Prohibitions 101

The lobby law contains a number of restrictions on expenditures by lobbyists, as well as on acceptance of lobby expenditures by state officers, state employees, immediate family and guests of state officers and employees, candidates for state offices, and officers-elect. With limited exceptions, violation of any of the provisions of the Lobby Law carry a criminal penalty.


 12 Prohibitions to Ponder:

  1. Presence is required for ALL food, beverages and entertainment unless it meets the “gift” exception. Never leave food or beverage in the Capitol complex unless the presence requirement is met. (And note: You used to be hand out Starbucks cards unless you plan on going, but now don’t hand them out at all.)
  2. Remember that a lobbyist may not spend more than $500 per year on entertainment for any one person, and if an entity is making the expenditure, it is governed by the same cap…
  3. Recognize that any transportation or lodging, with limited exceptions, should be paid for in advance at fair market value. Some exceptions include:
    (1) fact-finding trip to explore a matter related to the member’s or employee’s duties, or
    (2) trip in connection with a conference, educational program, or similar event at which the member or employee provides services that are “more than merely perfunctory” (giving a speech or participating on a panel, etc.)
  4. Incidental transportation allowed, but must be reported.
  5. If someone is a registered lobbyist it is not advisable to split expenditure with another person – unless they are also a registered lobbyist. (Splitting expenditures with a non-registrant still requires you to report the non-registrant’s part, but you are no longer exposed under the Penal Code. However, the non-registrant is and the total amount of some expenditures is limited to $500.) Entity expenditures should be avoided whenever possible.
  6. If you provide written or oral information to a member, then determine that it is not true, you have to correct it or run the risk of a criminal complaint.
  7. If you are having a conference, paying for the travel and lodging for the state official and spouse to participate is allowed within certain guidelines, but paying for guests to attend is not allowed.
  8. Expenditures involving local officials and employees are risky. 
Make sure you know how much of that risk you are willing to undertake.
  9. Most regulatory employees will not think that they are being lobbied and that they are subject to the lobby law. Know that they are.
  10. Don’t mix corporate activities with any campaign activity. Period.
  11. No political contributions during the session (through veto period) – and that includes caucuses. Does not include special sessions.
  12. Remember the Tiger Woods, General Petraeus, Anthony Weiner Test: Are you sure you want the world to read your e-mails or texts? If not, don’t write it.

When in doubt, err on side of caution – actions impact more than just you.

More detailed information from Texas Ethics Commission Guide to Lobbying in Texas:

RESTRICTIONS ON EXPENDITURES

The lobby law contains a number of restrictions on expenditures by lobbyists.  An entity that avoids registration by having one or more individual registrants report all the entity’s reportable activity on its behalf becomes subject to the restrictions on the earlier of the date the entity makes the expenditure that would have required the entity to register as a lobbyist or the date the entity receives, or is entitled to receive compensation or reimbursement that would have required the entity to register as a lobbyist.  1 T.A.C. § 34.45(b).  The restrictions apply both when the lobbyist makes an expenditure and when someone other than a lobbyist makes an expenditure on the lobbyist’s behalf with the lobbyist’s consent or ratification. Ethics Advisory OpinionNo. 30 (1992). Moreover, lobbyists should be aware not only of the restrictions on expenditures in the lobby law, but also the restrictions in Chapter 36 of the Penal Code.

The lobby law also contains a number of restrictions on acceptance of lobby expenditures by state officers, state employees, immediate family and guests of state officers and employees, candidates for state offices, and officers-elect.

Bribery. Under the bribery statute, Section 36.02 of the Penal Code, a person may not offer, confer, or agree to confer on a public servant, and a public servant may not solicit, accept, or agree to accept, a “benefit” as consideration for a decision, opinion, recommendation, vote, or other exercise of discretion by the public servant.

Cash Gifts and Loans. A registrant may not give a state officer or employee a gift of cash or a negotiable instrument. Nor may a registrant loan money or provide a guarantee or endorsement of a loan to a state officer or employee, unless the registrant is a corporation or other business entity that has been legally engaged in the business of lending money for more than one year before the loan is made and makes the loan in the due course of business. (An individual related to the state officer or employee within the second degree by consanguinity or affinity is not subject to either of these restrictions.) Gov’t Code §§ 305.024, .025(1), (2), (6). An expenditure by a lobbyist of less than $200 that is fully reimbursed by a state officer or employee before it would otherwise be reportable by the lobbyist is not considered a prohibited loan or a reportable lobby expenditure. 1 T.A.C. § 34.1 (definition of expenditure).

The prohibitions against cash gifts and loans do not apply to political contributions. (Texas campaign finance laws generally prohibit corporate contributions or expenditures to support or oppose a candidate or officeholder.)

Transportation and Lodging. A registrant may not provide transportation or lodging to a state officer, state employee, or immediate family or guests invited by a state officer or employee for a ceremonial event or pleasure trip. Gov’t Code § 305.024(a)(2)(A). A lobbyist may make necessary expenditures for transportation and lodging for the following purposes only:

  • to explore matters directly related to the state officer’s or employee’s duties, such as a fact-finding trip, including attendance at an informational conference, seminar, educational program, or attendance at an event where the state officer or employee provides services (such as giving a speech or participating on a panel) that are “more than merely perfunctory.”

  • a trip in connection with a conference, educational program, or similar event, if the state officer or employee provides services at the event (such as giving a speech or participating on a panel) that are “more than merely perfunctory.”

Id. at § 305.025(3), (4). A registrant may also make an incidental expenditure for transportation, such as an expenditure for a short ride in a car or taxi. Id. § 305.025(5); 1 T.A.C. § 34.13. The registrant must be present either on the trip or at the event for which the expenditures were made.

Food, Beverages, and Entertainment. A registrant may provide food or beverages to a state officer or state employee, or immediate family or guests invited by a state officer or employee only if the registrant is present at the event. A registrant may also make necessary expenditures for food and beverages provided in connection with a conference, seminar, educational program, or similar event in which the state officer or employee provides services (such as giving a speech or participating on a panel) that are “more than merely perfunctory” and the registrant is present at the event. Gov’t Code § 305.027.

However, the registrant does not need to be present if the expenditure is for food or beverages with a value of $50 or less, is intended as a gift for the state officer or employee, and is delivered by first-class United States mail or by common or contract carrier outside the Capitol Complex. Gov’t Code § 305.024(a)(2)(E).

There is no monetary limit on the expenditures a registrant may make for food or beverages.

Entertainment . A registrant may provide entertainment to a state officer or state employee, or immediate family or guests invited by a state officer or employee only if the registrant is present at the event. A registrant is subject to an aggregate $500 maximum annual expenditure limit for entertainment for an individual state officer or employee, or immediate family or guests invited by a state officer or employee. Gov’t Code § 305.024.

As of September 1, 2007, the total value of a joint expenditure for entertainment may exceed $500 IF each portion of the expenditure is made by a registrant and each portion of the expenditure does not exceed $500.  Note that each registrant remains subject to the $500 expenditure annual threshold.

A registrant may also provide necessary expenditures for entertainment provided in connection with a conference, seminar, educational program, or similar event in which the state officer or employee provides services (such as giving a speech or participating on a panel) that are “more than merely perfunctory” and the registrant is present at the event. Gov’t Code § 305.025.

Gifts. A registrant may provide one or more gifts to a state officer or state employee, or to immediate family or guests invited by a state officer or employee, up to a maximum expenditure total of $500 per officer, employee, immediate family, or guest during a calendar year. Gov’t Code § 305.024(a)(2)(C). (“Gift” in this context does not include transportation, lodging, or entertainment, but may include food or beverages in some circumstances.) A gift is illegal if it makes the lobbyist’s total expenditures for gifts to a particular state officer or employee, or immediate family or guest invited by a state officer or employee, exceed $500 in that calendar year.

As of September 1, 2007, the total value of a joint expenditure for a gift may exceed $500 IF each portion of the expenditure is made by a registrant and each portion of the expenditure does not exceed $500.  Note that each registrant remains subject to the $500 expenditure annual threshold.

Gifts from a lobbyist related to the state officer or employee, or immediate family or guest invited by a state officer or employee, within the second degree by consanguinity or affinity are not subject to this expenditure limit. Id. § 305.025(2).

Note: Although the restrictions in the lobby law are generally stricter than the restrictions on gifts to public servants in Chapter 36 of the Penal Code, in some circumstances, a registered lobbyist may actually be able to give a more valuable gift to a state officer or employee than a person who is not registered as a lobbyist.

Awards or Mementos. An award or memento is treated differently from other types of gifts. A lobbyist may provide an award or memento to a state officer or state employee, or their immediate family or invited guest, if it is not valued at more than $500. Gov’t Code § 305.024(a)(2)(D). An expenditure of more than $500 for a single award or memento is illegal, but there is no annual limit on the number of awards or mementos that a lobbyist may provide to a state officer or employee, or their immediate family or invited guest.

As of September 1, 2007, the total value of a joint expenditure for an award or memento may exceed $500 IF each portion of the expenditure is made by a registrant and each portion of the expenditure does not exceed $500.

Presence Requirement. In order to pay for food and beverages, entertainment, transportation, lodging, or the cost of attendance at a fundraiser or charity event for a state officer or state employee, or their immediate family or invited guest, a registrant must be present “at the event.” Gov’t Code §§ 305.006(f), 305.024(a)(2)(E). When the person who makes a lobby expenditure is an entity other than an individual, the presence requirement is satisfied if an individual registrant who represents the entity is present, or if an individual who has management or supervisory authority for the event is present. 1 T.A.C. § 34.17.

Political Fundraisers and Charity Events. A registrant may not make an expenditure for the attendance of a state officer or employee at a charity event unless the registrant is present at the event.

Political Contributions. Lobbyists are not prohibited from making campaign or officeholder contributions. The campaign finance law, however, generally prohibits corporations and labor organizations from doing so. Elec. Code § 253.094.

Honoraria. Section 36.07 of the Penal Code provides that “[a] public servant commits an offense if the public servant solicits, accepts, or agrees to accept an honorarium in consideration for services that the public servant would not have been requested to provide but for the public servant’s official position or duties.” Thus, a gift to a state officer or employee that is permissible under the lobby law may nonetheless be prohibited under the honorarium provision.

An exception to this prohibition allows transportation, lodging, and meals to be provided for a public servant in connection with a conference or similar event at which the public servant renders a service that is “more than merely perfunctory.” Ethics Advisory Opinion No. 93 (1992).

OTHER RESTRICTIONS

Contingent Fees. It is illegal for a person to retain or employ another to influence legislation or administrative action, or to accept employment or render any services to influence legislation or administrative action, when compensation for that employment or service is totally or partially contingent on the passage or defeat of any legislation, the governor’s approval or veto of any legislation, or the outcome of any administrative action. Gov’t Code § 305.022.

Exceptions. The contingent fee prohibition does not prohibit payment or acceptance of compensation that is expressly authorized by some other law or compensation for legal representation before a state administrative agency in a contested hearing or similar adversarial proceeding prescribed by law or administrative rules. Id. § 305.022(d). The prohibition also does not apply to a sales commission payable to an employee of a vendor of a product or service if the amount of the state agency purchasing decision does not exceed $10 million. Nor does the prohibition apply to a quarterly or annual compensation performance bonus payable to an employee of a vendor of a product or service. Id. § 305.022(c). The term “employee” means a person employed full-time by an employer to perform services for compensation. The term does not include an independent contractor or consultant. Id. § 305.022(e). A sales commission or other such fee payable to an independent contractor of a vendor of a product or service is not a prohibited contingent fee if the amount of the state agency purchasing decision does not exceed $10 million and the independent contractor is a lobby registrant who reports the vendor as a client and reports the full amount of the commission or fee as required by section 34.73 of the Ethics Commission Rules. Id. § 305.022(c-1). The contingent fee prohibition also does not prohibit a commission or fee paid to a person by a state agency if the person paid the commission or fee is a lobby registrant who reports the state agency as a client and reports the full amount of the commission or fee as required by section 34.75 of the Ethics Commission Rules. Id. § 305.022(c-2).

Conflicts Of Interest. The lobby law sets out circumstances in which a lobby registrant may not represent a client. Gov’t Code § 305.028. The lobby law also sets out circumstances in which a lobby registrant may represent a client only if the registrant satisfies certain conditions. On each report filed with the Ethics Commission, a lobby registrant must affirm that he or she has complied with the statutory provisions regarding conflicts of interest.

False Communications. A person violates Section 305.021 of the Government Code if, for the purpose of influencing legislation or administrative action, the person knowingly or willfully makes a false statement or misrepresentation of fact to a state officer or employee. It is also a violation of this section to cause a copy of a document the person knows to contain a false statement to be received by a state officer or employee without notifying the state officer or employee in writing of the truth.

Access to the Floor of the Legislature. A lobbyist may not go on to the floor of either house of the legislature while that house is in session unless invited by that house. Gov’t Code § 305.023.