Compliance Now

E-News from State and Federal Communications, Inc.
NOVEMBER 2018

Everything You Wanted to Know about Lobbying but Afraid to Ask

I had the opportunity in October to be the inaugural pop-up presenter for Women in Government. According to Lucy Gettman, the session was rated excellent by 90% of the attendees…So, instead of wondering what was up with the other 10%, I am sharing the information from the presentation.

Let me start with this: You both have responsibilities—public sector and private sector. If either of you screws up…you are both in trouble. Which means you both need to know what the laws are in your states.

At Women in Government—or any other program you attend— anything outside of the agenda should be questioned. There is not a legislator here who should expect an invitation from someone in the private sector.

I will use my friend Jim Clark from Roche Diagnostics as an example. He is registered in a number of states. He would never assume he could entertain a legislator just because that is not his state. In fact, his company has registered lobbyists all over the country and he needs to know if it will affect them.

I know by now you think I am a Debby Downer. But, this is important. I am the Corporate Crusader for Compliance. It is what I have spent my life doing.

Every legislator here has her own ethics law to follow. Every lobbyist here has his/her own lobbying law to follow. Gift laws affect the legislator, lobbyist, and lobbyist employer.

Every state in the country requires registration for lobbyists if communicating, directly or directly, with a member of the general assembly. There are thresholds, but you need to keep in mind these three important items:

Montana, Nebraska, Nevada, North Dakota, Oregon, South Dakota, and Wyoming do not require registration for executive agency lobbying. That doesn’t include the governor or his/her staff, but it excludes regulatory activity.
There are 22 states which we call “first toe in the water” states. You have to register before you go to the state. Plan ahead. Some require training. (Alabama, Arizona, Colorado, Delaware, Florida, Illinois, Iowa, Kansas, Kentucky (leg), Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, West Virginia.)
There are 26 states which require registration for procurement lobbying…And, procurement does not include just selling. It includes offering services and leasing items such as automobiles or wave runners at state parks.

I have a column that I write on LinkedIn called, “Another One Bites the Dust.” I haven’t kept up with it, but I need to get back into it. I hate writing about officials who resign because they got mixed up in ethics violations.

I recently gave a speech in Atlanta and it happened to be on September 13th—exactly one week after the Atlanta Journal Constitution printed an article titled “Vendor Reporting on Gifts to State Workers in Georgia Spotty at Best.”

Let me give you a couple highlights from the article. I have removed the name of the companies involved:

Georgia Tech found itself in a series of ethics scandals. Paul Strouts was vice president of Campus Services. He was accused of requiring the vendor with the campus bookstore to give $35,000 a year for a football stadium suite primarily for use for Campus Services vendors and employees, as well has his own family and friends. He was also accused of telling subordinates to override authority to approve raises.
Georgia didn’t always require vendors to register and report, but they do now. That all started in the 90s when Governor Roy Barnes fired Dotty Roach, the head of the state’s purchasing agency for getting too cozy with a software company. It was reported she received a $359 spa certificate and a $540 hot air balloon ride from sales rep who received $450,000 in commission for the $40,000,000 in software.

People, this is real stuff. A 100-year-old engineering company in New Jersey was fined $1 million for reimbursing low-level employees more than $500,000 for political contributions to gain government contracts. The company also had to forfeit $2.6 million. The company was banned from working in New Jersey for 10 years and had to file bankruptcy.

We all know the 10 Commandments, but there are more:

Thou shalt not divide by zero— I learned that in high school;
Thou shalt not hyphenate ly words—I learned that in college; and
Thou shalt not reimburse anyone for making a political contribution.

So, what do you need to do:

Know the rules in the states where you live. We joke—and it isn’t funny—that the last person to ask whether a gift can be accepted is a legislator. Lobbyists, do your own homework.
Lobbyists, alert new hires to the rules. Legislators, do not take advantage of these new folks.
Legislators and lobbyists—beware of “everyone does it.”
Determine the permissibility and appropriateness of conduct beforehand. You have heard it before, Know Before you Go.
Be the “go to” person at your company.
Establish a process for tracking activity.
Be consistent when calculating expenditures. Trust me—newspapers will know if the lobbyist reports do not match up with what legislators’ report. And, sometimes it isn’t the newspaper. We once got a call from an American University student telling us she reviewed reports for a class and the numbers didn’t match up with the law firm reported. And, she was correct. Our client accurately reported the pro-rata share of the retainer attributable to lobbying while the law firm reported the whole retainer. They wanted to be #1.
Training and retraining is important for legislators and lobbyists.
Ask questions.
Will it pass the Washington Post test? The Atlanta Journal Constitution test? The New York Times test?

You not only have to look after what you are responsible for, but also what the other person is responsible for.

You each have people who depend on you and everyone expects to see you at future conferences.

Thank you.

Elizabeth Z. Bartz

President and CEO
@elizabethbartz

Boston, Massachusetts Mayor Signs Lobbyist Registration and Regulation Ordinance

Alexandra Vernis, JD
Research Associate

Mayor Marty Walsh signed the Lobbyist Registration and Regulation Ordinance, requiring registration and reporting for individuals and entities attempting to influence city legislative and administrative action. The ordinance was passed by City Council in late September and requires registration by every person retained, employed or designated by any client or lobbying entity to engage in lobbying or lobbying activities. A home rule petition establishing the authority of the lobbying ordinance under the Massachusetts constitution was passed concurrently with the lobbying ordinance.

In addition to requiring annual lobbyist registration for individuals and entities, the ordinance implements quarterly reporting and creates penalties for registration and reporting violations. Annual registration fees are $150 per lobbyist and lobbyist client. Lobbying entities must pay $300. Late statements will result in a $50 per day fine until after the 20th day when it climbs to $100 per day.

Responding to a bid request when seeking a contract with the city is not included in the definition of lobbying and does not trigger registration. However, any communication to a city employee seeking to encourage the city to procure a particular item or service, or to consider a particular vendor, qualifies as a lobbying communication.

Another main piece of the legislation is the creation of the Municipal Lobbying Compliance Commission to oversee enforcement of the lobbying regulations. Commissioners will be appointed by the mayor and may include the City Council president and the city clerk.

The passing of the Lobbyist Registration and Regulation Ordinance comes after two years of Walsh calling for increased transparency through the implementation of a lobbying ordinance. In July, Walsh vetoed a similar ordinance passed by council as it failed to define and regulate lobbying and did not create an adequate enforcement mechanism. Walsh produced his own draft lobbying ordinance and worked with City Council to reach the agreed upon version.

The new ordinance will take effect on April 13, 2019, 180 days after it was signed by the mayor.

[The details for this article will be updated on our website in the Lobbying Compliance Laws and Procurement Lobbying Compliance Laws for Boston, Massachusetts.]

Summary of Changes UPDATE
Note Recent Changes to Compliance Regulations

Michael Beckett, Esq., Research Manager

CALIFORNIA: Gov. Jerry Brown signed a bill requiring lobbyists to complete training on sexual harassment in connection with lobbying activities. Assembly Bill 2055 adds a component to training already required for lobbyists registered with the state and conducted by the ethics committees in both houses of the Legislature. The lobbyist training course now must include information on each house of the Legislature’s policies against harassment, including sexual harassment, in connection with lobbying activities.

CALIFORNIA: On November 15, the Fair Political Practices Commission (FPPC) will consider proposed regulations to make biennial cost of living adjustments to campaign contribution and gift limits that will apply from January 1, 2019 through December 31, 2020. The proposed regulations would change the gift limit from $470 to $500 and make increases to campaign contribution limits for candidates. Adjusted contribution limits for gubernatorial candidates would increase from $29,200 to $31,000 per person. The FPPC is accepting written comments on the proposals until November 13, 2018.

MISSOURI: A public interest law firm challenged an executive order banning lobbyists from giving anything of value, including written materials, to executive branch officials. The Institute for Justice, a Virginia-based nonprofit libertarian law firm, filed suit against Gov. Mike Parson and members of the Missouri Ethics Commission for enforcing Executive Order 17-02, which expands the definition of gift to include publications addressing public policy issues. The Institute for Justice claims that by prohibiting the distribution of two of its public policy publications to government officials, the executive order violates the law firm’s First Amendment right to free speech. The law firm also claims the executive order violates its right to equal protection by prohibiting only lobbyists from sharing publications with state officials of the executive branch.

SOUTH DAKOTA: South Dakotans will have multiple ethics-related ballot measures to vote on this November. Constitutional Amendment W, also known as the South Dakota Voter Protection and Anti-Corruption Amendment, would create an independent ethics commission, decrease limits on campaign donations, bar gifts from lobbyists to many public officials, and prevent the Legislature from altering or rejecting laws approved by ballot question without returning to the ballot. More than 51 percent of voters supported a similar initiative in November 2016, but lawmakers repealed it in early 2017, citing constitutional concerns. Also on the November ballot, Initiated Measure 24, would prohibit contributions to ballot question committees by non-residents, out-of-state political committees, and entities who have not filed with the secretary of state for the four years prior to making a contribution.

TENNESSEE: A judge in Tennessee’s Davidson County Chancery Court ruled against the state, striking down a law prohibiting political action committees from making contributions to candidates after the 10th day before an election. Under the law, only political party committees can contribute to candidates in the 10-day window. Chancellor Ellen Hobbs Lyle ruled in favor of plaintiff Tennesseans for Sensible Election Laws based on insufficient facts from the state to overcome the plaintiff’s argument. In asserting the prohibition was an overbroad speech restriction, the plaintiff argued elected officials and political parties were reserving special treatment in the political process for themselves. Attorneys for the state announced their intention to file an appeal immediately.

Legislation We Are Tracking

At any given time, more than 1,000 legislative bills, which can affect how you do business as a government affairs professional, are being discussed in federal, state, and local jurisdictions. These bills are summarized in State and Federal Communications' digital encyclopedias for lobbying laws, political contributions, and procurement lobbying and can be found in the client portion of our website.

Summaries of major bills are also included in monthly email updates sent to all clients. The chart below shows the number of bills we are tracking in regard to lobbying laws, political contributions, and procurement lobbying.

	Total bills	Number of Jurisdictions	Passed	Died	Carried over to 2019
Lobbying Laws	414	50	27	217	6
Political Contributions	696	53	63	395	10
Procurement Lobbying	557	52	39	297	7

W E B S I T E T I P

Our website now has 2019 legislative session and lobbying key dates information for all 50 states, over 300 local jurisdictions, five U.S. territories, the federal government, Canada, and select European jurisdictions. In the Lobbying Compliance Laws publication, the key dates information provides a schedule of all reports and registrations due in 2019. Continue to watch the website for updates to the 2018 and 2019 key dates and for the addition of key dates information regarding your political contribution compliance programs.

Procurement: Do My Sales Activities Trigger Lobbyist Registration?

We have a free video for you to download. Our newest video, “Procurement: Do My Sales Activities Trigger Lobbyist Registration?”, gives comprehensive information on procurement lobbying. Considerations such as lobbying implications, reporting, and best practices are discussed.

If you are planning on seeking, negotiating, or renewing a business contract from the government, you need to watch this informative video. Click here for downloading instructions.

ASK THE EXPERTS

State and Federal Communications’ Experts Answer Your Questions

Here is your chance to “Ask the Experts” at State and Federal Communications, Inc. Send your questions to experts@stateandfed.com. (Of course, we have always been available to answer questions from clients that are specific to your needs, and we encourage you to continue to call or email us with questions about your particular company or organization. As always, we will confidentially and directly provide answers or information you need.) Our replies are not legal advice, just our analysis of laws, rules, and regulations.

My company recently hosted a dinner event where several state legislators were in attendance, and I delivered a few campaign contributions. Is this dinner expenditure a gift to the attending legislators, or can I consider this an in-kind contribution?

Please proceed with caution. For an expenditure to be considered an in-kind contribution, it really has to be made for the purpose of influencing the results of an election or making an electioneering communication. Labeling an expenditure (especially after the fact) as an “in-kind contribution” is not an acceptable choice to categorize would otherwise be considered a gift to a legislator, subject to that particular state’s gift laws and limitations. Here are some important questions to consider:

What is the purpose of the event? Is the event a political fundraiser? What language is on the invite? ...

Read the full article here

For more information, be sure to check out our Political Contributions Compliance online publication for any jurisdiction. Please feel free to contact us if you have any questions.

Myra Cottrill, Esq., Compliance Specialist

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State and Federal Communications, Inc.
Scrapbook - October 2018

Owner of the Minor League Teams - Akron Rubber Ducks and Jacksonville Jumbo Shrimp, and a friend of State and Federal Communications, Inc., Ken Babby, received the Andy Palich Service Award from the Summit County Sports Hall of Fame.

Elizabeth Z. Bartz attended the Public Affairs Council
Fall Board Meeting in October and met up with friend,
Nathan Gonzales, from Inside Elections.

We support the United Way of Summit County "Read to Me Day" each year.
Several of our staff participates in reading to students at Akron Public Schools.
Pictured above is Joseph M. May, Corporate Social Responsibility Manager.

Happy 7th Anniversary to
our Research Manager

Michael Beckett, Esq.

Plan to say hello at future events where State and Federal Communications, Inc.
will be attending and/or speaking regarding compliance issues.

November 1	WASRG Symposium, Washington, DC
November 8	Diversity in Advocacy, Washington, DC
November 9	The Women's Network: Leadership Summit, Washington, DC
November 9	WGR Workshop: Embracing and Improving Your Leadership Style, Washington, DC
November 13	WGR New Member Breakfast
November 14-17	NABPAC Post Election Conference, Palm Beach, FL
November 15	Akron Roundtable, Akron, OH
November 17-20	SGAC LPC, Scottsdale, AZ
November 308	WGR Workshop: Tactical Leadership Skills, Washington, DC
December 5-9	NCSL Capitol Forum, Washington, DC
December 5	Ohio Holiday Reception, Washington, DC
December 9-13	COGEL Conference, Philadelphia, PA
December 12-15	NCSL Legislative Leaders Symposium, New York City, NY

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Contact us to learn how conveniently our services will allow you to say "I Comply" for your compliance activities.

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