New Guidance on Lobbyist Reporting and Termination
Click here for the full PDF version of the Political Activity Law Bulletin.
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.