Lobbying Disclosure Act (LDA) changes made by the Honest Leadership and Open Government Act of 2007 (enacted September 14, 2007, Pub. L. No.

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1 LLP BOSTON NEW YORK PALO ALTO SAN FRANCISCO WASHINGTON, DC Lobbying Disclosure Act (LDA) changes made by the Honest Leadership and Open Government Act of 2007 (enacted September 14, 2007, Pub. L. No ) 1

2 Three requirements must be met to trigger LDA registration and reporting requirements: A company must have at least one employee who spends 20% or more of his or her working time engaging in lobbying activity over a quarterly period; That same employee must have 2 or more lobbying contacts; and The company must spend $10,000 or more on such lobbying activity over a quarterly period. Lobbying activity consists of: Lobbying contacts; and Research and preparation for such contacts (i.e., work done with the intent that the results will be used for lobbying contact). Lobbying contact includes the following communications to influence legislation, formal rulemaking by an agency, federal contracts, or any other position of the federal government: Communications with congressional members and staff; and Communications with Covered Executive Branch Officials (i.e., White House Staff and Presidential and Schedule C Appointees but not SES employees) 2

3 Must list issues lobbied (the legislation, rulemaking, or decision). Should include bill and brief description of legislation. Must list the House or Senate or Executive Branch Agency contacted. Lobbying registration reports must be filed quarterly (filed semi-annually under prior law). Reports must be filed electronically and are placed on a public database. Reports are due 20 days after end of quarter (they were formerly due 45 days after end of semi-annual period). Lobbying registration thresholds were also revised. Under the revised law, 20% time per quarter rather than per six months as under the prior law, $10,000 expenditure per quarter rather than $24,500 per six months under prior law. 3

4 Changes in Information Required at Registration HLOGA requires additional information from registrants. In particular: Disclosure of Governmental Clients LDA registrants required to identify whether any client is a state or local government or government-controlled entity (e.g., agency, district). Expanded Disclosure of Previous Legislative and Executive Branch Employment New registrants (and prior registrants who change company) required to disclose certain legislative and executive branch employment during the past 20 years (prior law required only a two-year look back). Enforcement Changes Increased Penalties Civil: HLOGA amended the LDA to increase civil penalties for violations from $50,000 to $200,000. Criminal: HLOGA added criminal penalties to the LDA (up to 5 years in prison and/or fines under Title 18 of the U.S. Code). HLOGA sets a knowingly and corruptly standard for criminal penalties. There is still a 60-day cure provision for reporting violations, but not for other violations of the new law, such as gift restrictions. 4

5 Lobbyists and lobbyist employers are now required to file a semi-annual report detailing political contributions, donations, and other expenditures made to, or for the benefit of, covered legislative and executive branch officials. The report is due 30 days after the end of each semiannual period (January-June and July- December). Contents of New Report (1) The report must contain the following information: The name of all PACs established or controlled by the lobbyist or lobbyist employer. Each federal candidate or incumbent, leadership PAC, or party committee that received contributions of $200 or more (aggregate) from the lobbyist, lobbyist employer, or their PACs during the semi-annual period. The date and amount of each contribution is required. 5

6 Contents of New Report (2) The report must contain the following information: Other contributions or donations to entities or events in which a covered official may have an interest (unless required to be reported under FECA), including: Events held to honor or recognize a covered legislative or executive branch official; Entities designated by, or established, financed, maintained, or controlled by, such an official; Entities named for a legislative branch official; Any entity in recognition of a legislative branch official. Contents of New Report (3) The report must contain the following information: Any funds paid, contributed, or arranged by a lobbyist, lobbyist employer, or their PAC(s) to pay for a meeting, conference, or similar event held by, or for the benefit of, one or more covered legislative or executive branch officials. Each Presidential inaugural committee and library foundation to which contributions of $200 (aggregate) were made by a lobbyist, lobbyist employer, or their PAC(s). 6

7 Certification With each semi-annual report, lobbyists and lobbyist employers must provide a certification that (i) they are familiar with the House and Senate gift rules, and (ii) they have not provided, requested, or directed a gift (including travel) to a Member or staff in violation of such rules. Donor Liability HLOGA amended the Lobbying Disclosure Act to make lobbyists and lobbyist employers liable for providing gifts or travel known not to be permitted by Senate or House rules. Increased Penalties HLOGA increased civil penalties for violations and added criminal penalties (up to 5 years in prison and/or fines under Title 18 of the U.S. Code) and set a knowingly and corruptly standard for criminal penalties. GAO audits 7

8 HLOGA amended the LDA to require registrants to disclose any entity that: (i) contributes over $5,000 per quarterly reporting period to the lobbying effort of the Registrant, and (ii) "actively participates" in the planning, supervision, or control of the Registrant's lobbying activities (under pre-existing law, the threshold is contribution of $10,000 per reporting period and "in whole or major part plans, supervises, or controls" lobbying activities). The term "actively participates" is not defined, but it sets a lower threshold than the pre-existing law, possibly covering those members who merely participate in lobbying strategy calls or going to the Capitol to lobby on "lobbying days." There is an exemption from this disclosure requirement if: (i) the Registrant lists the member entity on its public website as being a member of the Registrant or a contributor to the Registrant's lobbying effort (the specific Internet address must be provided), and (ii) the member does not in whole or major part plan, supervise, or control the Registrant's lobbying activities. Individual persons who are members of, or contributors to, a Registrant are exempt. 8

9 In addition to the LDA, criminal statutes constrain lobbyists activities, prohibiting actions such as bribery, gratuities, false statements, conspiracy, mail/wire fraud, and others. 9

10 Ethical codes, although unenforceable, provide additional parameters. For example: Corporate and association codes of ethics American League of Lobbyists Code of Ethics: Requires lobbyists and lobbyist employers to certify on a semi-annual basis that they (i) are familiar with the House and Senate gift and travel rules and (ii) have not provided a gift or travel to a Member or staff in violation of the rules. Violations of these rules and other requirements of the LDA carry up to $200,000 in civil penalties and/or up to five years imprisonment. 10

11 NO GIFTS (meals, entertainment, etc.) No gifts from lobbyists, agents of foreign principals or private entities that retain or employ registered lobbyists or agents of foreign principals OLD RULE: Permitted gifts from anyone, including lobbyists, under $50 per occurrence and under $100 per calendar year Exceptions to gift ban still available NO GIFTS (meals, entertainment, etc.) No gifts from lobbyists, agents of foreign principals or private entities that retain or employ registered lobbyists or agents of foreign principals OLD RULE: Permitted gifts from lobbyists under $50 per occurrence and under $100 per calendar year Exceptions to gift ban still available, plus bona fide constituent event exception 11

12 Registered Organizations may not sponsor events to honor Members of Congress during political conventions House Ethics Committee has interpreted prohibition to allow events in honor of a state congressional delegation Senate likely to issue similar guidance Tighter restrictions and new pre-approval procedures Lobbyists (and those employing lobbyists) may not sponsor travel No sponsorship of congressional travel if lobbyist accompanies Member or staff on any segment Member may not accept a trip that was planned, organized, requested or arranged by a lobbyist Certification by sponsor and pre-approval by Ethics Committee No more private jets Exceptions: Trip paid for directly by an institution of higher education One day/one night (two nights with pre-approval) 12

13 Tighter restrictions and new pre-approval procedures Lobbyists may not sponsor travel No sponsorship of congressional travel if lobbyist accompanies Member or staffer on any segment Exceptions: Approved 501(c)(3) charitable/educational organizations (lobbyist may not accompany) One day/one night Certification by sponsor and pre-approval by Ethics Committee Private jets OK but must be reimbursed at charter rate [NOTE DIFFERENCES BETWEEN HOUSE & SENATE RULES] 13

14 Two-year cooling off period for Members and very senior executive branch officials (e.g., Cabinet) (one year for senior staff) No lobbying by Member s spouse, unless spouse was lobbyist for one year prior to election or marriage Restrictions on negotiation of prospective private employment One-year cooling off period Restrictions on negotiations for prospective private employment Restrictions on lobbying by a Member s spouse Recusal if conflict of interest or appearance of conflict of interest due to employment negotiations 14

15 House Rules: No exercise facilities for former Members Senate: No floor privileges when Senate is in session for former Members who become lobbyists No use of gym or Member-only parking spaces for former Members who become lobbyists Registered lobbyists, organizations that employ registered lobbyists, and any employee listed as a lobbyist by a registrant may not make a gift or provide travel to a Member, Delegate, Resident Commissioner, officer, or employee of Congress, if the person has knowledge that the gift or travel may not be accepted under the rules of the House of Representatives or the Senate. 15

16 Questions or comments?