97.02

OPINION NO. 97-02

An opinion has been requested by a lobbyist (the Lobbyist) regarding application of the conflict of interest, financial disclosure and lobbyist disclosure provisions of the Ethics Law to the Lobbyist and others in view of the Lobbyist's marriage to a member of the Maryland General Assembly.

The Lobbyist, who is affiliated with a very active lobbying firm that also includes a parent of the Lobbyist (the Parent), was recently married to a member of the Maryland General Assembly (the Legislator). The Lobbyist has been a regulated lobbyist for about two years, representing clients involved in various matters, including horse racing, alcoholic beverages, construction contracting, and tobacco interests. Prior to the wedding the Lobbyist contacted the Ethics Commission, requesting advice regarding application of the conflict of interest, financial disclosure and lobbying disclosure requirements of the Public Ethics Law (State Government Article, Title 15, Annotated Code of Maryland) to the circumstances. Though the request was received within a few days before a Commission meeting, the request was added to our informal advice agenda in order to provide the Lobbyist with as much timely advice as possible prior to the event. In this initial advice, we made it clear to the Lobbyist that this Commission does not have authority to provide advice or consider the application of exceptions under the gift acceptance provisions of §15-505 of the Law as to members of the Legislature, as the Law provides that the Joint Committee on Legislative Ethics is the advisory body as to application of the conflict of interest provisions to members of the Legislature.

The limited information presented by the Lobbyist at the time of our initial consideration was reviewed informally and we provided specific advice as to application of the lobbyist and official disclosure requirements to the food and beverages provided at the reception (apparently proposed at that time to be paid by the Parent), the impact of official and lobbyist disclosure requirements as to a gift of a wedding ring from the Lobbyist to the Legislator, application of the lobbyist and official reporting requirements to wedding gifts from other lobbyist attendees to the Legislator, and application of lobbyist and official disclosure requirements to gifts from the Parent to the Legislator. The Lobbyist subsequently requested a formal opinion, reiterating to some extent the initial questions (including those relating to gift acceptance by the Legislator), requesting certain exemptions, and asking for other relevant guidelines. These issues were considered at the meeting of the Ethics Commission on January 9, 1997 as requested by the Lobbyist. This opinion is thus provided in response to the Lobbyist's specific request for a formal opinion and is based on very limited facts provided by the Lobbyist. It will therefore focus on specific facts where available and otherwise outline the general statutory principles to be applied in these types of situations.

The request presents issues subject to Commission authority primarily under the official financial disclosure and lobbyist disclosure provisions of Subtitles 6 and 7 of the Public Ethics Law, as well as a single limited question as to gift acceptance and disclosure by a nonelected legislative staff public official. 1 Both of these Subtitles rely on the definition of gift in §15-102(p) of the Law, under which gift is defined to mean "the transfer of any thing of economic value, regardless of form, without adequate and lawful consideration." The gift acceptance prohibition of §15-505 (relevant in this opinion only to the question of a legislative employee invited to the wedding reception) generally prohibits acceptance by officials and employees of any gift from a person subject to one's authority, or from a lobbyist. Various exceptions to this prohibition include, in most circumstances, meals and beverages consumed in the presence of the donor and, as to persons subject to Ethics Commission authority, gifts found by the Commission to be purely personal and private and not detrimental to the conduct of the government.

Subtitle 6 of the Law provides for annual financial disclosure by State and public officials, including members of the General Assembly and other elected officials, and others in all three branches of the government who are identified in accordance with the statutory process. Section 15-607(e) requires disclosure of gifts over $25 in value from a regulated lobbyist, a person regulated by the State, or a person doing business with the State. Gifts from an official's spouse, children and parents are excepted from this requirement. Subtitle 7 of the Law defines the requirements for registration and expenditure disclosure by regulated lobbyists. In particular, §15-704 sets forth in detail the information regarding compensation and expenditures that must be provided by regulated lobbyists. Section 15-704(b)(2) requires disclosure by a lobbyist of total expenditures in connection with lobbying activities, including expenditures on meals and beverages and on any other gifts for officials or employees and the spouses and dependent children of officials and employees. Meals and beverages are disclosed under this provision on the general activity report in a lump sum amount. There are no exceptions from this general disclosure, which, however, applies only for expenditures related to lobbying activities.

In order to more closely monitor gift activities between lobbyists and officials, more detailed and complete disclosure is required pursuant to §§15-704(b)(4) and (e), which require identification of the recipient of the gifts if certain thresholds are met, whether or not the gift was in connection with lobbying activity. Specifically, §15-704(b)(4) requires identification of recipients of gifts (also usually included in subsection (b)(2)) if there is a cumulative total to any one recipient of over $75, unless the recipient is otherwise identified pursuant to another special disclosure provision. Section 15-704(e) is another special disclosure provision, requiring identification of recipients of meals and beverages if the cost is $15 or more.

The Lobbyist's advice request presents questions under these provisions as to several categories of gifts. We will consider these situations in turn, keeping in mind that facts are uncertain as to some of them and also that gift acceptance advice as to the Legislator is not within our authority. 2 Entertainment or other events where food and beverages are provided are gifts that would be included in the statutory definition of gift. Meals and beverages provided to an official or employee at a wedding reception or other event would therefore be gifts to officials who attended and would be disclosable by them if provided by a regulated lobbyist and if the value received is over $25. The original value of the reception per person was described as $50. We were later advised that its value was $24, and the Law in §15-607(e)(2) provides for disclosure by officials of gifts received by them or by another individual at their direction. The Ethics Commission has generally advised that gifts to officials and spouses under these circumstances are thus attributable to and reportable by officials and employees who file annual disclosure, where the total amount received at an event exceeds $25. Assuming an official's spouse attended and the combined value exceeded $25, the gift would be disclosed by the official.

If the reception was paid for by a lobbyist (either the Parent or the Lobbyist) from personal funds, this particular event as described here would not be viewed as an activity related to lobbying, and the reception expenditures would therefore not be included on a regular activity report as meals and beverages. 3 Section 15-704(e) of the Law, however, requires disclosure by a lobbyist identifying elected legislative officials who receive meals and beverages of over $15 whether or not in connection with lobbying activities. Since the value received at the reception apparently exceeds this amount, disclosure by the Lobbyist or the Parent (if one of them paid for the reception) on a special meals and beverages report would be required, at least as to members of the Legislature, and as the section expressly requires it, for members of their immediate family.4 This report would identify the recipient. Also, if nonelected Executive Branch and Legislative Branch officials attended, expenditures for them and their immediate family would be counted toward the $75 report required by §15-704(b)(4), as cumulative expenditures by lobbyists of over $75 in a six-month period are also required to be reported (if the threshold is reached) whether or not the expenditure is in connection with lobbying.

The Lobbyist has also asked whether a nonelected Legislative Branch official and spouse may receive meals and beverages at the wedding reception. Our informal advice to the Lobbyist was that the law regarding acceptance of meals and beverages would not bar this activity under the specific circumstances presented. Apparently this individual and his spouse did attend, and we continue to believe our prior informal advice was correct. The Law provides (at §15-505(c)(2)(i)) that officials may accept meals and beverages consumed in the presence of the donor where there is no intent to influence or, if the gift is of substantial value, any appearance of influence. In considering this and similar kinds of situations, we have said as to persons under Commission authority that, while exceptions do not generally apply to allow acceptance of a gift by a spouse or another at the official's direction (a routine restaurant dinner with a lobbyist, for example), spouses can be included in most instances when the event is ceremonial and where it is expected that a spouse may attend. We thus advise that this individual's spouse's receipt of meals and beverages paid for by a lobbyist is allowed. Section 15-607(e) of the Law requires officials (such as this individual, who is a public official as defined in the Law) to disclose gifts to them or their immediate family exceeding $25 on the annual statement (if the reception is paid for by the Lobbyist or the Parent). Also, the amount would (as discussed above) count toward the $75 threshold for disclosure if there were to be any other gifts to this individual by the Lobbyist or the Parent.

In addition, the Lobbyist has asked about the gift of a wedding ring from the now-spouse Lobbyist to the Legislator, and whether this gift would be required to be disclosed. As previously noted, gift acceptance by Legislators falls outside the authority of the State Ethics Commission. If the Joint Committee on Legislative Ethics determines that the Legislator may accept the ring, then the Lobbyist may under the lobbying law provide the gift. Regarding official and lobbyist disclosure, it is our further view under these particular facts, since the Lobbyist and Legislator will be married at the time the Legislator files the annual financial disclosure statement, that the ring may be disclosed by the Legislator, but need not be, as gifts from spouses are specifically excepted from disclosure. There is, however, no statutory spouse exception for lobbyist gift reporting, and the Lobbyist must therefore disclose the ring if the gift is made and the value is $75 or more. This disclosure would be included on a special report pursuant to §15-704(b)(4), which requires disclosure by lobbyists of gifts given to identified officials with a cumulative value of $75 or more whether or not in connection with lobbying activities.5

The Lobbyist has further asked about the application of the Ethics Law to gifts given by the Parent (also a lobbyist) and gifts given by other lobbyists in connection with the wedding. In the absence of any information to the contrary, we assume these gifts are to both the Legislator and the Lobbyist. Since these gifts (as would gifts given on other occasions) would constitute a thing of value transferred without consideration, they would fit within the definition of gift and would be subject to the lobbyist and official gift disclosure requirements. As to both the Parent and other lobbyists, disclosure on the regular lobbying activity report would depend on whether the gifts were purchased with client or business funds. If they are from purely personal funds and not lobbying related, then such gifts would not be disclosed on a regular general lobbying report.6 A gift valued at $75 or more, however, would be included on a special $75 report, as reporting of gifts totaling this amount (with the identity of the recipient) is required whether or not the expenditure was in connection with lobbying activities. As to disclosure of these gifts by the Legislator, §15-607(e) requires officials to disclose gifts from lobbyists if the value is over $25 or there is a series of gifts totaling $100.

The Parent in this situation is a lobbyist working in the same firm with the Lobbyist, and now the father-in-law of a member of the Legislature. The question has been presented as to whether the official gift financial disclosure exception as to certain family members is available as to gifts from a lobbyist who is an in-law. As an initial matter, as has been previously discussed, the Ethics Law includes a variety of exceptions and exemptions, all tailored to deal with particular situations in their own context. Section 15-505 of the Law, which deals with gift acceptance exceptions, includes exceptions for gifts from an individual related to the official or employee by blood or marriage (subject to proviso language that may prohibit these gifts in some situations), apparently reflecting a legislative intention to include in-laws, or persons related by marriage, as to gift acceptance situations. Under the circumstances, use of different language in the financial disclosure exception would indicate an intention not to include in-laws in the officials disclosure exception.

This is consistent with the treatment of gift exceptions generally in the statute, with exceptions applying to acceptance limitations, and financial disclosure continuing to be required even for allowable gifts above threshold amounts. This exception is therefore not to be applied to include relatives other than those specifically identified in §15-607(e) of the Law, which defines immediate family as spouse and dependent children, and further specifies other children or a parent of the official filing the statement. Gifts to the Legislator from the Lobbyist would be from a spouse and would be excepted from disclosure under this provision. Gifts of over $25 from the Parent, however, would be from a lobbyist and would generally be disclosable by the Legislator. However, in view of the fact that the donor here is the Parent of the Lobbyist, if a gift from the Parent is clearly to the Lobbyist only, and is not given at the direction of the Legislator or for the benefit the Legislator, then disclosure by the Legislator would not be required.

In our view this discussion of application of the disclosure requirements of the Public Ethics Law accurately reflects the provisions of the Ethics Law and the need to make sure that business and gift interactions between members of the Legislature and individuals compensated to officially influence legislative activities be subject to appropriate disclosure and limitations. With the exception of lobbying reporting by spouses (which is the subject of our legislative proposal), we believe that these public concerns can be met without unwarranted intrusion in the relatively infrequent situations where clearly private relationships also occur. Our advice reflects our understanding of the Law and its intended purpose, as well as our acknowledgment of the general concerns expressed by the Lobbyist, and in the context of the specific situation presented. We also recognize that the Law needs to respond to a wide range of quite different fact situations that can exist, ranging from the recent marriage of a current lobbyist as presented here, to other situations where a marriage may exist as a technical matter but the parties are separated with no actual marital relationship, and believe that the advice included in this opinion reflects this need.

Disclosure required of the parties involved should be consistent with this advice and any further questions or detailed issues can be presented for further guidance should they arise.

Michael L. May, Chairman,
    Mark C. Medairy, Jr.,
     Charles O. Monk, II,
     April E. Sepulveda

Date: March 5, 1997

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1 Note, §15-104(1) of the Law specifically provides that the Joint Committee on Legislative Ethics shall be the advisory body as to application of the conflict of interest provisions of Subtitle 5 of the Law to members of the General Assembly. This includes the gift acceptance provisions of §15-505. We have therefore consistently advised the Lobbyist that we are without authority to provide advice regarding the ability of the Legislator to accept gifts; and that we cannot and will not respond to questions about the acceptance by the Legislator of gifts from the Lobbyist, the Parent, or any other lobbyist. We also, of course, cannot advise on the question of whether the Legislator may participate in any legislative matters where the Lobbyist's firm has client interests.

2 The Lobbyist has suggested that exception under §15-505(c)(2)(viii) would be available here. We do not agree. In the Public Ethics Law the Legislature has provided a variety of exemptions and exceptions to the requirements and prohibitions in the Law, either by express exemption or exception authority or by definition or language specifically included in substantive provisions. The gift acceptance provision of §15-505 includes several exceptions and exemptions that apply by their terms only to the particular limitations set forth in that section. The exemption authority in §15-505(c)(2)(viii) deals specifically with gift acceptance issues and is available to the Commission in dealing with individuals and situations that are subject to the Commission's conflict of interest authority. This section does not establish authority in the Commission to define exemptions for members of the Legislature (as the Commission has no authority as to gift acceptance by Legislators), and given the structure and sense of the Law, cannot in any way be read as a source of authority for exemptions from requirements under other provisions of the Law such as lobbying or official financial disclosure.

3 Receptions and events sponsored by lobbying firms or their clients would raise other issues not presented as a question here.

4 If any other non-legislative elected State officials attended, disclosure on the meals and beverages special report would be required regardless of the amount, under the provisions of §15-704(e).

5 Note that the State Ethics Commission has recommended legislation currently pending before the 1997 Session of the Legislature defining a carefully structured spouse-lobbyist gift reporting exception that would be applied to eliminate disclosure in these types of situations as a general matter, while allowing for disclosure to be required in situations where justified by the facts.

6 In another similar situation a gift filing was made by a lobbyist advising that a wedding gift was given using client funds rather than personal funds.