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Legal Update

Campaign Contribution Limits Lifted in Illinois Gubernatorial Election, but Pay-to-Play Limits Still Apply

29 March 2017
Mayer Brown Legal Update

The election season for governor of Illinois is underway. The Illinois gubernatorial primary election will be held on March 20, 2018, and the general election will be held on November 6, 2018. Also up for reelection are the other statewide elected officers (including the attorney general, comptroller, secretary of state and treasurer), every seat in the Illinois House of Representatives and 19 of 59 seats in the Illinois Senate.

Illinois law typically limits contributions to candidates for state and local elected offices, including governor.1 These contribution limits may be lifted in a particular race, however, if within one year before the election (i) a candidate in that race, or his or her immediate family, contributes more than $250,000 to the candidate’s committee (“self-funding”) or (ii) an independent expenditure committee (also known as a “Super PAC”) makes independent expenditures of more than that amount. If a self-funding candidate causes the limits to be lifted during a primary election cycle and wins the primary election for his or her political party and advances to the general election, the limits remain lifted during the general election cycle.

Chris Kennedy, a Democratic candidate for governor, recently exceeded the self-funding threshold by personally contributing more than $250,000 within one year of the March 2018 gubernatorial primary election. Consequently, contributions to candidates for Illinois governor, including Republican incumbent Governor Bruce Rauner, are no longer subject to the general limits that would otherwise apply. Candidates for other elective offices are still subject to the applicable contribution limits.

State contractors, investment advisors, and other persons and entities subject to “pay-to-play” rules, however, should be mindful of those restrictions, which continue to apply. The following are a few prominent examples of pay-to-play rules that may apply to contributions to candidates for Illinois governor:

  • Investment Advisors – Under SEC Advisors Act Rule 206(4)-5, registered investment advisors, as well as certain of their managers, marketing personnel, and other affiliated persons and entities, may not make contributions (other than de minimis contributions) to candidates for Illinois governor if they have received or may solicit investments from Illinois retirement systems and other funds to which the governor may appoint trustees. These systems and funds include the Illinois State Board of Investments, State Employees’ Retirement System, Teachers’ Retirement System of the State of Illinois, State Universities Retirement System and Secure Choice Savings Board.
  • Municipal Advisors, Broker-Dealers and Swap Dealers – The MSRB, FINRA and CFTC have each adopted rules similar to the SEC’s pay-to-play rule described above. These rules restrict the ability of municipal advisors, broker-dealers, third-party solicitors and swap dealers, as well as certain of their affiliated persons and entities, to make contributions to candidates for governor if the regulated firm transacts with or is engaged by government agencies under the governor’s jurisdiction, including agencies or boards to which the governor has an appointment power.
  • State Contractors – The Illinois “pay-to-play” law prohibits contributions to candidates for governor by businesses that contract with state agencies under the governor’s jurisdiction or the Metropolitan Pier and Exposition Authority (which manages McCormick Convention Center and Navy Pier in Chicago) or that seek contracts with those agencies totaling $50,000 or more per year. The prohibition also extends to certain of the business’s owners, executives, and other affiliated persons and entities.

Potential donors should be aware that donations to candidates for Illinois lieutenant governor, an office which is elected on a ticket with the governor, may be considered to be donations to the governor for these purposes. Donations to political action committees, political parties and independent expenditure committees may also be subject to pay-to-play rules under certain circumstances, particularly where the committee focuses its activity on a particular candidate.

1 For more discussion of contribution limits, see Mayer Brown’s recent Legal Update, Campaign Contribution Limits Increased for the 2017–18 US Election Cycle.

Authors

  • John A. Janicik
    T +1 312 701 7323
  • Joseph Seliga
    T +1 312 701 8818
  • Mitchell D. Holzrichter
    T +1 312 701 8212
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