Preparing For The Surge
Six Questions Compliance Teams Should Be Asking Ahead of the 2026 Midterm Elections
Political fundraising in the United States continues to grow in scale and complexity. As the 2026 midterm elections approach, candidates, party committees, and political action committees are raising funds earlier and spending more aggressively, particularly in competitive races.
All companies and individuals are subject to string campaign finance laws under the Federal Election Campaign Act (FECA) as well as at the state level. These regulations aim to prevent straw donor and reimbursement schemes along with potential reputational damage.
Firms that interact with government entities and compete for government business have additional risks that require them to track, pre-clear and report employee donations. For these firms, employee political contributions can trigger “pay-to-play” regulatory restrictions that can lead to penalties and even outright bans on contracts with implicated government entities while outsized aggregate donations could attract attention as potential bribery. The complex range of conflicts of interest, and disclosure obligations across federal, state, and local jurisdictions makes supervision of donation activity error prone and difficult.
Increased Activity, Increased Risk
Recent election cycles show how much money is moving through the system. Federal candidates and political action committees have raised and spent billions of dollars on political and judicial races at the county, state and federal level. As contribution volumes rise, so does the likelihood that employees and executives will participate.
This is not limited to senior leadership. Employees across functions may contribute to local or national campaigns, often without realizing that their role or client relationships could create a regulatory issue. For example, contributions tied to individuals involved in public sector business development or client coverage can trigger restrictions that directly impact a firm’s ability to engage with certain government entities.
Without consistent oversight, firms may not have a clear view of who is contributing, where contributions are going, or whether they comply with internal policies and regulatory requirements. Gaps in visibility often only become apparent after the fact, when remediation is more difficult.
Limits of Manual Processes
Many firms still rely on manual processes such as employee self-reporting and spreadsheet-based reviews. These approaches are difficult to manage at scale, particularly as contribution volumes increase and timelines shorten.
Employees may not be aware of jurisdiction-specific rules or may forget to report contributions altogether. Even when reporting occurs, compliance teams often need to validate that information against multiple public data sources, each with different formats and reporting delays. This creates inefficiencies and increases the likelihood of incomplete or inconsistent records.
Manual reviews also make it harder to apply policies consistently. Different reviewers may interpret rules in slightly different ways, and documentation may vary depending on how each case is handled. Without a clean view into campaigns and candidates, typos and misspelled names will make it impossible to accurately aggregate exposure and over time, the weak audit trail will make it harder to demonstrate a clear, repeatable compliance process.
Using Automation to Reduce Risk
Automation helps firms apply consistent controls and reduce reliance on manual review.
Pre-clearance workflows allow employees to submit contribution requests before donating. This gives compliance teams the ability to review and approve or deny activity in advance, rather than after the fact, reducing the likelihood of violations that require remediation.
Rules engines can automatically assess requests based on jurisdiction, contribution limits, pay-to-play restrictions, and employee role. This ensures that the same logic is applied across the organization, regardless of volume.
Centralized recordkeeping ensures that all contributions, approvals, and decisions are documented in one place. This creates a consistent audit trail and makes it easier to respond to regulatory inquiries. When combined with data reconciliation from federal, state, and local sources, firms can maintain a more complete and accurate record of political activity.
Many organizations are strengthening these capabilities by partnering with a RegTech provider. Purpose-built software products can integrate pre-clearance, rules evaluation, data aggregation, and reporting into a single system, reducing fragmentation and improving consistency. This approach also helps firms scale their compliance programs without adding manual overhead, while maintaining the level of control regulators expect.
Oversight and Training Still Matter
Technology improves consistency, but it does not replace the need for clear policies and employee training.
Employees need to understand when pre-clearance is required, how rules vary by jurisdiction, and why certain roles are subject to additional restrictions. Training should be practical and aligned with real scenarios, such as contributing to a local candidate in a jurisdiction where the firm has business interests.
Firms should also revisit onboarding processes to identify prior political contributions that may trigger look-back obligations. Without this step, organizations risk inheriting compliance exposure that is not immediately visible.
Processes need to be straightforward. If systems are difficult or time-consuming, employees are less likely to follow them consistently, which can undermine even well-designed controls.
Six Questions for Firms Should Ask
As activity increases ahead of the midterms, firms should assess whether their current controls are sufficient:
- Do we have a clear policy that meets our obligations in supervising political contributions across jurisdictions?
- Are contribution limits and pay-to-play rules clearly defined and accessible?
- Do employees pre-clear contributions before donating?
- Are contributions by employees involved in government relationships monitored closely?
- Do we have independent data on political contributions made by our employees and a mechanism to make sure that they were properly submitted and approved?
- Are onboarding and periodic reviews capturing prior contributions that may create risk?
Preparing for What’s Ahead
Political contribution activity is likely to continue increasing, both in volume and in complexity. Firms need processes that can handle higher activity levels without losing consistency or visibility.
Automation, combined with clear oversight and training, helps reduce human error, improve documentation, and support more consistent decision-making. Partnering with a RegTech provider, like StarCompliance (Star), can further strengthen these efforts by connecting workflows, data, and controls into a unified framework.
Firms that take these steps now will be better positioned to manage risk as activity builds toward the 2026 midterm elections and beyond.
Comment StarCompliance peut vous aider
Star’s Political Donations & Activities Compliance Software helps firms streamline pre-clearance, automate donation surveillance, and reconcile employee political activity within one centralized platform. With configurable workflows, automated reviews, and enhanced reporting, Star helps compliance teams reduce manual effort, strengthen oversight, and better manage pay-to-play risks.
See it in action: Product Spotlight Webinar
Join us on October 20, 2026, at 10:00 AM ET for a live demonstration of Star’s reimagined Political Donations & Activities solution. Discover how enhanced automation, expanded candidate data through BallotReady, and streamlined workflows can help your firm simplify political donation compliance and improve oversight.
Register today [HERE] to reserve your place.
