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Indiana Lobby Registration Commission

ILRC > Advisory Opinions > Final Advisory Opinions > FINAL ADVISORY OPINION 97-01 Advisory Opinions

FINAL ADVISORY OPINION 97-01
Parent / Subsidiary Disclosure

Indiana Lobby Registration Commission

(Determination made at public meeting of July 22, 1997)
(Ratification at public meeting of January 28, 1998)

VOTES ON RATIFICATION:

Chairman Bepko (in absentia) - yes
Vice-Chairman Krahulik - yes
Commissioner Hicks - yes
Commissioner Abbs - yes

Questions and written comments may be directed to 
Indiana Lobby Registration Commission,
115 W. Washington, Suite 1375, Indianapolis, IN 46204
(317) 232-9860


Determination

Only the corporate entity which hires the lobbyist or incurs the lobbying expenditure must report and register.

Example

"X" corporation is a multi-state provider of electricity and natural gas for business and consumer users. "Y" is its wholly-owned subsidiary with primary responsibilities for a geographical area within the state of Indiana. Y engages in lobbying activit ies in Indiana. X is not required to register as a lobbyist by virtue of Y's lobbying activities, even though X is the sole owner of Y.

Rationale

"Lobbying" means "communicating by any means, or paying others to communicate by any means . . ." I.C. 2-7-1-9.

When a subsidiary or otherwise related corporation hires its own lobbyist, the parent is not hiring the lobbyist. The parent has not itself communicated with the legislature, and nor has it paid another to communicate under such facts. Likewise, when a parent corporation hires a lobbyist, the subsidiary or otherwise related corporation has not communicated with the legislature, and not has it paid another to communicate by virtue of the parent corporation's lobbying activities.

The corporate entities authorized by law are observed, and the corporate veil will not be pierced for the purposes of requiring disclosure on behalf of the parent corporation, unless it appears that the parent is using a subsidiary corporation as a means of avoiding the lobbying registration laws. Such arrangements may not be used to willfully avoid lobby disclosure laws. A parent corporation may not do all of its lobbying through its subsidiary corporations with the intent of avoiding disclosure. Subs idiary corporations may not exist as a "lobbying shells." If the primary reason for the existence of the subsidiary corporation is that the subsidiary corporation may hire lobbyists whose lobbying efforts benefit primarily the parent corporation, then th e parent corporation must register and report as the employer lobbyist for those lobbying efforts