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HomeMy WebLinkAbout99-1001 CookOPINION 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: 8/30/99 DATE MAILED: 9/14/99 William A. Cook, President Pennsylvanians for Effective Government 240 N. 3rd Street Harrisburg, PA 17101 99 -1001 Re: Principal, Lobbying, Exemption, Indirect Communication, State Official, Ticket, Dinner, Expense, Non - Profit Organization, Periodic Newsletter, Seminar, Speaking Engagement, Association. Dear Mr. Cook: This Opinion is issued in response to your advisory request received on July 26, 1999. I. ISSUE: Whether a non - profit political education and action organization that seeks to elect candidates who favor a free enterprise system to state level offices, is exempt from the provisions of the Lobbying Disclosure Act if its activities are limited to: (1) educating its members on issues of political importance through seminars, periodic newsletters, speaking engagements, and an Internet site; (2) preparing testimony and testifying before a committee of the legislature or participating in an administrative proceeding of an agency; and (3) providing complimentary tickets, valued at less than $50 each, to ten or fewer state officials who will be guests or speakers at the organization's annual political fundraiser dinner. II. FACTUAL BASIS FOR DETERMINATION: As President of "Pennsylvanians for Effective Government" (PEG), you request an advisory based upon the following facts which you submitted in your letter dated July 22, 1999, and your subsequent submission of August 3, 1999. Cook, 99 -1001 Page 2 PEG was established in 1972. It is a non - profit political education and action organization which is composed of three not - for - profit organizations: a 501 c(6) business association; a 501 c(3) education committee, and a political action committee. PEG's mission is twofold: to educate its members on issues of political importance to the state business community; and to use business' political resources to elect to state level offices candidates who profess a strong belief in the free enterprise system. PEG's education efforts are restricted to providing information to members and contributors of the organization. This is accomplished through seminars, periodic newsletters, speaking engagements, and PEG's Internet site. PEG's primary monetary interaction with state legislators consists of providing political contributions to selected candidate campaign committees. These contributions are reported as required by law to the State Elections Bureau. PEG's non - election interaction with state legislators is limited to occasionally preparing testimony or testifying before a committee of the General Assembly. You have provided such testimony two times in the ten years that you have presided over the organization. PEG's hospitality interaction with state officials is limited to the provision of a complimentary ticket, valued at $50.00 or less, to approximately six to ten state officials who may be simply invited guests or a speaker at the PEG Political Committee Annual Dinner. The dinner is a political fundraiser. You state that the tickets are provided by PEG solely to allow the state officials to attend and enjoy the event but not to advance the interests of PEG on any administrative or legislative action. Since its inception in 1972, PEG has never employed a lobbyist. You note that since its creation, PEG has not, and by the direction of the Board of Directors, will not lobby before state officials on administrative actions or legislation of importance to the state business community. Based upon the above, it is your view that PEG is exempt from the registration and reporting requirements of the Lobbying 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 30, 1999, you appeared and offered commentary, which may be fairly summarized as follows. PEG does not take positions but provides analysis of key campaigns to the business community. If a legislator contacts PEG as to proposed legislation, PEG will not take a position. PEG's newsletter focuses upon elections but has editorial comment on political issues, such as campaign finance reform in one instance. The newsletter is sent to 1600 -1800 members, contributors, some legislators and possibly to the Governor and Lieutenant Governor. Approximately, 100 -150 complimentary issues are sent to similar type organizations and prospective members. PEG has an annual political fundraiser. Legislators ask for and usually receive complimentary tickets. The program for the fundraiser consists of a reception, dinner, and a keynote speaker who has views consistent with the philosophy of PEG. 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 Cook, 99 -1001 Page 3 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. (5) The proposal, consideration, promulgation or rescission of Cook, 99 -1001 Page 4 65 Pa.C.S. 1303. Id. 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 related term "association" is broadly defined in the Lobbying Disclosure Regulations as follows: Association - -An "association" as defined in the Association Code in 15 Pa.C.S. §102 (relating to definitions). The term includes a corporation, a partnership, a limited liability company, a business trust or two or more persons associated in a common enterprise or undertaking. The term does not include a testamentary trust or an inter vivos trust as defined in 20 Pa.C.S. §711(3) (relating to mandatory exercise of jurisdiction through orphans' court division in general). 51 Pa. Code §31.1. As for the substantive provisions to be reviewed, the following statutory exemptions are to be considered in determining whether PEG is exempt from the requirements of the Act: §1306. Exemption from registration and reporting The following individuals and activities shall be exempt from registration under Cook, 99 -1001 Page 5 section 1304 (relating to registration) and reporting under section 1305 (relating to reporting): (1) An individual who limits lobbying activities to preparing testimony and testifying before a committee of the legislature or participating in an administrative proceeding of an agency. (3) Any of the following: * * * (iv) A principal whose total expenses for lobbying purposes do not exceed $2,500 during any reporting period. * * * 65 Pa.C.S. § §1306(1), (3). In applying the above provisions of law to the facts which you have submitted, we shall first consider whether PEG is within the definition of "principal" which has two component parts. The first portion of the definition provides that individuals and certain entities may qualify as a principal. PEG is described as a non - profit political education and action organization. An organization, whether non - profit or for profit, is within the statutory definition of "principal." PEG as an organization is therefore within the first portion of the statutory definition of principal. The second portion of the definition sets forth the types of activities in which a principal engages. Based upon the facts which you have submitted, PEG's activities fall into 4 categories: (1) educating its members and contributors on issues of political importance to the state business community; (2) providing political contributions; (3) occasionally preparing or testifying before a committee of the General Assembly; and (4) providing complimentary tickets to a political fundraiser once a year to a few state officials. These 4 categories shall be reviewed seriatim. The first category of PEG activity involves the education of its members and contributors on issues of importance to the state business community, which is accomplished through seminars, periodic newsletters, speaking engagements and the PEG Internet site. Although such communications seem to be targeted directly at PEG members and contributors, the key issue is whether such activities would fall within the definition of "indirect communication" so as to constitute lobbying by PEG. We note that the definition of "indirect communication" specifically includes "educational campaigns on public issues" in the list of examples of qualifying activities. 65 Pa.C.S. §1303. PEG educational seminars and speaking engagements, and the educational portion of its Internet site, would constitute "indirect communication" and therefore "lobbying" to the extent such educational efforts would encourage those being educated to take action, the purpose or foreseeable effect of which would be to directly influence legislative action or administrative action. Taking a position on issues such as campaign finance reform is an effort to influence legislative action and constitutes lobbying. On the other hand, information limited exclusively to encouraging the election of particular candidates would not be considered "indirect communication" or any other form of lobbying. As for the PEG periodic newsletter, we are unable to determine from the facts whether the exclusion in the statutory definition of "indirect communication" would apply. Two conditions must be met for this exclusion to apply. First, PEG must be a bona fide Cook, 99 -1001 Page 6 association, which it appears to be. Second, the periodic newsletter must be primarily designed for and distributed to PEG members. Since the newsletter is sent to members and contributors with complimentary copies also sent to individuals /entities, we do not know factually whether the newsletter is primarily for members or others. The second category of PEG activity involves providing political contributions. We find that making political contributions which are otherwise reported as required by law does not constitute "lobbying." This conclusion is based upon the fact that the definition of "gift," which is a key term within the definition of "lobbying," excludes political contributions which are otherwise reported as required by law (see, 65 Pa.C.S. §1303 and the related definition in §1102 of the Ethics Act; and 51 Pa. Code §31.1). Thus, such political contributions would not be reportable under the Act. The third category of PEG activity involves preparing testimony or testifying before a committee of the General Assembly. Such activity by PEG clearly falls within the definition of lobbying, such that PEG is a principal. Moreover, the involvement of PEG in such activities does not fall within the exemption of Section 1306(1) because that exemption is exclusively for individuals whose lobbying activities are so limited. 65 Pa.C.S. §1306(1). Exemptions are to be strictly construed. See, Phillips v. State Ethics Commission, 470 A.2d 659 (Pa. Cmwlth. 1984), where the Court noted that for remedial legislation, coverage is to be liberally construed whereas exclusions are to be narrowly determined. PEG fails to qualify under either of the criteria for the exemption: PEG is not an individual, and its lobbying activities are not limited to this particular form of activity. The fourth and final category of PEG activity involves the provision of complimentary tickets to state officials as invited guests or speakers at the PEG Political Committee Annual Dinner. Our review of this activity focuses upon several considerations. First, such a ticket would constitute hospitality to the state official, received in connection with public office, that is, the ticket would be provided by virtue of the individual's status as a state official. See, 51 Pa. Code §31.1 (definitions of "Transportation and lodging or hospitality received in connection with public office or employment" and "Hospitality "). Our next consideration is the purpose of the complimentary tickets, specifically whether they are for the purpose of advancing the interest of the lobbyist or principal" so as to be part of PEG's lobbying activity. See, 65 Pa.C.S. §1303. Although you state that the purpose of the complimentary tickets is to allow the officials to attend and enjoy this annual PEG event and not to advance the interest of PEG on any administrative or legislative action," such statement is not a submitted fact, but rather, a proferred legal conclusion. We do not reach the same conclusion. We consider the giving of gifts to state officials and employees by a principal to inherently be for the purpose of advancing the interests of the principal and within the definition of "lobbying." In support of this conclusion, we would note that Section 1105(b)(6) of the Ethics Act clearly establishes the General Assembly's determination that gifts from registered lobbyists or their employees do not qualify for the reporting exemption for gifts from "friends." The same is necessarily true of a principal, which may lobby on its own behalf and clearly does so in providing gifts to State officials or employees. As noted above, PEG is a principal, and therefore the provision of these tickets would be within the definition of "lobbying" under the Act. Having reviewed the four categories of PEG activities, and having found that PEG is a principal as defined by the Act, we next consider whether PEG would nevertheless qualify for exemption from the registration and reporting requirements of the Act. A principal is subject to the registration and reporting provisions of the Act if its expenses for Cook, 99 -1001 Page 7 lobbying exceed $2500 in any reporting period. 65 Pa.C.S. §1306 (3)(iv). The facts which you have submitted lack complete specificity as to the expenses of PEG in any quarter, and so we cannot conclusively determine whether PEG will meet that threshold. It will be incumbent upon PEG to factually determine whether its expenses for the lobbying activities noted above exceed the registration threshold of $2500 in any quarter. 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: An organization which engages in lobbying activities on its own behalf is a "principal" and is subject to the provisions of the Lobbying Disclosure Act. The principal must satisfy the registration and reporting requirements of the Lobbying Disclosure Act if its total expenses for lobbying exceed $2500 in any quarter. 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