Pay to Play Updates – October 2022

An excerpt of Dentons’ Political Law Playbook.

Defense Contractor Pleads Guilty To Making Illegal Contributions To Sen. Collins’ 2020 Campaign – In late September, a former chief executive at engineering firm Navatek pled guilty to violating federal pay-to-play laws that prohibit defense contractors from making certain political contributions. Martin Kao was charged with using family members and a shell company to contribute over $200,000 in illegal donations to “Senator Susan Collins’” campaign, as well as with conspiracy and making false statements to authorities. There are no allegations raised against Senator Collins’ campaign, which divested all contributions related to Kao, in the criminal matter. Kao is scheduled for sentencing in February 2023.

SEC Fines Four Advisory Firms for Alleged Pay-to-Play Violations – Last month, the Securities and Exchange Commission (SEC) fined four investment advisors nearly $300K for allegedly being paid investment advisory fees from government entities after making campaign donations to elected officials. The SEC’s pay-to-play rule prohibits investment advisers from providing compensatory advisory services for two years following a campaign contribution to any official who would be in a position to influence the selection of the firm by a government entity. The lone dissenting SEC Commissioner objecting to the levied fines claimed that each enforcement scenario involved one-time, small-dollar contributions by one or two people, and all the investment advisers had established advisory relationships with the relevant government entities before the contributions occurred.

Indiana Contractor Ordered to Pay Restitution to Local Indiana Sanitary District – An Indiana contractor who pled guilty to conspiracy to commit wire fraud for illegally exchanging cash in order to win a contract with the Muncie Sanitary District was recently ordered to pay $104,750 in restitution to the district. Rodney Barber had admitted to giving an ex-local Democratic Party chairman $5,500 to help win the contract, as well as providing a district official with $5,000 to facilitate illegal contributions to then-mayor’s re-election campaign.

About the Political Law Playbook

Dentons’ Political Law Playbook is a monthly update on the most important developments in the areas of political law, government ethics, campaign finance, lobbying and election law. Each edition of Political Law Playbook will cast a spotlight on the unique issues at the intersection of law, policy and politics and give you a window into how the Dentons Political Law, Ethics and Disclosure team can help you navigate the compliance challenges you face.

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About Benjamin Keane

Ben Keane is a Partner in the Washington, DC and Atlanta, GA offices of Dentons and co-head of the firm’s Political Law, Ethics and Disclosure Team. Mr. Keane focuses his practice on the representation of elected officials, political candidates, PACs, SuperPACs, political parties, corporations, non-profit organizations and other entities with regard to federal, state and local election law, campaign finance, lobbying, pay-to-play, and ethics matters. He regularly counsels businesses, trade associations and other non-profits on the establishment and maintenance of successful political law compliance frameworks. Additionally, Mr. Keane assists clients across the country with political law investigation and audit matters involving federal, state and local government authorities, and frequently counsels presidential nominees, appointees and other federal officials on confirmation and ethics matters.

About Michael Zolandz

Mike Zolandz is the chair of Dentons' Federal Regulatory and Compliance practice, and serves as the Managing Partner for Dentons’ Washington, DC office. Mike focuses his practice on advising clients on their most critical and complex trade compliance and foreign investment projects, specializing in cross-border transactions and regulations related to international commerce.

About C. Randall Nuckolls

Randy Nuckolls is a partner Dentons’ Washington, D.C. office and is a member of the Public Policy practice. He has more than thirty years of experience working on federal policy issues.

About Michael Pfeifer

Michael Pfeifer is member of Dentons' Political Law, Ethics and Disclosure team. The focus of his practice is providing lobbying, campaign finance, and government ethics compliance counsel and representation to trade associations, political action committees (PACs), corporations and other business entities, non-profit organizations and elected officials at the federal, state and local levels.

About Merrill Weber

Merrill M. Weber is an associate in Dentons’ Washington D.C. office and member of the Political Law, Ethics and Disclosure team. Her practice focuses on providing counsel on state, federal, and local lobbying, campaign finance, and government ethics compliance issues to clients including trade associations, political action committees (PACs), corporations and other business entities, and non-profit organizations.