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Long Separate Regimes Converge to Regulate Lobbyist Political Acts G THE B IN EN V C R H E S A N 8 D 8 B 8 A E 1 R SINC Web address: http://www.nylj.com VOLUME 235—NO. 116 FRIDAY, JUNE 16, 2006 OUTSIDE COUNSEL BY LAURENCE D. LAUFER Long Separate Regimes Converge to Regulate Lobbyist Political Acts n Tuesday, Mayor Michael activities” is subject to disclosure. Bloomberg signed into law three • Contributions. In future elections, con- bills he and City Council Speaker tributions by lobbyists and associated persons Christine Quinn had called among to candidates seeking public financing will not O be matched with public funds.3 In determin- “the most significant political reforms in the city in nearly 20 years.”1 ing whether a contribution is not matchable, Twenty years earlier, in the wake of the Campaign Finance Board (CFB) is Borough President Donald Manes’ suicide and directed to rely on the computerized database the corruption it brought to light, the city had of lobbyist filings to be created by the city adopted its first lobbyist regulations and cam- clerk (clerk). paign finance reforms. Over the next two • Gifts. Lobbyists and associated persons decades the scope of these two regulatory may not offer or give a gift to any public ser- regimes expanded, but the boundary between vant. The Conflicts of Interest Board (COIB), them had not been breached. in consultation with the clerk, shall adopt rules For example, in 1998, a City Charter to define prohibited gifts and to create excep- referendum authorized regulation of the tions, in a manner consistent with its pre-exist- “acceptance of campaign contributions from ing rules and opinions governing “valuable individuals and entities doing business with gifts” received by public servants. The excep- the city,” but not of the making of such con- ------------------------------------------------ tions will include “de minimis gifts, such as tributions. New York City Charter The more narrow scope pens and mugs, gifts public servants may accept §1052(a)(12). Similarly, in 2004, when the of local legislative authority had as gifts to the city and gifts from family members and close personal friends on family Council extended contribution limits and seemingly compelled the city to disclosure requirements to candidates not or social occasions….” participating in public financing, it did not confine its regulation of political The COIB is authorized to direct the purport to regulate anyone other than candi- activity to that of city candidates Department of Investigation (DOI) to investi- dates and their authorized political commit- gate violations. The COIB will adjudicate tees. See City of New York, Local Laws Nos. and public servants. these violations, for which civil and criminal 58, 59, and 60 (2004). ------------------------------------------------ sanctions apply. This new law marks an In contrast, the contribution limits of the unprecedented extension of the COIB’s juris- Election Law apply to both recipients and (lobbyist), (c) (lobbying). The new laws cover diction to persons other than public servants makers of political contributions. See N.Y. fund-raising activities, gifts, and political con- and candidates. Election Law §14-114(1). The more narrow tributions by: (i) lobbyists; (ii) their spouses, scope of local legislative authority had domestic partners and unemancipated chil- Political Consulting seemingly compelled the city to confine its dren; (iii) officers and employees of lobbyist regulation of political activity to that of city organizations who engage in lobbying activi- • Political Consulting. The new law candidates and public servants.2 ties of the organization; (iv) officers and requires lobbyists to report “political consult- Until now, that is. These long separate employees employed in the organization’s ing activities”: (i) participating in the cam- regulatory regimes are converging to regulate division that engages in lobbying activities of paign of any candidate for city office or of any lobbyist political activities. This article summa- the organization; and (v) the spouses, domes- public servant who is a candidate for any rizes the new requirements. tic partners and unemancipated children of elective office “by providing political such officers and employees (hereinafter, lob- advice;” or (ii) providing political advice to a byist and associated persons). city elected official. Unlike “fund-raising The New Items • Fund-raising Activities. The new law activities,” this disclosure is required only for A person or organization retained, requires lobbyists to report “fund-raising activ- political consulting activities done “for com- employed or designated by any client to ities” of the lobbyist and associated persons, pensation” and does not apply to associated engage in “lobbying” is a “lobbyist.” specifically the “solicitation or collection” of persons’ activities. See N.Y.C. Administrative Code §3-211(a) contributions for candidates for city office and • Disclosure. Currently, every lobbyist must for public servants who are candidates for any file an annual statement of registration with the elective office, whether done as a volunteer or clerk, unless the lobbyist “does not expend, Laurence D. Laufer is a partner at for compensation. When a lobbyist is an incur or receive” more than $2,000 of Genova, Burns & Vernoia where he heads the organization the fund-raising activity of “reportable compensation and expenses” for corporate political activity law group. “only that division…that engages in lobbying lobbying in that year. See N.Y.C. Administrative NEW YORK LAW JOURNAL FRIDAY, JUNE 16, 2006 Code §3-213(a)(1). Future registrations will as practicable” is one year after enactment. of such matching claims? also identify the names, addresses and tele- Each March 1, the clerk must post on the Indeed, the promise of cooperative and com- phone numbers of associated persons. Internet a report detailing information about plementary compliance-monitoring among the Lobbyists required to register must also file complaints, civil penalties, orders to cease lob- clerk, the CFB, the COIB, and DOI is poten- periodic and annual reports. The new law bying activities, random audits, and compliance tially the new laws’ most dynamic innovation. requires filings by electronic submission. It also programs in the preceding calendar year. As There is also the promise of further reform. directs the clerk to supply reporting forms that soon as practicable after issuing an order or Long before the Joint Commission comes into “to the extent practicable shall be identical to imposing a civil penalty, the clerk must post on existence, the CFB is due (on Sept. 1) to make periodic reporting forms used by the New York the Internet information identifying the lobby- recommendations to the mayor and the City Temporary State Commission on Lobbying” ist or client in violation, the provision of law Council. See N.Y.C. Administrative Code §3- (Lobbying Commission) and authorizes the violated, the duration of the order, and/or the 713. More than a year ago the CFB resumed clerk to conform the city’s reporting periods amount of the penalty. inquiry into how to implement the 1998 with those of the Lobbying Commission. (The • Joint Commission. Approximately 30 Charter referendum, noted above, for which it Lobbying Commission administers the state’s months after enactment, the mayor and the has held four public hearings. The CFB’s Lobbying Act, which contains additional and council shall jointly appoint a five-member upcoming report may well address this subject. overlapping requirements that apply to persons commission to review and evaluate the per- With the first steps now taken, will the city lobbying city officers and employees. See formance of the clerk. Within six months ultimately adopt an approach similar to New Lobbying Act, codified as N.Y. Legislative Law thereafter, the commission will make recom- Jersey’s, which requires business entities to dis- §§1-a, et seq.) mendations to strengthen the lobbying law’s close certain contributions when they seek or Registration and periodic statements filed by administration and enforcement, including win government contracts and places special lobbyists and the annual report filed by lobbyist whether to increase the $2,000 threshold for limitations on the contributions they (and con- clients will now require detailed information filing a statement of registration. nected persons) make and, in some instances, about the subjects of the lobbying. Specifically, solicit?5 If so, which contributors and contribu- “information sufficient to identify the local law Observations tion-solicitors might become subject to similar or resolution, procurement, real property, rule, “pay-to-play” regulation by the city? rate making proceeding, determination of a Some contend the new laws leave a “glaring board or commission, or other matter…” must loophole”: campaign contributions that lobby- Conclusion be included. ists “bundle” may continue to be matched with A supplement to both periodic and annual public funds.4 With certain exceptions, current Here’s one thought. Currently, lobbyist reports will be “fund-raising and political con- law defines an intermediary as one who delivers clients must submit annual statements to the sulting reports.” These shall cover activities contributions. See N.Y.C. Administrative Code clerk. This class of individuals and companies “conducted directly by the lobbyist, or through §3-702(12). City candidates must disclose to is, therefore, already identified and subject to any other entity of which
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