As we enter the busy election season for federal candidates, clubs should be mindful of the rules when it comes to federal officeholders or candidates appearing at their facilities. Different rules and laws apply to appearances, whether they’re related to an officeholder’s official capacity or a campaign visit such as a fundraiser for a candidate.
The National Club Association (NCA) recently engaged with an attorney specializing in campaign and ethics law to ensure clubs have the most up to date information to help them comply with relevant campaign finance and congressional ethics laws whenever a federal official or candidate for office makes an appearance. In addition to federal rules, clubs should keep in mind that there are also likely rules in place for state officials and candidates. This memo, prepared by our outside counsel, Chris Winkleman, who also happens to be a member of an NCA club in Northern Virginia, offers that information; we encourage you to share it with the appropriate people in your club. For more information, please contact Joe Trauger, NCA interim president & CEO, at [email protected].
TO: National Club Association Member Clubs
FROM: Joe Trauger, vice president of government relations, National Club Association
Chris Winkelman, attorney, Holtzman Vogel Baran Torchinsky & Josefiak PLLC
SUBJECT: Federal Officeholder and Candidate Appearances at Member Clubs
The National Club Association is pleased to provide its member clubs with “Rules of the Road” guidance for political law compliance.
There is an ever-growing cottage industry of “good government” styled organizations whose sole focus is to file complaints against officeholders and candidates for newsy but often unfounded reasons. Official and candidate appearances at private clubs, whenever they become publicly known, are frequent targets for these muckraking groups. The best way to protect your Club, its membership and guests from being dragged into this arena is by: (1) documenting the details of such appearances with the candidate or hosting member in advance, and (2) keeping detailed records of all expenses and communications related to those appearances.
Our focus in this guidance is limited to federal officials and candidates. Please be aware that state and local officeholder and candidate appearances trigger separate state and local campaign finance and ethics rules. Please contact us for further guidance when preparing for these occasions.
- Official vs. Political Appearances
Any time a candidate or officeholder uses your Club facilities you should be aware of whether that person is appearing in their official or political/campaign capacity. This is not a determination to be made by your Club, as it can only be known by the official or candidate. Generally, official appearances are made to further that official’s knowledge of matters within their jurisdiction (such as listening sessions or roundtables). Political appearances, however, will typically involve candidate advocacy seeking political support and/or contributions.
If the appearance is official, ethics rules will dictate event logistics—which may include number of invited guests, food service details, and expenses. If the appearance is being made by a candidate in their political capacity, federal election laws will apply to ensure that all event-related expenses are provided at fair market value and paid for from permissible sources.
- Political and Campaign Events
The Federal Election Campaign Act (FECA) regulates the financing of and participation in federal elections. Club activities triggering compliance with FECA include a candidate’s use of club facilities and services whether rented out or otherwise made available for political events. The principal concern for your Club when hosting a political event is that FECA prohibits corporations (including nonprofit corporations) from making contributions to support the election or defeat of a federal candidate.[1] Contributions include direct and indirect payments of money, services, or anything of value given, loaned or advanced to influence a federal election.[2]
Member Clubs may rent out meeting rooms at their usual and normal rate, but reimbursement must be made within a commercially reasonable time. Should a Club member or political committee choose to cover the cost of such rental, they may do so as an in-kind contribution subject to federal contribution limits.[3] In these cases, we strongly advise that the Club receive payment in advance of the event to avoid any period of time during which the Club has inadvertently advanced use of its facilities for the benefit of the campaign without payment.
Member Clubs may also elect to provide their facilities for political events at no cost, or at a discount, but only under the following circumstances:
- Meeting rooms are customarily made available to civic and community groups;
- Meeting rooms are made available to other candidates upon request; and
- Meeting rooms are made available to candidates on the same terms (i.e., if provided for free to one candidate they must also be made available to other candidates at no charge).[4]
Member Clubs may also provide food services (and other staff services) for political events but only at the usual and normal rate. Payment for these services should be made in advance. Consistency and recordkeeping are critical. Campaign supporters often want to help a candidate out by covering the cost of an event or by reducing the charge they would otherwise receive. However, if there is any charge it must be at the usual and normal rate. Undercharging for an event will cause the Club to make a prohibited corporate contribution to the benefitting campaign.[5]
Finally, when a political appearance features a candidate who is also a current officeholder the relevant ethics rules also apply. Those rules are more fully detailed below.
- Official Capacity Appearances
When it is determined that an officeholder is making their appearance at your Club in their official capacity, you will need to determine which ethics rules apply based on their position. Covered employees in the Executive Branch are subject to different restrictions than Members of Congress and House or Senate staff.
- Executive Branch Employees
Executive Branch employees may not solicit or accept a gift given because of their official position or from a “prohibited source.”[6] Prohibited sources include anyone who: (1) has or seeks official action or business with the employee’s agency, (2) is regulated by the employee’s agency, or (3) has interests that may be substantially affected by the employee’s official duties.[7] The term “gift” refers to any gratuity, favor, discount, entertainment, hospitality, loan or any item having monetary value. It includes services and gifts of training, transportation, local travel, lodgings, and meals—whether provided in-kind, by ticket purchase, advance payment or reimbursement.[8] This prohibition generally applies to anything valued at more than $20 (keeping in mind that each source has an aggregate limit of $50 worth of gifts per year).[9]
Given the broad scope of these terms, Member Clubs may be concerned about making their facilities and services available for events in which Executive Branch employees will be participating as attendees, speakers or honorees. Those situations, however, may be permissible under certain exceptions from the gift rules. For example, Executive Branch officials may accept:
- Free attendance (including a meal provided to all attendees) to events at which the employee is making a speech or presentation as part of their official duties;
- Free attendance to widely attended gatherings where a large number of people representing a wide range of interests are expected to attend (i.e., open to participants within an industry or profession); or
- Modest items of food and non-alcoholic refreshments (such as soft drinks, coffee, and donuts) offered other than as part of a meal.
Depending on the particulars of the event, a variety of other exceptions may also apply.[10] We encourage your Club to reach out to us for further guidance in advance of events featuring Executive Branch employees.
Additionally, Member Clubs should be aware that President Biden has imposed additional ethics restrictions on all non-career political appointees serving in his administration. These restrictions include a ban on covered appointees accepting gifts from registered lobbyists (or organizations who employ lobbyists) for the duration of their appointment.[11] This prohibition is stricter than those applicable to all Executive Branch employees—specifically because it precludes covered appointees from relying on some of the gift exceptions that would otherwise be available. Of particular note here, covered appointees may not accept lobbyist-offered: (1) free attendance to widely attended gatherings, or (2) gifts provided by a former employer to attend a reception when other former employees have been invited.[12]
- Members of Congress and their Staff
Members of Congress and congressional employees may not solicit or accept gifts unless it is specifically allowed by the rules of their respective chamber.[13] The term “gift” means anything with monetary value—including gratuities or discounts, entertainment, hospitality, services, training, travel expenses, in-kind contributions, advanced payments and reimbursements.[14] This prohibition generally applies to anything valued at $50 or more (keeping in mind that each source has an aggregate limit of $100 worth of gifts per year).[15] Importantly, Members and employees of Congress may not accept gifts from registered lobbyists or foreign agents (or entities that employ such individuals).[16]
Although these gift restrictions are quite broad, there are exceptions that may apply to Member Club events. For example, Members and employees of Congress may accept:
- Free attendance at a widely attended event (25 or more attendees) that is related to official duties, and that is open to people from a given industry or who have mutual interests;
- Free attendance at a charity event, as long as it is not sponsored or paid for by a registered lobbyist or foreign agent (or an entity that employs such individuals);
- Public service awards (and associated travel, food, refreshments, and entertainment) presented in recognition of the Member or employee;
- Training expenditures in the interest of Congress, including food and refreshments furnished to all attendees as an integral part of the training;
- Gifts based on personal friendship;[17]
- Attendance at a fundraising event sponsored by a political organization.
In most cases, attendance at permissible events includes the cost of admission, food, refreshments, entertainment, and limited other benefits if provided to all attendees. One of the most likely exceptions to apply to Member Clubs is the exception for events sponsored by a political organization. A golf outing hosted by a trade association PAC, for example, would fall within this exception so long as the event is organized and paid for by the political organization, the event is a fundraiser for the organization, and the invitation to a Member of Congress or staffer comes directly from the political organization. As with the Executive Branch rules, a variety of other exceptions may apply to events being hosted at your Club that involve Members of Congress and their staff.[18] We urge you to seek guidance from us when planning for those occasions.
Member Clubs should be aware that the Ethics in Government Act (EIGA) requires Members and employees of Congress to file financial disclosure statements with their respective chambers. Relevant here, the EIGA requires disclosure of gifts received during the year whose aggregate worth exceeds “minimal value.”[19] Currently, the General Services Administration defines “minimal value” at a threshold of $415.[20] Depending on the circumstances, an event at your Club in which a Member of Congress participates may trigger these disclosure obligations for that Member’s annual financial disclosure filing.
[1] 52 U.S.C. § 30118(a).
[2] 11 C.F.R. § 100.52(a).
[3] See F.E.C. Contribution Limits, available at https://www.fec.gov/help-candidates-and-committees/candidate-taking-receipts/contribution-limits/.
[4] 11 C.F.R. § 114.3.
[5] See id. § 100.52(d).
[6] 5 C.F.R. § 2635.202(a), (b).
[7] Id. § 2635.203(d).
[8] Id. § 2635.203(b).
[9] Id. § 2635.204(a).
[10] A full list of gift exceptions, including useful examples, can be found in sections 2635.203(b) and 2635.204 of the Standards of Conduct. See https://www.oge.gov/web/oge.nsf/resources_standards-of-conduct
[11] Executive Office of the President, Ethics Commitments by Executive Branch Personnel § 1(1.), 86 Fed. Reg. 7029, 7029 (January 25, 2021).
[12] Id. § 2(c), 86 Fed. Reg. at 7030-31.
[13] House Rule 25.5(a)(1)(A); Senate Rule 35.1(a)(1).
[14] House Rule 25.5(a)(2)(A); Senate Rule 35.1(b)(1).
[15] House Rule 25.5(a)(1)(B); Senate Rule 35.1(a)(2).
[16] House Rule 25.5(a)(1)(A)(ii); Senate Rule 35.1(a)(2)(B).
[17] Any gift valued above $250 for a House Member or staffer should receive pre-approval https://ethics.house.gov/sites/ethics.house.gov/files/Ethics_INTERACTIVE%20Personal%20Friendship%20Gift%20Waiver%20Request%20Form_02-04-2019.pdf
[18] A full list of gift exceptions and useful examples is available on the House Ethics Committee’s website. See https://ethics.house.gov/house-ethics-manual/gifts.
[19] 5a U.S.C. § 102(a)(2).
[20] See Fed. Mgmt. Reg. Bulletin B-50 (March 10, 2020).