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Home My WebLink About3-L United Food and Commercial Workers Local 1776STATE ETHICS COMMISSION 309 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In Re:. United Food and Commercial File Docket: Workers Local 1776, X -ref: Respondent Date Decided: Date Mailed: 15 -003L Order No. 3 -L 617117 6116117 Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Maria Feeley Melanie DePalma This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding possible violation(s) of Pennsylvania's lobbying disclosure law ("Lobbying Disclosure Law "), 65 Pa.C.S. § 13A01 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as a "Notice of Alleged Noncompliance Investigative Complaint/Findings Report." An Answer was filed and a hearing was requested. 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. References in this adjudication and Order to $2,500.00 thresholds are to the thresholds that were in effect during the relevant time period. Such thresholds increased to $3,000.00 effective January 1, 2017. ALLEGATIONS: That United Food and Commercial Workers Local 1776 (also referred to herein as "UFCW" and "UFCW Local 1776' ), In its capacity as a principal, violated Section 13AO5 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, when UFCW filed deficient and/or otherwise failed to file, under oath or affirmation, quarterly expense reports with the Pennsylvania Department of State for calendar years 2013 and/or 2014, Identifying the name(s) and registration number(s) of all lobbyists /lobbying firms including but not limited to: Wendell Young, IV, Joseph (Joe) Conti, H. William De eese, and/or Shelly Communications) by whom, in exchange for economic consideration, lobbying was conducted on behalf of UFCW as a principal; and when UFCW failed to accurately report total costs of all lobbying activity within quarterly expense reports filed for years 2013 and /or 2014, namely by failing to identify /report monies paid to Strategic Communications, Wendell Young, IV, Joseph (Joe) Conti, H. William DeWeese, and /or Shelly Communications. IL FINDINGS: 1. In 1937, The Retail Clerks & Managers Protective Association Local 1357 was founded in Philadelphia by employees of American Stores and A &P. P.O. BOX 1 1470, HARRISBURG, PA 17108-1470 • 717 -783 -1610 • 1 -800- 932 -0936 • www.ethics.state.pa.us United Food and Commercial ±' -kers Local 1776, 15 -003L age a. In 1963, Local 1357 of the retail clerks had 4,000 members in Philadelphia area supermarkets. b. In 1971, Pennsylvania State Liquor Store clerks joined what would become UFCW Local 1776. C. In 1980, the Retail Clerks International Association had merged with the Amalgamated Meat Cutters to create the United Food and Commercial Workers International Union. d. In or around May of 1989, United Food and Commercial Workers Local 1357 changed its Local number to "1776" (UFCW Local 1776). e. During 1998, UFCW Local 1776 merged with UFCW Local 72, maintaining the Local number 1776. 2. UFCW Local 1776 represents approximately 21,000 members employed in central and eastern Pennsylvania, northeast Maryland, and southern New York in the following industries: supermarkets, drug stores, food processing plants, government services, manufacturing facilities, nursing homes, professional offices, and Pennsylvania's Wine and Spirits Shops. 3. A Limited Partnership was established with the Corporation Bureau of the Pennsylvania Department of State by UFCW Local 1776 on or about April 12, 2000. a. At that time, the registered address for UFCW Local 1776 was identified as: 3031 A Walton Road Suite 201 Norristown, PA 19401 4. As an entity, UFCW is a registered "principal` as that term is defined by the Lobbying Disclosure Law. a. UFCW first registered as a principal with the Pennsylvania Department of State on December 9, 2011, for the registration period January 1, 2011, through December 31, 2012, 1. Upon registration, UFCW was assigned registration number P32206. b. UFCW renewed its registration by filing a renewal with the Pennsylvania Department of State on February 15, 2013, for the registration period January 1, 2013, through December 31, 2014, 1. At the time UFCW filed its renewal (February 15, 2013), a du licate registration was filed and assigned registration number P40616. 2. Registration number P40616 was terminated on September 16, 2014. i. No quarterly expense reports either electronic or paper) were filed byy, or on behalf of, UFCW Local 1776 under registration No. P40616. C. An amended registration was filed by UFCW (under registration no. P32206) on or around May 2, 2014, for the registration period 2013 through 2014, for the specific purpose of addinglidentifying John Meyerson as lobbyist. United Food and Commercial y` •Evers Local 1776, 15 -003L age d. Most recently, UFCW renewed its registration (P32206) with the Pennsylvania Department of State on January 26, 2015, for the registration period from January 1, 2015, through December 31, 2016. 5. In filing its principal registration', UFCW identified its registered mailing address as follows: 3031A Walton Road Plymouth Meeting, PA 19462 6. As noted in prior findings, UFCW filed its initial principal registration statement with the Pennsylvania Department of State on or about December 9, 2011. a. The registration statement indicates that lobbying commenced on December 9, 2011. 7. At the time UFCW filed its initial registration statement with the Pennsylvania Department of State in 2011, and amended /renewal statements in 2013, 2014, and 2015, it identified the following lobbyist(s) and lobbying firm(s) as representing UFCW: Lobbying Firm Registration No. Start Date Emerald Strategies Inc. F01655 12/9/2011 Long, Nyquist & Associates, LLC F20296 2/14/2013 Lobbyist Name Registration No. Start Date John O'Connell L12630 1219/2011 Joseph Miller L27344 12/9/2011 David F. Bonsick L00416 5/2/2014 Mike Long L00119 2/14/2013 John Burch L31782 2/14/2013 Megan Callahan L01492 2/14/2013 Megan Crompton L32049 2/14/2013 Mike Kriner L42385 2/14/2013 Amy Long L28148 2/14/2013 Brock McCleary L39131 2/14/2013 Noel Nyquist L20741 2/14/2013 Todd Nyquist L20741 2/14/2013 Mark Phenicie L42243 2/14/2013 a. The preceding lobbyist(s) and lobbying firm(s) were identified by UFCW and reported by the Pennsylvania Department of State on the public access Department of State website. 8. John Meyerson was employed in various capacities with UFCW Local 1776 from approximately 1984 until February 2014. a. From approximately 1998 until 2013, Meyerson's position with UFCW Local 1776 was Director of Legislation and Political Action. 1 All findings from this point forward only refer to Registration No. P32206. United Food and Commercial V 'keys Local 1776, 15 -003L age 10 11. b. In 2014, Meyerson was employed as an independent consultant for UFCW Local 1776. C. Meyerson has been registered as a lobbyist with the Pennsylvania Department of State since September 10, 2007 (registration no. L05835). John Meyerson, as an employee and/or lobbyist for UFCW Local 1776, filed paper versions of the lobbying disclosure quarterly expense reports for UFCW Local 1776 with the Pennsylvania Department of State during 2013 and 2014. a. Meyerson did not file any quarterly expense reports electronically for UFCW Local 1776. Between 2013 and 2016, contracts were executed between UFCW Local 1776 and the individuals /entities identified below, for various lobbying services: Name of Lobbying Firm /Lobbyist Emerald Strategies, Inc. Shelly Communications John Meyerson Howard William DeWeese Long Nyquist & Associates Conti PHL Group LLC Date Lobbying Began 12/9/2011 1/4/2011 2/11/2014 2/24/2015 2/11/2013 9/1/2013 The lobbying disclosure quarterly expense reports filed by John Meyerson for UFCW Local 1776 in 2013 and 2014 are summarized below: Lobbying Firm, Total Costs of Date of signature Filing Period Lobbyist & Registration No. Lobbying by John Meyerson Jan -Mar 2013 Emerald Strategies, Inc. First Quarter John O'Connell, L12630 Shelly Communications, F12844 Peter Shelly, L01466 Long, Nyquist & Associates, LLC Faith Bender, L25036 $54,038.00 4/98/2013 Apr -Jun 2013 Emerald Strategies, Inc. Second Quarter John O'Connell, L12630 Shelly Communications, F12844 Peter. Shelly, L01466 Long, Nyquist & Associates, LLC, F20296 Faith Bender, L25036 $88,389.00 7/22/2013 Jul -Sep 2013 Emerald Strategies, Inc. Third Quarter John O'Connell, L12630 Shelly Communications, F12844 Peter Shelly, L01466 United Food and Commercial V 'kers Local 1776, 15 -003L Page Long, Nyquist & Associates, LLC, F20296 Faith Bender, L25036 Conti PHL Joe Conti, L42119 $67,390.08 10/24/2013 Oct -Dec 2013 Emerald Strategies, Inc. Fourth Quarter John O'Connell, L12630 Shelly Communications, F12844 Peter Shelly, L01466 Conti PHL Joe Conti, L42119 Long, Nyquist & Associates, LLC F20296 John Burch, L31782 $92,639.00 1/23/2014 Jan -Mar 2014 Emerald Strategies, Inc. First Quarter John O'Connell, L12630 Shelly Communications, F12844 Peter Shelly, L01466 Conti PHL Joe Conti, L42119 Long, Nyquist & Associates, LLC F20296 John Burch, L31782 $101,821.00 412112014 Apr -Jun 2014 Emerald Strategies, Inc. Second Quarter John O'Connell, L12630 David Bonsick, L00416 Shelly Communications, F12844 Peter Shelly, L01466 Conti PHL Joe Conti, L42119 Long, Nyquist & Associates, LLC F20296 John Burch, L31782 $103,671.00 7/23/2014 Jul -Sep 2014 Emerald Strategies, Inc. Third Quarter John O'Connell, L12630 David Bonsick, L00416 Shelly Communications, F12844 Peter Shelly, L01466 Long, Nyquist & Associates, LLC F20296 United Food and Commercial ' -kers Local 1776, 15 -003L Page John Burch, L31782 Conti PHL Joe Conti, L42119 $86,428.00 10/21/2014 Oct -Dec 2014 Emerald Strategies, Inc. Fourth Quarter John O'Connell, L12630 David Bonsick, L00416 Shelly Communications, F12844 Peter Shelly, L01466 Conti PHL Joe Conti, L42119 Long, Nyquist & Associates, LLC F20296 John Burch, L31782 UFCW, P32206 John Meyerson, L05835 $801770.00 1/2812013 a. The preceding quarterly expense reports were filed by Meyerson in paper format with the Pennsylvania Department of State. 12. Chris Naylor islwas employed as the Political & Legislative Directorfor UFCW Local 1776 during 2015. a. Naylor was responsible for filing the lobbying disclosure quarterly expense reports with the Pennsylvania Department of State for UFCW Local 1776. 13. The lobbying disclosure quarterly expense reports filed by Chris Naylor in 2015 (for the UFCW) with the Pennsylvania Department of State are summarized below: Lobbying Firm, Total Costs of Date of signature Filing Period Lobbyist & Registration No. Lobbying by Chris Naylor Jan -Mar 2015 Emerald Strategies, Inc. John O'Connell, L12630 David Bonsick, L00416 Shelly Communications, F12844 Peter Shelly, L01466 Long, Nyquist &Associates, LLC John Burch, F20296 Conti PHL Joe Conti, L42119 John Meyerson, L 05835 Chris Naylor, L42748 H. William DeWeese, L 42759 $138,882.00 4/28/2015 Apr -June 2015 Emerald Strategies, Inc. John O'Connell, L12630 David Bonsick, L00416 Shelly Communications, F12844 United Food and Commercial 1' 'keys Local 1776, 15 -003L age Peter Shelly, L01466 Long, Nyquist & Associates, LLC John Burch, F20296 Conti PHL Joe Conti, L42119 John Meyerson, L 05835 Chris Naylor, L42748 H. William DeWeese, L 42759 $136,898.00 7/22/2015 Jul -Sep 2015 Emerald Strategies, Inc. John O'Connell, L12630 David Bonsick, L00416 Shelly Communications, F12844 Peter Shelly, L01466 Long, Nyq u ist &Associates, LLC John Burch, F20296 Conti PHL Joe Conti, L42119 John Meyerson, L 05835 Chris Naylor, L42748 H. William DeWeese, L 42759 $126,939.00 12/28/2015 Oct -Dec 2015 Emerald Strategies, Inc. John O'Connell, L12630 David Bonsick, L00416 Shelly Communications, F12844 Peter Shelly, L01466 Long, Nyquist & Associates, LLC John Burch, F20296 Conti PHL Joe Conti, L42119 John Meyerson, L 05835 Chris Naylor, L42748 H. William DeWeese, L 42759 $129,080.00 1/29/2016 a. Naylor elected to file paper versions of the reports as opposed to electronic filings, with the Pennsylvania Department of State. 14. The Pennsylvania Department of State's lobbying disclosure website makes public the contents of all filed registration statements and uarterly expense reports, as well as an annual report to the General Assembly outlining lobbying activities, with detailed information on registered principals, lobbying firms and lobbyists. a. Registrations and quarterly expense reports can be filed with the Pennsylvania Department of State and reviewed online 24 hours a day, seven days a week. United Food and Commercial V 'kers Local 1776, 15 -003L Page b. If an entity chooses to file paper expense reports, same can be filed until 5:00 p.m. at 210 North Office Building, or submitted at the front entrance of the Capitol from 5:00 p.m. until midnight on the day the report is due. C. Quarterly expense report due dates are as follows: 1st Quarter January 1 -March 31 Report Due April 30'h 2nd Quarter April 1 -June 30 Report Due July 30th 3rd Quarter July 1- September 30 Report Due October 301h 4th Quarter October 1- December 31 Report Due January 30th d. The procedure for transferring the contents of a paper filing to the lobbyingg disclosure website requires an employee of the Department of State to hand - key (type) the contents from a paper file into an electronic database, so same can be displayed on the website. e. Quarterly ex. pense re-torts in paper format are maintained by the Division of Campaign Finance Lobbying Disclosure; however, only portions of the contents of the filings are entered into the electronic data /public access system. 1. Paper filings are available to the public and may be viewed at the offices of the Pennsylvania Department of State during normal business hours. 15. Pursuant to the Lobbying Disclosure Law, a principal 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 respective reporting period (quarter). THE FOLLOWING FINDINGS CONCERN NEGLECT OF UFCW LOCAL 1776 TO DISCLOSE LOBBYING EXPENSES RELATING TO INDIRECT COMMUNICATION ON QUARTERLY EXPENSE REPORTS. 16. The Pennsylvania Department of State Corporations Bureau records reflect that Articles of Incorporation were first filed for Strategic Communications Consultants, Inc. ( "Strategic Communications ") to be effective January 1, 2007. According to those records: a. The Incorporator of the business was listed as Karen Ritter. b. The registered address for Strategic Communications was originally identified as 150 North Radnor Chester Road, Radnor, PA 19087. C. Amendments were made to the Articles of Incorporation in 2008 and 2013, ultimately changing the address to the current business address: PO Box 62, Trumbauersvilie, PA 18970. 17. Those records also reflect that officers of Strategic Communications include Karen Ritter as the President/Treasurer and Robert Wolpe as the SecretaryNice- President. 18. The Investigative Division represents that the stated nature of business for Strategic Communications, as identified by Ritter as a representative of Strategic Communications, includes: public relations, strategic planning, labor relations, contract bargaining, political action, government relations, and marketing. 19. On or around January 4, 2011, Strategic Communications entered into an agreement with UFCW Local 1776. United Food and Commercial)' -kers Local 1776, 15 -003L age ` 20. The initial terms of the agreement between Strategic Communications and UFCW Local 1776 were to begin on January 1, 2011, and continue through June 30, 2011. 21. The description of services for the contract were as follows: a. Develop and implement, subject to union's input and approval, a strategic plan for an anti - privatization campaign for the Pennsylvania Wine and Spirits stores (the "Campaign ") as well as a tactical plan for the Campaign. b. Develop and implement, subject to union's input and approval, a media plan for the Campaign that includes both earned and paid media. C. Design and produce, and serve as the sole contracting and placement agent for, any electronic media (including radio, television, and the internet), direct mail, automated "robo" calls, billboards or other communications included in the media plan approved by union or as otherwise desired by union. d. Develop and implement subject union's input and approval, a coordinated external communications and public relations process to deliver the union's message to legislators, the public, and union members, including message development, production of message delivery systems and monitoring of communications feedback. e. Assist in approving email communications with members and decision makers, including designing and producing email newsletters and letters. f. Design and write any fact sheets, position papers, editorial responses, op -ed pieces, and other "free" or "earned" media that may be required by the union, its officers or staff members. g. Assist the officers and staff with internal union political education and mobilization, including drafting lobbying materials and other handouts for members to use when communicating with elected officials. h. Design and write any brochures, flyers, postcards, or other means of communication with the public, that are desired by the union. Provide ongoing advice and guidance to union regarding the Campaign and union's public relations, lobbying strategies, internal union communications, and membership education. j. Other services as the parties may mutually agree. 22. The agreement between Strategic Communications and UFCW Local 1776 was eventually terminated in or around February 28, 2013. 23. Following termination of the contract, Strategic Communications would still, on occasion, work with UFCW Local 1776 on similar projects. United Food and Commercial V -leers Local 1776, 15 -003L age 24. For example. [from] on or around March 1, 2013, through June 2014, Strategic Communications developed and produced radio and television ads for the UFCW PA Wine and Spirits Council, which includes UFCW Local 1776. 25. In March of 2013, the Pennsylvania House of Representatives was actively debating legislation related to privatizing the sale of winelspirits in the Commonwealth of Pennsylvania. a. Privatization efforts would divest the Commonwealth of the right of the exclusive sale of winelspirits. 26. During the Pennsylvania House of Representatives legislative session of 2013- 2014, House Bill 790 ("HB 790 ") was introduced with Representative Mike Turzai as the primary sponsor. a. HB 790 was an effort to amend the Act of April 12, 1951 (known as the Liquor Code). 27. The legislative history of HB 790 in the Pennsylvania House of Representatives is as follows: a. HB 790 was referred to the House Liquor Control Committee on March 11, 2013. b. The first consideration of the bill in the full House of Representatives was on March 18, 2013. C. There was a second consideration, with amendments, on March 20, 2013, as the bill was recommitted to House Appropriations on March 207 2013. d. There was a third consideration of HB 790 on March 21, 2013, and it was passed by the Pennsylvania House of Representatives on March 21, 2013, y a final vote of 105 to 90. HB 790 was then referred to the Law and Justice Committee of the Pennsylvania State Senate on April 3, 2013. 28. HB 790 was first forwarded to the Pennsylvania State Senate on June 24, 2013. a. The first consideration was on June 24, 2013. b. The second consideration of the bill was on June 25, 2013, at which time it was amended on the third consideration on June 28, 2013, and then was re- referred to Senate Appropriations. 29. As a labor union representing Commonwealth State Wine & Spirits store employees, UFCW Local 1776 opposed liquor privatization. 30. Soon after HB 790 was approved by the Pennsylvania House of Representatives, Strategic Communications began drafting and producing radio and television ads in support of the anti - privatization campaign. a. Strategic Communications outlined several approaches to reach the public concerning anti - privatization efforts. 1. Proposals were forwarded by Strategic Communications dated May 24, 2013 (airing dates June 3 -June 30, 2013). United Food and Commercial !' -kers Local 1776, 15 -003L age b. Strategic Communications accurately identified [its] services were for the benefit of UFCW PA Wine and Spirits Council. 31. From at least July 1, 2011, through to the present, the Commonwealth of Pennsylvania, on sole behalf of the Pennsylvania Liquor Control Board, has entered into successive agreements with the United Food and Commercial Workers Union, on behalf of UFCW Local 1776 and UFCW Local 23 ( "Commonwealth /Union Contracts "). a. For the Agreement effective July 1, 2015, through June 2019, the Commonwealth entered into the Agreement with the "United Food and Commercial Workers Union, Pennsylvania Wine and Spirits Council, on behalf of United Food and Commercial Workers Unions, Local 1776 and Local 23." b. The UFCW PA Wine and Spirits Council maintains an internet webpage which is linked to, and linked from, UFCW Local 1776's webpage. C. Both entities share common mailing addresses.. d. UFCW PA Wine and Spirits Council is not a registered corporation with the Pennsylvania Department of State. UFCW Local 1776 is registered as a limited partnership with the Pennsylvania Department of State. 32. During April through June 2013, UFCW Local 1776 paid to Strategic Communications, on behalf of the UFCW PA Wine and Spirits Council, the following amounts for the following radio and television ads: Date Description of Services Total Amount 4/29/2013 For approved TV /radio buy - May 2 -15, 2013 560 spots on cable TV in Bucks, Delaware, Johnstown /Altoona, Pittsburgh, as listed on attached buy plan - $286,810 140 spots on various radio stations, as listed on attached buy plan - $113,190 $400,000.00 5/6/2013 For approved Harrisburg radio buy - May 6 -15, 2013 224 spots (plus 240 online spots) on 4 Harrisburg radio stations. $33,120.00 5/24/2013 Cable TV issue Buy - $276,000 Radio Issue Buy - $164,000 Buy on the Rick Smith Show - $5,000 Buy on the Union Edge Radio Show - $5,000 $450,000.00 6/6/2013 Production expenses for three (3) television and three (3) radio ads: Reckless Scheme Fiscal Conservative United f=ood and Commercial 1 -leers Local 1776, 15 -003L Page Daughter Studio production and editing of all six (6) ads, including preparation of files for distribution to stations: Total of eight (8) full days @ $2160/day (includes 8% sales tax) - $17,280 Total expenses for all six (6) ads, including casting costs (young girl) payroll taxes and AFTRA health & welfare costs - $7,760.00 Purchase of rights - managed video clip for TV broadcast/cable use - $2,530 Additional charge for same clip for website use - $550 Purchase of royalty -free photographs for TV ads - $1,350 $29,470.00 6117- 3012013 Lehigh Valley Television - WFMZ June 17 -30, 2013 Week of June 17, 2013 - $4,800.00 Week of June 24, 2013 - $3,600.00 $9,700.00 6123 - 2712013 Harrisburg Television - WHTM (ABC 27) June 23 -27, 2013 $18,500.00 6123- 2712013 Harrisburg Radio - Additional Buy - Final June 23 -27, 2013 WNNK - $6,990 WRVV - $4,370 WHP - $4,370 WRBT - $6,360 $22,090.00 Total Cost of Radio & TV ads in 2013 $962,880.00 a. PA Wine and Spirits Council incurred expenses totaling $962,880.00 for radio and television ads that were prepared and airedlb road casted by Strategic Communications. All of the expenses identified above were publicly disclosed by UFCW Local 1776 within its LM -2 filings with the federal government. 33. As noted above, Strategic Communications produced three (3) television ads, on behalf of the UFCW PA Wine and Spirits Council. a. Specifically, television advertisements were identified as follows: "Daughter" Strategic Communications created and published a thirty (30) second video which was aired both on the internet, as well as television /radio stations, which was identified by Strategic Communications as "Daughter." The thirty (30) second video depicts a young female discussing how liquor privatization resulted in the death of her father, and the impact [that] an individual driving under the influence had upon her life. United Food and Commercial V kers Local 1776, 15 -003L Page 1. At the conclusion of the video clip, a voice states "...tell your State Senator to say `NO' to liquor privatization." 2. Appearing in text at the conclusion of the video are the words: "Paid For By UFCW PA Wine & Spirits Council." 3. At the time "Daughter" was aired /broadcasted, HB 790 was pending before the Pennsylvania Senate. b. "Fiscal Conservative" Strategic Communications published and created a thirty (30) second advertisement identified as "Fiscal Conservative" which Evarious pictures of political figures, and makes reference to efforts by then Governor Corbett to engage and further promote liquor privatization. 1. At the conclusion of the "Fiscal Conservative" video clip, a voice states "...tell your State Senator to say no to Governor Corbett's radical liquor privatization scheme." 2. Appearing in text at the conclusion of the video are the words "Paid For by UFCW PA Wine & Spirits Council." 3. At the time "Fiscal Conservative" was airedlb road casted, HB 790 was pending before the Pennsylvania Senate. 34. The expenses incurred by UFCW Local 1776 for the radio and television rod uction /airtime /b road cast, etc., coordinated /developed by Strategic Communica- tions for the production /airing /broadcasting of "Daughter" and "Fiscal Conservative," was an effort to inform the general public about the possible effects of pending legislation, specifically HB 790 (commonly referred to as the "Liquor Privatization Bill") and directing the public audience to °...tell your State Senator to say 'no"' to liquor privatization. 35. The Division of Campaign Finance and Lobbying Disclosure for the Department of State as of December 14, 2016, found that reports filed by UFCW Local 1776 for the second (2 "d) quarter of 2013, failed to report expenses paid by UFCW Local 1776 to Strategic Communications for the second quarter of 2013. Again, UFCW Local 1776 disclosed these expenses in publicly available federal filings, but did not disclose them in the state filings. 36. In or around April 2014, the Pennsylvania General Assembly revisited the concept of liquor privatization. 37. In or around April 2014, Strategic Communications prepared another radio and television ad for the UFCW PA Wine and Spirits Council concerning liquor privatization, and worked with the UFCW Local 1776 on that project. a. "Greed Kills" Strategic Communications created and published a one (1) minute video designed to promote anti -- privatization which contains a one 1 minute video clip of two women discussing the perceived dangers of liquor privatization. 1. Prior to the conclusion of the video clip, a voice states "...tell your State Senator and State Representative to say no to liquor privatization." 2. At the conclusion of the video, the following text appears at the bottom of the screen: "This Message Brought To You By The UFCW PA Wine And Spirits Council." United Food and Commercial -leers Local 1776, 15 -003L age 3. At the time "Greed Kills" was aired /broadcasted, HB 790 was an active bill pending before the Pennsylvania General Assembly. 39. The expenses incurred by UFCW Local 1776 for the radio and television production /airtime /broadcast, etc., coordinated /developed by Strategic Communica- tions for the prod uctionlairing /broadcasting of "Greed Kills' was an effort to inform the public of pending legislation, specifically HB 790 (otherwise known as the Liquor Privatization Bill) and to "...tell your State Senator and State Representative to say no to liquor privatization." 40. During April through May 2014, Strategic Communications submitted invoices totaling $300,000.00 to UFCW Local 1776 for the following radio and television ads: 4/22/2014 For approved TV /radio buy - April -May 2014 225 spots on cable TV in Philadelphia, Johnstown /Altoona and Pittsburgh 102 spots on Harrisburg radio stations 714 spots on the Radio PA network, including KYW and KDKA $300,000.00 Total cost of Radio & TV ads in 2014 $300,000 .00 a. UFCW Local 1776 made payment to Strategic Communications on behalf of PA Wine and Spirits Council, of which it is a part. 41. A search of the Division of Campaign Finance and Lobbying Disclosure for the Department of State as of December 14, 2016, found that reports filed by UFCW Local 1776 for the second (2nd) quarter of 2014 fail to report expenses paid by UFCW Local 1776 to Strategic Communications for the costs specific to indirect communication, totaling $300,000.00 for the second quarter of 2014. Again, UFCW Local 1776 disclosed these expenses in publicly available federal filings, but did not disclose them in the state filings. THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT UFCW LOCAL 1776 FAILED TO IDENTIFY LOBBYISTSILOBBYING FIRMS ACTING ON ITS BEHALF FOR THE 2013 AND 2014 CALENDAR YEARS. 42_ In accordance with Lobbying Regulation § 51.8. Amended filings, "[w]hen there is a change. in information required for the registration statement under section 13A04(b)(3) of the act (relating to registration), an amended registration statement will be /filed with the Department within 14 days of the end of the year in which the change occurs." 51 Pa. Code § 51.8. 43. UFCW filed paper versions of quarterly expense reports beginning with the quarter ending September 30, 2013, which identified the lobbyists and/or lobbying firms [which] were lobbying for UFCW. 44. The Division of Campaign Finance & Lobbying Disclosure for the Department of State never recorded the lobbyists' /lobbying firms' affiliation with UFCW Local 1776 upon the electronic /web database for UFCW Local 1776, since an amended registration was never filed by UFCW Local 1776. a. UFCW Local 1776 otherwise made disclosure of its affiliation with lobbyists /[obbying firms who had engaged in lobbying on [its] behalf, within quarterly expense reports, albeit no amended registration was filed. United Food and Commercial', -leers Local 1776, 15 -003L Page b. Paper filings made by UFCW with the Pennsylvania Department of State are Edocuments and are available for review by the public during normal business hours. III. DISCUSSION: The allegations are that United Food and Commercial Workers Local 1776 (also referred to herein as "UFCW" and "UFCW Local 1776 "), in its capacity as a principal, violated Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05: (1) when a UFCW filed deficient and/or otherwise failed to file, under oath or affirmation, quarterly expense reports with the Pennsylvania Department of State ( "Department of State ") for calendar years 2013 and /or 2014, identifying the name(s) and registration number(s) of all lobbyists/lobbying firms (including but not limited to: Wendell Young, IV, Joseph (Joe) Conti, H. William DeWeese, and /or Shelly Communications) by whom, in exchange for economic consideration, lobbying was conducted on behalf of UFCW as a principal; and (2) when UFCW failed to accurately report total costs of all lobbying activity within quarterly expense reports filed for years 2013 and /or 2014, namely by failing to identify /report id to Strati is C monies pa ommunications, Wendell Young, IV, Joseph (Joe) Conti, H. William DeWeese, and /or Shelly Communications. The Lobbying Disclosure Law includes the following pertinent definitions: § 13A03. Definitions. "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. "Indirect communication." An effort, whether written, oral or by any, other medium, to encourage others, including the general public, to take action, the purpose or foreseeable effect of which is to directly influence legislative action or administrative action. (1) The term includes letter- writing campaigns, mailings, telephone banks, print and electronic media advertising, billboards, publications and educational campaigns on public issues. "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. "Principal." An individual, association, corporation, partnership, business trust or other entity: United Food and Commercial -keys Local 1776, 15 -003L Page (1) on whose behalf a lobbying firm or lobbyist engages in lobbying; or (2) that engages in lobbying on the principal's own behalf. 65 Pa.C.S. § 13A03. Section 13A05 of the Lobbying Disclosure Law, pertaining to expense reporting, provides in part as follows: § 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 prodded 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. (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 (a), (b)(1) -(2), (d). Section 13A05 of the Lobbying Disclosure Law requires a registered principal to file United Food and Commercial Rers Local 1776, 15 -003L Page with the Department of State either a quarterly expense report or a statement of failure to meet the reporting threshold for each quarter it has been registered as a princippal, byy no later than the 30 day after each quarterly reporting period has ended. 65 N. A. § 13A05(a), (d); 51 Pa. Code § 55.1(d). 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. For the registration period January 1, 2013, through December 31, 2014, UFCW Local 1776 renewed its principal registration with the Department of State on February 15, 2013. UFCW Local 1776 was required to include on its registration statement the name and permanent business address of each individual paid to lobby for it. 65 Pa.C.S. § 13A04(b)(1)(vii). To the extent such information changed, UFCW Local 1776 was required to amend its registration statement within 14 days after each change occurred. 65 Pa.C.S. § 13A04(d)(1). Similarly, UFCW Local 1776 was required to list all of its lobbyists in its quarterly expense reports. 65 Pa.C.S. § 13A05(b)(1). During the years in question, specificail 2013 and 2014, UFCW Local 1776 filed quarterly expense reports, summarized at Fact Finding 11, on which it disclosed lobbyists /lobbying firms engaged in lobbM on its behalf. Although the list of lobbyists /lobbying firms lobbying on behalf of U CW Local 1776 changed during thattime period, UFCW Local 1776 did not amend its registration statement to include all of the changes. Additionally, the second quarter 2013 and second quarter 2014 expense reports filed by UFCW Local 1776 did not disclose certain advertising - related expenses incurred in opposing liquor privatization legislation. From April through June 2013, UFCW Local 1776 paid to Strategic Communications Consultants, Inc. ( "Strategic Communications ") -- on behalf of the UFCW PA Wine and Spirits Council, which includes UFCW Local 1776- -the total amount of $962,880.00 for radio and television ads aired /broadcasted while House Bill 790 ( "HB 790), otherwise Known as the "Liquor Privatization Bill," was pending before the Pennsylvania Senate. Each of these ads urged the listener to tell his/her State Senator to say "no" to liquor privatization. Appearing in text at the conclusion of the video ads were the words: "Paid For By UFCW PA Wine & Spirits Council. UFCW Local 1776 incurred the expenses for these ads in an effort to inform the general public about the possible effects of HB 790 and to direct members of the public audience to tell their State Senators to say "no" to liquor privatization. All of these expenses were publicly disclosed by UFCW Local 1776 within certain filings with the federal government but were not disclosed in the quarterly expense report filed by UFCW Local 1776 pursuant to the Lobbying Disclosure Law for the second quarter of 2013. During April through May 2014, Strategic Communications submitted invoices totaling an additional $300,000.00 to UFCW Local 1776 for the production /airing/ broadcasting of another radio and television ad which included a voice stating "...tell your State Senator and State Representative to say no to liquor privatization." At the conclusion of the video ad, the following text appeared at the bottom of the screen: "This Message Brought To You By The UFCW PA Wine And Spirits Council." At the time this ad was airedlbroadcasted, HB 790 was an active bill pending before the Pennsylvania General Assembly. UFCW Local 1776 made payment to Strategic Communications on behalf of PA Wine and Spirits Council, of which UFCW Local 1776 is a part. UFCW Local 1776 incurred the expenses for this ad in an effort to inform the public of HB 790 and to direct members of the public to tell their State Senators and State Representatives to say "no" to liquor privatization. As of December 14, 2016, the quarterly expense report(s) filed by United Food and Commercial, rkers Local 1776, 15 -003L age UFCW Local 1776 for the second quarter of 2014 failed to report expenses paid by UFCW Local 1776 to Strategic Communications for the aforesaid indirect communication costs totaling $300,000.00. Again; UFCW Local 1776 disclosed these expenses in publicly available federal filings, but did not disclose them in the state filings. 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: The Investigative, Division will recommend the following in relation to the above allegations: a. As a Principal registered with the Pennsylvania Department of State pursuant [to] the Pennsylvania Lobbying Disclosure Law (65 Pa.C.S. § 13A01 et seq.), UFCW neglected to include total costs paid to Strategic Communications during the Second (2nd) Quarter of 2013 and the Second (2nd) Quarter of 2014 in its Lobbying Disclosure submissions, as required by 13A05(a) and 13A05(b)(2)(iii) of the Lobbying Disclosure Law. As a Principal registered with the Pennsylvania Department of State pursuant ral the Pennsyylvania Lobbying Disclosure (65 Pa.C.S. § 13A01 et seq.), UFCW did not violate 13A05(a) and/or 13A05(b)(1) of the Lobbying Disclosure Law by failing to file amended lobbying registrations identifying the name(s) and registration number(s) of alll lobbyists/lobbying firms which engaged in lobbying on behalf of UFCW, in that disclosure of the required information (i.e. lobbyist/lobbying firm identification was made within quarterly expense reports filed in paper format with the Pennsylvania Department of State. UFCW's failure to include the information in its Lobbying Disclosure filings pursuant to 65 Pa.C.S. 13A05(a) and 13A05(b)(2 ge iii), as outlined in paragraph 3(a) above, [is] deemed to negligent in nature. Per the Consent Agreement of the parties, and upon acceptance of the Consent Agreement by the Commission, UFCW Local 1776 agrees to make payment as indicated below: a. UFCW agrees to make payment in settlement of this matter in the amount of $12,700.00, to be made payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. United Food and Commercial } Rers Local 1776,15-003L 7a—g—eTF- b. UFCW agrees to make payment of administrative costs in the amount of $2,500.00, to be made payable to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. 6. Upon acceptance of this Consent Agreement by the Commission and in consideration of the payments identified in Paragraph 5, supra, the Investigative Division considers its investigation of the allegations in the December 29, 2016 Notice of Alleged Noncompliance Investigative Complaint/Findintr Report (the "Notice ") closed and will recommend that the State Ethics Commission take no further action relating to any allegations in the Notice, will impose no further sanction, and will make no recommendation to any law enforcement or other authority to act in this matter. Such, however, does not prohibit the Commission from initiating appropriate enforcement actions in the event of UFCW's failure to comply with this Consent Agreement or the Commission's order. To the extent it has not already done so, UFCW agrees to file with the Pennsylvania Department of State, an amended quarterly expense re ort for the Second (2nd) Quarter of 2013 and the Second (2nd) Quarter of 2014, identifying total costs of all lobbying efforts expended during the reporting period for expenses paid to Strategic Communications. Consent Agreement, at 1 -3. In considering the Consent Agreement and Stipulation of Findings, we determine that the Consent Agreement of the parties sets forth a proper disposition for this case. Therefore, we hold as follows: 1. As a principal registered with the Department of State pursuant to the Lobbying Disclosure Law, UFCW neglected to include total costs paid to Strategic Communications during the second (2nd) quarter of 201 and the second (2nd) quarter of 2014 in its lobbying disclosure submissions, as required by Sections 13A05(a) and 13A05(b)(2 (iii) of the Lobbying Disclosure Law, 65 Pa.C.S. §§ 13A0055 a) and 13A05(b)(2)(iii). 2. UFCW's failure to include the information in its lobbying disclosure filings pursuant to 65 Pa.C.S. §§ 13A05(a) and 13A05(b)((?)(iii)), as outlined in paragraph 1 above, is deemed to be negligent in nature. 3. UFCW did not violate Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, as to the remaining allegation of the Notice of Alleged Noncompliance Investigative Complaint/Findings Report. Per the Consent Agreement of the parties, UFCW is directed to make payment in the amount of $12,700.00, to be made payable to the Commonwealth of Pennsylvania and forwarded to this Commission by no later than the thirtieth (30th) day after the mailing date of this adjudication and Order. United Food and Commercial ! -kers Local 1776, 15 -003L age Per the Consent Agreement of the parties, UFCW is further directed to make payment of administrative costs in the amount of $2,500.00, to be made ayable to the Pennsylvania State Ethics Commission by no later than the thirtieth (30tt') day after the mailing date of this adjudication and Order. Finally, to the extent it has not already done so, UFCW is directed to file with the Department of State an amended quarterly expense report for the second (2nd) quarter of 2013 and an amended quarterly expense report for the second (2nd) quarter of 2014, identifying total costs of all lobbying efforts expended during the reporting period for expenses paid to Strategic Communications. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: As a principal registered with the Pennsylvania De artment of State pursuant to Pennsylvania's lobbying disclosure law ( "Lobbying Disclosure Law "), 65 Pa.C.S. 13A01 et seq., United Food and Commercial Workers Local 1776 ( °UFCW'l neglected to Enclude total costs paid to Strategic Communications Consultants, Inc. during the second (2nd) quarter of 2013 and the second (2nd) quarter of 2014 in its lobbying disclosure submissions, as required by Sections 13A05 (a) and 13A05 2 iii of the Lobbying Disclosure Law, 65 Pa.C.S. §§ 13A0 (a) and 13A05b�2�iii. 2. UFCW's failure to include the information in its lobbying disclosure filings pursuant to 65 Pa.C.S. §§ 13A05(a) and 13A05(b)(2)(iii), as outlined in paragraph 1 above, is deemed to be negligent in nature. 3. UFCW did not violate Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, as to the remaining allegation of the Notice of Alleged Noncompliance Investigative Complaint/Findings Report. In Re: United Food and Commercial File Docket: 15 --003L Workers Local 1776, Date Decided: 6/7117 Respondent Date Mailed: 6116117 ORDER NO. 3 -L As a principal registered with the Pennsylvania Department of State ( "Department of State ") pursuant to Pennsylvania's lobbying disclosure law ( "Lobbying Disclosure Law "), 65 Pa.C.S. § 13A01 et seg., United Food and Commercial Workers Local 1776 ( "UFCW ") neglected toinclude total costs aid to Strategic Communications Consultants, Inc. during the second (2nd) quarter of 2013 and the second (2nd) quarter of 2014 in its lobbying disclosure submissions, as required b Sections 13A05 a and 13A05(b)(2)(iii) of the Lobbying Disclosure Law, 65 N.C.S. §§ 13A05 a� and 13A05(b)( )(iii). 2. UFCW's failure to include the information in its lobbying disclosure filings pursuant to 65 Pa.C.S. §§ 13A05(a) and 13A05(b)(2)(iii), as outlined in paragraph 1 above, is deemed to be negligent in nature. 3. UFCW did not violate Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, as to the remaining allegation of the Notice of Alleged Noncompliance Investigative Complaint/Findings Report. 4. Per the Consent Agreement of the parties, UFCW is directed to make payment in the amount of $12,700.00, to be made payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission by no later than the thirtieth (30th) day after the mailing date of this Order. Per the Consent Agreement of the parties, UFCW is further directed to make payment of administrative costs in the amount of $2,500.00, to be made payable to the Pennsylvania State Ethics Commission by no later than the thirtieth (3011) day after the mailing date of this Order. To the extent it has not already done so, UFCW is directed to file with the Department of State an amended quarterly expense report for the second (2nd} quarter of 2013 and an amended quarterly expense report for the second (2nd) quarter of 2014, identifying total costs of all lobbying efforts expended during the reporting period for expenses paid to Strategic Communications. Compliance with paragraphs 4, 5, and 6 of this Order will result in the closing of this case with no further action by this Commission. a. Noncompliance will result in the institution of an order enforcement action. BY THE COMMISSION, \ • NEW 1.1111 FOR