EXECUTIVE BRANCH LOBBYING

CORPORATE DONATIONS USED TO UNDERWRITE COSTS OF ANNUAL
PRUDENTIAL FINANCIAL-DAVIS PRODUCTIVITY AWARDS

SUMMARY:

Section 112.3125(6)(a), Florida Statutes, prohibits lobbyists and principals from making, and agency officials and employees from accepting, any indirect expenditures. However, where corporations that are registered as principals of Executive Branch agency lobbyists make donations to non-profit corporations that administer the annual Prudential Financial-Davis Productivity Awards, and where those corporations have no say in determining who receives an award or who attends the awards luncheon, the corporate donations are not expenditures prohibited by Section 112.3125(6)(a), Florida Statutes, as amended by Chapter 2005-359, Laws of Florida, and may therefore be accepted by agency officials and employees who are selected to receive the prestigious award.

QUESTION:

Have Executive Branch agency officials and employees received prohibited indirect expenditures when they attend the Prudential Financial-Davis Productivity Awards luncheon and receive awards of varying significance, where most of the corporate sponsors of the awards are registered as principals of lobbyists who lobby the Executive Branch?

Under the circumstances presented, your question is answered in the negative.

In your letter requesting this opinion, you write that your organization-Florida TaxWatch Research Institute, Inc. ("TaxWatch")-is a 501(c)(3) nonprofit, nonpartisan statewide scientific research institute based in Tallahassee. It, in conjunction with The Davis Productivity Awards Foundation, Inc. ("The Foundation"), also a 501(c)(3) entity, administers the Prudential Financial-Davis Productivity Awards Program ("Program"), a competitive annual program that recognizes, rewards, and encourages the replication of the outstanding public service achievements of Florida's State employees who exceed their job descriptions and performance expectations and whose innovative efforts significantly improve service delivery and serve the people of Florida with increasing effectiveness, productivity, and efficiency.

TaxWatch and The Foundation present the awards to State employees at a statewide banquet in Tallahassee and at six regional meetings across the state. Awards are in the form of cash prizes (ranging from $250 to $2,500 for teams or individuals), plaques, certificates of commendation, and letters of honorable mention, based on the level and significance of the achievements.

The 2006 Prudential Financial-Davis Productivity Awards Program is sponsored by a number of corporate sponsors, the majority of which are listed as principals of lobbyists who lobby Executive Branch agencies. Additionally, the Florida Lottery contributes directly to the Foundation to cover some of the program's direct production expenses. You explain that these companies' contributions are made payable to "Florida TaxWatch for the Davis Productivity Awards Foundation." TaxWatch commingles these unrestricted and undesignated donations to pay for the costs of the program and the awards, and recipients may include some who file financial disclosure as well as some who do not. Judges select recipients based on objective criteria relating to improved, measurable productivity and innovation.

Section 112.3125(6)(a), Florida Statutes, as amended by Chapter 2005-359, Laws of Florida, provides:

Notwithstanding s. 112.3148, s. 112.3149, or any other provision of law to the contrary, no lobbyist or principal shall make, directly or indirectly, and no agency official, member, or employee shall knowingly accept, directly or indirectly, any expenditure.

Section 112.3125(1)(d), Florida Statutes, as amended by Chapters 2005-359 and 2006-275, Laws of Florida, defines "expenditure" to mean

a payment, distribution, loan, advance, reimbursement, deposit, or anything of value made by a lobbyist or principal for the purpose of lobbying. The term 'expenditure' does not include contributions or expenditures reported pursuant to chapter 106 or federal election law, campaign-related personal services provided without compensation by individuals volunteering their time, or any other contribution or expenditure made by an organization that is exempt from taxation under 26 U.S.C. s. 527 or s. 501(c)(4).

The definition of "lobbies" in Section 112.3125(1)(f), Florida Statutes, includes "an attempt to obtain the goodwill of any agency official or employee." An "agency official or employee" means an officer or employee of an Executive Branch agency who is required to file financial disclosure. Section 112.3125(1)(b), Florida Statutes.

The question, then, is whether the corporate donations which underwrite the Prudential Financial-Davis Productivity Awards are indirect expenditures which principals are prohibited from making and agency officials and employees are prohibited from accepting. We have promulgated Rule 34-12.190, Florida Administrative Code, on indirect expenditures. It states:

34-12.190 Indirect Expenditures.
(1) Where an expenditure is made to a person other than the agency official or employee by a lobbyist or principal, where the expenditure or the benefit of the expenditure ultimately is received by the agency official or employee, and where the expenditure is provided with the intent to benefit the agency official or employee, such expenditure will be considered a prohibited indirect expenditure to the agency official or employee.
(2) Where an expenditure or the benefit of an expenditure is made to an agency official or employee by someone other than a lobbyist or principal, but the expenditure has been provided by or paid for by a lobbyist or principal who intends thereby to benefit the agency official or employee, such expenditure will be considered a prohibited indirect expenditure to the agency official or employee.
(3) Factors which the Commission will consider in determining whether a prohibited indirect expenditure has been made include but are not limited to:
(a) The existence or nonexistence of communications by the lobbyist or principal, or by the intervening third person, indicating the lobbyist's or principal's intent to make or convey the expenditure to the agency official or employee rather than to the intervening third person;
(b) The existence or nonexistence of any relationship between the lobbyist or principal and the third person, independent of the relationship between the lobbyist or principal and the agency official or employee, that would motivate an expenditure to the third person;
(c) The existence or nonexistence of any relationship between the third person and the agency official or employee that would motivate the expenditure;
(d) Whether the same or similar expenditures have been or are being provided to other persons having the same relationship to the lobbyist or principal as the third person;
(e) Whether, under the circumstances, the third person had full and independent decision-making authority to determine whether the agency official or employee, or another, would receive the benefit of the expenditure;
(f) Whether the third person was acting with the knowledge or consent of, or under the direction of, the lobbyist or principal;
(g) Whether there were or were intended any payments or bookkeeping transactions between the third person and the lobbyist or principal reimbursing the third person for the expenditure; and
(h) The degree of ownership or control the lobbyist or principal has over the third person.
(4) The provisions of this rule may be illustrated by the following examples:
EXAMPLE 1: A law firm which lobbies the agency of Agency Employee A ("A") invites all of its attorneys to attend a weekend retreat. The attorneys are encouraged to bring their spouses or significant others at the firm's expense. A is married to an attorney in the firm and has been asked by her spouse to attend the retreat. The lodging, meals, and entertainment provided to A for the weekend retreat would not be considered a prohibited indirect expenditure to A because the firm's invitation was to A's spouse through his employment with the firm.
EXAMPLE 2: Agency Official B ("B") hosts a turkey shoot attended by other agency officials and employees. Lobbyists who lobby the agency of B give money to a third person, who is not an agency official or employee, to pay for the food and beverages which will be served at the turkey shoot. B orders and prepares the food and beverages. The money provided to the third person by the lobbyists would be a prohibited indirect expenditure to B, because it was given with the intent of benefiting B and his guests at the turkey shoot.
EXAMPLE 3: Agency Official C ("C") and C's spouse have arranged to take a trip to New York City. A lobbyist who lobbies C's agency meets with the spouse and offers her theater tickets. The lobbyist and C's spouse know each other only through the lobbyist's involvement with C. The theater tickets would be a prohibited indirect expenditure to C.

Weighing the totality of the factors listed in Rule 34-12.190(3), it seems clear to us that the corporate sponsors are not using the Awards program as a ploy to make indirect expenditures for the personal benefit of any agency official or employee. You have said that sponsors do not select or have prior knowledge of who will receive an award or attend the luncheon, so, clearly, there would be no communications indicating their intent to make an expenditure for the personal benefit of a particular agency official or employee; corporate donors support the Awards program, as evidenced by their donations to TaxWatch and The Foundation, and, concomitantly, TaxWatch and The Foundation seek to recognize and award meritorious State employees. Based on the foregoing, we comfortably conclude that Section 112.3125(6)(a), Florida Statutes, is not violated by the corporate donations given to TaxWatch and The Foundation, nor by the awards and recognition given to the State employees who are chosen to receive a Prudential Financial-Davis Productivity Award. Because the corporate donations given to TaxWatch and The Foundation are not prohibited expenditures, it is unnecessary to address your proposal to have non-lobbying entities pay for the costs associated with awards given to those Executive Branch agency employees who do file financial disclosure.

Accordingly, we find that corporate donations to TaxWatch and The Foundation, used to underwrite the annual Prudential Financial-Davis Productivity Awards given to deserving State employees, are not indirect expenditures prohibited by Section 112.3125(6)(a), Florida Statutes.

ORDERED by the State of Florida Commission on Ethics meeting in public session on July 28, 2006 and RENDERED this 2nd day of August, 2006.

________________________
Norm M. Ostrau, Chairman