Aenc presentation bill scogginPresentation Transcript
AENC Update on Changes to NC Lobbying and Ethics LawWilliam G. ScogginTroutman Sanders17 February 2012
Lobbying Law - The Basics• Only two changes in 2011 session (will cover during overview S.L. 2011-393)• Will look at important definitions/concepts • Most in GS 120C-100 • Lobbyist/Lobby/Lobbying • Principal • Covered Persons/Designated Individuals • Applies to state officials
Lobbying• GS120C-100(9): Lobby or Lobbying. – Any of the following: a. Influencing or attempting to influence legislative or executive action, or both, through direct communication or activities with a designated individual or that designated individuals immediate family. b. Developing goodwill through communications or activities, including the building of relationships, with a designated individual or that designated individuals immediate family with the intention of influencing current or future legislative or executive action, or both. The term "lobby” or “lobbying" does not include communications or activities as part of a business, civic, religious, fraternal, personal, or commercial relationship which is not connected to legislative or executive action, or both.
Lobbyist• (10) Lobbyist. – An individual who engages in lobbying and meets any of the following criteria:• b. Represents another person or governmental unit, but is not directly employed by that person or governmental unit.• c. Contracts for payment for lobbying.• d. Is employed by a person and a significant part of that employees duties include lobbying. In no case shall an employee be considered a lobbyist if in no 30-day period less than five percent (5%) of that employees actual duties include engaging in lobbying as defined in subdivision (9)a. of this section or if in no 30-day period less than five percent (5%) of that employees actual duties include engaging in lobbying as defined in subdivision (9)b. of this section.• The term "lobbyist" shall not include individuals who are specifically exempted from this Chapter by G.S. 120C-700 or registered as liaison personnel under Article 5 of this Chapter.
Principal• The person or governmental unit on whose behalf the lobbyist lobbies and who makes payment for the lobbying.
Covered Persons/Designated Individuals• GS 120C-100(2) Designated individual. – A legislator, legislative employee, or public servant.• GS 138A-3(10) Covered person. – A legislator, public servant, or judicial officer, as identified by the [State Ethics] Commission under G.S. 138A-11.• http://www.ethicscommission.nc.gov/cpersons.htm
Gift Ban – GS 138A• Applies to covered persons for “gifts” from lobbyists and principals and others
Gift Ban GS138A• 138A-32. Gifts. • (c) No public servant, legislator, or legislative employee shall knowingly accept a gift from a lobbyist or lobbyist principal registered under Chapter 120C of the General Statutes. No legislator or legislative employee shall knowingly accept a gift from liaison personnel designated under Chapter 120C of the General Statutes. No public servant, legislator, or legislative employee shall accept a gift knowing all of the following: (1) The gift was obtained indirectly from a lobbyist, lobbyist principal, or liaison personnel registered under Chapter 120C of the General Statutes. (2) The lobbyist, lobbyist principal, or liaison personnel registered under Chapter 120C of the General Statutes intended for an ultimate recipient of the gift to be a public servant, legislator, or legislative employee as provided in G.S. 120C-303.
Gift Ban GS138A• (d) No public servant shall knowingly accept a gift from a person whom the public servant knows or has reason to know any of the following: • (1) Is doing or is seeking to do business of any kind with the public servants employing entity. • (2) Is engaged in activities that are regulated or controlled by the public servants employing entity. • (3) Has financial interests that may be substantially and materially affected, in a manner distinguishable from the public generally, by the performance or nonperformance of the public servants official duties.• (d1) No public servant shall accept a gift knowing all of the following: • (1) The gift was obtained indirectly from a person described under subdivision (d)(1), (2), or (3) of this section. • (2) The person described under subdivision (d)(1), (2), or (3) of this section intended for an ultimate recipient of the gift to be a public servant.
Parallel in GS 120C• § 120C-303. Gifts by lobbyists and lobbyist principals prohibited.• (a) Except as provided in subsection (b) of this section, no lobbyist or lobbyist principal may do any of the following:• (1) Knowingly give a gift to a designated individual.• (2) Knowingly give a gift with the intent that a designated individual be an ultimate recipient.• (b) Subsection (a) of this section shall not apply to gifts as described in G.S. 138A-32(e).• (c) The offering or giving of a gift in compliance with this Chapter without corrupt intent shall not constitute a violation of the statutes related to bribery under G.S. 14-217, 14-218, or 120-86, but shall be subject to civil fines under G.S. 120C-602(b).• (d) Gifts made to a nonpartisan state, regional, national, or international legislative organization of which the General Assembly is a member or a legislator or legislative employee is a member or participant of by virtue of that legislators or legislative employees public position, or to an affiliated organization of that nonpartisan state, regional, national, or international organization, shall not constitute a violation of subdivision (a)(2) of this section or of G.S. 138A-32(c).• (e) Gifts made to a nonpartisan state, regional, national, or international organization of which a public servants agency is a member or a public servant is a member or participant of by virtue of that public servants public position, or to an affiliated organization of that nonpartisan state, regional, national, or international organization, shall not constitute a violation of subdivision (a)(2) of this section or of G.S. 138A-32(c). (2006-201, s. 18; 2007-348, s. 12(a), (b); 2008-213, ss. 17-19, 90; 2010-169, s. 15(a).)
Exceptions• Exceptions are found generally in GS 138A-32(e)• Beware SEC opinions/guidance• Think about whether you really have to “give” it.
Registration and Reporting
Registration and Reporting• Registration of lobbyist within one business day of lobbying.• Principal’s authorization within 20 business days of lobbying by lobbyist• Reporting is quarterly except where reportable expenditures occur during session, when it becomes monthly. Watch out for special sessions.• Reports due 15 days after quarter.• Where a monthly principal report is due, the 10 days after month-end requirement is still in place.
What do you report?• GS 120C-403(d) – (e) govern this• Note that some things outside (9)a. and b. need to be reported - “ancillary” services
What are “ancillary services?”• In addition to reporting any payment to a lobbyist for lobbying under subsection (d) of this section, a lobbyist principal shall report, cumulatively for the year, any payment to a lobbyist for any of the following communications and activities that were used to lobby within the registration period under G.S. 120C-200(d):• a. Research.• b. Drafting of written communications.• c. Monitoring of proposed or pending legislative action or executive action, including time spent preparing communications with the lobbyist principal to relate information on proposed or pending legislative action or executive action.• d. Time spent advising and rendering opinions to the lobbyist principal as to the construction and effect of proposed or pending legislative action or executive action.
Reporting – when/how?• Once a year, in last quarterly report• Aggregated (all lobbyists, lobbying and ancillary services all lumped together)• Allocations are made with this report at the end of the period, rather than quarterly.• S.L. 2011-393 made crystal clear to regulators and the regulated that it is one cumulative amount (remember last year?!)
2011 reporting – due 1/24
Audits• Secretary of State • Authority? • Process • Response posture • Closure
Other Things• Filed: S 264 – Lobbyists Shall Not Serve on Board of Governors (?) S 772 – Consolidate Ethics, Elections and Lobbying (?) H 710 – Bd of Ethics, Lobbying and Campaign Finance (?) H 139 -- Limit Contributions by State Vendors (eligible) H 436 – Economic Disclosures for Sanitary Districts (expansion to locals) (eligible) H 752 – Revolving Door (6 mos. Increase to year plus contract involvement 36 mos.) (dead)
• Who is the principal? Not the association member• Gift ban exception pass-through sponsorships• Stealth covered persons in your membership/leadership• Informational materials• Educational events/your meetings
Clarify Use of Position• Prohibition on covered person profiting on position (GS 138A-31(b))• Problem identified with mention of name on agenda/brochure, etc.
Solution in S.L. 2011-393• Statute amended to exclude from prohibition: The inclusion of a covered persons public position in an agenda or other document related to a meeting, conference, or similar event when the disclosure could reasonably be considered material by an individual attending the meeting, conference, or similar event.