Committee Approves Pileggi Bill to Close Contingent-Fee Lobbying Loophole

HARRISBURG – The vast majority of states and the federal government already prohibit all forms of contingent-fee lobbying, and Pennsylvania would join their number under legislation sponsored by Senator Dominic Pileggi (R-9) which was unanimously approved today by the Senate State Government Committee.

Senate Bill 388 will prohibit lobbyists from collecting contingency fees for any award of state taxpayer funds, including grants, loans, and capital projects. It’s already illegal in Pennsylvania to lobby on a contingent-fee basis for the passage of legislation or an amendment, the adoption of a regulation, or any activity that requires legislative action. However, a loophole in the current law means that it’s legal to lobby on a contingent-fee basis when a grant, loan, or other form of funding is sought from the state.

“Allowing lobbyists to advocate for grants or loans when their payment is contingent on whether or not the grant or loan is awarded creates dangerous incentives,” said Senator Pileggi. “That’s why this practice has been prohibited by the federal government and so many other states. It’s time for Pennsylvania to do the same. I’m pleased that Senator Mike Folmer, Chairman of the Senate State Government Committee and a cosponsor of the legislation, placed Senate Bill 388 on the Committee agenda today.”

According to the National Conference of State Legislatures, 43 states and the federal government currently prohibit contingent-fee lobbying. NCSL reports that, “Federal regulations governing contractors who lobby for government contracts specifically prohibit contingency fees on the grounds that they may induce lobbyists to exert ‘improper influence’ on public officials, in other words, inducing someone to act on any basis other than the merits of the matter.”

Senate Bill 388 now moves to the full Senate for consideration.

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Lisa Reisteter, (717) 787-4712