By the U.S. House Gov.
In addition to campaign contributions to elected officials and candidates, companies, labor unions, and other organizations spend billions of dollars each year to lobby Congress and federal agencies. Some special interests retain lobbying firms, many of them located along Washington’s legendary K Street; others have lobbyists working in-house. We’ve got totals spent on lobbying, beginning in 1998, for everyone from AAI Corp. to Zurich Financial.
You can use the options below to search through our database in several ways: search by name for a company, lobbying firm or individual lobbyist; search for the total spending by a particular industry; view the interests that lobbied a particular government agency; or search for lobbying on a general issue or specific piece of legislation.
Total Lobbying Spending
1998
$1.45 Billion
1999
$1.44 Billion
2000
$1.56 Billion
2001
$1.63 Billion
2002
$1.82 Billion
2003
$2.04 Billion
2004
$2.18 Billion
2005
$2.42 Billion
2006
$2.62 Billion
2007
$2.86 Billion
2008
$3.30 Billion
2009
$3.50 Billion
2010
$3.55 Billion
2011
$3.33 Billion
2012
$3.30 Billion
2013
$0.82 Billion
Number of L0bbyists*
1998
10,408
1999
12,937
2000
12,536
2001
11,832
2002
12,118
2003
12,915
2004
13,169
2005
14,073
2006
14,502
2007
14,845
2008
14,215
2009
13,803
2010
12,972
2011
12,711
2012
12,411
2013
9,434
NOTE: Figures are on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on April 29, 2013.
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 Honest Leadership and Open Government Act of 2007 (HLOGA).
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 registrations 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’s New
This revision has been written based upon comments received in the last six months and issues that have arisen as a result of the Secretary’s and Clerk’s statutory and administrative responsibilities. It also includes non-substantive grammatical changes throughout.
Updated Registration Threshold
As required by the LDA, the lobbying disclosure thresholds referenced throughout the Guidance have been updated to reflect changes in the Consumer Price Index (as determined by the Secretary of Labor) during the preceding 4-year period. After January 1, 2013, an organization employing in-house lobbyists is exempt from registration if its total expenses for lobbying activities does not exceed and is not expected to exceed $12,500 during a quarterly period. The $3,000 income threshold for lobbying firms remains unchanged. See Guidance Section 4 on “Who Must Register and When” for additional information.
Section 3 – Definitions
Actively Participates:
An organization “actively participates” in the planning, supervision, or control of lobbying activities of a client or registrant when that organization (or an employee of the organization in his or her capacity as an employee) engages directly in planning, supervising, or controlling at least some of the lobbying activities of the client or registrant. Examples of activities constituting active participation would include participating in decisions about selecting or retaining lobbyists, formulating priorities among legislative issues, designing lobbying strategies, performing a leadership role in forming an ad hoc coalition, and other similarly substantive planning or managerial roles, such as serving on a committee with responsibility over lobbying decisions.
Organizations that, though members of or affiliated with a client, have only a passive role in the lobbying activities of the client (or of the registrant on behalf of the client), are not considered active participants in the planning, supervision, or control of such lobbying activities. Examples of activities constituting only a passive role would include merely donating or paying dues to the client or registrant, receiving information or reports on legislative matters, occasionally responding to requests for technical expertise or other information in support of the lobbying activities, attending a general meeting of the association or coalition client, or expressing a position with regard to legislative goals in a manner open to, and on a par with, that of all members of a coalition or association – such as through an annual meeting, a questionnaire, or similar vehicle. Mere occasional participation, such as offering an ad hoc informal comment regarding lobbying strategy to the client or registrant, in the absence of any formal or regular supervision or direction of lobbying activities, does not constitute active participation if neither the organization nor its employee has the authority to direct the client or the registrant on lobbying matters and the participation does not otherwise exceed a de minimis role.
Affiliated Organization:
An affiliated organization is any entity other than the client that contributes in excess of $5,000 toward the registrant’s lobbying activities in a quarterly period, and actively participates in the planning, supervision, or control of such lobbying activities. The 2007 amendments to the LDA did not change the way in which LDA identified affiliates (i.e., those that in whole or in major part plan, supervise, or control such lobbying activities) are to be disclosed on Forms LD-1 and LD-2.
Client:
Any person or entity that employs or retains another person for financial or other compensation to conduct lobbying activities on behalf of that person or entity. An organization employing its own lobbyists is considered its own client for reporting purposes.
Contribution Reports:
Form LD-203 is required to be filed semiannually by July 30th and January 30th (or next business day should either of those days fall on a weekend or holiday) covering the first and second calendar halves of the year. Registrants and active lobbyists (who are not terminated for all clients) must file separate reports that detail FECA contributions, honorary contributions, presidential library contributions, and payments for event costs. (See discussion in Guidance Section 7 below.)
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 through V position
Any member of the uniformed services serving at grade O-7 or above
Schedule C employees.
Covered Legislative Branch Official:
Covered Legislative Branch officials are:
A Member of Congress
An elected Officer of either the House or the Senate
An employee, or any other individual functioning in the capacity of an employee, who works for a Member, committee, leadership staff of either the Senate or House, a joint committee of Congress, a working group or caucus organized to provide services to Members, and any other Legislative Branch employee serving in a position described under Section 109(13) of the Ethics in Government Act of 1978.
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 Sections 3(8)(A) of the Act (2 U.S.C. § 1602(8)(A)). Note the exceptions to the definition at Section 3(8)(B) of the Act (2 U.S.C. § 1602(8)(B)). See Discussion at Guidance Section 4 below.
Lobbying Firm: A lobbying firm is 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 quarterly report on Form LD-2 filed pursuant to Section 5 of the Act (2 U.S.C. § 1604).
Lobbyist:
Any individual (1) who is either employed or retained by a client for financial or other compensation (2) whose services include more than one lobbying contact; and (3) whose lobbying activities constitute 20 percent or more of his or her services’ time on behalf of that client during any three-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.
Public Official:
A public official includes an elected or appointed official, or an employee of a Federal, state, or local unit of government in the United States. There are five exceptions to this definition, including a college or university, a government-sponsored enterprise, a public utility, guaranty agency, or an agency of any state functioning as a student loan secondary market. The 1998 amendments to the LDA expanded the definition of a public official in Section 3(15)(F) to add a group of governments acting together as an international organization. Its purpose was to ensure those international organizations, such as the World Bank, would be treated in the same manner as the governments that comprise them.
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 $3,000 during a quarterly 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 $12,500 during a quarterly period.
The registration requirement of potential registrants is triggered either (1) on 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% of time threshold), or (2) on the date their employee/lobbyist (who meets the 20% of time threshold) in fact makes a second lobbying contact, whichever is earlier. In either case, registration is required within 45 days.
Example 1: Lobbying firm “A” is retained on May 1, 2008 by Client “B” to make lobbying contacts and conduct lobbying activities. “A” files an LD-1 on behalf of “B” with an effective date of registration of May 1, 2008.
Example 2: Corporation “C” does not employ an individual who meets the definition of “lobbyist.” Employee “X” is told by her supervisor to contact the Congressman representing the district in which Corporation “C” is headquartered. “X” makes a lobbying contact on June 1, 2008. “X” does not anticipate making any further lobbying contacts, but spends 25% of her time on this legislative issue. No registration is required at this point. In August 2008, “X” is instructed to follow up with the Congressman again. “C” registers and discloses August 5, 2008 as the effective date of registration (the date that “X” contacted the Congressman for the second time and thereby met the definition of a lobbyist).
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) of the Act. 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 forthat client over any three-month period. Note that a registration would not be required for pro bono clients since 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, would not be met. Keep in mind that the obligation to report under the LDA arises from active status as a registrant. Therefore if a registration has been filed for a pro bono client, LD-2 and LD-203 reports would be expected to be filed until the registration is validly terminated.
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 quarterly period).
Example 1: Lobbyist “A” telephones Covered Official “B” in the morning to discuss proposed legislation. In the afternoon she telephones Covered Official “C” 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.
Clarification of an 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, regulation, or other action of the Congress or an agency.” The 1998 amendments to the LDA clarified that communications that are compelled by the action of a Federal agency 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.
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 is 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, is also pivotal. Generally, if work such as reporting or monitoring occurs at a time when future lobbying contacts are contemplated, such 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 other 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.
Please note that the 20% of time threshold applies to registration and not to the reporting section.
Is it Lobbying Contact/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 Section 6033(b)(8) of the Internal Revenue Code (IRC) 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” for Executive Branch lobbying. Registrants should note that the tax definition of lobbying is broader with respect to the type of activities reported, while it is narrower with respect to the universe of Executive Branch officials who qualify as covered Executive Branch employees.
Under the 1998 amendments to the LDA, registrants making a Section 15 election must use the Internal Revenue Code definition for Executive Branch lobbying, and the LDA definition for Legislative Branch lobbying. Because there are fewer Executive Branch officials under the IRC definitions than under the LDA definitions, this may result in fewer individuals being listed as lobbyists and fewer lobbying contacts reflected on the Form LD-2.
Also note that definitions under the tax code include “grass-roots” and “state” 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) isnot 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 $3,000.
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 $6,500 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 $6,5 00 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 $12,500.
Example 3: Same as Example 2, except the expenses related to the lobbying activities of Employees “A” and “B” total only $9,000, but the trade association also pays $5,000 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.
Timing
The registration requirement of a potential registrant is triggered either (1) on the date their employee/lobbyist is employed or retained to make more than one lobbying contact on behalf of the client (and meets the 20% of time threshold), or (2) on the date their employee/lobbyist (who meets the 20% of time threshold) in fact makes a second lobbying contact, whichever is earlier. In either case, registration is required within 45 days of that date.
Example: 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 $12,500 in a quarterly period. However, issues of interest to “B” turn out to be more controversial than expected, and the $12,500 threshold is in fact met a month later.
Lobbying firm “A” has no registration requirement at the present time. The requirement to register is triggered if and when 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 $12,500. “B” needs to register immediately.
Listing of Foreign Entities
Each registration must contain the name, address, principal place of business, amount of any contribution greater than $5,000 to the lobbying activities of the registrant, and approximate percentage of ownership in the client of any foreign entity that: holds at least 20% equitable ownership in the client or any affiliate of the client required to be listed on line 13; or directly or indirectly, in whole or major part, plans, supervises, controls, directs, finances, or subsidizes the activities of the client or affiliate of the client required to be listed on line 13; oris an affiliate of either the client, or an organization affiliated with the client identified on Line 13 or 14 of Form LD-1 and has a direct interest in the outcome of the lobbying activity. The purpose of the disclosure is to identify the interests of the foreign entity that may be operating behind the registrant.
Example: Lobbying Firm “A” is retained to lobby on behalf of Company “B,” which is wholly owned by Foreign Company “C.” “C” is wholly owned by Foreign Company “D,” and “D” is wholly owned by Foreign Company “E.” “C,” “D,” and “E” must be disclosed on Line 14.
Section 5 – Special Registration Circumstances
Elaboration on the Definition of Client
In some cases a registrant is retained as part of a larger lobbying effort that encompasses more than one lobbying firm on behalf of a third party. Generally, the entity that is paying the registrant is listed as the client on behalf of the third party. The third party, who is paying the intermediary (client), is listed also on Line 13 of Form LD-1 as an affiliate.
Example: Client “P” retains lobbying firm “F” for general lobbying purposes, but has a new interest in obtaining an outcome in an area new to “P.” “F” realizes that a boutique lobbying firm “L” has an excellent track record for obtaining the type of outcome “P” is seeking, and talks to “P” about subcontracting. “P” agrees with “F’s” strategy. “F” contacts “L” to retain the latter to do the project. “F” is responsible for paying “L.” Within 45 days, “L” registers disclosing “F on behalf of P” as the client, and listing “P” as the affiliate on Line 13 of Form LD-1.
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 Form LD 2 for the quarterly period that the registrant becomes entitled to it.
Example 1: On January 1, 2008, 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, 2008. The result is not obtained and “G” is not entitled to any fee during the first quarterly period. “G” must report its lobbying activities for the first quarterly period; the income reported is “Less than $5,000.” The desired result does occur in the second quarterly period of 2008. In the report for that period, “G” discloses its lobbying activities for that period and the total contingent fee.
Example 2: Lobbying Firm “J” discusses an arrangement to accept stock options worth $4,500 from Client “M” in lieu of payment of a contingency fee. After determining that acceptance of a success fee is not a violation of another statute, “J” signs a contract with “M,” and registers. Late in the first quarter of the lobbying activities, it appeared “J” achieved the result. “J’s” initial quarterly lobbying report disclosed lobbying income of less than $5,000. “M’s” stock value increased shortly thereafter to be valued at $6,000, so “J” exercised its options. “J” amended the previously filed quarterly report to reflect income of “$5,000 or more,” and rounded the amount to $10,000.
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 quarterly reports.
If Company “B” contributes $5,000 or more to “Z’s” lobbying activities during a quarterly period and actively participates in the planning, supervision, or control of the lobbying activities, 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 $5,000 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. 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, 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 2008. Effective upon close of business on December 31, 2008, “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 $12,500 during the January March quarterly 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, 2008, the date “D” first had lobbyist employees, and the registration is due by February 14, 2009. 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 by filing separate termination reports for each remaining registrant/client relationship. 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. “P’s” registration should be terminated, and P should file termination reports for each remaining registrant/client relationship, but only after P ceases to exist.
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 LD-2 quarterly report.
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 bona fide 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 that contribute more than $5,000 toward the lobbying activities of the registrant in the quarterly period, and actively participate in the planning, supervision, or control of the lobbying activities (Section 4(b)(3)). Such organizations are identified on Line 13 of Form LD 1.
Example 1: Association “A” has 20 organizational members who each pay $20,000 as a portion of their annual dues to fund “A’s” lobbying activities. “E” is an employee of Organization “O,” which is a member of “A.” “E” serves as a member of “A’s” board, as a representative of “O.” While “A” carries out various functions, a substantial part of its mission is lobbying on issues of interest to its member organizations. “E’s” board membership constitutes active participation by “O” in the lobbying activities of “A,” and thus “O” would need to be listed as an affiliated organization of “A.”
Example 2: Another association “A” has 1000 organizational members who each pay $20,000 as a portion of their annual dues to fund “A’s” lobbying activities. “E” is an employee of Organization “O,” which is a member of “A.” “E” serves as a member of “A’s” board, as a representative of “O.” “A” performs numerous functions, only a modest portion of which is lobbying. With regard to “A’s” lobbying activities, “A’s” board is only involved in approving an overall budget for such activities, but otherwise leaves supervision, direction, and control of such matters to a separate committee of member organizations. “E’s” board membership in this case does not constitute active participation by “O” in the lobbying activities of “A.”
Example 3: Another association “A” has 1000 organizational members who each pay $1,000 a month in annual dues to “A.” “E” is an employee of Organization “O,” which is a member of “A.” “E” serves as a member of “A’s” lobbying oversight group as a representative of “O.” The lobbying oversight group plans and supervises lobbying strategy for “A.” While “E’s” activities in “A” would constitute active participation, because “O” does not contribute $5,000 in the reporting quarter to the lobbying activities of “A,” “O” would not need to be listed as an affiliate of “A.”
Example 4: Another association “A” has 100 organizational members who each pay $30,000 a month as a portion of their annual dues to fund “A’s” lobbying activities. “E” is an employee of Organization “O,” and attends “A’s” annual meeting/conference, informally provides “O’s” list of legislative priorities to “A,” and also facilitates responses from “O” to occasional requests for information by “A’s” lobbyists. These activities would not make “O” an active participant in the lobbying activities of “A.”
Example 5: Organization “O” joins with a group of nine other organizations to form Coalition “C” to lobby on an issue of interest to it. Each contributes $50,000 to “C’s” budget. “O’s” vice president for government relations is part of the informal group that directs the lobbying strategy for “C.” “O” would be considered an active participant in “C’s” lobbying activities and would have to be disclosed.
Note that a coalition with a foreign entity as a member must identify the foreign entity on Line 14 of Form 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, a convention or association of churches and religious orders (Section 3(8)(B)(xviii)), if a church (its integrated auxiliary, a convention or association of churches, and religious orders) hires an outside firm that conducts lobbying activity on its 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 $3,000 in a quarterly period.
Section 6 – Quarterly Reporting of Lobbying Activities
When and Why a Report is Needed
Each registrant must file a quarterly report on Form LD-2 no later than 20 days (or on the first business day after such 20th day if the 20th day is not a business day) after the end of the quarterly period beginning on the first day of January, April, July, and October of each year in which a registrant is registered. Lobbying firms file separate reports for each client for each quarterly reporting period, while organizations employing in-house lobbyists file one report covering their in-house lobbying activities for each quarterly reporting period. All reports must be filed electronically (with exceptions as noted below). 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 quarterly period in which it incurred its registration requirement, and for each quarterly period thereafter, through and including the reporting period encompassing the date of registration termination. 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 quarterly 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 $3,000 during a particular quarterly period). A registrant with no lobbying activity during a quarterly period checks the no activity box on 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, 2008. During January March 2008, “A” lobbied for “Y” nearly full time. During the April – June period in 2008, however, “A” made only one lobbying contact for “Y” in April, but lobbying fees for the quarter were $10,000. For the April – June quarterly period, even though “A” had minimal lobbying activities, Lobbying Firm “Z” must report “A’s” lobbying activities (due to “A’s” being listed as a lobbyist) and must report the $10,000 lobbying fees.
Example 2: Lobbying Firm “Z” is retained by Client “X” on June 1, 2008 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, file its Q2 LD-2 Report by July 20, and, if it chooses to terminate, file its termination report by October 20.
Disclosing that a Client is a State or Local Government or Instrumentality
If the client is a state or local government or instrumentality, check the box on Line 7 of Form LD-2.
Mandatory Electronic Filing
Section 5 of the LDA was amended to require the mandatory electronic filing of all documents required by the LDA. The only exception to mandatory electronic filing is for the purpose of amending reports in the format previously filed, or for compliance with the Americans with Disabilities Act. Each electronic lobbying disclosure form provides usability for people with vision impairments who have the appropriate software and hardware. If you have questions regarding additional ADA accommodations, please contact the Senate Office of Public Records at 202-224-0758.
Preparing to File the Quarterly 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 expenses or income would be met. Since Section 6(a)(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 quarterly 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 reimbursable expenses, costs, or disbursements that are in addition to fees and separately invoiced. Line 12 of Form LD-2 provides boxes for a lobbying firm to report income of less than $5,000, or of $5,000 or more. If lobbying income is $5,000 or more, a lobbying firm must provide a good faith estimate of the actual dollar amount rounded to the nearest $10,000.
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 Form LD-2 provides for an organization to report lobbying expenses of less than $5,000, or $5,000 or more. If lobbying expenses are $5,000 or more, the organization must provide a good faith estimate of the actual dollar amountrounded to the nearest $10,000. Organizations using the LDA expense reporting method mark the “Method A” box on Line 14 of Form LD-2.
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 retained lobby firms or 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. An organization must contact any other organization to which it pays membership dues in order to learn what portion of the dues is used by the latter organization for lobbying activities. It is necessary for the former organization to include the portion of the dues that is designated for lobbying activities in the total of lobbying expenses reported by the former organization. A registrant cannot apportion the lobbying expense part of the dues to avoid disclosure. Dues payments for lobbying activities should be included in the estimate for the quarter in which they are paid.
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 quarterly 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 quarterly period are reportable. The Section 3(7) definition of lobbying activities is not limited to lobbying contacts. Examples of lobbying expenses to be included are reflected below.
Example 1: 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 quarterly period.
Example 2: Corporation “R” is a registrant that is interested in building a bypass around a city in state “S.” “R’s” governmental affairs team is comprised of lobbyists who are federally-focused, and lobbyists who are state-focused. The entire staff prepares a strategic lobbying plan to support the building of the bypass. This includes both federal and state lobbying. In this example, the time spent by the state level lobbyists preparing the materials would be included in “R’s” good faith estimate of lobbying expenses for the quarter because, at the time the materials were prepared, they were to be used for federal lobbying.
Example 3: Same circumstances as Example 2, but in this situation, the aforementioned strategic lobbying plan includes hiring one firm to help with the production of the plan, and another firm to place advertising in media in “S” to encourage citizens in “S” to contact their representatives about the importance of building the bypass. The total cost of producing the plan, but not the cost of the advertising media fees, must be included in “R’s” good faith estimate of lobbying expenses for the quarter.
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 or expenses (whichever, the organization believes in good faith is closer to the actual amount) 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 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 to the Internal Revenue Service their lobbying expenditures in conformity with 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 IRC Section 162(e) rules. We believe that this reporting option is available to include also 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 all 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 Form LD-2 would require any organization to report if the amount of lobbying expenses was less than $5,000, or $5,000 or more. If the expense amount is $5,000 or more, it should be rounded to the nearest $10,000. Line 14 of Form 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 the IRC and LDA are not harmonized in terms of expense reporting. Registrants are advised that if they elect to report under Section 15, they may not subtract lobbying expenses for lobbying state and local officials and grassroots lobbying from the total expenses reported under the LDA. Doing so alters the IRS reportable total, and is not permitted.
Quarterly Reporting of Lobbying Activities – Contents of Report
The two core disclosures required by Section 5(b) and 5(c) of the LDA and incorporated into Form LD-2 are: (1) lobbying income or expenses; and (2) lobbying issues. Form LD-2 has been designed to allow registrants the greatest flexibility in terms of document length to correspond with the varying amounts of information relating to the core disclosures. The following examples illustrate how the nature of the core disclosures builds 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 Q1 2008 reporting period, “A” received $3,000 from “B,” but had no lobbying activity becau