City of Cincinnati Bans Campaign Contributions From Those With “City Business”

This article is a guest post from the experts at Kelley Drye & Warren.

On May 26, 2022, a new City of Cincinnati anti-corruption ordinance will take effect prohibiting individuals and companies with business before the city council from making campaign contributions to city officials. The ordinance is intended to curb “pay-for-play” type corruption schemes involving officials who have direct influence over the fate of political donors’ applications for tax incentives and other city business, at least while the applications are actively under consideration. The measure comes at the recommendation of the city’s Economic Development Reform Panel, which was created by a December 2020 ordinance with a stated goal of combating political cronyism. 

The new ordinance prohibits certain Cincinnati officials from soliciting or receiving political contributions from “Financially Interested Persons” on the city’s Temporary Prohibition List. These individuals are those related to individual or corporate applicants requesting or applying for (a) development incentives, including loans and tax incentives, with an estimated potential value of $100,000 or more per year; (b) sales of city property with an estimated fair market value of $200,000 or more; or (c) city zoning changes. 

Specifically, “Financially Interested Persons” qualifying for the Temporary Prohibition List — those prohibited from contributing to the political campaigns — include the individual applicant for city business and their spouse and dependent children. If the applicant is a business entity, “Financially Interested Persons” prohibited from making such contributions include the entity itself, the owners, members, and partners of the entity and their spouses and dependent children, and the directors and principal officers of the entity and their spouses. 

Notably, a person or entity must have business actively under legislative review to qualify for the contribution ban via the Temporary Prohibition List. “Financially Interested Persons” qualify for the Temporary Prohibition List upon the earlier of (1) the time of application for city business or (2) the time any ordinance authorizing city business is filed with the Clerk of Council. Individuals will be removed from the Temporary Prohibition List six months after the relevant legislative period, (i.e., when their applications are no longer under current consideration).

The campaigns of Cincinnati officials prohibited from receiving or soliciting donations from those qualifying for the Temporary Prohibition List include the incumbent mayor and each member of the city council, and their agents, including their campaigns and associated political action committees. Campaigns of current city elected officials who are running for non-city office (e.g., campaigning to become a state representative) are also prohibited from receiving or soliciting such donations. The prohibition on solicitations does not apply to mass communications or speeches directed to 50 or more people. 

Cincinnati also intends to publish on its website, for the benefit of the public and political campaigns, a City Business List that will name all “Financially Interested Persons” without regard to whether an application for city business is under legislative review by council. Persons will be added to the City Business List upon the application for city business and will be removed from the List six months after final legislative action. 

Applicants are required to self-report all qualifying “Financially Interested Persons” subject to the ordinance so that they may be added to the Temporary Prohibition and City Business Lists. Campaigns and individuals are not required to report the contributions themselves, but are under a continuing obligation to update Financially Interested Persons on their application as such information changes. Accordingly, while elected officials are prohibited from soliciting certain donations and may (theoretically) refer to the Temporary Prohibition List before soliciting or accepting contributions, it is the developers and applicants that are actively responsible for self-reporting their own qualifying individuals to the city. 

Violations of the anti-corruption ordinance are a Class C-1 civil offense, which carries a fine of $500. The fine increases to $1,000 if payment is delinquent, and to $1,250 if sent for collection. However, the ordinance contains procedures for campaigns to cure a violation by returning or disposing of prohibited contributions.