GUEST COLUMN:

Explaining the basics of Nevada campaign finance law

Famous former Nevadan Mark Twain reportedly once said: “We have the best legislature money can buy.” For all the talk about there being too much money in politics — and there is a lot of money in politics — there are also a lot of laws and regulations that restrict how individuals, businesses and other organizations can contribute financially to the political process in Nevada. Here, we will explain some of the basics.

The rules that apply to contributing to Nevada political campaigns can be divided into four general categories:

Gregory A. Brower

Gregory A. Brower

• those prohibiting certain types of contributors

• those defining what can be contributed

• those restricting when a contribution can be made

• those limiting how much can be contributed.

The laws discussed here apply to campaigns for state office only, including the Legislature, executive branch offices, judicial offices and local offices. Federal campaigns, even those for offices representing Nevada, such as U.S. senator or U.S. representative, are governed by federal campaign laws.

First, it is important to understand that unlike the rules governing federal elections, which generally prohibit direct contributions by corporations and other organizations, Nevada law allows any “person,” including any form of business or social organization, i.e., a corporation, partnership, association, labor union or governmental agency, to make a contribution to a Nevada campaign. Under Nevada law, the only categories of persons who are prohibited from making campaign contributions are foreign nationals and so-called “straw donors.” A straw donor or “conduit contribution” scheme involves one person giving money to another for the purpose of having the second person make a contribution in their own name. This is typically done because the first person, the actual donor, either cannot legally make a contribution, wants to contribute more than he or she is legally allowed to, or wants to disguise the true source of his or her contribution.

Kristina Kleist

Kristina Kleist

The second general category of restrictions on contributions relates to the types of contributions that are allowed. Campaign contributions may consist of money ­— cash, check, credit cards — or may be “in kind.” In-kind contributions often take the form of goods and services provided to the campaign at no cost or below market cost, and typically include office space, professional services, transportation services, food and beverage, and the like. A contribution may also take the form of a loan to the campaign. While the amounts of loans from third parties are limited, a candidate may lend his or her campaign an unlimited amount.

A third category of restrictions on campaign contributions relates to the state’s biennial legislative sessions and prohibits contributions to certain officials during certain periods of time. Specifically, a person is prohibited from making a campaign contribution to legislators, the governor (or governor-elect) and the lieutenant governor (or lieutenant governor-elect) during a time period beginning 30 days before the start of a regular session of the Legislature and ending 30 days after the last day for a regular session. A similar “blackout” period applies to special sessions.

A fourth important category of limits on contributions concerns the amounts that can be contributed. A person can contribute up to a maximum of $5,000 to an individual candidate for any office for the primary election, and another $5,000 for the general election. A donor may contribute the entire maximum of $10,000 to a candidate before the primary election, but a candidate who accepts that amount but fails to advance beyond the primary is obligated to return the portion of the contribution that was intended for the general election. Contributions to PACs, political parties, legislative caucuses or other political organizations that are not individual candidate campaigns are not limited under Nevada law.

Because these restrictions and their interpretation can be complicated, and because both candidates and their campaigns, as well as contributors, can easily commit technical violations of these rules, most violations can be easily remedied by simply undoing the offending contribution when it is discovered. However, violations of a more serious nature can involve formal enforcement action by the Secretary of State’s Elections Division, and the most serious violations may be referred to the Nevada Attorney General’s office for investigation and possible criminal charges.

While our political system allows for and even encourages citizen participation of all types, including the making of financial contributions to campaigns, it is important for any participant in the process to understand the rules that apply. Anyone, and certainly business entities, with an interest in making contributions to a Nevada campaign, would be well advised to check the Nevada Secretary of State’s website and, when in doubt, consult with experienced campaign counsel before participating in the process.

Greg Brower and Kristina Kleist are attorneys with Brownstein Hyatt Farber Schreck in the political law practice.

Business

Share