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Advertising, Marketing & Promotions Alert >> New York Ethics Commission’s Proposed Regulation Draws Fire From Public Relations Firms

February 9, 2016

New York’s leading public ethics authority recently issued an Advisory Opinion expanding the reach of the State’s lobbying laws to public relations consultants. These rules could have far-reaching effects on the public relations industry.

The Advisory Opinion, however, has drawn fire from government officials, journalists and the public relations industry, who believe it raises serious practical questions and First Amendment concerns. For this reason, the new rules appear likely to be challenged in court.

In 2011, Governor Cuomo signed the Public Integrity Reform Act into law. The Act created the Joint Commission on Public Ethics, an independent agency with significant oversight over ethics and lobbying in the executive and legislative branches of State government.

The Joint Commission’s powers include advising public officials, administering financial disclosure and registration requirements, and enforcing violations of ethics and lobbying laws through the assessment of damages. As part of its mandate, the Joint Commission may issue advisory opinions interpreting and applying existing lobbying and ethics laws.

Definition of “Lobbying” & The Advisory Opinion
Since the passage of New York’s Lobbying Act in 1999, “lobbying” has been clearly and strictly defined as any attempt to introduce, pass or defeat a bill, executive order, or other government action.

Last week, however, the Joint Commission upended this long-settled definition by proposing to label certain public relations consultants as “lobbyists” and certain types of public relations activities as “lobbying.”

Under the Joint Commission’s proposed regulation, a public relations consultant falls within the newly expanded definition of lobbying if:

  • the byproduct of its communications is introducing, passing or defeating a bill;
  • the communications take a clear position on the bill; and
  • the communications attempt to “influence” a public official with respect to that bill.

Significantly, the Joint Commission’s interpretation of the term “influence” is very broad. It purports to cover any participation in the actual delivery of a message, whether oral or written. This means that public relations agencies may have to register as lobbyists for certain routine activities, such as acting as a spokesperson, pitching an editorial to a media outlet, or editing a press release. This is true regardless of whether the consultant specifically references a bill in its communication or whether a client retains final say over the content of that communication. In addition, the Joint Commission is currently considering yet additional rules concerning public relations activity on social media. These regulations would redefine certain public social media posts as lobbying and require disclosure of social media expenditures under the Lobbying Act. This is an especially significant development given the extensive involvement of public relations firms in social media.

If enacted, public relations consultants who receive more than $5,000 per year for their lobbying activities will fall within the purview of the Lobbying Act and thus be subject to extensive registration and reporting requirements. These reporting requirements include publicly disclosing the topics on which they are lobbying, the compensation they have received, and the identity of and any written agreement with their clients. The new regulations could go into effect as early as April 1, 2016.

Future Impact
If the Joint Commission’s Advisory Opinion is enacted, the impact on the public relations industry would be dramatic. Public relations consultants would be required to either cease their communications with interest groups, media outlets, and journalists, or face extensive registration and reporting requirements. In addition, public relations consultants could also face enforcement activity before the Joint Commission.

For these reasons, the Joint Commission’s Advisory Opinion has come under withering attack. Governor Cuomo’s office, despite noting that ethics reform is an administration priority, has said that the Advisory Opinion “raises some real questions.” Journalists have noted that these new restrictions could have a chilling effect on reporting news. Public relations trade organizations also have objected that the rules overreach and are vague.

In response to these criticisms, the Joint Commission issued on February 5 a series of clarifications to its Advisory Opinion.  It noted that certain types of vendors to public relations consultants, such as film crews or copywriters, are not required to register as lobbyists.  It also noted that journalists are not covered by the Advisory Opinion and that strictly "factual" communications between journalists and consultants do not trigger the Lobbying Act.  The Joint Commission’s clarifications indicate that it does not intend to apply the Lobbying Act to the entire public relations ecosystem.  However, the Joint Commission has thus far failed to address which core public relations activities would trigger New York's lobbying regulations.

As of this writing, the Joint Commission's rules appear headed for a challenge in the courts on First Amendment grounds. Under the First Amendment, restrictions on political speech must be justified by compelling government interest and be narrowly tailored to meet that interest. Here, however, public relations agencies and civil liberties groups claim that the Joint Commission’s rules are invalid because they cannot satisfy this test.

The Joint Commission’s mission to regulate ethics and lobbying requires balancing competing interests in transparency and free speech. According to many thought leaders, the Joint Commission’s recent Advisory Opinion swings the pendulum too far in one direction, and thus violates the First Amendment. Public relations agencies are best advised to wait before implementing expensive and possibly unnecessary changes since anticipated political and legal challenges could either nullify altogether, or dramatically reshape, the scope of the Joint Commission’s proposed rules. Davis & Gilbert will continue to monitor any legal challenges as they wind through the courts, and issue the necessary guidance in advance of the rules’ implementation.


The Bottom Line

The New York Joint Commission on Public Ethics’ recent Advisory Opinion expands the definition of lobbyist to include public relations consultants. In the process, it triggers onerous registration and reporting requirements for core public relations activities, such as acting as a spokesperson, pitching editorials, or editing press releases.

These rules, however, have been the subject of much controversy and criticism, and are likely to be challenged on First Amendment grounds. The industry, therefore, appears to be adopting a wait-and-see approach to these regulations.