But the lobbyists, who are required under state law to disclose gifts and entertainment worth more than $50, divided the cost of his $83 meal — there was no need to include his wife’s meal — among the nine clients they represented before the General Assembly session. That pushed the official value of the gift to a little more than $9, so no disclosure was required.
Lobbyists who wine and dine state officials often report each meal as a gift provided by multiple clients, according to an analysis released Wednesday by the Virginia Public Access Project, a nonpartisan group that tracks money in politics. Some say the intention is to treat entertainment expenses as a basic cost of doing business, such as lodging in Richmond during the session, and to have all clients bear part of it.
But spreading entertainment costs across multiple clients also understates the value of gifts provided to legislators, who base their disclosure reports on gift summaries that lobbyists provide at the end of the year.
Although the practice is not necessarily intended to dodge reporting requirements, it is drawing more scrutiny as Richmond looks to tighten ethics rules in response to a gifts scandal that has consumed Gov. Robert F. McDonnell (R) and his family and spilled into the race to succeed him.
The firm Hunton & Williams spent $427 on dinner for three in December, or about $142 per guest. But split by six of the firm’s clients, the gift value, for reporting purposes, was about $24. The cost of a $7,000 Hunton & Williams reception for 45 guests in January was more than $150 a head. But with nine clients splitting the bill, the gift value was less than $20 a head. A representative for Hunton & Williams agreed to look into the reporting practices but did not respond by press time.
When asked about the VPAP data Wednesday, some of the most senior Republicans in state government said legislators need to examine, if not close, the check-splitting loophole.
“While this practice may comply with the letter of the law, it certainly violates the spirit of the law,” Lt. Gov Bill Bolling (R) said. “It is definitely a loophole that needs to be closed. Unfortunately, as we start digging into these things, I think we are going to find a lot of situations like this.”
House Speaker William J. Howell (R-Stafford) said the legislature will probably scrutinize that loophole when it reconvenes in January. “I think this is an area at which we should certainly look closely,” he said. “We need to ensure that our reporting requirements are strong and clear enough, but also simple, easy to understand and transparent.”
Virginia has some of the nation’s most permissive ethics laws, allowing officials to accept gifts of unlimited size. Yet the state also has had a proud history of clean government, something widely attributed to the requirement that officials report gifts worth more than $50.
The McDonnell scandal, now the subject of federal and state investigations, has largely revolved around another disclosure loophole: Gifts to family members do not have to be reported.
Star Scientific chief executive Jonnie R. Williams Sr. has showered luxury items, five-figure monetary gifts and $120,000 in loans on the governor and his family — most of which was undisclosed. Some of his largesse — including a Rolex watch and a $70,000 loan — was extended to the governor, but other gifts were given to his wife and children. McDonnell has said there was no need to report presents to other family members.
The scandal has bled into the race for governor because the Republican nominee, Attorney General Ken Cuccinelli II, received $18,000 in gifts from Williams and owned stock in Star.
Marsden and his wife were treated to the dinner by Mindy Williams Carlin and Michael P. Carlin, co-owners of Fairfax-based Access Point Public Affairs.
The Carlins reported the $333.27 entertainment expense on disclosure forms filed with the state this summer, but they did not identify whom they entertained. They did not have to, because divided among four diners and nine clients, the value fell well below the $50 threshold.
In an interview, Williams Carlin said they had entertained Marsden and his wife. Marsden confirmed that such was the case. He said someone could make “a valid argument” that splitting the check in that way undermines the spirit of disclosure rules. He said the General Assembly should take up that question, particularly “given what we’ve been through this year.”
“We need to settle one way or the other, either you can do that or you can’t,” he said.
The Carlins paid the tab and later divided the cost of the dinner across the nine clients they were representing before the General Assembly that session, including several chambers of commerce and I Drive Smart Inc.
Williams Carlin said dinners with legislators are more about relationship-building than pushing for or against specific legislation. And because that benefits all their clients, they all share the cost.
“When we are talking about an issue, we do that in a meeting or in their office,” she said. “For a typical dinner for us during session ... it’s really a time to decompress and really not talk about issues.”
Williams Carlin said she has consulted state officials on whether that is the proper way to report entertaining a legislator at dinner when no specific client’s issue was discussed. She said she has been told that state statutes are silent on that point.
“It has to be reported, obviously, because it’s an entertainment [expense],” she said. “I divide it like I do my lodging expenses. I divide it equally among the number of clients we register for.”
If the rules change, she said, “we will deal with it and follow the rules.”