HomeMy WebLinkAbout99-1008 PowellOPINION 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: 8/31/99
DATE MAILED: 9/14/99
99 -1008
Dennis M. Powell, President
Massey Powell Enterprises, Inc.
2622 Butler Pike
Plymouth Meeting, PA 19462 -1121
Re: Lobbying, Lobbyist, Corporation, Registration, Exemption, Gambling, Indirect
Communication.
Dear Mr. Powell:
This Opinion is issued in response to your advisory request received on August 4,
1999.
I. ISSUE:
Whether a corporation, on behalf of a client who is opposed to gambling expansion,
engages in lobbying when it assembles a team, updates and reports to its client about
gambling, identifies leaders and support networks and interfaces with groups opposed to
gambling.
II. FACTUAL BASIS FOR DETERMINATION:
You represent a client who is concerned about the expansion of gambling in
Pennsylvania. Your services are retained on a monthly basis to monitor gambling
activities at the grassroots level. The client has also retained a lobbyist to work with
legislators on this issue.
Your duties are set forth in the agreement with your client as follows: assembling
and managing the Pennsylvania Team on the client's behalf; updating the client on any
news or activities concerning gambling in Pennsylvania; interfacing with key grassroots
groups opposed to gambling; identifying opinion leaders and other potential networks of
support statewide; and issuing periodic reports to the client.
Powell, 99 -1008
Page 2
You have not been retained to talk with legislators or to advocate your client's
position to them. Your client has a paid lobbyist to perform that function.
You seek an advisory as to whether your activities on behalf of your client require
registration as a lobbyist under the Lobbyist Disclosure Act (Act).
By letter dated August 9, 1999, you were notified of the date, time, and location of
the public meeting at which your request for an Opinion was to be considered.
At the public meeting on August 31, 1999, you appeared and offered commentary,
which may be fairly summarized as follows.
Massey Powell Enterprises, Inc. (MPI) does not lobby for clients but rather provides
strategy, analysis and communication.
MPI has one corporate client which is opposed to gambling. MPI prepares reports
for that client which includes surveying newspapers, monitoring political races and
identifying candidates' positions on gambling. Though such activities, MPI's client will be
able to identify areas of support. You interface with groups opposed to gambling by
identifying groups, their location, leadership, membership and reach. You discuss issues
with such groups to find out what they do. MPI serves as a conduit of information for its
client which seeks to be current on the gambling issue.
You concede that if gambling becomes a campaign issue, MPI will mobilize the
various groups in support of its client's position. In addition, MPI would take action so
that people would petition their government on this issue, as for example, by contacting
newspaper editors to print articles favorable to the client's position.
III. DISCUSSION: It is initially noted that pursuant to Section 1308(c) of the Act in
conjunction with Sections 7(10) and 7(11) of the Ethics Act, 65 P.S. § §1107(10), (11),
advisories are issued to the requestor based upon the facts which the requestor has
submitted. This 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,
Powell, 99 -1008
Page 3
65 Pa. C. S. 1303.
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:
(1) proposal, consideration, promulgation or
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.
The term "principal" is 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
Powell, 99 -1008
Page 4
Id.
(2) that engages in lobbying on the principal's own
behalf.
The term "lobbyist" is defined in the statute as follows:
'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.
The issue before us is whether you must register as a lobbyist on behalf of your
client who has retained your services to monitor gambling activity at the grassroots level.
The question is simply whether the services you provide to your client constitute
lobbying. It would seem that your activities of updating your client and issuing reports to
the client would not constitute lobbying. As for your duty of interfacing with the grassroots
groups opposed to gambling, it appears at this point in time that your duties would not
encourage such groups or individuals to take action, the purpose or foreseeable effect of
which would be to directly influence legislative or administrative action. Finally, as to the
two duties of assembling a Pennsylvania Team for your client and identifying opinion
leaders and other potential network support statewide, this appears to be activities of
keeping your client knowledgeable and ready as to the gambling issue. It appears that
such activities on the part of TV1P1 would not constitute lobbying.
If any of your activities would constitute an effort to influence legislative or
administrative action as defined and explained above, then such activities would be
lobbying. We reference the foregoing in light of your statement that if gambling does
become a campaign issue, you would mobilize various groups, assemble a coalition and
engage in indirect communications on behalf of your client.
If your firm would engage in lobbying activities, it would have to register regardless
of the amount of compensation received since there is no threshold exemption for lobbyists
that are entities. As for the individual employees in your firm, those individuals whose
compensation, for lobbying as to all principals represented, would exceed $2500 in the
aggregate in any reporting period would also have to register as lobbyists.
Parenthetically, we note that Section 1306 (6) of the Act provides an exemption
under specified conditions for corporate employees.
§ 1306. Exemption from registration and reporting.
The following individuals and activities shall be exempt from registration under
section 1304 (relating to registration) and reporting under section 1305 (relating to
reporting):
*
*
(6) An employee, who is not a registered lobbyist, of a corporation which:
(i) is registered as a principal under section 1304;
(ii) has one or more registered lobbyists; and
(iii) includes in its reports under section 1305 all of the
employee's expenses related to lobbying.
65 Pa. C. S. § 1306(6).
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Page 5
There are six conditions that must be satisfied for the exemption to apply. The first
requirement is that the lobbyist be an employee. Second, the employee cannot be a
registered lobbyist, that is, an individual required to register as a lobbyist on behalf of
some other principal. Third, the individual must be employed by the corporation.
Employment by an entity which is not a corporation does not qualify. Fourth, the
corporation must be registered as a principal pursuant to Section 1304 of the Act. Fifth,
the corporation must have one or more registered lobbyists. Sixth, the employee's
expenses relating to lobbying ust be included in the corporation's reports. If all of the
foregoing conditions are met, the corporate employee would not have to register as a
lobbyist under the Act.
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:
A corporation which limits its activities to the gathering and providing of information
to a client is not required to register as a lobbyist. If the corporation at some future time
would mobilize various groups and assemble a coalition for others to take action to
influence legislative /administrative action, such activities would constitute lobbying and
would require registration and compliance with the Lobbying Disclosure Act.
Pursuant to Section 1308 of the Lobbying Disclosure 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 Lobbying Disclosure 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