EXECUTIVE BRANCH LOBBYING

CORPORATE GIFTS AND DONATIONS TO THE UNITED WAY FOR THE ANNUAL FLORIDA STATE EMPLOYEES' CHARITABLE CAMPAIGN

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 the United Way of Florida and its local fiscal agents, which are then used to generate interest and participation in the Florida State Employees' Charitable Campaign among officers and employees of State agencies, those prizes and donations are not indirect expenditures prohibited by Section 112.3125(6)(a), Florida Statutes, as amended by Chapter 2005-359, Laws of Florida, and can be accepted by agency officers and employees.

QUESTION:

May companies that employ or retain lobbyists who are registered to lobby Executive Branch agencies sponsor FSECC-related events or donate prizes through the United Way and its local fiscal agents to be used in FSECC giveaways, silent auctions, and other promotions without violating Section 112.3125(6)(a), Florida Statutes, as amended by Chapter 2005-359, Laws of Florida?

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

This opinion is sought on behalf of the United Way of Florida, which contracts with the Department of Management Services to serve as the statewide fiscal agent, as well as by the 40+ Statewide Agency Coordinators and the 27 local United Way fiscal agents who conduct the Florida State Employees' Charitable Campaign (FSECC) around Florida.

You explain that the local fiscal agents for the FSEC Campaign work closely with State agency coordinators to coordinate and conduct FSECC-related fundraising events, many of which involve the donation of prizes from local companies. Prizes donated through United Way fiscal agents might range from dinner for two at a local restaurant, a gift basket, a trip for two, movie passes, etc. In addition, some companies sponsor luncheons for FSECC-related events. You question whether companies that employ or retain lobbyists to lobby Executive Branch agencies may continue to sponsor FSECC events and donate prizes to the United Way, which uses such sponsorships and prizes to generate enthusiasm and participation in the FSECC.

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 issue we must address is whether corporate donations to the United Way of Florida and its local fiscal agents are indirect expenditures which principals are prohibited from making and agency officials and employees are prohibited from accepting. They are not direct expenditures because they are not given directly to an agency officer or employee by a principal or lobbyist of the Executive Branch. Instead, they are given to the local fiscal agents for the United Way, and they make the final disposition of the gifts or sponsorships in accordance with their objectives for the FSEC Campaign.

We have promulgated Rule 34-12.190, Florida Administrative Code, to provide guidance 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.

When we examine the factors listed in Rule 34-12.190(3), there is nothing to suggest that corporate donors are giving donations to the United Way in an effort to convey a personal benefit to an agency official or employee. We observe that corporate donors have no way of knowing in advance which employee, from which agency, is eligible to receive a prize or attend a sponsored meal. Their eligibility has nothing to do with their status as an "agency official or employee," as both reporting and non-reporting employees participate in the Campaign. Moreover, eligibility to receive a prize or attend a function may depend on other factors, such as the employee's contribution level, chance, or some other factor unknowable by a corporate donor. For these reasons, we are of the opinion that Section 112.3125(6)(a), Florida Statutes, is not violated by the donations and prizes that the United Way receives from corporate donors which it then uses to generate interest and participation in the Florida State Employees' Charitable Campaign among State agency employees. Concomitantly, agency officers and employees have not received a prohibited indirect expenditure when they receive a prize or participate in a United Way function made possible by a corporate sponsor.

Accordingly, corporate donations to the United Way of Florida and its local fiscal agents, used to generate interest and participation in the Florida State Employees' Charitable Campaign among State agencies, 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.

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Norm M. Ostrau, Chairman