Oheka Castle owner Gary Melius was not a registered lobbyist, even though he was hired to help get laws passed that would boost his client Interceptor Ignition Interlocks Inc. But whether he engaged in actual lobbying and violated state law by not reporting it hinges on what exactly Melius did to assist his former associates, experts on public integrity laws say.
According to state law, the term lobbying means "any attempt to influence . . . the passage or defeat of any legislation" or certain other decisions at the state level. It makes exceptions for those engaged in "drafting, advising clients on or rendering opinions" on laws, among other activities. Suffolk County has a similar law.
Melius, the politically influential Long Island developer who survived being shot in the head at Oheka last week, had been battling Interceptor in court over company shares he said he was owed for his efforts at getting a law passed in Suffolk County that would require ignition-locking technology that Interceptor could provide.
In 2009, New York passed a measure requiring felony drunken drivers to install ignition locks that mandate a breath test to determine drivers' blood-alcohol level before the car can start. It took effect in August 2010.
Interceptor's founder, John Ruocco, hired KNET Inc., a company controlled by Melius, in June 2010 to "work with others to amend the laws in certain states of the United States" to require ignition locks similar to those made by Interceptor, according to a signed contract filed in the court case. The agreement also called for Melius to "assist [Interceptor] in obtaining certification" as a provider of ignition locks, and to introduce Interceptor to local, state or federal public officials and automobile insurers.
The locks made by Interceptor were designed to track cars' location, take photographs of drivers as they blow into the breath analyzer, transmit information to authorities in "real-time" and contact 911 if a driver fails the breath test, Melius' attorneys wrote in a court document.
According to a ruling in the lawsuit, by Supreme Court Justice Thomas Whelan, Melius' contract called for him to receive 2.8 million shares in Interceptor in exchange for "the enactment or amendment of laws" requiring the technology offered by Interceptor. In his ruling, the judge stated, "such a law was passed in 2010 in Suffolk County." As a result, Melius should get his Interceptor shares, the judge concluded.
Extent of Melius' role eyed
But Whelan's ruling doesn't spell out exactly what Melius did -- leaving plenty of legal wiggle room for determining whether he complied with the state's lobbying law.
Just because Melius was hired to "work for" or "assist with" the passage of a certain law doesn't mean he actually engaged in lobbying or needed to register as a lobbyist, said David Grandeau, the former head of the New York State Commission on Lobbying.
It all depends on what Melius actually did, said Grandeau, who is now an attorney in private practice. "Assistance could mean doing research. It could mean identifying what legislators are susceptible . . . " said Grandeau, adding that those activities do not constitute lobbying as the state defines it.
" 'Work with others' can be as simple as managing a lobbying effort," Grandeau said. "I have lots of clients who manage lobbying efforts, but don't actually lobby."
The attorneys who represented Melius in the lawsuit, Paul Sweeney and Tony Dulgerian, did not return calls for comment Tuesday.
Grandeau said Melius would have had to register as a lobbyist if the contract between Melius and Ruocco "contained specific language that required 'lobbying,' " or if he engaged in an "attempt to influence" the passage or defeat of any proposed legislation. Such efforts could include meeting with elected officials or other county officials.
That said, Grandeau said the lobbying law outlaws paying lobbyists based on the success of their efforts -- so-called contingency contracts. If Melius lobbied and was paid for his success, that would seem to violate state law, Grandeau said.
Others contended the language in Melius' contract appears to call for lobbying.
"Normally when you're influencing policy and you're getting paid to do it, it's called lobbying," said Blair Horner, legislative director for the New York Public Interest Research Group.
"There are ways that you could thread the needle and be effectively lobbying without having to disclose it under the law," Horner said. "It all hinges on the specific of the case. That's why there's a watchdog entity in New York whose job it is to figure these things out and that's why individuals who engage in this kind of activity should be checking. What you're describing to me sounds like they're getting paid to lobby."
Stakes for lobbyists, officials
A spokesman for the state Joint Commission on Public Ethics said he could not comment on whether Melius or Interceptor sought an opinion on their activities, because such communications are confidential.
Suffolk County has its own laws on lobbying, which are similar to the state's law in certain ways. However, unlike the state, Suffolk bans political contributions by lobbyists.
Similar to the state's measure, Suffolk's legislation allows exceptions for those who draft laws and advise clients.
Those exceptions generally apply to attorneys and other "professionals who provide expert advice to the client, but don't engage with county officials to advocate for or against a particular proposal," said Paul Sabatino, a former chief deputy county executive for the county, who wrote Suffolk's laws on lobbying.
"To put it in plain English, somebody hired Melius to get legislation adopted," Sabatino said. "It sounds like lobbying to me."
Melius' Huntington estate serves as a 127-room hotel and opulent wedding venue. Many of the region's most powerful leaders in politics, real estate and law enforcement have attended or hosted events there. Melius also is a generous contributor to candidates across the political spectrum for county, state and federal office.
According to records of the state ethics commission dating back to 2007, neither Melius nor KNET has registered as a lobbyist. County records contain no references to Melius or KNET registering as a lobbyist.
Violating county or state laws on lobbying could result in stiff penalties. Under state law, anyone who expects to be paid, or spend, more than $5,000 to influence legislation must register as a lobbyist and file disclosures.
State law lays out fines of up to $25,000 and up to a year in jail for anyone who knowingly fails to file required reports as a lobbyist, or who improperly gives gifts to a public official.
Under the local law, anyone who earns or spends more than $1,000 to advocate for legislation must register as a lobbyist.
Elected county officials must file twice-yearly statements asserting they have not accepted contributions from lobbyists, Sabatino said. Those who break the lobbying law can face fines up to $1,000 and up to 1 year in jail.
With Sandra Peddie