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HomeMy WebLinkAbout157-SL, District1199CPI-10NE: 717-783-1610 STATE ETHICS COMMISSION FACSMLE. 717-787-0806 TOLI FREE: 1-800-932-0936 HNANCE BUILDING WELSH E: 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120 0400 In Re. Districtl 199C, File Docket: 22-004-L Respondent Order No. 157-SL Date Decided: 4/12/23 Date Mailed: 4/14/23 Before: Shelley Y. Simms, Chair Rhonda Hill Wilson Paul E. Parsells David L. Reddecliff 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. § 13A0I et sue., 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 Districtl 199C (hereinafter also referred to as "Respondent") a Notice of Alleged Noncompliance. A Stipulation of Finding's 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, 1. 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. § 13A0I et seq.), failed to timely file a quarterly expense report pursuant to 65 Pa.C.S. § 13A05 for the fourth (0') quarter of 2021. 11. FINDINGS: I Respondent, District] 199C ("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. § 13A0I et M. a. Respondent initially registered as a principal with the Department of State on October 29, 2020 for the registration period January 1, 2019 through December 3 1, 2020. K Respondent's registration statement indicates that lobbying commenced on July 1, Districtl199C, 22-004-L Page 2 2020. 2. Respondent filed a principal registration statement with the Pennsylvania Department of State for the registration period January 1, 2021 through December 31, 2022. 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 "P66452." C. In filing its principal registration, Respondent identified its registered mailing address as: Rohan Wright' Districtl 199C 1319 Locust Street Philadelphia, PA 19107 d. On its principal registration, Respondent listed Bellevue Strategies as its lobbying firm and Mustafa Rashed and Julie Platt (both affiliated with Bellevue Strategies) as its Lobbyists. 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 rirms.-- 1. A principal or lobbying firm required to register under subsection (a) shall file a single registration ' Listed as the Authorized Representative in Respondent's Principal Registration Statement, Districtl 199C, 22-004-L Page 3 statement setting forth the following information with the department: i. Name of the business. ii. Permanent address. iii. Daytime telephone number. 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. § 13AO4(a), (b)(1), (d). 4. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations provide further information in relation to registration periods and reporting periods: Distried 199C, 22-004-L Page 4 § 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). 5. Section 13A05 of the Lobbying Disclosure Law sets forth, in part, the following requirements for the contents of quarterly reporting forms filed by principals: § 13AQ5. 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. (b) Content.— (1) Each expense report must list the names and registration numbers when available of all lobbyists by whom lobbying is conducted on behalf of the principal and the general subject matter or issue being lobbied. (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. District] 199C, 22-004-L Page 5 (ii) The costs for direct communication. (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. 65 Pa.C.S. § 13Ao5(a), (b)(1)-(2). 6. In addition to the Lobbying Disclosure Law, the duly promulgated Regulations provide further 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). 7. 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 § 5 5.1(d). 8. 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. 65 Pa.C.S. § 13A05(d). Districtl 199C, 22-004-L Page 6 9. 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 (01) quarter 2021 expense report by January 312, 2022. 10. The Regulations promulgated under the Lobbying Disclosure Law specifically provide the following in relation to a delinquent filing: § 51.4. Delinquency. (a) A registration statement or report required to be filed under section 13A04 or 13A05 of the act (relating to registration; and reporting) is delinquent if not received by the Department on the date due as follows: (1) Hard copy filings must be received by 5 p.m. in the office. For quarterly expense reports, from 5 p.m. until 12 a.m, midnight, a hard copy filing may be filed with the Department's designee. The filing location and the Department's designee will be on the Department's web site. i. Hard copy filings are no longer allowed pursuant to Act 2018-2 (H.B.1175), § 2, approved February 14, 2018, eff. April [15], 2018. (2) Electronic filings may be filed until 12 a.m. midnight. (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(a)-(b), I L By Warning Notice letter dated April 6, 2022, Respondent was served with notice' in January 30, 2022 being Sunday. s Respondent was also emailed by the Investigative Division on May 12, 2022 at the email assigned to their Registration notifying them that they were facing enforcement for their failure to file their 414 Quarter 2021 expense report. District1199C, 22-004-L Page 7 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 2021. a. Said Warning Notice was mailed to: Rohan Wright District 1199C 1319 Locust Street Philadelphia, PA 19107 b. This is the same address as listed on Respondent's principal registration statement. C. By submitting the principal registration statement, Respondent consented to receipt of service of notices, other official mailings or process, at the address listed on the registration statement. (See, Paragraph 2(a) above). 12. Said Warning Notice letter set forth the nature of the alleged noncompliance and the administrative and criminal penalties for failing to file. 13. 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 (41h) quarter of 2021 with the Department of State within thirty (30) days from the mailing date of the Warning Notice letter. 14. The Director of the Bureau of Campaign Finance and Civic Engagement - Department of State conducted a search of the Department of State's records, and, as of June 16, 2022, no fourth (4th) quarter of 2021 expense report was found to have been filed with the Department of State for District1199C. 15. 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: a. 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 20th late day, $100 for each late day. (iii) For each late day after the first 20 late days, $200 for each late day. Districtl 199C, 22-004-L Page 8 65 Pa.C.S. § 13A09(c)(1). 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 limited 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(e)(4)j. 65 Pa.C.S. §§ 13A09(d), (e)(4). d. A person that intentionally fails to register or report as required by the law commits a misdemeanor of the 2nd degree. 65 Pa.C.S. § 10A09(e)(1). e. A registrant who files a report under the law with knowledge that the report contains a false statement or is incomplete commits a misdemeanor of the 2°d degree. 65 Pa.C.S. § 13A09(e)(2). IIL 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 2021. 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 October 29, 2020 for the registration period January 1, 2019, through December 31, 2020. Respondent's registration statement indicated that lobbying commenced on July 1, 2020. Respondent was assigned the principal registration number "P66452." Per the Department of State's website, on July 29, 2021, Respondent renewed its registration as a principal with the Department of State for registration period January 1, 2021, through December 31, 2022. 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 Districtl 199C, 22-004-L Page 9 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 on July 29, 2021, for the registration period January 1, 2021, through December 31, 2022, 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 2021. 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 April 6, 2022, 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 letter 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 2021 with the Department of State within thirty (30) days of the mailing date of the Warning Notice letter. As of June 16, 2022, no fourth quarter 2021 expense report was found to have been filed with the Department of State for Districtl 199C. Per the Department of State's website, on July 11, 2022, Respondent submitted a quarterly expense report for the fourth quarter of 2021. 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 20"' 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: The Investigative Division will recommend the following Districtl I99C, 22-004-L Page I0 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 seg.), failed to timely file a Quarterly Expense Report pursuant to 65 Pa.C.S. § 13A05, for the fourth (4"h) quarter of 2021; b. That the transgressions of the Lobbying Disclosure Law outlined in paragraph (a) above are deemed negligent in nature; 4. In settling this matter, Respondent agrees to the following: a. Regarding Respondent's negligent failure to file a timely fourth (4th) quarter expense report, and pursuant to Section 13A09 of the Lobbying Disclosure Law, 65 Pa. C.S. § 13A09, Respondent agrees to a three (3) year ban from lobbying and/or registering as a principal in the Commonwealth of Pennsylvania. b. Considering the circumstances in the attached stipulation of findings and the ban in paragraph a, Respondent will not be required to pay a monetary penalty. 5. The Investigative Division will recommend that the State Ethics 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 quarterly expense reports with the Department of State for the fourth quarter of 2021 as required by Section 13A05 of the Lobbying Disclosure Law. Districtl 199C, 22-004-L Page 11 Accordingly, we hold that Respondent, as a registered principal, failed to timely file quarterly expense reports with the Department of State for the fourth quarter of 2021 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 a three (3) year ban from lobbying and/or registering as a principal in the Commonwealth of Pennsylvania. 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. Accordingly, we approve the Consent Agreement that has been submitted by the parties. Respondent District1199C is banned from lobbying and registering as a principal for three years in the Commonwealth of Pennsylvania. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: As a principal registered with the Pennsylvania Department of State ("Department of State") under principal registration number "P66452," Districtl 199C has been subject to the reporting requirements of Section 13A05 of Pennsylvania's Lobbying Disclosure Law ("Lobbying Disclosure Law"), 65 Pa.C.S. § 13A05. 2. District1199C, in its capacity as a principal registered with the Department of State under principal registration number "P66452," failed to timely file a quarterly expense report with the Department of State for the fourth quarter of 2021 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 are 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(1), was satisfied. 5. Based upon the totality of the circumstances in this case, the imposition of a three year ban on lobbying and registering as a principal in the Commonwealth of Pennsylvania, are warranted. In Re: Districtl 199C, File Docket: 22-004-L Respondent Date Decided: 4/12/23 Date Mailed: 4/14/23 ORDER NO. 157-SL 1. Districtl 199C, in its capacity as a principal registered with the Pennsylvania Department of State ("Department of State") under principal registration number "P66452," failed to timely file a quarterly expense report with the Department of State for the fourth quarter of 2021 as required by Section 13A05 of Pennsylvania's lobbying disclosure law ("Lobbying Disclosure Law"), 65 Pa.C.S. § 13A05. 2. The transgressions of the Lobbying Disclosure Law outlined in paragraph 1 immediately above are deemed to be negligent in nature. Respondent Districtl 199C is banned from lobbying and registering as a principal in the Commonwealth of Pennsylvania for a period of three years. 4. Noncompliance with Paragraph 3 of this Order will result in the Commission initiating appropriate enforcement action(s). BY THE COMMISSION, Shelley Y. S s, Chair