The Joint Commission on Public Ethics has formally proposed regulations regarding the Lobby Act’s restrictions on gifts from clients/lobbyists to public officials.
The following provides our comments on JCOPE’s March 2013 informal draft rule, and includes a summary of how the proposed final rules have been amended to address our concerns.
Our major concern was to assure that the regulations remain consistent with underlying statutory provisions, and avoid placing significant new compliance burdens, or creating compliance uncertainty, for regulated business clients and lobbyists.
We will be submitting comments on this proposal prior to the September 27 deadline, and appreciate any additional feedback from Business Council members.
Vice President of Government Affairs
T 518.465.7511 x. 205
August 26, 2013
Political Event – Part 934.2 (b) – Defines “bona fide political event” as including only those events whose primary purpose is to provide financial support to a “political organization” (i.e., a political party or a candidate campaign) or a “political candidate.” This term is used in the statutory definition of “gift,” which excludes “complimentary attendance, including food and beverage, at bona fide political events.” As such, this draft rule would not allow a client or lobbyist from providing public officials (legislators) with complementary attendance at political fundraising events that do not directly and primarily benefit a party or candidate. It strikes us that the statutory language focuses on the function or purpose of the event, not the sponsor, and we do not support this definition. Importantly, any provisions here should only apply to those entities – clients and lobbyists – subject to the jurisdiction of the Lobbying Act and JCOPE. A political action committee, constituted pursuant to the state Election Law, would not be subject to this rule, regardless of how this final provision reads; an event sponsored by a PAC would not be subject to this rule. 8/14/13 VERSION: No change, issue remains a TBC concern.
Complementary Attendance – Part 934.2(f) – For purposes of the gift ban exclusion, the draft rule defines “complementary attendance” as the waiver of registration or admission fees related to food, refreshment, entertainment, instruction or materials, including continuing education credits or similar attendance certificates, but excludes registration or admission to activities that are not part of the regular agenda of an event, and also excludes travel, lodging or items of more than nominal value. As example, complementary attendance would apply to the registration fee for a policy-oriented conference sponsored by a client, but would not extend to a related outing with a separate registration fee. This proposal is comparable to longstanding lobby commission guidance and policy, and we believe it sets forth a workable approach to such events. 8/14/13 VERSION: No change, TBC supports language as is.
Educational Program – Part 934.2 (g) – In defining “educational program,” the draft rule’s criteria includes whether the entity providing the program is “an accredited educational entity.” This definition relates to the gift exclusion for food and beverages for participants at professional or educational programs. We are concerned that this criterion would be used to preclude applicability of the gift exclusion in cases where bona fide educational programs are offered or sponsored by qualified but non-accredited entities. We recommend this criterion be amended to include “an accredited educational entity or another entity qualified by its composition and/or experience.” This or similar language would allow trade and/or professional associations with longstanding practice of offering educational programs, but without any particular accreditation body, to be included in the definition of educational program. 8/14/13 VERSION: Amended to address TBC concerns.
Definition of “Gift” – Part 934.2(i) – The draft rule defines “gift” as anything more than nominal value, excluding only 1) anything paid for or secured by state contract, 2) awards and prizes in contests or events, or in random drawings open to the public, and 3) public service announcements. This is simply inconsistent with the statutory definition, under which twelve specific categories of goods and activities are categorically excluded from the term “gift”, and therefore not subject to the Lobby Act’s gift restrictions. As proposed, this draft rule first dissects the statutory definition of “gift,” then reassembles it in a way that makes subtle yet important changes to the statutory definition. As example, under the statute, complementary attendance at widely attended events is not a gift in the first instance, therefore is not subject to the statutory considerations regarding offering or providing of gifts set forth in the statute and reiterated in paragraphs 1 through 3 of this subdivision. Likewise, the proposed provisions regarding “multiple gifts” set forth elsewhere in the draft rule would not apply to items/activities that are excluded from the statutory definition of “gift.” We strongly urge JCOPE to refrain from using its rulemaking authority to change unambiguous statutory definitions and provisions. 8/14/13 VERSION: Amended to address TBC concerns raised above. Note that JCOPE has added a new definition of “nominal value,” as an “item or service with a fair market value of ten dollars or less,” which is used in the definition of “gift.”
Professional Programs – Part 934.2(p) – In defining “professional program,” the draft rule states that this term excludes a program sponsored by an entity that does or seeks to do business with a public official’s employer and describes the products or services offered or sold by such entity. This definition applies to the gift exemption for food and beverages offered to all participants in a professional or educational program (that is not otherwise a widely attended event and/or where the value of the food/beverage is more than fifteen dollars per event.) We have two concerns. First, it is unclear how, or by what criteria, JCOPE will determine that an entity “seeks to do business” with a public entity, resulting in uncertain compliance obligations. Second, the Lobbying Act already imposes restrictions on contacts with public officials during official acts of procurement. As such, the need for the broad restriction here is unclear. For these reasons, and the lack of any specific statutory basis for this additional exclusion, we recommend that it be struck from the draft regulation. 8/14/13 VERSION: Amended to address one of TBC concerns (i.e., they dropped the provisions regarding “doing business with the state.”)
Widely Attended Events – Part 934.2(s) – The proposed definition of “widely attended event” reflects verbatim the statutory definition of this term. We support this approach, as it avoids imposing additional terms or conditions on what constitutes “widely attended events” that are excluded from the definition of “gift.” 8/14/13 VERSION: No change, TBC supports language as is. Note, however, that in its propose Part 933 rule governing Public Officers Law limitations on the receipt of gifts, JCOPE proposes that public officials obtain prior approval from their agency’s “top official” or designee to attend a widely attended event, with such determinations applicable only for the specific individual seeking approval.
“Gifts” – Part 934.3 (c) – This provision requires that if an “item or service offered or given is a gift,” somebody - presumably the client or lobbyist giver - must determine whether the gift falls within one of the exclusions set forth in draft 934.4 which includes (but is not limited to) the statutory exclusions from the definition of a “gift” set forth in Section 1-c (j) of the Lobbying Act. As mentioned earlier, this approach is contrary to statutory provisions, which categorically preclude from the definition of “gift” the items and activities set forth the draft section 934.4 related to “exclusions.” 8/14/13 VERSION: Amended to address TBC concerns.
Multiple Gifts – Part 934.3(e) – This draft provision states that “a gift that is otherwise permissible may be prohibited if it is one of multiple gifts from the same person, entity or organization. Such gifts could create a reasonable basis for the impression that the gift was intended to influence or reward the public official.” We appreciate the issue that JCOPE is attempting to address here. The statute states that a gift is not permissible unless, under the circumstances, it is not reasonable to infer that the gift was intended to influence the public official recipient. JCOPE is attempting to provide information as to how it will apply this somewhat ambiguous standard, in saying in effect that giving multiple gifts to a single public official will be viewed with a “jaundiced eye.” However, we have two concerns with this approach. First, JCOPE’s proposed language is only somewhat less ambiguous than the statutory provision it seeks to clarify. Since regulations have the force and effect of law, we are always concerned with the setting of compliance standards that cannot be clearly articulated. This is a case that JCOPE’s oversight and compliance approach may be best set out in guidance, rather than regulation. Second, as discussed elsewhere, as result of the proposed reshuffling of the statutory definition of “gift,” this multiple gift provision applies to items and activities that should not be considered as gifts in the first place, and therefore should not be subject to additional regulatory provisions governing multiple gifts. This concern would be remedied through amendments to the rule’s proposed definition of “gift.” 8/14/13 VERSION: No change, issue remains a TBC concern.
Gift Exclusions – Part 934.4 We have several comments/concerns regarding this subpart.
- Subdivision (a) states that a “gift” is permitted to be offered or given by a client/lobbyist to a public official if it meets the criteria set forth in paragraphs 1 through 11 of this subpart. As discussed elsewhere, this represents an important change from the clear statutory definition of “gift,” which categorically excludes the items and activities discussed in paragraphs 1 through 11 (and also categorically excludes contributions made pursuant to Article 14 of the state Election Law, an additional exclusion that was left out of the draft rule, perhaps inadvertently.) These listed items and activities are not gifts in the first place under statute, so it is inappropriate to include them in the regulatory definition of “gift,” regardless of whether the rule also somehow makes them “permissible” gifts. 8/14/13 VERSION: Amended to address TBC concerns.
- Paragraph (a)(1) states that the statutory gift exemption for food and beverage valued at fifteen dollars or less is to be applied on a “per event” basis. This is a case of statutory ambiguity, whereby this threshold could be applied on a per item basis, or a lifetime basis, or somewhere in between. While statutory clarity is preferred, we believe the JCOPE proposal to apply it on a per event basis is workable. We also reiterate our earlier concerns regarding the additional draft language regarding multiple gifts, since food and beverages valued at fifteen dollars or less are not included in the statutory definition of “gift.” 8/14/13 VERSION: No change, issue remains a TBC concern.
- Paragraph (a)(3) – The draft rule allows a gift of “complementary attendance offered by the sponsor of a widely attended event.” In addition to switching the statutory basis of this provision, as discussed in detail above, we are concerned that this paragraph also diverges from the related statutory language by excluding complimentary food and beverage, in addition to complementary attendance, offered by the sponsor of a widely attended event. This omission should be corrected. 8/14/13 VERSION: Amended to address TBC concerns.
- Paragraph (a)7, subparagraphs (ii) and (iii) create non-statutory provisions allowing clients/lobbyists to offer discounts to “a select group of public officials,” in contrast to the statutory gift exclusion for discounts made available to “the general public or a segment of the general public defined on a basis other than status as a public official.” We assume that the intent of this regulatory proposal is to address circumstances such as where an entity (e.g., a professional association) offers a discounted rate for educational material or events to public officials. While perhaps a justifiable policy objective, we do not see how these special rules for discounts to public officials can be reconciled with the statutory provisions specifying that discounts to segments of the general public cannot be offered on the basis of one’s status as a public official. We would support an effort to obtain a statutory amendment to address this concern. In doing so, however, we would not support the proposed regulatory provision, in clause (d), that could be used to disallow a discount offered to a non-legislative public officials, if the offeror has an interest in an issue involving the agency employing the public officials to which such discount is offered. We believe this is an excessively broad standard. 8/14/13 VERSION: Provision modified, however the underlying statutory authority issue remains. Also, the proposed rule provides no mechanism for determining whether a specific targeted discount is allowable. No change, issue remains a TBC concern.
- Paragraph (a)(11) – To qualify for the gift exclusion for food and/or beverage offered at a professional or educational program, the draft rule states that such programs must be “a part of a public official’s official duties.” [Emphasis added.] It is unclear what is meant by being “part of” a participant’s “official duties;” it could be interpreted as meaning that the person was acting as an official representative of their employer, which may be overly strict in some cases. We believe that JCOPE’s intent here could be better addressed by changing this from “a part of” to “related to” the person’s official duties. The “related to” concept is already incorporated into statute and these regulations with regard to widely attended events, and seems to us to apply a workable standard for professional and educational programs as well. 8/14/13 VERSION: No change, issue remains a TBC concern.