These days, it is not enough for companies with dealings with government officials to adopt election and political law compliance policies.  They need to adopt the right policies.

A $200,000 settlement the Financial Industry Regulatory Authority recently obtained against L.J. Hart & Co. (“Hart”), a Missouri municipal-bond underwriter, is a case in point.  The case involved allegations that Hart handed out free tickets to professional football, baseball, and hockey games to local Missouri officials involved in issuing securities.  Under rules adopted by the Municipal Securities Rulemaking Board, occasional sporting event tickets are not necessarily prohibited as long as the recipients are “hosted” by the gift-giver.  Hart’s internal policy, however, failed to catch that nuance and instead suggested that there was a blanket exception for all sporting event tickets, even if Hart employees did not attend the game.  Two thousand tickets to games not attended by Hart employees later, FINRA faulted Hart for giving the tickets (in violation of MSRB rule 20) and failing to adopt adequate policies and supervisory processes to prevent such gifts (in violation of MSRB rule 27).

Here, Hart’s problems could have been avoided (or at least mitigated) had it simply adopted a more careful, fine-tuned compliance policy.  This cautionary tale should therefore remind companies of the importance of ensuring their internal election and political law compliance policies are fly-specked and fully consistent with applicable law.

Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

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