• INTERACTING WITH PUBLIC OFFICIALS AND CAMPAIGN CONTRIBUTIONS

  • It is the policy of Pepco Holdings, Inc. and its affiliates (collectively, “PHI” or the “Company”) to maintain professional and productive relationships with public officials and to comply with all federal, state and local laws, rules, regulations and orders governing those relationships, including the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”).

    To keep government and regulatory officials informed about Company business, we maintain relationships with government employees and representatives including elected and appointed public officials (collectively, "public officials"). Employees and other persons representing the Company who are responsible for contact with state, federal and other levels of government must be totally familiar with, and abide by, any applicable specific standards adopted by the jurisdiction or any governmental body therein.

    Similarly, employees and other persons who work or on behalf of the Company who are not responsible for contacts with state, federal local government, but may from time to time come into contact with public officials, should always keep in mind the importance of maintaining professional and productive relationships with these officials and the importance of complying with all applicable federal, state and local laws, rules, and regulations.

    Lobbying: 

    PHI employees considered lobbyists (as defined by local, state and federal government rules and regulations), and other persons under contract to lobby on behalf of PHI, are expected to understand and follow applicable governmental laws, rules and regulations regarding lobbying, where required. These persons also are expected to be properly registered as lobbyists and where required to file all required reports.

    The federal government, each state, and certain localities have laws requiring registration and reporting by lobbyists and in some cases, also by the lobbyist’s employer. Lobbying activity generally includes attempts to influence the passage or defeat of legislation. The U.S. Government and many states, however, have extended the definition of lobbying activity to cover efforts to influence formal rulemaking by executive branch agencies or other official actions of agencies, including decisions to enter into contracts, or other financial arrangements. Moreover, “grassroots” activity (where one communicates with the public or segment of the public, such as PHI employees, encouraging them to call their representative or another public official for the purpose of influencing the passage of legislation or a rulemaking) is in many cases also considered lobbying activity.

    Generally, responding to requests for information from public officials, testifying before government agencies on the public record, and submitting comments on proposed regulations are not considered lobbying and do not require registration. However, specific requirements of lobbying registration laws are quite complex and vary from jurisdiction to jurisdiction. To ensure that PHI and its employees are in compliance with these laws, employees may not engage in any of the lobbying activities, as described above, on behalf of PHI, without prior approval of the Senior Vice President of Government Affairs and Corporate Citizenship.

    Furthermore, because maintaining good relationships with elected officials and government agencies requires that PHI present timely, accurate, and consistent information to elected officials and government agencies, employees and others working at or on behalf of PHI should not initiate contact with elected officials or government agencies on matters relating to the Company nor represent Company policies or positions on public issues (even if such activity does not constitute lobbying as described above) without the prior notification and approval of either Government Affairs and Corporate Citizenship, the Legal Services Group, or Regulatory Affairs (depending on which official or agency is to be contacted). Where in the judgment of a business unit head such prior notification and approval is not possible due to time constraints, he or she may approve action without such prior justification and approval, and provide appropriate information for coordination purposes after the fact.

    Contact the Senior Vice President of Government Affairs and Corporate Citizenship if you have any questions concerning lobbying or contacts with government officials or agencies.

    Compliance with the FCPA: 

    U.S. companies and their officers, employees and agents must comply with the provisions of the FCPA when doing business outside the United States. The FCPA prohibits giving or offering anything of value to a foreign official, whether inside or outside the United States, to (1) induce the recipient to misuse his or her official position, (2) obtain or retain business or (3) secure some improper advantage. “Anything of value” is defined broadly, and includes gifts, money, services, entertainment and meals above certain limits. A “foreign official” includes any officer, employee, candidate, agent, representative, official or de facto official of any non-U.S. government, military, government-owned or affiliated company, or political party, or any public international organization. The prohibition extends to the official’s friends and family members.

    Compliance with the FCPA is very complicated. The slightest mistake may expose both the Company and its employees to criminal prosecution, including the imposition of large fines and terms of imprisonment. Thus, all employees are required to contact the Office of the Vice President & Corporate Secretary before providing any gift, money, meals, entertainment, service, or other item of value to a foreign official, regardless of value and even if it is reasonably believed that the practice is lawful or commonplace in the foreign country.

    When doing business in a foreign country or with a representative of a foreign country, always maintain detailed and accurate records of transactions involving the Company. For purposes of FCPA compliance, certain employees will be required to provide the Company with detailed information regarding their contacts when doing business outside of the United States on behalf of the Company with any foreign country or any representative thereof, and employees may be required to periodically complete a questionnaire regarding FCPA-related matters or undertake and successfully complete appropriate FCPA compliance training.

    Campaign Contributions and Activities: Federal law and certain states prohibit a corporation, such as PHI, from making political contributions. This includes monetary contributions (e.g., in the form of a corporate check or a purchase of tickets to a political fundraiser) as well as "in-kind" contributions (e.g., the use of corporate personnel or facilities, or payment for services). PHI will not make corporate contributions that are prohibited under applicable law.

    To ensure that PHI is in compliance with these laws, all employees of PHI must comply with the following requirements:

    • Any proposed political contribution or expense incurred by PHI on behalf of any candidate, campaign, political party, political committee (e.g., a PAC or ballot measure committee), or any entity exempt from federal income taxes under Section 527 of the Internal Revenue Code must be approved in advance by the Senior Vice President of Government Affairs and Corporate Citizenship.
    • No corporate assets, funds, facilities, or personnel may be used to benefit any candidate, campaign, political party, or political committee (e.g., a PAC or ballot measure committee), or any entity exempt from federal income taxes under Section 527 of the Internal Revenue Code without advance approval by the Senior Vice President of Government Affairs and Corporate Citizenship.
    • You have the right, and are encouraged, to voluntarily participate in the political process and make personal contributions, as long as the following requirements are met, and if applicable, pre-clearance is obtained, as described under the pay-to-play section below:
      • If you anticipate causing any corporate funds or assets (such as corporate facilities or personnel) to be used in connection with your volunteer activity, you must obtain pre-approval, as described above.
      • If you choose to participate in a political process, you must do so as an individual, not as a representative of PHI. Indeed, any overt, visible, and partisan political activity that could cause someone to believe that your actions reflect the views or position of PHI requires the prior approval of the Senior Vice President of Government Affairs and Corporate Citizenship.
      • No one at PHI may make a political contribution to obtain or retain business or to obtain any other improper advantage.
      • PHI shall not directly nor indirectly reimburse or otherwise compensate any person for his or her personal political contribution.
      • No one at PHI may actually threaten force or reprisal against an employee to contribute to, support, or oppose any political group or candidate.
      • You may not work on a political fundraiser or other campaign activity during working hours unless you obtain pre-approval, as described above.

    Pay-to-Play Laws: Some states and localities have special laws that prohibit a company (i.e., PHI and its subsidiaries) from entering into a contract with governmental entity for a certain period of time if certain of its employees, employees of its affiliates, or their immediate family members make or solicit political contributions. To ensure compliance with these laws, if your position is included in the list below, you must obtain approval from the Senior Vice President of Government Affairs and Corporate Citizenship prior to making or soliciting political contributions at the state or local level, including contributions to candidates, officeholders, political parties, or other political committees (e.g., PACs), or to a state or local official running for federal office in that jurisdiction. The covered positions are:

    • Members of the Board of Directors of PHI and Pepco Energy Services;
    • Executive officers of PHI and Pepco Energy Services; and
    • Employees of PHI and Pepco Energy Services who deal with, or anticipate dealing with, state or local government agencies with regard to governmental contracts or agreements (such as soliciting or negotiating such contracts).

    An employee in a covered position must also obtain prior approval for political contributions made or solicited by his or her spouse or dependent child in the jurisdictions listed below (if a state is listed, prior approval is required for both state and local contributions or solicitations; prior approval is also required for contributions or solicitations for state or local officials running for federal office in the listed jurisdictions):

    --Connecticut, Illinois, Kentucky, New Jersey*, Pennsylvania* and Rhode Island.

    --Dallas, Denver, Los Angeles County Metropolitan Transportation Authority ("LA MTA") and San Antonio.

    *Pay-to-play laws in New Jersey and Pennsylvania cover civil union partners and life partners, respectively, in addition to spouses and children.

    (Note: "Pay-to-Play" list last updated November 2013)

    Contact the Senior Vice President of Government Affairs and Corporate Citizenship if you have questions about the restrictions listed above, including whether and how they apply to a particular situation.