Advisory Opinion No. 1998-8

Application Of The Codes’ Gift Restrictions To A Nonlobbyist Member
Of A Business Organization Engaged In Lobbying

The State Ethics Commission has been asked to issue an advisory opinion applying the relevant provisions of the Codes of Ethics, Conn. Gen. Stat. Chapter 10, Parts I and II, to the following hypothetical question.

A law firm with eighty members, twenty of whom are partners, engages in lobbying on behalf of various clients. Specifically, five firm members, including two partners, are registered lobbyists. If a nonlobbyist member of the firm entertains a public official, how do the Codes’ gift restrictions apply? In responding to this query, the Commission has been asked to address benefits provided by either a partner or an associate; and occasions which are either business or personal.

The foregoing hypothetical presents a long-standing question which has now been definitively addressed by a 1997 amendment to Conn. Gen. Stat. § 1-79a. This amendment states that:

For purposes of calculating the dollar limits under the exceptions to the term "Gift"…any expenditure provided by a lobbyist who is an individual shall be deemed to have also been provided by the business organization which he owns or by which he is employed, and any expenditure provided by a business organization shall be deemed to have also been provided by all owners and employees of the business organization who are lobbyists. Conn. Gen. Stat. § 1-79a, as amended by June 18 Special Session P.A. No. 97-6, S.9.

The principal purpose of this amendment was to prevent various lobbyist members of a "Business organization" (i.e., a business entity "…other than a client lobbyist, which is owned by, or employs, one or more individual lobbyists." Conn. Gen. Stat. § § 1-79(o) and 1-91(t)) from multiplying the benefits the organization could provide under the statutory exceptions to the Codes’ gift ban. An ancillary effect, however, is to make clear that nonlobbyist members of the business organization are deemed to fall outside of the parameters of these restrictions. Therefore, a nonlobbyist member of a law firm may personally make expenditures which benefit a public official without regard to the Codes’ stringent lobbyist gift provisions. This conclusion remains constant whether the individual is a partner or associate and whether the expenditure is for business or personal reasons.

If, however, the nonlobbyist attorney is reimbursed by the business organization/firm, the language of § 1-79a mandates that such reimbursed expenditures be attributed to the lobbyist members of the law firm ("…any expenditure provided by a business organization shall be deemed to have also been provided by all owners and employees of the business organization who are lobbyists."). Consequently, if the nonlobbyist attorney routinely makes such reimbursed expenditures in the course of business, to avoid violation of the lobbyist gift ban it will be necessary to segregate the firm’s lobbying work into a separate and distinct government relations entity. (In fact, establishment of such separate business organizations for lobbying purposes is, already, the preferred practice for law firms engaged in lobbying, since it protects a firm’s attorney client records from the Commission’s lobbyist random audit authority.)

Finally, the nonlobbyist firm member must be cognizant of two additional concerns. First, the lobbyist gift ban prohibits not only gifts from lobbyists but also gifts given by "…anyone acting on behalf of a …" lobbyist. Conn. Gen. Stat. § 1-97(a). Therefore, it would be a substantive violation of the Code Of Ethics For Lobbyists for the nonlobbyist to provide an otherwise prohibited benefit to a public official at the behest of, or in concert with, a lobbyist member of the firm. Secondly, an essentially parallel provision of The Code Of Ethics For Public Officials prohibits gifts to a public official or state employee, if the donor: "(1) is doing business with or seeking to do business with the department or agency in which the official or employee is employed or (2) is engaged in activities which are directly regulated by such department or agency." Conn. Gen. Stat. § 1-84(m). Consequently, the nonlobbyist attorney must, in each instance, consider the application of § 1-84(m) before proceeding to bestow any regulated benefit upon a state servant.

By order of the Commission,

Stanley Burdick
Chairman