Disclosure Rules Eased

But Reformers Say Intent of Law Still Assured

Posted July 18, 2008 at 5:12pm

The devil is always in the details. And for lobbyists who were expecting to have to publicly report in devilishly difficult detail every breakfast, briefing and conference they attended with lawmakers, life just got a little easier.

A collective sigh of relief came as the House Office of the Clerk and Senate Office of Public Records posted revised guidelines last week, relaxing some of the financial reporting requirements for lobbyists and lobbying organizations attending events and parties.

The offices advised lobbyists in May to note in the LD-203 form the fee involved if a “covered official” was merely in attendance at an event. The offices deleted that requirement. The new guidelines also modified the amount of financial detail lobbyists must report on political action committees they control.

The about-face came after the House Clerk and Secretary of the Senate’s office were flooded with calls from lobbyists as well as ethics and union lawyers arguing that the office’s interpretation of

the statute was too broad and cumbersome.

While the new guidelines mean less disclosure, lawmakers involved in crafting the lobbying reform legislation say it still captures much of the money that is spent by private groups hosting parties for lawmakers.

And they argue that the revised guidelines actually better reflect the law’s intent.

The changes “are more in line with the statute,” said Brendan Daly, a spokesman for Speaker Nancy Pelosi (D-Calif.). “The original guidance was overly broad.”

Daly said the Speaker and Senate Majority Leader Harry Reid (D-Nev.) might consider further revisions.

Reid’s office also said the original guidelines were too broad.

“For instance, a simple speaking engagement by a Member of Congress would have been treated as ‘honoring’ that Member,” Reid spokesman Jim Manley said. “The revised guidance reflects an effort to address concerns and specifically includes language to ensure that the revisions are narrow and may not be abused by the reporting community.”

The House Clerk and Secretary of the Senate moved to ease concern surrounding section 203 of the Honest Leadership and Open Government Act, the law that requires all individual lobbyists and lobbying organizations to file forms that list ties to any political action committees, federal campaign contributions of more than $200 and expenditures for certain events that honor covered officials.

The forms are due July 30, and failure to file carries increased civil and criminal penalties, including a fine of up to $200,000.

Reform groups involved in crafting the original legislation supported the changes.

Public Citizen’s Craig Holman and Democracy 21’s Fred Wertheimer said they were consulted by Reid and Pelosi’s office as to what the proposed changes would look like.

Holman said the initial guidelines were very broad. “I had no problem with that, quite frankly, but it is not in the law. … If we wanted the rules expanded to every lobbyist, we would have to amend the law itself. It wasn’t what we were asking for originally.”

Wertheimer said he believed the extent to which the cost of convention parties will have to be publicly reported hasn’t changed from what the law originally intended.

“My sense of these guidelines is that it does not allow lobbyists who throw parties to honor or recognize a Member at the conventions not to have to report,” Wertheimer said. “The thrust of the disclosure provision is if you are paying for a party for a Member at the conventions, you have to disclose it.”

Laurence Gold, the AFL-CIO’s associate general counsel and a lawyer in private practice who represents other lobbying organizations, along with five other union lawyers, wrote the Senate and House earlier this month stating their concerns about having to file reports when attending a meeting with a Member.

In the letter, the union groups argued that the reporting would “both chill ordinary interaction and association with Members of Congress and impose undue and unreasonable recordkeeping and reporting burdens on registrants and their employed lobbyists.”

Gold said the new guidance adheres more closely to the intent of the law.

“On the principal point we raised in our letter about events to honor or recognize an official, they have improved the interpretation,” Gold said.

The new revisions require lobbyists and lobbying organizations to report the fee or contribution for an event if a covered official is honored or receives an award and they are a “sponsor” as defined by the Senate and House gift rules.

The House and Senate’s gift rules take a narrow view of sponsor, requiring that a person or group not only make a financial contribution to an event but have primary responsibility for the event’s organization.

“That’s a very significant thing they’ve done by narrowing what’s the definition of sponsoring and paying for an event. Just being a donor doesn’t count,” said Cleta Mitchell, an ethics lawyer at Foley & Lardner.

Additionally, lobbyists must report the cost of an event if they are buying numerous tables at a dinner party so it would “appear that they are paying the costs of the event and/or would not appear to be just ticket or table buyers,” according to the guidance.

While the last distinction of how many tables were bought by an organization was not specifically included in the lobbying reform, Public Citizen’s Holman says it is an important distinction.

“There are times in which lobbying organizations will pay a premium above the cost of the tickets,” Holman said. “That gets their name printed in the brochure of the event and they can almost get heralded as a co-host of the event.”

Not all ethics lawyers thought the modifications went far enough.

Kenneth Gross of Skadden Arps Slate Meagher & Flom continued raising concerns about the requirement of individual lobbyists in filing information regarding political action committees.

The previous guidance stated that lobbyists sitting on a PAC board would have to list all donations of the PAC on their personal LD-203 form. This could require a single lobbyist to list all the donations of several PACs they were involved with.

Under the new guidance, lobbyists are required to list only that they are on the board of the connected PAC, not document the individual contributions made by the PAC.

But if the lobbyist sits on a unconnected PAC, which according to Gross would include partnerships such as law firms and most limited liability corporations, they would still have to individually list the PAC contributions.

“These revised examples are certainly helpful,” Gross said. “But they don’t get us all the way where we need to be with regard to PAC disclosure and there are still issues regarding functional issues of exporting data and I still feel there is an issue regarding certification.”