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 restrictions on how individuals, businesses and other organizations can contribute financially to the political process in Nevada. This client alert is intended to provide the basics about how the law restricts contributions to elections in the Silver State.
Introduction
Even in the midst of the COVID-19 pandemic, the 2020 election season is upon us. And, while social distancing and other precautions have made it difficult for campaigns to do everything that campaigns and candidates typically do, raising and spending money continues. Over time, the Nevada Legislature has enacted a series of laws and has adopted regulations intended to regulate the influence of money on politics, and to combat actual or apparent corruption in the lawmaking process.1 It is obviously important for not only candidates, election committees and political parties, but for contributors as well, to be aware of the details of these rules. Violations can result in a range of enforcement actions ranging from administrative fines to felony criminal charges.
Who, What, When and How Much
The laws that apply to Nevada campaign contributions can be divided into four general categories: (1) those prohibiting certain types of contributors; (2) those defining what can be contributed; (3) those restricting when a contribution can be made; and (4) those limiting how much can be contributed. The laws discussed below apply to campaigns for state office only, including the state legislature, state executive branch offices, judicial offices and local offices. Federal campaigns, even those for federal offices representing Nevada, such as U.S. senator or U.S. representative, are governed by federal campaign laws.2
Who May Contribute
First, it is important to understand that Nevada law differs significantly from federal law in that while federal law generally restricts corporations, labor unions, national banks and other types of organizations from directly contributing to political campaigns, Nevada law is much more liberal in this regard. Indeed, any “person,” including any form of business or social organization, i.e., a corporation, partnership, association, labor union or governmental agency may legally 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.” While federal law has long prohibited foreign nationals from directly contributing to federal, state and local elections in the U.S., Nevada law also specifically prohibits a foreign national from making a contribution for virtually any political purpose, including to a candidate, a committee for political action (“PAC”), a committee for the recall of a public officer, an independent expenditure effort, a political party or related committee, or a legislative caucus.3 It is also important to note that like federal law, Nevada law prohibits the making of a political contribution in the name of another. This is sometimes known as a “straw donor” or “conduit contribution,” and typically involves when one person gives money to another for the purpose of having the second person make a contribution in their name. This is typically done because the first person, the actual donor, either cannot legally make a contribution, wants to contribute more than he/she is legally allowed to, or wants to disguise the true source of his or her contribution.
What May Be Contributed
The second general category of restrictions on political contributions in Nevada 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 to the otherwise applicable limits discussed below, a candidate may loan his or her campaign an unlimited amount.
When Contributions May Be Made
A third category of restrictions on campaign contributions in Nevada relates to the state’s biennial legislative sessions and prohibits contributions to certain officials or officials-elect 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 window of time 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.4 A similar “blackout” period applies to special sessions of the legislature. This means no campaign fundraising, at least by those politicians directly involved in the legislative process, during a regular or special session of the legislature.5
How Much Can Be Contributed
A fourth important category of limits on contributions to Nevada campaigns 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 $5,000 for the general election. A person may contribute $10,000 to a candidate before the primary election, but a candidate who accepts that amount from a single donor before the primary election and then does not advance beyond the primary, is obligated to return the $5,000 portion of the contribution that was for the general election. A person may also contribute up to $5,000 to a candidate for a special 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 by the Nevada Secretary of State’s office 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.
The Bottom Line
While our political system allows for and even encourages citizen participation of all types, including the making of financial contributions to campaigns, there are certain limits that apply. As this summary explains, there are many potential traps for the unwary when it comes to the political contributions. And, it is important to emphasize that this is only a summary. The laws and regulations in this area, even at the state level, can be complicated. Therefore, anyone, and certainly business entities, with an interest in making contributions to Nevada election efforts, would be well advised to, at a minimum, check the Nevada Secretary of State’s website6 and, when in doubt, consult with experienced campaign counsel before participating in the process.
This document is intended to provide you with general information regarding Nevada campaign finance law. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.
This document is intended to provide you with general information regarding Nevada campaign finance law. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.
1 See generally Nevada Revised Statutes (“NRS”) Chapter 294A and Nevada Administrative Code (“NAC”) Chapter 294A.
2 See Brownstein Client Alert “Election 2020: What You Need to Know About Federal Campaign Finance Law.”
3 See NRS 294A.325.
4 This prohibition does not apply to “Legislators-elect,” because, unlike statewide executive branch officials who do not officially assume office until they are sworn-in in January following their election, newly elected legislators are deemed to be officially in office as of the date they are elected.
5 Interestingly, this prohibition does not technically apply to the affected officials if they are a candidate for federal office. In other words, a governor, lieutenant governor or state legislator can solicit and accept contributions for a federal campaign during a legislative session.
6 www.nvsos.gov.