General Information - Lobbying:
The Maryland Public Ethics Law
provides that the State Ethics Commission shall administer the State’s
lobbying law, financial disclosure law, and conflict of interest laws for
officials and employees other than judges and legislators; and it requires
local governments to enact their own ethics law. The Public Ethics Law may be found in the
Maryland Code Annotated, State Government Article, Title 15 (Supp. 2005).
LOBBYIST DISCLOSURE PROGRAM
The lobbyist disclosure program
requires certain entities[1] who
expend funds or receive compensation to influence legislative or executive action,
to register with the State Ethics Commission and report their
expenditures. The Ethics Law allows the
public to know which persons or entities are making a significant effort to
influence public policy and governmental decisions and establishes standards of
conduct to insure the integrity of the lobbying process. The provisions of the lobbying law can be
found in the Maryland Code Annotated, State Government Article, Title 15,
Subtitle 7.
The lobbying provisions of the
law create a lobbying registration year that extends from November 1st through
the following October 31st.
(§15-703) This one-year period
is the longest period of time that a person may register with the Commission as
a lobbyist. The Public Ethics Law
requires registration only when a person engages in activities requiring
registration, and, at that point, the person must register with the Commission
within five days. (§15-703(d))
There are two lobbying reporting
periods during the year: November 1st
through April 30th and May 1st through October 31st. (§ 15-704(a))
A person who is registered during any portion of either or both
reporting periods must file an Activity Report, even if that person had no
activity during that reporting period.
The Public Ethics Law establishes
lobbying registration requirements for persons undertaking activities for the
purpose of influencing:
Ø legislative
action;
Ø executive
action;
Ø executive
action relating to the development or adoption of regulations or the
development or issuance of an executive order;
Ø executive
action in a procurement contract that exceeds $100,000;
Ø executive
action to secure from the State a business grant or loan that exceeds $100,000;
Ø soliciting
others to communicate with officials or employees to influence legislative or
executive action; and
Ø compensating
one or more persons to influence legislative or executive action.
LEGISLATIVE ACTION
Legislative action includes
action or non-action as to introduction, sponsorship, consideration, debate,
amendment, passage, defeat, approval, veto, or any other official action or
non-action on any bill, resolution, amendment, nomination, appointment, report,
or any other matter pending which is within the official jurisdiction of the
General Assembly.
EXECUTIVE ACTION
Executive action is any act taken
by an official or employee of the executive branch for which the executive
branch is responsible.
Registration Requirements:
LEGISLATIVE LOBBYING
A person is required to register
as a legislative action lobbyist if any of the following requirements is met:
1.
The person communicates in the presence of an
official or employee in the legislative branch or executive branch for the
purpose of influencing any legislative action during a lobbying reporting
period and incurs
expenses of $500 or more other than for personal travel or subsistence
expenses. Expenses for items such as
meals and beverages, legislative receptions, invitations, and postage are
examples of expenses that will trigger the $500 registration requirement; or
2.
The person communicates in the presence of an
official or employee in the legislative branch or executive branch for the
purpose of influencing any legislative action during a lobbying reporting
period and the person earns $2,500 or more as compensation, from all lobbying employers
cumulatively, for all such communication and activities; or
3.
The person is not in-the-presence of an official or
employee but communicates with an official or employee for the purpose of
influencing legislative action and earns at least $5,000 from all lobbying
employers cumulatively as compensation for all such communication and
activities relating to the communication during a reporting period for
activities aimed at influencing legislative action.
EXECUTIVE ACTION LOBBYING
A person is required to register
as an executive action lobbyist if one of the following registration
requirements is met (NOTE: Only No. 2 requires the actual physical presence of
the person.)
1.
The person communicates with any official or
employee in the executive branch for the purpose of influencing executive
action during the reporting period and the person expends a cumulative amount
of $100 or more during the reporting period on one or more officials or
employees of the executive branch for meals, beverages, special events or gifts in connection with or
for the purpose of influencing executive action. Any executive action activity is covered by
this provision.
2.
The person is compensated $2,500 or more in a
reporting period, from all lobbying employers cumulatively, for all such
communication and activities relating to the communication or incurs expenses of $500, per
lobbying employer, or more (other than for personal travel or subsistence)
and gets in the
presence of an official or employee for the purpose of influencing executive
action relating to the development or adoption of regulations or the development or issuance
of an executive order.
3.
The person is employed to influence an official or
employee in the development or adoption of regulations or the development or
issuance of an executive order and earns at least $5,000, from all lobbying employers
cumulatively, as compensation for all such communication and activities relating
to the communication during the reporting period, even if not in-the-actual-presence of
officials or employees for these purposes.
4.
The person is compensated to influence executive
action in a procurement
contract that exceeds $100,000 must register as a lobbyist if either of the following
elements is met and even if the criteria in No.1 above are not met.
Ø The
person or entity communicates with any official or employee in the executive
branch for the purpose of influencing executive action during the reporting
period, and the person or entity expends a cumulative amount of $100 or more during a
six-month lobbying reporting period on one or more officials or employees of
the Executive Branch for meals, beverages, special events or gifts in
connection with or for the purpose of influencing any executive action. Section 15-102(l) defines executive action
as “an act for which the Executive Branch of State government is
responsible and that is taken by an official or employee of that branch;”
Ø A person
or entity is compensated to influence executive action in any procurement contract
that exceeds $100,000.00, even if not in the presence of an official or
employee, unless the person or entity is a bona fide salesperson or
commercial selling agency employed or maintained by the employer. (§§
15-701(a)(4) and 15-701(b)(4)).
5.
The person is compensated by a business entity to influence executive
action to secure a business grant or loan from the State (see
Qualified Exemptions discussed below).
GRASSROOTS LOBBYING
The Ethics Law requires
registration for any person, group, organization or business entity that expends $2,000,
including salaries, contractual employees, postage, telecommunication services,
electronic services, advertising, printing and delivery services, in a
reporting period for the express purpose of soliciting others to communicate
with any official to influence any legislative or executive action.
General Exemptions:
There are six situations listed
below which are general
exceptions to the registration requirements. These exceptions are
applicable only where actions are limited to the particular activity listed
below.
1.
Appearances as part of the official duties of a
duly elected or appointed official or employee of the State or a political
subdivision of the State, or of the United States, and not on behalf of any
other entity.
2.
Actions of a member of the news media to the
extent the actions are in the ordinary course of gathering and disseminating
news or making editorial comments to the general public.
3.
The representation of a bona fide religious
organization solely for the purpose of protecting the right of its own
members to practice the doctrine of the organization.
4.
Appearances as part of the official duties of an
officer, director, member, or employee of an association engaged exclusively in lobbying
for counties and municipalities and not on behalf of any other
entity.
5.
Actions as part of the official duties of a
trustee, administrator, or a faculty member of a non-profit independent college
or university in the State provided the official duties of the individual do
not consist primarily of attempting to influence legislative or executive
action.
6.
Volunteer or pro bono activities by attorneys, who are not employed by
the organized bar as registered lobbyists, in the course of serving as an
officer, committee or section chair, or representative designated to represent
a section, committee, or the organized bar at large,
including:
a. Testimony
before either the Senate or the House of Delegates;
b. Testimony
before a committee or subcommittee of the Senate or the House of Delegates;
c. Communication
with an official or employee of the Legislative Branch; Executive Branch in the presence of that
official or employee;
d. Communication
with an official or employee of the Legislative Branch; or Executive Branch not
in the presence of that official or employee.
Qualified Exemptions:
The following eight activities
are exempt from
regulation if
the person engages in no other acts for an employer during the reporting period
that require registration:
1. Appearances before
the General
Assembly or any committee or subcommittee at the specific request of
the body involved.
2. Appearances before
an executive
unit at the specific
request of the executive unit involved provided the individual engages in no
other acts during the reporting period requiring registration.
3. An elementary, secondary, or
postsecondary school student or student organization that communicates as part of a course or student
activity is not subject to the registration requirements based solely on the $500.00
expense threshold.
4. Appearances before a
legislative committee at the specific invitation or request of regulated lobbyist provided
no other act is undertaken for which registration is required and provided the
witness notifies the committee that the testimony is at the request of a
regulated lobbyist.
5. Professional services in
drafting bills or in advising and rendering opinions to clients as to the
construction and effect of proposed or pending legislation where these services
do not otherwise constitute activities as a regulated lobbyist.
6. Appearances before
an executive unit at
the specific request of a regulated lobbyist if the witness notifies the
executive unit that the testimony is at the request of the regulated lobbyist,
and the individual engages in no other acts during the reporting period
requiring registration.
7. A person
who seeks to
secure a business grant or loan for the purpose of locating, relocating, or
expanding a business in or into the State.
8. A bona fide full-time
official or employee of a business entity seeking to secure a business grant or
loan.
Persons Compensating Lobbyists:
Those who spend at least $2,500 to
provide compensation to one or more persons are required to register as
lobbyists, unless
they meet the two registration and reporting exemption requirements listed
below and claim this exemption on their lobbyist’s registration form.
1.
The employer must not engage in other acts (other
than employing a lobbyist) that require registration.
2.
The employed lobbyist must report all of the
lobbying related expenses of the employer on the lobbying activity report,
including compensation, other expenditures made by the lobbyist and any other
support expenses, compensation or other lobbying related expenditures made by
the lobbyist’s employer. The exemption must be
claimed on the lobbying registration form signed by the lobbyist and the
employer.
If the lobbyist neglects to file any of the required
reports, the employer will be responsible for doing so.
Gifts:
The
Ethics Law has a variety of provisions involving limitations on and disclosure
of gifts. Lobbyists are required to
report gifts on their activity reports in varying detail depending on the
nature of the gift, the value of the gift, and the recipient. In most instances, officials are also
required to disclose gifts received from lobbyists in excess of $20 or a series
of gifts of $100 or more.
A regulated lobbyist and the lobbyist
employer may not knowingly, directly or indirectly, make a gift to an official
or employee if the donor knows, or has reason to know, that the employee or
official may not receive the gift (§15-713). Subtitle 5 of the Public Ethics
Law prohibits both the lobbyist from giving and the employee or official from
receiving the gift. Although the gift
provisions of the Ethics Law for all employees and officials are similar, there
may be some differences in the content and the interpretation of these laws.
The Joint Committee on Legislative Ethics[2], and
not the State Ethics Commission, considers the issues related to permissible
gifts to legislators.
Section 15-505(a)(1) of the Public Ethics Law prohibits officials or employees from soliciting any gift. Thus, even a gift that may be accepted cannot be solicited.
In addition to the general gift
solicitation prohibition, §15-505(a)(3) prohibits officials from
directly soliciting or facilitating the solicitation of a gift from an
individual regulated lobbyist on behalf of another person or group,
including charitable and community group solicitation. Section 15-713 also prohibits a regulated
lobbyist from making a gift directly or indirectly that the lobbyist knows the
intended recipient is prohibited from soliciting or accepting and from engaging
in any charitable fund-raising activity at the request of an official or
employee (including soliciting, transmitting the solicitation of) or
transmitting a charitable contribution.
Officials and employees may not receive gifts from regulated lobbyists and certain other donors. However, if the unsolicited gift is of insignificant value, would not tend to impair or appear to impair the impartiality or independent judgment of the recipient, and certain gifts specifically listed in the Ethics Law may be accepted:
* Meals and beverages in the presence of the donor.
* Ceremonial awards or gifts of insignificant monetary value.
* Other unsolicited nominal gifts.
* Trivial gifts of informational value.
* Certain reasonable expenses for serving as a speaker at a meeting.
* As to elected officials, certain
tickets as a courtesy to the office for non-sporting events such as charitable,
cultural or political events.
Special Gift
Limits on Meals and Beverages – §15-505
1. A public official member of the legislative staff (generally higher level managers, committee counsels, etc.) may accept meals and beverages only at receptions to which all members of a designated legislative unit are invited.
2. Generally, legislators may accept meals and beverages only under special specified circumstances, as follows:
A. Meals and beverages received and consumed by the member in the presence of the donor as part of a meal or reception to which all members of a legislative unit (a list of approved legislative units is available from the State Ethics Commission) were invited.
B. Meals and beverages received from the donor, other than a regulated lobbyist, while the General Assembly is not in session at a location within a county that contains the member’s district if the donor is located within the County that contains the member’s district.
C. Meals and beverages received at the time and in the geographic location of a meeting of a legislative organization for which the member’s presiding officer has approved the member’s attendance at State expense.
Special Gift
Limitations - Nominal Gifts §15-505
Elected officials in the Executive branch
(Governor, Lt. Governor, Attorney General, Comptroller, Sheriff, States
Attorney, Clerk of the Court and Register of Wills) and members of the General
Assembly may accept from a regulated lobbyist only unsolicited gifts that do
not exceed $20 in value.
Generally, nominal gifts include such items as t-shirts, caps, flowers, paperweights, etc. NOTE: This category of gifts is separate from permissible reasonable travel expenses (see below) and ceremonial gifts such as plaques or trivial gifts of informational value.
Special Gift
Limitation: Tickets and Free Admission
Section 15-505 (c)(2)(viii) permits an elected constitutional officer to accept tickets, or free admission from the person sponsoring or conducting the event, as a courtesy or ceremony to the office, to attend a charitable, cultural or political event. (Note: tickets to sporting events may not be accepted).
Non-elected
officials and employees may not accept tickets or free admission to events from
controlled donors. “Controlled donors” includes regulated
lobbyists.
Reporting Requirements:
REGISTRATION
A lobbying registration form is
to be submitted no later than five days after taking an action or actions
requiring registration. The longest
period of time an individual may register is from November 1 through October 21
of the following year. Included on the
form are:
è the type(s) of lobbying to be done;
è the lobbyist’s name and permanent address;
è the name of the employer;
è the period of activity and the nature of the
lobbying matters to be addressed.
The
form must be signed by the lobbyist and the lobbyist’s employer and be
accompanied by a fee of $100.00 per registration.
ACTIVITY REPORTS
A person required to register is
also required to report expenses relating to lobbying activity (Form No. 4). A lobbying activity report is required for
any part of a six-month reporting period during which the lobbyist is
registered. The reporting periods are
November 1 to April 30 (form is due by May 31) and May 1 to October 31 (form is
due by November 30). If a person is registered as
a lobbyist and has not participated in any lobbying activities during the
lobbying reporting period, that person must still file a lobbying activity
report and check “no activity” in the introductory paragraph of the
form. Lobbying activity reports are
to be filed with the State Ethics Commission,
Information
Required On The Lobbying Activity Report
Lobbying activity reports require
careful documentation and record keeping.
In addition to updating any information that has changed since the
registration form was filed, disclosure is required regarding compensation,
gifts, official expenses, research assistance, publications, witness fees and
all other costs related to the lobbying effort.
The description of the matter lobbied should include legislative bill
numbers, where possible. Lobbyists
and registrants must retain any documents necessary to substantiate their
records for at least three years from the date the report is filed. After reasonable notice, these records are to
be made available to the Ethics Commission for inspection.
In addition to the general
lobbying activity report, there are a variety of special reports that may need
to be filed. For example, organizations
whose primary purpose is lobbying must file a report disclosing those persons
or entities that finance 5% or more of the organization’s effort. Also, lobbyists are required to report campaign
contributions and certain business transactions with officials.
SPECIAL REPORTS
Grassroots -
Contributors Report: § 15-704(d) (Form 12)
A
regulated lobbyists, other than an individual, that is organized and operated
for the primary purpose of attempting to influence legislative or executive action
must file a report identifying the name and permanent address of each entity that provided at least 5% of
the regulated lobbyist’s total receipts during the preceding 12 months.
Legislative
Meals or Receptions: § 15-708 (Forms 13E & 13F)
If a regulated lobbyist plans to
hold a legislative meal or reception event to which a qualified legislative unit is
invited, the following requirements apply:
1.
The invitees must be a qualified group. Qualified groups include all members of the
General Assembly, either house thereof, all members of any standing committee,
or all members of a formally recognized (for ethics disclosure purposes) county
or regional delegation.
2.
At least five days before the event, there
must be a written invitation to all members of the qualified legislative unit
and an invitation disclosure form (Form No. 13 E) must be filed with the
Department of Legislative Services.
3.
Within fourteen days after the event, an
expenditure report must be filed with the State Ethics Commission (Form No. 13 F). If the final costs for the event are not
known by the time the Form No. 13F must be filed (14 days after the event), the
lobbyist must estimate the cost and provide as much information as possible on
the form. If the total cost has been accurately
reported on the Form No. 13F, the regulated lobbyist should not include this
event on the activity report (see immediately below). If the total cost has not been accurately
reported on the Form No. 13F, then the regulated lobbyist must include this
event and its final cost on the activity report (see immediately below).
Lobbyists &
Officials - Gift Disclosure: § 15-704 (Form 4)
Generally there are two types of public disclosure under the Public Ethics Law: Lobbyists’ Activity Reports and Public Officials’ Financial Disclosure. Officials’ Financial Disclosure reports are filed each year for the previous calendar year. Lobbyists’ Activity Reports are filed within 30 days of the close of each six-month lobbying reporting period.
Elected
officials, candidates and employees designated to be public officials (higher
level staff and those involved in procurement) are required to disclose
individual gifts from controlled donors, if a) the gift has a value of
over $20, or b) there is a series of gifts totaling $100.
There are some limited exceptions to this required disclosure:
1. Food
or beverages received and consumed by legislators and public official
legislative staff in the presence of the donor as part of a meal or reception
to which all members of a legislative unit were invited.
2. Food or beverages received by a member of the General Assembly at the time and geographic location of a meeting of a legislative organization for which the member’s presiding officer has approved the member’s attendance at State expense.
3. A ticket or free admission extended to a member of the General Assembly by the person sponsoring or conducting the event, as a courtesy or ceremony to the office, to attend a charitable, cultural or political event to which all members of a legislative unit are invited. However, if the member accepts two or more tickets during the calendar year from the same donor, with a cumulative value of $100 or more, disclosure is required even if a legislative unit is invited.
There are no exceptions to financial disclosure gift reporting for Executive elected officials or other filers of financial disclosure.
Lobbyists -
General Gift Disclosure: § 15-704 (Form 4)
Lobbyists must report the gross amounts of all gifts in the relevant reporting categories. There are other provisions of law that require the lobbyist to name the gift recipients:
1. If an official or employee receives $200 or more for expenses to speak or participate at a meeting; and
2. If an elected executive official receives meals and beverages in any amount (§15-705(a)).
3. A gift of two or more tickets or admission, totaling $100 or more, made to a member of the General Assembly as part of a legislative unit must be disclosed as to the recipient.
4. Gift
disclosures that do not require the naming of the recipient in accordance with
1, 2, and 3 above must be included in the $75 gift reports, with the following
exceptions:
A. Gifts of a ticket to a member of the General Assembly to which a legislative unit is invited (subject to the $100 rule above);
B. Food and beverages for a meal or reception to which all members of a legislative unit are invited;
C. Food and beverages received by members of the General Assembly at the time and geographic location of a meeting of a legislative organization for which the member’s presiding officer has approved the member’s attendance at State expense; and
D. Food, lodging and expenses in return for participation in a panel or speaking engagement at a meeting.
Seventy-Five
Dollar Gift Disclosure: § 15-704 (Form 13D)
The $75 gift reporting rule pertains to all gifts reportable to the official, employee or member of the immediate family by a regulated lobbyist or by an entity activity on behalf of the regulated lobbyist, regardless of whether the gift is attributable to more than one entity and whether or not it is in connection with lobbying. The $75 threshold pertains to an individual gift or a series of gifts given within the six-month reporting period. For example, if one employer reaches the $75 level for a gift or gifts, the lobbyist must disclose the name of the recipient on the special reporting form. If a lobbyist using funds from more than one employer, or his or her own funds, reaches the $75 level for a gift or gifts, the lobbyist must complete the special reporting form.
Business
Transactions With Officials: § 15-706 (Form 21)
Business transactions with
officials or employees may be limited by §15-713(11) and are subject to the disclosure
requirements of § 15-706 of the Ethics Law.
Section
15-706 requires a regulated lobbyist to file a report if, during a
six month lobbying reporting period, the lobbyist engaged in a business
transaction with a member of the General Assembly, Governor, Lieutenant
Governor, Attorney General, Secretary of State, Comptroller, State Treasurer or
Secretary of a principal State department.
Doing business with any of the following is considered to be the
same as doing business with an official:
§
the spouse of the official.
§
a business entity in which the
official or the spouse participates as a proprietor or partner.
§
a business entity in which the
official or the spouse has an ownership interest of at least 30% in the entity.
Covered
transactions are those involving the exchange of value of $1,000 or more in a
single transaction or $5,000 or more for a series of transactions.
The reporting period of the transactions is
the previous six-month lobbying reporting period (either November 1
through April 30, or May 1 through October 31).
The disclosure form (Commission Form # 21) requires:
§
The date(s) of the transaction(s).
§
The name and title of the official
involved in the transaction(s).
§
The nature and value of anything
exchanged. Value is determined by the
actual consideration or fair market value.
Campaign
Contributions from Lobbyists: § 15-707 (Form 22)
Two regulated lobbyist campaign finance disclosure
programs are part of the Ethics Law. One
program addresses lobbyist
disclosure and is fully administered by the State Ethics Commission and
subject to all of the civil and criminal sanctions under the Ethics Law. This program requires a regulated lobbyist to
disclose, on a separate report to be filed at the time of filing the six-month
lobbyist activity report, any contribution made directly or indirectly by the
regulated lobbyist during the reporting period for the benefit of the Governor,
Lt. Governor, Attorney General, comptroller, Member of the General Assembly or
candidate for election to any of those offices.
It is important to note that the law applies to direct and indirect
contributions. For example,
reported contributions would include those made to a political committee for an
applicable candidate or a slate on which a candidate is a member, a
contribution to a PAC created to support a specific candidate or a group of
candidates, or a PAC contribution designated for transfer to a particular
candidate or candidates. A lobbyist must
also disclose any contributions made by other persons at the direction of the
lobbyist which funds could be considered to be the lobbyist’s funds or
under the lobbyist’s control. This
may also include a contribution by a family member or a political action
committee. The State Ethics Commission
will distribute the applicable forms each reporting period. A lobbyist may not solicit or transmit contributions
on behalf of covered officials.
Campaign
Contributions from Lobbyists’ Employers:
The second campaign contribution
disclosure program addresses employers paying compensation to a lobbyist. The disclosure report is filed with the State
Board of Elections, which has developed forms for this activity. The election law governs criminal violations
of the Board of Elections’ program, but civil sanctions are governed and
administered by the Ethics Commission in accordance with § 15-714 of the Ethics
Law. The State Ethics Commission may
coordinate with the State Election Board on this program, however the Elections
Board administers the filing of forms and is responsible for reporting any
violations to the Commission.
Standards of Conduct:
The standards of conduct are set
forth in § 15-713 of the Ethics Law. A
regulated lobbyist may not:
§ Be engaged for lobbying purposes for compensation that is dependent in any manner on the enactment or defeat of legislation, the outcome of executive action on a procurement contract, or