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HomeMy WebLinkAbout117-SL State Voicesv 'S k ,.. STATE ETHICS COMMISSION 309 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In Re: State Voices, Fife Docket: 16 -011 -L Respondent X -ref: Order No. 117 -SL Date Decided: 10/20/16 Date Mailed: 1112116 Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Melanie DePalma This is a final adjudication of the State Ethics Commission as to the alleged delinquency and/or deficiency of expense repport 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 State Voices (hereinafter also referred to as "Respondent ") a Notice of Alleged Noncompliance. 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 timer file a quarterly expense report pursuant to 65 Pa.C.S. § 13A05, for the first (1 ) quarter of 2016. III. FINDINGS: 1. Respondent is State Voices ( "Respondent ") and is a registered principal as that term is defined by the Pennsylvania Lobbyingg Disclosure Law ( "Lobbying Disclosure Law "), Act 134 of 2006, 65 Pa.C.S. § 13A0'i, et seg. a. Respondent initially registered as a principal with the Department of State on October 17, 2013, for the registration period January 1, 2013, through December 31, 2014. b. Respondent's registration statement indicates that lobbying commenced on September 1, 2013. C. 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. d. Respondent was assigned the principal registration number "P42165." e. In filing its principal registration, Respondent identified its registered mailing address as: P.Q. BOX 1 1470, HARRISBURG, PA 17108 -1470 • 717- 783 -1610 • 1- 800 - 932 -0936 • www.ethics.state.pa.us State Voices, 16 -011 -L Page 2 1625 Massachusetts Avenue NW Suite 308 Washington, D.C. 20036 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. -- 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 Mme 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 fi e 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). 3. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations provide further information m relation to registration periods and reporting periods: § 59.3. Registration periods and reporting periods. State Voices, 16 -011 -L Page 3 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). 4. Section 13A05 of the Lobbying Disclosure Law sets forth, in ppart, 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 exppenses, expenditures related to gifts, hospitality, transportation and lodgin 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). 5. 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. State Voices, 16 -011 -L ag2F_- 51 Pa. Code § 51.3(b). 6. As a registered principal, Respondent [is required to file either a quarterly expense report or a statement of failure to meet the reporting threshold for each quarter it has been registered as a principal, by no later than the 30 day after each quarterly reporting period has ended. 65 Pa.C.S. § 13A05(a), (d); 51 Pa. Code § 55.1(d)]. 7. 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 lobbyingg exceed $2,500 for a registered principal in a reporting penod. 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). 8. As a registered principal, Respondent [is required to file either a quarterly expense report or a statement of failure to meet the reporting thr %shold for each quarter it has been registered as a principal, by no later than the 30 day after each quarterly reporting period has ended. 65 Pa.C.S. § 13A05(a), (d); 51 Pa. Code § 55.1(d)]. a. Respondent filed quarterlytexpense re orts from the third (3rd) quarter of 2013 through the ffourth (4 ) gLlpirter o 2015. Respondent filed a quarterly expense report for the fourth (4'") quarter of 2015 on February 18, 2016. b. Respondent did not file a first (1St} quarter 2016 expense report by the filing deadline; [because April 30, 2016, was a Saturday, the filing deadline was Monday, May 2, 2016. See, 51 Pa. Code § 51.2]. 9. 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). State Voices, 16-011 -L ague T___ 10. [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, we her, 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 $2,500 or less, a statement to that effect shall be filed with the Department by checking the appropriate block on the quarterly expense report form. (d) The principal shall file a quarterly expense report or statement of failure to meet the reporting threshold on or before the 30th day after the quarterly reporting period ends. (g) A quarterly expense report of a principal required to be registered under the act must include at least the following information: (3) The total costs of all lobbying for the period. The total must include all office expenses, personnel expenses, expenditures related to gifts, hospitality, transportation and lodging to State officials or employees, and any other lobbying costs. (i) The total amount reported under this paragraph shall be allocated in its entirety among the following categories: (A) The costs for gifts, hospitality, transportation and lodging given to or provided to State officials or employees or their immediate families. (B) The costs for direct communication. (C) The costs for indirect communication. (ii) Registrants shall use a good faith effort to allocate expenses required to be reported under this subsection to one of the three categories listed herein. A given expense may not be included in more than one category.... 51 Pa. Code § 55.1(a), (b), (d), (g)(3)(i) -(ii). 11. By Warning Notice letter dated May 31, 2016, Respondent was served with notice in State Voices, 16 -011 -L Fa-- accordance with Section 13A09 of the Lobbying Disclosure Law and Section 63.4(1) of the Lobbying Disclosure Regulations of the s ecific� allegations that Respondent failed to file a quarterly expense report for the first (1$) quarter of 2016. a. Said Warning Notice was mailed to: State Voices 1625 Massachusetts Avenue NW Suite 308 Washington, D.C. 20036 b. This is the same address as listed on Respondent's principal registration statement. 12. Said Warning Notice letter set forth the nature of the alleged noncompliance and the administrative and criminal penalties for failing to file. 13. 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 a quarterly expense report for the time period covering the first (1S) quarter of 2016 with the Department of State within thirty (30) days from the maifing date of the Warning Notice letter. 14. The Chief of the Division of Campaign Finance and Lobbying Disclosure for the Commonwealth of Pennsylvania Department of State conducted search of the Department of State's records, and, as of July 19, 2016, no first {15) quarter 2016 expense report was found to have been filed with the Department of State for Respondent. 15. The Lobbying Disclosure Law provides for civil and criminal penalties for failing to comply with the re istration statement filing and quarter) expense reporting requirements thereof. Specifically, the Lobbying Disclosure Law provides that: a. Negligent failure to register or report, as required by the Law, is punishable byy an administrative penalty not exceeding $50.00 for each late day. See, 65 Pa.C.S. § 13A09(c)(1). 16. As of the date of the filing of the Notice of Alleged Noncompliance, Respondent's expense report was a total of eighty -three (83)* days delinquent. a. Respondent subsequently filed its first (1S) quarter 2016 expense report on July 29, 2016. b. Respondent's first (1St) quarter 2016 expense report was 90 days* delinquent (May 1, 2016* — July 29, 2016). The first quarter expense report period closed March 31, 2016. See, 65 Pa.C.S. § 13A03 Definitions -- "Reporting period." 2. Expense reports were to be filed within thirty (30) days of March 31, 2016, that date being April 30, 2016 *. See, 65 Pa.C.S. § 13A05(a). 3. The first day in which Respondent's first (15) quarter 2016 expense report was delinquent was May 1, 2016 *. State Voices, 16 -011 -L age i sic] [Because April 30, 2016, was a Saturday, the filing deadline was Monday, May , 2016. See, 51 Pa. Code § 51.2. However, given that the pparties have entered into a Consent Agreement based upon the calculation to which they have stipulated, we shall accept their calculation.] Ill, 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 ailed to timely file a quarterly expense report pursuant to 65 Pa.C.S. § 13A05 for the first quarter of 2016. 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 October 17, 2013, for the registration period January 1, 2013, through December 31, 2014. Respondent's registration statement indicated that lobbying commenced on September 1, 2013. Respondent was assigned the principal registration number "P42165." We take administrative notice that per the Department of State's web site, Respondent last renewed its principal registration on April 25, 2015, for the registration period January 1, 2015, through December 31, 2016. 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 lobbyin exceed $2,500 for a reporting period /quarter, the principal is required to file a quarterpy 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). Having renewed its principal registration on April 25, 2015, for the registration period January 1, 2015, through December 31, 2016, Respondent was re uired to file a quarterly expense report for the first quarter of 2016. Respondent failed to f1e a quarterly expense report for the first quarter of 2016 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). By Warning Notice letter dated May 31, 2016, 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 2016 with the Department of State within thirty (30) days of the mailing date of the Warning Notice letter. State Voices, 16 -011 -L Page As of July 19, 2016, no first quarter 2016 expense report was 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 2016 was 90 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 Respondent, in its capacity as a Principal registered with the Pennsylvania Department of State pursuant to the Pennsylvania Lobbying Disclosure Law 2Pa.C.S. § 13A04), failed to timely file a Quarterly XI'pense eport pursuant to 65 Pa. C.S. § 13A05, for the first (Is ) quarter of 2016. b. That the transgression(s) of the Lobbying Disclosure Law outlined in paragraph (a) above islare deemed to be negligent in nature. C. As of the date of the filing of the Notice of Alleged Noncompliance, Respondent's expense report was a total of ninety (90) days delinquent (May 1, 2016 -- July 29, 2016). 1. The first quarter expense report period closed March 31, 2016. See, 65 Pa.C.S. § 13A03 Definitions -- "Reporting period." 2. Expense reports were to be filed within thirty (30) days of March 31, 2016, that date being April 30, 2016. See, 65 Pa.C.S. § 13A05(a). 3. The first day in which Respondent's first (1S) quarter 2016 Expense Report was delinquent was May 1, 2016. 4. Respondent filed its outstanding first (1S) quarter 2016 Expense Report on July 29, 2016, 4. The Respondent agrees to pay an administrative penalty, by way of certified check or money order, in the amount of $3,400.00 in settlement of this matter, payable as follows: a. $3,150.00 (90 days x $35.00 per diem) to the Commonwealth of Pennsylvania, and forwarded to the Pennsylvania State Ethics Commission upon execution State Voices, 16 -011 -L Page 9 of this agreement. $250.00 to the State Ethics Commission, repre�sen�tinq a portion of the costs incurred by this Commission in the investigation and enforcement of this matter, to be made payable to the Pennsylvania State Ethics Commission. 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. Respondent agrees to timely file all future Quarterly Expense Reports for the Quarter(y 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.) 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 -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 2016 as required by Section 13A05 of the Lobbying Disclosure Law. Accordingly, we hold that Respondent as a registered principal failed to timely file a quarterly expense report with the Department of State for the first quarter of 2016 as required by Section 13A05 of the Lobbying Disclosure Law. We 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 90 days delinquent in filing its quarterly expense report for the first quarter of 2016. As part of the Consent Agreement, Respondent agreed to pay an administrative penalt , by way of certified check or money order, in the amount of $3,150.00 (90 days x $35.0 per day), payable to the Commonwealth of Pennsylvania and forwarded to this Commission upon execution of the Consent Agreement. Respondent also agreed to pay $250.00 to this Commission, representing a portion of the costs incurred by the State Voices, 16 -011 -L Page 0 Commission in the investigation and enforcement of this matter, to be made payable to the Pennsylvania State Ethics Commission. The Consent Agreement provided that said settlement payments 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 payments 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. This Commission hereby levies one administrative penalty against Respondent State Voices in the amount of $3,150.00 for its delinquent quarterly expense report for the first quarter of 2016. Additionally, per the Consent Agreement of the parties, Respondent is directed to pay the amount of $250.00 representing y a portion of the costs incurred b 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 has already made payment of the aforesaid administrative penalty in the amount of $3,150.00 through this Commission to the Commonwealth of Pennsylvania, as per the Consent Agreement of the parties. Respondent has also made payment to this Commission in the amount of $250.00, 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 State Voices: has already made payment of the aforesaid administrative penalty in the amount of $3,150.00; has made payment to this Commission in the amount of $250.00, 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; and has now filed a quarterly expense report for the first quarter of 2016, 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 "P42165," State Voices has been subject to the reporting requirements of Section 13A05 of Pennsyylvania's lobbying disclosure law ( Lobbying Disclosure Law "), 65 Pa.C.S. 51 3A05. 2. State Voices, 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 2016 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. State Voices, 16 -011 -L Page 1� 5. Based upon the totality of the circumstances in this case, the imposition of an administrative penalty in the amount of $3,150.00 (90 days x $35.00 per day) and the payment to this Commission in the amount of $250.00, representing a portion of the costs incurred by the Commission in the investigation and enforcement of this matter, are warranted. In Re: State Voices, File Docket: 16 -011 -L Respondent Date Decided: 10/20/16 Date Mailed: 1112116 ORDER NO. 117 -SL 1. State Voices, in its capacity as a principal registered with the Pennsylvania Department of State ( "Department of State ") under principal registration number "P42165," failed to timely file a quarterly expense report with the Department of State for the first quarter of 2016 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 State Voices in the amount of $3,150.00 for its delinquent quarterly expense report for the first quarter of 2016. 4. Additionally, per the Consent Agreement of the parties, State Voices is directed to Ethe additional amount of $250.00, representing a portion of the costs incurred by this Commission in the investigation and enforcement of this matter, to be made payable to the Pennsylvania State Ethics Commission. 5. In that State Voices: has already made payment of the aforesaid administrative penalty in the amount of $3,150.00; has made payment to this Commission in the amount of $250.00, 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; and has now filed a quarterly expense report for the first quarter of 2016, no further action is required in this case, and this case is closed. BY THE COMMISSION, Colafella, Chair