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HomeMy WebLinkAbout008-SL Salus University In Re: Salus University, : File Docket: 11-008-L Respondent : X-ref: Order No. 008-SL : Date Decided: 1/31/12 : Date Mailed: 2/1/12 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 Salus University (hereinafter also referred to as “Respondent”) a Notice of Alleged Noncompliance and an Amended 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. I.ALLEGED NONCOMPLIANCE: That Salus University, 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 timely file a quarterly expense report pursuant [to] 65 st Pa.C.S. § 13A05, for the first (1) quarter of 2011. II.FINDINGS: 1. Respondent is Salus University (“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 initially registered as a principal with the Department of State on January 12, 2007, for the registration period January 1, 2007, through December 31, 2008. i. Respondent submitted its registration fee of $100.00 via check number 1234. b. On January 8, 2009, Respondent renewed its principal registration with the Department of State for the registration period January 1, 2009, through December 31, 2010. Salus University, 11-008-L Page 2 i. Respondent submitted its renewal fee of $100.00 via check number 245179. c. On December 21, 2010, Respondent renewed its principal registration with the Department of State for the registration period January 1, 2011, through December 31, 2012. i. Respondent submitted its renewal fee of $200.00 via credit card order number LD DOS 266234 101221112701. d. In filing and renewing its principal registration, Respondent identified its registered mailing address as: 8360 Old York Road Elkins Park, PA 19027 2. Respondent filed a principal registration statement with the Pennsylvania Department of State on January 12, 2007. a. Respondent’s registration statement indicated that lobbying commenced on January 12, 2007. b. By registering with the Department of State, Respondent consented to receive service of notices, other official mailings or process at the address listed on the registration statement. c. Respondent was assigned the principal registration number “P01122.” 3. Respondent renewed its principal registration with the Department of State for both the 2009-2010 and 2011-[2012] registration periods. a. By renewing the registration with the Department of State, Respondent consented to receive service of notices, other official mailings or process at the address listed on the registration statement. 4. 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. Salus University, 11-008-L Page 3 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.-- 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)(1), (d). 5. 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(a). 6. 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.-- (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. Salus University, 11-008-L Page 4 (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)(1)-(2). 7. 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. 8. 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). 9. Section 13A03 of the Lobbying Disclosure Law defines the following terms: “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; Salus University, 11-008-L Page 5 (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 personnel expenses and offices expenses. 65 Pa.C.S. § 13A03. 10. As a registered principal, Respondent is required to file quarterly expense reports with the Department of State. st a. Respondent timely filed quarterly reports for each quarter from the first (1) th quarter of 2007 through the fourth (4) quarter of 2010. ndrd b. Respondent timely filed quarterly reports for the second (2) and third (3) quarters of 2011. 11. 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). 12. [In relation] to the filing requirements of quarterly expense reports, the Regulations read, in part: Salus University, 11-008-L Page 6 § 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)(3)(i)-(ii). 13. By Warning Notice letter dated July 26, 2011, 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 specific allegations that Salus University, 11-008-L Page 7 Respondent failed to file a quarterly expense report for the first (1st) quarter of 2011. a. Said Warning Notice was sent to: Salus University c/o Thomas Lewis 8360 Old York Road Elkins Park, PA 19027 b. This is the same address listed on Respondent’s principal registration statement. c. By submitting the principal registration statement, Respondent consented to receipt of service of notices, other official mailings or process, at the address listed on the registration statement. (See, Paragraphs 2(b) and 3(a) above). 14. Said Warning Notice letter set forth the nature of the alleged noncompliance and the administrative and criminal penalties for failing to register. 15. Said Warning Notice letter 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 st first (1) quarter of 2011 with the Department of State within thirty (30) days from the mailing date of the Warning Notice letter. 16. The Acting Chief of the Division of Campaign Finance and Lobbying Disclosure conducted a search of the records of the Department of State, and, as of October 5, st 2011, no first (1) quarter 2011 expense reports or notices of termination were found to have been filed with the Department of State for Respondent. 17. 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, in part, that: a. 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). 18. As of the date of the filing of the instant Notice of Alleged Noncompliance, Respondent’s expense report is a total of one hundred and sixty-four (164) days delinquent. st a. Respondent’s first (1) quarter 2011 expense report is 164 days delinquent (May 3, 2011 - October 13, 2011). st i. First (1) quarter expense report period closed March 31, 2011. See, 65 Pa.C.S. § 13A03 Definitions - “Reporting period.” ii. Expense reports were to be filed within thirty (30) days of March 31, 2011, that date being April 30, 2011. See, 65 Pa.C.S. § 13A05(a). st iii. The first day in which Respondent’s first (1) quarter 2011 expense Salus University, 11-008-L Page 8 report was delinquent was May 3, 2011. st iv. April 30, 2011, was a Saturday, thus Respondent’s first (1) quarter expense report was not considered delinquent until May 3, 2011. (See, 51 Pa. Code § 51.2). 19. The thirty-day deadline set forth in the said Warning Notice letter to Respondent expired August 25, 2011, prior to Respondent fully complying with the specific requirements of the Lobbying Disclosure Law. III. DISCUSSION: In the instant matter, the alleged noncompliance is that Respondent, as a principal registered with the Pennsylvania Department of State (“Department of State”) pursuant to the Lobbying Disclosure Law, failed to timely file a quarterly expense report pursuant to 65 Pa.C.S. § 13A05 for the first quarter of 2011. 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. Respondent initially registered as a principal with the Department of State on January 12, 2007, for the registration period January 1, 2007, through December 31, 2008. Respondent was assigned the principal registration number “P01122.” On January 8, 2009, Respondent renewed its principal registration with the Department of State for the registration period January 1, 2009, through December 31, 2010. On December 21, 2010, Respondent renewed its principal registration with the Department of State for the registration period January 1, 2011, through December 31, 2012. 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(d). For the registration period January 1, 2011, through December 31, 2012, Respondent was a registered principal as of January 1, 2011; therefore, Respondent was required to file a quarterly expense report for the first quarter of 2011. Respondent failed to file a quarterly expense report for the first quarter of 2011 by the filing deadline. 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(b). Salus University, 11-008-L Page 9 By Warning Notice letter dated July 26, 2011, Respondent was served with notice of the alleged noncompliance in accordance with Section 63.4(1) of the Lobbying Disclosure Regulations, 51 Pa. Code § 63.4(1). The Warning Notice letter provided Respondent an opportunity to cure the alleged noncompliance and avoid the institution of these proceedings by filing a quarterly expense report for the first quarter of 2011 with the Department of State within thirty (30) days of the mailing date of the Warning Notice letter. As of October 5, 2011, no first quarter 2011 expense reports or notices of termination were found to have been filed with the Department of State for Respondent . 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). Per the Consent Agreement and Stipulation of Findings, the parties are in agreement that Respondent’s expense report for the first quarter of 2011 was 164 days delinquent. 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 Salus University , 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 timely file a Quarterly Expense Report pursuant [to] 65 Pa.C.S. § st 13A05, for the First (1) Quarter of 2011. b. That the transgressions of the Lobbying Disclosure Law outlined in paragraph (a) above are deemed to be negligent in nature. st c. Salus University was deficient in filing its First (1) Quarter 2011 Expense Report by a total of 164 days, calculated as set forth below: i. On July 26, 2011, a Warning Notice regarding the delinquent quarterly expense report was sent to Respondent via First Class United States Mail; ii. Respondent did not file the outstanding st Quarterly expense report for First (1) Quarter 2011 within the stated cure period; iii. Respondent filed the delinquent Quarterly expense reports with the Pennsylvania st Department of State for the First (1) Quarter 2011 on or about October 18, 2011; iv. For purposes of this Consent Agreement only, Salus University, 11-008-L Page 10 the delinquent period was calculated from the st date the First (1) Quarter 2011 expense report was delinquent (May 3, 2011), until the date of Service of the Notice of Alleged Noncompliance (October 13, 2011), said period being one hundred sixty-four days (164). 4. Salus University agrees to pay an administrative penalty, by way of certified check or money order, in the amount of $5,740.00 (164 days x $35.00 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 such time 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 will submit said settlement payment for deposit into the Treasury of the Commonwealth. 5. To the extent it has not already done so, Salus University 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. Salus University agrees to timely 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 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 Salus University, or any individual or representative of Salus University. 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 and Stipulation of Findings, we agree with the parties that Respondent as a registered principal failed to timely file a quarterly expense report with the Department of State for the first quarter of 2011 as required by Salus University, 11-008-L Page 11 Section 13A05 of the Lobbying Disclosure Law. Accordingly, we hold that that Respondent as a registered principal failed to timely file a quarterly expense report with the Department of State for the first quarter of 2011 as required by Section 13A05 of the Lobbying Disclosure Law. We shall accept the recommendation of the parties for a determination that the transgression(s) of the Lobbying Disclosure Law outlined immediately above are deemed to be negligent in nature. The parties have agreed that Respondent was 164 days delinquent in filing its quarterly expense report for the first quarter of 2011. As part of the Consent Agreement, Respondent agreed to pay an administrative penalty, by way of certified check or money order, in the amount of $5,740.00 (164 days x $35.00 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 October 31, 2011. Respondent also agreed to timely 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. This Commission hereby levies one administrative penalty against Respondent Salus University in the amount of $5,740.00 for its delinquent quarterly expense report for the first quarter of 2011. We take administrative notice that Respondent has already made payment of the aforesaid administrative penalty in the amount of $ 5,740.00 through this Commission to the Commonwealth of Pennsylvania, as per the Consent Agreement of the parties. Additionally, per the Consent Agreement, Respondent filed a quarterly expense report for the first quarter of 2011 on or about October 18, 2011. As for Respondent’s agreement to file all outstanding and future quarterly expense reports as set forth in the Consent Agreement, 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 amount of $ 5,740.00 in accordance with the Consent Agreement of the Salus University, 11-008-L Page 12 parties, and has now filed a quarterly expense report for the first quarter of 2011, no further action is required in this case, and 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 “P01122,” Salus University has been subject to the reporting requirements of Section 13A05 of Pennsylvania’s lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A05. 2. Salus University, in its capacity as a principal registered with the Department of State, failed to timely file a quarterly expense report with the Department of State for the first quarter of 2011 as required by Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05. 3. The transgression(s) of the Lobbying Disclosure Law outlined in paragraph 2 immediately above are deemed to be negligent in nature. 4. 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. 5. Based upon the totality of the circumstances in this case, the imposition of an administrative penalty in the amount of $5,740.00 (164 days x $35.00 per day) is warranted. In Re: Salus University, : File Docket: 11-008-L Respondent : Date Decided: 1/31/12 : Date Mailed: 2/1/12 ORDER NO. 008-SL 1. Salus University, in its capacity as a principal registered with the Pennsylvania Department of State (“Department of State”) under principal registration number “P01122,” failed to timely file a quarterly expense report with the Department of State for the first quarter of 2011 as required by Section 13A05 of Pennsylvania’s lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A05. 2. The transgression(s) of the Lobbying Disclosure Law outlined in paragraph 1 immediately above are deemed to be negligent in nature. 3. This Commission hereby levies one administrative penalty against Salus University in the amount of $5,740.00 for its delinquent quarterly expense report for the first quarter of 2011. 4. In that Salus University has already made payment of the aforesaid administrative penalty in the amount of $5,740.00 in accordance with the Consent Agreement of the parties, and has now filed a quarterly expense report for the first quarter of 2011, no further action is required in this case, and this case is closed. BY THE COMMISSION, ___________________________ Louis W. Fryman, Chair