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HomeMy WebLinkAbout19-1001 O'DonnellPHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE: 717-787-0806 TOLL FREE: 1­800-932-0936 FINANCE BUILDING WEBSITE: www,ethigs.pa.gov 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 OPINION OF THE COMMISSION Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Melanie DePalma Monique Myatt Galloway Michael A. Schwartz Shelley Y. Simms DATE DECIDED: 517/19 DATE MAILED: 5/23/19 19-1001 To the Requester: Robert W. O'Donnell, Esquire O'Donnell Stacey This Opinion is issued in response to your advisory request letter dated January 29, 2019, and your email of February 4, 2019. 1&3­1111 Whether a charter school formed as a Pennsylvania non-profit cor oration would be nv exempt from the registration and reporti requirements of Pennsy`lvania's lobbying disclosure law ("Lobbying Disclosure La\i�, 65 Pa.C.S. 5 13A0I et s., if: (1) its employees who engage in lobbying activities would be actin in their official capacities, and (2) its expenses for non-exempt lobbying purposes would not exceed $3,000 in any reporting period; and if its expenditures for non-exempt lobbying purposes would exceed $ in a reporting period, whether expenses that would otherwise be exempt would have to be included in expense reports as subject to disclosure. 111. FACTUAL BASIS FOR DETERMINATION: You have been authorized by the Board of Directors/Board of Trustees of Mastery Charter High School ("MCHS") to request an advisory opinion on its behalf. You have submitted facts that may be fairly summarized as follows. MCHS is a Pennsylvania non-profit corporation and a charter school organized and operating under the Pennsylvania Charter School Law, 24 P.S. § 17-1701-Ae?secl. Citing Eiben Opinion 04-002, you acknowledge that MCHS is a'subdivision as :political subdivisioas that term li_dg�ed in the Public Official and Employee Ethics Act Ethics Act"), 65 Pa.C.S. § 1102. MCHS intends to advocate for certain public policies, and in that effort, it will communicate directly and indirectly with public officials in Pennsylvania. Employees of MCHS will conduct that communication as part of their official duties. MCHS might also retain independent contractors to aid in that communication. O'Donnell 19-1001 mwym:�Niq Page 2 You pose the following questions: (1) Whether MCHS would be exempt from the registration and reporting requirements of the Lobbying Disclosure Law as a principal, lobbyist or lobbying firm as long as its employees would be acting in their official capacities; (2) Whether MCHS's exemption would be unaffected unless its expenses for non-exempt lobbying purposes would exceed $3,000 in a reporting period; and (3) In the event that the expenditures for non-exempt lobbying purposes would exceed $3,000 in a reporting period, whether the expenses incurred by MCHS which would otherwise be exempt would have to be included as expenditures subject to disclosure. By letter dated March 26, 2019, you were notified of the date, time and location of the public meeting at which your request would be considered. DISCUSSION: Itisinitial noted that pursuant to Section 13A08(a oftheLobbyin Disclosure Law, 65Pa,C.S. M08(a in con unction with Sections 1104(10) and 11 ?11)oftheEthics Act, 65 Pa. N. §§ 11 � '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 � ly disclosed all of the material facts. MCHS is both a corporation and a "political subdivision" as the Ethics Act defines thatterm.1 See, Eiben,supra. Given that a corporation or rolitical subdivision can be a ;,principal" as tF6 T7qbb�ing D 7isclosure Law Lobbying Disclosure Regulations define the MCHS would be considered a "principal" to the extent it would ent its own behalf and/or lobbying firm(s) or lobbyist(s) would engage in lobbying on its behalf: § 13A03. Definitions. "Prin ciph�l." An individual, association, corporation, partnership, business trust or other entity: (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. Definitions. Political subdivision —The term as defined in section 1102 of the Ethics Act (relating -fo--de-Fin-itions .— 1 The Ethics Act defines the term "political subdivision" as "[a]n county, oily,borough, incorporated town, township, school district, vocational school count institution district, any authority, entity or body organized by the aforementioned. 65 Pa.C.�. § 1 1K. O'Donnell 19-1001 airy 23, 219 Page 3 Principal— (i) An individual, association, corporation, partnership, business trust or other entity, incluTing a Commonwealth aaencv or ool - itical subdivision on-w-fiose behal a firm 11 or lobbyi,st —en g ages in lobbying, or that en es in o an o ehalt. (H) Membership in an association alone is not sufficient to make an association member a principal. 51 Pa. Code § 51.1 (Emphasis added).2 A pdriincipal is subject to the registration and reporting requirements of Sections 13A04 and n 5A05 of the Lobbying Disclosure Law unless it qualifies for exemption pursuant to Section 13A06 of th=bbying Disclosure Law. 65 Pa.C.S. §§ 13A04,13AO5, 13AO6. Section 13AO6 of the Lobbying Disclosure Law provides, in pertinent part: § 13A06. Exemption from registration and reporting. The following persons and activities shall be exempt from registration under section 13A04 relating to registration) and reporting under section 13A05 (relating to reporting): (6) Except as required under section 13A05(d),3 a principal whose total expenses for lobbying purposes do not exceed [$3,000) during any reporting period. (9) An elected or appointed official of a political subdivision who is acting in an official capacity for the political subdivision. 2 See Commission held, inter alia, that the definition of the e 5 _ n8 Is w, 65 Pa.C.S. fSKOSJincludes a governmental entity nc t rM y on whose in lobbyingor t , at engages in lobbying on its own behalf. The CHS wouldengage in o bying on behalf of others for economic basis in the submitted facts to conclude that MCHS would be a "lobbying 13A03 (definitions of "lobbying firm" and "lobbyist"). 3 Section 13A95(d) of the Lobbying Disclosure Law provides: (d) Thresholds for reporting, --An expense report required under this section shall be filed electronically using the computerized filing system developed by the department that is consistent with the purpose of this chapter when total expenses for lobbying exceed [$3,00 registered ncipal in a reporting period. In a reporting period in which Ic total expenses are [�3, 000] or less, a statement to that effect shall be filed electronically using the e computerized filing system developed by the department that is consistent with the purpose of this chapter. 65 Pa.C,S. § 13AO5(d). O'Donnell,, 19-1001 May 23, 2 19 Page 4 65 Pa.C.S. § 13A016(6),(9). The Lobbying Disclosure Regulations further provide: § 57.1. General Rule. (a) Unless I specified 'irL-§ 5.7.2 (relating to qualifications for exemption), a person, principal, lobo�ing firm or lobbyist that qualifies for any exemption under § 5) .2 will not be required to register or report with respect to any activity covered by the exemption. However, if an individual does not qualify for an exemption in § 57.2(a), then the activity described in the exemption shall be included within the reports otherwise required by the act. (b) Upon losing exempt status, a person, principal, lobbying firm or I=lobbyist is immediately subject to the registration and reporting requirements of the act. § 57.2. Qualifications for exemption. (a) Exemption from registration. The following persons and activities shall be exempt from re?istration under section 13A04 of the act relating to registration) and reporting under section 13A05 of act (relating to reporting): (6) The exemption in section 13A06(6) of the act is limited to a principal whose total eqenses for lobbying purposes do not exceed [$3,000 during any reporting period. (7) The exemptions in section 13AO6(7�, M3 (9� and (10) of the act (as referenced in section 1 A 8)) exclude Commonwealth aovernmental entities and -RoEtFca-1 subdivisions as well as eiectea oniciais, appoinieg officials and eMDlovees of the ent ties or subdivisions i rNITIN I IN-INTOIL9 IF -I RO-YAWA-Irs OW-OTSUWATUre-16 91IFEARN R&KOIROW W, perlormecl b the qovernmentai entities or Dv inei otticials/employees in an official capacity. Specifically, these sections exempt Dbb lying by a governmental entityc entity on its own behalf and lobbying by an official/employee of the entityacting in an official capacity so that neither the oicial/emolovee nor the ciovernmLnTaT—entit would be reguFr—ed 't-0- register ar report as to those activities under the act. I he governmental entity would be required to register and report as a princial if other lobbyists or lobbying firms would engage in lobbying on behalf of the governmental entity and he total expenditures for those lobbying activities would not bring the governmenTa7entity within the exemption in section 13A06(6) of the act. 51 Pa. Code §§ 57.1 (a)-(b); 57.2(a)(6)-(7)(Emphasis added). O'Donnell, 19-1001 May 23, 2019 Page 5 In Staffieri, 0 nion 07-1002, this Commission held that lobbying by the Southeast—er—n-P—ennsyfviania Transportation Authority ("SEPTA") on its own behalf and lobbying by SEPTA employees acting in an official capacity on behalf of SEPTA would be exempt from the registration and reporting requirements of the Lobbyin s�Disclosure Law and would not necessitate registration or reporting SEPTA or y such SEPTA employees, However, this Commission further held that by r lobbyists other than SEPTA officials/employees would engage in lobbyinq on behalf of SEPTA, their exempt, and SE PTA � bb n activities d 'nol be exem pt, and � EPTA would be required to register and s e report total with e ct to those non- exempt lobbvincl activities assuming its lobbying yi tivi s would as aprincipal t r X� ses f0 m 0 y ng ac JvJ Jes wo� expenses non exempt uld not bring it within the exemption at 65 Pa C S or 066) See also, Confidential fjd tial 0 -10 -7. 3A ee on en �Jlnion, 07 01, at 6 In applying the aforesaid statutory and regulatory provisions and Commission precedent to the submitted facts and questions posed, you are advised as follows: LobbyingH itself or by MCHS officials/employees acting in their official x capacities wouldeMeC MCHS itself the registration and. reporting requirements of the LoNying Disclosure Law. If MCHS's expenses for lobbying by person(s) other than itself or its own officials/employees acting in their official capacities would exceed $3,000 in any reportin .9 period, MCHS would lose exempt status and immediately would be subject to the registration and reporting requirements of the Lobbying Disclosure Law. 51 Pa. Code § 57.1(b). As a registered principal, MCHS would be required to electronically file with the PennsylvaniaDepartment of State either a quarter expense report or a statement of failure to meet the reportinthreshold of Section 13Z,5(d) of the Lobbying Disclosure Law c (by checking the appropriate block on the quarterly expense report form) oreach quarter it r oth would be registered a principal, with such filings due by no later than the 3 day after each uarterly reporting period would end. 65 Pa,CS. § 13A05(a), (d); 51 Pa. Code § 5 5. 1 (d�. However, ex enses incurred by MCHS for the lobbying activities of MCHS itself or for MCHS acting in their official capacities would not have to be included as expenditures subject to disclosure pursuant to the Lobbying Disclosure Law. 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: Based upon the submitted facts, Mastery Charter Hi School ("MCHS"), which is both a Pennsylvania non-profit corporation and a charter school organized and operating under the Pennsylvania Charter School Law, 24 P.S. § 17-170f-A et seq., would be considered aii9principal" as that term is defined by Pennsylvania's lobbying '8c osure law 2 Lobbying Disclosure Law"), 65 Pa.C,S. § 13A03, and Lobbying Disclosure Regulations, Pa. Code § 51.1, to the extent it would engage in lobbyingon its own behalf and/or lobbying firm(s) or lobbyist(s) would engage in lobbying on its alf. Lobbyinq�.bt MCHS itself or by MCHS officials/employees acting in their official capacities e exempt from the registration an reporting requirements of the Lobbying would �g y Disclosure Law. If MCHS's expenses for lobbyin person(s) other than itself or its own officials/emNloyees acting in their official capacities would exceed $3,000 in any reportin .9 period, MCHS would lose exempt status and immediately would be subject to the registration and reporting requirements of the Lobbying Disclosure Law. As a registered principal, MCHS would be required to electronically file with the Pennsylvania Department o State either a quarterly expense report or a statement of O'Donnell 19-1001 Nfa—y 2T,-2b 19 Page 6 failure to meet the reporting threshold of Section 13A05(d) of the Lobbyin? Disclosure Law (by checking the appropriate block on the quarterly expense re ort form) or each quarter it would be registered as principal, with such filing due b no Plater than the 30til Zy after each uarterly reporting period would end. 65 Pa.C.S. � 13A05(a), (d); 51 Pa. Code § 55.1 (d� . However, expenses incurred by MCHS for the lobbying activities of MCHS itself or c for MCHS employees actinT, in their official capacities would not have to be included as expenditures subject to disclosure pursuant to the Lobbying Disclosure Law. The request for an advisory has only been addressed under the Lobbying Disclosure Law and, derivatively, the Public Official and Employee Ethics Act, 65 Pa.C.S. 15 1101 et seg., to the extent applicable. _ Pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), a requesterwho truthfully discloses all material facts in a requestfor 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 an regulation, statutory enactment, or ruling precludes further reliance upon this apinion. This letter is a public record and will be made available as such. By the Commission, Ni AhKaPC&o1afella Chair