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Win, Lose or Straw: How a Trump Official’s Campaign Donations Provide a Helpful Reminder for Companies to Know and Comply with Campaign Finance Laws During Election Season

Win, Lose or Straw: A Trump Official’s Alleged Campaign Finance Violations Spotlight a Larger Focus on Company Compensation Schemes During an Election Year Background Decorative Image

On Sunday, September 6, 2020, the Washington Post reported that U.S. Postmaster General Louis DeJoy’s former North Carolina–based company allegedly used company funds to reimburse employees for donations to federal and state political campaigns that DeJoy had asked them to make. If true, such “conduit” or “straw donor” political contributions would likely have violated federal election law, which prohibits corporate donations to individual candidate’s campaigns and the solicitation of campaign contributions that are later reimbursed. In the immediate aftermath of the reports, both Congress and the North Carolina Attorney General’s Office indicated that they were opening investigations into the matter.

It is perfectly normal for company employees to be politically active, and provided you stay within the legal limits and are not reimbursed for your contributions, it is perfectly legal to give money to a campaign in your individual capacity. Legal and even criminal implications arise, however, if your company’s employees feel pressured to give money or support candidates and they believe that their compensation or job security may be tied to such decisions. As Election Day approaches, companies should ensure their policies and procedures adequately address political contributions so they are in line with federal and state election law. Companies should also take time to ensure their compliance policies and programs are designed to prevent violations of campaign finance law, such as those alleged against DeJoy and his former company. If you have a question or discover an issue, it is especially important to seek competent counsel who can advise you and your company to steer clear of any violation of federal or state election law. For more on this timely topic, read here.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.