Sex from a lobbyist is not considered a gift to officials

The timing of a ruling by the State Ethics Commission was perfect, some would say. It was adopted the day before Valentine’s Day. It came as the result of questions from an unknown attorney to the Secretary of State’s Lobby Compliance Division which oversees lobbyists in North Carolina. The question was purely hypothetical, asking if a lobbyist engaged in sex with an official (member of or staff member of a State legislator or some other official), it that reportable as a gift. Anyway, this is such a good story, why leave out any of the details. Here is the text of the ruling as presented in a letter from the State Ethics Commission to the Compliance Director of the Secretary of State’s office:

This is in response to your request for a formal advisory opinion submitted on behalf of the North Carolina Secretary of State (“the Secretary”). You have asked whether consensual “sexual favors or sexual acts” between a lobbyist and a designated individual constitute a gift or “thing of value” that would trigger the gift ban and reporting requirements of the Lobbying Law and whether those activities would fall within the definition of “goodwill lobbying” and trigger the Lobbying Law’s registration obligation. You have made this request in a general and largely hypothetical context, with little or no supporting facts. This response must therefore be likewise limited.

This opinion was adopted by the State Ethics Commission at its February 13, 2015, meeting.

Section 120C-303(a)(1) of the Lobbying Law restricts a registered lobbyist from giving a gift to a designated individual unless a gift ban exception applies. “Gift” is defined as “[a]nything of monetary value given or received without valuable consideration….” G.S. 138A-3(15). A lobbyist must report certain “reportable expenditures,” defined to include gifts and “things of value” greater than $10 per day given to a designated individual or immediate family member.

Consensual sexual relationships do not have monetary value and therefore are not reportable as gifts or “reportable expenditures made for lobbying” for purposes of the Lobbying Law’s expenditure reporting provisions. See G.S. 120C-402 and G.S. 120C-403.2 However, a lobbyist or lobbyist principal’s provision of paid prostitution services by a third party to a designated individual could constitute a gift or thing of value, albeit an illegal one, depending on the particular facts. You have not provided any information that this is an issue in this situation.

You have also asked whether consensual sexual relationships between a person and a designated individual could constitute “goodwill lobbying” and would thereby trigger the lobbyist registration requirements of the Lobbying Law, G.S. 120C-200. It is unclear why you have asked this question, because in the scant factual assumptions provided, you state that your question concerns a relationship between a “lobbyist” and a designated individual, so presumably the person in question is already registered. Indeed, if there were no lobbyist involved, there would be no need to even consider the application of the Lobbying Law’s gift ban or expenditure reporting requirements. However, in order to avoid the need to further address these issues, the Commission will respond to your question.

G.S. 120C-200 requires the registration of a “lobbyist,” which is defined as an “individual who engages in lobbying” and is employed by the lobbyist principal or receives payment for lobbying. G.S. 120C-100(a)(10). “Lobbying” includes both direct lobbying and “developing goodwill through communications or activities, including the building of relationships, with a designated individual … with the intention of influencing current or future legislative or executive action.” G.S. 120C-100(a)(9). Thus, if the lobbyist does not receive payment from the lobbyist principal for engaging in the sexual relationship which you reference, which the Commission presumes to be the case here, those activities would not constitute goodwill lobbying and would therefore not trigger a registration requirement.

In your December 15, 2014, request for a formal advisory opinion, you requested that the Commission publish this opinion in an unredacted form; thus you have waived confidentiality as provided for in N.C.G.S. § 120C-102(d).3

Please do not hesitate to call the Commission’s staff if you have any questions about the foregoing formal advisory opinion.

Nice to know that sexual favors by lobbyists to members of the General Assembly could result in favorable legislation without regard to the gift reporting law. One might wonder if the State Ethics Commission members or the State Ethics Commission staff can apply the ruling to themselves. No accusations; just thinking aloud, wondering. Click those links to get to know the SEC members and the SEC staff.

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