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Historic Lobbying Disclosure Act Guidance
(not valid for post January 1, 2008 filings)
Chapter 1: Section 1: Introduction
Chapter 2: Section 2: What is New?
Chapter 3: Section 3: Definitions
Chapter 4: Section 4: Lobbying Registration
Chapter 5: Section 5: Special Registration Circumstances
Chapter 6: Section 6: Semiannual Reporting of Lobbying Activities
Chapter 7: Section 7: Termination
Chapter 8: Section 8: Relationship of LDA to Other Statutes
Chapter 9: Section 9: Public Availability
Chapter 10: Section 10: Review and Compliance
Chapter 11: Section 11: Penalties
Section 1: Introduction
Section 6 of the Lobbying Disclosure Act ("LDA"), 2 U.S.C. § 1605, provides that: "The Secretary of the Senate and the Clerk of the House of Representatives shall (1) provide guidance and assistance on the registration and reporting requirements of this Act and develop common standards, rules and procedures for compliance with this Act; [and] (2) review, and, where necessary, verify and inquire to ensure the accuracy, completeness and timeliness of registrations and reports[.]"
The LDA does not provide the Secretary or the Clerk with the authority to write substantive regulations or issue definitive opinions on the interpretation of the law. The Secretary and Clerk have, from time to time, jointly issued written guidance on the registration and reporting requirements. This document is both a compilation of previously issued guidance documents and our interpretation of the changes that were made to the LDA as a result of the Lobbying Disclosure Technical Amendments Act of 1998 ("TAA"). The revised format addresses problems that the filing community has experienced to date in using the guidance documents, i.e., the lack of a "subject index" that quickly finds the answers to their specific topical questions and the need to refer to more than one source to research filing advice.
This compilation supersedes all previous guidance documents. This combined guidance document does not have the force of law, nor does it have any binding effect on the United States Attorney for the District of Columbia or any other part of the executive branch. To the extent that the guidance relates to the "accuracy, completeness and timeliness of registration and reports," it will serve to inform the public as to how the Secretary and Clerk intend to carry out their responsibilities under the LDA.
Section 2: What is New?
Lobbying Disclosure Technical Amendments Act of 1998
The TAA, enacted on April 6, 1998 (P.L. 105-166), amends the Lobbying Disclosure Act of 1995 in four areas. These changes were made in response to questions that had been raised during the first year of experience under the LDA.
Definition of Covered Executive Branch Official
The application of coverage of Section 3(3)(F) of the LDA ("who is a covered executive branch official?") was intended for "Schedule C" employees only. Senior Executive Service employees are not covered executive branch officials as defined in the Act unless they fall within one of the categories below. Covered executive branch officials are:
- The President
- The Vice President
- Officers and employees of the Executive Office of the President
- Any official serving in an Executive Level I-V position
- Any member of the uniformed services serving at grade 0-7 or above
- "Schedule C" employees.
Clarification of Exception to Lobbying Contact
Section 3(8)(B)(ix) excepts from the definition of "lobbying contact" communications "required by subpoena, civil investigative demand, or otherwise compelled by statute, regulations, or other action of the Congress or an agency." The TAA clarifies that communications that are compelled by the action of a Federal agency would include communications that are required by a Federal agency contract, grant, loan, permit, or license.
Example: Contractor "A" has a contract to provide technical assistance to Agency "B" on an ongoing basis. Technical communications between Contractor "A's" personnel and covered officials at Agency "B" would be required by the contract and therefore would not constitute "lobbying contacts."
Note, however, that this exception would not encompass an attempt by "A" to influence covered officials regarding either matters of policy, or an award of a new contract, since such communications would not be required by the existing contract.
The TAA also expands the definition of "public official" in Section 3(15)(f) to add a "group of governments acting together as an international organization." The purpose of the provision is to ensure those international organizations, such as the World Bank, would be treated in the same manner as the governments that comprise them (communications made by the expanded class of "public officials" acting officially would be exempt from the definition of "lobbying contact," and therefore exempt from potential registration and reporting requirements of the LDA).
Estimates Based on Tax Reporting System (See Sections 4 and 5 also)
The TAA does not change the optional expense reporting methods available to an organization employing in-house lobbyists. For all other LDA purposes, the TAA clarifies that registrants making a Section 15 election must use the IRC definitions for executive branch lobbying, and the LDA definitions for legislative branch lobbying.
We are reading the TAA to extend the group entitled to use the "safe harbor" established under section 15(b) of the LDA to a small number of trade associations not required by the IRC to report nondeductible lobbying expenses to their members (i.e., those whose members are tax exempt).
Finally, the TAA eliminated the option of filing IRS Form 990 with LD-2.
Exemption from FARA based on Registration under the LDA
The Foreign Agents Registration Act ("FARA") was amended by the TAA to clarify that any agent of a foreign principal engaged in lobbying activities (other than an agent of a foreign government or foreign political party) who registers under the LDA would be exempt from the requirements of FARA. Such lobbyists could register under the LDA even if their lobbying activities did not meet the registration threshold under the LDA. The change corrects an anomaly in which less active foreign commercial lobbyists (those not meeting the de minimis thresholds for registration under the LDA) were subject to the more rigorous reporting requirements of FARA, while more active foreign commercial lobbyists registered and reported under the LDA.
Revised Forms, Instructions and Format
LD-1, the registration form, and LD-2, the reporting form, have been revised. Previous editions of these forms are obsolete.
Instructions for both LD-1 and LD-2 have been updated to correspond with the new forms.
LD-1U, the former update form, has been eliminated and shall not be used. Updated registration information is reported on LD-2 on a semiannual basis only (unless the Secretary or the Clerk notifies a registrant of an error and requests a correction immediately).
The revised LD-1 (6/98) closely resembles the obsolete LD-1 (1/96) . The changed content is discussed below.
- The lines are renumbered.
- Effective Date of Registration: The registrant is required to enter the date the registrant was retained to lobby for the client or first makes a lobbying contact for the client, whichever is earlier. This entry will assist the Secretary and the Clerk in assessing the timeliness of the registration.
- Identification Number: This line is left blank for an initial registration. The numbers are assigned by the Office of Public Records and the Legislative Resource Center after the registration is processed and will be unique to each registrant-client relationship.
- Optional e-mail address: The contact person may include his/her e-mail address if he/she wishes to receive electronic correspondence.
- A "Self" box has been added on Line 7 ("Client name").
- A lobbyist's job title is no longer required. His or her status as a former covered executive or legislative branch official is the only information required other than the lobbyist's name.
- "Yes" and "No" boxes for Affiliated Organizations and Foreign Entities are added. One of the most common errors on the registrations that have been filed under the LDA is leaving the affiliated organization and foreign entity lines blank. The "Yes" and "No" boxes signal to the registrant that entry is required.
- Every line on LD-1 must be completed. If the space on LD-1 is insufficient for any of the required information, attach additional pages as needed, clearly stating the names of the registrant and client and identifying the line number(s) to which the information pertains.
The revised LD-2 combines the previous version of LD-2 and the former LD-1U. The reasons for this change are twofold: first, it appeared redundant to require registrants to disclose new information (such as new lobbyists and issue codes) in two different places in the same filing; and second, rather than follow the LDA's requirements to update registration information on a semiannual basis, many registrants were filing unnecessary and excessive amounts of paper to report relatively minor changes mid-reporting cycle. Specific refinements to LD-2 are discussed below.
- The new LD-2 allows a registrant that has no lobbying activity to file a one-page report. The registrant must complete the income or expense information as well as marking the "No Lobbying Activity" box. This is a change from the previous form and guidance.
- If a registrant's name changes, the registrant should include a note or memorandum that identifies the new as well as the former name, so that the change is apparent.
- Signature lines have been added to every page to provide registrants with options for filing differing lengths of reports. The report need only be signed once on the last page of the document.
- The lines of the form have been renumbered.
- Registrants now must provide their address on LD-2 in order to ensure that the Secretary and the Clerk have up-to-date address information. If a registrant's contact wishes to receive electronic correspondence, a space for an e-mail address is provided.
- A "Self" box has been added to Line 7 ("Client Name").
- LD-2 adds a space to supply a termination date (see section below on the completion of termination reports).
- The income or expense reporting format has been modified to guide registrants into completing only the section pertinent to them. Lobbying firms (including the self-employed) complete only the income section. Organizations employing in-house lobbyists complete only the expense section and must select which method of expense reporting that they are utilizing.
- The lobbying activity reporting page emphasizes that only one general issue area code per page must be used. The addition of "Check if None boxes" for the Houses of Congress and Federal agencies contacted and for the foreign entity interest were added because registrants left them blank when there was nothing to report. This practice led to a public record that was incomplete and subject to interpretation in lieu of clarity regarding the lobbying activity of the registrant. As discussed above, new lobbyists may be disclosed on this page by marking the "New" box and providing the information (if applicable) regarding previous employment within the last two years as a covered executive or legislative branch official.
Section 3: Definitions
- The registration information update page should be filed only if registration information is changed. This page is not intended to be a "stand alone" filing. Section 5 of the LDA does not require or encourage the submission of mid-reporting cycle registration information changes, unless a registrant is specifically requested to do so by the Secretary or the Clerk.
Affiliated Organization: Any entity other than the client that contributes in excess of $10,000 toward the registrant's lobbying activities in a semiannual period, and in whole or in major part plans, supervises, or controls such lobbying activities.
Client: Any person or entity that employs or retains another person for financial or other compensation to conduct lobbying activities on behalf of the person or entity. An organization employing its own lobbyists is considered its own client for reporting purposes.
"In whole or major part": The term "in major part" means in "substantial" part. It is not necessary that an organization or foreign entity exercise majority control or supervision in order to fall within Sections 4(b)(3)(B) and 4(B)(4)(B). In general, 20 percent control or supervision should be considered "substantial" for purposes of these sections.
Lobbying Activities: Lobbying contacts and any efforts in support of such contacts, including preparation or planning activities, research and other background work that is intended, at the time of its preparation, for use in contacts and coordination with the lobbying activities of others.
Lobbying Contact: Any oral, written or electronic communication to a covered official that is made on behalf of a client with regard to the enumerated subjects at 2 U.S.C. § 1602(8)(A). Note the exceptions to the definition at 2 U.S.C. § 1602(8)(B). See Discussion at Section 5 below.
Lobbying Firm: A person or entity consisting of one or more individuals who meet the definition of a lobbyist with respect to a client other than that person or entity. The definition includes a self-employed lobbyist.
Lobbying Registration: An initial registration on Form LD-1 filed pursuant to Section 4 of the Act (2 U.S.C. § 1603).
Lobbying Report: A semiannual report on Form LD-2 filed pursuant to Section 5 of the Act (2 U.S.C. § 1604).
Lobbyist: Any individual who (1) is either employed or retained by a client for financial or other compensation (2) for services that include more than one lobbying contact; and (3) whose "lobbying activities" constitute 20 percent or more of his or her services on behalf of that client during any six-month period.
Person or Entity: Any individual, corporation, company, foundation, association, labor organization, firm, partnership, society, joint stock company, group of organizations, or state or local government.
Registrant: A lobbying firm or an organization employing in-house lobbyists that files a registration pursuant to Section 4 of the Act.
Section 4: Lobbying Registration
Who Must Register and When
Lobbying firms are required to file a separate registration for each client. A lobbying firm is exempt from registration for a particular client if its total income from that client for lobbying activities does not exceed and is not expected to exceed $6,000 during a semiannual period.
Note: A lobbyist is not the registrant unless he/she is self-employed. In that case, the self-employed lobbyist is treated as a lobbying firm.
Organizations employing in-house lobbyists file a single registration. An organization is exempt from registration if its total expenses for lobbying activities do not exceed and are not expected to exceed $24,500 during a semiannual period.
Registration is required no later than 45 days after a lobbyist first makes a lobbying contact or is employed or retained to make a lobbying contact.
Preparing to File a Registration - Threshold Requirements
In order to determine the applicability of the LDA, one must first look at the definition of "lobbyist" under Section 3(10). Under this definition, an individual is a "lobbyist" with respect to a particular client if he or she makes more than one lobbying contact and his or her "lobbying activities" (as defined in Section 3(7)) constitute at least 20 percent of the individual's time in services for THAT client over any six-month period.
More than One Lobbying Contact
"More than one lobbying contact" means more than one communication to a covered official. Note that an individual falls within the definition of "lobbyist" by making more than one lobbying contact over the course of services provided for a particular client (even if the second contact occurs in a later semiannual period).
Example 1: Lobbyist "A" telephones Covered Official "A" in the morning to discuss proposed legislation. In the afternoon she telephones Covered Official "B" to discuss the same legislation. Lobbyist "A" has made more than one lobbying contact.
Example 2: Under some circumstances a series of discussions with a particular official might be considered a single communication, such as when a telephone call is interrupted and continued at a later time. Discussions taking place on more than one day with the same covered official, however, should be presumed to be more than one lobbying contact.
Do Lobbying Activities Constitute 20% Or More of an Individual's Time?
Lobbying activity is defined in Section 3(7) as "lobbying contacts and efforts in support of such contacts, including background work that is intended, at the time it was performed, for use in contacts, and coordination with the lobbying activities of others." If the intent of the work is to support ongoing and future lobbying, then it would fall within the definition of lobbying activities. Timing of the work performed, as well as the status of the issue, are also pivotal. Generally, if work such as reporting or monitoring occurs at a time when future lobbying contacts are contemplated, internal reporting and monitoring should be considered as a part of planning or coordinating of lobbying contacts, and therefore included as "lobbying activity." If, on the other hand, a person reports back to the relevant committee or officer regarding the status of a completed effort, that activity would probably not be included as a lobbying activity, if reports are not being used to prepare a lobbying strategy the next time the issue is considered.
Communications excepted from the definition of "lobbying contact" under Section 3(8)(B) of the LDA may be considered "lobbying activities" under some circumstances. Communications excepted by Section 3(8)(B) will constitute "lobbying activities" if they are in support of other communications which constitute "lobbying contacts."
Example: Under Section 3(8)(B)(v), the term "lobbying contact" does not include "a request for a meeting, a request for the status of an action, or any similar administrative request, if the request does not include an attempt to influence a covered executive branch official or a covered legislative branch official." However, a status request would constitute "lobbying activity" if it were in support of a subsequent lobbying contact.
Is it Lobbying Contact or Lobbying Activity?
If a communication is limited to routine information-gathering questions and there is not an attempt to influence a covered official, the exception of Section 3(8)(B)(v) for "any other similar administrative request" would normally apply. In determining whether there is an attempt to influence a covered official, the identity of the person asking the questions and her relationship to the covered official obviously will be important factors.
Example 1: Lobbyist "A," a former chief of staff in a congressional office, is now a partner in the law firm retained to lobby for Client "B." After waiting one year to comply with post-employment restrictions on lobbying, Lobbyist "A" telephones the member on whose staff she served. She asks about the status of legislation affecting Client "B's" interests. Presumably "B" will expect the call to have been part of an effort to influence the member, even though only routine matters were raised at that particular time.
Example 2: Company "Z" offers temporary employment to recent college graduates. The graduates are hired to conduct surveys of congressional staff by reading prepared questions and recording the answers. The questions seek only information. These communications do not amount to lobbying contacts.
Lobbying Contacts and Activities Using Section 15 Election (Alternate Reporting Methods)
Section 15 of the LDA permits those organizations that are required to file and do file under Sections 6033(b)(8) of the Internal Revenue Code and organizations that are subject to Section 162(e) of the IRC to use the tax law definitions of lobbying in lieu of the LDA definitions for determining "contacts" and "lobbying activities." Registrants should note that the tax definition of lobbying is broader with respect to the type of activities reported, while they are narrower with respect to executive branch officials contacted.
Registrants who make such an election must use the Internal Revenue Code definition for executive branch lobbying and the LDA definition for legislative branch lobbying. This may result in the registrant reporting fewer lobbying contacts with fewer executive branch officials since the IRC definitions are narrower than the LDA definitions. Also note that definitions under the tax code include "grass-roots," "state" and "local" lobbying, while the LDA excludes those types of lobbying from the definition of "lobbying activities." The LDA does not permit modification of the tax code definition to exclude such expenditures when reporting lobbying expenses.
Relationship Between 20% of Time and Monetary Threshold
If the definition of "lobbyist" is satisfied with respect to at least one individual for a particular client, the potential registrant (either a lobbying firm or an organization employing the lobbyist, or a self-employed individual lobbyist) is not required to register if it does not meet the monetary thresholds of Section 4(a)(3)(A)(I), in the case of a "lobbying firm," or of Section 4(a)(3)(A)(ii), in the case of an organization employing in-house lobbyists. Note that the monetary exemption is computed based on the lobbying activities of the potential registrant as a whole for the particular client in question, not simply on the lobbying activities of those individuals who are "lobbyists."
Example 1: A law firm has two lawyers who perform services for a particular client. Lawyer "A" spends 15 percent of the time she works for that client on lobbying activities, including some lobbying contacts. Lawyer "B" spends 25 percent of the time he works for the client on lobbying activities, but makes no lobbying contacts. Neither lawyer falls within the definition of "lobbyist," and therefore the law firm is not required to register for that client, even if the income it receives for lobbying activities on behalf of the client exceeds $6,000.
Example 2: Employee "A" of a trade association is a "lobbyist" who spends 25 percent of his time on lobbying activities on behalf of the association. There are $15,000 of expenses related to Employee "A's" lobbying activities. Employee "B" is not a "lobbyist" but engages in lobbying activities in support of lobbying contacts made by Employee "A." There are $10,000 of additional expenses related to the lobbying activities of Employee "B." The trade association is required to register because it employs a "lobbyist" and its total expenses in connection with lobbying activities on its own behalf exceed $24,500.
Example 3: Same as Example 2, except the expenses related to the lobbying activities of Employees "A" and "B" total only $18,000, but the trade association also pays $10,000 to an outside firm for lobbying activities. Registration is still required because payments to outside contractors (including lobbying firms that may be separately registered under the LDA) must be included in the total expenses of an organization employing lobbyists on its own behalf.
The registration requirement is triggered at the earlier of the date a lobbyist is employed or retained to make more than one lobbying contact on behalf of the client, or the date a lobbyist in fact makes a second lobbying contact. In either case, registration is required within 45 days.
Section 5: Special Registration Circumstances
Examples: Lobbying Firm "A" is retained to monitor an issue, but whether or not lobbying contacts will be made depends on future legislative developments. In another case, Corporation "B," which employs an in-house lobbyist, knows that its lobbyist will make contacts but reasonably expects its lobbying expenditures will not amount to $24,500 in a semiannual period. However, issues of interest to "B" turn out to be more controversial than expected, and the $24,500 threshold is in fact met two months later.
Lobbying Firm "A" has no registration requirement at the present time. The requirement to register is triggered when and if the firm makes contacts, or reasonably expects that it will make contacts. Corporation "B's" registration requirement arose as soon as it knew, or reasonably expected, that its lobbying expenditures will exceed $24,500. "B" needs to register immediately.
Lobbying Firms Retained Under A Contingent Fee
Law other than the LDA governs whether a firm may be retained on a contingent-fee basis. There is, for example, a general prohibition on the payment of contingent fees in connection with the award of government contracts. Assuming, however, that the agreement is not contrary to law or public policy, an agreement to make lobbying contacts for a contingent fee, like other fee arrangements triggers a registration requirement at inception. The fee is disclosed on LD-2 for the semiannual period that the registrant becomes entitled to it.
Example: On January 1, 1998, Lobbying Firm "G" agrees to lobby for Client "H" for a fee contingent on a certain result, and the agreement is permitted under other applicable law. Lobbying activities begin. "G" is required to register by February 14, 1998. The result is not obtained and "G" is not entitled to any fee during the first semiannual period. "G" must report its lobbying activities for the first semiannual period; the income reported is "Less than $10,000." The desired result does occur in the second semiannual period of 1998. In the report for that period, "G" discloses its lobbying activities for that period and the total contingent fee.
Registration for Entities with Subsidiaries Or State and Local Affiliates
Assuming a parent entity or national association and its subsidiary or subordinate are separate legal entities, the parent makes a determination whether it meets the registration threshold based upon its own activities, and does not include subordinate units' lobbying activities in its assessment. Each subordinate must make its own assessment as to whether any of its own employees meet the definition of a lobbyist, and then determine if it meets the registration threshold with respect to lobbying expenses.
Example: Lobbyist "Z" is an employee of Company "A," which is a wholly-owned subsidiary of Company "B." "Z's" lobbying activities advance the interests of both. Which company is responsible for registering and reporting under the LDA?
The registration and reporting requirements apply to the organization of which Lobbyist "Z" is an employee. Therefore, Company "A" would register and file the semiannual reports.
If Company "B" contributes $10,000 or more to "Z's" lobbying activities during a semiannual period and plans, supervises, or controls the lobbying activities in whole or significant part, Company "B" must be listed on Company "A's" Form LD-1, Line 13. A contribution may take any form, and may be direct or indirect. For example, if Company "B" established Company "A" with an initial capital contribution of $1,000,000, which "A" draws upon for employee salaries, including "Z's," and to pay for office space used by "Z," a $10,000 contribution probably has been made.
If Company "B" is a foreign entity, and the facts are otherwise the same as above, "B" would be listed on Line 14 of the Form LD-1 filed by Company "A." "B's" interests in specific lobbying issues would also be disclosed on Line 19 of Form LD-2.
The LDA does not make any express provision for combined or consolidated filings. We are of the view, however, that a single filing by a parent corporation may be appropriate in some cases, especially when there are multiple subsidiaries and the lobbyists address the same issues for all and act under the close control of the parent. In this regard, we note that the LDA does not contain any specific definition of "employee" (there is only the general definition of Section 3(5)), and the policy of the LDA is to promote disclosure of real parties in interest.
In circumstances in which multiple subsidiaries each have only a fraction of the lobbyist's time and little control over his work, the parent which in fact exercises actual control can be regarded as the "employer" for LDA purposes. In such cases, the parent may file a single registration, provided that Line 10 of Form LD-1 discloses that the listed lobbyists are employees of subsidiaries and the subsidiaries are identified as affiliated organizations on Line 13.
Effect of Mergers and Acquisitions on Registrations.
The following examples serve to illustrate hypothetical situations regarding mergers and acquisitions:
Example 1: Corporation "C" registered under the LDA during 2004. Effective upon close of business on December 31, 2004, "C" merged with Corporation "D." "D," the surviving corporation, had no lobbyist-employees before the merger and is not registered. How and when should this information be reported? Assuming that "D" retains at least one of "C's" lobbyist-employees and will incur lobbying expenses of at least $24,500 during the January-June semiannual period, Corporation "D" is required to register. The 45-day period in which its initial registration must be filed begins to run on December 31, 2004, the date "D" first had lobbyist-employees, and the registration is due by February 14, 2005. On the other hand, if "D" will not be lobbying after the merger, it is not required to register. In pre-merger discussions, Corporation "C" might have agreed to terminate its registration and file its final lobbying report before ceasing its corporate existence. If, however, "C" did not do so, Corporation "D" should terminate the registration and file the outstanding lobbying report in "C's" name. "D" may simply annotate the signature block on Form LD-2 to indicate that it is filing as successor-in-interest to "C."
Example 2: Lobbying Firm "O" is a registrant under the LDA. It merges with Lobbying Firm "P," which is also a registrant. The new entity will be known as Lobbying Firm "T." How and when should this information be reported? The answer depends on the particular facts. If Lobbying Firm "T" is a newly-created legal entity, it should file a new registration within 45 days. The registrations of both "O" and "P" should be terminated, and separate final lobbying reports filed for each. But if "T" is simply the new name adopted by "O" following the merger with "P," with "P" going out of existence, "O" should report its new name and other updated information (such as the names of lobbyist-employees of "P" who are retained or hired by "T") on Form LD-2, with a cover note explaining the nature of the change. "P's" registration should be terminated, and a final report for "P" only should be filed.
Example 3: Corporation "J," a registrant, acquired Corporation "K," a non-registrant. At the time of the acquisition, "J" changed its name to "J & K." How and when should this information be reported? For LDA purposes, this is simply a change in the name of the registrant. The change should be reported on Line 1 of the next semiannual report (LD-2) with a cover memo noting the name change.
Associations or Coalitions
The LDA provides that "[i]n the case of a coalition or association that employs or retains other persons to conduct lobbying activities, the client is the coalition or association and not its individual members" (Section 3(2)). A bonafide coalition that employs or retains lobbyists on behalf of the coalition may be the client for LDA purposes, even if the coalition is not a legal entity or has no formal name. A registrant lobbying for an unnamed informal coalition needs to adopt some type of identifier for Line 7 of Form LD-1, and indicate "(Informal Coalition)" or another applicable description. For all coalitions and associations, formal or informal, the LDA requires further disclosures, e.g., of organizations other than the client which contribute more than $10,000 toward the lobbying activities of the registrant in semiannual period, and in whole or major part plan, supervise or control the lobbying activities (Section 4(b)(3)). Such organizations are identified on Line 13 of Form LD-1. Further, in some cases it may be advisable for a registrant to identify members of a coalition who are not otherwise disclosed on Line 13 or Line 14 of Form LD-1. Consider, for example, an informal coalition consisting of only a few members who each pay a lobbying firm at least $6,000 in fees. Arguably, the coalition members could be viewed as separate clients for LDA purposes. The lobbying firm treating the coalition as the client could protect itself by disclosing the names of the coalition members. Giving the coalition some formal organization may also be considered in this type of case.
Note that a coalition with a foreign entity as a member must identify the foreign entity on line 14 of LD-1 if the foreign entity meets the test of either Section 4(b)(3) or 4(b)(4).
Churches, Integrated Auxiliaries, Conventions or Association of Churches and Religious Orders - Hiring of Outside Firms.
Although the definition of a lobbying contact does not include a communication made by a church, its integrated auxiliary, convention or association of churches and religious orders (Section 3(8)(B)(xviii)), if a church hires an outside firm that conducts lobbying activity on their behalf, the outside firm must register if registration is otherwise required.
Registration of Professional Associations of Elected Officials
The Section 3(15) definition of "public official" includes a professional association of elected officials who are exempt from registration. If the association retains an outside firm to lobby, the lobbying firm must register if otherwise required to do so, i.e., the firm employs a lobbyist as defined in Section 3(10) and lobbying income exceeds $6,000 in a semiannual period.
Section 6: Semiannual Reporting of Lobbying Activities
When and Why a Report is Needed
Each registrant must file a semiannual report on Form LD-2 no later than 45 days after the end of the semiannual period beginning on the first day of each January and the first day of July of each year in which a registrant is registered. If a registrant engaged in lobbying activities during the semi-annual period preceding their registration, a Form LD-2 should be filed disclosing such activities. Lobbying firms file separate reports for each client for each semiannual reporting period, while organizations employing in-house lobbyists file one report covering their in-house lobbying activities each semiannual reporting period. The Clerk and Secretary consider reports as filed timely if they are postmarked by February 14 or August 14. In the event that either of the aforementioned dates occur on a weekend or a federal holiday, the next business day postmark is also considered timely. Registrants should keep in mind that their reports are date-stamped by the House Legislative Resource Center and the Senate Office of Public Records on the dates they are actually received, and that inquiries regarding any discrepancy between the date stamp and the mailing date will be directed to the registrant. The Secretary and Clerk do not have the authority under the LDA to grant extensions to registrants.
The obligation to report under the LDA arises from active status as a registrant (i.e., a registration on file that has not been validly terminated). Section 5(a) of the LDA requires a registrant to file a report for the semiannual period in which it incurred its registration requirement, and for each semiannual period thereafter, through and including the reporting period for which it terminates its registration. A timely report using Form LD-2 is required even though the registration was in effect for only part of the reporting period. So long as a registration is on file and has not been terminated, a registrant must report its lobbying activities even if those activities during a particular semiannual period would not trigger a registration requirement in the first instance (e.g., a lobbying firm's income from a client amounted to less than $6,000 during a particular semiannual period). A registrant with no lobbying activity during a semiannual period completes, signs, and files the first page (only) of Form LD-2.
Example 1: "A" is the only lobbyist of Lobbying Firm "Z" listed in the registration filed for Client "Y" on February 14, 1998. During January-June 1998, A lobbied for "Y" nearly full-time. During the July-December period in 1998, however, A spent less than 20 percent of her time for "Y" in lobbying activities, all in July and August, and lobbying fees for those two months were $20,000. For the July-December semiannual period, Lobbying Firm "Z" must report the fees, and must report "A's" lobbying activities.
Example 2: Lobbying Firm "Z" is retained by Client "X" on June 1, 1998 for thirty days to lobby on a particular issue that is on the legislative calendar and the issue is settled prior to the departure of House and Senate Members for the July 4th recess. Firm "Z" must file its registration by July 15, and its termination report by August 14.
Preparing to File the Semiannual Report - Income or Expense Recording
The LDA does not contain any special record keeping provisions, but requires, in the case of an outside lobbying firm (including self-employed individuals), a good faith estimate of all income received from the client, other than payments for matters unrelated to lobbying activities. In the case of an organization employing in-house lobbyists, the LDA requires a good faith estimate of the total expenses of its lobbying activities. As long as the registrant has a reasonable system in place and complies in good faith with that system, the requirement of reporting bottom line expenses or income would be met. Since Section 6(5) requires the Secretary and Clerk to "retain registrations for a period of at least 6 years after they are terminated and reports for a period of at least 6 years after they are filed," we recommend registrants retain copies of their filings and supporting documentation for the same length of time.
Lobbying Firm Income
Lobbying firms report income earned or accrued from lobbying activities during a semiannual period, even though the client may not be billed or make payment until a later time. For a lobbying firm, gross income from the client for lobbying activities is reportable, including costs or disbursements that are in addition to fees and separately invoiced. Line 12 of LD-2 provides boxes for a lobbying firm to report income of less than $10,000, or of $10,000 or more. If lobbying income is $10,000 or more, a lobbying firm must provide a good faith estimate of the actual dollar amount rounded to the nearest $20,000.
Organization Expenses using LDA Expense Reporting Method
Organizations that employ in-house lobbyists may incur lobbying-related expenses in the form of employee compensation, office overhead, or payments to vendors which may include lobbying firms. Organizations must report expenses as they are incurred, though payment may be made later. Line 13 of LD-2 provides for an organization to report lobbying expenses of less than $10,000, or $10,000 or more. If lobbying expenses are $10,000 or more, the organization must provide a good faith estimate of the actual dollar amount rounded to the nearest $20,000. Organizations using the LDA expense reporting method mark the "Method A" box on Line 14.
To ensure complete reporting, the Secretary and Clerk have consistently interpreted section 5(B)(4) to require such organizations to report all of their expenses incurred in connection with lobbying activities, including all payments to outside entities, without considering whether any particular payee has a separate obligation to register and report under the LDA. Logically, if an organization employing in-house lobbyists also retains a lobbying firm, the expense reported by the organization should be greater than the fees reported by the lobbying firm of which the organization is a client.
All employee time spent in lobbying activities must be included in determining the organization's lobbying expenses, even if the employee does not meet the statutory definition of a "lobbyist."
Example: The CEO of a registrant, "Defense Contractor," travels to Washington to meet with a covered DOD official regarding the renewal of a government contract. "Defense Contractor" has already determined that its CEO is not a "lobbyist," because he does not spend 20 percent of his time on "lobbying activities" during a semiannual period. Nonetheless, the expenses reasonably allocable to the CEO's lobbying activities (e.g., plane ticket to Washington, salary and benefit costs, etc.) will be reportable.
Similarly, all expenses of lobbying activities incurred during a semiannual period are reportable. The Section 3(7) definition of lobbying activities is not limited to lobbying contacts.
Example: A research assistant in the Washington office of the registrant, "Defense Contractor" (described in the example above) researches and prepares the talking points for the CEO's lobbying contact with the covered DOD official. Likewise, the expenses reasonably allocable to the research assistant's lobbying activities will be included in "Defense Contractor's" expense estimate for the semiannual period.
The examples below are intended to be illustrative of the possibilities of LDA expense reporting, and are not intended to require detailed accounting rules.
Example 1: An organization employing in-house lobbyists might choose to estimate lobbying expenses by asking each professional staffer to track his/her percentages of time devoted to lobbying activities. These percentages could be averaged to compute the percentage of the organization's total effort (and budget) that is devoted to lobbying activities. Under this example the organization would include salary costs (including a percentage of support staff salaries), overhead, and expenses, including any third-party costs attributable to lobbying.
Example 2: Another organization, which lobbies out of its Washington office, might avoid the need for detailed breakdowns by including the entire budget of its Washington office.
Organizations Reporting Expenses under Section 15 (Optional IRC Reporting Methods)
Section 15(a) of the LDA allows entities that are required to report and do report lobbying expenditures under section 6033(b)(8) of the Internal Revenue Code ("IRC") to use IRC definitions for purposes of LDA Sections (4)(a)(3) and 5(b)(4). Charitable organizations, as described in IRC Section 501(c)(3), are required to report their lobbying expenditures under Section 6033(b)(8) of the IRC. They may treat as LDA expenses the amounts they treat for "influencing legislation" under the IRC.
Section 15(b) of the LDA allows entities that are subject to section 162(e) of the IRC to use IRC definitions for purposes of LDA Sections (4)(a)(3) and 5(b)(4). The eligible entities include for-profit organizations (other than lobbying firms) and tax-exempt organizations such as trade associations that calculate their lobbying expenses for IRC purposes with reference to Section 162(e) rules. We believe that this reporting option is available to include a small number of trade association registrants not required by the IRC to report non-deductible lobbying expenses to their members (i.e., those whose members are tax-exempt).
If an eligible organization elects to report under Section 15, it must do so consistently for both reports covering a calendar year. The electing organization also must report all expenses that fall within the applicable Internal Revenue Code definition. The total that is ultimately reportable to the Internal Revenue Service is the figure that would be used for Line 13 reporting. Line 13 of LD-2 would require any organization to report if the amount of lobbying expenses were less than $10,000, or $10,000 or more. If the expense amount is $10,000 or more, it should be rounded to the nearest $20,000. Line 14 of LD-2 requires the electing organization to mark as applicable, either the "Method B" box (IRC Section 6033(b)(8)) or the "Method C" box (IRC Section 162(e)). The Secretary and Clerk are aware that IRC and LDA are not harmonized in terms of expense reporting, and registrants are advised that backing out grass roots and state and local lobbying expenses that would alter the IRS reportable total is not permitted.
Semiannual Reporting of Lobbying Activities - Contents of Report
The two core disclosures required by Section 5(b) and © of the LDA and incorporated into Form LD-2 are: (1) lobbying income or expenses; and (2) lobbying issues. LD-2 has been designed to allow registrants the greatest flexibility in terms of document length to correspond with varying amounts of information relating to the core disclosures. The following examples illustrate how the nature of the core disclosures build the form.
Example 1: Registrant "A" represents Client "B" to monitor an issue of interest to B and make occasional lobbying contacts as necessary. During the Mid-Year 1998 reporting period, "A" received $7,000 from "B," but had no lobbying activity because "B's" issue was dormant. "A" would complete the top portion of page 1 of LD-2, mark the boxes labeled "No Lobbying Activity" and"Less than $10,000," sign and date the first page, and file the report.
Example 2: Same circumstances as above, except that "A" has two lobbyists who make lobbying contacts on a single lobbying issue with the Senate and the House. In this case, the second page of LD-2 would have to be completed, "A" would sign and date page 2, and file the report.
Example 3: Same circumstances as example 2, but one of the lobbyists retires during the reporting period. In this case, a third page of LD-2 would be required as well as the first two completed pages reflecting the removal of the lobbyist's name (his/her retirement) from A's registration and reports.
Section 5(b) requires specific information on the nature of the lobbying activities. Page 2 of Form LD-2 requires the registrant to:
- Disclose the general lobbying issue area code (list 1 code per page)
- Identify the specific issues in which the lobbyist(s) engaged in lobbying activities
- Identify the Houses of Congress and Federal Agencies contacted
- Disclose the lobbyists who had any activity in the general issue area
- Describe the interest of a foreign entity if applicable
When reporting specific lobbying issues, some registrants have listed only House or Senate bill numbers on the issues page without further indication of their clients' specific lobbying issues. Such disclosures are not adequate, for several reasons. First, Section 5(b)(2)(A) of the LDA requires disclosure of "specific issues upon which a lobbyist employed by the registrant engaged in lobbying activities, including ... bill numbers[.]" As we read the law, a bill number is a required disclosure when the lobbying activities concern a bill, but is not in itself a complete disclosure. Further, in many cases, a bill number standing alone does not inform the public of the client's specific issue. Many bills are lengthy and complex, or may contain various provisions that are not always directly related to the main subject or title. If a registrant's client is interested in only one or a few specific provisions of a much larger bill, a lobbying report containing a mere bill number will not disclose the specific lobbying issue. Even if a bill concerns only one specific subject, a lobbying report disclosing only a bill number is still inadequate, because a member of the public would need access to information outside of the filing to ascertain that subject. In our view, the LDA contemplates disclosures that are adequate to inform the public of the lobbying client's specific issues from a review of the LD-2, without independent familiarity with bill numbers or the client's interest in specific subject matters within larger bills. The disclosures on Line 16 must include bill numbers, where applicable, but must always contain information that is adequate, standing alone, to inform the public of the specific lobbying issues.
Example: Client "A's" general lobbying issue area is "Environment." During the second half of 1997, lobbyists for "A" made contacts concerning the Department of Defense appropriations for environmental restoration. For fiscal 1998, the Department of Defense Appropriations Act was part of the Omnibus Consolidated Appropriations Act for 1998, H.R. 3610, a lengthy and complex bill that did not have numbered sections throughout. Title II contained separate but unnumbered provisions making appropriations for "Environmental Restoration, Army," "Environmental Restoration, Navy," "Environmental Restoration, Air Force," "Environmental Restoration, Defense-Wide," and"Environmental Restoration, Formerly Used Defense Sites." Lobbying contacts for Client "A" addressed all environmental restoration funding within the Defense Department bill. An appropriate disclosure of the specific lobbying issue would read as follows: H.R. 3610, Department of Defense Appropriations Act for 1998, Title II all provisions relating to environmental restoration.
The Houses of Congress and Federal agencies contacted by lobbyists during the reporting period must be disclosed on Line 17 of Form LD-2. The LDA adopts the Administrative Procedure Act definition of agency found in 5 U.S.C. 551(1). Therefore, disclose the specific agency contacted whether or not it is part of an executive branch department. It is not necessary to report the offices within the agency that were contacted. If lobbyists were engaged in lobbying activities that did not involve lobbying contacts, then the registrant must mark the "Check if None" box.
Previously identified lobbyists and new lobbyists for this reporting period must be listed on Line 18 of LD-2 if they had any lobbying activities during the reporting period, whether or not they made lobbying contacts. The issue page is only intended to reflect lobbying activity by lobbyists, and not activity of those who are not lobbyists. Once an individual has met the definition of a lobbyist and has been disclosed or identified as such, he or she does not need to meet that standard every reporting period in order to trigger disclosure of his or her lobbying activities. The registrant does not report the names of individuals who may perform some lobbying activities, but who do not and are not expected to meet the LDA definition of a lobbyist.
Example: Lobbying Firm "A" filed its initial registration for Client "B" on February 14, listing Lobbyists "X," "Y" and "Z." From January through June, Lobbyists "W" (hired in April) and "X" and "Y" made contacts for "B," while Lobbyist "Z" was assigned work for other clients. Lobbyist "Z" is expected, however, to be active on behalf of Client "B" after Labor Day until adjournment. In its Form LD-2 for Client "B," filed on or before August 14, Lobbying Firm "A" lists "W," "X" and "Y" on Line 18. "W" is also identified as "new," and Firm "A" would disclose if "W" occupied a covered position within the last two years. "Z" is not listed on the Form LD-2 filed for Client "B" for the January - June semiannual period, but because of the current expectation that he will lobby during the July - December period, his name is not deleted as a lobbyist for "B."
New lobbyists should be disclosed on the appropriate issue(s) page(s) for the reporting period in which the individual first meets the definition of lobbyist. We are aware that there will be situations in which a registrant expects an individual to become a lobbyist and wishes to disclose the name of that individual for a matter of public record. Section 5 of the LDA, however, provides that updated registration information is contained in the registrant's next semiannual report. Therefore, there may be a period of time in which an individual is legitimately making lobbying contacts but is not be identified on the public record until the next semiannual report is filed. In such cases, the registrant reports updated information as the LDA requires.
A foreign entity is reported on Line 19 if both of two circumstances apply: 1) the foreign entity must be an entity that is required to be identified on Form LD-1 or on the registration information update page. That, in turn, depends on whether the entity meets one of the three conditions of Section 4(b)(4) of the LDA; and 2) the entity must have an interest in the specific lobbying issues listed on Line 16. If a foreign entity has an interest in the specific issues, Line 19 requires a description of that interest. For the sake of clarity the registrant should indicate whether the foreign entity(s) is/are the same as identified on the registration.
Section 7: Termination
Example: "[Name of foreign entity], identified on LD-1, exports [type of product] to United States and would benefit from [specific desired outcome]."
Termination of a Lobbyist
The LDA is not specific as to how far into the future the registrant should project an expectation that an individual will act as a lobbyist. It seems neither realistic nor necessary to expect registrants to make such projections beyond the next succeeding semiannual reporting period. Accordingly, if a registrant reasonably expects an individual to meet the definition of lobbyist in either the current or next semiannual period, the lobbyist should remain in an "active" status. If a registrant does not believe this to be the case, the lobbyist can be removed form the list of lobbyists for the registrant. Line 23 of LD-2 is used to delete names of employees who are no longer expected to act as lobbyists for the client, due to changed job duties, assignments, or employment status.
Example 1: Lobbying Firm "Y" registers for Client "Z" on March 15, 1998, listing employees "A," "B," "C," and "D" on line 10 of Form LD-1. For the first semiannual period in 1998, "Y" will list "A," "B" and "C" on Line 18 of LD-2. "D" has no lobbying activities for that semiannual period, so he would not be listed. During the second half of 1998, "D" leaves firm "Y" to start his own lobbying business. For the second semiannual period, "Y" will report that "D" no longer meets the definition of "lobbyist" for Client "Z" on Line 23 of LD-2.
Example 2: Lobbying Firm "Y" registers for Client "Z" as above listing the aforementioned "A," "B," "C," and "D" as lobbyists on March 15, 1998. One month after registration, "C" and "D," who engaged in lobbying activities for "Z" as partners of "Y," decide to leave the partnership effective June 1, 1998. On the Mid-Year Report for 1998, "Y" would report any lobbying activity for "C" and "D" on Line 18 of LD-2. "Y" would also reflect "C" and "D's" departure by listing them on Line 23 of LD-2 in the same filing.
Termination of a registrant/client relationship
Under Section 4(d) of the LDA, a lobbying firm may terminate a registration for a particular client when it is no longer employed or retained by that client to conduct lobbying activities and does not anticipate further lobbying activities for that client. An organization employing in-house lobbyists may terminate its registration when in-house lobbying activities have ceased and are not expected to resume. Similarly, in situations in which a registration is filed in anticipation of meeting the registration threshold that is never met, a registrant also has the option of termination. Just as we have been interpreting that the obligation to report semiannually under the LDA arises from active status as a registrant (Sections 5(a), 5(b)(2), 5(b)(3), 5(b)(4)), we believe that a report disclosing the final lobbying activity of a registrant is mandatory. In order to terminate the registration, the registrant must file Form LD-2 by the next semiannual filing date, checking the "Termination Report" box, and supplying the date that the lobbying activity ended. A valid termination report discloses lobbying income or expenses and any lobbying activity by lobbyists during the termination period.
Section 8: Relationship of LDA to Other Statutes
Example 1: Lobbying Firm "A" accepted a contract with Client "B" on January 1, 2001, began lobbying activities, and timely registered on or before February 14. On March 31, the contract with "B" ended. Lobbying Firm "A" must file Form LD-2 by August 14, 2001, disclosing the lobbying income from and lobbying activity for Client "B" that took place between January 1 and March 31. The firm will check the "Midyear" box on Line 8, the "Termination Report" box on Line 10, and fill in "3/31/01" in the termination date space (also on Line 10).
Example 2: Corporation "C" filed its registration on February 14, 2001, listing employee "E" as its only lobbyist. Through June 30, "E" spends less than 20 percent of her total time in lobbying activities. "C" would not have filed a registration if it had foreseen that its lobbying activities would be so limited, and there is no expectation that "E" or any other employee of "C" will meet the Section 3(10) definition of "lobbyist" for the July-December semiannual period nor that lobbying expenses will exceed $24,500. While Corporation "C" as a registrant must file a report for January-June 2001, "C" will check the "Termination Report" box on Form LD-2, write in 6/30/01, disclose the amount of expenses for the reporting period and "E's" lobbying activity for the reporting period.
LDA and FARA
The technical amendments to the LDA reflected a determination that the FARA standards are appropriate for lobbying on behalf of foreign governments and political parties, but that LDA disclosure standards should apply to other foreign lobbying (also refer to the section in this document entitled "What is New?"). An agent of a foreign commercial entity is exempt under FARA if the agent has engaged in lobbying activities and registers under the LDA. An agent of a foreign commercial entity not required to register under the LDA (such as those not meeting the de minimis registration thresholds) may voluntarily register under the LDA. The amendments reaffirm the bright line distinction between governmental and non-governmental representations, and are not meant to shroud foreign government enterprises. Questions relating to the Foreign Agents Registration Act must be directed to the Department of Justice Foreign Agent Registration Unit at (202) 514-1231.
LDA and IRC
The LDA and the IRC intersect in three different ways. Restrictions on lobbying by tax-exempt organizations are governed by the definitions in the IRC, not those of the LDA.
First, Section 15 defines which registrants are eligible for the "safe harbor." Section 15 allows entities that are required to report and do report lobbying expenditures under section 6033(b)(8) of the IRC to use IRC definitions for purposes of LDA Sections (4)(a)(3) and 5(b)(4). Section 15(b) of the LDA allows entities that are subject to section 162(e) of the IRC to use IRC definitions for purposes of LDA Sections (4)(a)(3) and 5(b)(4).
Second, Section 15 advises registrants regarding how they should use IRC definitions. Prior to the technical amendments the statute was not clear as to the extent to which eligible organization could use IRC definitions for other reporting and disclosure requirements of the LDA. As a result of the amendments, registrants who make the Section 15 election must use IRC definitions (including the IRC definition of a covered executive branch official) for executive branch lobbying, and LDA definitions for legislative branch lobbying.
Third, Section 15 allows electing registrants to plug in the amount that is ultimately reportable to the Internal Revenue Service for LDA semiannual reports.
LDA and False Statements Accountability Act of 1996
The False Statements Accountability Act of 1996, amending 18 U.S.C. § 1001, makes it a crime knowingly and willfully (1) to falsify, conceal or cover up a material fact by trick, scheme or device; (2) to make any materially false, fictitious, or fraudulent statement or representation; or (3) to make or use any false writing or document knowing it to contain any materially false, fictitious, or fraudulent statement or entry; with respect to matters within the jurisdiction of the legislative, executive, or judicial branch. The False Statements Accountability Act does not assign any responsibilities to the Clerk and Secretary.
LDA and Prohibitions on the Use of Federal Funds For Lobbying
The LDA does not itself regulate lobbying by federal grantees, or contractors, though other laws, as well as contractual prohibitions, may apply. Questions concerning lobbying activities of federal grantees or contractors should be directed to the appropriate agency or office administrating the contract or grant.
Note, however, that Section 18 of the LDA prohibits 501(c)(4) organizations who engage in lobbying activities from receiving federal funds through an award, grant or contract.
Section 9: Public Availability
The Act requires the Secretary of the Senate and the Clerk of the House of Representatives to make all registrations and reports available to the public as soon as practicable after they are received.
Section 10: Review and Compliance
The Secretary of the Senate (Office of Public Records) and the Clerk of the House (Legislative Resource Center) must review, verify, and request corrections in writing to ensure the accuracy, completeness, and timeliness of registrations filed under the Act.
Section 11: Penalties
Whoever knowingly fails: (1) to correct a defective filing within 60 days after notice of such a defect by the Secretary of the Senate or the Clerk of the House; or (2) to comply with any other provision of the Act, may be subject to a civil fine of not more than $50,000.