While Congress and the courts continue to struggle with how much disclosure should be required in our campaign finance system, a new front could be opening up – litigation.  Almost unnoticed by the main stream media, News Corp.’s proposed $139 million April 22 agreement to settle a shareholder derivative lawsuit included a clause that would require annual public disclosure of political contributions.  The clause, which still needs to be approved by the Delaware Chancery Court, would also require the company to notify its board on an annual basis when payments exceeded $25,000. 

 As BNA, noted:

 The clause is “a new angle, for sure,” said Timothy Smith, director of environmental, social and governance shareholder engagement at Walden Asset Management. Smith partly spearheaded an initiative in which shareholder resolutions were filed at more than 50 companies in the 2013 proxy season calling for disclosure of federal and state lobbying activities (3441 Money & Politics Report, 2/4/13).

This development follows a pending rulemaking petition before the SEC that would mandate such disclosures. On Monday May 6, James Madison’s Montpelier Center for the Constitution is sponsoring a two day conference entitled “Can Campaign Finance Be Reformed?”  I will be participating in a panel focused on “Disclosure – What Should be Disclosed, When, By Whom?” along with University of Virginia Law Professors Michael Gilbert and Deborah Hellman.  I’ll report back in.

The Office of Government Ethics proposed a new rule last week that would eliminate many exemptions to gift giving for federal employees. The proposed rule would eliminate most of the exemptions that were available in the past -- including gifts worth less than $20 and free attendance to widely attended and other social events when the gift givers are a registered lobbyist or an organization that employs them.

As noted in the Washington Post:

"That could force government employees to check whether gift-givers are lobbyists by looking in disclosure filings."

Strangely, and with no evidence to back this up, OGE's stated justification for the proposed rule was that it "is increasingly recognized that the more realistic problem is not the brazen quid pro quo, but rather the cultivation of familiarity and access that a lobbyist may use in the future to obtain a more sympathetic hearing for clients.” This proposed rule, like prior Obama Administration initiatives, fails to grasp that the Lobbying Disclosure Act (Act) was enacted to bolster transparency -- not to create disincentives to registration. The Act includes time and financial thresholds to be met before being required to register. This proposed rule could further give rise to what is known as "stealth lobbying" -- which is lobbying activity that stays below the registration thresholds and thus stays out of the public eye. Like the irrational limits the Obama Administration placed on former lobbyists coming into government, individuals and organizations that once registered (and perhaps over reported) may elect to navigate the registration thresholds to stay under the radar and simply not register at all. So much for promoting openness in government...