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HomeMy WebLinkAbout99-1010 Flaherty1999. I. ISSUE: OPINION 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 -1010 John E. Flaherty, Jr., Esquire Dechert Price & Rhoads 4000 Bell Atlantic Tower 1717 Arch Street Philadelphia, PA 19103 -2793 Re: Lobbying, Lobbyist, Attorney, Practice of Law, Representation of Client, Administrative Action, Application, Enforcement, Statement of Policy, Corporation, Client. Dear Mr. Flaherty: This Opinion is issued in response to your advisory request received on August 6, Whether a law firm in representing a corporation is engaged in lobbying regarding its advocacy as to application or enforcement proceedings before an administrative agency, departmental policy in the context of applications or enforcement proceedings, or departmental policy in general which could benefit the corporation. II. FACTUAL BASIS FOR DETERMINATION: You represent a corporate client which is engaged in a business regulated by the Pennsylvania Department of Environmental Protection (DEP). The corporation is required to have permits issued by DEP in order to operate its facilities. The corporation is subject to enforcement proceedings brought by DEP if permit violations occur. Permit applications are made when the corporation intends to commence activities at a site or when the permit expires and requires a renewal. The applications may also include subsequent requests Flaherty, 99 -1010 Page 2 for modification of the permit to allow expansion of the site or modification of the terms and conditions of the permit as to site operations. In seeking such permits (or their modification, amendment, or renewal), or in addressing enforcement matters, the representatives of the corporation, including both senior managers and technical staff employees, as well as outside advisors (including engineers and attorneys), communicate directly with DEP through letters, telephone conversations and meetings as well as through the permit application process. Most of the communications are through regional DEP offices; however, on occasion the client or its advisors communicate with senior DEP officials at DEP headquarters in Harrisburg. Most of the communications with DEP are routine and are factually specific to a particular site. If a permit application raises new legal or technical issues, the corporation or its advisors may communicate directly with senior DEP officials to request that DEP modify a previous department policy or guidance that affects the pending application. In addition to applying for permits on individual sites, the corporate personnel occasionally communicate with senior officials at DEP concerning the department's position on the issuance of permits and more general matters, such as the impact of interstate commerce on facilities located within the Commonwealth. These discussions sometimes occur in the context of applying for a particular permit; at other times, they occur independently of individual applications. The corporation requests an advisory on the applicability of the Lobbying Disclosure Act (Act) to the following situations: 1. Are the communications with DEP "lobbying" and the people making such communications "lobbyists" when the efforts of the corporation and its advisors are limited to the application process or enforcement proceedings for a specific site? 2. Are the communications with DEP "lobbying" and the people making such communications "lobbyists" when DEP, in the context of considering an application or enforcement matter for a specific site, is asked to establish, modify or favorably interpret a department policy? 3. Are the communications with DEP "lobbying" and the people making such communications "lobbyists" when the communications seek a change in policy in general way, that is, without reference to a specific site, with the recognition that the change in policy could benefit the corporation. 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. Regarding the corporate client whose activities are regulated by DEP as to permit issues, sometimes DEP is asked to change a policy which would have the effect of approving a permit. Such action may be specific whereby a change in departmental policy is directed to a permit at a certain site. At other times, the Secretary or Deputy Secretary is approached as to a change in policy which will be generalized in terms of impact. Although you typically seek action as to a permit for a particular site, there are occasions where you seek a change in policy that would benefit all existing or potential clients. 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), Flaherty, 99 -1010 Page 3 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, 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 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. Flaherty, 99 -1010 Page 4 65 Pa. C. S. 1303. Id. (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 (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. We shall now consider the three questions you submit for our opinion under the Act. The first matter concerns whether your representation of a corporate client before DEP would be considered lobbying when it would involve your communications on behalf of your client as to the application process or enforcement proceedings for a particular site. Such activities would not fall within the definition of administrative action. Based upon your factual submission, we consider such representation to be the practice of law. You would be providing legal representation on behalf of your client. It is our view that the practice of law and lobbying are separate, distinct and mutually exclusive activities. See, Reilly v. Ozzard, 33 N.J. 529, 166 A.2d 360. Therefore, the above activity would constitute the practice of law, but not lobbying. Flaherty, 99 -1010 Page 5 Before we address your second inquiry as to action regarding a departmental policy, we must ascertain the meaning of the terms "guideline" and "statement of policy." Although such terms are not defined in the Act itself, the Regulations at 51 Pa. Code §31.1 (definition of "administrative action ") adopt definitions set forth in the Administrative ode: Guideline - A document, other than an adjudication, interpretation or regulation, which announces the policy an agency intends to implement in future rulemakings, adjudications or which will otherwise guide the agency in the exercise of administrative discretion. The document may not amend, repeal or suspend a published regulation or otherwise effectively circumscribe administrative choice, but shall establish a framework within which an agency exercises administrative discretion. If authorized by statute, the documents may be incorporated into or published as regulations. The term includes, but is not limited to: (1) Plans for agency operation and administration which establish important policies to be utilized in the future exercise of administrative discretion. (2) General policies and plans for the award and administration of discretionary grants of public monies. (3) Announcements of principles and standards to be applied in future adjudications. Statement of policy- A document, except an adjudication or a regulation, promulgated by an agency which sets forth substantive or procedural personal or property rights, privileges, immunities, duties, liabilities or obligations of the public or a part thereof. The term includes a document interpreting or implementing a statute enforced or administered by an agency. The term includes, but is not limited to, guidelines and interpretations. 1 Pa. Code § 1.4. (Emphasis added); see also, related definition of "statement of policy" in 45 P.S. §1102. With such definitions, we shall now consider whether, during your representation of a client, the prospective advocacy to establish, modify or favorably interpret a department policy in the context of consideration of a specific application or enforcement matter for a specific site would be considered lobbying. Advocating for a favorable interpretation of a policy for your client as to a specific site would constitute the practice of law. However, advocating to establish, modify or rescind a policy generally would be seeking to influence administrative action and as such, would be lobbying. Your third inquiry is whether communications requesting a change in policy in a general way without reference to a specific site or specific client, but with the recognition that the change in policy could benefit the corporation, would be lobbying. Under this factual scenario, we do not believe that your activities would constitute the practice of law, that is, the provision of legal services for a specific client. Rather, such would be an effort to influence administrative action. The definition of administrative action includes the development or modification of an agency's guideline or statement of policy, which is what you would be doing. Therefore, such activities would be lobbying. If such lobbying would occur, your firm would have to register as a lobbyist. Although there are certain exemptions for individuals as to lobbying, no such exemption is accorded to an entity or a firm regarding the $2500 quarterly threshold. Likewise, any individual lobbyist in the firm who would not qualify for one of the exemptions set forth in Flaherty, 99 -1010 Page 6 Section 1306 would have to register. 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 law firm practices law but does not engage in lobbying when it represents a corporate client as to a specific application or enforcement proceedings before a Commonwealth agency for a specific site. A law firm which advocates on behalf of its client for a favorable interpretation of an agency policy in a specific matter involving the client is practicing law but not lobbying. However, advocating for the establishment, modification or rescission of a departmental policy would be an effort to influence administrative action and would be lobbying. The activity of seeking a change in departmental policy generally which may benefit a client would be an effort to influence administrative action so as to be lobbying. 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 Vice Chair Austin M. Lee did not participate in this matter.