Originally published in Political Activity Law Bulletin, June 11 2009
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The Clerk of the House and the Secretary of the Senate recently
issued additional guidance regarding Lobbying Disclosure Act
("LDA") reporting requirements and the conditions under
which a lobbyist's registration may be terminated. The notice
issued June 5th is intended to address some of the most common
questions that have come up as many registered federal lobbyists
have filed terminations in the wake of the strict restrictions on
lobbyists' activities and job prospects imposed by the Obama
Administration. The June 9th revisions to the standard LDA guidance
are in response to comments received by the Secretary and Clerk and
issues that have arisen concerning LDA compliance over the
preceding six months.
June 5th Notice
The notice issued June 5th clarifies that each LDA registrant and
each individual who "is registered or required to
register" under the LDA must file an LD-203 semiannual
contributions report. Accordingly, individuals who were in fact
listed on LD-2 quarterly reports must submit contributions reports
under the "is registered" prong of the test, even if
those individuals never actually satisfied the two lobbying
contacts, 20% lobbying activities registration threshold.
Further, the notice explains that merely amending a previously
filed LD-1 registration form or LD-2 reporting form does not
relieve a lobbyist or registrant from the obligation to file a
contributions report. The notice states, "Filers are expected
to use reasonable care when filling out and submitting LD-1, LD-2,
and LD-203 forms," the import being that being inadvertently
listed as a lobbyist on an LD-2 should not excuse that individual
from the obligation to file an LD-203.
The only means to free an individual from the obligation to file an
LD-203 semiannual report is to terminate that individual's
lobbying registration by listing his/her name on Line 23 of the
registrant's LD-2 quarterly report. The guidance states that an
individual may be listed on Line 23 (and therefore be terminated as
a "registered lobbyist") only if: (1) the
individual's lobbying activities on behalf of the client did
not constitute 20% or more of the time that the individual engaged
in total activities for the client during the current calendar
quarter, and is not reasonably expected to constitute 20% or more
in the upcoming quarter; or (2) the individual did not make more
than one lobbying contact on behalf of the client in the current
calendar quarter, and does not reasonably expect to make more than
one lobbying contact on the client's behalf in the upcoming
quarter.
The second condition for termination listed above is particularly
noteworthy because it appears inconsistent with the registration
standard supplied in the statutory text of the LDA itself. The LDA,
as well as prior House and Senate guidance, make clear that an
individual qualifies as a lobbyist by spending 20% of his/her time
engaged in lobbying activities for a client in a calendar quarter
and making two or more lobbying contacts over the course of
services provided for that client (even if the second contact
occurs in a later quarter). Thus, an individual qualifies as a
lobbyist if he/she made two or more lobbying contacts at any point
during their work for a client, and not merely in the current or
subsequent calendar quarter.
We believe the guidance contained in the notice could be read to
mean (and likely was intended to mean) that an individual can
deregister if he or she has never met the "two contacts"
test, does not meet that test in the current quarter and does not
expect to meet it in the upcoming quarter, but the language
actually used in the notice does not quite match up with that
result. To the extent this new guidance seems to create a
discrepancy with the plain meaning of the statute, we believe the
Clerk and the Secretary may revisit this part of their advice to
lobbyists and registrants in the near future.
June 9th Revised LDA Guidance
The Clerk of the House and the Secretary of the Senate have indicated they plan to update the LDA Guidance on a semiannual basis. The most recent update, issued June 9th, incorporates the information described above in the June 5th notice. Additionally, the update includes the following revisions and clarifying statements:
- Persons trigger LDA registration on the earlier of the
following two dates: (1) the date their employee/lobbyist is
employed or retained to make more than one lobbying contact on
behalf of a client and meets the 20% time threshold; or (2) the
date their employee/lobbyist in fact makes a second lobbying
contact and meets the 20% time threshold.
- Registrants reporting lobbying expenses using the tax reporting
method may not subtract grassroots lobbying expenses from the
amount reported.
- Contributions to state and local candidates and political
committees are not reportable on the LD-203 semiannual
contributions report unless the contribution recipient is
registered with the Federal Election Commission.
- Contributions to a charitable organization established by an
individual before he/she became a covered official are not
reportable on the LD-203 semiannual contributions report if the
individual no longer has a relationship with the
organization.
- A covered official's de minimis contribution to a
charitable organization (in proportion to the organization's
overall receipts) is not determinative as to whether the official
finances, maintains, or controls the organization for purposes of
LD-203 reporting.
- A covered official who serves as a non-voting (e.g., honorary
or ex-officio) board member of an organization is not considered to
control that organization for purposes of LD-203 reporting.
- Costs relating to sponsorship of a non-preferential, multi-candidate primary or general election debate for a particular office are not reportable on the LD-203 semiannual contributions report.
This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.