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HomeMy WebLinkAbout16-1001 KauffmanOPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Maria Feeley Melanie DePalma DATE DECIDED: 7/27/16 DATE MAILED: 7/29/16 Barry L. Kauffman c/o Common Cause Pennsylvania 800 North Third Street, Suite 401 Harrisburg, PA 17102 16 -1001 Dear Mr. Kauffman: This Opinion is issued in response to your advisory request letter dated June 23, 2016. I. ISSUE: Whether, pursuant to Pennsylvania's lobbying disclosure law ( "Lobbying Disclosure Law "), 65 Pa.C.S. § 13A01 et seq., an individual's transition from being the Executive Director and an employee of Common Cause Pennsylvania to being an independent contractor providing services- -which may include lobbying - -to Common Cause Pennsylvania would result in changes to the individual's status as a lobbyist orchanges to the individual's responsibilities regarding expense reports filed by Common Cause Pennsylvania. II. FACTUAL BASIS FOR DETERMINATION: As the former Executive Director of Common Cause Pennsylvania, you have requested an advisory Opinion from this Commission based upon the following submitted facts. At the time you submitted your request for an advisory Opinion from this Commission, you were the Executive Director and an employee of Common Cause Pennsylvania. You were also a registered lobbyist for Common Cause Pennsylvania, which is a registered principal. You stated that on June 30, 2016, you would be leaving your position as Executive Director of Common Cause Pennsylvania but would continue to provide services to Kauffman, 16 -1001 July 29, 2016 Page 2 Common Cause Pennsylvania on a contract basis from July 1, 2016, through December 31, 2016. You further stated that such services might include lobbying activity. You stated that you do not intend to provide lobbying services to any other entity for the remainder of the 2015 -2016 legislative session. You posed the following questions (1) Whether, as an independent contractor providing services to Common Cause Pennsylvania on a contract basis, you would be considered to be an employee of Common Cause Pennsylvania for purposes of the Lobbying Disclosure Law; (2) If you would not be considered an employee of Common Cause Pennsylvania, whether you would be considered a "lobbying firm," and if so, whether you would need to establish a new registration as a "firm" or could continue as an individual who does lobbying for compensation by Common Cause Pennsylvania; (3) If you would be considered to be affiliated with Common Cause Pennsylvania for the purpose of lobbying registration and reporting, whether your reporting responsibility would be limited to signing the lobbyist affirmation contained in the quarterly expense report and, if you would so choose, submitting a statement of limited knowledge; (4) Whether you are correct in your understanding that all principal and lobbyist registrations automatically terminate on December 31 of even - numbered years; and (5) Given that you would be continuing to serve Common Cause Pennsylvania on a contract basis until the end of 2016, whether you would be required to file a termination report and whether you or Common Cause Pennsylvania would be required to file an amended registration form. By letter dated June 29, 2016, you were notified of the date, time and location of the public meeting at which your request would be considered. At the public meeting on July 27, 2016, you appeared and indicated that you are doing the same work that you previously did as an employee of Common Cause, butwith a different payment arrangement. III. DISCUSSION: It is initially noted that pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), in conjunction with Sections 1107(10)) and 1107(11) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, this Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. As a registered lobbyist in Pennsylvania, you are subject to the prohibitions, restrictions, and requirements imposed upon lobbyists by the Lobbying Disclosure Law. The following terms pertinent to your request are defined in the Lobbying Disclosure Kauffman, 16 -1001 July 29, 2016 Page 3 Law as follows: § 13A03. Definitions "Lobbying firm." An entity that engages in lobbying for economic consideration on behalf of a principal other than the entity itself. "Lobbyist." Any individual, association, corporation, partnership, business trust or other entity that engages in lobbying on behalf of a principal for economic consideration. The term includes an attorney at law while engaged in lobbying. 65 Pa.C.S. § 13A03. The Lobbying Disclosure Regulations include the following definitions relevant to your inquiry: § 51.1. Definitions. Lobbying firm —An entity that engages in lobbying for economic consideration on behalf of a principal other than the entity itself. Lobbyist —An individual, association, corporation, partnership, business trust or other entity that engages in lobbying on behalf of a principal for economic consideration. The term includes an attorney at law while engaged in lobbying. Membership in an association alone is not sufficient to make an association member a lobbyist. Employee —An individual from whose wages an employer is required under the Internal Revenue Code (26 U.S.C.A.) to withhold Federal Income Tax. For the limited purpose of determining exemption under Section 13A06(2) of the act (relating to exemption from registration and reporting), the term "employee" includes an "independent contractor" under the Internal Revenue Code, when the employee engages in the activity of gathering, commenting on and disseminating the news. 51 Pa. Code § 51.1. Section 13A04 of the Lobbying Disclosure Law, pertaining to registration, details the information that is required to be disclosed on a registration statement filed by a principal or lobbying firm, 65 Pa.C.S. § 13A04(b), or by a lobbyist, 65 Pa.C.S. § 13A04(c). Section 13A04(d) -(e) of the Lobbying Disclosure Law provides as follows: § 13A04. Registration (d) Amendments. -- (1) If there is a change of information required for the registration statement under subsection Kauffman, 16 -1001 July 29, 2016 Page 4 (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. (e) Termination. -- (1) A lobbyist, lobbying firm or principal may terminate registration by filing notice of termination with the department. (2) After a review of the notice of termination, but no later than 15 days after receipt of the notice, the department shall issue to the lobbyist, lobbying firm or principal a letter stating that the registrant has terminated registration. The filing of notice shall not affect the commission's authority to conduct investigations and hearings under section 13A08(g) (relating to administration). (3) No lobbying may occur after the filing of notice of termination unless the lobbying is pursuant to a separate registration statement which is filed with the department and which, at the time of the lobbying, has not been terminated. (4) Nothing in this subsection shall be construed to exempt a lobbyist, lobbying firm or principal from any of the requirements in section 13A05 (relating to reporting). 65 Pa.C.S. § 13A04(d) -(e) Having set forth the relevant provisions of the Lobbying Disclosure Law and the Lobbying Disclosure Regulations, we shall now address the specific questions that you have posed. In response to your first question, you are advised that following termination of your employment with Common Cause Pennsylvania, you would not be considered an "employee" of Common Cause Pennsylvania for purposes of the Lobbying Disclosure Law. This is because, as an independent contractor, you would not fall within the definition of the term "employee" set forth in the Lobbying Disclosure Regulations, 51 Pa. Code § 51.1. In response to your second question, you are advised that following termination of your employment with Common Cause Pennsylvania, you would not be considered a "lobbying firm" as that term is defined in the Ethics Act. This is because, based upon the submitted facts, you would be acting as an individual and not as an entity. By definition, a "lobbying firm" is "[a]n entity that engages in lobbying for economic consideration on behalf of a principal other than the entity itself." 65 Pa.C.S. § 13A03 (Emphasis added); 51 Pa. Code § 51.1 (Emphasis added). In response to your third question, you are advised that to the extent you would Kauffman, 16 -1001 July 29, 2016 Page 5 continue to be a registered lobbyist for Common Cause Pennsylvania, you would be required to satisfy the requirements of the Lobbying Disclosure Law that apply to registered lobbyists. You would be required to fulfill the responsibilities of a registered lobbyist with regard to the expense reports filed by Common Cause Pennsylvania as to all quarters during which you were, at any point in time, a registered lobbyist for Common Cause Pennsylvania. Specifically, you would be required to sign the lobbyist affirmation contained in the expense reports filed by Common Cause Pennsylvania. 65 Pa.C.S. § 13A05(b)(4). You could, if you would choose to do so, file statement(s) of limited knowledge as to the expense reports filed by Common Cause Pennsylvania. Id. You would not be required to file separate lobbyist expense report(s) unless you would engage in lobbying not contained in the expense report(s) filed by Common Cause Pennsylvania. 65 Pa.C.S. § 13A05(b)(6); 51 Pa. Code § 55.1(e). In response to your fourth and fifth questions, you are advised as follows. All principal and lobbyist registration statements automatically terminate at midnight on December 31 of even - numbered years. See, 51 Pa. Code § 51.3(a). Unless previously terminated, your registration statement will automatically terminate at midnight on December 31, 2016. Based upon the submitted facts, you would not be required to terminate your registration statement. If you would choose to file a notice of termination, you would not be able to engage in lobbying on behalf of a principal such as Common Cause Pennsylvania without first having an active, separate lobbyist registration statement on file with the Pennsylvania Department of State in accordance with Section 13A04(e)(3) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A04(e)(3). See also, 51 Pa. Code § 53.6(e) -(f). Under the current version of the Lobbying Disclosure Law, the filing of a notice of termination would not require the filing of a so- called "termination report." However, as noted above, you would be required to fulfill the responsibilities of a registered lobbyist with regard to the expense reports filed by Common Cause Pennsylvania as to all quarters during which you were, at any point in time, a registered lobbyist for Common Cause Pennsylvania. See, 65 Pa.C.S. § 13A04(e)(4); 51 Pa. Code § 53.6(i). You would not be required to amend your registration statement unless the information required to be disclosed therein would change. (We may not address the portion of your fifth question regarding whether Common Cause Pennsylvania would be required to file an amended registration form because you have not established "standing" to request an advisory opinion on behalf of Common Cause Pennsylvania.) The request for an advisory has only been addressed under the Lobbying Disclosure Law and, derivatively, the Ethics Act to the extent applicable. IV. CONCLUSION: As a registered lobbyist in Pennsylvania, you are subject to the prohibitions, restrictions, and requirements imposed upon lobbyists by Pennsylvania's lobbying disclosure law ( "Lobbying Disclosure Law "), 65 Pa.C.S. § 13A01 et seg. Based upon the submitted facts that: (1) at the time you submitted your request for an advisory Opinion from this Commission, you were the Executive Director and an employee of Common Cause Pennsylvania and a registered lobbyist for Common Cause Pennsylvania, which is a registered principal; (2) on June 30, 2016, you would be leaving your position as Executive Director of Common Cause Pennsylvania butwould continue to provide services to Common Cause Pennsylvania on a contract basis from July 1, 2016, through December 317 2016; (3) the services that you would provide to Common Cause Pennsylvania as an independent contractor might include lobbying activity; and (4) you do not intend to provide lobbying services to any other entity for the remainder of the 2015 -2016 legislative session, you are advised as follows. Kauffman, 16 -1001 July 29, 2016 Page 6 Following termination of your employment with Common Cause Pennsylvania, you would not be considered a "lobbying firm" or an "employee" of Common Cause Pennsylvania for purposes of the Lobbying Disclosure Law because you would not fall within the applicable statutory and regulatory definitions of those terms. To the extentyou would continue to be a registered lobbyist for Common Cause Pennsylvania, you would be required to satisfy the requirements of the Lobbying Disclosure Law that apply to registered lobbyists. You would be required to fulfill the responsibilities of a registered lobbyist with regard to the expense reports filed by Common Cause Pennsylvania as to all quarters during which you were, at any point in time, a registered lobbyist for Common Cause Pennsylvania. Specifically, you would be required to sign the lobbyist affirmation contained in the expense reports filed by Common Cause Pennsylvania. You could, if you would choose to do so, file statement(s) of limited knowledge as to the expense reports filed by Common Cause Pennsylvania. You would not be required to file separate lobbyist expense report(s) unless you would engage in lobbying not contained in the expense report(s) filed by Common Cause Pennsylvania. All principal and lobbyist registration statements automatically terminate at midnight on December 31 of even - numbered years. Unless previously terminated, your registration statement will automatically terminate at midnight on December 31, 2016. Based upon the submitted facts, you would not be required to terminate your registration statement. If you would choose to file a notice of termination, you would not be able to engage in lobbying on behalf of a principal such as Common Cause Pennsylvania without first having an active, separate lobbyist registration statement on file with the Pennsylvania Department of State in accordance with Section 13A04(e)(3) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A04(e)(3). See also, 51 Pa. Code § 53.6(e) -(f). Under the current version of the Lobbying Disclosure Law, the filing of a notice of termination would not require the filing of a so- called "termination report." However, as noted above, you would be required to fulfill the responsibilities of a registered lobbyist with regard to the expense reports filed by Common Cause Pennsylvania as to all quarters during which you were, at any point in time, a registered lobbyist for Common Cause Pennsylvania. See, 65 Pa.C.S. § 13A04(e)(4); 51 Pa. Code § 53.6(i). You would not be required to amend your registration statement unless the information required to be disclosed therein would change. Pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), a requester who truthfully discloses all material facts in a request for an advisory and who acts in good faith based upon a written Opinion of this Commission issued to the requester shall not be held liable for a violation of the Lobbying Disclosure Law. The protection afforded for reliance upon this Opinion will remain in effect until such time as any regulation, statutory enactment, or ruling precludes further reliance upon this Opinion. This letter is a public record and will be made available as such. By the Commission, Nicholas A. Colafella Chair