280 South Mangum Street, , Durham, NC 27701

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3605 Glenwood Avenue, Suite 500, Raleigh, NC 27612

(919) 787-8880 Contact

I.   Ethics:

A.  The principles of conduct governing an individual or group.
B.  In our case, conforming to professional standards of conduct.
C.  A set of moral principles or values.

II. Professional Standards of Conduct which apply to lobbyists

A. Our personal standards of right and wrong

Some standards of conduct come from within- they are a part of us- evolving from our parents, religious teachings, professional career, or whatever.  In our dealings with legislators and other lobbyists, these standards apply. For example, we do not lie.  We have a duty of confidentiality to our clients, and some things we cannot disclose. But while honoring that confidentiality, we must not deceive; sometimes we simply cannot answer a question. We cannot mislead and give a wrong impression.  The consequences of misleading a legislator are both obvious and severe. SUGGESTION:  Be truthful with legislators about everything except your personal opinions about other legislators and other lobbyists- and as to those, if your opinion is not positive- don’t express it.

B. North Carolina Rules of Professional Conduct (for lawyer lobbyists)

1) North Carolina State Bar Lawyer’s Handbook
2) Most rules apply to lobbying activities
3) SUGGESTION:  Read these rules and comments periodically

C. North Carolina Statutes which regulate our conduct

1) Article 9A of Chapter 120 (§ 120-47.1 – 120-47-11)
2) Contingency Lobbying Fees Prohibited §120-47.5 (a)  No person shall act as a lobbyist for compensation which is dependent in any manner upon the passage or defeat of any proposed legislation or upon any other contingency connected with the action of the General Assembly, the House, the Senate or any committee thereof.

a) This precludes a bonus payment or higher compensation of any nature based on performance.  We are offered that all the time.
b) SUGGESTION:  Always have a written engagement letter with your client.

3) Election Influence Prohibited § 120-47.5 (b)  No person shall attempt to influence the action of any member of the General Assembly by the promise of financial support of the member’s candidacy, or by threat of financial contribution in opposition to the member’s candidacy, in any future election.

a) Notice the statute prohibits an “attempt to influence”
b) SUGGESTION:  Never discuss policy issues with a legislator during a conversation about contributions, fundraising, PACS, etc.

D.  North Carolina Professional Lobbyists Association Code of Conduct.

1) Can be found in the front of the NCPLA Member Listing booklet.
2) Applies to members of NCPLA.

E. Federal and State Criminal Laws.

1) Prohibit anyone from interfering with the citizen’s right to a government official’s honest services.
2) The Hobbs Act (18 U.S.C. § 1951)

a) Public Official is subject to liability under the Hobbs Act.
b)  Prohibits “extortion” defined as “ . . . the obtaining of property from another, with his consent, induced . . . under color of official right.”
c)  Can apply in the course of financing an election campaign.
d)  Elements of offense:

i.  the receipt of a campaign contribution by an elected official
ii. in return for an explicit promise or undertaking by the official to perform or not perform an official act- a quid pro quo.
iii. the quid pro quo need not be actually fulfilled.
iv. the acceptance of a benefit can be sufficient to form the basis of a violation.
v.  Payments don’t have to be campaign contributions, and other items of value such as gifts, meals, or travel expenses can constitute a violation if the necessary elements are present.

3) The “Devil” Statute (18 U.S.C. § 666)

a) Governs the conduct of lobbyists
b) The statute penalizes any person who “corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward an agent of a state (e.g. legislator) or of a local government in connection with any business of such government.” (emphasis added)
c)  A campaign contribution not reported may be sufficient.

4) Mail and Wire Fraud (18 U.S.C. § 1346)

a) Prohibits the use of the mail or wires in furtherance of a scheme to defraud.
b) Applies to any person- legislator or lobbyist
c) The weapon of choice for a federal prosecutor
d)  “Scheme to defraud” includes a scheme to deprive another of the intangible right of honest services.
e)  Under federal law, every citizen has a right to honest services of their state legislators.
f)  Every legislator has a fiduciary duty to provide honest services.
g)  No lobbyist (or other person) can interfere between that right and that duty.

5) North Carolina Criminal Statute: G.S. § 120-86

“No person shall offer or give to a legislator or a member of a legislator’s immediate household, or to a business with which that legislator is associated, and no legislator shall solicit or receive, anything of monetary value, including a gift, favor or service or a promise of future employment, based on any understanding that the legislator’s vote, official actions or judgment would be influenced thereby, or where it could reasonably be inferred that the thing of value would influence the legislator in the discharge of the legislator’s duties.” (emphasis added)

III.    The Practical Problem

With that background, what’s going on in the real world of N.C, Legislative campaigning?

1)  Have you gotten any written requests for campaign contributions lately?  Probably 1, 2, or 3 a day.  Nothing wrong with that- usually they are properly written and don’t contain any implication of quid pro quo.  But what about that handwritten note at the bottom?  “I was pleased that I was able to sponsor your bill last session.”  Is that a reward?  Might some FBI agent think it was a reward?  or  “I look forward to working with you on the licensing issue next session.”  Is that a quid pro quo?  Might some FBI agent interpret that as a quid pro quo?
2)  How about telephone solicitations from candidates?  More and more legislative and statewide candidates are going down the lobbyist list and calling.  Most do it properly and don’t discuss anything except the campaign, but these conversations are not scripted and might start out . . . “I expect to chair such and such a committee . . .”  You can see how mixing that comment with a solicitation might get you and that legislator in trouble.
3) What if the candidate on the telephone makes reference to what he or she has done for your client?  Use of the wires?  yes.  Reward for past services?  might be interpreted that way.  Quid pro quo? Some might think so.  It scares me to death when a candidate calls asking for money- even if it is an old friend.  You have to be very careful what is said even to the point of correcting the caller.  “My contributions are based solely on the qualifications of the candidate, not for any other reason.”  That can be hard.
4) How about a legislator riding up and down the highway using a cell phone to chit chat about particular legislation in his or her committee and then asking for a contribution?
5) As the cost of campaigns doubles and triples, and as candidates more and more are personally solititing funds, the risks increase proportionately.

A. Solicitation letters from candidates must be carefully worded

1) they must not imply that a favorable response would give influence
2) they must not imply that they are asking for a “reward” for past acts
3) they must not even give the appearance of either (1) or (2).

B. The same applies to telephone solicitations

1) more dangerous because they usually are not scripted
2) they might begin with an innocent reference to past legislation

III. Suggested Do’s and Don’ts for Campaign Contributions

A. In discussing a contribution with a legislator or legislative candidate, think about how your conversation might sound if you or the legislator were being wiretapped.
B. Avoid cash contributions at all times.
C. Always mail a contribution check; never hand money in any form to a legislator or a legislative candidate.  You simply cannot control what the legislator says to you at the time the contribution is made. (e.g. “I am glad I could help you with your bill last session”- a reward? the appearance of a reward?)
D.  Never send a contribution without a generic cover letter.
E.  Comments in the cover letter should be neutral and with one eye on making sure you aren’t doing anything to interfere with the citizens’ right to that legislator’s honest services.  e.g. “We are supporting you because we appreciate honest government.”
F.  Do not make contributions during the legislative session- even if the courts ultimately permit this to happen.  For a time last year, our statute prohibiting solicitations and contributions during the session was struck down and we were all fair game. The 2000 General Assembly amended G.S. 163-178.13(b) to attempt to meet the court challenge and may have successfully done so.  In any event, the statutory prohibition is back in effect for now.
G.  Never refer to a campaign contribution while talking with a public official about a policy issue, a piece of legislation, etc.
H. The same care should be taken in conversations during strategy sessions among lobbyists and in PAC committee discussions.
I.  Avoid phrases such as “quid quo pro” and “who do we need to get” and “we have taken care of that legislator.”
J. Legislators should avoid referring to campaign contributions while talking with lobbyists.
K. Contributions should be mailed to campaign offices, not legislative offices.
L. Read solicitation letters carefully.  If the letter could be interpreted as indicating an offer to compromise the legislator’s duty to provide honest services, you should not respond with a check that accepts the offer.  The same caveat applies if there is a reference to the passage of past legislation that your client supported which could be interpreted as a reward if you respond with a check.

I am honored that you would ask me to come and talk about this topic and will be happy to attempt to answer any questions you have.

Note: Some of the material in this outline came from a manuscript by Anthony F. Troy, former Attorney General for the Commonwealth of Virginia.

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