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HomeMy WebLinkAbout99-1022 McGeeMichael J. McGee Vice President REALTORS Legislative Alliance 555 West Uwchlan Ave. Exton, PA 19341 Dear Mr. McGee: 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: 11/23/99 DATE MAILED: 12/7/99 99 -1022 Re: Lobbying, Principal, Lobbyist, Corporation, Shareholder, State Official, Fundraiser, Direct Communication, Indirect Communication, Registration, Government Affairs, PAC Fundraising. This Opinion is issued in response to your advisory request received on September 7, 1999. I. ISSUE: Whether any of the following activities by the chief staff executive of a corporation would constitute lobbying under the Lobbying Disclosure Act: providing assistance to a state association with state legislative issues in return for its funding to augment the corporation's local government affairs efforts; attending a state association's business meetings where legislation is discussed, read or analyzed; fundraising for a political action committee; attending a political fundraiser; or attending an outing with legislative staff without discussing any particular legislation. II. FACTUAL BASIS FOR DETERMINATION: As Vice President of the REALTORS Legislative Alliance (RLA), you seek an advisory from the State Ethics Commission as to your duties under the Lobbying Disclosure Act ( "Act). The RLA was formed in 1998 as a subsidiary, for - profit corporation of the Chester County, Delaware Valley and Greater Philadelphia Associations of REALTORS. In 1999, the Montgomery County Association of REALTORS became the fourth shareholder. You are the Chief Staff Executive of the RLA. McGee, 99 -1022 December 7, 1999 Page 2 The primary function of the RLA is to provide local and regional legislative representation for its four shareholders by monitoring and commenting on local ordinances, meeting with local government officials, attending political functions, and keeping the membership informed about the RLA's activities. The RLA also coordinates fundraising efforts on behalf of its Political Action Committee (PAC). In addition to its work at the local and regional levels of government, the RLA has entered into an agreement with the Pennsylvania Association of REALTORS (PAR) whereby the PAR provides funds to augment the RLA's local government affairs efforts, and in return, the RLA occasionally provides assistance with state legislative issues, such as by coordinating REALTOR attendance at fundraisers and meeting with legislators about state issues. You estimate that you would have to spend approximately 90 hours of your time in a quarter on state issues in order for the total value of your compensation for lobbying in that quarter to exceed $2,500. You state that this would be an unusual amount of time for you to spend on state issues, and that given your responsibilities as the Chief Staff Executive of the RLA and its mission to provide local /regional governmental affairs representation, the percentage of your time spent on actively lobbying state officials or coordinating REALTOR attendance at fundraisers is minimal. You assure this Commission that even under the broadest definition of "lobbying activities," you were exempt from the registration /reporting requirements of the Act for the quarter ending in September, 1999. However, in order to ensure full compliance with the Act you pose the following questions. You seek clarification as to how lobbying activities are being interpreted. You ask whether you would be lobbying in any of your following activities: attending a political function such as a fundraiser; attending a fundraiser for a local candidate where a state legislator is present; going on an outing with legislative staff without discussing any particular legislation; attending the state association business meetings where legislation is being discussed, read, or analyzed; or PAC fundraising. You ask whether, based upon the facts which you have submitted, you would be required to register under the Act, and, if so, who the principal(s) would be for registration purposes. By letter dated November 2, 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. 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: McGee, 99 -1022 December 7, 1999 Page 3 (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: (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 McGee, 99 -1022 December 7, 1999 Page 4 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. 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. In applying the above provisions of law to the facts which you have submitted, we preliminarily note that under the Act, "lobbying" is limited to efforts at the State level. This conclusion is based upon a review of the pertinent definitions in the Act. The definition of "lobbying" states, in pertinent part, that lobbying is an effort to influence "legislative action" or "administrative action." 65 Pa.C.S. §1303. The definition of "legislative action" establishes that such action is taken by a "State official or employee," which latter term is itself defined to include only individuals who are elected or appointed to positions in State government and who are involved in legislative action or administrative action. Similarly, the definition of "administrative action" is clearly limited to action at the State government level. The first subparagraph of the definition involves certain actions by an "agency." The term "agency" is defined as "A State agency, board, commission, authority or department." Id. The second subparagraph pertains to the review, revision, approval or disapproval of regulations at the State level. The third and fifth subparagraphs pertain to certain actions taken by the Governor, and the remaining subparagraph involves the nomination or appointment of officers /employees of the Commonwealth. Thus, only those portions of the RLA's /your efforts which occur at the State level would constitute "lobbying" under the Act. You state that those efforts are very limited and are performed pursuant to an agreement with the PAR. The agreement is that the PAR will provide the RLA with funds to augment the RLA's local government affairs efforts, and in return, the RLA will occasionally provide assistance with state legislative issues, such as by coordinating REALTOR attendance at fundraisers and meeting with legislators about state issues. We shall consider each of these two specific examples of activities for the PAR. The coordination of attendance at fundraisers would not, per se, constitute lobbying McGee, 99 -1022 December 7, 1999 Page 5 under the Act. In Cook, Opinion 99 -1001, we addressed for the first time issues involving political fundraisers. In that Opinion we held that information which is limited to encouraging the election of particular candidates is neither "indirect communication" nor any other form of lobbying. We further held that political contributions which are otherwise reported as required by law do not constitute "lobbying." Given that the aforesaid activities, which are directly aimed at furthering the election of particular candidates, do not constitute lobbying, the mere coordination of attendance at such fundraisers would not in and of itself constitute "lobbying" under the Act. However, meeting with legislators about state issues would constitute lobbying under the Act. First, such meetings would clearly constitute an effort to influence legislative action. Second, under the facts which you have submitted, these lobbying efforts would be made on behalf of the PAR in exchange for economic consideration consisting of the funds which, by agreement, the PAR provides to the RLA to augment the RLA's local government affairs efforts. The definition of "lobbyist" includes both individuals and corporations. The necessary conclusion is that you and the RLA engage in lobbying on behalf of the PAR. The PAR is therefore the "principal," and you and the RLA are "lobbyists." We shall next address the question of whether you would be required to register under the Act. Pursuant to Section 1306(3)(ii) of the Act, 65 Pa.C.S. §1306(3)(ii), an individual lobbyist is exempt from the Act's registration /reporting requirements until such time as his or her compensation from all principals represented exceeds $2500 in a quarter. Roth, Opinion 99 -1006. Once the threshold of $2500 is exceeded, the individual lobbyist no longer qualifies for exemption and has ten days within which to register. Id. (Citing 65 Pa.C.S. §1304(a)). This exemption is not available to entities such as corporations. Powell, Opinion 99 -1008. In applying these principles to the facts which you have submitted, it would appear that factually, you might not exceed the $2500 threshold so as to be required to register. Thus, you are advised that for as long as you would not exceed that threshold, you - -as an individual lobbyist - -would qualify for exemption under 65 Pa.C.S. §1306(3)(ii). If and when the threshold of $2500 would be exceeded, you would no longer qualify for exemption and would have ten days within which to register. Id. You are further advised that since there is no threshold exemption for lobbyists that are entities, the RLA would be required to register under the Act as a lobbyist for the PAR. In addressing your remaining inquiries, you have generally asked how lobbying activities are interpreted. The question as posed is too general for this Commission to make any type of response herein, other than to suggest that you review the rulings of the Commission for information. Turning to more specific inquiries, you ask whether attending a political function such as a fundraiser would constitute lobbying, particularly if a state legislator would be present. For the same reasons noted above as to the coordination of attendance at fundraisers, we conclude that mere attendance at a political function would not constitute lobbying. However, activity which would attempt to influence legislative action or administrative action would constitute lobbying, regardless of whether the activity would occur at such a political function. Furthermore, the provision of hospitality to a State official or employee by a lobbyist or principal, even at a political fundraiser, would be deemed to inherently be within the definition of "lobbying" and reportable by a registrant under the Act. See, Cook, Opinion 99 -1001; Chiavetta, Opinion 99 -1003. With regard to your inquiry about being on an outing with legislative staff where no particular legislation would be discussed, such activity would not constitute lobbying if you McGee, 99 -1022 December 7, 1999 Page 6 would merely be a guest at a function. However, if you or your principal would provide gift(s) or hospitality to a State official or employee at such a function, then such activity would be within the definition of "lobbying" and reportable under the Act. See, Cook, supra; Chiavetta, supra. You ask whether lobbying would include attendance at state association business meetings where legislation is discussed, read, or analyzed. Your mere attendance at the state association's business meeting would not constitute lobbying by you. However, if, while at the meeting, you would attempt to influence legislative action or administrative action, for example through direct communication with a State official or employee attending the meeting, or through indirect communication targeted at others, such would constitute lobbying regardless of the fact that it would occur at such a meeting. Finally, as to whether PAC fundraising would be considered lobbying, the fundraising itself would not constitute lobbying, although lobbying could occur at a fundraising function. 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: Where a state association provides funds to a corporation in exchange for the corporation's performance of duties which include meeting with legislators about state issues, the corporation is a lobbyist for the state association and is required to register as a lobbyist. An officer /employee of the corporation who is paid by the corporation to perform such lobbying duties for the state association is also a lobbyist. The officer /employee would be required to register as a lobbyist if his or her total compensation for lobbying would exceed $2500 in any quarter. The following activities, in and of themselves, would not constitute "lobbying" under the Act: mere attendance at a political function; the mere coordination of attendance at fundraisers; mere attendance at a state association's business meeting where legislation is discussed, read, or analyzed; or PAC fundraising. However, activity which would attempt to influence legislative action or administrative action would constitute lobbying, regardless of whether the activity would occur at such functions. The provision of hospitality to a State official or employee by a lobbyist or principal, even at a political fundraiser, would be deemed to inherently be within the definition of "lobbying" and reportable by a registrant under the Act. Being on an outing with legislative staff where no particular legislation would be discussed would not constitute lobbying except as to a lobbyist or principal who would provide gift(s) or hospitality to a State official or employee at such a function. 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, McGee, 99 -1022 December 7, 1999 Page 7 Daneen E. Reese Chair