Nathan said the ballot initiative meets constitutional muster because federal appellate courts have maintained that corporate contributions can continue to be restricted.  Nathan cites the 2003 Federal Election Commission v. Beaumont case.

 “The court held that contribution limits, up to and including complete bans on direct corporate contributions, are constitutional if they are ‘closely drawn’ to match a ‘sufficiently important interest,’ ” Nathan wrote to Kenneth McGhie, general counsel for the elections board.

 Nathan added, “Following Citizens United, at least two federal appellate courts have evaluated and rejected the argument that Citizens United implicitly overruled Beaumont, and sustained bans on corporations and other business entities contributing to candidates.”

 Frustrated by corporations’ ability to funnel multiple donations to candidates through limited liability contributions, Ward 1 activist Bryan Weaver and Ward 7 Advisory Neighborhood Commissioner Sylvia Brown proposed the initiative last month.  They formed the Committee to Restore Public Trust, which has the support of D.C. Council member Tommy Wells (D-Ward 6).

 In their filings with the Board of Elections and Ethics, supporters said a ban on corporate giving would align the District with federal law while also guarding against so-called “pay to play.”

Under the city charter, a measure can be petitioned onto the ballot as long as it does not appropriate money, “negate or limit” a council budget act, or violate the city’s Human Rights Act. Nathan ruled that there would be no such conflict with the “Fair Elections to Restore Public Trust” proposal.

 “The provisions in the proposed initiative that relate to contributions … are all related to a valid government interest as described by the Supreme Court,” Nathan wrote.

 Currently, the District allows business entities to donate directly to political funds — including campaigns, transitions, constituent services and legal defense funds — subject to the same contribution limits that apply to individuals

 Before supporters can pick up petitions, the Board of Elections and Ethics will still have to a hold a public hearing to vet any concerns about approving the referendum.  Supporters would then have 180 days to collect valid signatures from 5 percent of registered voters

So far, there appears to be limited formal opposition to the proposal, and odds appear to heavily favor passage if it lands on the ballot. But opponents could argue that the measure is unfair because it does not seek to ban contributions from labor unions.

Nathan said workers who received payments signed documents claiming that they were unemployed, which would put them in violation of the city’s False Claims Act.

“In every case, we will try to get the money back,” he said.

Nathan said there does not appear to be a “ring leader or collusion.” Instead, employees saw a hole and took advantage, he said.

She said most employees were placed on administrative leave, stretching to 15 or 30 days, depending on their contracts.

Nathan said the city did not want to risk lawsuits from employees who could claim that the city did not follow policy in their terminations. Each employee has been given the opportunity to “explain in writing what happened,” he said.

“We are going to give them due process,” he said.

Mayor Vincent C. Gray (D) attributed the alleged fraud to poor supervision of the benefits program in the past. “The controls were insufficient,” he said.

Mallory said a U.S. Department of Labor grant allowed the employment agency to install the technology and increase controls that began detecting fraud last year.