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HomeMy WebLinkAbout168-SL, Milne Spirit Works, LLCPHONE:717-783-1610 STATE ETHICS COMMISSION TOLL FREE:1-800-932-0936 FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 In Re: Milne Spirit Works, LLC, File Docket: 25-005-L Respondent Order No. 168-SL Date Decided: 7/23/25 Date Mailed: 7/24/25 Before: Michael A. Schwartz, Chair David L. Reddecliff, Vice Chair Paul E. Parsells Robert P. Caruso Emilia McKee Vassallo FACS! M I L E: 717-787-0806 WESSITE: www.ethcs..pa_ iov This is a final adjudication of the State Ethics Commission as to the alleged delinquency and/or deficiency of expense report(s) required to be filed pursuant to Pennsylvania's lobbying disclosure law, 65 Pa.C.S. § 13A01 et s�Mc., hereinafter referred to as the "Lobbying Disclosure Law." The Investigative Division initiated these proceedings by filing with the State Ethics Commission and serving upon Respondent Milne Spirit Works, LLC (hereinafter also referred to as "Respondent") a Notice of Alleged Noncompliance. A Stipulation of Findings and a Consent Agreement were subsequently submitted by the parties to the Commission for consideration. The Stipulated Findings are set forth as the Findings in this Order. The Consent Agreement has been approved. I. ALLEGED NONCOMPLIANCE: That Respondent, in its capacity as a principal registered with the Department of State pursuant to the Lobbying Disclosure Law (65 Pa.C.S. § 13A01 et sett .), failed to timely file a quarterly expense report pursuant to 65 Pa.C.S. § 13Ap5 for the fourth (0') quarter of 2024. IL FINDINGS: Respondent is a registered principal as that term is defined by the Pennsylvania Lobbying Disclosure Law ("Lobbying Disclosure Law") Act 134 of 2006, 65 Pa.C.S. § 13A01 et se_ __lc . a. Respondent initially registered as a principal with the Department of State on September 6, 2023, for the registration period January 1, 2023 through December 31, 2024. Milne Spirit Works LLC, 25-005-L Page 2 b. Respondent's registration statement indicates that lobbying commenced on August 9, 2023. 2. Respondent filed a principal registration statement with the Pennsylvania Department of State for the registration period January 1, 2023 through December 31, 2024. a. By registering with the Department of State, Respondent consented to receive service of notices, other official mailings, or process at the address listed on the registration statement. b. Respondent was assigned the principal registration number "P69918." C. In filing its principal registration, Respondent identified its registered mailing address as: 53 Washington Avenue Portland, ME 04101 3. The Lobbying Disclosure Law, specifically 65 Pa.C.S. § 13A04, states the following regarding the registration of an entity as a principal: § 13A04. Registration a. General rule. —Unless excluded under section 13A06 (relating to exemption from registration and reporting), a lobbyist, lobbying firm or a principal must register with the department electronically using the computerized filing system developed by the department that is consistent with the purposes of this chapter within ten days of acting in any capacity as a lobbyist, lobbying firm or principal. Registration shall be biennial and shall begin January 1, 2007. b. Principals and lobbying firms.-- 1. A principal or lobbying firm required to register under subsection (a) shall file a single registration statement setting forth the following information with the department: i. Name of the business. ii. Permanent address. iii. Daytime telephone number. Milne Spirit Works, LLC, 25-005-L Page 3 iv. E-mail address of the authorized representative employee or agent, if available. V. Nature of business. vi. Name, registration number and acronym of any affiliated political action committees. vii. Name and permanent business address of each individual who will for economic consideration engage in lobbying on behalf of the principal or lobbying firm. viii. Registration number when available. ix. Name of the authorized representative, employee or agent. d. Amendments.-- 1. If there is a change of information required for the registration statement under subsection (b)(1) or (2) or (c), an amended registration statement shall be filed with the department electronically using the computerized filing system developed by the department that is consistent with the purpose of this chapter within 14 days after the change occurs. 2. When there is a change in information required for the registration statement under subsection (b)(3), an amended registration statement shall be filed with the department electronically using the computerized filing system developed by the department that is consistent with the purpose of this chapter within 14 days of the end of the year in which the change occurs. 65 Pa.C.S, §§ 13A04(a), (b)(1), (d). 4. Section 13A03 of the Lobbying Disclosure Law defines the following terms: "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 Milne Spirit Works, LLC, 25-005-L Page 4 (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, "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, (1) legislation; (2) legislative motions; (3) a veto by the Governor; or (4) confirmation of appointments by the Governor or appointments to public boards or commissions by a member of the General Assembly. "Legislation." Bills, resolutions, amendments and nominations pending or proposed in either the Senate or the House of Representatives. The term includes any other matter which may become the subject of action by either chamber of the General Assembly. "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. The term may include personnel expenses and office expenses. 65 Pa.C.S. § 13A03. 5. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations provide further information in relation to registration periods and reporting periods; § 51.3. Registration periods and reporting periods. a, Registration under section 13A04 of the act (relating to registration) shall be biennial. The first registration period which commenced January 1, 2007, continues through December 31, 2008. Subsequent registrations shall commence on January 1 of each odd numbered year. 51 Pa. Code § 51.3(a). Milne Spirit Works, LLC, 25-005-L Page 5 6. Section 13A05 of the Lobbying Disclosure Law sets forth, in part, the following requirements for the contents of quarterly reporting forms filed by principals: § 13A05. Reporting (a) General rule.- A registered principal shall, subject to the penalties under 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities), file quarterly expense reports with the department electronically using the computerized filing system developed by the department that is consistent with the purpose of this chapter no later than 30 days after the last day of the quarter. 65 Pa.C.S. § 13A05(a). 7. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations provide fiirther instructions in relation to registration periods and reporting periods: § 51.3. Registration periods and reporting periods. (b) Reporting under section 13A05 of the act (relating to reporting) shall be quarterly within each calendar year: for January through March; April through June; July through September; and October through December. Quarterly expense reports shall be filed on or before the 30th day after the quarterly reporting period ends. 51 Pa. Code § 51.3(b). 8. As a registered principal, Respondent is required to electronically file with the 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 30"' day after each quarterly reporting period has ended. 65 Pa.C.S. §§ 13A05(a), (d); 51 Pa. Code § 55.1(d). 9. Section 13A05 of the Lobbying Disclosure Law additionally sets forth the threshold with regard to reporting expenditures: (d) Thresholds for reporting.-- An expense report required under this section shall be filed when total expenses for lobbying exceed $3,000 for a registered principal in a reporting period. In a reporting period in which total expenses are $3,000 or less, a statement to that effect shall be filed. Milne Spirit Works, LLC, 25-005-L Page 6 65 Pa.C.S. § 13A05(d). 10. As a registered principal, Respondent is required to file quarterly expense reports with the Department of State for all quarters it is registered as a principal; including quarters in which Respondent's lobbying expenses are $3,000.00 or less. a. Respondent did not file a fourth (4") quarter 2024 expense report by January 30, 2025. b. Respondent has remedied the failure by filing its expense report for the fourth (4"') quarter 2024 on May 12, 2025. 11, The Regulations promulgated under the Lobbying Disclosure Law specifically provide the following in relation to a delinquent filing: § 51.4. Delinquency. (b) A failure to timely file a registration statement, a quarterly expense report, a separate expense report, a notice of termination or an amendment to one of these filings constitutes a failure to register or report as required by the act; delinquency continues until the filing is received by the Department in proper form. 51 Pa. Code § 51.4(b). 12. In relation to the filing requirements of quarterly expense reports, the Regulations read, in part: § 55.1. Quarterly expense reports. (a) A quarterly expense report is required to be filed as set forth in this section when the total lobbying expenses of a registered principal, registered lobbying firm or registered lobbyist lobbying on the principal's behalf, together, exceed [$3,000] in a quarterly reporting period. The threshold of [$3,000] includes any economic consideration paid by a principal to a lobbying firm or lobbyist for lobbying. Individuals exempt under section 13A06 of the act (relating to exemption from registration and reporting) need not register or report. (b) For a quarterly reporting period in which the total lobbying expenses of a registered principal, registered lobbying firm Milne spirit Works, LLC, 25-005-L Page 7 or registered lobbyist lobbying on the principal's behalf, together, are [$3,000] or less, a statement to that effect shall be filed with the Department by checking the appropriate block on the quarterly expense report form. (d) The principal shall file a quarterly expense report or statement of failure to meet the reporting threshold on or before the 30th day after the quarterly reporting period ends. (g) A quarterly expense report of a principal required to be registered under the act must include at least the following information; (3) The total costs of all lobbying for the period. The total must include all office expenses, personnel expenses, expenditures related to gifts, hospitality, transportation and lodging to State officials or employees, and any other lobbying costs. (i) The total amount reported under this paragraph shall be allocated in its entirety among the following categories: (A) The costs for gifts, hospitality, transportation and lodging given to or provided to State officials or employees or their immediate families. (B) The costs for direct communication. (C) The costs for indirect communication. (ii) Registrants shall use a good faith effort to allocate expenses required to be reported under this subsection to one of the three categories listed herein. A given expense may not be included in more than one category... 51 Pa. Code §§ 55.1(a), (b), (d), (g)(3)(i)-(ii), Milne Spirit Works, LLC, 25-005-L Page 8 13. By Warning Notice letter dated March 10, 2025, Respondent was served with notice in accordance with Section 13A09 of the Lobbying Disclosure Law and Section 63.4(1) of the Lobbying Disclosure Regulations of the specific allegations: that Respondent failed to file quarterly expense reports for the fourth (41h) quarter of 2024. a. Said Warning Notice was mailed to: Milne Spirit Works, LLC 53 Washington Avenue Portland, ME 04101 b. This is the same address as listed on Respondent's principal registration statement. 14. Said Warning Notice letter set forth the nature of the alleged noncompliance and the administrative and criminal penalties for failing to file. 15. Said Warning Notice letter provided Respondent an opportunity to cure the alleged noncompliance and avoid the institution of these proceedings as to alleged noncompliance by filing a quarterly expense report for the time period covering the fourth (0) quarter of 2024 with the Department of State within thirty (30) days from the mailing date of the Warning Notice letter. 16. The Director of the Bureau of Campaign Finance and Lobbying Disclosure - Department of State conducted a search of the Department of State's records, and, as of May 1, 2025, no fourth (4"') quarter of 2024 expense report was found to have been filed with the Department of State. 17. The Lobbying Disclosure Law provides for civil and criminal penalties for failing to comply with the registration statement filing and quarterly expense reporting requirements thereof. In pertinent part, the Lobbying Disclosure Law provides that: Negligent failure to register or report as required by this chapter is punishable by an administrative penalty not exceeding the following: (i) For the first ten late days, $50 for each late day. (ii) For each late day after the first ten late days through the 201" late day, $100 for each late day. (iii) For each late day after the first 20 late days, $200 for each late day. 65 Pa.C.S. § 13A09(c)(1). Milne Spirit Works, LLC, 25-005-L Page 9 b. The total amount of the administrative penalty that may be levied after hearing by a majority vote of all of the Commission Members shall not be Iimited by any other provision of law. 65 Pa.C.S. § 13A09(c)(2). C. Any person that fails to comply with the requirements of the Lobbying Disclosure Law, after notice of noncompliance and after a hearing if one is requested, may be prohibited from lobbying for economic consideration for up to five (5) years [in accordance with 65 Pa.C.S. § 13A09(c)(4)]. 65 Pa.C.S, §§ BA09(d), (e)(4). 18. Respondent's expense report was a total of ninety-one (91) days delinquent when the Notice of Noncompliance was filed. 19. Respondent has presented extensive mitigation in this matter: a. Respondent is a small four -person company which is currently not profitable b. Respondent's mailbox is not checked regularly, nor does Respondent have an assigned person to receive and review mail. C. Since registering as a principal on September 6, 2023, and until the fourth quarter of 2024, Respondent consistently filed quarterly expense reports. 1. Each expense report claimed expenses for lobbying in the amount of $0.00. 2. The Investigative Division was not able to find any prior warning notices or Notice of Noncompliance issued to Respondent regarding any other delinquent or deficient expense reports. d. The imposition of a severe financial penalty would likely bankrupt Respondent. C. Respondent does not intend to engage in lobbying in Pennsylvania in the future. III. DISCUSSION: In the instant matter, the alleged noncompliance is that Respondent, as a principal registered with the Pennsylvania Department of State ("Department of State") pursuant to the Lobbying Disclosure Law, failed to timely file a quarterly expense report pursuant to 65 Pa.C.S. § 13A05 for the fourth quarter of 2024. Milne Spirit Works, LLC, 25-005-L Page 10 As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are set forth above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Respondent initially registered as a principal with the Department of State on September 6, 2023, for the registration period January 1, 2023, through December 31, 2024. Respondent's registration statement indicated that lobbying commenced on August 9, 2023. Respondent was assigned the principal registration number "P69918." Per the Consent Agreement of the parties, Respondent was registered as a principal with the Department of State for the registration period January 1, 2023, through December 31, 2024. Pursuant to Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05, and Section 51.3 of the Lobbying Disclosure Regulations, 51 Pa. Code § 51.3, expense reports are filed on a quarterly basis. When a registered principal's total expenses for lobbying exceed $3,000 for a reporting period/quarter, the principal is required to file a quarterly expense report with the Department of State by no later than 30 days after the last day of such quarter. For a reporting period in which total expenses are $3,000 or less, a statement to that effect must be filed with the Department of State by the principal by checking the appropriate block on the quarterly expense report form. 51 Pa. Code § 55.1(b). Thus, a registered principal must file either a quarterly expense report or a statement of failure to meet the reporting threshold by no later than the 30th day after each quarterly reporting period ends. 51 Pa. Code § 55.1(d). Having registered for the registration period January 1, 2023, through December 31, 2024, Respondent was required to file either a quarterly expense report or a statement of failure to meet the reporting threshold for the fourth quarter of 2024. Respondent failed to file either. Failure to timely meet the aforesaid filing requirement constitutes a failure to report as required by the Lobbying Disclosure Law, and the delinquency continues until the filing is received by the Department of State in proper form. 51 Pa. Code § 51.4(b). By Warning Notice letter dated March 10, 2025, Respondent was served with notice of the alleged noncompliance in accordance with Section 63.4(1) of the Lobbying Disclosure Regulations, 51 Pa. Code § 63.4(1). The Warning Notice Ietter provided Respondent an opportunity to cure the alleged noncompliance and avoid the institution of these proceedings by filing a quarterly expense report for the fourth quarter of 2024 with the Department of State within thirty (30) days of the mailing date of the Warning Notice letter. As of May 1, 2025, no fourth. quarter 2024 expense report was found to have been filed with the Department of State for the Respondent. Respondent has since filed its fourth (01) quarter expense reports for 2024 and is up to date on filing. Milne Spirit Works LLC, 25-005-L Page 11 Negligent failure to register or report as required by the Lobbying Disclosure Law is punishable by an administrative penalty as follows: (1) for the first ten late days, $50.00 for each late day; (2) for each late day after the first ten late days through the 201" late day, $100 for each late day; and (3) for each late day after the first 20 late days, $200 for each late day. 65 Pa.C.S. § 13A09(c)(1). Having highlighted the Stipulated Findings and issues before us, we shall now apply the Lobbying Disclosure Law to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations as follows: 3. The Investigative Division will recommend the following conclusions in relation to the above deficiencies: a. That Respondent, in its capacity as a Principal registered with the Pennsylvania Department of State pursuant to the Pennsylvania Lobbying Disclosure Law (65 Pa.C.S. § 13A01 et sea.), failed to timely file a Quarterly Expense Report pursuant to 65 Pa.C.S. § 13A05, for the fourth quarter (4`h) quarter of 2024; i. On March 10, 2025, a Warning Notice regarding the delinquent quarterly expense report was sent to Respondent via certified mail; and ii. Respondent did not file the outstanding Quarterly Expense Report for the fourth (0) quarter 2024 within the stated cure period. b. That the transgressions of the Lobbying Disclosure Law outlined in paragraph (a) above are deemed negligent in nature; 4. In regard to Respondent's failure to file a timely fourth (41h) quarter 2024 expense report, and pursuant to Section 13A09 (c)(1) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A09(c)(1), Respondent agrees to pay a total amount of $4,550.00, which shall be made payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within 30 days of the adjudication in this matter. 5. The Investigative Division will recommend that the State Ethics Milne Spirit Works, LLC, 25-005-L Page 12 Commission take no further action in this matter; and make no specific recommendations to any law enforcements or other authority to take action in this matter. Such, however, does not prohibit the Commission from initiating appropriate enforcement actions in the event of Respondent's failure to comply with this agreement or the Commission's order or cooperating with any other authority who may so choose to review this matter further. Consent Agreement, at 1-2. In considering the Consent Agreement and Stipulation of Findings, we agree with the parties that Respondent as a registered principal failed to timely file a quarterly expense report with the Department of State for the fourth quarter of 2024 as required by Section 13A05 of the Lobbying Disclosure Law. Accordingly, we hold that Respondent, as a registered principal, failed to timely file a quarterly expense report with the Department of State for the fourth quarter of 2024 as required by Section 13A05 of the Lobbying Disclosure Law. We accept the recommendation of the parties for a determination that the transgression of the Lobbying Disclosure Law outlined immediately above is deemed to be negligent in nature. As part of the Consent Agreement, Respondent agreed to pay an administrative penalty in the total amount of $4,550.00 payable to the Commonwealth of Pennsylvania and forwarded to this Commission by no later than the thirtieth (30t") day after the mailing date of this Order. We determine that the Consent Agreement submitted by the parties sets forth a proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. The Commission gives great weight to the considerable mitigation presented by the Respondent. Accordingly, we approve the Consent Agreement that has been submitted by the parties. Respondent is ordered to pay the aforesaid administrative penalty in the total amount of $4,550.00 by way of electronic payment, certified check or money order in the amount of $4,550.00 payable to the Commonwealth of Pennsylvania and forwarded to this Commission by no later than the thirtieth (30"') day after the mailing date of this adjudication and Order. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. As a principal registered with the Pennsylvania Department of State ("Department of State") under principal registration number "P69918," Respondent Milne Spirit Works, LLC ("Respondent") has been subject to the reporting requirements of Section 13A05 of Milne Spirit Works, LLC, 25-005-L Page 13 Pennsylvania's Lobbying Disclosure Law ("Lobbying Disclosure Law"), 65 Pa.C.S. § 13A05. 2. Respondent, in its capacity as a principal registered with the Department of State under principal registration number "P69918," failed to timely file a quarterly expense report witli the Department of State for the fourth quarter of 2024 as required by Section 13A05 of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A05. 3. The transgression of the Lobbying Disclosure Law outlined in paragraph 2 immediately above is deemed to be negligent in nature. 4. The prerequisite service of a warning notice in accordance with Section 63.4(1) of the Lobbying Disclosure Regulations, 51 Pa. Code § 63.4(l), was satisfied. 5. Based upon the totality of the circumstances in this case, in particular the considerable mitigation provided by the Respondent, the imposition of an administrative penalty in the total amount of $4,550.00 is warranted. In Re: Milne Spirit Works, LLC, : File Docket: 25-005-L Respondent : Date Decided: 7/23/25 Date Mailed: 7/24/25 ORDER NO.168-SL Respondent Milne Spirit Works, LLC ("Respondent"), in its capacity as a principal registered with the Pennsylvania Department of State ("Department of State") under principal registration number "P69918," failed to timely file a quarterly expense report with the Department of State for the fourth quarter of 2024 as required by Section 13A05 of Pennsylvania's lobbying disclosure law ("Lobbying Disclosure Law"), 65 Pa.C.S. § 13A05. 3. Pursuant to Section 13A09(c) of the Lobbying Disclosure Law, 65 Pa.C.S. § 13A09(c), and the Consent Agreement of the parties, this Commission hereby levies one administrative penalty against Respondent in the total amount of $4,550.00 for its delinquent fourth quarter 2024 expense report. 4. Respondent is ordered to pay an administrative penalty in the total amount of $4,550.00 by utilizing the Commission's electronic payment system or by forwarding to this Commission a certified check or money order in the amount of $4,550.00 payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission by no later than the thirtieth (30'h) day after the mailing date of this Order. 5. Noncompliance with Paragraph 4 of this Order will result in the Commission initiating appropriate enforcement action(s).