Today, when companies involve themselves in politics, there are a lot of regulations that they must comply with, whether at the federal or state level. While regulations may vary by state, companies need to know certain things before they begin to lobby for policy change or get involved in elections.

Inside Counsel recently sat down with Josh Hicks of McDonald Carano, who leads the firm's Government Affairs & Advocacy Group, to discuss the major issues to consider before considering engaging in political activity. Hicks represents clients before the Nevada legislature, local governments and state agencies, and advises on all aspects of Nevada campaign finance and election law, including ballot initiatives.

“Political compliance in each state is unique, and it is always best to retain experienced counsel,” he said. “Counsel can help a company understand contribution limits, in-kind contributions, reporting of campaign contributions and expenses, PAC registration and reporting, lobbying reporting requirements and allowed and prohibited lobbying activities.”

There are extensive statutes, regulations, case law and policy guidance on political activity in each state. According to Hicks, they are generally designed to create transparency and accountability to the public among donors, elected officials and political organizations. Many of these rules are constantly subject to amendment, so it is important to stay on top of any changes. For instance, in Nevada, the rules regarding allowed and prohibited lobbying activities underwent a significant change in 2015.

“At a minimum, a company should review the statutes and regulations in their state that are pertinent to political activity. Most of these can be found online,” he explained. “In Nevada, companies can find this information on the Nevada Secretary of State and the Nevada Legislature websites. If a company plans on engaging in significant political activity, including any lobbying activities, it is important to have a more thorough understanding as some rules are set forth in policy guides and less formal rulings.”

So what are the major issues to consider before considering engaging in political activity?
A company should have a solid understanding of allowed and prohibited political activities, as well as a sound understanding of what type of political activities are subject to reporting. In addition, it is very important for a company to know what type of lobbying activities are allowed or prohibited so as to ensure that advocacy efforts are not negatively impacted by an inadvertent misstep.

Amanda G. Ciccatelli is a Freelance Journalist for Corporate Counsel and InsideCounsel, where she covers intellectual property, legal technology, patent litigation, cybersecurity, innovation, and more.