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HomeMy WebLinkAbout00-1002 HoganOPINION OF THE COMMISSION Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Julius Uehlein Louis W. Fryman John J. Bolger Frank M. Brown Susan Mosites Bicket DATE DECIDED: 2/1/2000 DATE MAILED: 2/11/2000 Mary Lou Hogan Executive Secretary Malt Beverage Distributors Association of PA 100 South Broad Street, Suite 1905 Philadelphia, PA 19110 -1023 00 -1002 Re: Reporting, Expense Report, "Total" Categories, "Single Aggregate Good Faith Estimate of Total Amount Spent for Personnel and Office Expenses Related to Lobbying," Grand Total, Lobbyist's Compensation. Dear Ms. Hogan: This Opinion is issued in response to your advisory request received on November 10, 1999. I. ISSUE: For reporting under the Lobbying Disclosure Act, whether the total compensation paid to a lobbyist should be included within the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" at block 13 of the Expense Report, and the proportionate amount of that compensation which was devoted to "direct communication "should also be reported as within the "single aggregate good faith estimate of the total amount spent for direct communication" at block 14, or whether block 14 should reflect only the "direct communication expenditures" not already reported at block 13. II. FACTUAL BASIS FOR DETERMINATION: Hogan, 00 -1002 Page 2 As Executive Secretary of the Malt Beverage Distributors Association of Pennsylvania, you request an advisory under the Lobbying Disclosure Act (Act) concerning the proper way to report a lobbyist's compensation on the Expense Report. In particular, you ask whether the total compensation paid to a lobbyist should be included within the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" at block 13 of the Expense Report, and the proportionate amount of that compensation which was devoted to "direct communication "should also be reported as within the "single aggregate good faith estimate of the total amount spent for direct communication" at block 14, or whether block 14 should reflect only the "direct communication expenditures" not already reported at block 13. By letter dated January 7, 2000, you were notified of the date, time, and location of the public meeting at which your request for an Opinion was to be considered. III. DISCUSSION: It is initially noted that pursuant to Section 1308(c) of the Act in conjunction with Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. § §1107(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. The Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted, in issuing advisories. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. In order to decide the issues which you have raised, this Commission must review the pertinent definitions and substantive provisions of the Act and related Regulations. Section 1303 of the Act defines "lobbying" as follows: "Lobbying." An effort to influence legislative action or administrative action. The term includes: (1) providing any gift, entertainment, meal, transportation or lodging to a State official or employee for the purpose of advancing the interest of the lobbyist or principal; and (2) direct or indirect communication. 65 Pa.C.S. §1303. The key terms "legislative action," "administrative action," "direct communication," and "indirect communication" that are within the definition of "lobbying" are themselves defined as follows: "Legislative action." An action taken by a State official or employee involving the preparation, research, drafting, introduction, consideration, modification, amendment, approval, passage, enactment, tabling, postponement, defeat or rejection of legislation; legislative motions; overriding or sustaining a veto by the Governor; or confirmation of appointments by the Governor or of appointments to public boards or commissions by a member of the General Assembly. "Administrative action." Any of the following: (1) An agency's: (i) proposal, consideration, promulgation or Hogan, 00 -1002 Page 3 65 Pa.C.S. §1303. The terms "principal" and "lobbyist" are defined in the statute as follows: "Principal." Any individual, firm, association, corporation, partnership, business trust or business entity: (1) on whose behalf a lobbyist influences or attempts to influence an administrative action or a legislative action; or (2) that engages in lobbying on the principal's own behalf. Id. rescission of a regulation; (ii) development or modification of a guideline or a statement of policy; or (iii) approval or rejection of a regulation. (2) The review, revision, approval or disapproval of a regulation under the act of June 25, 1982 (P.L.633, No.181), known as the Regulatory Review Act. (3) The Governor's approval or veto of legislation. (4) The nomination or appointment of an individual as an officer or employee of the Commonwealth. (5) The proposal, consideration, promulgation or rescission of an executive order. "Direct communication." An effort, whether written, oral or by any other medium, made by a lobbyist or principal, directed to a State official or employee, the purpose or foreseeable effect of which is to influence legislative action or administrative action. "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. The term includes letter- writing campaigns, mailings, telephone banks, print and electronic media advertising, billboards, publications and educational campaigns on public issues. The term does not include regularly published periodic newsletters primarily designed for and distributed to members of a bona fide association or charitable or fraternal nonprofit corporation. "Lobbyist." Any individual, firm, association, corporation, partnership, business trust or business entity that engages in lobbying on behalf of a principal for economic consideration. The term includes an attorney who engages in lobbying. Hogan, 00 -1002 Page 4 As for the substantive provisions to be reviewed, the Act provides as follows: §1305. Reporting (b) Content. -- (2) Expense reports must contain the following categories: (i) A single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying. This subparagraph includes salaries and other forms of compensation, benefits, vehicle allowances, bonuses and reimbursable expenses for those involved in lobbying. If compensation is to be reported by or for an individual or entity whose lobbying is incidental to regular employment, it shall be sufficient to report a good faith prorated estimate based on the value of the time devoted to lobbying. Reportable personnel costs include costs for lobbying staff, research and monitoring staff, consultants, lawyers, lobbyists, publications and public relations staff, technical staff and clerical and administrative support staff who engage in lobbying but are exempt from reporting under section 1306(6) (relating to exemption from registration and reporting). This subparagraph includes costs for offices, equipment and supplies utilized for lobbying. (ii) A single aggregate good faith estimate of the total amount spent for direct communication. 65 Pa.C.S. §1305(b)(2)(i), (ii) (Emphasis added). The following provisions from the Regulations are also pertinent: §35.1. Quarterly expense reports. (g) A quarterly expense report of a principal required to be registered under the act shall include the following information: (4) A single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying, to be calculated as prescribed by subsection (i). (5) A single aggregate good faith estimate of the total amount spent for direct communication. In calculating this good faith estimate, any reasonable accounting method may be used. (6) The total costs for gifts, entertainment, meals, transportation, lodging and receptions, given to or provided to State officials or employes or their immediate families, except that any cost under this paragraph which is of a value not exceeding $10 need not be reported under section 1305(b)(3) of the act. If the same or similar gift, hospitality or transportation or lodging is provided to more than one State official or employe, the aggregate economic value of which is $10 or more, such value shall be included in the Hogan, 00 -1002 Page 5 appropriate totals reported under section 1305(b)(2) of the act. (7) A single aggregate good faith estimate of the total amount spent for indirect communication. In calculating this good faith estimate, any reasonable accounting method may be used. (i) The single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying shall include salaries and other forms of compensation, benefits, vehicle allowances, bonuses and reimbursable expenses for those involved in lobbying, and costs for offices, equipment and supplies utilized for lobbying. (1) In calculating the single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying, any reasonable accounting method may be used. (2) Reportable personnel costs include costs for lobbying staff, research and monitoring staff, consultants, lawyers, lobbyists, publications and public relations staff, and technical staff, as well as clerical and administrative support staff who engage in lobbying but who are exempt from reporting under section 1306(6) of the act (relating to exemption from registration and reporting). (3) Compensation, benefits and expenses of any nature shall be included if paid in furtherance of lobbying. (4) If compensation is to be reported by or for an individual or entity whose lobbying is incidental to regular employment, it shall be sufficient to report a good faith prorated estimate based on the value of the time devoted to lobbying. The time devoted to lobbying shall include: (i) Research time spent in preparation for lobbying. (ii) Time spent in direct communication or indirect communication. (iii) Other time consumed in furtherance of lobbying for which the individual or entity is compensated or reimbursed. (5) Office expenses shall include, but not be limited to: the rental value of the physical facilities of an office during the period of time used for lobbying, together with additional charges for utilities, telephone usage, fax, insurance, services, furnishings, computers, printers, systems, copiers, fax machines, office supplies, postage and other costs related to the physical facilities and operation of an office during the period of time used for lobbying. 51 Pa. Code § §35.1(g)(4) -(7); (i)(1) -(5) (Emphasis added). In applying the above provisions of law to the facts which you have submitted, it is clear under the Act and the Regulations that the total compensation paid to a lobbyist would be included within the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" at block 13 of the Expense Report. The language above to which we have added emphasis necessitates that conclusion. In calculating the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying," any compensation paid by the principal to a contract lobbyist is added in its entirety. Roth, Opinion 99 -1006. The Hogan, 00 -1002 Page 6 principal must also include any other expenditures related to lobbying, such as for its own in -house efforts. We find that block 13, that is, the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying," is actually a "grand total" of all lobbying and lobbying - related expenditures. See, Frankel, Opinion 99- -1027. Although varying interpretations could be argued, it is this one which makes the most sense and which gives the most meaning to the category. First, given the broad description of this category in the Act and Regulations, any expense of lobbying would qualify as a personnel or office expense. Second, given that there would inherently be at least some overlap between this category and the other three "total" categories of reporting required by Section 1305(b)(2) of the Act, our interpretation that this category is a "grand total" gives the most certainty and meaning to it. Registrants will not be put in the difficult position of trying to determine which expenses to include and which not to include, and the public will be given meaningful information as the result of a consistent approach. Having determined that the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" reported at block 13 of the Expense Report is a grand total of all lobbying and lobbying - related expenditures, we further conclude that the proportionate amount of the lobbyist's compensation which was devoted to "direct communication" should also be reported as within the "single aggregate good faith estimate of the total amount spent for direct communication" at block 14. As a grand total, the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" includes - -but is not limited to - -the amounts "broken out" in blocks 14, 15, and 16 of the expense form, which are the other three categories of "total" reporting required by Section 1305(b)(2). That is not to say that the amounts reported in blocks 14, 15, and 16 will necessarily total the amount reported in block 13. To the contrary, block 13 will typically include some expenditures that need not be broken out into the other categories. But the amounts reported at blocks 14, 15, and 16 should be wholly included within the amount reported at block 13. Based upon the above analysis, we hold that the total compensation paid to lobbyists should be included within the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" at block 13 of the Expense Report, and that the proportionate amounts of such compensation which were devoted to "direct communication," "gifts, entertainment, meals, transportation, lodging and receptions given or provided to State officials or employees or their immediate families," or "indirect communication" should also be included within the appropriate totals for those categories at blocks 14, 15, and 16 of the Expense Report. The propriety of the proposed conduct has only been addressed under the Act and derivatively the Ethics Act to the extent applicable; the applicability of any other statute, code, ordinance, regulation or other code of conduct has not been considered in that they do not involve an interpretation of the Act. IV. CONCLUSION: For expense reporting under the Lobbying Disclosure Act, the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" required by Section 1305(b)(2) of the Act is a "grand total" of all lobbying and lobbying - related expenditures. The total compensation paid to lobbyists should be included within the "single aggregate good faith estimate of the total amount spent for personnel and office expenses related to lobbying" at block 13 of the Expense Report, and the proportionate amounts of such compensation which were devoted to "direct communication," "gifts, entertainment, meals, transportation, lodging and receptions given or provided to State officials or employees or their immediate families," or to "indirect communication" should also be included within the appropriate totals for those categories at blocks 14, 15, and 16 of the Expense Report. Hogan, 00 -1002 Page 7 Pursuant to Section 1308 of the Act, a requestor who truthfully discloses all material facts in a request for an advisory and who acts in good faith based upon a written opinion of the Commission issued to the requestor shall not be held liable for a violation of the Act. This Opinion is a public record and will be made available as such. Finally, a party may request this Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §39.1. By the Commission, Daneen E. Reese Chair