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Navigating the Law of Politics (and more)

Politics has become a regulated industry.  At Berke Farah LLP,  we provide legal advice and counsel to help clients navigate all aspects of the political process including campaign finance & election law, government ethics, lobbying law, corporate anti-corruption compliance, government investigations, non-profits, and fundraising  as well as on white collar criminal defense, regulatory, and corporate governance. Our clients include Fortune 500 companies, national trade associations, lobbying and public relations firms, political committees, Members of Congress (including senior leadership) and Presidential campaigns.

                                  

Campaign Music – “I Told You So” Edition

More from Berke Farah LLP Senior Consultant Matthew Swanlund on the laws governing use of music in campaigns:

 http://aestheticlegal.com/campaign-music/

Campaign Music – “I Told You So” Edition

DATEJuly 6, 2016

POSTED BYMatthew Swanlund

COMMENTS0

When will these politicians stop making such ridiculous mistakes with their campaign music? Almost exactly a year ago I wrote about Donald Trump’s objectionable use of music in his presidential run, which unsurprisingly has continued since my original article. However, a new political figure has now entered the ring to challenge the king of objectionable campaign music use.

Former Republican presidential hopeful Mike Huckabee was just ordered to pay $25,000 to a company owned by Survivor guitarist Frankie Sullivan to settle a lawsuit stemming from Huckabee’s unauthorized use of the band’s “Eye of the Tiger” at a rally in support of Kim Davis. This is an unusual development because in the past politicians have usually escaped with an embarrassed mea culpa for objectionable campaign music use, but that was when their campaigns took the time to at least secure the appropriate licensing. Even Donald Trump survived with just a slight public scolding from Neil Young.

The Huckabee case was filed by Rude Music, which is owned by Survivor founding member Frank Sullivan, who co-authored the song. His attorneys argued that Huckabee himself is a musician and is familiar with copyright laws, which makes his ignorance even more baffling. This is not Huckabee’s first rodeo, though. In the legal filings, Sullivan’s attorneys noted that in 2008, the founder of the band Boston demanded that Huckabee’s campaign stop playing “More Than a Feeling” at campaign events.

A number of campaigns have been hit with legal claims for the unauthorized use of campaign music at events and rallies. John McCain’s campaign, the Republican National Committee and the Ohio Republican Party in 2009 settled a lawsuit filed by Jackson Browne over the use of “Running on Empty” in a campaign advertisement. The settlement was reportedly for a six-figure sum.

More recently, a number of artists have requested that Donald Trump’s campaign stop playing their music at rallies, although Trump’s campaign has insisted that their use has been legal because they have licensed the works from performing rights agencies. Most campaigns would be embarrassed by the artist’s objections, but that hasn’t stopped Trump.

Sullivan has been historically aggressive in protecting his songs. In 2012, he also sued Newt Gingrich over the GOP candidate’s use of the Rocky III theme on the campaign trail; they eventually settled out of court. Mitt Romney, who also briefly used the track at 2012 rallies, escaped with just a cease-and-desist letter.

Huckabee initially came under fire for using the track at a September 2015 rally without permission. However, this rally was high-profile in nature – Huckabee was celebrating the release of Kentucky county clerk Davis, who was imprisoned after refusing a court order to give marriage licenses to same-sex couples. We all remember Huckabee raising Davis’ arm in the air as if he was celebrating Nelson Mandela’s release from prison. That was the first critical mistake Huckabee made – using the song in such a politically divisive setting, which ensured that it would be publicized widely.

In a recent Rolling Stone article, Sullivan said, “I do not like mixing rock and roll with politics; they do not go hand in hand. What upset me most [about Huckabee’s use] was that, once again, my song was being used to further a political agenda – and no one even bothered to ask for permission.” That was the second critical mistake Huckabee made – not only did he fail to secure the appropriate licensing, he didn’t ask the artist permission to use the song.

At a minimum, Huckabee would need a public performance license to play the song at the rally. Such a license can be obtained from ASCAP, BMI or SESAC, which are music performing rights organizations that license the public performances of its members’ musical works. A public performance is defined as one that occurs in a public place where people gather (other than a small circle of a family or social acquaintances). A public performance is also one that is transmitted to the public, for example, radio or TV broadcasts, and via the Internet. A campaign rally or event would qualify as a public performance place.

While many venues have proper “public performance” licenses in place, as a general rule the licenses granted for convention centers, arenas and hotels specifically exclude music used during conventions, expositions and campaign events. This Huckabee rally took place in front of a public courthouse, so there was no public performance license in place for the venue. Securing a public performance license would have guaranteed that the Huckabee campaign would have at least been in compliance with copyright law, which they failed to do.

“The ‘Eye of the Tiger’ copyright is a very valuable asset, and we work very hard to protect it,” Sullivan’s attorney told CNN. In court, Huckabee’s attorney argued that “non-commercial, fair use” laws protected this specific use of “Eye of the Tiger.” However, Sullivan’s team countered that Huckabee had claimed the rally as a “presidential campaign expense.” Ah, that might have been the fatal mistake by Huckabee – claiming publicly that it was non-commercial fair use, but then privately claiming the rally as a presidential campaign expense. Whoops.

In the same Rolling Stone article, Sullivan said, “I do not agree with Kim Davis’ stance and do not believe in denying gay rights and the freedom for all individuals to choose the lifestyle they want to live. Our Constitution, and the words of our Founding Fathers, stand tall for freedom, which is what America is all about. I find it ridiculous in this day and age that this fight against gay marriage has gone on, even after the Supreme Court’s ruling. Let’s stop!”

Not only can it be detrimental and embarrassing to have an artist object to a candidate’s use of campaign music (for anyone other than Trump, evidently), it can also be financially risky. The Huckabee campaign wrote a check for $25,000 to Sullivan to settle this claim, but the damages could have been higher. For example, statutory damages for intentional copyright infringement can be as high as $150,000, plus recovery of the plaintiff’s attorney’s fees.

If a political campaign wants to eliminate campaign music mistakes, particularly if the campaign wants to use a song as its theme, they should contact the management of the artists and the songwriters and obtain their permission to use the song. Obviously, this is the best way to ensure that the artist supports the use of the campaign music. Second, a public performance license will ensure that public performance of the song at campaign events is in compliance with copyright law. Third, a synchronization license should be obtained for use of the song in commercials, multimedia presentations, websites and any other uses in conjunction with video. Finally, the publisher of the song and the record label that controls the master recording may require a separate license.

 

The Dangerous Use of Music in Political Campaigns

by Matthew Swanlund (Senior Consultant)

Recently, Donald Trump entered the race for President of the United States descending an escalator in Trump Tower to the tune of Neil Young’s “Rockin’ in the Free World.” According to the Trump campaign team, they obtained all necessary licenses to publicly perform the song from the copyright holder. However, Neil Young, was never contacted by the Trump team.

Based on the statement from Young’s record label, he wasn’t happy about it. Neil Young issued the statement: “Donald Trump was not authorized to use ‘Rockin’ in the Free World’ in his presidential candidacy announcement. Neil Young, a Canadian citizen, is a supporter of Bernie Sanders for President of the United States of America.” Whoops.

So who’s right here in this mess? Did Trump satisfy his legal obligations when he secured the appropriate public performance license? Does Neil Young have the ability to control who publicly performs his songs? Who thought it a great idea to enter on a descending escalator?

If Trump is only using the song when he appears for an event descending on an escalator, then he likely would only need a public performance license. Such a license can be obtained from ASCAP, BMI or SESAC, which are music performing rights organizations that license the public performances of its members’ musical works. A public performance is defined as one that occurs in a public place where people gather (other than a small circle of a family or social acquaintances). A public performance is also one that is transmitted to the public, for example, radio or TV broadcasts, and via the Internet. A campaign rally or event would qualify as a public performance place.

While many venues have proper “public performance” licenses in place, as a general rule the licenses granted for convention centers, arenas and hotels specifically exclude music used during conventions, expositions and campaign events. I’m hypothesizing here, but I’m sure that Trump Tower already has the most extensive, classy and visually opulent public performance license ever created by man. However, if Trump’s campaign plans on holding events at dozens of different venues where he will be descending escalators, it may be easier for the campaign itself to obtain a public performance license from ASCAP, BMI or SESAC. This would guarantee that, no matter where he descends, the campaign would be in compliance with copyright law.

In our multimedia and social media centric world, especially as relates to political campaigns, it is highly likely that the Trump campaign would like to use the song in commercials, on the campaign website, YouTube page and social media accounts. A public performance license will not likely be sufficient for these purposes. These uses involve rights such as synchronization of music with video and the possible use of the master sound recording. The campaign will need to contact the song’s publisher and possibly the artist’s record label to negotiate the appropriate licenses with them. Campaign videos containing music that are posted on the Internet also require these licenses. TV and radio stations, and any web sites that transmit the commercial must hold a public performance license.

ASCAP, BMI and SESAC do not issue mechanical and synchronization licenses, which means that to obtain such licenses the campaign must negotiate directly with the songwriters or publishers. Additionally, a mechanical license does not grant the right to reproduce sound recordings, also known as “master use rights.” Master use rights can only be obtained from the owner of the master recording, usually a record company.

Even if a song is properly licensed by a campaign, there is other potential liability that could arise for playing that song at an event. If an artist does not want his or her music to be associated with the campaign, the artist may be able to take legal action even if the campaign has the appropriate copyright licenses. While the campaign would technically be in compliance with copyright law, it could potentially still be in violation of other applicable laws, including: “rights of publicity”, which in many states provide image protection to famous entertainers or artists; the “Lanham Act,” which covers the confusion or dilution of a trademark (such as a band or artist name) through unauthorized use; and “false endorsement,” where use of the artist’s identifying work implies that the artist supports a product or candidate.

How then can a campaign protect itself against these types of claims? If a campaign wants to eliminate any of these claims, particularly if the campaign wants to use a song as its theme, they should contact the management of the artists and the songwriters and obtain their permission to use the song. Obviously, this is the best way to ensure that the artist supports the campaign. Second, a public performance license will ensure that public performance of the song at campaign events is in compliance with copyright law. Third, a synchronization license should be obtained for use of the song in commercials, multimedia presentations, websites and any other uses in conjunction with video. Finally, the publisher of the song and the record label that controls the master recording may require a separate license.

It appears that the Trump campaign folded under the objections of Neil Young because, among other things, it is embarrassing to use a song to embody the message of a campaign by an artist that does not support the campaign. However, at least Trump got off relatively easy. Governor Scott Walker was not so lucky when he used a Dropkick Murphys song in his campaign without permission earlier this year. The Dropkick Murphys responded, “@ScottWalker @GovWalker please stop using our music in any way…we literally hate you!!! Love, Dropkick Murphys.”

https://aestheticlegal.wordpress.com/2015/07/07/the-dangerous-use-of-music-in-political-campaigns/

Federal Lobbying Reports Reminder

By William J. Farah

This is to remind you that quarterly federal lobbying reports (Form LD-2)  are due Monday, October 20th.  This report will cover federal lobbying activity between July 1 and September 30, 2014.  (The next federal contribution report (Form LD-203) is not due until January 30th.)

 Also, for those of you responsible for your organization’s PAC filings, please note that, because this is an election year, federal PACs are subject to an additional fling requirement.  In addition to filing the usual monthly/quarterly report in October, federal PACs also file a pre-general election report, which is due October 23, 2014. 

Finally, with the November elections now less than 30 days away, PACs active in state and local elections should be mindful of any  irregular “pre-election” and other special (e.g., “24 hour/48 hour”) reporting requirements that may be applicable.  Filing errors occurring during the period immediately preceding an election are sometimes subject to more severe penalties and can attract media attention.   While trying to be responsive to candidate requests for contributions, please also be extra mindful of any filing and disclosure obligations those contributions may trigger for your PAC.

President Obama Rescinds Order Affecting Lobbyists

By William J. Farah

President Obama has largely rescinded his 2010 directive banning the appointment of lobbyists to serve on federal advisory committees.  A “Notice of revised guidance” issued by the Office of Management and Budget (“OMB”) and published in today’s Federal Register states that lobbyists now may be appointed to serve on advisory committees, boards and commissions, if they are appointed in a “’representative capacity,’ meaning that they are appointed for the express purpose of providing a committee with the views of a nongovernmental entity, a recognizable group of persons or nongovernmental entities (an industry sector, labor unions, or environmental groups, etc.), or state or local government.”  79 Fed. Reg. 47482.  The ban remains in effect for lobbyists who would be serving in their individual capacity. The President’s decision follows litigation initiated by several lobbyists who claimed their constitutional rights had been violated by the ban.  Most recently, the U.S. Court of Appeals for the District of Columbia had overturned a lower court ruling dismissing the lobbyists’ complaint and remanded the case with instructions that the lower court more carefully examine the government justifications for the ban.  

 

Survey Shows More Companies Adopting and Strengthening Political Spending Policies

By William J. Farah

An annual survey prepared by the Center for Political Accountability (CPA) and released last week indicates that an increasing number of large companies are adopting policies and procedures designed to improve transparency and oversight of their political activities. This trend appears to be a reaction to a number of factors, including increasingly aggressive legal tactics by shareholders (including pension funds such as the New York Common Retirement Fund), who are demanding more information about how companies spend corporate funds in the political arena. Last year, there was a marked increase in the number of shareholder proposals to require greater corporate disclosure of political spending, and several lawsuits to compel the production of corporate books and records by companies that were not responsive to these demands.

The CPA uses an index comprised of 24 elements that are weighted to rank corporate political spending policies and procedures. According to CPA’s 2013 report, 78 percent of the 195 S&P companies it tracks made improvements to their disclosure practices last year, and the number of companies receiving the top five overall scores grew from five last year to 16 this year. They are: Merck, Qualcomm, United Parcel Service, AFLAC, CSX, Microsoft, Gilead Sciences, Noble Energy, ConocoPhillips, Exelon, JPMorgan Chase, Time Warner, Wells Fargo, Intel, PG&E and Yum! Brands.

At the same time many companies are moving to strengthen their political spending practices, the Securities and Exchange Commission (SEC) continues to consider a 2011 petition submitted by 10 law professors from several leading law schools to make disclosure of political spending mandatory. Although there were indications the SEC might consider the petition earlier this year, SEC Chair Mary Jo White deferred any action pending further agency review. There has since been no indication when the SEC might take action on the petition.

The CPA rating has taken on significance in recent years by providing a target list to shareholder activists. Those companies receiving a low score are at greater risk of attracting shareholder proposals and lawsuits aimed at corporate political activities. We have worked with a number of clients to help them design and strengthen political compliance programs. This includes assisting clients in identifying and implementing changes to their policies and practices that will improve the company’s CPA score and, in some cases, working with the CPA to be certain the company’s efforts are understood and receive appropriate credit.

 

Lobbying Firm Faces Charges Under Lobbying Disclosure Act

By Elliot S. Berke

It appears that the Justice Department is getting a bit more aggressive in enforcing violations under the Lobbying Disclosure Act, as amended (LDA).  As reporteed in the BLT: Blog of the Legal Times:

After allegedly failing to turn in 124 federal lobbying reports on time, a West Hempstead, N.Y.-based consulting firm with only one lobbying client is facing a fine up to $33 million.  The U.S. Attorney’s Office for the District of Columbia on Friday filed a civil suit against Biassi Business Services Inc. (BBSI) in the U.S. District Court for the District of Columbia, claiming the firm knowingly violated requirements of the Lobbying Disclosure Act. The law governs the reporting of federal lobbyists’ activities.  “The Government alleges that BBSI knowingly failed to comply with the periodic reporting requirements of the LDA and to remedy delinquent filings after being notified by the Secretary of the U.S. Senate (the “Senate”) and the Clerk of the U.S. House of Representatives (the “House”),” Assistant U.S. Attorney Brian Hudak wrote in the complaint. “As such, and because BBSI has failed to remedy its unlawful actions despite a plethora of notices from the House, Senate, and the U.S. Attorney’s Office, the United States brings this action.”

Under the LDA, the fine can be up to $200,000 per violation. Prosecutors stated that BBSI had 124 knowing violations of lobbying reporting requirements and 41 knowing failures to fix a defective filing within 60 days.

Keith Morgan, the Deputy Chief, Civil Division, U.S. Attorney’s Office who oversees LDA violations, recently spoke at McGuireWoods’ Political Law 2013 Conference: Compliance for Businesses and Staffers. This is the fourth case the U.S. Attorney’s Office has brought involving LDA violations since 2010.

The IRS Scandal: What's Next?

By Elliot S. Berke

Well, this could be a huge development. Playing second fiddle to the recent IRS scandal involving how the agency mishandled applications from some right-leaning groups is the simple fact that the Service has historically offered little guidance on how it measures the primary purpose of such activities. Senate Finance Committee Chairman Max Baucus (D-Mont.) had promised to use the panel’s investigative powers to uncover the root causes of inappropriate IRS scrutiny of prospective tax-exempt organizations.  But today, Chairman Baucus said there also needs to be more clarity on permissible 501(c)(4) activities, calling for reform of vague laws related to such organizations.  Could this “clarity” become party of his overall push for major tax reform?  Stay tuned.

This is the dawning of the age of disclosure?

By Elliot S. Berke

 While Congress and the courts continue to struggle with how much disclosure should be required in our campaign finance system, a new front could be opening up – litigation.  Almost unnoticed by the main stream media, News Corp.’s proposed $139 million April 22 agreement to settle a shareholder derivative lawsuit included a clause that would require annual public disclosure of political contributions.  The clause, which still needs to be approved by the Delaware Chancery Court, would also require the company to notify its board on an annual basis when payments exceeded $25,000. 

 As BNA, noted:

 The clause is “a new angle, for sure,” said Timothy Smith, director of environmental, social and governance shareholder engagement at Walden Asset Management. Smith partly spearheaded an initiative in which shareholder resolutions were filed at more than 50 companies in the 2013 proxy season calling for disclosure of federal and state lobbying activities (3441 Money & Politics Report, 2/4/13).

This development follows a pending rulemaking petition before the SEC that would mandate such disclosures. On Monday May 6, James Madison’s Montpelier Center for the Constitution is sponsoring a two day conference entitled “Can Campaign Finance Be Reformed?”  I will be participating in a panel focused on “Disclosure – What Should be Disclosed, When, By Whom?” along with University of Virginia Law Professors Michael Gilbert and Deborah Hellman.  I’ll report back in.

 

Changes Coming to Conflicts of Interest Standards in Congress

By Elliot S. Berke and William J. Farah

The House Ethics Committee is having a busy holiday season, following up on what was a busy overall year for the congressional ethics panel.  Late Thursday, the Committee issued a series of press releases and reports to close out this Congress.   The Committee’s investigative reports always contain conclusions of interest and sometimes set new precedents (which do not always get fully digested by the House community at large).  Most interesting with this round of reports, however, was the Committee’s promise to revisit the House’s current conflicts of interest standards in light of its investigations over the past Congress.  As the Committee stated:

The Committee…believes the time has come to engage in comprehensive review of the House’s conflicts standards so that they are clearer and more easily digested by the House community.

Based on the statement, it will be more important than even during future congresses for any entity that interacts with the Members of Congress and for congressional offices to establish protocols to avoid even the perception of a conflict of interest.  More on the Committee’s findings and conclusions can be found at ethics.house.gov.  Happy Holidays!

Why Showtime's Homeland Could Use a Political Law Refresher Course

By Elliot S. Berke

SPOILER ALERT!  On Showtime’s Homeland this week, Sgt. Brody made public the worst kept secret in pretend Washington — he would indeed run for the Congressional seat being vacated by disgraced Congressman Dick Johnson.  However, in making his announcement probably Brody broke several laws that could put his fake congressional run at risk (Sgt. Brody has of course also been offering material support to a terrorist cell headed by Abu Nazir in violation of the USA Patriot Act, but perhaps we’ll save that for another blog post).   First, Brody made his announcement on the steps of the Capitol, which likely was in violation of the Hatch Act. Second, Brody appeared in uniform and is still an active member of the Marine Corps — likely violations of the Department of Defense Directive 1344.10 (DoDD 1344.10), and the Uniform Code of Military Justice.  Stay tuned to see if a fake FEC complaint is filed against Brody’s fake congressional campaign committee (and of course whether he commits fake treason before the season finale).

Obama Administration Declares on What it Calls 'Cult of Familiarity' by Lobbyists

By Elliot S. Berke

The Office of Government Ethics proposed a new rule last week that would eliminate many exemptions to gift giving for federal employees. The proposed rule would eliminate most of the exemptions that were available in the past — including gifts worth less than $20 and free attendance to widely attended and other social events when the gift givers are a registered lobbyist or an organization that employs them.

As noted in the Washington Post:

“That could force government employees to check whether gift-givers are lobbyists by looking in disclosure filings.”

Strangely, and with no evidence to back this up, OGE’s stated justification for the proposed rule was that it “is increasingly recognized that the more realistic problem is not the brazen quid pro quo, but rather the cultivation of familiarity and access that a lobbyist may use in the future to obtain a more sympathetic hearing for clients.” This proposed rule, like prior Obama Administration initiatives, fails to grasp that the Lobbying Disclosure Act (Act) was enacted to bolster transparency — not to create disincentives to registration. The Act includes time and financial thresholds to be met before being required to register. This proposed rule could further give rise to what is known as “stealth lobbying” — which is lobbying activity that stays below the registration thresholds and thus stays out of the public eye. Like the irrational limits the Obama Administration placed on former lobbyists coming into government, individuals and organizations that once registered (and perhaps over reported) may elect to navigate the registration thresholds to stay under the radar and simply not register at all. So much for promoting openness in government…

New Enforcement of the Lobbying Disclosure Act?

By Elliot S. Berke

One of the major criticisms of the Lobbying Disclosure Act (LDA) by the so-called “watchdog” community is that with little enforcement there is little incentive for accurate disclosure. The Justice Department has never brought a court action to enforce the 16-year-old lobbying law and has settled only three matters out of court. But that could finally be changing. At a little noticed conference in Washington, DC last week, Keith Morgan, a top official in the civil division in the Office of the U.S. Attorney for the District of Columbia, which has authority to enforce the LDA, suggested there was a new sheriff in town.

As noted in the BNA:

“[Morgan] said his office has made progress in an effort to create a database of potential LDA violators and to identify repeat offenders who appear to be ignoring the requirements of the law. Those identified are being contacted by the U.S. Attorney’s Office and could be subject to fines at some point in the future, he indicated. Morgan compared the situation to a grace period in which automatic cameras are installed to identify violators of traffic laws, but the violators initially are warned and not fined.  ‘There will be additional penalties,’ he said.”

Morgan made these comments at a Sept. 9 PLI conference alongside other panelists including Jack Smith, the head of DOJ’s Public Integrity Section; Brian Fitzpatrick, a top anti-corruption agent with the FBI, and Ann Ravel, the recently appointed chairwoman of California’s Fair Political Practices Commission.

More Lobbying Reform on the Horizon?

By Elliot S. Berke

If the ABA has its way, Congress will significantly reform the thresholds for lobbyist registration.  The ABA House of Delegates, acting on the recommendation of a special task force on lobbying reform, voted this week to support significant reforms.   A recent article in Roll Call took a good look at the issue, reporting:

The ABA wants to narrow the threshold at which a lobbyist must register from 20 percent or more of the time spent on lobbying activities for clients to some “reasonable” but unspecified amount that would be “designed to avoid imposing undue financial burdens” on smaller or one-man shops. The association also proposed a two-year window during which lobbyists could not lobby Members for whom they have raised money or raise money for Members they have lobbied in the past.

Don’t expect congressional action any time soon, however.  Congress has been more inclined to react to scandal rather than calls for reform when looking to change lobbying law (such as the passage of HLOGA in 2007).