Pa. Ethics Commission fines lobby groups
Groups opposed bills to limit access to drugs for injured workers.
HARRISBURG — The Pennsylvania Ethics Commission fined a Philadelphia law firm's lobbying wings for late disclosure of their involvement in Twitter and advertising campaigns against workers' compensation bills.
The rulings, made public Friday, found that lobbyists failed to abide by the state's Lobbying Disclosure Law's public reporting requirements while orchestrating more than 100 tweets and other “indirect communication” messages meant to influence legislation in the state Capitol.
The outfits, PA Works Now and Citizens to Protect our Pennsylvania, agreed to pay a combined $29,080 in fines for failing to register with the Pennsylvania Department of State, which administers the disclosure law.
The groups spent more than $115,800 on professional lobbyists, online posts, billboards and flyers aimed at defeating two bills, according to the rulings. The bills would have limited injured workers' access to prescription drugs by creating a state-approved list of medications and dosages.
One bill was sponsored by Rep. Ryan Mackenzie, R-Lehigh. It was defeated in the House in 2017. The Senate spearheaded another version of the bill that Democratic Gov. Tom Wolf later vetoed.
The rulings do not say who fronted the lobbying groups.
PA Works Now was financed by the workers compensation law firm Pond Lehocky Stern Giordano, according to a June 2017 Morning Call story.
The story quoted one of the firm's partners, Samuel Pond, in opposition to Mackenzie's bill. The story also exposed how Pond's law firm owned its own pharmacy, Workers First, which its legal clients used for prescription medication that could have been reduced under the bill.
Pond Lehocky later funded Citizens to Protect our Pennsylvania to oppose a Senate bill that was a copycat version of Mackenzie's failed bill.
Pond did not respond to a call for comment on Friday.
To navigate the Commission's investigation, Pond Lehocky hired Matt Haverstick, a lawyer with expertise in handling state ethics cases and other legal matters involving state government.
“It was a negotiated resolution to a situation everyone, including the commission, acknowledged was a mistake,” Haverstick said Friday. “By ‘mistake,' I mean an accident. None of this was done intentionally.”
If at least $2,500 is spent to influence an issue in Harrisburg, the law gives lobbyists 10 days to register with the Department of State. The registrants then have to file quarterly reports detailing how much they spent on “direct [or] indirect” communication, meals or gifts to state officials.
The lobbying law is an important transparency tool, said Melissa Melewsky, a lawyer who is registered as a lobbyist for the Pennsylvania NewsMedia Association, which also is a registered lobbying outfit. The registration costs tied to it are cheap, too, for lobbyists, she said.
“It's not an onerous process,” Melewsky said.
PA Works didn't register its lobbying activities until 388 days after it started, the ruling states. The Citizens group also was late. Both groups missed quarterly expense reporting deadlines, too.
In February, 2017, Mackenzie introduced House Bill 18. It would have created a pre-approved list, or “formulary,” of opioids and other drugs for injured employees receiving medical care and financial assistance for lost wages under the Workers Compensation Act of 1915. Any nonapproved drugs would need to be sought through an appeals process overseen by the Department of Labor & Industry as well as a workers' compensation judge.
By the spring, Mackenzie was targeted by Pa Works Now's advertising blitz.
“House Bill 18 would destroy #injuredworkers rights to fair medical treatment. Tell @RepMackenzie to #StopHB18. paworksnow.com,” one May 17, 2017, tweet read.
A month later, the House postponed a vote on the bill after opposition mounted from police, teachers, construction workers, lawyers and doctors.
In September 2017, The Philadelphia Inquirer published a deeper investigative story into Pond Lehocky's pharmacy unit, finding it charged much higher prices for prescriptions. The firm later announced it was dropping its pharmacy unit, but not before the Republican-controlled Senate began adopting Senate Bill 936 to set up the formularies.
In January, the Citizens group began mailing thousands of flyers in opposition to the bill, a ruling states.
The Senate bill passed both chambers. Wolf vetoed it in mid-April.
Following formal complaints, the Ethics Commission initiated investigations against both outfits. The investigation found Citizens and PA Works Now failed to register as lobbyists until after Wolf 's veto — April 30 and May 24, respectively.
Pa Works and Citizens agreed to pay fines of $13,580 and $15,500 respectively, and promised to abide by the law.