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HomeMy WebLinkAbout100-SL The Center for Working Families In Re: The Center for Working Families : File Docket: 15-017-L Respondent, : X-ref: Order No. 100-SL : Date Decided: 10/7/15 : Date Mailed: 10/27/15 Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Kathryn Streeter Lewis Maria Feeley Melanie DePalma This is a final adjudication of the State Ethics Commission as to the alleged delinquency and/or deficiency of 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 The Center for Working Families (hereinafter also referred to as “TCWF” and “Respondent”) a Notice of Alleged Noncompliance. The Respondent did not file an Answer, Appeal, or other Request for Hearing. A Stipulation of Findings and a Consent Agreement 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 Respondent, 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), negligently failed to timely file a quarterly expense report th pursuant to 65 Pa.C.S. § 13A05, for the fourth (4) quarter of 2014. II.FINDINGS: 1. Respondent is The Center for Working Families (“TCWF”) and is/was 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. TCWF registered as a principal with the Department of State on July 29, 2014, for the registration period January 1, 2013, through December 31, 2014. b. In filing its principal registration, TCWF identified its registered mailing address as: thnd 419 7 Street NW, 2 Floor Washington, DC 20004 The Center for Working Families, 15-017-L Page 2 2. TCWF filed a principal registration statement with the Pennsylvania Department of State on July 29, 2014. a. TCWF’s registration statement indicates that lobbying commenced on May 15, 2014. b. By registering with the Department of State, TCWF consented to receive service of notices, other official mailings, or process at the address listed on the registration statement. c. TCWF was assigned the principal registration number “P42507.” 3. 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.-- 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. The Center for Working Families, 15-017-L Page 3 65 Pa.C.S. § 13A04(a), (b)(1), (d). 4. 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). 5. 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. (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 immediate 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). 6. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations provide further instructions in relation to registration periods and reporting periods: The Center for Working Families, 15-017-L Page 4 § 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). 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; (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 The Center for Working Families, 15-017-L Page 5 employee, the purpose or foreseeable effect of which is to influence legislative action or administrative action. The term may include personnel expenses and office expenses. 65 Pa.C.S. § 13A03. 10. As a registered principal, TCWF is required to file quarterly expense reports with the Department of State. nd a. TWCF timely filed quarterly expense reports for both the second (2) and rd third (3) quarters of 2014 pursuant to registration number P42507. th b. TCWF did not file a quarterly expense report for the fourth (4) quarter of 2014 pursuant to registration number P42507 by the reporting deadline of January 30, 2015, as required by the Pennsylvania Lobbying Disclosure Law. th c. On or about January 19, 2015, a fourth (4) quarter 2014 expense report was filed pursuant to registration number P42503 relating to Center for Working Families. 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: § 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, The Center for Working Families, 15-017-L Page 6 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 March 4, 2015, 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 th Respondent failed to file a quarterly expense report for the fourth (4) quarter of 2014. a. Said Warning Notice was mailed to: The Center for Working Families, 15-017-L Page 7 The Center for Working Families thnd 419 7 Street NW, 2 Floor Washington, DC 20004 b. This is the same address as 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, paragraph 2(b) above). 14. Said Warning Notice letter set forth the nature of the alleged noncompliance and the administrative and criminal penalties for failing to file. 15. Said Warning Notice letter provided TCWF an opportunity to cure the alleged noncompliance and avoid the institution of these proceedings as to alleged noncompliance by filing a quarterly expense report for the time period covering the th fourth (4) quarter of 2014 with the Department of State within thirty (30) days from the mailing date of the Warning Notice letter. a. TCWF did not reply within 30 days of the Warning Notice being forwarded to TCWF. 16. The Chief of the Division of Campaign Finance and Lobbying Disclosure conducted a search of the Department of State’s records, and, as of April 17, 2015, no fourth th (4) quarter 2014 expense report was found to have been filed with the Department of State for TCWF pursuant to principal registration number P42507. 17. On April 30, 2015, a Notice of Alleged Noncompliance was filed in the instant matter naming TCWF as a Respondent and alleging that TCWF, 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), negligently failed to timely file a quarterly expense report pursuant to 65 Pa.C.S. § 13A05, for the fourth th (4) quarter of 2014. 18. After the Notice of Alleged Noncompliance was filed in this matter, Representatives of Respondent contacted the Investigative Division and advised that TCWF maintained a duplicate registration under registration number P42503 relating to Center for Working Families (“CWF”). a. TCWF and CWF is the same entity; however, said entity maintained two principal registration numbers. th 19. On January 19, 2015, CWF filed a fourth (4) quarter 2014 expense report with the Department of State pursuant to registration number P42503. a. All reportable lobbying expenses incurred by the \[entity\] known as TCWF th and/or CWF were reported on the fourth (4) quarter 2014 expense report filed under P42503 on January 19, 2015; therefore, TCWF/CWF erroneously believed that all necessary expenses had been properly reported, and as such, TCWF inadvertently failed to file an expense report pursuant to registration number P42507. i. On June 25, 2015, the Pennsylvania Department of State, the official The Center for Working Families, 15-017-L Page 8 filing repository for all filings pursuant to the Lobbying Disclosure Law, confirmed that TCWF/CWF maintained duplicate registrations under P42507 and P42503. ii. As confirmed by the Department of State, TCWF/CWF maintained two active principal registrations and reported all lobbying expenses pursuant to registration number P42503. 20. On or about July 6, 2015, after the Notice of Alleged Noncompliance was filed in th this matter, TCWF filed a fourth (4) quarter 2014 expense report pursuant to P42507, which indicates that no lobbying expenses were incurred by TCWF during the second quarter of 2014 \[sic\]. 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, negligently failed to timely file a quarterly expense report pursuant to 65 Pa.C.S. § 13A05 for the fourth quarter of 2014. 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 registered as a principal with the Department of State on July 29, 2014, for the registration period January 1, 2013, through December 31, 2014. Respondent’s registration statement indicated that lobbying commenced on May 15, 2014. Respondent was assigned the principal registration number “P42507.” 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 th threshold by no later than the 30 day after each quarterly reporting period ends. 51 Pa. Code § 55.1(d). Having registered on July 29, 2014, for the registration period January 1, 2013, through December 31, 2014, Respondent was required to file a quarterly expense report for the fourth quarter of 2014. Respondent timely filed quarterly expense reports for the second and third quarters of 2014 pursuant to registration number P42507; however, Respondent did not file a fourth quarter 2014 expense report under registration number P42507 by the reporting deadline of January 30, 2015. By Warning Notice letter dated March 4, 2015, 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 Center for Working Families, 15-017-L Page 9 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 fourth quarter of 2014 with the Department of State within thirty (30) days of the mailing date of the Warning Notice letter. As of April 17, 2015, no fourth quarter 2014 expense report was found to have been filed with the Department of State for Respondent pursuant to principal registration number P42507. On April 30, 2015, a Notice of Alleged Noncompliance was filed in the instant matter alleging that Respondent negligently failed to timely file a quarterly expense report for the fourth quarter of 2014. Thereafter, representatives of Respondent contacted the Investigative Division and advised that Respondent maintained a duplicate registration under registration number P42503 relating to “Center for Working Families” (“CWF”). The parties have stipulated that TCWF and CWF is the same entity. On January 19, 2015, CWF filed a quarterly expense report with the Department of State for the fourth quarter of 2014 pursuant to registration number P42503. On June 25, 2015, the Department of State confirmed that TCWF/CWF maintained duplicate active registrations under P42507 and P42503, such that TCWF/CWF had reported all lobbying expenses pursuant to registration number P42503. 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 no violation of Section 13A05 of the Pennsylvania Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, occurred in relation to Respondent’s failure to timely file th a Quarterly Expense Report for the fourth (4) quarter of 2014, as any and all reportable expenses incurred by th Respondent were reported on the fourth (4) Quarter 2014 Expense Report filed pursuant to Principal Registration Number P42503 on January 19, 2015, which was a duplicate registration for Respondent, and as such, Respondent inadvertently failed to file a Fourth th (4) Quarter 2014 Expense Report pursuant to Registration Number P42507. 4. The State Ethics Commission has incurred costs in the investigation and enforcement of this matter, and as such, Respondent agrees to pay an amount of $500.00, representing a portion of those costs, to be made payable to the Pennsylvania State Ethics Commission. a. Said payment (certified check or money order) shall be forwarded to the Pennsylvania State Ethics Commission The Center for Working Families, 15-017-L Page 10 upon execution of this agreement, and 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 shall submit said payment of costs for deposit. th 5. On July 6, 2015, Respondent filed a Fourth (4) Quarter 2014 Expense Report pursuant to Principal Registration Number P42507, indicating that no lobbying expenses were incurred by th the Respondent during the Fourth (4) Quarter of 2014. a. Respondent 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 accordance 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 Respondent, or any individual or representative of Respondent. 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 1-2. In considering the Consent Agreement and Stipulation of Findings, we accept the proposed outcome recommended by the parties, and we hold that no violation of Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, occurred in relation to the allegation that Respondent negligently failed to timely file a quarterly expense report for the fourth quarter of 2014, as any and all reportable expenses incurred by TCWF/CWF were reported on the fourth quarter 2014 expense report filed under duplicate principal registration number P42503 on January 19, 2015. As an observation, Section 13A04(b) of the Lobbying Disclosure Law provides that a principal required to register is to file a single registration statement. 65 Pa.C.S. § 13A04(b). Because Respondent maintained two active registration statements, instead of only one, there appeared to be two different entities, when in fact, there was only one entity. We take administrative notice that, per the Department of State’s web site, the registrations under both registration numbers (P42507 and P42503) are now listed as “expired.” As part of the Consent Agreement, Respondent has agreed to pay the amount of $500.00, representing a portion of the costs the State Ethics Commission has incurred in the investigation and enforcement of this matter, by way of certified check or money order payable to the Pennsylvania State Ethics Commission and forwarded to this Commission The Center for Working Families, 15-017-L Page 11 upon execution of the Consent Agreement. The Consent Agreement provided that said 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 payment of costs for deposit. 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. Per the Consent Agreement of the parties, Respondent The Center for Working Families is directed to pay the amount of $500.00, representing a portion of the costs incurred by the Commission in the investigation and enforcement of this matter, to be made payable to the Pennsylvania State Ethics Commission. We take administrative notice that Respondent The Center for Working Families has already made payment to this Commission in the amount of $500.00, representing a portion of the costs incurred by the Commission in the investigation and enforcement of this matter. As for Respondent’s agreement to file all 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 The Center for Working Families has already made payment to this Commission in the amount of $500.00, representing a portion of the costs incurred by this Commission in the investigation and enforcement of this matter, in accordance with the Consent Agreement of the parties, 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”), The Center for Working Families (“TCWF”) 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. No violation of Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, occurred in relation to the allegation that TCWF negligently failed to timely file a quarterly expense report for the fourth quarter of 2014, as any and all reportable expenses incurred by TCWF were reported on the fourth quarter 2014 expense report filed under duplicate principal registration number P42503 on January 19, 2015. 3. Based upon the totality of the circumstances in this case, the payment to this Commission in the amount of $500.00, representing a portion of the costs incurred by the Commission in the investigation and enforcement of this matter, is warranted. In Re: The Center for Working Families : File Docket: 15-017-L Respondent, : Date Decided: 10/7/15 : Date Mailed: 10/27/15 ORDER NO. 100-SL 1. No violation of Section 13A05 of Pennsylvania’s lobbying disclosure law (“Lobbying Disclosure Law”), 65 Pa.C.S. § 13A05, occurred in relation to the allegation that The Center for Working Families, in its capacity as a principal registered with the Pennsylvania Department of State (“Department of State”) under principal registration number “P42507,” negligently failed to timely file a quarterly expense report for the fourth quarter of 2014, as any and all reportable expenses incurred by The Center for Working Families were reported on the fourth quarter 2014 expense report filed under duplicate principal registration number P42503 on January 19, 2015. 2. Per the Consent Agreement of the parties, The Center for Working Families is directed to pay the amount of $500.00, representing a portion of the costs incurred by the Commission in the investigation and enforcement of this matter, to be made payable to the Pennsylvania State Ethics Commission. 3. In that The Center for Working Families has already made payment to this Commission in the amount of $500.00, representing a portion of the costs incurred by this Commission in the investigation and enforcement of this matter, in accordance with the Consent Agreement of the parties, no further action is required in this case, and this case is closed. BY THE COMMISSION, ___________________________ Nicholas A. Colafella, Chair