84.11

OPINION NO. 84-11

An advisory opinion has been requested as to whether certain activities of a corporation bring it within the definition of a lobbyist.

This request is presented by a Baltimore attorney on behalf of his client, an out-of-State corporation (the Corporation) registered to do business in Maryland. The Corporation held a reception in Baltimore on July 15, 1983 that is the subject of this request. The purpose of the reception is described as educational and public relations directed. Its focus was on Baltimore County, and the invitees included primarily public officials within the County. All of the County's Annapolis delegation was invited, as were several County officials and individuals from the local chamber of commerce and similar business associations. The State officials represented 2/3 of those invited and 50 percent of the attendees. Approximately 25—30 persons attended, including representatives of the Corporation. Attendees included three delegates and three senators. No State executive officials were included.

The reception involved provision of drinks and hors d'oeuvres, at a cost of $849.56, and a $450 fee was paid to a local law firm for organization of the reception. According to the attorney, the focus of the meeting was to impact the Corporation's relations with the government officials that would be involved in its Baltimore County activities. The reception included a general presentation addressing the Corporation's operations, its charitable and community work, and its beneficial impact on the local economy. There was also a question and answer period and a time when Corporation representatives mingled with guests. The request lists several topics that came up in this informal period, including the Corporation's position on the sale of alcoholic beverages and its plans regarding retail sale of gasoline. The Corporation was last registered for the 1982 legislative session, and subsequent to submission of this request registered for the current reporting period, to lobby on alcohol and gasoline issues.

The Public Ethics Law at §5-103 (Article 40A, §5-103(a), Annotated Code of Maryland, the Ethics Law) requires registration by lobbyists, by persons who compensate one or more registrants in excess of $500 during a reporting period, and by persons who spend in excess of $2,000 for the purpose of urging others to communicate with officials to influence legislative or executive action. Section 1-201(s) of the Law defines a lobbyist as a person:

1) Who, in the presence of any official or employee in the legislative or executive branch, communicates with that official or employee for the purpose of influencing any legislative action; and

2) Who, for that purpose, either incurs expenses of $100 (exclusive of personal travel and subsistence expenses) or receives $500 or more as compensation.

Title 5 of the Law requires registration and reporting by lobbyists. In implementing these provisions we have looked to three basic questions. The first is whether the entity or person is "in the presence of" an official or employee. As to this issue, we have followed the approach of our predecessor (the Public Disclosure Advisory Board) and held that a corporation can be in the presence of an official through its own agents and employees. Thus, since Corporation representatives participated in the reception, and legislative officials were present, we believe that it was in the presence of legislative officials as contemplated in this definition.

The second question is whether the person or entity communicated with officials for the purpose of influencing legislative action. Section 1-201(r) of the Ethics Law defines "legislative action" very broadly to include action or non-action on specific types of matters pending or proposed in the Legislature, or "any matter which is within the official jurisdiction of the General Assembly." We have not dealt with this concept in connection with determining as an initial matter whether an entity meets the definition of a lobbyist. We did, however, consider, in our Opinion No. 82-4,1 whether certain activities of a registrant were in connection with lobbying and therefore required to be disclosed on an activity report. We found there that the absence of a specific bill or legislative proposal does not necessarily place the situation outside of the concept of lobbying. Particularly, we held that ...expenditures for events that are designed to provide information and company views and to influence, directly or indirectly, how members or staff of the General Assembly act or refrain from acting on issues of interest to the Registrant's employer, are "expenditures on acts requiring registration" that must be reported in accordance with §5-105 of the Ethics Law.

The Corporation's reception was held during the summer and there were apparently no bills discussed or then pending before the General Assembly. It is our view, however, that this situation is similar to the one we considered in Opinion No. 82-4, and that the Corporation's reception involved appearances with the intent to influence legislative action. Two-thirds of those invited to the reception were State legislative officials, and 50 percent of the actual attendees were State Senators or Delegates. Moreover, some of the subjects discussed were subjects that have been or may be legislated on, and for which the Corporation subsequently registered to lobby during the current legislative session. Under all of these circumstances, we must believe that the focus of this event was the County legislative delegation, and the intent was to influence the legislators to act favorably toward the Corporation in matters expected to be at issue before the General Assembly. We therefore conclude that the reception involved "communications for the purpose of influencing legislative action," and was a lobbying activity as contemplated in §1-201(s) of the Law.

The third question in defining a lobbyist is to determine whether the activities involved the expenditure (for the lobbying purpose) in excess of $100 (exclusive of personal travel or subsistence) or receipt of $500 or more in compensation. Based on the limited information available at this time, there would not appear to be any individuals who were compensated by the Corporation at or above $500 in connection with this reception. In our Opinion No. 81-12, however, as well as in Opinion No. 82-4, we indicated that where special events were designed to create a favorable atmosphere for consideration of legislative action, present or future, then paying for meals and beverages of various State officials attending the function constituted a lobbying expense, which, if it exceeded $100, would meet the criteria defining a lobbyist. The expenditures here on meals and beverages were extensive, and approximately half of the guests were State legislative officials. Additionally, the compensation of various company officials and private attorneys present also appears to exceed the $100 threshold. We thus believe that the $100 threshold has been met, as to the Corporation itself.

We therefore advise the Corporation that it should submit a lobbying registration and activity report for the reporting period during which the reception was held. Corporation representatives may coordinate with Commission staff if they have any questions regarding the details and procedures of the registration and reporting requirements.

Herbert J. Belgrad, Chairman
    Reverend John Wesley Holland
    Betty B. Nelson
    Barbara M. Steckel

Date: March 28, 1984

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1 Except as otherwise expressly cited to the Maryland Register, Opinion citations are to Commission Opinions published in COMAR Title 19A.