Presentations by Claire Guthrie Gastañaga
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Legal Constraints
Registration and Regulation of Corporate PACs and Lobbyists in Virginia
Virginia State Government Relations Workshop, Public Affairs Council, Berkeley Hotel, January 16-17, 2002

Three key pieces of legislation:
The Virginia Lobbying Disclosure and Regulation Act,
§§ 2.2-418-435 of the Code of Virginia.
Campaign Finance and Disclosure Act,
§§ 24.2-900-930 of the Code of Virginia.
Prohibition on Campaign Fundraising During Legislative Sessions,
§ 24.2-940 of the Code of Virginia.
The current Code of Virginia is available on line at http://leg1.state.va.us or http://legis.state.va.us. It is updated annually on July 1.

Campaign Finance and Disclosure
General Reference: Office of the State Board of Elections
Virginia is a disclosure state.
There are NO limits on campaign contributions (individual, PAC or corporate) only disclosure requirements.

Corporate Contributions
Corporations can give directly to state and local candidates in Virginia in unlimited amounts.
Corporations do not have to form PACs to make political contributions to Virginia non-federal candidates or to Virginia PACs. (All federal races are, of course, subject to FEC requirements.)
A corporate contribution made from its operating funds, like an individual contribution made from personal funds, is reported by the recipient candidate or committee, but not by the contributor company.
Donated in-kind goods or services constitute reportable contributions from a company.
For all contributions in excess of $100 (individually or cumulatively), the candidate or committee must report the full name and mailing address of the contributor, the type of business, the principal place of business, and the amount received. For in-kind contributions, the nature of the goods or services and the basis for determining value must also be reported.

Discussion Points – Political Contributions
Example 1
A company makes office space available to a candidate or a political committee. The fair market value of the space is $500 per month, but the company only charges the candidate or the political committee $200. The difference, $300, is a reportable in-kind contribution.
Example 2
A web page developer designs a web page for a candidate. The developer’s normal fee for this service is $2,500.00 although he doesn’t charge the candidate for the service. The candidate must report an in-kind contribution of $2,500.00 and record the same amount as an expense. If the web page developer then volunteers to answer phones or go door to door for the candidate, things that are not usually services he provides, the candidate does not have to report such services as in-kind contributions.
Example 3
Company A wants to make a contribution to Candidate A but does not want to be reported as having done so. Candidate B suggests that Company A make a contribution to her leadership PAC with the promise that Candidate B will then write a check from the PAC for the same amount to Candidate A. Should the company go along with this arrangement?

Prohibition on Contributions During the Legislative Session
§ 24.2-940.

No member of the Virginia General Assembly and no statewide official (Governor, Lt. Governor, Attorney General) may solicit or accept a campaign contribution while the General Assembly is meeting in regular session (from the 2nd Wednesday in January until adjournment sine die).
No corporation, individual or political committee may make or promise to make a contribution to a General Assembly member or a statewide official during the regular session of the General Assembly.
The prohibition includes contributions to the campaign committees of such individuals but does not extend to events held by political parties or political committees.

Reporting Requirements/ Independent Expenditures
A corporation is required to file a Statement of Organization and comply with reporting requirements if it makes independent expenditures for communications in excess of $200 in a calendar year expressly advocating the election or defeat of a clearly identified candidate.
Any communication advocating the election or defeat of a clearly identified candidate or nominee must include an authorization statement indicating the person, company or committee responsible.
This requirement now extends to paid campaign phone calls made within a certain number of days before an election if the calls convey or solicit information regarding a candidate or political party. § 24.2-1014.

Reporting Requirements/Political Committees (PACS)
Corporations (alone or in combination with others) may choose to form political committees to support state and local candidates.
If a company decides to form a political committee, it must meet certain requirements:
File a Statement of Organization

1) within ten days of making or anticipating making expenditures in excess of $200 or receiving contributions; and

2) annually on January 15 thereafter.
File disclosure reports on schedule required by State Board of Elections (different for election and non-election years). May be a Report of No Activity.
File a final report when the PAC seeks to end its existence. Excess funds may be returned proportionally to contributors, given to another PAC or campaign or to a charitable organization.
Note: Disclosure reports may be filed electronically. Fines are imposed for failure to file on time.

Lobbying Disclosure and Regulation
General Reference: Office of the Secretary of the Commonwealth

Registration Requirements
- Who is a lobbyist?
You are a lobbyist if 1) you are employed and receive payments for the purpose of lobbying; or 2) you contract for economic consideration, including reimbursement of expenses, for the purpose of lobbying; or 3) you represent an organization or association for the purpose of lobbying.
- What constitutes lobbying?
You are lobbying if you are influencing or attempting to influence legislative or executive action through oral or written communication with an executive or legislative official or if you are soliciting others to influence such officials.
You are NOT lobbying if you are 1) merely requesting an appointment or information on the status of legislative or executive action; 2) responding to published notices requesting public comment; 3) soliciting an association to which you belong to influence legislative or executive action; or 4) communicating with members of your association or with your principal.
- When do you register?
You may begin registering on May 1 for the following General Assembly Session.
You must register for each principal that you represent prior to engaging in lobbying for that principal.
Your registration expires on May 1. You must register every year. There are no automatic renewals.
- Are there any exceptions to the registration requirement?
You do not have to register as a lobbyist if your activities are limited to formal testimony at public meetings or when compelled by action of a legislative body or executive agency.
You do not have to register if you receive $500 or less in compensation and reimbursements in a calendar year for your lobbying activities.
You receive no compensation or anything of value for lobbying and you spend $500 or less in lobbying expenses.
You are an employee of a business whose job does not regularly include influencing or attempting to influence legislative or executive action.
- How do you register?
You may register on line at http://www.commonwealth.state.va.us:8000/lobbyist.htm or by filing a registration form with the Secretary of the Commonwealth, P.O. Box 2454, Richmond, VA 23218.
- How much does it cost to register?
You must pay a fee of $50 for each principal that you represent.

Lobbyist Disclosure Statements and other Reports
- What reports am I required to file as a registered lobbyist and when are they due?
You must file a lobbyist disclosure statement on July 1 each year. You and your principal may be fined for filing late.
You must send a summary or copy of Schedule A or B of the disclosure statement to every legislative or executive official who is identified on either schedule twice each year: by July 1 for the period January 1 to May 1 and by January 5 for the period May 1 through December 31.
- How do I file the disclosure report?
You may file on line at http://www.commonwealth.state.va.us:8000/lobbyist.htm
or by filing a disclosure report with the Secretary of the Commonwealth, P.O. Box 2454, Richmond, VA 23218.
- Who is responsible for filing the statement and for the information contained therein?
The signatures of BOTH the lobbyist and the principal must be on the disclosure form. Photocopy or faxed signatures not acceptable.
- What information is included in the lobbyist disclosure report?
Names and addresses of principal and lobbyist.
Description of legislative and executive actions for which you lobbied and the activities conducted.
Dollar amount of the compensation received by the lobbyist or paid to the lobbying firm.
A total of all funds spent on entertainment events and an itemized list of entertainment events with a value over $50.00.
A total of all funds spent on gifts and an itemized list of gifts valued at more than $25.00.
Any other lobbying expenses.
- What are the penalties for violating the disclosure requirements?
A lobbyist and his principal are both liable for civil penalties for a failure to file on time ($50 plus $50 per day beginning on the 11th day after the due date).
A person who makes a knowing material misstatement on the disclosure statement could be guilty of a Class 5 felony ( 1 to 10 years imprisonment or 12 months in jail and a fine up to $2,500.00, either or both).
Other violations of the registration and disclosure act may be Class 1 misdemeanors (up to 12 months in jail and a fine up to $2,500.00, either or both).

Discussion Points – Disclosure Requirements
- Compensation
You must decide how much to report that you received for lobbying in Virginia and explain how you arrived at the amount.
Your salary is $100,000. You spent 10 days in January and February lobbying members of the legislature and 5 days during the rest of the year lobbying members of the executive branch.
If you work full-time as a lobbyist for your company, working 48 weeks per year at 5 days per week that would be 240 days. $100,000 divided by that number of days = $416.66 per day. 15 days x $416.66= $6,249.90.
- Meals and Entertainment – Schedule A
Any entertainment paid for or reimbursed by the principal and/or the lobbyist must be disclosed.
The amount disclosed should be the total amount expended by the principal or the lobbyist in furnishing entertainment to a reportable guest.
If the cost of a single event is greater than or equal to $50, Schedule A must be filed with the lobbyist’s report.
If the average cost per person in attendance exceeds $50, then the names of each reportable guest must be specified.
- Who is a reportable guest?
The Governor; the Lieutenant Governor; and the Attorney General.
Officer or employee of the Governor or Lt. Governor other than clerical employees.
The Cabinet Secretaries, and the Deputy Secretaries.
The heads of executive branch agencies.
Members of supervisory and policy boards, commissions and councils as defined in § 2.2-2100 of the Code of Virginia.
Members and members-elect of the General Assembly.
A member of a committee, subcommittee, commission or other entity established by and responsible to the General Assembly.
Employees of the General Assembly or an entity established by and responsible to the General Assembly.
Example 1
You take a legislator out for coffee. The total bill is $10.00. This amount must be included in your entertainment expenditure totals, but Schedule A does not need to be completed.
Example 2
You take a legislator out to dinner with 2 other company representatives or nonlegislative guests. The total bill for the 4 of you is $175.00. You would include the amount in your entertainment expenditure totals and itemize it on Schedule A, but you would not be required to name the legislator on the form.
If the total bill for the dinner for 4 is $201.00, however, you would have to name the legislator on the form because the average cost per attendee was in excess of $50.00 (i.e., $50.25).
- Gifts – Schedule B
A gift is anything of value to the extent that a consideration of equal or greater value is not received.
Informational or promotional materials are not gifts.
Total amounts spent for gifts of any amounts must be included in your expenditure totals.
If a single gift to an individual has a value greater than $25.00, it is must be itemized on Schedule B (date, description, name of recipient and cost), unless it is returned to you unused or donated to a charitable organization within 60 days of receipt.
- Other Expenses – Schedule C
You report total expenditures for entertainment, gifts, office expenses, communications, personal living and travel expenses, compensation of lobbyists, honoraria, and registration costs on Part 1, section 6a-6h of the disclosure form.
You itemize expenses that are not included in these totals in Schedule C. Examples of such expenses would be rental of a bill box at the General Assembly Building and the fees for Lobbyist in a Box.
Expenditures for “infrastructure” should be prorated among clients.
- What other things should I know about lobbying and hiring lobbyists?
Contingent compensation is prohibited.
Records related to lobbying must be kept for two years.
You may not hire certain state officers or employees to represent you or act in a representative capacity on behalf of any person or group, for compensation, on any matter before the agency of which he was an officer or employee. This includes any activities for which registration as a lobbyist would be required. § 2.2-3104.

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