We are only one month into 2019 and the 2020 Presidential Election is a hot topic of discussion. With some candidates forming exploratory committees (to determine whether they are going to run) and other candidates declaring that they are in fact running for President, now is the time for companies to make sure they have a workable plan for political activity compliance.
Although federal campaign finance law prohibits corporate contributions (direct and in-kind), it does not prohibit:
- a corporation from forming a connected political action committee;
- a corporation from providing administrative support to that connected political action committee;
- a corporation making independent expenditures or contributing to a federal Super PAC (provided the corporation is not a federal government contractor);
- officers and employees of a corporation from making individual political contributions; and
- officers and employees of a corporation from volunteering their time for a political campaign.
Politics is often viewed as a forbidden topic in the workplace; however, companies should not shy away from developing and implementing a plan for political activity compliance. At a minimum, companies should evaluate whether:
- officers and employees understand the restrictions on using corporate resources in connection with federal political activity;
- a candidate for federal office may visit a company and speak with the company’s officers and employees;
- if a company has a connected federal PAC (or wishes to form a federal PAC), that PAC is operating in accordance with the law;
- officers and employees know that they cannot seek reimbursement for individual political contributions;
- company employees in the finance department know that they cannot issue company checks to reimburse anyone for a personal political contribution;
- officers and employees understand that their volunteer political activity cannot interfere with their work responsibilities; and
- the company is a federal government contractor (especially if the company wishes to engage in independent expenditure activity).
Although a corporate political activity compliance plan may vary depending upon the size of the company, as the 2020 Presidential Election field continues to expand, it is important for companies to not only develop a plan, but to also educate and train employees and officers about the “Dos and Don’ts” of federal political activity.