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Home My WebLink About10-1001 Stine OPINION OF THE COMMISSION Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Raquel K. Bergen Nicholas A. Colafella Mark Volk DATE DECIDED: 3/25/10 DATE MAILED: 4/9/10 Tamara S. Stine Dublin Associates 212 N. Third St. Suite 203 Harrisburg, PA 17101 10-1001 Dear Ms. Stine: This Opinion is issued in response to your advisory request letter dated February 5, 2010. I. ISSUE: Whether, pursuant to Pennsylvania’s lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A01 et seq., a registered lobbyist would be permitted to receive a retainer in the form of stock in the client’s/principal’s company. II. FACTUAL BASIS FOR DETERMINATION: As a registered lobbyist in Pennsylvania, you seek an advisory from this Commission under the Lobbying Disclosure Law. You state that you have a potential client that is a start up business. The potential client would like to pay you a retainer with stock in the company rather than cash. You ask whether the Lobbying Disclosure Law would prohibit such an agreement. By letter dated February 19, 2010, you were notified of the date, time and location of the public meeting at which your request would be considered. III. DISCUSSION: It is initially noted that pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), in conjunction with Sections 1107(10) and 1107(11) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. §§ 1107(10), (11), Stine, 10-1001 April 9, 2010 Page 2 advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, this Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. As a registered lobbyist in Pennsylvania, you are subject to the prohibitions, restrictions and requirementsimposed upon lobbyists by the Lobbying Disclosure Law. The following terms are relevant to your inquiry and are defined in the Lobbying Disclosure Law as follows: "Lobbyist." Any individual, association, corporation, partnership, business trust or other entity that engages in lobbying on behalf of a principal for economic consideration. The term includes an attorney at law while engaged in lobbying. "Principal." An individual, association, corporation, partnership, business trust or other entity: (1) on whose behalf a lobbying firm or lobbyist engages in lobbying; or (2) that engages in lobbying on the principal’s own behalf. "Economic consideration." Anything of value offered or received. The term includes compensation and reimbursement for expenses. 65 Pa.C.S. § 13A03. The above statutory definitions establish that a lobbyist engages in lobbying on behalf of a principal for “economic consideration,” and that economic consideration is anything of value offered or received including, but not limited to, compensation and reimbursement for expenses. The Lobbying Disclosure Law does not contain any express prohibition against accepting stock in a client’s/principal’s company as a retainer for lobbying services. The definition of “economic consideration” as “anything of value offered or received” recognizes that economic consideration for lobbying may not always be in the form of money. However, subject to a certain statutory exclusion pertaining to procurement lobbying, Section 13A07(e) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A07(e), prohibits “contingent compensation” arrangements. A “contingent compensation” arrangement would exist where a lobbyist would receive compensation for lobbying contingent in whole or in part upon the occurrence, nonoccurrence or amendment of “legislative action” or “administrative action” as those terms are defined by the Lobbying Disclosure Law. It might be possible under some circumstances for an arrangement to compensate a lobbyist with stock to equate to contingent compensation, such as, for example, where the value of the stock would depend upon the outcome of the lobbying effort. Stine, 10-1001 April 9, 2010 Page 3 You have not provided any details regarding the prospective client or proposed stock compensation arrangement in question. Therefore, you are generally advised that the Lobbying Disclosure Law would not prohibit you as a registered lobbyist from accepting stock in a client’s/principal’s company as a retainer for lobbying services as long as such compensation arrangement would not involve contingent compensation contrary to Section 13A07(e) of the Lobbying Disclosure Law. The request for an advisory has only been addressed under the Lobbying Disclosure Law and, derivatively, the Ethics Act to the extent applicable. IV. CONCLUSION: As a registered lobbyist in Pennsylvania, you are subject to the prohibitions, restrictions and requirements imposed upon lobbyists by Pennsylvania’s lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A01 et seq. The Lobbying Disclosure Law would not prohibit you as a registered lobbyist from accepting stock in a client’s/principal’s company as a retainer for lobbying services as long as such compensation arrangement would not involve contingent compensation contrary to Section 13A07(e) of the Lobbying Disclosure Law. Pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), a requester who truthfully discloses all material facts in a request for an advisory and who acts in good faith based upon a written Opinion of this Commission issued to the The requester shall not be held liable for a violation of the Lobbying Disclosure Law. protection afforded for reliance upon this Opinion will remain in effect until such time as any regulation, statutory enactment, or ruling precludes further reliance upon this Opinion. This letter is a public record and will be made available as such. Finally, a party may request this Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair