LOBBYING EDUCATION: PART I

LOBBYING ETHICS2

I. ROLE OF THE STATE ETHICS COMMISSION II. REQUESTING ADVICE III. GIFT BAN & GIFT BAN EXCEPTIONS IV. ADDITIONAL REQUIREMENTS, PROHIBITIONS & RESTRICTIONS

ON LOBBYISTS

ROLE OF THE STATE ETHICS COMMISSION

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INTERPRETATION INVESTIGATION

Interpret State Government Ethics Act

(Ch. 138A) and Lobbying Law (Ch. 120C)

Issue advice & formal advisory opinions to anyone affected by

Lobbying Law

Adopt rules interpreting all of Ch. 120C & administering Ch. 120C,

except for Art. 2, 4 & 8 (registration & reporting). See 30 NCAC

Investigate alleged violations of

Lobbying Law, including gift ban,

“cooling off” period, and other

prohibitionsRefer alleged registration &

reporting violations to Secretary of

State

WHO can request advice?

WHO issues advice?

WHAT can you request?

WHEN must it be requested?

Anyone affected by the Lobbying Law

State Ethics Commission

Advice involving specific questions relating to real or

reasonably anticipated situations

Before situation occurs

REQUESTING ADVICE4

INFORMAL ADVICE vs.FORMAL ADVISORY OPINIONS

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INFORMAL ADVICE

FORMAL ADVISORY OPINION

Request Written or verbal Must be written

Advice Issued by staff Issued by State Ethics Commission

Confidential Yes Yes

Immunity No Yes

Redacted Advice Published

No Yes• Must publish on website

with all identifying information removed unless confidentiality waived

• Must share unedited copy with Secretary of State, not a public record

What is it? When & to whom

does it apply? What are the

exceptions?

NC’s GIFT BAN & GIFT BAN EXCEPTIONS

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Gift Ban Rule: Unless there is an exception

LOBBYISTS & LOBBYIST PRINCIPALS Cannot knowingly give

a gift, directly or indirectly, to “designated individuals”› Legislators› Legislative

Employees› Public Servants

LIAISON PERSONNEL

Cannot knowingly give a gift, directly or indirectly, to:› Legislators› Legislative Employees

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Gift Ban Applies 24/7/365

“Indirect Gift”8

Lobbyist or Lobbyist Principal cannot knowingly give a gift with the intent that a designated individual be an ultimate recipient.

** Effective 12-01-10 – language changed from “the” ultimate recipient to “an” ultimate recipient - broadened the indirect gift ban – for example- now it would be an indirect gift if the giver sponsors an event where food is being provided to the attendees knowing and intending for DIs to attend the event at which the food will be served = DI is an ultimate recipient of the gift and a gift ban exception must apply to give

“Indirect Gift” (cont’d)9

AO-L-12-002 The Commission determined that the indirect gift ban of the Lobbying Law and the Ethics Act would apply to donations made by event sponsors who are restricted donors if those donors intended that any designated individual be “an ultimate recipient” of a donation. Thus, depending upon the intent of the donor in making in-kind and cash donations in support of the event, those donations could be restricted unless a gift ban exception applies….

Also, even if the organization receiving the donations is not subject to the gift ban, complimentary event admission provided by the receiving organization to attending designated individuals may also be subject to the indirect gift ban. Therefore, if a restricted donor makes a contribution with the intent that those officials obtain free admission to the event, that contribution and the receipt of complimentary admission would be restricted by the indirect gift ban unless an exception applied.

However, the indirect gift ban would not restrict designated individuals from attending the event as long as they purchase tickets on the same terms as members of the general public.

“Indirect Gift” (cont’d)10

AO-L-11-004The Commission determined that it would be permissible for the company to donate various items and funding to a State agency and otherwise participate in public outreach events hosted by the State agency. However, the company could not donate items with the intent that a public servant, legislator, or legislative employee (“designated individual”) be an ultimate recipient, unless a gift ban exception applied.

WHO are Designated Individuals…

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Legislators› Members of the General Assembly.› Individuals elected or appointed to General

Assembly before taking office.› Candidates.

Legislative Employees› Employees & Officers.› Consultants & Committee Counsel.› Law school interns.› NOT included: nonsupervisory employees of

facility maintenance, food services staff, & pages.

WHO are…12

Public Servants Executive Branch Constitutional Officers, including

individuals elected or appointed prior to taking office, & candidates.

Heads of principal State departments. Governor’s office employees. Policy-making positions, chief deputies, confidential

assistants. Certain managerial positions. Others designated by Governor. Certain UNC & community college officials, Board

of Governors & boards of trustees members. Voting members of State non-advisory boards.

HOW do you know if someone is a “Designated Individual”?

List available on Commission’s website at www.ethicscommission.nc.gov

or by calling (919) 715-2071

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Click on Public Servant link – once screen is up, hit Ctrl F then type the individual’s last name in the find box, hit Next and it will search for that name in each covered board. You will need to search the individual’s name through each category of Public Servant.

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What is a “Gift”?

“Anything of monetary value”

Given or received without valuable consideration

No de minimis exception

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What is NOT a “Gift”?

Paid fair market or face value.

Commercially available loans made on same terms & not for lobbying.

Contractual or commercial arrangements not made for lobbying.

Academic or athletic scholarships.

Campaign contributions properly received & reported. (Lobbyists cannot make campaign contributions to certain candidates.)

Certain expressions of condolence.

Cards, letters, notes, e-mails, etc (State Ethics Commission determination).

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GIFT BAN EXCEPTIONS N.C.G.S. §138A-32(e)

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I. FOOD & BEVERAGE FOR “IMMEDIATE CONSUMPTION”

II. MEETINGS & CONFERENCES GENERALLYIII. NON-PARTISAN ORGANIZATIONSIV. INFORMATIONAL MATERIALSV. FAMILY, FRIENDS, OTHERSVI. GIFTS TO STATE OR RELATED TO STATE

BUSINESSVII. AVAILABLE TO GENERAL PUBLICVIII.UNC ATHLETIC TICKETS

Gathering Open to the General Public

10 or more attendees Sign or other communication

outside gathering indicating open to the public N.C.G.S. §138A-32(e)(1)b

If general public is required to pay fee, NOT open to the general public (30 NCAC 07B .0101)

Open Meeting of Public Body Properly noticed under the

Open Meetings LawN.C.G.S. §138A-32(e)(1)a

FOOD & BEVERAGE: Open Meetings & Gatherings Open to PublicN.C.G.S. §138A-32(e)(1)

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Lobbyist, Lobbyist Principal, or Liaison Personnel

can pay for food & beverage for “immediate consumption” on premises consumption

FOOD & BEVERAGE: Specific Invitees

N.C.G.S.§138A-32(e)(1)c19

All House or Senate members; All members of county or

municipal legislative delegation; Recognized caucus; Committee/commission of

General Assembly; All legislative employees; or Public servant’s entire board or

at least 10 public servants.

At least 10 people associated with person or govt. unit actually attend; or

all shareholders, employees, bd. members,

officers, members, subscribers located in NC

are invited.

Lobbyist, Lobbyist Principal, Liaison Personnel can pay for

Food & beverage for immediate consumption when all members of one of these listed groups are “invited” AND one of the 2nd requirements is met:

And

“Invited” – written; at least 24 hrs. in advance; date, time, location; from at least 1 host or sponsor; if sponsored by lobbyist or lobbyist principal, must state whether gathering is permitted by this exception.

Food & Beverage: Specific Invitees (30 NCAC 07B .0102 & .0103)20

Associated with person or govt. unit:

Employee. Director, officer,

partner, holds leadership position.

Owner of interest of $10,000 or more.

Owner of 5% or more of the business.

Registered lobbyist.Commission will make case-by-case determinations on other relationships, such as memberships in organizations.

Associated with person or govt. unit actually attend:

When sponsored by lobbyists or lobbyist

principals, 10 individuals associated with the

“group” of sponsoring lobbyists or lobbyist

principals must actually attend.

• Written notice by 1 host or sponsor to 1 of the qualifying groups is sufficient

• Notices by e-mail are permitted.

FOOD & BEVERAGE: “Official Duty” for Public Servants N.C.G.S. §138A-32(e)(12)

Lobbyist or lobbyist principal can pay for

Food & beverage for immediate consumption at

Organized gathering where› Public servant’s attendance

is primarily related to public position; and,

› 10 individuals other than public servant or immediate family actually attend or all individuals connected with sponsor in specific NC office or county are notified & invited.

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MEETINGS & CONFERENCES GENERALLYEducational & Speaker/Panel Member

N.C.G.S. §138A-32(e)(3)(i) and (ii)

Lobbyist principalCan pay reasonable

actual expenditures for food & beverage, travel, registration, lodging, incidental items of nominal value, incidental entertainment.

1) “Educational” Meeting (primarily related to public duties; see 30 NCAC 07C .0101 ); or, 2) Designated Individual is a “bona fide speaker or panel member”.

Meeting has formal agenda, notice given at least 10 days in advance and attended by at least 10 participants.

Food, beverage, transportation & entertainment must be

› Provided to all attendees or defined groups of 10 or more; and,

› Part of or in conjunction with meeting.

Entertainment must also be incidental to the principal agenda.

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Educational Meeting conti 23

30 NCAC 07C. 0101 Educational Meeting Criteria

A lists of non-exclusive factor considered by the Commission in determining whether an event qualifies as an educational meeting under N.C.G.S. §138A-32(e)(3)(i)

**this exception has been strictly applied and meetings deemed “educational” by others may not qualify under this exception**

2011 and 2012 Educational Meeting Advisory Opinions AO-L-11-001 AO-L-11-002 AO-L-11-003

NONPARTISAN AGENCY ORGANIZATIONSMeetings & Conferences N.C.G.S. §138A-32(e)(3)(iii) and (iv)

Lobbyist principal ONLY

Can pay reasonable actual expenditures for DIs food & beverage, travel, registration, lodging, incidental items of nominal value, incidental entertainment.

Attendance at meeting of nonpartisan organization where agency is a member or designated individual attending because of public position.

Meeting has formal agenda, notice given at least 10 days in advance and attended by at least 10 participants.

Food, beverage, transportation & entertainment must be

› Provided to all attendees or defined groups of 10 or more; and,

› Part of or in conjunction with meeting.

Entertainment must also be incidental to the principal agenda.

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NONPARTISAN AGENCY ORGANIZATIONS: Gifts Made Directly to Nonpartisan OrganizationN.C.G.S. §120C-303(d) and (e)

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Gifts are allowed if they are:

Made by a lobbyist or lobbyist principal directly to

Nonpartisan state, regional, national, or international organization of which

Agency is a member; or, Designated Individual is a member or

participant by virtue of public position.

MEETINGS & CONFERENCES GENERALLY Reimbursable Expenses for Public ServantsN.C.G.S. §138A-32(f)

Applies ONLY to Public Servants & NOT legislators or legislative employees.

Lobbyist or lobbyist principal Can pay for any expense

that would otherwise be reimbursable by the State IF

Public servant received approval in advance from employing entity to accept the expense on behalf of the State.

Actual expense may exceed State rate.

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INFORMATIONAL MATERIALS

N.C.G.S. § 138a-32(e)(2) May give

informational materials relevant to designated individual’s public duties.

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FAMILY, FRIENDS & OTHERSExtended Family N.C.G.S. §138A-32(e)(7)

May give gifts to your extended family member who is a designated individual.

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FAMILY, FRIENDS & OTHERS:Other Relationships N.C.G.S. §138A-32(e)(10)

Gifts based on business, civic, religious, fraternal, personal, or commercial relationship permitted if: Relationship is not

related to the DI’s public position; and,

Reasonable person would conclude not given for “lobbying.”

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FAMILY, FRIENDS & OTHERS: Relationship with Lobbyist Principal N.C.G.S. §138A-32(e)(11)

Lobbyist principal only can pay

Can give food & beverage for immediate consumption at, & related transportation to

Designated individual who is a director, officer, board member, employee or independent contractor of lobbyist principal or of a 3rd party that received funds from the lobbyist principal to purchase the food, beverages and/or transportation for/at

Conference, meeting, similar event

Must be available to all attendees of same class

AO-L-12-003

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FAMILY, FRIENDS & OTHERS:Plaques & Non-Monetary MementosN.C.G.S. §138A-32(e)(4)

May give a plaque or similar non-monetary mementos recognizing designated individual’s services in a field or specialty or to a charitable cause

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GIFTS TO THE STATE N.C.G.S. §138A-32(e)(5)

Lobbyist or lobbyist principal

May pay for gifts For use by and

benefit of the State

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RELATED TO STATE BUSINESS: PUBLIC SERVANTS N.C.G.S. §138A-32(e)(8)33

Industry & Tourism Related: Food, beverage, transportation, lodging, entertainment, or related expenses if Gift not otherwise subject to an exception Public servant is responsible for conducting industry

recruitment, international trade, or tourism promotion Gift was not solicited or accepted in exchange for

performing public duties Gift is reported to the State Ethics Commission

Cultural Protocol: Gift Valued at less than $100 Given in accordance with cultural protocol As part of overseas trade mission

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Gifts to General Public or All State Employees N.C.G.S. §138A-32(e)(6)

Anything made generally available to the general public; AO-L-10-003

LP wanted to provide event transportation to an invitation event for DIs at which DIs would be provided food and beverages. LP planned to allow the general public to ride the bus that it provided for this event. The Commission determined that allowing the general public to ride a private bus at no charge on a date, at limited times, and on a route that is specifically tailored for the benefit of the designated individuals did not result in this transportation being “generally made available to the general public.” This event transportation could not be provided to attending legislators under N.C.G.S. §138A-32(e)(6).

or

All State employees.

UNC ATHLETIC TICKETSN.C.G.S. § 120C-502(e)

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UNC Board of Governors, UNC constituent institutions, or their legislative liaisons

Cannot give designated individuals Athletic tickets For lobbying (direct lobbying or goodwill

lobbying)

GIFT BAN REMINDERS36

Gift ban applies to Executive Branch public servants.

Gift ban applies at all times. Commission may designate other boards

and commissions as covered by the State Ethics Act -

Check the Commission’s website to determine who is a designated individual = covered by the gift ban

If allowed to give it, must report it if over $10

“CODE OF CONDUCT”

OTHER PROHIBITIONS & RESTRICTIONS

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Additional Lobbyist Requirements, Prohibitions & Restrictions38

1. Register and Report.

2. Prior to any lobbying communication or activity with DI - Must Identify Yourself as a Lobbyist and Disclose Identity of LP connected to that lobbying communication or activity. N.C.G.S. §120C-201(e)

3. No Contingency Fees. Cannot accept a fee contingent upon the outcome of lobbying. N.C.G.S. §120C-300

Exception for individuals who are also sales people doing business with the State whose regular remuneration agreement includes commissions based on sales.

Regular remuneration means any money, thing of value, or economic benefit conferred on or received by the individual in return for services rendered or to be rendered by that individual or another.

Additional Lobbyist Requirements, Prohibitions & Restrictions 39

4. Cannot Serve as Treasurer. Lobbyists cannot serve as campaign treasurer or assistant campaign treasurer for a political committee for the election of a legislator or Constitutional officer.

5. No Use of Cash/Credit. No lobbyist or another acting on lobbyist’s behalf can allow a DI or a DI’s immediate family member to use cash or credit of the lobbyist for lobbying, unless the lobbyist is present. N.C.G.S. §120C-305. (**gift ban applies here)

Additional Lobbyist Requirements, Prohibitions & Restrictions40

6. Appointments to Certain Boards Prohibited. Lobbyist ineligible for appointment by State official to any State board that has regulatory authority over the activities of a person or governmental unit the lobbyist currently represents or has represented within 120 days after lobbyist’s registration has expired.

▪ Does not prohibit appointments by local government.

▪ Any appointment or registration made violating this section is void.

Additional Lobbyist Requirements, Prohibitions & Restrictions N.C.G.S. §120C-30441

7. Legislators Cannot Be Lobbyists. “Cooling Off Period” No legislator or former legislator can be a registered lobbyist:

▪ While in office; or,▪ Before the later of the close of the legislative

session during which the legislator served or 6 months after leaving office.

8. Certain Public Servants Cannot Be Lobbyists. Constitutional officers and heads of principal State departments cannot be a registered lobbyist while in office or employed, or

within 6 months thereafter.

“COOLING OFF PERIOD” FOR “STATE AGENCY” EMPLOYEES42

An employee

of a “State agency”

Cannot register as a

lobbyist

To lobby the State

agency that previously employed him or her

For 6 months

after leaving

the State agency

“State agency”

an agency in executive branch

Applies to all employees of

a State agency,

If the former employee registers as a NC

lobbyist within the 6 mo. period, the employee must

indicate his/her former employing State

agency

“Cooling Off Period” (cont’d)

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N.C.G.S.§120C-304 “Cooling Off Period” does not apply to legislative employees

AO-L-11-005Lobbying Law “cooling off period” does not apply to local government liaison

personnel.

AO-L-12-001A registered lobbyist may file a notice of candidacy for a state elected

legislative office and continue to lobby while he or she runs for a state legislative office. If elected to office in the 2012 election, the lobbyist will need to cease lobbying and terminate his or her registration as a lobbyist effective on or before December 31, 2012, as the legislative office term will commence on January 1, 2013. If not elected the lobbyist can continue to lobby and can re-register as a lobbyist in 2013 as he or she will not have been “in office” so there will be no “cooling off” period applicable under the Lobbying Law.

Liaison Personnel - State and Local GovN.C.G.S. §120C-500, -501 and -502

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State employees, counsel employed under N.C.G.S. §147-17, officer, OR local government employee whose principal duties include “lobbying” legislators or legislative employees. NOT a “lobbyist”. Employing or appointing State entity is NOT a

lobbyist principal.Must register and report.No registration fee.Gift Ban applies to giving to legislators and

legislative employees.

LOBBYING EDUCATION: PART II

“LOBBYING”

Registration and Reporting What triggers the requirement to

register and report?

Who must register and when?

What must be reported?

When must the report be filed?

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What Triggers the Requirement to Register?

Lobbying for Payment

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What is “Lobbying” N.C.G.S. §120C-100(a)(9) a. and b.

Direct communications or activities with a designated individual or a designated individual’s immediate family member

• Designed to influence current or future legislative or executive action

• Also Includes developing goodwill through communications and activities, including the building of relationships, designed to influence current or future legislative or executive action

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Communications or activities with a DI or DI’s immediate family

Designated Individuals include: Legislators, legislative employees; and Legislative candidates who have filed Public servants (N.C.G.S. §138A-3(30)):

and State constitutional officer candidates

who have filed

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Designated Individual’s Immediate Family Members Spouse, if not legally separated

Child who lives in the household

Extended family who live in the household N.C.G.S. §138A-3(17).

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What is “Legislative Action”?N.C.G.S. §120C-100(a)(5)

Generally includes all steps in the legislative process taken by a legislator or a legislative employee – from preparation and research to final action; including reports, bills, amendments, etc., whether or not the matter is identified by an official title, general title, or other specific reference.

Also includes consideration of any bill by the Governor for approval or veto.

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What is “Executive Action” N.C.G.S.§ 120C-100(a)(3)

Generally speaking, consists of all actions taken by a public servant acting in an official capacity that are necessary to

consider, prepare, draft, approve, postpone, reject or defeat

a policy, procedure, guideline, regulation, rule, or a request for proposal or invitation for bid.

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NOT “Executive Action”N.C.G.S.§ 120C-100(a)(3)a.-b.

Prior, present, or possible contested cases, judicial proceedings or quasi-judicial proceedings.

Communications regarding permits, licenses, eligibility, certification, benefits, claims, rights, obligations, duties, entitlements, payments, or penalties.

Inquiries about or responding to requests for proposals.**This exclusion pertains to active RFP, not the development or drafting of RFP**

Ratemaking.

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NOT “Executive Action” (cont’d)N.C.G.S.§ 120C-100(a)(3)c.-e.

Internal administrative functions

Ministerial functions

Public servant’s communication with a person or another on that person’s behalf with respect to:

Public comments made at an Open Meeting; or, Submitted as written comments

on proposed executive action in response to a request for public comment, provided that:

Identity of person on whose behalf comments are made is disclosed as part of public participation; and,

No reportable expenditure is made

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What is NOT “Lobbying”N.C.G.S.§ 120C-(a)(9)

Lobbying does not include: Communications or activities as part of

Business, civic, religious, fraternal, personal, or commercial relationship which are

Not connected to legislative or executive action.

Example - Communications with a DI that pertain to current contract obligations and duties are not lobbying.

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WHO IS A LOBBYIST

An individual who engages in lobbying for payment

Three types of lobbyists – all lobby and all receive payment for lobbying

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Three Types of Lobbyists1. Firm Employed Lobbyist - Represents the

position, interest, or idea of another“ person” or “government unit” but is not directly employed by that person or gov unit, and receives payment for lobbying. N.C.G.S.§ 120C-100(a)(10)b.

2. Contract lobbyist – Contracts (with the lobbyist principal) for payment for lobbying. N.C.G.S.§ 120C-100(a)(10)c.

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Three Types of Lobbyists cont…

3. Employee Lobbyist - Is employed by a person and a significant part of that employee’s duties includes lobbying

Except that an employee is not a lobbyist if the individual’s actual duties did not include either

5% or more of direct lobbying in any 30-day periodOR

5% or more of goodwill lobbying in any 30-day period

The two types of lobbying are not added together

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Who is a Lobbyist Principal?N.C.G.S.§ 120C-100(a)(11) Person (broadly defined) or governmental unit on

whose behalf the lobbyist lobbies AND who pays for the lobbying.

If the lobbyist is compensated by a law firm, consulting firm, or other entity retained by the person or governmental unit, the principal is the person whose interests the lobbyist represents.

If the lobbyist is retained by an organization or association, the principal is the organization or association (not the members of the organization).

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Who is NOT a “Lobbyist”?N.C.G.S.§ 120C-700(1) and (2) Expressing Personal Opinion. Individual solely

engaged in expressing a personal opinion or stating facts or recommendations on legislative or executive action to a designated individual and not acting as a lobbyist.

Invitation. Person appearing before committee, commission, board council, or other collective body whose membership includes one of more designated individuals at the invitation or request of the committee or a member and who does not act in any further activities as a lobbyist with respect to legislative or executive action.

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Who is NOT a “Lobbyist”? (cont’d)N.C.G.S. §120C-700(3) Government Officials & Employees.

Elected or appointed official or employee of State, federal govt., or governmental agency (e.g., county, municipality, school district), when acting solely in connection with matters pertaining to the office and public duties.

Also, individuals appointed as county attorneys under NCGS §153A or city attorneys under NCGS §160A are considered county or city employees.

Does not include Legislative or Local Gov. Liaison Personnel, they must register and report under 120C- 500.

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Who is NOT a “Lobbyist”? (cont’d)N.C.G.S. §120C-700(4)

Professional Services for Clients. Person performing professional services in drafting bills, or advising and rendering opinions to clients, or to designated individuals on behalf of clients, as to the construction and effect of proposed or pending legislative or executive action where the professional services are not otherwise connected with the legislative or executive action.

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Who is NOT a “Lobbyist”? (cont’d)N.C.G.S. §120C-700(5) and (6)

News Media. Person who owns, publishes, or is an employee of any recognized news medium, while engaged in the acquisition and publication of news and commentary on news as a part of their job.

Designated Individuals. Designated individuals while acting in their official capacity.

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Who is NOT a “Lobbyist”? (cont’d)N.C.G.S. §120C-700(7) and (8)

Responding to Inquiries. Person responding to inquiries from a designated individual and who does not act in any further activities as a lobbyist in connection with that inquiry.

Political Committee. Person who is a political committee as defined in N.C.G.S. §163-278.6(14), that person’s employee, or that person’s contracted service provider.

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REGISTRATIONARTICLE 2

Who Must Register?

• Lobbyists• Lobbyist Principals• Solicitors• Liaison Personnel • Local Government Liaisons

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Lobbyist Registration and FeesN.C.G.S. §120C-200; -201

Must register with Secretary of State within 1 business day of lobbying.

Must file a separate registration for each principal.

$100 fee for each registration. Secretary of State may reduce or waive fees for

lobbyists representing nonprofits.

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Lobbyist Registration: Amendments & Renewals N.C.G.S. §120C-200; -201

Must file amended registration form within 10 business days of any change.

Registrations are effective from the date of filing until January 1st of the following year, unless resignation is filed.

Each year new registrations must be filed and fees paid.

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Lobbyist Principal Authorizations and FeeN.C.G.S. §120C-206

LP must file signed written authorization within 20 business days after lobbyist registers.

$100 fee paid when LP files first authorization Pays one fee for the year regardless of number

of lobbyists LP authorizes EXCEPT if LP status is terminated and then renewed in the same year Secretary of State may reduce or waive fees for

nonprofit principals.

Must file amended authorization form within 10 business days of any change.

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SOLICITATION OF OTHERS

“Solicitation of Others”N.C.G.S. §120C-101(a)(13)

Broadcast, cable, satellite E-mail or website posting Communication through print media

Mailing Telephone Communication at conference or meeting

Solicitation (request) of the public To communicate directly with or contact

designated individuals For purpose of:

Influencing legislative or executive action To further solicitor’s position

Includes solicitations (requests) made by:

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Solicitation of Others”Is Not

Any communication made by a person or the person’s agent to the person’s stockholders, employees, board members, officers, members, subscribers, etc.

Communications with those who have affirmatively assented to receive regular publications or notices.

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When Solicitation Activities Trigger Registration & Reporting? N.C.G.S. §120C-215

Solicitor - Person not otherwise required to register and report must register & report when:

Total expense for solicitation of others

Exceeds $3,000

During any 90-day period

“Expenses” include the costs of:

Producing & transmitting the communication and

Cost of planning, hosting, sponsoring, or attending if the communication is made at a conference, meeting, or similar event.

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What is a Solicitor Required to Report N.C.G.S. §120C-215 & -404

Once registered Solicitor must report

Solicitation of Others

And

Reportable expenditures made for lobbying.

Reports must be filed quarterly. Failure to timely file a report will void

solicitor’s registration.

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LIAISON PERSONNEL

Liaison Personnel N.C.G.S. §20C-100(a)(8)

Liaison Personnel – State employees, counsel employed under N.C.G.S.§ 147-17, or officer whose principal duties include in practice or as set forth in their job description lobbying legislators or legislative employees. N.C.G.S. §120C-100(a)(8)

Who must designate liaison personnel? All agencies of the State, including boards, departments,divisions, UNC constituent institutions, community colleges and other executive branch agencies. Exception for State agencies with no staff.

Is there a limit on the number of liaison personnel in an agency? Yes.

Generally, no more than 2 individuals can be designated. The Chief Justice of the Supreme Court must designate at least 1, but

no more than 4, individuals to lobby for legislative action.**

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Local Government Liaison Equivalents N.C.G.S. §120C-502 (*New provision in 2011*)

Employees of a county, city or any other local governmental unit whose principal duties in practice or as set forth in their job description include lobbying for legislative action. N.C.G.S. §120C-502

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State and Local Gov Liaison Personnel

• Not “Lobbyists”

• Must Register and Report

• Gift Ban Applies to Gifts from Liaison to Legislators and Legislative Employee

• Agency or Gov Unit Liaison represents is Not a Lobbyist Principal

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What are Liaison Personnel and Local Gov Liaison Required to Report? N.C.G.S. §120C-501(c), -502(b) and -402

Liaison Personnel and Local Gov. Liaison Equivalents report what the liaison made and the state or gov unit paid for “Reportable expenditures” made for lobbying

with a value greater than $10 per DI per day

“Solicitation of others” when costs exceed $3,000 and the liaison paid for such

Gifts over $10 in value per DI per dayAND

What “reportable expenditures” the Liaison truly paid for and was not reimbursed for

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REPORTINGARTICLE 4

What Has to be Reported? Reportable expenditures made for

lobbying Solicitation of others when total cost of

such solicitation is more than $3,000 Reportable expenditures reimbursed to a

lobbyist Reportable expenditures that are Gifts The names of persons or gov units the LP

“loaned” its lobbyist to, whether for pay or not

Payments for lobbying and for certain communications and activities used to lobbying

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What Does A Lobbyist Report? N.C.G.S. §120C-402(b)

Lobbyist reports what the lobbyist truly paid for and was not reimbursed for “Reportable expenditures” made for lobbying

with a value greater than $10 per DI per day that the lobbyist paid for and was not reimbursed

“Solicitation of others” when costs exceed $3,000 and the lobbyist paid for such and was not reimbursed

Gifts over $10 in value per DI per day that the lobbyist paid for and was not reimbursed

and Lobbyist reports reimbursed “reportable

expenditures” which the lobbyist principal did NOT report (includes reimbursement by LP or by another on LP’s behalf)

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What Does A Lobbyist Principal Report? N.C.G.S. §120C-403(b) Lobbyist Principal reports what the

Principal paid for “Reportable expenditures” made for lobbying

over $10 in value per DI per day that the Principal paid for

“Solicitation of others” that the Principal paid for when costs for such exceed $3,000

Gifts over $10 in value per DI per day the Principal paid for

Payments to lobbyists for lobbying and for certain communications and activities used to lobby

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Lobbyist Principal Also Reports

Reportable expenditures” reimbursed or paid to lobbyist which the lobbyist did NOT report

Name of each person or gov unit to whom the Lobbyist Principal “loaned” its lobbyist, whether for pay not

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What is a “Reportable Expenditure”N.C.G.S. §120C-100(a)(12)

Broadly defined Includes

Anything of value, separately or cumulatively greater than $10 per DI or DI immediate family member per calendar day,

Contracts, agreements, promises, etc. whether or not legally enforceable

That is directly or indirectly made to, at the request of, for the benefit of, or on behalf of DI or DI’s immediate family

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Determining the $10 Reporting Threshold To determine if the reporting $10 threshold

has been met – use the aggregate total amount of all things of value made to, at the request of, for the benefit of, or on behalf of a DI and that DI’s family members on that calendar day (30 NCAC 10C .0101)

• For example – provide food and beverages with fair market value of $7 per person to the DI and to the DI’s spouse – $14 was given so must report

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I. Gifts Reporting(Gifts are reportable expenditures)

***Remember – to give any gift, regardless of its

value, there must be an applicable gift ban exception -No de minimus exception***

- First question: Are you allowed to give it? - Second question: Must it be reported?

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Gifts that must be reported

Gifts given to a DI with a value separately or cumulatively value greater than $10 per DI per calendar day

Includes all gifts given by Lobbyist Includes all gifts given by LP, EXCEPT

LP (e)(10) gifts are not required to be reported until the value, separately or cumulatively, is greater than $200

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II. “Reportable Expenditures Made for Lobbying” Must Be Reported “Reportable expenditures made for

lobbying” include expenditures that are not gifts but are:

Made at the request of or on behalf of DI or DI immediate family member

Or Made for the benefit of an Immediate family

member And That exceed the $10 threshold

Also includes certain overhead expenses connected with lobbying events, such as room rental costs.

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Reporting of Gift and Reportable Expenditures Made for Lobbying

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AO-L-11-004The Commission determined that it would be permissible for the company to donate various items and funding to a State agency and otherwise participate in public outreach events hosted by the State agency. However, the company could not donate items with the intent that a public servant, legislator, or legislative employee (“designated individual”) be an ultimate recipient, unless a gift ban exception applied. Those donations would be reportable, depending upon their value, if they are: (a) deemed to be a gift to a designated individual; or (b) if the donations are made for lobbying and

(ii) are made at the request of a designated individual or his or her immediate family; or

(ii) are a gift to a member of a designated individual’s immediate family.

Reporting of Multi-Sponsored Food and Beverage “Lobbying” Event Reporting requirements remain whether the reportable expenditure event is sponsored by one Lobbyist Principal/Lobbyist or many

Each sponsoring Lobbyist Principal and Lobbyist must report

Reportable expenditures that are “gifts” and Reportable expenditures “made for lobbying”

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Reporting of Gift of Food and Beverages at Multi-Sponsored “Lobbying” Event

Each Sponsoring LP and L Reports the f&b gift Fair market value of the gift (the food and

beverages) given to and received by a Designated Individual, if over $10

Various ways of determining the fair market value of the food and beverage gift Cost of ticket if tickets to the event are sold and

the only things being given to those attending are food and beverage ***Entertainment cannot be given under most exceptions.***

If no tickets are sold, caterer’s charge per person If no caterer, fair market value per person is the

total cost divided by number of attendees AO-L-09-002

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Reporting of Reportable Expenditures Made For Lobbying at Multi-Sponsored “Lobbying Event”

• Each LP must also report the amount of its sponsorship/contribution to the lobbying event

Example 1:

Two LPs sponsored a legislative lunch at which the attending legislators were given lunch catered at $25 per person. One sponsor contributed $1,000 and one sponsor contributed $500. Each LP must report the food and beverage gifts of $25 per person and report the amount of its contribution.

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Reporting of Reportable Expenditures Made For Lobbying at Multi-Sponsored “Lobbying” Event

Example 2If the reportable expenditure is a contribution of $200 to a reception for the Governor and Council of State Members where food and beverage valued at $8 per person was a given, the full $200 contribution must be reported but the $8 gift of food and beverage given to each person does not need to be reported separately from the amount of the contribution.

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Details Required on ReportN.C.G.S. §120C-401(b) and §120-401(c)

For each reportable expenditure must state

Fair market value or face value if shown The date of the expenditure A description The name and address of the payee or beneficiary The name of any DI or that DI’s immediate family

member connected with the expenditure

• And must categorize each reportable expenditure

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Fair Market Value of the Reportable Expenditure

Fair market value or face value of the reportable expenditure must be reported if $10 threshold is met

Fair market value can be determined a number of ways

If the reportable expenditure is or includes a gift over $10 in value, the gift and its fair market value must be reported separately

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Date of the Reportable Expenditure

The date of a reportable expenditure

Made to or for the benefit of a DI or DI immediate family member

Date the reportable expenditure is received by the DI or DI immediate family member .

30 NCAC 10C .0102

Made at the request of or on behalf of a DI or DI immediate family member

Date the reportable expenditure is made by the giver. 30 NCAC 10C .0103

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Description of the Reportable ExpenditureN.C.G.S. §120C-401(b)(3)

A description of each reportable expenditure must be included on the report

For the N.C.G.S.§120C-401(b)(3) requirement to have meaning this requires more than the categorizing required by N.C.G.S.§120C-401(c)

Description should name or otherwise identify What was given Any third party recipient The reportable expenditure event, meeting, or

circumstance and provide the date of the event or meeting.

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Who is the Payee?N.C.G.S. §120C-401(b)(4)

“Payee” is the person to whom the money is paid or is to be paid

When reporting an allowed gift of food and beverages given to an attending legislator, the person who was paid to provide the food and beverages is the payee

Must list name and address of payee on report

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Who is the Beneficiary?N.C.G.S. §120C-401(b)(4)

The “Beneficiary” is the person, other than the designated individual or that designated individual’s immediate family member, who benefited from the reportable expenditure made at the request of or on behalf of the designated individual or that designated individual’s immediate family member.

When a contribution is made to the food bank at the request of a legislator, the food bank is the beneficiary.

Must list name and address of beneficiary on report

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Reporting Names of Di’s and DI Immediate Family N.C.G.S. §120C-401(b)(5)

General Requirement Report the names of any DI and any DI immediate

family member “connected with” the reportable expenditure

“Connected with” the reportable expenditure includes any DI or DI immediate family member receiving or benefitting in any way from the

reportable expenditure Requesting or on whose behalf the reportable

expenditure was made *LP donation requested by or made on behalf of a DI – DI is

connected*

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Exceptions to Reporting Names of DIs and DI Immediate Family N.C.G.S. §120C-401(b1)-(b2)

When more than 15 DI’s benefit from or request** a reportable expenditure, names do not have to be reported; if:

Approximate number benefiting or requesting Basis for their selection Approximate # DI family members must be listed

separately

If gift given with intent that a DI be an ultimate recipient and L or LP does not know name(s) then must provide Description of DI & immediate family connected with the

RE that clearly distinguishes its purpose or composition Approximate number of receiving DI and DI immediate

family members, if known**

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Reportable Expenditure CategoriesN.C.G.S. §120C-401(c)

Reportable Expenditures must be reported under the following categories

Transportation and lodging Entertainment Food and beverages Meetings and events Gifts Other reportable expenditures

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When to Report a Reportable Expenditure

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Reportable Expenditure Made to or for Benefit of DI or DI Immediate Family Member

A reportable expenditure made to or for the benefit of a DI or DI immediate family member (example is an allowed gift)

Must be reported on the expense report filed for the month the reportable expenditure is received by the DI or DI immediate family member

30 NCAC 10C .0102

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Reportable Expenditure Made at the Request of or on Behalf of DI or DI Immediate Family Member

A reportable expenditure made at the request of or on behalf of a DI or DI immediate family member (example is a requested contribution)

Must be reported on the expense report filed for the month the reportable expenditure is made by the giver

30 NCAC 10C .0103

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Additional Reporting Required

Lobbyists and Lobbyist Principals must also report Solicitation of Others when total cost of the solicitation exceeds $3,000.

Lobbyist Principal must report the names of persons or gov units the LP “loans” its lobbyist to lobby for, whether for pay or not. **N.C.G.S. §120C-403(b)(6)** (new prov. in 2011)

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Annual Reporting Required by Lobbyist Principals

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Annual Reporting of Payments to a Lobbyist for Lobbying and for “Lobbying Services”N.C.G.S. §120C-403(d) and (e) (this was 403(b)(3))

In the last report a Lobbyist Principal files for the registration year it must report the cumulative combined total of all payments to

a lobbyist for:

lobbying, direct and goodwill

“lobbying services” - certain listed communications and activities used to lobby during the registration year

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Payment

“Payment” defined in N.C.G.S. §120C-100(a)(11k) as:

Any money, thing of value, or economic benefit

Conveyed to a lobbyist

For lobbying

Excludes - reimbursement of actual travel,

administrative expenses, or subsistence

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Payments for “Lobbying Services” N.C.G.S. §120C-403(e)(2) Lobbyist Principal must report, cumulatively for

the year, any payment to a lobbyist for the following activities and communications that were used to lobby within the registration year Research Drafting of Written Communications Monitoring of proposed or pending legislative or

executive action Includes time spent preparing communications with LP

to relay information on such legislative or executive action

Time spent advising and rendering opinions to LP as to construction and effect of proposed or pending legislative or executive action

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Portion of Payment that is ReportableN.C.G.S. §120C-403(d)(1)

Consulting or Law Firm Paid LobbyistLobbyist represents Lobbyist Principal but is not directly employed by the Lobbyist Principal and is not under contract with the Lobbyist Principal for lobbying

Reportable The portion of the payment that was for

lobbying and To whom the payment was paid

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Portion of Payment that is ReportableN.C.G.S. §120C-403(d)(2) and (3) Contract Lobbyist

Lobbyist under contract with Lobbyist Principal for lobbying

Reportable – the portion of the contract that is reasonably allocated for lobbying

Full Time Employee Lobbyist or Lobbyist Paid by Annual Fee or Retainer Reportable

Lobbyist Principal must estimate and report the portion of the salary, fee, or retainer that is reasonably allocated for lobbying

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Estimating or Determining the Portion Reasonably Allocated to Lobbying

Lobbyist Principal may rely on statement from lobbyist estimating the portion of salary or other payment reasonably allocated for lobbying and lobbying services. N.C.G.S. §120C-403(e)(1)

Lobbyist’s estimate must be verifiable in some manner. 30 NCAC 10C .0301

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Lobbyist’s Estimate is Reasonably Allocated

A Lobbyist’s estimate is reasonably allocated if it

Specifies a portion of the lobbyist’s salary, fee or retainer that is the estimated payment for lobbying

Includes all payments for lobbying conveyed by the Lobbyist Principal to the Lobbyist during the registration year

Includes all payments for lobbying services conveyed by the Lobbyist Principal to the Lobbyist during the registration year

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Lobbyist’s Estimate is Reasonably Allocated (cont’d)

Is consistent with known facts and circumstances underlying employment terms and compensation agreement between the lobbyist principal and the lobbyist

Is made retrospectively

AND

Is made in good faith.

30 NCAC 10C .0301

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Report Format & CategoriesN.C.G.S. §120C-401(b)-(c)

FMV or face value, if shown

Date of reportable expenditure

Description Name & address of

payee or beneficiary Name of any DI or

immediate family connected with reportable expenditure with certain exceptions

Transportation & lodging

Entertainment Food & beverage Meetings & events Gifts Other reportable

expenditures

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Filing DeadlinesN.C.G.S. §120C-401(e)-(f)

Quarterly filing whether or not reportable expenditures made

Due within 15 business days after end of filing period

Monthly if reportable expenditures for lobbying legislators and legislative employees when General Assembly is in session

Due within 10 business days after end of the month

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Filing DeadlinesN.C.G.S. §120C-401(e)-(f)

Annual Reporting of Payments for Lobbying and Lobbying Services filed with last quarter of filing

Filed under oath

Failure to timely file SOS must send certified letter 20 days to file report & pay late filing fee of

$50/day – maximum of $500

Failure to file after notice voids registration

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INVESTIGATIONS & VIOLATION CONSEQUENCESARTICLE 6

JurisdictionN.C.G.S.§ 120C-601 through -603State Ethics

Commission: Investigate complaints

of violations of Ch. 120C, except for matters related solely to Art. 2, 4 & 8

Petition court for subpoenas

Records are confidential Report apparent

violations to DA

Secretary of State: Perform systematic

reviews of reports filed by L & LP

Investigate complaints of violations related solely to Articles 2, 4, & 8

Petition court for subpoenas

Records are confidential Report apparent

violations to DA

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Violation ConsequencesN.C.G.S.§ 120C-602

Criminal Class 1 misdemeanor for failure to register

as lobbyist, lobbyist principal (Art. 2) or violation of certain prohibitions/restrictions (Art. 3).

If convicted, cannot lobby for 2 years.

Civil Secretary of State or Commission may levy

civil fines for violations up to $5,000/violation.

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STATE ETHICS COMMISSIONContact Information Location: 424 N. Blount Street

Raleigh, NC 27601-1010

Mailing Address: 1324 Mail Service

CenterRaleigh, NC 27699-1324

Phone: (919) 715-2071  

Fax: (919)715-1644

Email: ethics.comission@doa.nc.go

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Website: www.ethicscommission.nc.gov

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