HomeMy WebLinkAbout002-SL R&J Properties Group, LLC
In Re: R&J Properties Group, LLC, : File Docket: 10-001-L
Respondent : X-ref: Order No. 002-SL
: Date Decided: 3/3/11
: Date Mailed: 3/7/11
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Donald M. McCurdy
Raquel K. Bergen
Nicholas A. Colafella
Mark Volk
This is a final adjudication of the State Ethics Commission as to the alleged
delinquency and/or deficiency of registration statement(s) and/or expense report(s)
required to be filed pursuant to Pennsylvania’s lobbying disclosure law, 65 Pa.C.S. §
13A01 et seq., hereinafter referred to as the “Lobbying Disclosure Law.”
The Investigative Division initiated these proceedings by filing with the State Ethics
Commission and serving upon Respondent a Notice of Alleged Noncompliance. A
Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were
subsequently submitted by the parties to the Commission for consideration. The
Stipulated Findings are set forth as the Findings in this Order. The Consent Agreement
has been approved.
This is a final Order, and it is publicly available upon issuance. Reconsideration
may be requested, but a request for reconsideration will not affect the finality of this
adjudication or its availability as a public document. Any reconsideration request must be
received at this Commission within thirty days of the mailing date noted above and must
include a detailed explanation of the reasons as to why reconsideration should be granted
in conformity with 51 Pa. Code §§ 21.29(b), 21.29 (d)-(f), and 63.4(19).
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I. ALLEGED NONCOMPLIANCE:
That R&J Properties Group, LLC, in its capacity as a principal registered with
the Pennsylvania Department of State pursuant to the Pennsylvania Lobbying
Disclosure Law (65 Pa.C.S. § 13A04), failed to file quarterly expense reports
pursuant to 65 Pa.C.S. § 13A05, for the second (2nd), third (3rd), and fourth (4th)
quarter(s) of 2009.
II. FINDINGS:
1. Respondent is R&J Properties Group, LLC, (“Respondent”) and is a registered
principal as that term is defined by the Pennsylvania Lobbying Disclosure Law
(“Lobbying Disclosure Law”), Act 134 of 2006, 65 Pa.C.S. § 13A01 et seq.
a. Respondent registered as a principal with the Department of State on May
12, 2009.
b. In filing its principal registration, Respondent identified its registered mailing
address as:
3895 Stoneridge Lane
Dublin, Ohio 43017
2. The Lobbying Disclosure Law, specifically 65 Pa.C.S. § 13A04, states the following
regarding the registration of an entity as a principal:
§ 13A04. Registration
a. GENERAL RULE. Unless excluded under section 13A06 (relating to
exemption from registration and reporting), a lobbyist, lobbying firm or a
principal must register with the department within ten days of acting in any
capacity as a lobbyist, lobbying firm or principal. Registration shall be
biennial and shall begin January 1, 2007.
b. PRINCIPALS AND LOBBYING FIRMS.
1. A principal or lobbying firm required to register under subsection (a)
shall file a single registration statement setting forth the following
information with the department:
i. Name.
ii. Permanent address.
iii. Daytime telephone number.
iv. E-mail address, if available.
v. Name and nature of business.
vi. Name, registration number and acronym of any affiliated
political action committees.
vii. Name and permanent business address of each individual who
will for economic consideration engage in lobbying on behalf of
the principal or lobbying firm.
viii. Registration number when available.
****
d. AMENDMENTS.—
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1. If there is a change of information required for the registration
statement under subsection (b)(1) or (2) or (c), an amended
registration statement shall be filed with the department within 14
days after the change occurs.
2. When there is a change in information required for the registration
statement under subsection (b)(3), an amended registration statement
shall be filed with the department within 14 days of the end of the
year in which the change occurs.
65 Pa.C.S. § 13A04(a), (b), (d).
3. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations
provide further information in relation to registration periods and reporting periods:
§ 51.3. Registration periods and reporting periods.
a. Registration under section 13A04 of the act (relating to registration) shall be
biennial. The first registration period which commenced January 1, 2007,
continues through December 31, 2008. Subsequent registrations shall
commence on January 1 of each odd numbered year.
51 Pa. Code § 51.3.
4. On May 1, 2009, Respondent entered into an agreement with GSP Consulting,
Corp., the purpose of which was to retain GSP Consulting, Corp. to engage in
lobbying activity on behalf of Respondent.
a. Executing the agreement on behalf of Respondent was Jason Zadeh, the
then Managing Member of R&J Properties Group, LLC.
5. GSP Consulting, Corp., lobbying firm identification number “F01712,” is an entity
registered with the Pennsylvania Department of State as a lobbying firm.
6. On or about May 8, 2009, GSP Consulting, Corp. informed Respondent of the need
to register as a principal with the Pennsylvania Department of State.
7. Subsequent to that communication, Respondent filed a principal registration
statement with the Pennsylvania Department of State on May 12, 2009, which
indicated that lobbying commenced on May 1, 2009.
8. Respondent was assigned the principal registration number “P16477.”
9. Stephen E. Morgan, lobbyist registration number “L00563,” was a lobbyist affiliated
with GSP Consulting, Corp., and was the primary GSP Consulting, Corp. lobbyist
who performed lobbying activities on behalf of the Respondent.
10. Section 13A05 of the Lobbying Disclosure Law sets forth, in part, the following
requirements for the contents of quarterly reporting forms filed by principals.
§ 13A05. Reporting.
(a) GENERAL RULE.-- A registered principal shall, under oath or affirmation, file
quarterly expense reports with the department no later than 30 days after the
last day of the quarter.
(b) CONTENT.—
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(1) Each expense report must list the names and registration numbers
when available of all lobbyists by whom lobbying is conducted on
behalf of the principal and the general subject matter or issue being
lobbied.
(2) Each expense report shall include the total costs of all lobbying for
the period. The total shall include all office expenses, personnel
expenses, expenditures related to gifts, hospitality, transportation and
lodging to State officials or employees, and any other lobbying costs.
The total amount reported under this paragraph shall be allocated in
its entirety among the following categories:
(i) The costs for gifts, hospitality, transportation and lodging given
to or provided to State officials or employees or their
imme-diate families.
(ii) The costs for direct communication.
(iii) The costs for indirect communication.
(iv) Expenses required to be reported under this subsection shall
be allocated to one of the three categories listed under this
section and shall not be included in more than one category.
65 Pa.C.S. § 13A05(a), (b).
11. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations
provide further instructions in relation to registration periods and reporting periods:
§ 51.3. Registration periods and reporting periods.
(b) Reporting under section 13A05 of the act (relating to reporting) shall be
quarterly within each calendar year: for January through March; April
through June; July through September; and October through December.
Quarterly expense reports shall be filed on or before the 30th day after the
quarterly reporting period ends.
51 Pa. Code § 51.3(b).
12. As a principal, Respondent is required to file, under oath or affirmation, quarterly
expense reports with the Department of State no later than thirty (30) days after the
last day of the quarter.
13. Section 13A05 of the Lobbying Disclosure Law additionally sets forth the threshold
with regard to reporting expenditures:
(d) THRESHOLDS FOR REPORTING.-- An expense report required
under this section shall be filed when total expenses for lobbying
exceed $2,500 for a registered principal in a reporting period. In a
reporting period in which total expenses are $2,500 or less, a
statement to that effect shall be filed.
65 Pa.C.S. § 13A05(d).
14. Section 13A03 of the Lobbying Disclosure Law defines the following terms:
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“LOBBYING.”
An effort to influence legislative action or administrative
action in this Commonwealth. The term includes:
(1) direct or indirect communication;
(2) office expenses; and
(3) providing any gift, hospitality, transportation or lodging to a State
official or employee for the purpose of advancing the interest of the
lobbyist or principal.
“LEGISLATIVE ACTION.”
An action taken by a State official or employee
involving the preparation, research, drafting, introduction, consideration,
modification, amendment, approval, passage, enactment, tabling,
postponement, defeat or rejection of:
(1) legislation;
(2) legislative motions;
(3) a veto by the Governor; or
(4) confirmation of appointments by the Governor or appointments to
public boards or commissions by a member of the General Assembly.
“LEGISLATION.”
Bills, resolutions, amendments and nominations pending
or proposed in either the Senate or the House of Representatives. The term
includes any other matter which may become the subject of action by either
chamber of the General Assembly.
“DIRECT COMMUNICATION.”
An effort, whether written, oral or by any
other medium, made by a lobbyist or principal, directed to a State official or
employee, the purpose or foreseeable effect of which is to influence
legislative action or administrative action. The term may include personal
expenses and offices expenses.
65 Pa.C.S. § 13A03.
15. On July 22, 2009, GSP Consulting, Corp. forwarded correspondence to
Respondent as a reminder that the second quarter 2009 expense report would be
due on July 30, 2009.
a. Respondent was invoiced for direct communication lobbying efforts rendered
on behalf of R&J Properties Group, LLC., during the second quarter of 2009
which was in excess of the threshold reporting amount of $2,500.00.
16. Invoices forwarded by GSP Consulting, Corp. to Respondent record that during the
relative time period, GSP Consulting, Corp., acting as the lobbyist for Respondent,
engaged in direct communication with State Representative Jesse White regarding
the “Cool Valley project,” a 911-acre commercial and residential development
project located within Cecil Township, Washington County, undertaken by the
Respondent.
17. Respondent did not file a second quarter 2009 expense report by July 30, 2009.
18. On October 27, 2009, GSP Consulting, Corp. forwarded correspondence to
Respondent as a reminder that the third quarter 2009 expense report would be due
on Friday, October 30, 2009.
a. Respondent was invoiced for direct communication lobbying efforts rendered
on behalf of R&J Properties Group, LLC., during the third quarter of 2009
which was in excess of the threshold reporting amount of $2,500.00.
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19. Invoices forwarded to Respondent indicate that during the month of July 2009, GSP
Consulting, Corp., acting as the lobbyist for Respondent, engaged in direct
communication lobbying efforts with the Chief of Staff of State Senator Barry Stout,
Cheryl Hicks, regarding the timing and status of Senate Bill 987.
20. Senate Bill 987 proposed legislative action “[a]uthorizing the Department of General
Services, with the approval of the Governor, to grant and convey to Washington
County Authority, certain lands situate in Cecil Township, Washington County,” for
use in furtherance of the Cool Valley project.
21. Senate Bill 987 was introduced as proposed legislation by Senator Stout, along with
Senators John Pippy and Richard A. Kasunic, on June 26, 2009.
22. Jason Zadeh, the then Managing Member of R&J Properties Group, LLC., engaged
in the majority of the direct communication with Senator Stout’s office regarding
Senate Bill 987, and incurred expenses as a result of same.
a. Once Senate Bill 987 was introduced before the General Assembly, GSP
Consulting, Corp.’s and/or Stephen Morgan’s lobbying effort was continuing
in nature.
b. All lobbying efforts and direct communication undertaken on behalf of the
Respondent concerning Senate Bill 987 were an effort to influence
legislative action, as that term is defined by the Lobbying Disclosure Law, 65
Pa.C.S. § 13A03.
23. In addition to meeting with Senator Stout regarding Senate Bill 987, GSP
Consulting, Corp. and/or Morgan met with Senator Stout, in addition to other State
officials and/or employees, in efforts to obtain public funding for the “Cool Valley”
project.
a. Respondent sought public funding via the Redevelopment Capital
Assistance Program.
1. The Redevelopment Capital Assistance Program is commonly
referred to as “RCAP.”
b. Any funding through RCAP must be appropriated via legislative enactment,
namely through an appropriations bill, where specific projects would be
sponsored/supported by any given legislator.
24. Following multiple lobbying efforts on behalf of the Respondent, Senator Stout
agreed to support inclusion of funding for the Cool Valley project within the Capital
Budget Project Itemization Act.
a. House Bill 2291 included a $10,000,000 infrastructure and site development
appropriation to support the Cool Valley mixed-use project and was
approved by the Governor on October 19, 2010.
25. In addition to GSP Consulting, Corp. and/or Morgan, Jason Zadeh, the then
Managing Member of R&J Properties Group, LLC., also participated in lobbying
efforts on behalf of Respondent in regards to House Bill 2291 and incurred
expenses as a result of said lobbying efforts.
a. All lobbying efforts and direct communication undertaken on behalf of the
Respondent concerning House Bill 2291 were an effort to influence
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legislative action as that term is defined by the Lobbying Disclosure Law, 65
Pa.C.S. § 13A03.
26. Respondent did not file a third quarter 2009 expense report by October 30,
2009.
27. On January 5, 2010, GSP Consulting, Corp. forwarded correspondence to
Respondent as a reminder that the fourth quarter 2009 expense report would be
due on January 29, 2010 [sic].
a. Respondent was invoiced for direct communication lobbying efforts rendered
on behalf of R&J Properties Group, LLC., during the fourth quarter of 2009
which was in excess of the threshold reporting amount of $2,500.00.
28. Invoices forwarded to Respondent indicate that during the month of December
2009, GSP Consulting, Corp., acting as the lobbyist for Respondent, engaged in
direct communication with Cheryl Hicks, the Chief of Staff of State Senator Barry
Stout; Cathleen McCormack, Special Assistant to Governor Rendell, and Scott
Dunkelberger, Director for the Center of Business Financing with the Department of
Community & Economic Development (“DCED”).
29. In addition to meeting with Senator Stout, Morgan, on behalf of Respondent, and/or
Jason Zadeh, the then Managing Member of R&J Properties Group, LLC., met with
Cathleen McCormack, Special Assistant to the Governor, on December 8, 2009, in
connection with the Cool Valley project.
a. The purpose of the December 8, 2009, meeting with McCormack was to
introduce the Cool Valley project to the office of the Governor, prior to the
introduction of language seeking funding for the Cool Valley project via
House Bill 2291.
30. Respondent did not file a fourth quarter 2009 expense report by January 29, 2010.
31. The Regulations promulgated under the Lobbying Disclosure Law specifically
provide the following in relation to a delinquent filing:
§ 51.4. Delinquency.
(a) A registration statement or report required to be filed under section 13A04 or
13A05 of the act (relating to registration; and reporting) is delinquent if not
received by the Department on the date due as follows:
(1) Hard copy filings must be received by 5 p.m. in the office. For
quarterly expense reports, from 5 p.m. until 12 a.m. midnight, a hard
copy filing may be filed with the Department's designee. The filing
location and the Department's designee will be on the Department's
web site.
(2) Electronic filings may be filed until 12 a.m. midnight.
(b) A failure to timely file a registration statement, a quarterly expense report, a
separate expense report, a notice of termination or an amendment to one of
these filings constitutes a failure to register or report as required by the act;
delinquency continues until the filing is received by the Department in proper
form.
51 Pa. Code § 51.4(a), (b).
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32. With respect to the filing requirements for quarterly expense reports, the
Regulations provide, in part:
§ 55.1. Quarterly expense reports.
(a) A quarterly expense report is required to be filed as set forth in this
section when the total lobbying expenses of a registered principal,
registered lobbying firm or registered lobbyist lobbying on the
principal's behalf, together, exceed $2,500 in a quarterly reporting
period. The threshold of $2,500 includes any economic consideration
paid by a principal to a lobbying firm or lobbyist for lobbying.
Individuals exempt under section 13A06 of the act (relating to
exemption from registration and reporting) need not register or report.
(b) For a quarterly reporting period in which the total lobbying expenses
of a registered principal, registered lobbying firm or registered
lobbyist lobbying on the principal's behalf, together, are $2,500 or
less, a statement to that effect shall be filed with the Department by
checking the appropriate block on the quarterly expense report form.
****
(d) The principal shall file a quarterly expense report or statement of
failure to meet the reporting threshold on or before the 30th day after
the quarterly reporting period ends.
****
(g) A quarterly expense report of a principal required to be registered
under the act must include at least the following information:
(3) The total costs of all lobbying for the period. The total must
include all office expenses, personnel expenses, expenditures
related to gifts, hospitality, transportation and lodging to State
officials or employees, and any other lobbying costs.
(i) The total amount reported under this paragraph shall
be allocated in its entirety among the following
categories:
(A) The costs for gifts, hospitality, transportation and
lodging given to or provided to State officials or
employees or their immediate families.
(B) The costs for direct communication.
(C) The costs for indirect communication.
(ii) Registrants shall use a good faith effort to allocate
expenses required to be reported under this subsection
to one of the three categories listed herein. A given
expense may not be included in more than one
category. . . .
51 Pa. Code § 55.1(a), (b), (d), (g).
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33. By Warning Notice letter dated July 6, 2010, Respondent was served with notice in
accordance with Section 13A09 of the Lobbying Disclosure Law and Section
63.4(1) of the Lobbying Disclosure Regulations, of the alleged noncompliance and
the administrative and criminal penalties for failing to comply with same, specifically
that Respondent failed to file quarterly expense reports for the second, third, and
fourth quarter(s) of 2009.
34. The Warning Notice letter, forwarded to Respondent’s registered mailing address,
provided Respondent an opportunity to cure the alleged noncompliance and avoid
the institution of these proceedings as to alleged noncompliance by filing quarterly
expense reports for the time period covering the second, third, and fourth quarter(s)
of 2009 with the Department of State within thirty (30) days from the mailing date of
the Warning Notice letter.
35. In addition to the foregoing Warning Notice, Jason Zadeh, the then Managing
Member of R&J Properties Group, LLC., was telephonically contacted on no less
than two (2) occasions following the issuance of the July 6, 2009, Warning Notice
letter, in an attempt to obtain compliance.
36. The Lobbying Disclosure Law provides for civil and criminal penalties for failing to
comply with the registration statement filing and quarterly expense reporting
requirements thereof. Specifically, the Lobbying Disclosure Law provides that:
1. Negligent failure to register or report, as required by the law, is punishable
by an administrative penalty not exceeding $50.00 for each late day. 65
Pa.C.S. § 13A09(c)(1).
2. The total amount of the administrative penalty that may be levied after
hearing by a majority vote of all of the Commission Members shall not be
limited by any other provision of law. 65 Pa.C.S. § 13A09(c)(2).
3. Any person that fails to comply with the requirements of the Lobbying
Disclosure Law, after notice, may be prohibited from lobbying for economic
consideration for up to five (5) years. 65 Pa.C.S. § 13A09(d).
4. A person that intentionally fails to register or report as required by the law
commits a misdemeanor of the 2nd degree. 65 Pa.C.S. § 13A09(e)(1).
5. A registrant who files a report under the law with knowledge that the report
contains a false statement or is incomplete, commits a misdemeanor of the
second degree. 65 Pa.C.S. § 13A09(e)(2).
6. Except as set forth in paragraphs (4) or (5) above, a person that intentionally
violates [the Lobbying Disclosure Law] commits a misdemeanor of the third
degree. In addition to any other penalties imposed under [the Lobbying
Disclosure Law], the court may impose a fine not to exceed $25,000 against
a principal who is found guilty under [Section 13A09(e)(3) of the Lobbying
Disclosure Law].
7. In addition to any criminal penalties imposed under [the Lobbying Disclosure
Law], the Commission may prohibit a person from lobbying for economic
consideration for up to five years for conduct which constitutes an offense
under [Section 13A09(e) of the Lobbying Disclosure Law]. Criminal
prosecution or conviction is not required for imposition of [such prohibition].
The Commission shall not impose [such prohibition] unless the person has
been afforded the opportunity for a hearing, which shall be conducted by the
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Page 10
Commission in accordance with sections 1107(14) and 1108(e) [of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §§ 1107(14) and 1108(e)].
37. As of the date of the filing of the Notice of Alleged Noncompliance, Respondent’s
expense reports were a total of one thousand seventy-four (1,074) days delinquent.
a. The second quarter expense report period closed June 30, 2009. See, 65
Pa.C.S. § 13A03 Definitions – “Reporting period.”
1. Expense reports were to be filed within thirty (30) days of June 30,
2009, that date being July 30, 2009. See, 65 Pa.C.S. § 13A05(a).
2. The first day in which Respondent’s second quarter 2009 expense
report was delinquent was July 31, 2009.
3. Respondent’s second quarter expense report is 451 days
delinquent (July 31, 2009 – October 25, 2010).
b. The third quarter expense report period closed September 30, 2009. See,
65 Pa.C.S. § 13A03 Definitions – “Reporting period.”
1. Expense reports were to be filed within thirty (30) days of September
30, 2009, that date being October 30, 2009. See, 65 Pa.C.S. §
13A05(a).
2. The first day in which Respondent’s third quarter 2009 expense report
was delinquent was October 31, 2009.
3. October 31, 2009, was a Saturday, thus Respondent’s third quarter
expense report was not considered delinquent until November 2,
2009. (See, 51 Pa. Code § 51.2).
4. Respondent’s third quarter expense report is 358 days delinquent
(November 2, 2009 – October 25, 2010).
c. The fourth quarter expense report period closed December 31, 2009. See,
65 Pa.C.S. § 13A03 Definitions – “Reporting period.”
1. Expense reports were to be filed within thirty (30) days of December
31, 2009, that date being January 30, 2010 [sic]. See, 65 Pa.C.S. §
13A05(a).
2. The first day in which Respondent’s fourth quarter 2009 expense
report was delinquent was January 30, 2010 [sic].
3. January 30, 2010, was a Saturday, thus Respondent’s fourth quarter
expense report was not considered delinquent until February 2, 2010.
(See, 51 Pa. Code § 51.2).
4. Respondent’s fourth quarter expense report is 265 days delinquent
(February 2, 2010 – October 25, 2010).
III.DISCUSSION:
In the instant matter, the alleged noncompliance is that R&J Properties Group, LLC
(“Respondent”), as a principal registered with the Pennsylvania Department of State
(“Department of State”) pursuant to the Lobbying Disclosure Law, failed to file quarterly
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expense reports pursuant to 65 Pa.C.S. § 13A05 for the second, third, and fourth quarters
of 2009.
The relevant provisions of the Lobbying Disclosure Law are set forth in the Fact
Findings above. Certain relevant provisions of the Lobbying Disclosure Regulations, 51
Pa. Code § 51.1 et seq., are also set forth in the Fact Findings.
As noted above, the parties have submitted a Consent Agreement and Stipulation of
Findings. The parties' Stipulated Findings are set forth above as the Findings of this
Commission. We shall now summarize the relevant facts as contained therein.
On May 1, 2009, Respondent entered into an agreement with GSP Consulting,
Corp. to retain GSP Consulting, Corp. to engage in lobbying activity on behalf of
Respondent. GSP Consulting, Corp. is registered with the Department of State as a
lobbying firm.
On or about May 8, 2009, GSP Consulting, Corp. informed Respondent of the need
for Respondent to register as a principal with the Department of State. On May 12, 2009,
Respondent filed a principal registration statement with the Department of State, indicating
that lobbying commenced on May 1, 2009. Respondent was assigned the principal
registration number “P16477.”
Pursuant to Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05,
and Section 51.3 of the Lobbying Disclosure Regulations, 51 Pa. Code § 51.3, expense
reports are filed on a quarterly basis. When a registered principal’s total expenses for
lobbying exceed $2,500 for a reporting period/quarter, the principal is required to file a
quarterly expense report with the Department of State by no later than 30 days after the
last day of such quarter. For a reporting period in which total expenses are $2,500 or less,
a statement to that effect must be filed by the principal. Thus, a registered principal must
file either a quarterly expense report or a statement of failure to meet the reporting
threshold by no later than the 30th day after each quarterly reporting period ends. 51 Pa.
Code § 55.1.
The primary GSP Consulting, Corp. lobbyist who performed lobbying activities on
behalf of Respondent was Stephen E. Morgan (“Morgan”). During the second quarter of
2009, Respondent was invoiced for direct communication lobbying efforts rendered on
behalf of Respondent, which amount was in excess of $2,500.00. Such lobbying efforts
included direct communication with State Representative Jesse White regarding the “Cool
Valley project,” a 911-acre commercial and residential development project undertaken by
Respondent in Cecil Township, Washington County.
Second quarter expense reports were due to be filed by July 30, 2009. On July 22,
2009, GSP Consulting, Corp. forwarded correspondence to Respondent as a reminder that
the second quarter 2009 expense report would be due on July 30, 2009. Respondent did
not file a second quarter 2009 expense report by July 30, 2009. Respondent’s second
quarter 2009 expense report was delinquent commencing July 31, 2009.
During the third quarter of 2009, Respondent was invoiced for direct communication
lobbying efforts rendered on behalf of Respondent, which amount was in excess of
$2,500.00. Invoices forwarded to Respondent indicate that during the month of July 2009,
GSP Consulting, Corp. as a lobbyist for Respondent engaged in direct communication
lobbying efforts with Cheryl Hicks (“Hicks”), Chief of Staff of State Senator Barry Stout,
regarding the timing and status of Senate Bill 987.
Jason Zadeh (“Zadeh”), Respondent’s then Managing Member, also engaged in
direct communication with Senator Stout’s office regarding Senate Bill 987 and incurred
expenses as a result of same.
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Page 12
Senate Bill 987 proposed legislative action “[a]uthorizing the Department of General
Services, with the approval of the Governor, to grant and convey to Washington County
Authority, certain lands situate in Cecil Township, Washington County,” for use in
furtherance of the Cool Valley project. Fact Finding 20.
On June 26, 2009, Senate Bill 987 was introduced as proposed legislation by
Senators Stout, John Pippy and Richard A. Kasunic. GSP Consulting, Corp.’s and/or
Morgan’s lobbying effort on behalf of Respondent continued. All lobbying efforts and direct
communication undertaken on behalf of Respondent concerning Senate Bill 987 were an
effort to influence legislative action as that term is defined by the Lobbying Disclosure Law,
65 Pa.C.S. § 13A03.
In addition to meeting with Senator Stout regarding Senate Bill 987, GSP
Consulting, Corp. and/or Morgan met with Senator Stout, in addition to other State officials
and/or employees, in efforts to obtain public funding for the “Cool Valley” project.
Respondent sought public funding via the Redevelopment Capital Assistance
Program (“RCAP”). Any funding through RCAP must be appropriated via legislative
enactment, namely through an appropriations bill, where specific projects would be
sponsored/supported by a given legislator. Following multiple lobbying efforts on behalf of
Respondent, Senator Stout agreed to support inclusion of funding for the Cool Valley
project within the Capital Budget Project Itemization Act.
House Bill 2291 included a $10,000,000 infrastructure and site development
appropriation to support the Cool Valley mixed-use project and was approved by the
Governor on October 19, 2010.
Zadeh also participated in lobbying efforts on behalf of Respondent as to House Bill
2291 and incurred expenses as a result of said lobbying efforts.
All lobbying efforts and direct communication undertaken on behalf of Respondent
concerning House Bill 2291 were an effort to influence legislative action as that term is
defined by the Lobbying Disclosure Law, 65 Pa.C.S. § 13A03.
Third quarter expense reports were due to be filed by October 30, 2009. On
October 27, 2009, GSP Consulting, Corp. forwarded correspondence to Respondent as a
reminder that the third quarter 2009 expense report would be due on October 30, 2009.
Respondent did not file a third quarter 2009 expense report by October 30, 2009. The
parties have stipulated that Respondent’s third quarter expense report was considered
delinquent commencing November 2, 2009.
During the fourth quarter of 2009, Respondent was invoiced for direct
communication lobbying efforts rendered on behalf of Respondent, which amount was in
excess of $2,500.00.
Invoices forwarded to Respondent indicate that during the month of December
2009, GSP Consulting, Corp. as a lobbyist for Respondent engaged in direct
communication with Hicks, Cathleen McCormack (“McCormack”), Special Assistant to
Governor Rendell, and Scott Dunkelberger, Director for the Center of Business Financing
with the Department of Community & Economic Development.
In addition to meeting with Senator Stout, Morgan and/or Zadeh met with
McCormack on December 8, 2009, to introduce the Cool Valley project to the office of the
Governor prior to the introduction of language seeking funding for said project via House
Bill 2291.
R&J Properties Group, LLC, 10-001-L
Page 13
Fourth quarter expense reports were due to be filed by February 1, 2010. (See, 51
Pa. Code § 51.2). On January 5, 2010, GSP Consulting, Corp. forwarded correspondence
to Respondent as a reminder of the need to file a fourth quarter 2009 expense report.
Respondent did not timely file a fourth quarter 2009 expense report. Respondent’s fourth
quarter expense report was considered delinquent commencing February 2, 2010.
Failure to timely file a quarterly expense report constitutes a failure to report as
required by the Lobbying Disclosure Law, and the delinquency continues until the filing is
received by the Department of State in proper form. 51 Pa. Code § 51.4.
By Warning Notice letter dated July 6, 2010, Respondent was served with notice of
the alleged noncompliance in accordance with Section 63.4(1) of the Lobbying Disclosure
Regulations. The Warning Notice letter provided Respondent an opportunity to cure the
alleged noncompliance and avoid the institution of these proceedings by filing quarterly
expense reports for the second, third, and fourth quarters of 2009 with the Department of
State within thirty (30) days from the mailing date of the Warning Notice letter.
Additionally, Zadeh was telephonically contacted on at least two occasions following the
issuance of the July 6, 2009, Warning Notice letter, in an attempt to obtain compliance.
Negligent failure to register or report as required by the Lobbying Disclosure Law is
punishable by an administrative penalty of up to $50.00 for each late day. 65 Pa.C.S. §
13A09(c)(1). As of the date of the filing of the Notice of Alleged Noncompliance,
Respondent’s expense reports were a total of one thousand seventy-four (1,074) days
delinquent. The parties have stipulated that Respondent’s second quarter expense report
is 451 days delinquent (July 31, 2009 – October 25, 2010), Respondent’s third quarter
expense report is 358 days delinquent (November 2, 2009 – October 25, 2010), and
Respondent’s fourth quarter expense report is 265 days delinquent (February 2, 2010 –
October 25, 2010).
Having highlighted the Stipulated Findings and issues before us, we shall now apply
the Lobbying Disclosure Law to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations
as follows:
3. The Investigative Division will recommend the following conclusions
in relation to the above deficiencies:
a. That R&J Properties Group, LLC, in its capacity as a
Registered Principal, failed to timely file a Quarterly
Expense Report with the Pennsylvania Department of
nd
State, for the Second Quarter (2) 2009, by July 30,
2009, in accordance with Section 13A05 of the
Lobbying Disclosure Law, 65 Pa.C.S. § 13A05;
b. That R&J Properties Group, LLC, in its capacity as a
Registered Principal, failed to timely file a Quarterly
Expense Report with the Pennsylvania Department of
rd
State, for the Third Quarter (3) 2009, by October 30,
2009, in accordance with Section 13A05 of the
Lobbying Disclosure Law, 65 Pa.C.S. § 13A05;
c. That R&J Properties Group, LLC, in its capacity as a
Registered Principal, failed to timely file a Quarterly
Expense Report with the Pennsylvania Department of
th
State, for the Fourth Quarter (4) 2009, by January 29,
2010, in accordance with Section 13A05 of the
R&J Properties Group, LLC, 10-001-L
Page 14
Lobbying Disclosure Law, 65 Pa.C.S. § 13A05;
d. That the transgressions of the Lobbying Disclosure Law
outlined in paragraphs (a) through (c) above are
deemed to be negligent in nature;
e. R&J Properties Group, LLC, was deficient in filing its
Quarterly Expense Reports for calendar year 2009, by
a total of 1,074 days;
nd
i. Respondent’s Second (2) Quarter
Expense Report is 451 days delinquent
(July 31, 2009 – October 25, 2010);
ii. Respondent’s third (3rd) Quarter Expense
Report is 358 days delinquent (November
2, 2009 – October 25, 2010);
th
iii. Respondent’s fourth (4) Quarter
Expense Report is 265 days delinquent
(February 2, 2010 – October 25, 2010);
iv. For purposes of this Consent Agreement
only, the delinquent period was
calculated from the date each Quarterly
Expense Report was due, until the filing
date of the Notice of Alleged
Noncompliance.
4. R&J Properties Group, LLC, agrees to cause to be paid an
administrative penalty, by way of certified check or money order, in
the amount of $15,036.00 (1,074 days x $14.00 per diem) in
settlement of this matter, payable to the Commonwealth of
Pennsylvania, and forwarded to the Pennsylvania State Ethics
Commission upon execution of this agreement.
a. Said settlement payment (certified check or money
order) is to be held by the Investigative Division until
suchtime as the Commission accepts this Consent
Agreement and Issues a Final Order. Upon issuance of
the Final Order of this matter by the Commission, the
Investigative Division submit [sic] said settlement
payment for deposit into the Treasury of the
Commonwealth.
5. To the extent it has not already done so, R&J Properties Group, LLC,
agrees to file all outstanding Quarterly Expense Reports for the
Quarter(s) that said entity was/is Registered as a Principal with the
Pennsylvania Department of State, within fifteen (15) days of the
execution of this agreement.
a. R&J Properties Group, LLC, agrees to file all future
Quarterly Expense Reports for the Quarter(s) that said
entity is/remains a Registered Principal with the
Pennsylvania Department of State, in accord with the
Pennsylvania Lobbying Disclosure Law (65 Pa.C.S. §
13A01 et seq.) and the Regulations of the Lobbying
R&J Properties Group, LLC, 10-001-L
Page 15
Disclosure Law (51 Pa. Code. § 51.1 et seq.)
6. The Investigative Division will recommend that the State Ethics
Commission take no further action in this matter; impose no further
sanctions and make no specific recommendations to any law
enforcement or other authority to take action in this matter as to either
R&J Properties Group, LLC, or any individual or representative of
R&J Properties Group, LLC. Such, however, does not prohibit the
Commission from initiating appropriate enforcement actions in the
event of Respondent’s failure to comply with this agreement or the
Commission’s Order or cooperating with any other authority who may
so choose to review this matter further.
Consent Agreement, at 1-3.
In considering the Consent Agreement, we agree with the parties that Respondent
as a registered principal failed to timely file quarterly expense reports with the Department
of State for the second, third and fourth quarters of 2009 as required by Section 13A05 of
the Lobbying Disclosure Law. However, as to the recommended finding as to the fourth
quarter of 2009, we note that the filing deadline would have been February 1, 2010, not
January 29, 2010. 51 Pa. Code § 51.2.
Accordingly, we hold as follows: (1) Respondent R&J Properties Group, LLC, in its
capacity as a registered principal, failed to timely file a quarterly expense report with the
Department of State for the second quarter of 2009 by July 30, 2009, in accordance with
Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05; (2) Respondent R&J
Properties Group, LLC, in its capacity as a registered principal, failed to timely file a
quarterly expense report with the Department of State for the third quarter of 2009 by
October 30, 2009, in accordance with Section 13A05 of the Lobbying Disclosure Law, 65
Pa.C.S. § 13A05; and (3) Respondent R&J Properties Group, LLC, in its capacity as a
registered principal, failed to timely file a quarterly expense report with the Department of
State for the fourth quarter of 2009 by February 1, 2010, in accordance with Section 13A05
of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05. We shall accept the
recommendation of the parties for a determination that the transgressions of the Lobbying
Disclosure Law outlined in paragraphs (1) through (3) immediately above are deemed to
be negligent in nature.
Respondent was deficient in filing its quarterly expense reports for calendar year
2009 by a total of 1,074 days: 451 days for the second quarter expense report, 358 days
for the third quarter expense report, and 265 days for the fourth quarter expense report.
As part of the Consent Agreement, Respondent agreed to pay an administrative
penalty in the total amount of $15,036.00 (1,074 days x $14.00 per day) in settlement of
this matter, payable to the Commonwealth of Pennsylvania and forwarded to this
Commission upon execution of the Consent Agreement. The Consent Agreement provided
that said settlement payment would be held by the Investigative Division until this
Commission would accept the Consent Agreement and issue a final Order, whereupon the
Investigative Division would submit said settlement payment for deposit into the Treasury
of the Commonwealth.
To the extent it had not already done so, Respondent further agreed to file all
outstanding quarterly expense reports for the quarter(s) that Respondent had been
registered as a principal with the Department of State, within fifteen (15) days of the
execution of the Consent Agreement. The Consent Agreement was fully executed as of
December 9, 2010.
R&J Properties Group, LLC, 10-001-L
Page 16
Respondent also agreed to file all future quarterly expense reports for the quarter(s)
that it is/remains a registered principal with the Department of State, in accordance with
the Lobbying Disclosure Law and the Lobbying Disclosure Regulations.
We determine that the Consent Agreement submitted by the parties sets forth a
proper disposition for this case, based upon our review as reflected in the above analysis
and the totality of the facts and circumstances. Accordingly, we approve the Consent
Agreement that has been submitted by the parties.
W e hereby levy one administrative penalty against Respondent R&J Properties
Group, LLC, in the total amount of $15,036.00 for its delinquent quarterly expense reports
for the second, third, and fourth quarters of 2009.
We take administrative notice that Respondent has already made payment of the
aforesaid administrative penalty in the total amount of $ 15,036.00 through this Commission
to the Commonwealth of Pennsylvania, as per the Consent Agreement of the parties. We
further take administrative notice that Respondent has now filed quarterly expense reports
for the second, third, and fourth quarters of 2009 and statements of failure to meet the
reporting threshold for all four quarters of 2010.
As for Respondent’s agreement to file all future quarterly expense reports in
accordance with the Lobbying Disclosure Law and the Lobbying Disclosure Regulations,
we note that failure to do so may result in further proceedings before this Commission.
In that Respondent has already made payment of the aforesaid administrative
penalty in the total amount of $ 15,036.00 in accordance with the Consent Agreement of
the parties, and has now filed quarterly expense reports for the second, third, and fourth
quarters of 2009 and statements of failure to meet the reporting threshold for all four
quarters of 2010, this case is closed.
IV.CONCLUSIONS OF LAW:
1. As a principal registered with the Pennsylvania Department of State (“Department
of State”) under principal registration number “P16477,” R&J Properties Group,
LLC, is subject to the reporting requirements of Section 13A05 of Pennsylvania’s
lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A05.
2. R&J Properties Group, LLC, in its capacity as a registered principal, failed to timely
file a quarterly expense report with the Department of State for the second quarter
of 2009 by July 30, 2009, in accordance with Section 13A05 of the Lobbying
Disclosure Law, 65 Pa.C.S. § 13A05.
3. R&J Properties Group, LLC, in its capacity as a registered principal, failed to timely
file a quarterly expense report with the Department of State for the third quarter of
2009 by October 30, 2009, in accordance with Section 13A05 of the Lobbying
Disclosure Law, 65 Pa.C.S. § 13A05.
4. R&J Properties Group, LLC, in its capacity as a registered principal, failed to timely
file a quarterly expense report with the Department of State for the fourth quarter of
2009 by February 1, 2010, in accordance with Section 13A05 of the Lobbying
Disclosure Law, 65 Pa.C.S. § 13A05.
5. The transgressions of the Lobbying Disclosure Law outlined in paragraphs 2
through 4 immediately above are deemed to be negligent in nature.
6. The prerequisite service of a warning notice in accordance with Section 63.4(1) of
the Lobbying Disclosure Regulations, 51 Pa. Code § 63.4(1), was satisfied.
R&J Properties Group, LLC, 10-001-L
Page 17
7. Based upon the totality of the circumstances in this case, the imposition of an
administrative penalty in the total amount of $15,036.00 (1,074 days x $14.00 per
day) is warranted.
In Re: R&J Properties Group, LLC, : File Docket: 10-001-L
Respondent : Date Decided: 3/3/11
: Date Mailed: 3/7/11
ORDER NO. 002-SL
1. R&J Properties Group, LLC, in its capacity as a principal registered with the
Pennsylvania Department of State (“Department of State”) under principal
registration number “P16477,” failed to timely file a quarterly expense report with
the Department of State for the second quarter of 2009 by July 30, 2009, in
accordance with Section 13A05 of Pennsylvania’s lobbying disclosure law
(“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A05.
2. R&J Properties Group, LLC, in its capacity as a registered principal, failed to timely
file a quarterly expense report with the Department of State for the third quarter of
2009 by October 30, 2009, in accordance with Section 13A05 of the Lobbying
Disclosure Law, 65 Pa.C.S. § 13A05.
3. R&J Properties Group, LLC, in its capacity as a registered principal, failed to timely
file a quarterly expense report with the Department of State for the fourth quarter of
2009 by February 1, 2010, in accordance with Section 13A05 of the Lobbying
Disclosure Law, 65 Pa.C.S. § 13A05.
4. The transgressions of the Lobbying Disclosure Law outlined in paragraphs 1
through 3 immediately above are deemed to be negligent in nature.
5. W e hereby levy one administrative penalty against R&J Properties Group, LLC, in
the total amount of $15,036.00 for its delinquent quarterly expense reports for the
second, third, and fourth quarters of 2009.
6. In that R &J Properties Group, LLC has already made payment of the aforesaid
administrative penalty in the total amount of $ 15,036.00 in accordance with the
Consent Agreement of the parties, and has now filed quarterly expense reports for
the second, third, and fourth quarters of 2009 and statements of failure to meet the
reporting threshold for all four quarters of 2010, no further action is required in this
case and this case is closed.
BY THE COMMISSION,
___________________________
Louis W. Fryman, Chair