Source: http://www.ct.gov/ethics/cwp/view.asp?a=2305&q=401970
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Ethics: 2007-15
ADVISORY OPINION 2007-15
Application of the Code of Ethics for Lobbyists’ to Registration and Reporting Requirements of Non-Profit Organizations
The Citizen’s Ethics Advisory Board issues this advisory opinion at the request of Betty Gallo, a registered lobbyist and head of the government relations and lobbying firm, Betty Gallo & Co. In that request, Ms. Gallo asks several questions about the lobbying laws.
Ms. Gallo, who represents a number of non-profit organizations, asked the following questions about “expenditures” and whether or not they trigger the registration threshold and/or whether or not they are reportable on the financial reports of a registered lobbyist.
1. Pursuant to General Statutes § 1-91 (f), whether “members” of a registered lobbyist include individuals on a mailing list or individuals on an e-mail list.
2. Once expenses related to communications with the members of a registered lobbyist are incurred, what types of communications:
i. are considered exempt from the reporting requirement, and
ii. count towards the communicator lobbyist registration threshold?[1]
(E.g., a staff person contacts a member directly to request that he/she contact a legislator or to conduct door-to-door canvassing.)
3. In the instance where the staff person of a non-profit who primarily conducts grassroots activities (e.g., soliciting others to contact their legislators) goes to the capitol to testify about a particular issue, whether:
i. the non-profit must report, on its lobbyist report, the compensation it paid for the individual’s time spent testifying and the time spent in preparation, and whether
ii. the compensation received for the time spent testifying and the time spent in preparation must be counted towards the registration threshold for the individual.
4. Whether the compensation paid/received for the time a staff person of a client lobbyist spends as an approved member of a state task force or advisory committee (e.g., the Long Term Care Advisory Council[2]) counts towards the lobbyist registration threshold, or (if the individual is already a registered lobbyist) whether the compensation for such time must be reported.
Pursuant to the Code of Ethics for Lobbyists (“Code of Ethics”), client lobbyists must report “expenditures.”[3] The Code of Ethics defines expenditure as “any advance, conveyance, deposit, distribution, transfer of funds, loan, payment . . . for the purpose of influencing any legislative or administrative act . . . .”[4] Excluded from the definition of “expenditure,” however, is “any expenditure made by any club, committee, partnership, organization, business, union, association or corporation for the purpose of publishing a newsletter or other release to its members, shareholders or employees, or contributions, membership dues or other fees . . . .” [5]
The former State Ethics Commission (“former Commission”) stated in Advisory Opinion No. 78-2 that the “regulations of the Commission define ‘member’ as a dues-paying member.” Since then, the regulations were amended to define “member” as “bona fide members.”[6] Neither the statute, the regulations, nor the former Commission provided any further guidance as to what constitutes a “bona fide member.” We must, therefore, construe the term according to the “commonly approved usage of the language . . . .”[7] Merriam Webster Dictionary defines “bona fide” as “neither specious nor counterfeit; genuine.” It further defines “member” as “one of the individuals composing a group.”
Because these definitions do not provide a definitive answer in the case at hand, for guidance, we turn to other definitions of “bona fide member” outside of the Code of Ethics. A search of the provisions of <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Connecticut’s General Statutes does not reveal a definition of the term “bona fide member” that is on-point with the issue in question. However, a federal watchdog agency—the Federal Election Commission—has adopted a definition of “member” which is consistent with our view of the meaning of a “bona fide member.” The definition is contained in the federal campaign finance regulations, and defines “member” as:
all persons who are currently satisfying the requirements for membership in a membership organization, affirmatively accept the membership organization's invitation to become a member, and either:
(3) Have a significant organizational attachment to the membership organization that includes: affirmation of membership on at least an annual basis and direct participatory rights in the governance of the organization. For example, such rights could include the right to vote directly or indirectly for at least one individual on the membership organization's highest governing board; the right to vote on policy questions where the highest governing body of the membership organization is obligated to abide by the results; the right to approve the organization's annual budget; or the right to participate directly in similar aspects of the organization's governance.[8]
It is the opinion of the Citizen's Ethics Advisory Board that this definition more clearly sets forth a meaningful definition of the term “member.” We, therefore, hereby adopt this definition and extend it to the term “bona fide member” as used in the agency’s regulations.[9] Thus, to answer Ms. Gallo’s first question (i.e., whether, pursuant to § 1-91 (f), “members” include individuals on a mailing list or individuals on an e-mail list), in light of this definition, we conclude that unless the criteria set forth in the definition above are met, individuals on a mailing list or an e-mail list are not “bona fide members.” Expenses incurred by a client lobbyist to communicate with such individuals who do not meet the “bona fide members” criteria stated herein must, therefore, be reported on the client lobbyist’s financial report(s). This conclusion is in keeping with the public policy of enhanced disclosure. It would not be in keeping with that policy if client lobbyists did not report expenses incurred for communications to non-members who join a mailing/email list.
Next, we turn to Ms. Gallo’s second question: once expenses related to communications with the members of a registered lobbyist are incurred, what type of communications with members[10] are considered exempt from the reporting requirement, and count towards the communicator lobbyist registration threshold? Pursuant to § 1-91 (f), any expense incurred by a “club, committee, partnership, organization, business, union, association or corporation for the purpose of publishing a newsletter or other release to its members, shareholders or employees, or contributions, membership dues or other fees . . .” shall not be considered “expenditures.”
This question has already been answered as it pertains to email communications. The former Commission, by way of Advisory Opinion No. 2001-14, advised that an email communication is considered an “other release” for purposes of the exception to “expenditure.” “[A]nd, therefore,” the former Commission stated, “[the expenses] need not be counted for registration or reporting purposes, if the electronic distribution is limited to the classes of individuals enumerated in the statute.”
Ms. Gallo’s hypothetical (i.e., a staff person contacts a member directly to request that he/she contact a legislator or to conduct door-to-door canvassing) pertains not only to email contact, but also to contact either in person or via telephone call. Ms. Gallo’s hypothetical also seeks clarification regarding: 1) whether the staff person’s time must be reported and 2) whether any other expenses incurred (e.g., telephone usage, mileage for travel to a member’s home, etc.) must be reported on the client lobbyist’s financial report.
The exception to the definition of “expenditure” reads “for the purpose of publishing a newsletter or other release . . . .”[11] The term “publishing” in the statute qualifies both “newsletter” and “other release.” Thus, the exception only extends to communications made by way of “published” materials. The exception does not, however, extend to other types of communication, e.g., telephone calls or personal contacts. To answer Ms. Gallo’s question - only communications made to members by way of “published” materials are exempt from reporting. Expenses incurred in communicating with members in other ways (e.g., staff time and telephone charges) are not exempt and must be reported by the client lobbyist. Similarly, a staff person who communicates with members by way of “published” material need not count compensation received for the time spent producing the material towards the $2,000 lobbyist registration threshold. Conversely, a staff person who communicates with members in ways other than by “published” materials must count compensation received for the time spent communicating towards the $2,000 lobbyist registration threshold.
In her next question, Ms. Gallo asks about the instance in which the staff person of a non-profit who primarily conducts grassroots activities (e.g., soliciting others to contact their legislators) goes to the capitol to testify about a particular issue; whether the non-profit must report, on its lobbyist report, the compensation it paid for the individual’s time spent testifying and the time spent in preparation; and whether the compensation received for the time spent testifying and the time spent in preparation must be counted towards the registration threshold for the individual.
The broad definition of lobbying includes “soliciting others to communicate with any official or his staff in the legislative or executive branch of government or in a quasi-public agency, for the purpose of influencing any legislative or administrative action . . . .”[12] The individual in question falls within this definition. He or she is, therefore, lobbying and must register as a lobbyist if he or she reaches the $2,000 threshold. [13] The client, in turn, must report the individual’s time spent testifying and the time spent in preparation. If the individual, in the time spent lobbying and “in furtherance of lobbying” does not reach the $2,000 threshold, he or she need not register as a lobbyist. Nonetheless, the client must still report the “pro rata value of the compensation . . . [provided to] individuals who lobby but who need not register because they do not meet the financial threshold for lobbying . . . .”[14]
Last, Ms. Gallo asks whether compensation paid/received for the time a staff person of a client lobbyist spends as an approved member of a state task force or advisory committee counts towards the lobbyist registration threshold, or (if already a lobbyist) whether compensation for such time must be reported.
This question has been answered by the former Commission as it pertains to statutorily-authorized task forces. In Advisory Opinion No. 99-16, the former Commission, after referencing General Statutes § 1-91 (l) (5),[15] stated that “the time spent in such participation [i.e., on a legislative task force] up until the release of the task force report is not considered reportable lobbying activity, but any subsequent activity by the lobbyist to try to encourage or discourage legislative action of the recommendation is considered lobbying.” The former Commission also determined, however, that this exception does not extend to participation on an ad hoc working group established by the Department of Public Utilities Control to study issues raised under legislation because “the groups are not legislatively mandated and are, therefore, not subject to the formal and public structure of a statutorily authorized task force.”[16]
Thus, assuming that the lobbyists have joined a statutorily-authorized task force or committee (as is the case with the Long Term Care Advisory Council), uncompensated service on such a task force does not constitute lobbying activity within the meaning of the Code of Ethics. “When undertaken in furtherance of task force activities, neither communicating with legislators nor expending funds will trigger the Code's registration requirement.”[17] Nonetheless, we hereby re-emphasize what was previously determined by the former Commission: any subsequent activity to try to encourage or discourage legislative action of the recommendation is considered lobbying. Any funds associated with time spent engaging in such subsequent activity (i.e., staff compensation) must be reported by lobbyists. In addition, individuals who lobby but who do not register as lobbyists because they do not meet the financial threshold must carefully keep track of any such compensation received, to ensure that they do register if and when they reach the $2,000 registration threshold.
Unless there is affirmative acceptance of the membership organization's invitation to become a member, and either (1) some significant financial attachment to the membership organization, such as a significant investment or ownership stake, or (2) payment of membership dues at least annually, of a specific amount predetermined by the organization, or (3) a significant organizational attachment to the membership organization that includes: affirmation of membership on at least an annual basis and direct participatory rights in the governance of the organization, individuals on a mailing list or an e-mail list are not “bona fide members.”
Only expenses incurred for communications made to members by way of “published” materials are exempt from reporting. In addition, the staff person of a client lobbyist who communicates with members in ways other than by “published” materials must count compensation received for the time spent communicating towards the $2,000 lobbyist registration threshold.
In the instance where the staff person of a non-profit who primarily conducts grassroots activities (e.g., soliciting others to contact their legislators) goes to the capitol to testify about a particular issue, the client must report compensation paid for the individual’s time spent testifying and the time spent in preparation, and the individual must register as a lobbyist if he/she reaches the $2,000 threshold.
The time spent participating on a legislative task force up until the release of the task force report is not considered reportable lobbying activity and does not count towards the $2,000 lobbying threshold. Nonetheless, any subsequent activity to try to encourage or discourage legislative action of the task force recommendation is considered lobbying. Any compensation paid/received for the time spent engaging in such activity must be reported by lobbyists and counts towards the registration threshold for anyone not currently registered as a lobbyist.
Dated_______12/27/07_______
[1] This threshold is created by General Statutes § 1-91 (l), which defines “lobbyist” as “a person who in lobbying and in furtherance of lobbying makes or agrees to make expenditures, or receives or agrees to receive compensation, reimbursement, or both, and such compensation,
reimbursement or expenditures are two thousand dollars or more in any calendar year or the combined amount thereof is two thousand dollars or more in any such calendar year.”
[2] The Long Term Care Advisory Council, authorized by General Statutes § 17b-338, advises and makes recommendations to the State of Connecticut Long-Term Care Planning Committee.
[3] General Statutes § 1-96 (e).
[4] General Statutes § 1-91 (f).
[5] (Emphasis added.) § 1-91 (f).
[6] Regs., Conn. State Agencies § 1-92-49 (a) (1) (B).
[7] General Statutes § 1-1 (a).
[8] 11 CFR § 100.134 (f).
[9] Regs., Conn. State Agencies § 1-92-49 (a) (1) (B).
[10] We will assume for purposes of this question that communications are occurring with individuals who are indeed “bona fide members.”
[11] (Emphasis added.) § 1-91 (f).
[12] General Statutes § 1-91 (k).
[13] While there is an exception to the definition of lobbyist for “[a]ny individual or employee who receives no compensation or reimbursement specifically for lobbying and who limits his activities solely to formal appearances to give testimony before public sessions of committees of the General Assembly or public hearings of state agencies and who, if he testifies, registers his appearance in the records of such committees or agencies . . . ,” (Emphasis added), such exception is much narrower than the facts presented here and therefore is not dispositive of the issue raised herein. General Statutes § 1-91 (l) (4).
[14] Regs., Conn. State Agencies § 1-92-49 (a) (5).
[15] General Statutes § 1-91 (l) (5) exempts from the definition of “lobbyist,” “[a] member of an advisory board acting within the scope of his appointment . . . .”
[16] Advisory Opinion No. 98-32.
[17] Request for Advisory Opinion No. 0979.
Content Last Modified on 1/10/2008 4:45:07 PM