Compliance Notes - Vol. 7, Issue 16

RECENT LOBBYING, ETHICS & CAMPAIGN FINANCE UPDATES

Campaign Finance & Lobbying Compliance

Congressional candidate and entrepreneur Michael Carbonara has invested roughly $2.2 million in campaign funds into cryptocurrency, an unconventional strategy that has generated substantial gains while raising questions about self-dealing. The campaign paid at least $21,000 in transaction fees to Ibanera, a financial technology company Carbonara previously led as CEO, prompting scrutiny over whether cryptocurrency investing constitutes a necessary campaign expense and whether the fees reflected fair-market value. Carbonara has defended the approach as consistent with his support for digital assets and noted that campaigns can earn investment income on idle funds. The crypto activity also has inflated the campaign's reported receipts, with approximately $2 million effectively counted twice when funds were converted back from cryptocurrency holdings. (Claire Heddles, Miami Herald)

Pennsylvania: Pennsylvania Democrats are pushing a legislative proposal that would make it illegal for corporations to contribute to political campaigns, with violations potentially costing companies their state charters and business privileges. Representative Joe Webster is the lead sponsor of the proposal, which also would allow the state Attorney General to bring civil actions against corporations engaging in election or ballot question activity. Webster said the measure responds to increased corporate political spending following the U.S. Supreme Court’s 2010 Citizens United decision. The measure was referred to the House State Government Committee on August 5, 2026. Webster expects it could pass the House but said he does not expect it to reach Governor Shapiro’s desk this year, instead aiming to advance it in 2027. (Emily Scolnick, Pennsylvania Capital-Star)

Tennessee: U.S. Senator Marsha Blackburn’s campaign transferred $4.8 million from her federal Senate campaign account to Club for Growth Action PAC, while a closely affiliated Tennessee PAC later spent nearly the same amount supporting her Tennessee gubernatorial bid. According to OpenSecrets, a nonprofit organization that tracks political spending, this created an apparent “workaround” to state campaign-finance limits. The PAC supporting Blackburn, Tennessee Freedom Fund, shares a treasurer and Washington, DC address with Club for Growth Action PAC. The arrangement has drawn scrutiny because Tennessee law prohibits Blackburn from directly using federal campaign funds in the gubernatorial race. Earlier this year, state regulators dismissed a complaint alleging Blackburn used Senate campaign resources to aid her gubernatorial bid before formally entering the race. (Adam Friedman, Tennessee Lookout)

Government Ethics & Transparency

Georgia: On August 3, 2026, Georgia’s State Ethics Commission unanimously overturned an administrative law judge’s decision in favor of two conservative groups tied to the collapse of First Liberty Building & Loan, reviving a case that could result in $45,000 in civil penalties. The Georgia Republican Assembly and an affiliated PAC are accused of failing to disclose more than $187,000 in political spending and failing to comply with committee registration and reporting requirements. The organizations maintain they operated independently, while regulators contend that overlapping leadership, fundraising activity and other ties suggest the parent group exercised authority over the PAC. The commission is expected to determine next month whether to impose civil penalties and the GRA could appeal the decision to Superior Court. (Ray Bianchi, Hoodline)

New Mexico: The New Mexico State Ethics Commission reached a settlement with Elevate New Mexico over allegations that the Virginia-based corporation failed to disclose its lobbying campaign supporting the proposed Project Jupiter data center campus in Doña Ana County. The Commission alleged that the campaign urged New Mexico Environment Department officials to approve air-quality permits sought by Yucca Growth Infrastructure for two microgrid power plants serving the data center campus without filing required disclosures under the Lobbyist Regulation Act. As part of the July 24, 2026, settlement, Elevate New Mexico agreed to register the lobbying campaign and file campaign-finance disclosures. The recent filings show Yucca Growth Infrastructure LLC provided all $3.667 million in contributions to Elevate, which reported spending $419,478 on advertising, including digital, social media, billboard, direct-mail and television ads. (Fallon Fischer, KRQE)

We read the news, cut through the noise and provide you the notes.

Compliance Notes from Nossaman’s Government Relations & Regulation Group is a periodic digest of the headlines, statutory and regulatory changes and court cases involving campaign finance, lobbying compliance, election law and government ethics issues at the federal, state and local level. Our attorneys, policy advisors and compliance consultants are available to discuss any questions or how specific issues may impact your business. If there is a particular subject or jurisdiction you’d like to see covered, please let us know.