Advisory Opinion NO

QUESTION PRESENTED

Whether a consultant who assists a local government in the preparation of a proposal for a grant from the state government, advocates for the award of the grant, and accepts a small percentage of the grant award as compensation is in violation of the prohibition on contingent fees for lobbying under O.C.G.A. § 21-5-76(a), where there is no intergovernmental agreement or other “contract” between the local government and any state agency.

ADVISORY OPINION

Advisory Opinion C.F.C. 2013-01

The Georgia Government Transparency and Campaign Finance Commission (the “Commission”) has received this request for advisory opinion from the law firm of Holland & Knight LLP.

The Georgia Government Transparency and Campaign Finance Act (the “Act”) provides that

No lobbyist shall be employed for compensation contingent, in whole or in part, upon the passage or defeat of any legislation, upon the adoption or decision not to adopt any state agency rule or regulation, or upon the granting or awarding of any state contract.

See O.C.G.A. § 21-5-76(a).

A person is deemed a lobbyist under the Act in a number of alternative situations. See O.C.G.A. § 21-5-70(5). If a person falls within any of those enumerated definitions, then that person must register with the Commission as a lobbyist. See O.C.G.A. § 21-5-71(a)(1). Under the Act, once a person is deemed and registered as a lobbyist, he or she is prohibited from being employed on a contingent fee basis upon the granting or awarding of any state contract. Code Section 21-5-76(a) does not provide for any exceptions to this prohibition depending upon the scope of the lobbyist’s engagement. Thus, a person cannot shed the lobbyist mantel by claiming his or her work is a consulting job not within the scope of his or her lobbying activities.

The Act does not define the word “state contract.” Likewise, the Act does not provide a definition of the term “grant.” While no Georgia court has directly addressed the question of whether a grant is a contract, a review of federal law reveals that grant agreements are routinely deemed “contracts.” See, e.g., Knight v. U.S., 52 Fed. Cl. 243, 251 (2002)(“A grant agreement is an enforceable contract in this court.”); Heart of Valley Metropolitan Sewage Dist. V. U.S. E.P.A., 532 F. Supp. 314, 317 (E.D. Wis. 1981)(“[S]uch a grant agreement is a contract enforceable in the Court of Claims.”); 42 U.S.C. § 5908(m)(2)(“[T]he term ‘contract’ means any contract, grant, agreement….”); Ozdemir v. U.S., 89 Fed. Cl. 631, 639 (2009)(‘[T]he word ‘contract’ encompasses a wide range of formal agreements, including [grants]….”); County of Suffolk, N.Y. v. U.S., 19 Cl. Ct. 295, 300 (1990)(characterizing dispute related to two federal grant agreements as a breach of contract action). But see City of Manassas Park v. U.S., 224 Ct. Cl. 515, 521 (1980)(holding claim related to grant agreement not contractual); Trauma Serv. Group, Ltd. v. U.S., 33 Fed. Cl. 426, 429 (1995)(“Not every agreement is a contract.”). In light of this persuasive authority, the Commission finds that a grant can be a state contract as the term is used in O.C.G.A. § 21-5-76(a). But the Commission does not find that every grant is such a contract.

Accordingly, the Commission finds that the Act does not prevent a consultant who is not a lobbyist from being employed on a contingent fee basis upon the granting or awarding of any state contract. The Commission finds, however, that a consultant who is a lobbyist and who assists a local government in the preparation of a proposal for a grant from the state government, advocates for the award of the grant, and accepts a small percentage of the grant award as compensation could be in violation of the prohibition on contingent fees for lobbying under O.C.G.A. § 21-5-76(a). Because the question of whether a grant agreement is a state contract is factual and must be determined on a case-by-case basis, the Commission finds that it cannot offer a bright line test in response to the question presented.


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