Opinion ID: 1941415
Heading Depth: 1
Heading Rank: 4

Heading: engaged for lobbying purposes

Text: Bereano commences by contending that he was not subject to any sanction because he was not engaged for lobbying purposes on behalf of Mercer on or after 1 November 2001, the date when the legislation took effect. At the threshold, we agree with Bereano on the question of whether the sanction provision of § 15-405 may be applied retrospectively. In general, statutes are presumed to operate prospectively unless a contrary intent appears. A statute will be given retrospective effect if that is the legislative intent, but not if this would impair vested rights, deny due process, or violate the prohibition against ex post facto laws. A statute governing procedure or remedy is applied to cases pending in court only when the statute becomes effective. Allstate Ins. Co. v. Kim, 376 Md. 276, 289, 829 A.2d 611, 618 (2003). In State Ethics Commission v. Evans, 382 Md. 370, 855 A.2d 364 (2004), we applied these principles to the statute in question in the instant case. Evans was a registered lobbyist who was convicted of wire and mail fraud in the United States District Court for the District of Maryland as a result of his lobbying activities. Evans, 382 Md. at 373, 855 A.2d at 365. He completed his sentence in 2000, before § 15-405 took effect. Id. In 2002, after that section had been in effect for several months, Evans attempted to return to lobbying and the Commission immediately attempted to sanction him under its newly granted authority. Evans, 382 Md. at 373, 855 A.2d at 366. We held that § 15-405 was unavailable as the basis for sanctions unless the improper conduct occurred when that statute was in effect. Evans, 382 Md. at 388, 855 A.2d at 374. Bereano submits that his plight is indistinguishable from that of Evans. He classifies any improper conduct as the inclusion of a prohibited contingency clause in the agreement by which he was retained, a discrete act that occurred prior to 1 November 2001, the effective date of § 15-405. Bereano testified that he did not fulfill the agreement by lobbying on behalf of Mercer after 1 November 2001. For diverse reasons, we disagree. First, under the applicable standard of review, the Commission was empowered to resolve conflicts in the evidence, based upon its conclusions concerning its determination of the credibility of the testimony and evidence presented. Faced with conflicting evidence in the form of Bereano's 13 November 2001 registration as a lobbyist on behalf of Mercer, his bills to Mercer for legislative expenses, as well as meals, the fact that he filed official documents showing lobbying activities after 1 November 2001, and its evaluation of Bereano's demeanor and credibility while testifying, the Commission found uncredible his claim to have done nothing other than socialize with legislators: We find the Respondent's testimony to be less than credible and incongruous with the plain language of the documents submitted into evidence. Respondent's fee letter of September 1, 2001 to Mr. Traina recites that he was following up our discussions. Respondent proposes to represent Mercer Ventures in the State of Maryland in a lobbying capacity relating to the company plans to develop and obtain contracts and arrangements with various county, municipal, and State government agencies and departments  (emphasis added). The lobbying services would include government matters at both the State and local levels and Respondent would provide information to the company as to matters of concern and importance with its work and relationship with the State of Maryland. Respondent also indicates that he would register as a lobbyist. A reader of the September 1, 2001 letter has to go five paragraphs into the letter before the words private contracts and businesses appear. Respondent was being hired to obtain State contracts in Maryland and his testimony that it was not until nine months after the fee agreement that he became aware that Mr. Traina had some existing contracts with State agencies, is not credible. Respondent testified that he did nothing at the State level. Yet he registered as a lobbyist on November 13, 2001 for the period November 1, 2001 through October 31, 2002 (Staff Counsel Exhibit No. 1, Respondent Mercer Venture Exhibit 2). On June 12, 2002 Respondent filed an Amended and Revised General Lobbying Activity Report under oath and on behalf of Social Work Associates for the period November 1, 2001 through April 30, 2002. (Staff Counsel Exhibit No. 4). Respondent reported compensation and expenses related to any and all legislative and executive matters concerning staffing and case management, and social services issues. Included in the report is $200 for gifts to or for officials or employees or their immediate families. [footnote omitted] At the hearing Respondent could not explain the gift disclosure and denied making any gifts to officials on behalf of Mercer Ventures. During the same time period, Respondent was submitting invoices to Mr. Traina that included statements for legislative expenses and legislative expenses and meals. Respondent testified that he kept detailed time records on all his activities on behalf of his clients. Yet Respondent did not produce records at the hearing showing his activities on behalf of Mr. Traina and Mercer Ventures. We will not second-guess its assessment of that evidence. What the Court of Special Appeals observed, in another case in the context of declaring a mistrial, is equally appropriate here: [The trial court's] reviewing stand was, after all, far better situated than our own. He had shared firsthand the entire course of the trial; had observed the demeanor and reactions of witnesses, lawyers, and jurors alike; was privy to the vital non-verbal communication; and was in the right position to sense the vibrations that never surface in a typewritten record. DeLuca v. State, 78 Md.App. 395, 435, 553 A.2d 730, 750 (1989). In the case at bar, we accept all of the Commission's first level factual findings that Bereano took actions that constituted lobbying after 1 November 2001. We next will review the Commission's interpretation of the law as it applies to the facts actually found, not to the facts envisioned, especially when the Commission's decision turns on its assessment of a party's credibility. Having done so, we must determine if the administrative decision is premised upon an erroneous conclusion of law. Aviation Admin. v. Noland, 386 Md. 556, 573 n. 3, 873 A.2d 1145, 1155 n. 3 (2005) (quoting United Parcel v. People's Counsel, 336 Md. 569, 577, 650 A.2d 226, 230 (1994)). For the reasons that follow, we conclude that the facts found by the Commission correctly interpreted Maryland Code (1984, 2004 Repl.Vol.), § 15-713(1) of the State Government Article and the law was not applied retrospectively. The Commission found: The plain language of the agreement drafted by the Respondent clearly contemplated the lobbying of various county, municipal and State government agencies and departments in Maryland, for a flat fee plus the 1% contingency fee. A fair reading of the focus of the agreement was that Respondent was going to lobby in Maryland and as a side thought, the fee agreement would also apply if Respondent was successful in other States. . . . The facts indicate that Respondent did not file his lobbying registration on behalf of Mercer Ventures d/b/a Social Work Associates with the Commission until November 13, 2001. As such, Respondent is subject to the provisions of the law in effect as of that date, which includes the new sanctions contained in HB2. Additionally, the contingency fee restrictions contained in the Ethics Law date back to the inception of the law in 1979 and have not changed in substance since 1994. Moreover, the fee agreement at issue here was in effect until June 12, 2002 when the contingent fee provision was terminated by letter. Respondent billed Mercer Ventures pursuant to this agreement and submitted Lobbying Activity Reports in reference to this agreement, well past the November 1, 2001 effective date of HB2. As a result, Respondent's agreement and continuing relationship with Mercer Ventures is properly subject to the sanctions introduced by HB2. Accordingly, we do not believe the present complaint is a retroactive application of the law and we have authority to impose fines and suspension if appropriate. . . . Respondent continues to lobby and is currently registered on behalf of Mercer Venture, Inc. and on behalf of the tobacco industry on matters concerning the wholesale and retail business of tobacco; the welfare system on matters concerning Welfare Pilot Program, privatization issues, welfare eligibility, supplemental benefits and medical management care and child support collection programs; and the professional liability insurance industry on matters concerning professional malpractice insurance issues for physicians and other healthcare providers, negligence and tort law issues, among other clients. As pointed out by the Court of Special Appeals: According to the Commission, the fact that Bereano may not have actually secured contracts for Mercer or have been compensated pursuant to the terms of the contingency clause of the Fee Agreement was irrelevant because S.G. § 15-713(1) proscribes a registered lobbyist from being engaged for lobbying purposes for compensation that is contingent upon legislative or executive action. 174 Md.App. at 161, 920 A.2d at 1146. And further: Despite Bereano's explanations of the intentions of the parties, the plain language of the Fee Agreement supports the Commission's interpretation that Bereano was engaged for lobbying purposes on behalf of Mercer to develop and obtain contracts and arrangements with . . . State government agencies and departments. For his success in obtaining contract[s] and performance of services with any government entity, unit or agency in the State of Maryland, he was to be compensated one percent of the first year receivable in addition to the $2,000 monthly retainer. (Emphasis added.) In effect, the securing of government contracts was such an integral part of the Fee Agreement that all of the provisions of the Fee Agreement were subject to modification except for the provision and understanding . . . to compensate [Bereano] when and after any contract is entered into [with] a government unit. Even if the percentage of the first year receivable was intended as a flat fee for continuing services, the contract still provides for compensation that is contingent upon the executive action. 174 Md.App. at 172-73, 920 A.2d at 1152-53. Bereano argues that he simply signed the agreement but did absolutely nothing to execute it. As the Court of Special Appeals stated, We are persuaded that the legislative intent as expressed in the language of the statute supports an interpretation that entering into a contract for `lobbying purposes' for compensation is an `engage[ment]' and that the `engage[ment]' continues for so long as the contract remains in effect. 174 Md.App. at 168, 920 A.2d at 1150. The crucial element is not that an agreement was signed by the parties. To the contrary it is that the agreement gave Mercer a claim upon Bereano's time and lobbying services. There is no requirement that services actually be rendered, as the benefit to Traina begins and continues for as long as Bereano is on call. Thus, the agreement entitled Mercer to expect that Bereano would take actions to protect and advance its interests and would refrain from taking actions that would have an undesirable effect. For example, had unfavorable legislation been introduced during the term of the agreement and had Bereano done nothing to thwart it, Mercer might have legal recourse for Bereano's failure to fulfill his lobbying obligations. In this regard, there is a kinship to a lawyer's engagement fee or availability fee, in which the service purchased by the client is the attorney's availability to render service if and as needed as long as the agreement continued. In re Gray's Run Technologies, Inc., 217 B.R. 48, 53 (Bkrtcy. M.D.Pa.1997). Bereano's engagement as Mercer's lobbyist commenced, but did not terminate, on the day the agreement was signed. Despite his protestations, the Commission found that Bereano engaged in the lobbying activities for which he was engaged by Mercer, making himself available for, and engaging in, lobbying purposes after 1 November 2001, the effective date of the statute. We agree.