Seventh Floor

1501 M Street, NW

Washington, DC 20005

Phone: (202) 466-6550 Fax: (202) 785-1756

MEMORANDUM

To: / PPSV Clients and Friends
From: / Ben Tesdahl
Date: / July 1, 2011
Re: / Lobbying Disclosure Requirements in HLOGA

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On September 14, 2007, President Bush signed into law the Honest Leadership and Open Government Act of 2007 (“HLOGA” or the “Act”). The Act includes a package of amended ethics and lobbying disclosure rules, including amendments to the Lobbying Disclosure Act of 1995 (“LDA”). These amendments impose greater restrictions and requirements on lobbyists and organizations employing lobbyists. The effective date of the most important changes set out in the new legislation is January 1, 2008.

As discussed further below, the new changes to the law will require many lobbying organizations to file quarterly LDA reports with Congress, rather than the semi-annual reports that had been filed in the past. In addition, a newly required report must be filed twice each year and signed by an organization official, confirming among other things that the organization and its lobbyists have not violated any of the rules regarding gifts to members of Congress.

Below is a brief overview of the LDA, including a summary of key changes that were made to this law. The summary below focuses primarily on the LDA reporting requirements of nonprofit and for-profit organizations lobbying on their own behalf with in-house lobbyists. If an organization solely hires outside lobbyists, it would not need to file LDA reports; instead, the outside lobbying firm would file its own reports and list the hiring organization as a client.

If you have any questions or need further guidance on the LDA, please feel free to contact Ben Tesdahl at Powers Pyles Sutter & Verville at the phone number above.

I. General Overview

Very briefly stated, under LDA amendments effective January 1, 2008, if any organization with one or more in-house “lobbyists” spends at least $10,000 (now adjusted for inflation to $11,500) in any calendar quarter on total “lobbying activities” (including salaries of in-house lobbyists plus the cost of outside lobbying firms), it must file quarterly reports with Congress. Each portion of the above requirement is explained in more detail below.

A. Who is Considered an In-House “Lobbyist”

LDA reporting is only a concern if an organization has one or more federal “lobbyists.” Consequently, it is important to first determine which employees may be lobbyists. An employee of an organization is considered a “lobbyist” for LDA purposes if he or she satisfies both of the following tests:

(i)  He/she is compensated for lobbying and spends at least twenty percent of his/her time on “lobbying activities” in any calendar quarter. The term “lobbying activities” includes not only direct lobbying contacts with federal officials but also all preparation and planning activities and all research and other background work that is intended at the time it is performed to be used in lobbying contacts.

(ii)  During the entire course of his/her entire employment with an organization, he/she makes more than one “lobbying contact” with a Congressional member or his/her staff or certain high-level Executive Branch officials. Specifically, the term “lobbying contact” means any oral or written communication (including electronic communication) to a "covered executive branch official" or a "covered legislative branch official" made on behalf of an organization with regard to:

a. the adoption or modification of Federal legislation or legislative proposals;

b. The adoption or modification of a Federal rule, regulation, Executive Order, or any other program, policy, or position of the U.S. Government;

c. The administration or execution of a Federal program or policy (including the negotiation, award, or administration of a Federal contract, grant, loan, permit, or license); or

d. The nomination or confirmation of a person for a position subject to confirmation by the Senate.

B.  If an Organization has In-House Lobbyists, How Much Must It Spend on Federal Lobbying to Have an LDA Reporting Obligation to Congress and When are Those Reports Due?

Beginning January 1, 2008, an organization must file quarterly reports (within 20 days after the end of each calendar quarter) with both chambers of Congress if the organization:

(i) has at least one employee during the calendar quarter who is a “lobbyist” (as defined above); and

(ii) spends at least $10,000 in that quarter in connection with all lobbying

activities. (The old reporting threshold was $24,500 semi-annually.) The $10,000 figure is adjust periodically for inflation and is now $11,500).

NOTE: In reporting its lobbying expenses, an organization should include the combined cost of salaries/overhead of its in-house lobbyists and the cost of any outside lobbying firms that were paid for lobbying during that quarter. So there is some double-reporting, because those outside lobbying firms will also be filing their own lobbying reports and listing the income they received from each of their clients.

C. What Gets Reported?

An organization’s quarterly LDA reports must include, among other things:

i. A list of the specific issues upon which lobbying occurred, including a list of bill numbers and reference to specific executive branch actions;

ii. A list of the chambers of Congress and the Federal agencies contacted by lobbyists for the registrant;

iii. A list of the employees of the registrant who acted as lobbyists on behalf of the client;

iv.  A good faith estimate of the total expenses that the registrant and its employees incurred in connection with lobbying, rounded to the nearest $10,000.

(The old rule had expenses rounded to the nearest $20,000 semi-annually.)

II. Other Key Changes to the Law Effective January 1, 2008

·  Electronic LDA reporting will be required.

·  A lobbyist must disclose any employment as a covered Executive Branch official or covered Legislative Branch official within the past twenty years. (The old rule required disclosure going back only 2 years.)

·  Associations and coalitions that receive over $5,000 per quarter from any organization for “lobbying activities” must disclose that funding organization’s name if that funding organization “actively participates” in the “planning, supervision, or control” of the association or coalition’s lobbying activities.

·  Registered lobbyists under the LDA (both individuals and organizations) will now be required to file a new semi-annual report identifying certain political contributions (if any). The reports are due by January 30 and July 30 of each year. As noted above, the new report also requires certification by the individual lobbyist or organization filing the report that the lobbyist or organization has read and is familiar with House and Senate gift rules, and that he/she has not knowingly provided, requested or directed a gift to a member, officer or employee of Congress that would violate these gift rules. This is a major change in the law because previously, only Members of Congress and their staff members were legally responsible for complying with gift rules.

·  The fifty dollar exception for gifts (including for meals and entertainment), has been eliminated. Thus, no gifts or meals may be given to members of Congress or their staffs, other than very narrow exceptions, such as refreshments of nominal value at a widely attended event.

·  There are now severe restrictions on Congressional travel, which can no longer be accepted from corporations and associations that are registered under the LDA, except under very limited circumstances.

·  If a “lobbying firm” earns at least $2500 in fees in any calendar quarter for its lobbying activities for a particular client, then the lobbying firm must file LDA reports for itself and list that client. (Previously, the threshold amount was $6,000 semi-annually.)

·  Congress modified “revolving door” rules so that Senators who leave office must wait two years (and Senate staff must wait one year) before they can lobby Congress.

III. Enforcement

Congress has increased the penalty for failure to comply with the LDA. The enforcement provisions are described below.

·  Noncompliance with the LDA could result in civil penalties up to $200,000 and criminal penalties of up to five years imprisonment and/or criminal fines for a “knowing, willful and corrupt” violation of any provision of the LDA. (The old rule had a $50,000 fine.)

·  The Comptroller General will conduct random audits to determine the extent of compliance with the LDA and issue an annual report to Congress.

·  The Attorney General must semiannually report to Congress the aggregate number of enforcement actions taken by the Department of Justice under the LDA, including any sentences imposed.

IV. Internet Resources

·  The House and Senate ethics rules that govern gifts (including meals and entertainment) and travel that may be provided to Members of Congress and staff can be found at the House and Senate websites: www.house.gov/ethics and http://ethics.senate.gov.

·  Further information about the LDA, including instructions on how to fill out LDA forms, is provided by the House and Senate at the following links:

http://lobbyingdisclosure.house.gov/amended_lda_guide.html

http://www.senate.gov/legislative/common/briefing/lobby_disc_briefing.htm

This memo is intended to be informational only and does not constitute legal advice or opinion. Specific questions should be addressed to PPSV legal counsel and/or the government authorities responsible for interpreting and applying the Act and the LDA.

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