurisdictions — including different voter registration requirements, where or when voter registration may occur, and how voters may be removed from registration lists.

     The measure establishes several national standards with regard to state voter registration systems, which would be effective for the November 2020 elections (except for the automatic registration requirement).

    Specifically, it requires states to automatically register eligible voters, including when individuals turn 18 and become eligible to vote, with certain federal and state agencies to electronically transfer information on such individuals to state election officials (although individuals may decline to be registered). All states would be required to accept online applications to register to vote, and to allow individuals to update their voter registration information online.

    It also provides for national same-day voting registration, requiring states to allow individuals to register to vote on election day (including early voting days) and cast their vote that same day. This requirement would not apply to states to do not require their voters to register.

Removing Voter Registrations & Voter Suppression

    The bill prohibits certain practices used by states to remove individuals from voter registration lists that many critics say unfairly targets certain voters.

    Specifically it forbids the practice of states "systematically" removing individuals from their voter rolls using information obtained by cross-checking individuals who may have moved out of state — unless the voter's full name, date of birth, and last four digits of their social security number is checked, or the state has received documentation from the existing cross-state voter registration system that the voter is no longer a resident of the state.

    It also effectively prohibits a process known as "voter caging," under which a state removes a registered voter from its voter rolls because mail sent to that individual was returned as undeliverable, giving the state a predicate to assume that the individual no longer lives at that address. Specifically, states would be prohibited from preventing an individual from voting based on the fact that their names were dropped from voter registration lists on the basis of a voter caging document or voter caging list or other unverified match list. Similarly, states could not prevent an individual from voting because their name on their voter registration and some other identity document required for voting (such as a state drivers license) does not exactly match.

    Finally, it makes it a crime to disseminate to individuals false information intended to impede or prevent another person from voting, such as providing incorrect information regarding the location and times when polling places will be open or false information regarding qualifications to vote. Specifically, it would be a crime if such information is communicated (by any means) within 60 days of an election and the individual sending the information knows it to be materially false and intends to impede or prevent persons from voting.

Restore Voting Rights of Convicted Felons

    The measure gives individuals convicted of criminal felony offenses the right to vote in a federal election once they have served their prison sentence.

    Under current law there are no federal standards and state practices vary widely, with some allowing felons to vote even while in prison, some restoring voting rights once the individual is released from prison, and many others suspending the right to vote for a set time after being released or for indefinite periods thereafter.

Election Security

    To preserve the integrity of elections the bill requires that votes be cast using paper ballots, in particular an "individual, durable, voter-verified paper ballot" which must be produced for inspection and verification by the voter before their vote is cast and counted, and which also must be preserved for any recount or audit.

    The Election Assistance Commission (EAC) would be required to award grants to states so they can replace their voting equipment with systems that incorporate paper ballots. The commission would determine grant levels to individual states, but such grants could not be less than $1 for each of the average number of voters in the last two elections. Voting systems updated with those grants also must have the ability to process a ranked voter system, although states would not be required to use that voting system.

    The EAC must also award grants for states to perform audits of election results.

Cyber Threats

    The measure statutorily designates the nation's election infrastructure as "critical" — thereby permitting the Homeland Security Department to provide services that state and local election officials can utilize to reduce both cyber and physical risk to their election systems and facilities. (The department administratively made such a designation in January 2017.)

    The department would be required to assess threats to the election system at least 180 days before an election and inform states of any such threats. It also must establish a competitive grant program to provide funds for research and development of ways to secure election infrastructure.

    The bill requires that voting systems be tested nine months before each general election, and if any hardware or software fails it would have to be decertified and could not be used in the election.

    The Election Assistance Commission, meanwhile, must expand its existing state grant for improving the administration of elections to allow that funding to be used for cyber and risk mitigation training, increased technical support for information technology infrastructure, enhancing the cybersecurity and operations of a state's voting system, and enhancing the security of voter registration databases.

    Finally, the measure establishes a voluntary Election Security Bug Bounty Program to provide compensation to entities that notify election and cybersecurity officials about cyber threats and vulnerabilities to the election system.

Redistricting 'Reform'

    The bill requires states to use independent redistricting commissions when redrawing congressional districts for the U.S. House of Representatives after each decennial U.S. census, or by a three-judge panel if a commission's redistricting plan is not enacted into law by the state.

    Currently, both congressional district boundaries and the state's own legislative boundaries are drawn by the legislatures of most states, which is often used to favor one party over the other through "gerrymandering" — although a number of states have shifted to use of a board or commission for redistricting.

    The measure also prohibits the redrawing of congressional districts in mid-decade, rather than immediately after the decennial census.

Ethics 'Reform'

    The bill includes numerous provisions to strengthen and enhance federal ethic rules, including those that apply to members of Congress and executive branch officials, and it requires the establishment of a code of ethics for the Supreme Court.

Congressional Ethics

    The bill prohibits members of Congress from serving on the board of directors of any for-profit entity, and it codifies rules that prohibit members and staff from using their official positions to further their financial interests or the financial interests of their immediate families.

    It also prohibits members of Congress from using taxpayer funds to settle cases of employment discrimination against them (the Congressional Accountability Act of 1995 Reform Act enacted in December (PL 115-397) prohibits members from using taxpayer funds to settle cases of sexual harassment, but not discrimination).

    To improve transparency with regards to lobbyists and the financing of members campaigns, the measure requires that campaign finance reports filed with the Federal Election Commission (FEC) be linked online to the websites of the Clerk of the House and Secretary of the Senate, where Lobbying Disclosure Act reports are electronically filed and made publicly available.

Congressionally Mandated Reports

    Congress each year receives thousands of reports from federal agencies, but they are not currently collected in a central location or in an online form.

    The bill requires the Government Publishing Office (GPO) to establish and maintain a publicly available website that contains copies of all congressionally mandated reports. The website must contain descriptive information on the reports, a searchable database, the ability to download reports individually or in bulk, an electronic means for federal agencies to submit reports to the website, and a list of all reports that can be searched and sorted by time frame or submission status.

Executive Branch Ethics

    The bill generally requires the president and vice president, within 30 days of assuming office, to divest any financial interests that create a conflict of interest by converting the interests to cash or another investment that meets standards established by the Office of Government Ethics, or by placing the interests in a qualified blind trust.

    It requires all presidential appointees to recuse themselves from financial matters involving the president or his or her spouse, or an entity in which the president or spouse has an interest. If a presidential appointee is recused, a career professional from the agency would perform the functions and duties of the presidential appointee with respect to the matter.

Prevent Conflicts of Interest

    To prevent possible conflicts of interest, the measure prohibits an individual who leaves a corporation to enter government service from receiving any incentive payments from the corporation. It also effectively prohibits "golden parachutes" in the form of a bonus that some firms pay employees upon their accepting a government job.

    It prohibits federal procurement officers who were responsible for awarding contracts from receiving any compensation from a company for two years after leaving government service, if the procurement officer had awarded a contract to that company. It also prohibits federal officials from most dealings with their former agency for two years after they leave government service.

    Current law requires a one-year prohibition on most dealings with a former agency, and also allows acquisition and program officials to accept compensation or employment from a different division or affiliate of a company than the division with which the official had prior dealings.

Revolving Door

    The bill clarifies "revolving door" restrictions to ensure compliance with current law. Specifically, it prohibits an official from using his or her position to "participate personally and substantially in a particular matter in which the covered employee knows or reasonably should have known that a former employer or former client of the covered employee has a financial interest." The measure allows for certain waivers.

    The measure increases penalties for violations, allowing for up to five years of in prison and fines of up to $100,000 for each violation.

Foreign Lobbyists

    The Foreign Agents Registration Act (FARA) requires all U.S. citizens working to influence U.S. policy on behalf of foreign governments or political parties to register with the Justice Department and provide information about their lobbying efforts.

    The bill requires foreign agents to disclose transactions of financial value that are given to federal officeholders, including any gifts, profits, salary, favorable regulatory treatment, or any other direct or indirect economic or financial benefit.

    It also creates within the counterespionage section of the Justice Department's National Security Division a FARA investigation and enforcement unit, and authorizes the department to impose various civil fines on offenders who fail to comply with the law — including fines of $10,000 for failure to file timely a registration statement and $200,000 for failure to remedy a defective filing within 60 days of being notified.

Presidential and Vice Presidential Tax Transparency

    The bill requires sitting presidents and vice presidents, as well as candidates for the two offices, to regularly submit their tax returns to the Federal Election Commission (FEC), which would make them publicly available after redacting certain personal information.

    Under the measure, President Trump and Vice President Pence would be required within 30 days of enactment to submit copies of their federal income tax returns for the ten most recent taxable years for which they filed.

    In the future, sitting presidents and vice presidents each year would be required to submit their current tax return and tax returns for the nine preceding years.

    Candidates for president, meanwhile, would be required within 15 days of becoming a candidate to submit to the FEC a copy of their federal income tax returns for the ten most recent taxable years.