[29 Pa.B. 3868]
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CHAPTER 39. OPINIONS AND ADVICES OF COUNSEL Sec.
39.1. Ethics Act regulations in Part I as to opinions and advices of counsel. 39.2. Standing requirements. 39.3. Prospective conduct to be reviewed. § 39.1. Ethics Act regulations in Part I as to opinions and advices of counsel.
The Commission shall provide advices of counsel and opinions in accordance with the procedures in section 1107 of the Ethics Act (relating to powers and duties of commission) and Chapter 13 (relating to opinions and advices of counsel). A principal, lobbyist or State official or employe who acts in good faith based upon a written advice or opinion of the Commission issued to him shall not be held liable for a related violation of the act.
§ 39.2. Standing requirements.
(a) An advice or opinion may be requested by a lobbyist, principal, State official or employe, or by his authorized representative, as to his own conduct, or by a lobbyist, principal, State official or employe regarding the conduct of employes responsible to him.
(b) An unauthorized request for an advice or opinion as to the conduct of another shall be considered a ''third- party request'' and will not be entertained.
§ 39.3. Prospective conduct to be reviewed.
An advice or opinion will only be issued as to prospective-future-conduct.
CHAPTER 41. COMPLIANCE AUDITS Sec.
41.1. Lotteries. 41.2. Number and scope of compliance audits. 41.3. Audit procedures. 41.4. Audit report. 41.5. Confidentiality. § 41.1. Lotteries.
(a) Each year, the Commission will initiate, by lottery, random audits of registration statements and disclosure reports required to be filed under the act.
(b) The Commission may hold up to four lotteries per year. The number of lotteries held in a given year will be a matter within the Commission's discretion.
(c) No lobbyist or principal will be subject to a random audit more than once in any 12-month period.
§ 41.2. Number and scope of compliance audits.
(a) The purpose of conducting the audits shall be to ensure compliance with the act.
(b) Each year, the number of audits to be conducted will be determined by the Commission through resolutions adopted at public meetings. The number of audits conducted in a given year will depend upon various factors, including the complexity, results and time required to complete the audits.
(c) An audit shall include registration statements and disclosure reports, as well as other relevant information to verify, explain, clarify, support or contravene the registration statements and disclosure reports.
(d) An audit shall be limited in time to the previous 4 calendar years, except that lobbying activities performed prior to August 1, 1999, will not be audited under the act.
§ 41.3. Audit procedures.
The following general procedures will be employed by the Commission for audits conducted under section 1308(g) of the act (relating to administration and enforcement):
(1) At least 30 days prior to the initiation of the audit, each audit subject will be advised by letter that it was randomly selected for audit and further advised of the time, date, place and general scope as well as a tentative time frame for completion of the audit. The letter will contain a request for documents deemed necessary for conduct of the audit.
(2) Prior to the initiation of the audit, a review of the subject's reports on file with the Commission for a period not to exceed 4 years will be conducted.
(3) The audit will be initiated by way of conference with the audit subject or in the case of a firm, the designated representative thereof.
(i) The audit will include a detailed field examination of the financial records of the audit subject relating to lobbying activities.
(ii) The audit may include independent verification of some or all of the information reported.
(A) The audit may include related records from other sources, in which case the subject of the audit shall cooperate fully and shall execute all waivers, releases or authorizations to allow the Commission to obtain the records.
(B) Registrants shall have an affirmative duty to cooperate fully in any audit of themselves.
(3) The audit may include interviews of lobbyists, principals, representatives and employes thereof and other individuals necessary to the completion of the audit.
(4) A post audit conference will be conducted with the subject of the audit, or in the case of an entity, with the designated representative thereof.
(5) Post audit preparation of a report describes the result of the audit.
§ 41.4. Audit report.
(a) The Division of the Commission that is responsible for performing compliance audits will, at the conclusion of each audit, prepare an audit report which will include findings.
(b) An audit report may include recommendations as to recordkeeping, reporting and other related practices arising from the audit.
(c) Upon completion, an audit report will be served upon the principal or lobbyist that is the subject of the audit.
(1) Service of the audit report shall be complete upon mailing.
(2) Within 30 days of service of the audit report, the subject of the audit may file with the Commission a statement setting forth the subject's position as to the audit report.
(d) Audit reports and any related responses shall be submitted to the Executive Director of the Commission for review, and may form the basis for further proceedings under the act or the Ethics Act.
§ 41.5. Confidentiality.
An audit report and findings will be confidential, except that the Commission will include the relevant portion of an audit as part of its findings of fact in a Commission order which results from an investigation arising out of an audit.
CHAPTER 43. INVESTIGATIONS, HEARINGS AND REFERRALS Sec.
43.1. Intentional violations. 43.2. Commission proceedings under section 1307 of the act. 43.3. Late or deficient filings--Commission proceedings under section 1304 or 1305 of the act. 43.4. Noninvestigative process for late or deficient filings. 43.5. Investigative process for late or deficient filings. 43.6. Civil penalties for late or deficient filings. 43.7. Commission decisions as to late or deficient filings. § 43.1. Intentional violations.
(a) If the Commission after investigation believes an intentional violation of the act has been committed, it will refer all relevant documents and other information to the Office of Attorney General.
(b) Under section 1309(b) of the act (relating to penalties) and § 43.4(16) (relating to noninvestigative process for late or deficient filings), if the Commission finds that a failure to register or report was intentional, it will refer the matter to the Attorney General for investigation and prosecution.
(c) Nothing contained in the act or regulations promulgated thereunder shall prohibit the Office of Attorney General from initiating an investigation or prosecution under the act pursuant to its authority by law, and the Office of Attorney General need not await a referral from the Commission before initiating such an investigation or prosecution.
§ 43.2. Commission proceedings under section 1307 of the act.
(a) Upon receipt of a complaint as defined in § 31.1 (relating to definitions), the Commission, through its Executive Director, will conduct a preliminary inquiry into an alleged negligent violation of section 1307 of the act (relating to prohibited activities).
(b) Upon the motion of the Executive Director of the Commission, the Commission, through its Executive Director, may conduct a preliminary inquiry into an alleged negligent violation of section 1307 of the act.
(c) Preliminary inquiries will be conducted in accordance with the procedures for preliminary inquiries set forth within § 21.3 (relating to preliminary inquiries), to the extent applicable.
(d) The Commission, through its Executive Director, may initiate an investigation and hold a hearing concerning alleged negligent violations of section 1307 of the act by a lobbyist or principal, in accordance with sections 1107 and 1108 of the Ethics Act (relating to powers and duties of commission; and investigations by commission) and, to the extent applicable, the related provisions in §§ 21.1--21.3, 21.5 and 21.21--21.27.
(1) If the respondent does not submit a timely request for a hearing, the Investigative Division shall have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(2) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve any contested facts to make a final determination.
(e) The Commission will decide cases, issue orders and rule upon requests for reconsideration concerning alleged negligent violations of section 1307 of the act, in accordance with sections 1107 and 1108 of the Ethics Act and, to the extent applicable, the related provisions in §§ 21.28--21.30 (relating to decision; finality; reconsideration; and effect of order).
(f) At least four members of the Commission present at a meeting must find a violation by clear and convincing proof.
§ 43.3. Late or deficient filings--Commission proceedings under section 1304 or 1305 of the act.
(a) Commission proceedings under section 1304 or 1305 of the act (relating to registration; and reporting) may be initiated based upon one or more of the following:
(1) Receipt of a complaint.
(2) An audit or related audit conducted by the Commission under Chapter 41 (relating to compliance audits).
(3) Reviews of filings conducted by Commission staff.
(4) The motion of the Executive Director of the Commission, which is based upon a reasonable belief that a violation of the act may have occurred.
(b) The Commission, through its Executive Director, will initiate proceedings involving section 1304 or 1305 of the act (relating to registration; and reporting) under either the noninvestigative procedures set forth in § 43.4 (relating to noninvestigative process for late or deficient filings) or under the investigative procedures in § 43.5 (relating to investigative process for late or deficient filings).
(1) In each case, the Executive Director of the Commission will elect which process will be followed, which election may be based upon factors, including but not limited to, the following:
(i) The complexity of the matter.
(ii) Whether an investigation is needed to fully review the matter.
(iii) Whether the filer has had prior notice of the requirements of the act.
(iv) Whether the filer has in the past complied with the act.
(2) The election of the process to be followed will not be controlled by the manner in which the alleged negligent violation or noncompliance comes to the attention of the Commission.
(3) If a formal complaint is received alleging a failure to register or report as required by the act, or the filing of a report containing a false statement, the Commission through its Executive Director may elect to proceed in the matter under the noninvestigative procedures of § 43.4 rather than through the investigative procedures of § 43.5.
(i) A complainant will be notified of the Executive Director's election of the process to be followed.
(ii) A complainant will also be notified of the final resolution of the matter.
(4) Information received under subsection (a) may form the basis for proceedings under either the noninvestigative procedures of § 43.4, or, upon the motion of the Executive Director, the investigative procedures of § 43.5.
§ 43.4. Noninvestigative process for late or deficient filings.
The noninvestigative process for matters under section 1304 or 1305 of the act (relating to registration; and reporting) will include the following procedures:
(1) The Executive Director of the Commission will issue a notice of noncompliance to the lobbyist, principal or individual that has failed to register or report as required by the act. A notice of noncompliance may encompass multiple failures to comply with the act.
(2) The notice of noncompliance will state the nature of the alleged noncompliance and the civil and criminal penalties for failing to register, failing to file a report or filing a report containing a false statement. A notice of noncompliance will also advise of the right to a hearing before the Commission and the time and manner in which to request a hearing.
(3) The notice recipient shall have 20 days from the mailing date of the notice of noncompliance in which to cure the noncompliance. If the noncompliance is not cured within that time, the Investigative Division may file with the Commission a petition for civil penalties, which petition shall be served upon the respondent by the Investigative Division.
(4) The petition for civil penalties shall set forth the pertinent factual averments in numbered paragraph form, and shall notify the respondent of the opportunity to file a written answer and to request a hearing in the matter.
(5) An answer to the petition for civil penalties shall be filed (received at the Commission) within 30 days of service of the petition upon the respondent.
(6) An answer to the petition for civil penalties shall specifically admit or deny each of the allegations made in the petition, and shall set forth the facts and state concisely the matters of law upon which the respondent relies. Matters not specifically denied shall be deemed admitted.
(7) Failure to file an answer within the 30-day period or the filing of general denials will be deemed an admission of the averments of the petition for civil penalties.
(8) A request by the respondent for a hearing shall be in writing and be received at the Commission within 30 days of service of the petition for civil penalties upon the respondent.
(i) A request for a hearing may be set forth within an answer to the petition or it may be submitted separately.
(ii) Failure to submit a timely request for a hearing shall be deemed a waiver of a hearing, so that a final order may be entered against the respondent without a hearing.
(9) If the respondent does not submit a timely request for a hearing, the Investigative Division will have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(10) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve contested facts to make a final determination.
(11) The respondent will be given access to evidence intended to be used by the Investigative Division at the hearing, as well as exculpatory evidence obtained by the Investigative Division.
(12) Access to evidence does not include an original complaint or the name of a complainant, information which is otherwise privileged, or information not within paragraph (11).
(13) A hearing under section 1309 of the act (relating to penalties) will be public and will be conducted by the Commission in accordance with sections 1107(14) and 1108(e) of the Ethics Act (relating to powers and duties of commission; and investigations by commission), and to the extent applicable, the related provisions of Part I (relating to State Ethics Commission). The Investigative Division bears the burden of proof.
(14) The hearing officer or the parties may request that briefs be presented. The filing of briefs shall be in accordance with the procedures for filing briefs under § 21.27 (relating to briefs) to the extent applicable.
(15) After the opportunity for a hearing has been provided, and following the submission of any briefs, the Commission will determine, based upon the record before it, whether the respondent was required to register or report under the act; whether the failure to register or report was negligent; and if the failure was negligent, the amount of the civil penalty to be imposed. At least four members of the Commission present at a meeting must find a violation by clear and convincing proof.
(16) If the Commission finds that the failure to register or report was intentional, it will refer the matter to the Attorney General for investigation and prosecution.
(17) The determination of the Commission will be in the form of a final order with findings and reasons for the adjudication.
(18) Requests for reconsideration may be submitted to the Commission. The Commission will consider and rule upon requests for reconsideration under the procedures set forth in § 21.29(b) and (d)--(f) (relating to finality; reconsideration) to the extent applicable.
(19) The official record of the case before the Commission will be publicly available.
(20) The files of the Investigative Division will not be publicly available.
§ 43.5. Investigative process for late or deficient filings.
The investigative process for matters under section 1304 or 1305 of the act (relating to registration; and reporting) shall include the following procedures:
(1) The Commission, through its Executive Director, may conduct a preliminary inquiry into any alleged negligent violation of section 1304 or 1305 of the act. Preliminary inquiries will be conducted under the procedures for preliminary inquiries in § 21.3 (relating to preliminary inquiries), to the extent applicable.
(2) The Commission, through its Executive Director, may initiate an investigation and hold a hearing concerning alleged negligent violations of section 1304 or 1305 of the act, in accordance with sections 1107 and 1108 of the Ethics Act (relating to powers and duties of commission; and investigations by commission) and, to the extent applicable, the related provisions of §§ 21.1--21.3, 21.5 and 21.21--21.27.
(i) If the respondent does not submit a timely request for a hearing, the Investigative Division will have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(ii) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve any contested facts to make a final determination.
(3) The Commission will decide cases, issue orders and rule upon requests for reconsideration concerning alleged negligent violations of section 1304 or 1305 of the act, in accordance with sections 1107 and 1108 of the Ethics Act and, to the extent applicable, the related provisions in §§ 21.28--21.30 (relating to decision; finality; reconsideration; and effect of order). At least four members of the Commission present at a meeting must find a violation by clear and convincing proof.
§ 43.6. Civil penalties for late or deficient filings.
Following a noninvestigative process under § 43.4 (relating to noninvestigative process for late or deficient filings), or an investigative process under § 43.5 (relating to investigative process for late or deficient filings), if the Commission finds negligent failures to register or report as required by the act, the Commission may, upon the vote of at least four of its members present, levy one or more civil penalties as provided for in this section.
(1) Each negligent failure to register or report as required by the act is punishable by a civil penalty of up to $50-per-day for each day the registration statement or report is delinquent or deficient.
(2) A civil penalty shall be calculated from the first day the registration statement or report is delinquent or deficient, through the date a complete and accurate registration statement or report is filed or the Commission decides the matter, whichever first occurs.
(3) In determining whether to impose a civil penalty that is less than $50-per-day, the Commission may consider factors including the following:
(i) Whether the respondent contacted the Commission or took any meaningful measures to attempt to remedy the delinquency, deficiency or falsehood.
(ii) Whether the respondent has raised any justifiable excuse such as, for example, the following:
(A) The unavailability of records due to loss, theft or destruction through no fault of the respondent.
(B) Incapacitating physical or mental illness, hospitalization, accident involvement, or death of a person required to register or report, a person whose participation is essential to the filing, or a member of the immediate family of the persons.
(iii) Whether the record establishes that the matter involved the first instance that the respondent was subject to the registration/reporting requirements of the act.
(iv) Whether Commission records indicate that the Commission has previously notified the respondent, in writing, of other delinquent, deficient, or false registration statements or reports.
(v) Whether proceedings have previously been initiated against the respondent under the act, either by the Commission or by the Office of Attorney General.
(vi) Whether there are any other factors which should be considered as aggravating or mitigating factors in the case.
(4) The imposition of a civil penalty by the Commission shall not preclude a criminal prosecution for intentional violation of the act.
§ 43.7. Commission decisions as to late or deficient filings.
The determination of the Commission will be in the form of a final order with findings and reasons for the adjudication.
CHAPTER 45. PROHIBITION AGAINST LOBBYING AS A SANCTION Sec.
45.1. Basis for prohibition against lobbying. 45.2. Procedures for imposing prohibition against lobbying. § 45.1. Basis for prohibition against lobbying.
(a) Under section 1309 of the act (relating to penalties), the Commission may prohibit a lobbyist or principal from lobbying for up to 5 years when the lobbyist or principal has done one or more of the following:
(1) Intentionally failed to register or report as required by the act.
(2) Filed a report under the act with knowledge that the report contained a false statement.
(3) Otherwise intentionally violated the act.
(4) Failed to comply with section 1304, 1305 or 1307 of the act (relating to registration; reporting; and prohibited activities) after notice of noncompliance and after a hearing, if requested.
(b) For the limited purpose of the imposition of a prohibition against lobbying, the respondent shall be deemed to have been notified of noncompliance when served with both of the following:
(1) A findings report, notice of noncompliance or other form of process which meets the requirements of section 1309(a) of the act.
(2) A Commission order or court order finding the respondent in noncompliance with, or in violation of, the act.
(c) For the limited purpose of the imposition of a prohibition against lobbying, the respondent shall be deemed to have failed to comply after notice of noncompliance if the respondent has not satisfied the requirements of the act within 30 days of the issuance of a Commission order or court order finding the respondent in noncompliance/violation, or within another time for compliance as specified by the order.
(d) The prohibition against lobbying will not be imposed unless the defendant/respondent has been afforded the opportunity for a hearing as to whether the prohibition should be imposed.
(1) A hearing, if requested, will be conducted by the Commission in accordance with sections 1107(14) and 1108(e) of the Ethics Act (relating to powers and duties of Commission; and investigations by Commission) and, to the extent applicable, Chapter 21 (relating to investigations).
(2) The record of the underlying proceeding on violation/noncompliance, as well as relevant evidence of mitigating or aggravating factors, shall be admissible.
§ 45.2. Procedures for imposing prohibition against lobbying.
(a) Giving consideration to the factors set forth in subsection (b)(14), the Commission, through its Executive Director, may institute proceedings to seek the imposition of a prohibition against lobbying.
(b) The procedures for the imposition of a prohibition against lobbying shall be as follows:
(1) The proceedings shall be initiated with the Commission through the filing of a petition by the Investigative Division, which petition shall be served upon the respondent by the Investigative Division.
(2) The petition shall set forth the pertinent factual averments in numbered paragraph form, and shall notify the respondent of the opportunity to file a written answer and to request a hearing in the matter. If the basis for the petition is the failure to comply with a Commission order, the petition shall be docketed to the same number as the base case before the Commission. If the basis for the petition is the failure to comply with a court order, the petition shall be docketed to the same number as the base case before the Commission if there was one, and if not, to a new number.
(3) An answer to the petition shall be filed (received at the Commission) within 30 days of service of the petition upon the respondent.
(4) An answer to the Investigative Division's petition shall specifically admit or deny each of the allegations made in the petition, and shall set forth the facts and state concisely the matters of law upon which the respondent relies. Matters not specifically denied shall be deemed admitted.
(5) Failure to file an answer within the 30-day period or the filing of general denials will be deemed an admission of the averments of the petition seeking the prohibition.
(6) A request by the respondent for a hearing shall be in writing and be received at the Commission within 30 days of service of the petition upon the respondent.
(i) A request for a hearing may be set forth within an answer to the petition or it may be submitted separately.
(ii) Failure to submit a timely request for a hearing will be deemed a waiver of a hearing, so that a final order may be entered against the respondent without a hearing.
(7) If the respondent does not submit a timely request for a hearing, the Investigative Division will have an additional 7 days beyond the respondent's deadline in which to submit a written request for a hearing.
(8) The Commission may sua sponte schedule a hearing if it is determined that a hearing is needed to resolve contested facts to make a final determination.
(9) The respondent will be given access to evidence intended to be used by the Investigative Division at the hearing, as well as exculpatory evidence obtained by the Investigative Division.
(10) Access to evidence does not include an original complaint or the name of a complainant, information which is otherwise privileged or information not within paragraph (9).
(11) A hearing under this chapter will be public and be conducted by the Commission in accordance with sections 1107(14) and 1108(e) of the Ethics Act (relating to powers and duties of Commission; and investigations by Commission), and to the extent applicable, the related provisions of Part I (relating to State Ethics Commission). The Investigative Division bears the burden of proof.
(12) The hearing officer or the parties may request that briefs be presented. The filing of briefs shall be in accordance with the procedures for filing briefs under § 21.27 (relating to briefs), to the extent applicable.
(13) After the opportunity for a hearing has been provided, and following the submission of briefs, the Commission will determine, based upon the record before it, whether and for how long a prohibition against lobbying is to be imposed against the respondent.
(i) If a lobbyist or principal has been found to be in noncompliance or in violation of the act in a proceeding before the Commission, for which noncompliance or violation the penalty of prohibition of lobbying may be imposed, such finding of noncompliance or violation shall be res judicata, and the Commission's further determination shall be limited to the amount of time, if any, that the lobbyist or principal shall be prohibited from lobbying.
(ii) To the extent any factual matters remain to be proven, such shall be proven by clear and convincing evidence.
(iii) A prohibition against lobbying may only be imposed by a vote of at least four members of the Commission present at a meeting.
(14) In determining whether and for how long a prohibition against lobbying is to be imposed against a respondent, the Commission may consider factors including the following:
(i) Whether the respondent contacted the Commission or took any meaningful measures to attempt to remedy the violation or failure to comply.
(ii) Whether the respondent has raised a justifiable excuse.
(iii) Whether the record establishes that the matter involved the first instance that the respondent was subject to the requirements of the act.
(iv) Whether other proceedings have been initiated against the respondent under the act, either by the Commission or by the Office of Attorney General.
(v) Whether there are other factors which should be considered as aggravating or mitigating factors in the case.
(15) The determination of the Commission will be in the form of a final order with findings and reasons for the adjudication.
(16) Requests for reconsideration may be submitted to the Commission. The Commission will consider and rule upon requests for reconsideration under the procedures set forth in § 21.29(b) and (d)--(f) (relating to finality; reconsideration), to the extent applicable.
(17) The official record of the case before the Commission will be publicly available.
(18) The files of the Investigative Division will not be publicly available.
(c) If a lobbyist or principal is convicted in a criminal proceeding for a violation of the act for which the penalty of prohibition of lobbying may be imposed, such conviction shall be res judicata, and the Commission's determination shall be limited to the amount of time, if any, that the lobbyist or principal shall be prohibited from lobbying.
[Pa.B. Doc. No. 99-1177. Filed for public inspection July 23, 1999, 9:00 a.m.]
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