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HomeMy WebLinkAbout99-1020-R StabackOPINION OF THE COMMISSION The Honorable Edward G. Staback State Representative 115th Legislative District 307 Betty Street P.O. Box 305 Archbald \Eynon, PA 18403 -0305 1020. I. ISSUE: 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: 2/1/2000 DATE MAILED: 2/11/2000 99- 1020 -R Re: Reconsideration, Staback, 99 -1020, Lobbying, Principal, Lobbyist, State Official, Constituent, Hospitality, Ticket, NASCAR, Race, Report. Dear Representative Staback: This Opinion constitutes this Commission's reconsideration of Staback, Opinion 99- Whether tickets provided by a raceway owner /principal to a State official for distribution to specified or unspecified constituents constitute hospitality to the State official under the Lobbying Disclosure Act or the Public Official and Employee Ethics Act. II. FACTUAL BASIS FOR DETERMINATION: This matter initially arose from your advisory request received on August 23, 1999 which resulted in the issuance of Staback, Opinion 99 -1020 (Staback) on October 13, 1999. In that Opinion, we determined that tickets provided by a raceway owner to a State official for distribution to his constituents, with or without specification by the State official as to who those recipient constituents will be, constitute hospitality to the State official under the Lobbying Disclosure Act (Act) or the Public Official and Employee Ethics Act (Ethics Act). Staback, 99- 1020 -R Page 2 In a timely request for reconsideration of Staback, you contended that this Commission erred in concluding that tickets provided to a State official by a raceway owner (principal) for dispersement to constituents constitute hospitality to the State official regardless of whether those constituents are specified or unspecified. You submitted three main arguments in support of your request. Your first main argument was that Staback disregards the role of the State official as a mere "conduit" where he or she provides the names of the ticket recipients to the principal and then disperses the tickets to those individuals. In support of this argument, you contrasted the two hypothetical scenarios that had been posed in your letter dated September 29, 1999. In the first scenario, the State official does not identify the constituents to the principal, and upon receipt of the tickets from the principal, distributes the tickets to the recipients. In the second scenario, the State official identifies each constituent to the principal, and upon receipt of the tickets from the principal, distributes the tickets to each recipient. You stated that the difference between the two scenarios is that the principal in the second scenario determines whether the tickets will be made available to those identified, and the State official acts merely as a "conduit" for the delivery of the tickets. You argued that under the second scenario, the decision to provide tickets to the recipients identified by the State official rests solely with the principal /lobbyist. Your second main argument was that notwithstanding the above distinction, Staback treats the State official as the recipient of all the tickets in both scenarios in contravention of the express provisions of Section 35.1(k)(6) of the Lobbying Disclosure Regulations, 51 Pa. Code §35.1(k)(6). You stated that pursuant to the cited Regulation, the principal /lobbyist is given the exclusive option to determine the manner in which lobbying - related expenditures are to be reported when more than one individual is benefited at a common event or occasion. Although each of the "options" set forth in subsections (i) through (iii) of §35.1(k)(6) inherently seeks to approximate and report the value received by each participant, you contended that Staback "usurps" the principal /lobbyist's option to calculate the benefit and forces the use of a single method that is not authorized by the Act or Regulations. You asserted that Staback results in inaccurate and misleading reporting, thereby creating an impression that the full cost of the common event has been expended on the State official rather than the several participants who enjoyed the benefits. Your third main argument was that the premises underlying Staback lead to the faulty conclusion that the State official is the sole beneficiary of the tickets. You contended that the constituents themselves, rather than the State official, are the beneficiaries of the tickets. You asserted that Staback ignores the uncontroverted fact that in both hypothetical scenarios, the principal /lobbyist has provided the tickets for the benefit of the recipient constituents who utilize them for their own enjoyment. You further observed that the total value of the tickets is finite and cannot be enjoyed by both the ticket recipients and the State official. For the above reasons, you asked this Commission to reconsider Staback. You specifically sought a determination that the principal is vested with the exclusive authority under Section 35.1(k)(6) of the Regulations to determine by three specified options the manner in which the value of the benefit is enjoyed by multiple participants. In addition to your letter requesting reconsideration, several letters supporting your request were received from Counsel of the Caucuses within the Senate and House of Representatives. The Chief Counsel to the House Democratic Caucus asserted that this Commission made material errors of both law and fact in Staback by disregarding the Act and Regulations (Section 35.1(k)(6)) which vest the authority in the principal /lobbyist to calculate the value of gifts or hospitality for individual participants at common events and by finding that a State official, who merely acts as a "conduit" of gifts or hospitality, is the actual recipient of those items for reporting purposes, contrary to the intent of the General Assembly. The Staback, 99- 1020 -R Page 3 General Counsel to the Senate Majority Caucus, the Chief Counsel to the Senate Democratic Leader and the Chief Counsel to the House Majority Leader submitted letters raising parallel arguments urging this Commission to grant reconsideration and to issue a second Opinion that the tickets would not be imputed to the State official under the Act and the Lobbying Disclosure Regulations. At the public meeting of November 23, 1999, we considered your request for reconsideration. Legislative Counsel were in attendance at that meeting, and they were able to answer some of our questions relative to this matter, but there were other questions which could not be answered without your presence and involvement. Accordingly, we granted your request for reconsideration on the basis that there may have been an error of law, such that we would revisit the matter at a time when you could be present to provide the necessary additional information. At the public meeting on February 1, 2000, you appeared and offered commentary which may be fairly summarized as follows. There are two major races that occur at the Pocono Speedway in June and July. Both races are on the NASCAR circuit and hence, attract the most popular race car drivers in the country. Attendance at each race can range from 125,000 to 150,000 people. Some of your constituents, whom you presume to be "race car buffs," come to you to ask whether there are any complimentary tickets to the races. In general, these constituents ask for "in- field" passes, which would allow them to access the in -field portion of the track itself. You estimate that in -field passes are worth $15 or $20 each. In response to these requests, you compile a list of the names of the people requesting the tickets and the number of tickets requested. The list is compiled chronologically by adding the names of the constituents as the requests are made. You stress that you do not contact the racetrack unless a constituent specifically makes a request for tickets. You further state that you do not respond to such requests from people outside of your legislative district. The people who make the requests are constituents who have known you for a number of years and who are aware that you can obtain tickets for them. Two weeks prior to the race, you send the list to the racetrack, which you state is a principal, for consideration. If the racetrack honors the request, it will simply package the tickets and send them back to you for distribution to those individuals whose names appear on the list. The racetrack has the option of mailing the tickets directly to your constituents or denying the request altogether. The number of names on the list varies depending upon the race. Generally, the list contains requests for 20 to 30 tickets. If the requests are for in -field passes, which are the cheapest tickets, the racetrack usually grants the entire request. The racetrack will not grant requests for more expensive tickets such as "hot pit" passes, which would allow an individual to access the garage area where the race cars, drivers and mechanics congregate; tickets for the upper -level grandstand; or tickets for the tower or penthouse. You add that you would never ask the racetrack to honor these more expensive ticket requests. On the other hand, you note that the racetrack may honor a request for a "cold pit" pass, which would allow an individual into the pit area where he or she may be able to see the race cars, drivers and mechanics from a distance. You state that you do not believe that your status as a Member of the General Assembly has any effect on the racetrack's decision as to whether it will honor your request. Staback, 99- 1020 -R Page 4 You state that you believe that even if you were not a State official, the racetrack would give the same consideration to your request as it would to any non - profit group such as a boy scout troop or a girl scout troop or a senior citizens group. In your view, providing tickets to your constituents is another way of dealing with a constituent problem, much like helping someone straighten out a problem with his or her driver's license at PennDOT. You state that you do not believe that you gain anything by providing the tickets to your constituents. You further state that in your opinion, the beneficiaries of the tickets are the ticket recipients who attend the race, and the racetrack itself, which makes a profit from the sale of food and race car paraphernalia to the constituents. III. DISCUSSION: Having granted reconsideration of Staback, Opinion No. 99 -1020, your inquiry is before us de novo. Upon consideration of your arguments, and based upon the following analysis, we determine that we reached the correct conclusion in the first Opinion which we issued in this matter. 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 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, we must review the pertinent definitions and substantive provisions of the Act and related Regulations. The stated intent of the Lobbying Disclosure Act is as follows: §1302. Statement of intent and jurisdiction (a) Intent. - -The Constitution of Pennsylvania recognizes the principle that all free government is founded upon the authority of the people. It further provides that the power to make law in this Commonwealth is vested in the General Assembly and the power to enforce law is vested in the Executive Department. The ability of the people to exercise their fundamental authority and to have confidence in the integrity of the process by which laws are made and enforced in this Commonwealth demands that the identity and the scope of activity of those employed to influence the actions of the General Assembly and the Executive Department be publicly and regularly disclosed. 65 Pa.C.S. §1302(a)(Emphasis added). 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 Staback, 99- 1020 -R Page 5 (2) direct or indirect communication. 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. "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. Id. The Lobbying Disclosure Regulations include the following pertinent definitions: Anything of value- - (i) For the limited purpose of reporting gifts, transportation, lodging or hospitality under section 1304 or 1305 of the act (relating to registration; and reporting), or under section 1105(b)(6) or (7) of the Ethics Act (relating to statement of financial interests), these terms mean anything of any nature whatsoever which is not or would not ordinarily be obtainable in the marketplace without consideration, including, but not limited to: (L) A complimentary ticket/pass, or the purchase of a ticket /pass, to an event such as a reception, rally, fund - raiser, sporting event, theater, opera, concert, exhibition, or the like. (ii) The term does not include services to a constituent or other member of the public based upon a referral or recommendation by a legislator or other State official or employe made within the scope of such office or employment. Effort to influence legislative action or administrative action - -An effort to initiate, support, promote, modify, oppose, delay or advance a legislative action or administrative action. The term does not include services to a constituent or other member of the public based upon a referral or recommendation by a legislator or other State official or employe made within the scope of such Staback, 99- 1020 -R Page 6 office or employment. Gift -- Anything which is received without consideration of equal or greater value. (i) The term does not include a political contribution which is otherwise reported as required by law or a commercially reasonable loan made in the ordinary course of business. (ii) For the purpose of categorizing a reportable item under section 1304 or 1305 of the act, or under section 1105(b)(6) or (7) of the Ethics Act, the term does not include "transportation and lodging or hospitality received in connection with public office or employment" as defined in this section, which is otherwise reported as required by law. (iii) The term does not include services to a constituent or other member of the public based upon a referral or recommendation by a legislator or other State official or employe made within the scope of such office or employment. Hospitality -- Includes the following: (i) Meals. (ii) Beverages. (iii) Recreation and entertainment. 51 Pa. Code §31.1 (Emphasis added). Section 35.1(k)(6) of the Lobbying Disclosure Regulations provides, in pertinent part: (k) For purposes of reporting the value of gifts or transportation, lodging or hospitality to be disclosed under section 1304 or 1305 of the act, or under section 1105(b)(6) or (7) of the Ethics Act: (6) When more than one individual is benefited incident to an occasion or transaction, the registrant may calculate the value of the gifts, transportation, lodging or hospitality provided to a particular individual by one of the following: (i) Calculating the actual benefit provided to that individual. (ii) Dividing the totals of expenditures common to more than one beneficiary including that individual by the number of recipients, and adding the resulting figures (quotients) together with the value of all other gifts, transportation, lodging or Staback, 99- 1020 -R Page 7 hospitality provided to that particular individual. (iii) Allocating a portion of the total expenditures common to more than one beneficiary to each individual based upon each individual's participation and adding that value to the value of all other gifts, transportation, lodging or hospitality provided to that individual. 51 Pa. Code §35.1(k)(6). As in the first Opinion issued in this matter, we must determine whether, under the facts which you have submitted, raceway tickets provided to you for distribution to specified or unspecified constituents constitute hospitality to you under the Act. We shall review each of the arguments which you have raised in support of your position, both in requesting reconsideration and in submitting additional commentary to this Commission after reconsideration was granted. Your first main argument when you sought reconsideration was that Staback disregards the role of the State official as a mere "conduit" where the State official provides the names of the ticket recipients to the principal and then disperses the tickets to those individuals. You argued that under such a scenario, the decision to provide tickets to the recipients identified by the State official rests solely with the principal /lobbyist. We reject the argument that under such a scenario the State official is merely a "conduit." We do not believe that a State official who requests tickets from a principal, for recipient constituents whom the State official identifies, and then distributes the tickets to those constituents is merely acting as a "conduit." Because the tickets are provided by the principal to the State official at the State official's request, to be distributed to constituents identified by the State official, all of the tickets are attributable to the State official for reporting purposes under the Act and the Ethics Act. Your second main argument when you sought reconsideration was that notwithstanding the above distinction, Staback treats the State official as the recipient of all the tickets in both scenarios in contravention of the express provisions of Section 35.1(k)(6) of the Lobbying Disclosure Regulations, 51 Pa. Code §35.1(k)(6). Your position is that pursuant to the cited Regulation, the principal /lobbyist is given the exclusive option to determine the manner in which lobbying - related expenditures are to be reported when more than one individual is benefited at a common event or occasion. You asserted that Staback results in inaccurate and misleading reporting, thereby creating an impression that the full cost of the common event has been expended on the State official rather than the several participants who enjoyed the benefits. We hold that Section 35.1(k)(6) of the Lobbying Disclosure Regulations, which provides three separate methods of calculating value, has no application to this issue. The issue before us does not concern valuation but rather attribution. The fact that you as a State official identify who the ticket recipients will be makes you a beneficiary of a single transaction which specifically is the principal's accommodation of your request for the tickets provided. Thus, Section 35.1(k)(6) is inapplicable. Under the facts which you have submitted, it is the State official who is provided outright with all of the tickets and is vested with discretion to designate who the recipients will be. As for any asserted impressions generated by our ruling in this regard, the State official may, if he or she so chooses, explain the circumstances surrounding the tickets when filing the Statement of Financial Interests required under the Ethics Act. Your third main argument when you sought reconsideration was that the premises Staback, 99- 1020 -R Page 8 underlying Staback lead to the faulty conclusion that the State official is the sole beneficiary of the tickets. You contended that the constituents themselves, rather than the State official, are the beneficiaries of the tickets, and that in both hypothetical scenarios, the principal /lobbyist has provided the tickets for the benefit of the recipient constituents who utilize them for their own enjoyment. You further observed that the total value of the tickets is finite and cannot be enjoyed by both the ticket recipients and the State official. At the public meeting on February 1, 2000, you further stated that you do not believe that you gain anything by providing the tickets to your constituents. You stated that in your opinion, the beneficiaries of the tickets are the ticket recipients who attend the race, and the racetrack itself, which makes a profit from the sale of food and race car paraphernalia to the constituents. We determine that because all of the tickets provided by the raceway owner to the State official are for "constituents," they are provided to the State official by virtue of his or her position as a State official. The raceway owner is a principal, and the provision of the tickets to you for your constituents constitutes lobbying by the principal. The ability of a principal /lobbyist to determine whether the tickets will be provided to the identified recipients merely relates to the quantity of tickets for reporting purposes. Accordingly, for these reasons as well as those noted above, we conclude that the tickets constitute hospitality to you as the State official for the reporting requirements of the Act and the Ethics Act, regardless of whether the constituents are identified by you in advance or are subsequently specified by you. Although we agree that an individual ticket is finite and may only admit one individual to a sporting event, it is equally true that multiple benefits may arise from each ticket: the advancement of the interests of the raceway owner /principal, the use of a free ticket by the constituent and the generation of good will toward the State official by the constituent who receives the ticket. Your fourth argument is that your provision of the tickets to your constituents is a "constituent service," and therefore does not fall within the regulatory definitions of "anything of value" and "effort to influence legislative action of administrative action," set forth above (see also, the regulatory definition of "gift" set forth above). You contend that providing tickets to your constituents is another way of dealing with a constituent problem, much like helping someone straighten out a problem with his or her driver's license at PennDOT. In interpreting the exception for constituent services provided in the definitions of "anything of value," "effort to influence," and "gift" under Section 31.1 of the Lobbying Disclosure Regulations, we hold that the term "constituent services" involves the relationship between the constituent and his government and the intervention of the State official to facilitate a matter involving the government, as for example, where a State official helps a constituent straighten out a problem with a driver's license at PennDOT. The term does not include a situation where a State official provides a nongovernmental benefit to a constituent, such as a free ticket to a sporting event. Based upon this distinction, the exception for constituent services under Section 31.1 of the Lobbying Disclosure Regulations is also inapplicable. Having dispelled the above arguments, we reach the same conclusions as to your inquiry that we did in our initial Opinion issued in this matter. In general, tickets which are provided to a State official without any specification as to who the ultimate recipients will be constitute hospitality to the State official. This is so because the State official has discretion to give the tickets to himself or herself, family or friends, or to any others whom he or she chooses. Under this type of scenario, the tickets clearly constitute hospitality to the State official. Staback, 99- 1020 -R Page 9 The result is the same if the State official specifies to whom the tickets are to be provided. See, Confidential Opinion 99 -1011. Under such a scenario, all of the tickets constitute hospitality to the State official. Under the facts which you have presented, all of the tickets provided by the raceway owner /principal to you for "constituents" constitute hospitality to you regardless of whether the recipient constituents are identified by you in advance or are subsequently determined by you. Under either of the scenarios which you have presented, the raceway owner /principal does not specify to whom the tickets are to be provided, but rather provides the tickets to you either as to constituents whom you identify in advance or will subsequently specify. Either way, you are in a position to identify who will ultimately receive the tickets. Further, such tickets are for "constituents" and hence are provided to you by virtue of your position as a State official. This is not a situation where a principal or lobbyist provides tickets with no contact, involvement or consultation with you as a State official. This case involves you as a State official having the ability to specify the ultimate recipients of the tickets, either by supplying their names in advance or by subsequently distributing the tickets to whomever you choose. The tickets constitute hospitality to you which is subject to the reporting requirements of the Ethics Act regardless of whether they are provided by a registered lobbyist or principal. Such tickets are also subject to the reporting requirements of the Act if the donor is a principal or lobbyist, as is the case with the Pocono Speedway. Accordingly, we hold that raceway tickets provided by a raceway owner /principal to a State official for distribution to the State official's constituents constitute hospitality to the State official under the Act and the Ethics Act regardless of whether the recipient constituents are identified by the State official in advance or are subsequently specified by the State official. Our holding in this matter is consistent with the stated intent of the General Assembly in promulgating the Lobbying Disclosure Act that the scope of activity of those employed to influence the actions of the General Assembly and the Executive Department be publicly and regularly disclosed." 65 Pa.C.S. §1302(a). Parenthetically, there would be no reporting requirements as to tickets provided directly by the raceway owner /principal to other individuals where there is no contact or involvement on your part. Likewise, there would be no reporting requirements for you as a donor either under the Act or Ethics Act regarding your subsequent provision of such tickets to constituents. IV. CONCLUSION: Raceway tickets provided by a raceway owner /principal to a State official for distribution to the State official's constituents constitute hospitality to the State official under the Lobbying Disclosure Act and the Public Official and Employee Ethics Act regardless of whether the recipient constituents are identified by the State official in advance or are subsequently specified by the State official. 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. By the Commission, Staback, 99- 1020 -R Page 10 Daneen E. Reese Chair Commissioners Louis W. Fryman and John J. Bolger dissent.