Trade Groups Trip Over Disclosure Rule
The first-quarter lobbying disclosures appear to have been filed without much of a hitch so far, as the first real changes to the lobby laws in more than 10 years take effect.
But there is one provision targeting stealth coalitions that seems to have tripped up quite a few trade associations and that has more than a few groups running afoul of the law.
The new rule part of the Honest Leadership and Open Government Act requires coalitions and trade associations to list anyone who actively participates in the planning, supervision, or control of the groups lobbying and pays more than $5,000 in dues during the reporting quarter.
Theres one way to avoid this requirement: Trade groups or coalitions that already list their members on their Web sites dont need to list them again on the lobby forms. But a link to that Web site must be included on the disclosure form.
Yet, after reviewing the first-quarter lobbying disclosure reports of more than 50 prominent trade associations, only 16 including the U.S. Chamber of Commerce, the National Association of Broadcasters and the Business Roundtable provided a link or listed their membership.
Of those 16, only two the Recording Industry Association of America and the American Bankers Association opted to list members on the form.
Its possible, of course, that many trade groups do not assess dues during the first quarter, and so their members did not make any contributions. And many have hundreds, if not thousands, of members who do not actively participate in their lobbying.
Im not that surprised, said Pamela Gavin, the longtime superintendent of public records for the Senate. Most of them have lots of members. A lot of them dont have players who actually actively participate, and it depends on when they pay their dues.
None of the members of the National Federation of Independent Business or the American Dental Association, for example, pay more than $5,000 a quarter.
And the American Gaming Association, which says its members didnt actively participate in lobbying planning during the first quarter, doesnt need to list its members or a link to its Web site.
The law recognizes that if youre a de minimus participant [in a trade group], its not in the public interest to know about you, said Ki Hong, a partner at Skadden, Arps, Slate, Meagher & Flom.
Ethics lawyers say theyve cautioned clients to err on the side of disclosure.
Anybody who interprets that provision narrowly is doing so at their own risk, said Jeff Altman, of McKenna Long & Aldridge, who specializes in association compliance. I think the vast majority of organizations that we dealt with had no problem making the disclosure. They just didnt understand the requirement for what they were supposed to do.
Still, there appears to be some genuine confusion among the ranks of trade association counsels.
Despite guidance put out by the Senate Clerks Office, many major trade associations said their lawyers were unaware of the requirement or said they thought listing members on their Web site was enough.
The Grocery Manufacturers Association, CTIA-The Wireless Association, the Association of American Railroads and the Securities Industry and Financial Markets Association all amended their reports to include a link to their Web site after Roll Call contacted them about the issue.
Yet others, like the American Council of Life Insurance, are keeping with the status quo of listing their members only online.
Our view is, first of all, there is some murkiness on what exactly is participation or control and how much of the $5,000 is in a quarter, said David Leifer, associate general counsel at ACLI. We thought we were over-complying by listing names on the Web site.
So far, only one trade association, at least publicly, is not playing along. The National Association of Manufacturers originally filed its first-quarter report without a membership list as it was waiting for the U.S. Court of Appeals for the District of Columbia to weigh in on whether it would allow a court injunction until its case was heard.
After the appeals court denied NAMs stay, the association amended its reports, including a link to members who actively participated and paid more than $5,000 in dues during the first quarter.
The group is now waiting for the appeals court to hear the case on its merits, which, after being granted an expedited review, will happen sometime in July.
Despite having to release some of its membership, NAM general counsel Jan Amundson said the organization is committed to the lawsuit. Its membership is private, she said, and should remain so.
This has been a historic policy of NAM, and Congress, in one decision, is undoing something that weve had on the books for decades, Amundson said. Many [members] fear harassment or boycott and other things that happen to organizations that some part of the public doesnt like.