State of Alaska

Department of Administration

Alaska Public Offices Commission

Alaska Department of Administration, Alaska Public Offices Commission

AO 08-03-LOB

Number:           AO 08-03-LOB

Requested by:   Raymond Gillespie, Gillespie & Associates
                          Registered lobbyist

Prepared by:    Patricia Ware
                          Juneau Branch Administrator

Date issued:      June 11, 2008

Subject:           Must a lobbyist report non-reimbursed expenses and if so, how and in what level of detail? What records must be maintained by lobbyists to comply with the law?

This letter responds to your February 13, 2008, request for an advisory opinion to clarify the reporting requirements for registered lobbyist expenditures under AS 24.45.051.  Your request contains multiple questions and includes both hypothetical situations and actual issues related to your lobbying business. Because AS 15.13.374 (b)(4) specifies that advisory opinions may not address hypothetical situations, we have limited this advisory opinion to the practical questions related to your lobbying business which may be summarized as follows:

Questions:

  1. Does APOC have legal authority to require lobbyists to disclose non reimbursed expenses?
  2.  Does APOC have legal authority to require lobbyists to report expenses other than food and beverages, living accommodations, and travel?
  3. What limits does the phrase “in support of or in connection with” lobbying impose on the reporting requirements under AS 24.45.051(1) and (2)?
  4. If expenses are not billed or attributed to one particular client, how should they be reported using APOC’s client-specific reporting forms?
  5. What records are lobbyists required to maintain to be in compliance with lobbying statutes?

Short Answer

APOC has the authority to administer AS 24.45, which governs disclosure and reporting requirements for lobbyists.  AS 24.45.021.  Under the statute, a lobbyist is required to disclose non reimbursed expenses for food and beverages, living accommodations, and travel that are reasonably related to his or her work as a lobbyist.  AS 24.45.051(2).   The statute does not mandate disclosure of other non-reimbursed expenditures falling outside of the categories of food and beverages, living accommodations, and travel. AS 24.45.151(2).  If however the lobbyist receives reimbursement for these “other expenses,” the reimbursement must then be reported as income or payments received under AS 24.45.051(1).  In reporting on lobbyist form 23-3, expenditures common to more than one client shall either be divided by the number of clients, or allocated based on the percentage of work done for each client.  Lobbyists are required to retain any and all records to substantiate reports filed for a period of at least six years from the date of filing. 

Law

AS 24.45.011 Purpose

The legislature finds and declares that the operation of responsible representative democracy requires that the fullest opportunity be afforded to the people to petition their government for the redress of grievances and to express freely to individual members of the legislature, to its committees, and to officials of the executive branch, their opinions on pending legislation or administrative actions; and that the people are entitled to know the identity, income, expenditures, and activities of those persons who pay, are paid or reimbursed for expenses, or who make expenditures or other payments in an effort to influence legislative or administrative action.

AS 24.45.021. Administration.

(a) This chapter shall be administered by the Alaska Public Offices Commission created under AS 15.13.020 (a).
. . . .

AS 24.45.031 Powers and Duties.

(a) In addition to its other duties under this chapter, the commission shall (1) prescribe the forms for registration, reports, statements, notices, and other documents required by this chapter; (2) prepare and publish instructions setting out the methods of accounting, bookkeeping, and preservation of records required to facilitate compliance with and enforcement of this chapter and explaining the duties of persons subject to the provisions of this chapter; the instructions shall be updated periodically; (3) provide assistance to persons in complying with the provisions of this chapter;
. . . .

AS 24.45.051 Reports:

(a) Each lobbyist registered under AS 24.45.041 shall file with the commission a report concerning the lobbyist's activities during each reporting period prescribed in AS 24.45.081 , so long as the lobbyist continues to engage in lobbying activities. The report shall be made on a form prescribed by the commission and filed in accordance with AS 24.45.071 and 24.45.081. Upon request of the commission, information required under this section shall be submitted electronically. The report also must include any changes in the information required to be supplied under AS 24.45.041 (b) and the following information for the reporting period, as applicable:

(1) the source of income, as defined in AS 39.50.200 (a) and the monetary value of all payments, including but not limited to salary, fees, and reimbursement of expenses, received in consideration for or directly or indirectly in support of or in connection with influencing legislative or administrative action, and the full name and complete address of each person from whom amounts or things of value have been received and the total monetary value received from each person;

(2) the aggregate amount of disbursements or expenditures made or incurred during the period in support of or in connection with influencing legislative or administrative action by the lobbyist, or on behalf of the lobbyist by the lobbyist's employer in the following categories:

(A) food and beverages;
(B) living accommodations;
(C) travel;

. . . .

AS 24.45.171 Definitions:

. . . .

(8) "influencing legislative or administrative action" means to communicate directly for the purpose of introducing, promoting, advocating, supporting, modifying, opposing, or delaying or seeking to do the same with respect to any legislative or administrative action;

. . . .

(11) "lobbyist" means a person who

(A) is employed and receives payments, or who contracts for economic consideration, including reimbursement for reasonable travel and living expenses, to communicate directly or through the person's agents with any public official for the purpose of influencing legislation or administrative action for more than 10 hours in any 30-day period in one calendar year; or

(B) represents oneself as engaging in the influencing of legislative or administrative action as a business, occupation, or profession;

. . . .

Sec 4, SCS CSHB 281 (FIN), 25th Leg. 1st Sess. (Alaska 2008) (proposed amendment to AS 24.45.111(a) awaiting transmittal to the governor).

* Sec. 4. AS 24.45.111(a) is amended to read:

(a) A person required to register or report as a lobbyist or as a person who employs, retains, or contracts for the services of a lobbyist shall preserve all accounts, bills, receipts, books, papers, and documents necessary to substantiate the reports required to be made and filed under this chapter for a period of at least six years [ONE YEAR] from the date of the filing of the report containing these items.

. . . .

AS 24.45.111 Preservation of Records:

(a) A person required to register or report as a lobbyist shall preserve all accounts, bills, receipts, books, papers, and documents necessary to substantiate the reports required to be made and filed under this chapter for a period of at least one year from the date of the filing of the report containing these items. These accounts, bills, receipts, books, papers, and other documents shall be made available for inspection by the commission, or members of its staff, at any time. If a lobbyist is required under the terms of the lobbyist's employment contract to turn any records over to the employer, responsibility for the preservation of these records under this section rests with the employer.

Facts

Ray Gillespie is a registered professional lobbyist who is subject to the reporting requirements under AS 24.45.051. Mr. Gillespie has indicated that he incurs a variety of business expenses as a professional lobbyist for food and beverages, living accommodations, and travel as well as various other expenses that do not fall into those categories. Some of Mr. Gillespie’s expenses are not reimbursed by his clients, including travel to and from Juneau, home living accommodations, room and board, and office expenses. In addition, many of his expenses are incurred generally and are not attributable to one particular client.

APOC requires all registered lobbyists to summarize their income and expenditure activity on a standard form, Schedule A (Form 23-3A). The form separates income and expenditure activity into three categories: reimbursable expenditures, non-reimbursable expenditures, and compensation. The reimbursable expenditures and non-reimbursable expenditures are further broken down into four categories: food and beverage, living accommodations, travel, and “other expenses”. One form must be completed for each of the lobbyist’s clients.

Analysis:

APOC administers the lobbying law, AS 24.45, and it is empowered to
prescribe the forms for lobbyist reporting as well as prepare instructions and provide assistance for compliance under this chapter.  AS 24.45.021and .031.
Registered lobbyists are required to report certain expenditures regardless of whether these expenses are reimbursed by an employer or client. The determining factor for whether an expense is reportable under AS 24.45.051(1) and (2) is if it is “in support of or in connection with influencing legislative or administrative action” AS 24.45.051(1) and (2). “Influencing legislative or administrative action,” is defined as direct communication for the purpose of “introducing, promoting, advocating, supporting, modifying, opposing, or delaying or seeking to do the same with respect to any legislative or administrative action.” AS 24.45.171(8).  Although the words “in support of or in connection with” are not defined, when read together with “influencing legislative or administrative action,”  APOC has historically interpreted this phrase to mean a registered lobbyist must report expenses that are reasonably related to the individual’s work as a lobbyist.  
This interpretation of “in support of or in connection with” is in keeping with the legislative purpose of the lobbying disclosure law, which is to ensure transparency. The legislative intent, as stated in AS 24.45.011 is that “the people are entitled to know the identity, income, expenditures, and activities of those persons who pay, are paid or reimbursed for expenses, or who make expenditures or other payments in an effort to influence legislative or administrative action.”  AS 24.45.011.  If the expenditure is made as part of an effort “to influence legislative or administrative action,” the public is entitled to know of the expenditure and the lobbyist has a duty to disclose it.

The lobbying reporting statute differentiates between expenditures that are reimbursed and those that are not.  AS 24.45.051(1) requires reporting of all payments received by the lobbyist and includes “reimbursement of expenses” AS 24.45.051(1).  Under AS 24.45.051 any payment received by the lobbyist that is reasonably related to lobbying must be reported on Form 23-3.  AS 24.45.051(1) governing reimbursed expenses is much broader than AS 24.45.151(2) governing non-reimbursed expenses.  The reporting requirement contained in AS 24.45.51(2) for non-reimbursed expenses is expressly limited to the three listed categories:  food and beverages, living accommodations, and travel.  AS 24.45.051(2).  Although form 23-3 includes a category for “other” non-reimbursed expenses, a lobbyist is not required to report non-reimbursed expenses that do not fit into one of those three categories specified in the statute. Reporting of such non-reimbursed expenses outside the three categories is discretionary.

Using these principles as guidelines, Mr. Gillespie is required to report expenses for travel to and from Juneau if such travel is reasonably related to his work as a lobbyist.  If travel to and from Juneau is for personal reasons such as seeing family this is not a reportable expense. Likewise, travel in Juneau, if reasonably related to Mr. Gillespie’s lobbying activities, is a reportable expense. Obvious examples are travel to attend meetings or dine with public officials, since these types of travel support and are connected with Mr. Gillespie’s lobbying. Travel inside Juneau for personal reasons such as shopping, dining, and other non-business related reasons is not reportable.

The same guidelines apply to the expenditure categories of food and beverages and living accommodations. Mr. Gillespie’s expenditures on food and beverages while in Juneau during legislative session that are unrelated to lobbying activities, such as meals in his home, are not reportable.  On the other hand, living accommodation expenses incurred solely because of Mr. Gillespie’s work as a lobbyist, such as the cost of a hotel or other lodging, is reportable. Mr. Gillespie’s year-round living accommodations, although he engages in lobbying while he resides there, are not reportable, since these are expenses he would incur regardless of his work as a registered lobbyist.   

Because lobbyist form 23-3 is client specific, if an expense is not attributable to one particular client, the lobbyist shall either divide the total expenditures common to more than one client by the number of clients, or allocate a portion of the total expenditures to each client based on the percentage of the lobbyist’s work done for that client. 

Finally, you asked for guidance in determining what records you must retain in connection with the expenditure reporting requirements.  Under House Bill 281 recently enacted by the legislature, lobbyists are required to retain any and all records to substantiate reports filed for a period of at least six years from the date of filing.  Sec. 4, SCS CSHB 281 (FIN), 25th Leg. 1st Sess. (Alaska 2008) (proposed amendment to AS 24.45.111(a) awaiting transmittal to the governor).  This bill amends the one year records retention requirement of AS 24.45.111(a). 

1 AS 24.45.171(10) defines “lobbyist” as a person who “is employed and receives payments, or who contracts for economic consideration, including reimbursement for reasonable travel and living expenses, to communicate directly or through the person's agents with any public official for the purpose of influencing legislation or administrative action for more than 10 hours in any 30-day period in one calendar year;” or “represents oneself as engaging in the influencing of legislative or administrative action as a business, occupation, or profession.”

. . . .

Conclusion

A lobbyist must report expenditures on lobbyist form 23-3 when the expenses are reasonably related to the individual’s work as a registered lobbyist If a lobbying expense is not reimbursed, a lobbyist must only report it if falls within one of the three categories listed in AS 24.45.051(2): food and beverages, travel, and living accommodations.

The Commission approved the advice in this letter by an affirmative vote of 5-0 on June 11, 2008. The advice in this opinion applies only to the specific activity for which the advice was requested.

A copy of the original letter requesting the above advisory opinion is available upon request at the Alaska Public Offices Commission. Call (907)276-4176 or (800)478-4176.