An opinion has been requested from the State Ethics Commission as to how a lobbyist (the Requestor) should report expenses related to the cost of publications encouraging persons to communicate with State employees or officials regarding their official actions. Disclosure of this information is required on lobbyist activity reports by §5-105(a)(2)(iv) of the Public Ethics Law (Article 40A, Annotated Code of Maryland, the Ethics Law).

The Requestor is a registered lobbyist for a professional association (the Association) that publishes a periodic newsletter. While parts of the publication deal exclusively with Association business and matters of general interest to the membership, parts of it are devoted to legislation affecting Association members. Some of this legislatively-directed material specifically encourages Association members to communicate with officials or employees about legislation. Other materials, including news articles, features and editorials, contain background information, status reports, or other supportive discussion related to the material expressly encouraging communications on legislative matters.

The Requestor has filed activity reports for the periods of her registration. She has, as a general matter, disclosed in the appropriate portion of the lobbying activity report expenses incurred by the Association for publications encouraging persons to communicate with officials and employees regarding legislative matters, ranging in amounts between $150 and $500. The expenses reported have been a prorated amount reflecting the percentage of the cost of the newsletter equal to the percentage of legislative material in the publication. The question is whether this approach is proper under the provisions of Title 5 of the Ethics Law, and, if so, what principles should be followed in reporting prorated expenses in this category.

Section 5-103 of the Ethics Law requires registration by any person who expends certain amounts, compensates another, or is himself compensated in excess of certain amounts in connection with efforts to influence State employees or officials. It also requires registration by any person who expends in excess of $2,000 for the express purpose of soliciting others to communicate with any official to influence any legislative or executive action. Section 5-105 requires any person registered during a reporting period to file a lobbying activity report disclosing specified expenditures made during the reporting period on acts requiring registration, including expenditures on "publications which expressly encourage persons to communicate with officials." We believe that the criteria defining who must register and those setting forth the required expenditures to be disclosed are, to some extent, independent of each other. If a person meets the criteria for registration under any category then he must report all expenditures listed in §5-105(a) if they relate to the lobbying activities described in §5-103, without regard to the minimum limits set forth in §5-103.

Thus, we conclude that the Requestor must report all expenditures on publications expressly encouraging others to communicate with officials or employees even though those expenditures are below the $2,000 minimum set forth in §5-103. However, we believe that the disclosure should be limited to only those costs reasonably connected to the lobbying activities set forth in sections 5-103 and 5-105 of the Ethics Law. We therefore agree that the approach currently followed by the Requestor of prorating the publication costs to reflect the percentage of the newsletter devoted to legislation is correct. This is reflective of the substantive connection between the disclosure provisions of §5-105 and the coverage criteria of §5-103. Further, a chief purpose of the lobbying disclosure provisions is to allow the Commission to compute total lobbying expenditures in the various reporting categories, so that the Legislature and the public can be made aware of the extent of expenditure involved in influencing legislative and executive action. To include newsletter expenditures attributable to general Association interests rather than its purely lobbying activities would, in our view, artificially inflate the expenditure totals.

However, in calculating the percentage of newsletter expenditures that are devoted to covered activities, the Requestor must include all items that are reasonably related to the Association's lobbying efforts. In our view, including only items that specifically urge persons to communicate regarding a specific contemplated legislative or executive action would be an overly technical approach that would miss the purpose of the lobbying disclosure provisions of the Ethics Law, which is to inform the Legislature and the public about the expenditures made by entities in their efforts to influence governmental actions. Thus we conclude that feature articles, and other materials that provide background, explanation and supporting discussions for articles expressly urging communications with Maryland State government officials and employees, should be included in calculating the percentage of a newsletter devoted to covered expenditures.

The resulting percentage should then be applied to the total attributable costs of preparing, printing, and distributing the newsletter to compute the amount to be disclosed on the lobbying activity report. The costs reported as attributable to this activity should not also be reported in other expense categories of the activity report, (such as office expenses, professional and technical research, salaries for staff of registrant, or other expenses) since this would result in double reporting.

Herbert J. Belgrad, Chairman
    Jervis S. Finney
    Reverend John Wesley Holland
    Barbara M. Steckel

Date: June 23, 1981