Ethics under the capital dome


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A Guide to Lobbying in Texas

Royce Poinsett Special Counsel - Government Relations

Presented at TWCA Annual Conference

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Ethics under the capital dome

  1. 1. ETHICS UNDER THE CAPITOL DOME A Guide to Lobbying in Texas Royce Poinsett Special Counsel - Government Relations© 2011
  2. 2. Outline of Presentation I. Why Do Ethics Matter? II. Are You a Lobbyist? III. Gifts IV. Texas Public Information Act V. Confidentiality VI. Political Contributions VII. Tips on Effective Lobbying 2
  3. 3. I. Why Do Ethics Matter? 3
  4. 4. I. Why Do Ethics Matter?1. MoralityGod and Santa Claus are watching. 4
  5. 5. I. Why Do Ethics Matter? 2. Criminal Penalties The District Attorney is watching. 5
  6. 6. • Why Do Ethics Matter?2. Criminal PenaltiesViolation of the Lobby Law or the Penal Code:Bribery 2nd degree felony, 2-20 years, fine up to $10,000Contingent fees for lobbying 3rd degree felony, 2-10 years, fine up to $10,000Other violations of the Lobby Law or the Penal Code Class A misdemeanor, 1 year, fine up to $4,000 6
  7. 7. I. Why Do Ethics Matter? 3. Controversy; Distraction from Policy Efforts The Press and The Opposition are Watching. 7
  8. 8. I. Why Do Ethics Matter? 4. Reputation Everyone is Watching. 8
  9. 9. Texas Ethics Commission 2003-2010 9
  10. 10. Texas Ethics Commission 2003-2010 10
  11. 11. I. Why Do Ethics Matter? Anyone who participates in the Legislative Process should be extremely careful of getting themselves, their employer, or a public official and their staff, into ethics trouble. 11
  12. 12. I. Why Do Ethics Matter? Is it Legal? How Does it Smell? 12
  13. 13. I. Why Do Ethics Matter?The Golden Rule ofEthics at the Capitol:"How would this look in theAustin American-Statesman tomorrowmorning?" 13
  14. 14. I. Why Do Ethics Matter?When In Doubt, Ask First!Who Can You Ask?A Legislator or StafferThe Texas Ethics CommissionA Private Ethics Attorney 14
  15. 15. II. Are You a Lobbyist? 15
  16. 16. II. Are You a Lobbyist?The Texas Lobby Law defines "Lobbying" as thecombination of: 1. Lobbying Communications PLUS 2. Lobbying Expenditures over a Certain Monetary Threshold 16
  17. 17. II. Are You a Lobbyist? 1. "Lobbying Communications" Defined as "Direct Communications" with members of the legislative or executive branch of state government to influence legislation or administrative action. 17
  18. 18. II. Are You a Lobbyist?1. "Lobbying Communications", cont.Certain communications are not considered "LobbyingCommunications": Testifying at a legislative hearing; Responding to a specific request for information from Government; Submitting info required by law; 18
  19. 19. II. Are You a Lobbyist?1. "Lobbying Communications", cont.Certain Communications are not considered “LobbyingCommunications”: Requesting a written opinion from a state agency; Communicating with an agency to achieve compliance with existing laws; or Communication documented as part of a public record in a proceeding of a rulemaking or adjudicative nature. 19
  20. 20. II. Are You a Lobbyist?2. Lobby Expenditures: Monetary Thresholds (i) the "Compensation and Reimbursement Threshold" More than $1,000 in lobbying compensation or reimbursements in a calendar quarter or (ii) the "Expenditure Threshold" More than $500 in lobbying expenditures in a calendar quarter 20
  21. 21. II. Are You a Lobbyist?Major Exemptions“Incidental Lobbying”If lobbying constitutes no more than 5% of yourcompensated time during a calendar quarter, you do nothave to register as a lobbyist. Note: But this is not an exception to registration if you make lobby expenditures that exceed the “expenditure threshold.” 21
  22. 22. II. Are You a Lobbyist?Major Exemptions, cont.Local Officials & EmployeesThe Lobby Act exempts an officer or employee of apolitical subdivision of the state who communicates toinfluence legislation or administrative action in his or hergovernmental capacity. 22
  23. 23. Focus: Lobbying by Local Governments“Taxpayer-funded lobbying distorts the democratic process,” said PeggyVenable, Texas director of Americans for Prosperity. ”While citizensare hard at work, taking care of their families, volunteering in theircommunities, and paying their taxes, they should not have to worry thatsome of those tax dollars are going to lobby against taxpayer interests.”Michael Quinn Sullivan, president of Texans for Fiscal Responsibility,pointed to a newspaper article quoting City of Denton officials whopraised their Austin lobbyists for stopping bills that allow voters to reinin local tax increases and limit government spending. 23
  24. 24. E-Mails Reveal City Pressured Yankees For Free LuxurySuiteNovember 30, 2008 -- N.Y. Mayor Michael Bloombergs top aidesengaged in a behind-the-scenes brawl to win a free luxury suite at thenew Yankee Stadium that could wind up costing taxpayers. Some ofBloombergs top deputies spent months threatening and cajoling toget the free skybox, and they also demanded free food.The Yankees got the city to write a letter to the IRS so they couldobtain tax-free bonds. The e-mails indicated that Bloombergs aidesin return wanted a free luxury suite and the right to buy at cost 180 ofthe best seats to all home games, including playoff games. 24
  25. 25. II. Are You a Lobbyist?So You ARE a Lobbyist: What Now?Registered Lobbyists are subjected to stricterrestrictions, and more oversight, than other citizens.1. Registration & Fee ($750)2. Stricter Guidelines3. Reporting of Compensation & Expenditures 25
  26. 26. Lobbyist isnt returning calls to explain why hes not registeredApril 3, 2007The question cropped up repeatedly via telephone and e-mail justabout as soon as a recent column about lawyer/lobbyist David Earlwas published. "Why isnt David Earl a registered lobbyist?" one ofthose messages began. "He does not appear on the Texas EthicsCommission Web site list of registered lobbyists for 2007.”Earl’s a central player in efforts in Austin this legislative sessiontrying to change several laws dealing with municipal developmentrules.Three state lawmakers that I know of have either talked to Earlpersonally or have been paid a visit in their Austin offices byGonzalez concerning those issues. 26
  27. 27. III. Gifts 27
  28. 28. III. Gifts Cash Meals Entertainment Travel & Lodging Gift Items 28
  29. 29. III. Gifts Is it LEGAL for me to give this to this public servant? Is it SMART? How would it look in the newspaper? 29
  30. 30. Lobbyists run $12.8 million tab for lawmakersMeals, trips buy access in AustinJan. 24, 2009Since 2005, lobbyists have spent at least $12.8 million wining anddining Texas lawmakers and other state workers — includingthousands of dollars for trips to a Ritz-Carlton lodge in Georgia, aresort in British Columbia and the Hyatt Regency in Lake Tahoe,according to a Houston Chronicle review.Lobbyists say they spend money on lawmakers and officials toinform them of their clients’ concerns. But critics say lobbyists usemeals and entertainment to get close to lawmakers and other stateofficials, giving them an advantage over those who can’t afford to dothe same. 30
  31. 31. III. Gifts Bribery Legislators and Employees may not solicit or accept any benefit, gift, favor, or service for having performed their official duties in favor of another 31
  32. 32. Abramoff Sentenced to Four Yearsin Prison WASHINGTON - Jack Abramoff, thepowerhouse Washington lobbyist whoadmitted running a wide-rangingcorruption scheme that ensnaredlawmakers, Capitol Hill aides andgovernment officials, yesterday received asentence of four years in prison. 32
  33. 33. III. GiftsHonorariums are ProhibitedA Legislator or Employee may not accept an“Honorarium” of any kind.An "Honorarium" is payment for services (forexample, a speech) that a Legislator or Employeewould not have been asked to provide but for theirofficial status. 33
  34. 34. III. GiftsCertain Gifts ARE AllowedLegislators and Employees may accept certainGifts under certain circumstances.Whether a gift is acceptable may depend onwhether the donor is a Registered Lobbyist ornot. 34
  35. 35. III. Gifts1. Cash, Loans or Negotiable InstrumentsRarely an acceptable gift.Never acceptable from a Lobbyist. 35
  36. 36. III. Gifts2. Food & BeveragesThe “Presence Requirement”:You must be present at the meal or event.If you are a lobbyist and the Food & Beverages costsover $90, "Detailed Reporting" applies.There is no annual limit on the amount of Food &Beverages you can give. 36
  37. 37. Panel to dine on lobbys dimeMay 5, 2005AUSTIN - In a move that has good-government groups crying foul,a Texas House committee chairman has elected to hold a end-of-session dinner for his committee at the posh $4 million home ofone of the states most powerful lobbyists.The House Regulated Industries Committee deals with some of themost powerful companies in telephone, cable and electric utilities.The Austin lobbyists clients include energy providers with businessbefore the committee. 37
  38. 38. III. Gifts3. EntertainmentThe “Presence Requirement”:You must be present at the meal or event.If you are a Lobbyist and the Entertainment costsover $90,"Detailed Reporting" applies.A Lobbyist may give only $500 in entertainment toa single Legislator or Employee in a calendar year. 38
  39. 39. Wined, dined and rubbed the right wayJanuary 30, 2007Chardonnay and cheese are no longer enough to draw a Capitol crowd toreceptions hosted by trade associations or their lobbyists.Tonight at the Four Seasons Hotel, the "ladies of the Legislature," as theinvitation from Texans for Lawsuit Reform refers to them, will be offeredmini-massages (feet, hands and necks only), manicures and pedicures, alongwith "food and cocktails galore" at the tort reform groups "girls night out."Austin, over the years, has flirted with keeping up with the lobbying efforts ofWashington, but that was a fast crowd with which to compete, even beforeJack Abramoff got his federal prison number.Still, from time to time, the Austin crowd has stirred the publics attention —and the Legislature passes laws that tend to spur the perception of money orgood times sullying the states business. 39
  40. 40. III. Gifts 4. Travel & Lodging: Non-Lobbyists A Non-Lobbyist may provide Travel & Lodging for any type of trip, so long as he or she is present on the trip. Legislators and certain agency heads are required to report certain gifts and travel from Non-Lobbyists on their annual Personal Financial Statement. 40
  41. 41. III. Gifts4. Travel & Lodging: LobbyistsA Lobbyist may not provide a Legislator or Employee withTravel or Lodging for a "pleasure trip". 41
  42. 42. III. Gifts4. Travel & Lodging: Lobbyists, cont.A Lobbyist may provide Travel and Lodging in connectionwith a fact-finding trip or a trip to a seminar or conference atwhich the Legislator or Employee is providing services (suchas speaking) that are "more than perfunctory."The Lobbyist must be present at the event."Detailed Reporting" applies if the cost exceeds $90. 42
  43. 43. III. Gifts4. Travel & Lodging, cont.Professor Alan Rosenthal of Rutgers University:"Dont go anywhere where its warmer than your winter orcooler than your summer, or somewhere where there is abody of water or gambling." 43
  44. 44. Lobbyists run $12.8 million tab for lawmakersMeals, trips buy access in AustinJan. 24, 2009In the summer of 2007, a trade association for engineers spent nearly$15,000 to send several lawmakers to the Fairmont Chateau WhistlerResort in British Columbia, Canada. The association reported spending anestimated $3,000 apiece on the members for the trip.In exchange for speaking, the officials each received food and beveragesworth between $450 and $600. They also received two golf outings, eachvalued at between $100 and $150. One lawmaker who attended defendedthe trip as a chance for members to mix with one another and talk toindustry leaders who have a stake in state policy. 44
  45. 45. III. Gifts5. Gift Items: Non-LobbyistsA Non-Lobbyist may give a Legislator or Employee a gift with avalue of less than $50. This does not include cash, checks, ornegotiable instruments.Legislators and certain agency heads are required to report certaingifts and travel from Non-Lobbyists on their annual PersonalFinancial Statement. 45
  46. 46. III. Gifts5. Gift Items: LobbyistsA Lobbyist may give a Legislator or Employee gifts of any value, solong as they do not total more than $500 during a calendar year.A Lobbyist may also give a Legislator or Employee "awards andmementos" of an unlimited total value, so long as they are worth nomore than $500 apiece."Detailed Reporting" is required is the cost exceeds $50. 46
  47. 47. V. GiftsRecap: “Detailed Reporting” by Lobbyists in Some CircumstancesThe name of the Legislator or Staffer and a description of the giftwill appear on a Lobbyist’s Activities Report: if expenditures for Food & Beverages, Entertainment or Travel & Lodging exceed $90; if expenditures for a gift, award, or memento exceed $50; each time an expenditure is made to attend political fundraisers or charity events, regardless of the amount spent. 47
  48. 48. Lobbyists payments for gifts criticizedMay 20, 2005AUSTIN – A House committee chairman was criticized by consumergroups Friday for letting lobbyists pay directly for expensive end-of-sessiongifts that many have traditionally bought with their own accounts.The chairman gave gold rings with the legislative insignia to the eightmembers of his committee Thursday to express appreciation for theirwork.The rings were paid for by lobbyists and contributors who had asked earlyin the session if they could contribute to the gifts, he said. Some of thelobbyists had issues before the committee, and some did not. 48
  49. 49. V. GiftsHow to Keep it Safe:Food & Beverages: Under $90 + PresenceTravel & Lodging: Avoid, or Check FirstGift Items: Under $50Gift Certificates: NoEntertainment: Under $90 + Presence + No more than $500 per year per recipient 49
  50. 50. III. Gifts Is it LEGAL for me to give this to this public servant? Is it SMART? How would this look in the newspaper tomorrow? 50
  51. 51. IV. The Texas Public Information Act 51
  52. 52. • The Texas Public Information ActThe Texas Public Information Act givesmembers of the public the right toaccess government records.All government information is presumed to be available tothe public. Certain protections may apply to "confidentialinformation," if permitted by the Attorney General.Governmental bodies must promptly release requestedinformation that is not confidential by law. 52
  53. 53. IV. The Texas Public Information Act"Dont write it if you can say it,Dont say it if you can whisper it,Dont whisper it if you can nod it,Dont nod it if you can wink it." - Louisiana Governor Earl K. Long"How would this look in thenewspaper tomorrow morning?" 53
  54. 54. V. Confidentiality 54
  55. 55. V. Confidentiality "Who are those lobbyists at that table, and what are they talking about?" 55
  56. 56. V. Confidentiality 56
  57. 57. 57
  58. 58. VI. Political Contributions 58
  59. 59. VI. Political ContributionsChapter 253 of the Election Code contains a number ofrestrictions regarding the acceptance and use of politicalcontributions, including the following:  Legislators and most statewide officers may not accept contributions during a period that begins 30 days before a regular legislative session convenes and ends 20 days after adjournment.  Contributions in the Capitol are prohibited at any time. 59
  60. 60. VI. Political Contributions  Political contributions from labor organizations and from most corporations are prohibited.  Federal law generally prohibits the acceptance of contributions from foreign sources. 60
  61. 61. Legislator questions rejection of donation requestJuly 20, 2005AUSTIN – A state representative questioned Tuesday whetheran executive of a telecom company had violated state bribery laws byrejecting the lawmakers request fora campaign contribution because ofa vote he made on a specifictelecommunications bill.The companys Presidentshand-written reply said:"Because of your vote in supportof SB21 during the special session,our PAC committee cannot supportyou at this time." 61
  62. 62. VII. Tips on Effective Lobbying 62
  63. 63. VII. Tips on Effective Lobbying “To be persuasive we must be believable. To be believable we must be credible. To be credible we must be truthful.” Edward R. Murrow 63
  64. 64. VII. Tips on Effective Lobbying 2. Be Prepared 4. Be Honest 6. Tell Both Sides 4. Respect Staff 64
  65. 65. VII. Tips on Effective Lobbying Beware: False Communications A person commits a crime if, for the purpose of influencing legislation or administrative action, the person knowingly or willfully:  makes a false statement or misrepresentation to a Legislator or Employee.  provides a document containing a false statement to a Legislator or Employee. Class A misdemeanor, up to one year imprisonment, fine up to $4,000. 65
  66. 66. V. Conclusion "How would this look in the paper tomorrow morning?" Thanks. Go forth and lobby ethically. 66
  67. 67. Royce PoinsettSpecial Counsel - Government Relations512.322.2518 ∙