Alert: Reminder of Obligation to File a Report or Certification on Political Contributions in Pennsylvania
For more info, contact:
01.27.14
Under the Pennsylvania Election Code, 25 P.S. § 3260(a), companies, partnerships and other entities that are awarded non-bid contracts by the Commonwealth of Pennsylvania or any of its political subdivisions during the preceding calendar year (“Covered Entities”) must file a report of political contributions with the Pennsylvania Secretary of State by February 15 of the current year. This report must list all political contributions made in the preceding calendar year (x) by the officers, directors, associates, partners, limited partners,[1] individual owners, members and employees of the Covered Entity,[2] and members of their respective immediate families[3] (collectively, “Covered Persons”) (y) to state and local elected officials and candidates for state and local elected office[4] (z) if a Covered Person’s contributions exceeded $1,000 in the aggregate for all candidates and officials in that year. A form of report is attached to this client alert as Annex A. Information from filed reports will be made publicly available by April 15 of each year.
A Covered Entity must file a certification even if none of its Covered Persons made contributions that met the above criteria. A form of this certification is attached to this client alert as Annex B. The obligation to file reports or certificates continues until the non-bid contract terminates or the financing is repaid.
“Bid” contracts are contracts issued through requests for bids issued under the commonwealth procurement code or a similar statute and, conversely, “non-bid” contracts are contracts that do not involve a bidding procedure. Examples of non-bid contracts include (this list is not exhaustive): (i) a negotiated investment by a state authority in a development joint venture, (ii) a non-bid loan or other funding agreement entered into with a state source or quasi-governmental organization that manages state funds like the Philadelphia Industrial Development Corporation or Pennsylvania Department of Community and Economic Development or (iii) a negotiated investment by a Pennsylvania state or municipal pension authority (such as PSERS or SERS) in an investment fund.[5]
Each Covered Entity must file a report that lists all qualifying contributions by all of its Covered Persons. With respect to employees of the Covered Entities and their immediate families, only those contributions actually known to the entity’s management at the time of filing the report must be listed (based on, for instance, an annual survey sent to each employee). If a Covered Person contributes more than $1,000 in the aggregate to certain candidates and officeholders, all of the Covered Person’s contributions must be listed even if the contributions to each individual candidate or officeholder did not exceed $1,000 in the prior year.
Please call Keith Kaplan at (215) 569-4143 or Jon Katona at (215) 569-4222 if you have any questions about this obligation.
This client alert addresses reporting obligations under the Pennsylvania Election Code, 25 P.S. § 3260(a), only. There are other political contribution regulations governing restrictions on contributions and reporting contributions in Pennsylvania and its municipalities, including the City of Philadelphia. In addition, other states may have similar reporting obligations. If you have questions about other reporting obligations, please contact us.
[1] An investment fund is not required to report the political contributions of its unaffiliated limited partners as long as the unaffiliated limited partner does not directly enter into an agreement with the state authority.
[2] If a partnership or other contractor, which is managed by a management company, enters into a non-bid contract with a state authority (where, for instance, the management company negotiates the contract on behalf of the contractor), the management company must file the report with respect to its Covered Persons too.
[3] A person’s “immediate family” includes his or her spouse and unemancipated children.
[4] For the avoidance of doubt, contributions to out-of-state elected officials and candidates for out-of-state office need not be disclosed. However, contributions to political committees registered in Pennsylvania should be disclosed.
[5] The investment fund itself, its management company and general partner would be required to file the report. In addition to the obligation imposed by the statute, state authorities sometimes include provisions in their side letter agreements that the fund’s general partner must provide copies of the reports to them by February 15 of each year.
In addition, state universities generally are excluded from the definition of state authority for the purposes of this statute but you should check with counsel to confirm whether a specific state university is excluded.