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Home My WebLink About25-1500 KrakPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 To the Requester: Natalie Krak Dear Ms. Krak: STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL February 28, 2025 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.ya.�4ov 25-1500 This responds to your letter dated February 12, 2025, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the issue presented below: Issue: Whether, pursuant to the reporting requirements of Section 13A05(b)(2)(i) of Pennsylvania's Lobbying Disclosure Law ("Lobbying Disclosure Law"), 65 Pa.C.S. § 13A05(b)(2)(i), The Hershey Company ("Company"), in its capacity as a registered principal, would be required to disclose on its quarterly expense report as a gift or as hospitality edible products that the Company would provide to Pennsylvania state legislators' Capitol offices to be displayed and shared with constituents and visitors for promotional purposes and public consumption. Brief Answer: To the extent that the Company would engage in lobbying by providing edible products to Pennsylvania state legislators' Capitol offices to be displayed and shared with constituents and visitors for promotional purposes and public consumption, the edible products would constitute a "gift" as the Lobbying Disclosure Law defines that term and would be reportable as such on the Company's quarterly expense report. Facts: As a registered lobbyist for the Company, you request an advisory from the Commission based upon submitted facts that may be fairly summarized as follows. Krak, 25-1500 February 28, 2025 Page 2 The Company intends to provide products manufactured in Pennsylvania to certain Pennsylvania state legislators' Capitol offices to be displayed and shared with constituents and visitors to their offices. The products would be provided primarily for public consumption and promotional purposes through display in the offices and free distribution to the public and would be of minimal value to any individual recipient. The products that could be provided would include Hershey's Kisses, snack -size Twizzlers, snack -size bags of SkinnyPop popcorn, and the like. You seek guidance as to whether the Company, as a registered principal, would be required to disclose on each quarterly expense report as a gift or as hospitality edible products that the Company would provide to Pennsylvania state legislators' Capitol offices to be displayed and shared with constituents and visitors for promotional purposes and public consumption. Discussion: It is initially noted that pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), in conjunction with Sections 1107(10) and 1107(11) of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all material facts. The following definitions set forth in the Lobbying Disclosure Law are relevant to your inquiry: § 13A03. Definitions. "Lobbying." An effort to influence legislative action or administrative action in this Commonwealth. The term includes: (1) direct or indirect communication; (2) office expenses; and (3) providing any gift, hospitality, transportation or lodging to a State official or employee for the purpose of advancing the interest of the lobbyist or principal. "Principal." An individual, association, corporation, partnership, business trust or other entity: (1) on whose behalf a lobbying firm or lobbyist engages in lobbying; or Krak, 25-1500 February 28, 2025 Page 3 (2) that engages in lobbying on the principal's own behalf. "Gift." Anything which is received without consideration of equal or greater value. The term shall not include a political contribution otherwise reportable as required by law or a commercially reasonable loan made in the ordinary course of business. The term shall not include hospitality, transportation or lodging. "Hospitality." Includes all of the following: (1) Meals. (2) Beverages. (3) Recreation and entertainment. The term shall not include gifts, transportation or lodging. 65 Pa.C.S. § 13A03. Section 13A05 of the Lobbying Disclosure Law, pertaining to expense reporting, requires a registered principal to electronically file with the Pennsylvania Department of State either a quarterly expense report or a statement of failure to meet the reporting threshold for each quarter it has been registered as a principal, by no later than the 301h day after each quarterly reporting period has ended. 65 Pa.C.S. § 13A05(a). Section 13A05(b) of the Lobbying Disclosure Law provides, in part: § 13A05. Reporting. (b) Content.-- (2) Each expense report shall include the total costs of all lobbying for the period. The total shall include all office expenses, personnel expenses, expenditures related to gifts, hospitality, transportation and lodging to State officials or employees, and any other lobbying costs. The total amount reported under this paragraph shall be allocated in its entirety among the following categories: (i) The costs for gifts, hospitality, transportation and lodging given to or provided to State officials or employees or their immediate families. (ii) The costs for direct communication. Krak, 25-1500 February 28, 2025 Page 4 (iii) The costs for indirect communication. (iv) Expenses required to be reported under this subsection shall be allocated to one of the three categories listed under this section and shall not be included in more than one category. (2.1) For purposes of filing an expense report under this subsection, a registrant may use any reasonable methods of estimation and allocation. 65 Pa.C.S. § 13Ao5(b)(2), (2.1). Conclusion: As a registered principal in Pennsylvania, the Company is subject to the prohibitions, restrictions, and requirements imposed upon principals by the Lobbying Disclosure Law. As a registered principal, the Company is required to electronically file with the Pennsylvania Department of State either a quarterly expense report or a statement of failure to meet the reporting threshold of Section 13A05(d) of the Lobbying Disclosure Law for each quarter it is registered as a principal, with such filings due by no later than the 301h day after each quarterly reporting period would end. 65 Pa.C.S. § 13A05(a). To the extent that the Company would engage in lobbying by providing edible products to Pennsylvania state legislators' Capitol offices to be displayed and shared with constituents and visitors for promotional purposes and public consumption, the edible products would not be considered "hospitality" as that term is defined by the Lobbying Disclosure Law. Rather, the edible products would constitute a "gift" as the Lobbying Disclosure Law defines that term and would be reportable as such on the Company's quarterly expense report. Lastly, the request for an advisory has only been addressed under the Lobbying Disclosure Law and, derivatively, the Ethics Act to the extent applicable. Pursuant to Section 13A08(a) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A08(a), a requester who truthfully discloses all material facts in a request for an advisory and who acts in good faith based upon a written Advice or Opinion of the Commission issued to the requester shall not be held liable for a violation of the Lobbying Disclosure Law. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be Krak, 25-1500 February 28, 2025 Page 5 received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717-787-0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Respectfully, Bridget K. Guilfoyle Chief Counsel