LOS ANGELES ADOPTS PAY-TO-PLAY LAW, RESTRICTS CAMPAIGN CONTRIBUTIONS, FUNDRAISING BY CITY CONTRACTORS

Los Angeles voters approved on March 8 a measure that prohibits political contributions and fundraising by bidders on City contracts. Violators are subject to debarment for a minimum of one year for the first violation and longer periods for subsequent violations.

Under this new “pay-to-play” law, if a contractor bids on or submits a proposal in response to a contract solicitation that has an anticipated value of $100,000, the contractor is prohibited from:

• Making a campaign contribution to any elected City official or candidate for City office if the contract requires approval by the City Council
• Making a campaign contribution to the Mayor, the City Attorney, the Controller, a City Council member, or a candidate for any of those elected City offices, if the elected official who receives the contribution (or candidate for that office) must approve the contract
• Fundraising on behalf of any of these candidates or officials

Also subject to the contribution ban are the contractor’s Chairman of the Board, President, CEO, COO, any person who holds an ownership interest of 20% or more in the bidding entity, and any person who is authorized by the bid or proposal to represent the contractor before the City.

In an unusual provision, the ban even extends to subcontractors and their principals, if a subcontractor stands to receive at least $100,000 from performance under the contract.

The contribution ban applies from the time a bid or proposal is submitted until the earliest date that any of the following occurs: the contract is signed, the bid or proposal is withdrawn, or the City rejects all proposals for the contract. For successful bidders, their subcontractors, and each of their principals, the ban continues for 12 months after the contract is signed.

The new law also prohibits incumbent city revenue bond underwriters from contributing to city officials, and firms that have made certain contributions and gifts may not receive a no-bid contract for underwriting services.

GEORGIA CONCLUDES THAT ANY EMPLOYEE CAN TRIGGER LOBBYING LAWS, EXEMPTS MOST VOLUNTEER WORK FOR TRADE ASSOCIATIONS

Georgia regulators have concluded that any officer or employee who meets with public officials and expresses an opinion on actual or potential legislation that may affect the company must register as a lobbyist. An opinion issued by the Georgia Government Transparency and Campaign Finance Commission (formerly the State Ethics Commission) rejected the argument that lobbying laws are triggered only when an individual has an employment agreement which states that his or her duties include lobbying.

The opinion notes that members of trade associations who meet with legislators as part of a “day at the Capitol” are generally exempt from state lobbying laws because they participate as volunteers who are promoting their industry, not in the capacity of employees. However, the opinion warns that such individuals may have to register if they are required to belong to a trade association as part of their employment.

In a related matter, Georgia ethics officials are considering a request to clarify what kinds of sales activities require registration under the state’s procurement lobbying law. The request asks the ethics commission to address whether an employee is lobbying when he or she provides a public official with informational materials, submits a bid or response to a request for proposals, or participates in a bid conference. We will continue to monitor this request and provide further information as soon as it is available.