Ethics Advisory Opinion No. 15
September 13, 2004
Issued By: The Ethics Review Board
Whether a non-profit organization, which intends to spend money for lobbying activities, must register as a lobbyist;
Whether persons acting on behalf of the organization must also register;
If a requirement for registration exists, when must the registration take place?
A law firm represents a not-for-profit organization, which may, from time to time, have one, or more of its members engage in lobbying activities to further the interest of the organization. The organization, at the direction of the Board of Directors, may expend money for lobbying activities.
The organization seeks an advisory opinion on whether it must register as a lobbyist if it expends monies in connection with lobbying activities; and whether the persons acting on behalf of the organization must also register, even if these agents will not be expending any of their own personal money. Also, the organization requests direction regarding when the organization and/or persons acting on behalf of the organization are required to register, i.e. must the registration occur before any money is expended?
Under Part E, Section 1(g) and (h) of the Ethics Code, a “lobbyist” is a person who
1) communicates, either verbally or in writing
2) with a city official
3) in an effort to influence or persuade the official
4) to favor or oppose, recommend or not recommend, vote for or against, or take or refrain from taking action on any municipal question.
Under Part E, Section 2, except as provided by Section 3 of Part E (Exceptions), a person who engages in lobbying must register with the City Clerk if:
(a) with respect to any client, the person engages in lobbying activities for compensation; or
(b) the person expends monies for lobbying activities.
The terms “compensation” and “expenditure” are defined in Section 1 of Part E (Definitions).
Compensation means money or any other thing of value that is received, or is to be received, in return for or in connection with lobbying services rendered, or to be rendered, including reimbursement of expenses incurred in lobbying. “Compensation” for professional services that do not primarily require contact or advocacy with public officials does not constitute “compensation in connection with lobbying services” for purposes of this section, if contact with public officials is incidental to the primary purpose of the employment.
Expenditure means a payment, distribution, loan, advance, reimbursement, deposit, or gift of money or anything of value, including a contract, promise, or agreement to make an expenditure, regardless of whether such contract, promise, or agreement is legally enforceable.
The Ethics Code provides for some exceptions to the lobbyist registration requirements. First, it excepts mobilizing entities and not-for-profit organization from registration for certain types of activities:
A person whose only lobbying activity is to encourage or solicit the members, employees, or owners (including shareholders) of an entity by whom the person is compensated to communicate directly with one or more city officials to influence municipal questions. This exception is intended to apply to neighborhood associations and not-for-profit organizations. Part E, Section 3(b).
Further, the Ethics Code exempts an organization from registration if its expenditure is to hire a lobbyist to advocate on its behalf:
A client who would only be required to register under Section 3 because of any expenditure to compensate a registrant, other than an employee, to lobby on a municipal question of interest to a client, provided that the compensated registrant files a registration statement or activity report for the period in question. Part E, Section 3(f).
Must the organization register?
If the organization expends money for lobbying activity, then Part E, Section 3 would require the organization to register with the city as a lobbyist, unless the expenditure is related only to efforts to mobilize its constituency or membership to communicate with city officials, or the expenditure is for payment to a non-employee to lobby on behalf of the organization with city officials.
It should also be noted that if the expenditures are made to communicate with officials during a meeting open to the public under the Texas Open Meetings Act, Texas Government Code 551, such contacts would not constitute “lobbying” for purposes of the registration requirement. Ethics Code Part E, Section 1(h)(5)
Must the organization’s member register?
If a member of the organization either engages in lobbying activities (as described in Section 1(h) of Part E) for compensation or expends funds for lobbying, the individual is required to register as a lobbyist, unless an exception applies under Part E, Section 3. Whether the individual receives compensation for lobbying (if any lobbying activity is undertaken) must be determined in accordance with Section 2 of Part E. Again, as with the organization, if the member’s only activity is to mobilize the organization’s constituency or membership to individually contact public officials, that member would not be required to register. Also, if the member is compensated, but his only communications with public officials occur at meetings open to the public under the Open Meetings Act, he would not be required to register.
Further, if the individual member receives no compensation (acts as a volunteer) and if the individual expends no funds for lobbying, there is no requirement for the individual member to register as a lobbyist.
If registration is required, when is the registration deadline?
An initial registration form must be filed by a person or entity required to register under Section 2 of Part E (Persons Required to Register as Lobbyists) within 90 days after the start of lobbying activity. However, in no event shall a registrant knowingly fail to register, or knowingly fail to disclose such registration to relevant city officials, prior to official city action relating to the subject matter of the lobbying activity. Ethics Code, Part E, Section 4(b).
ARTHUR DOWNEY, District 9