Organizations that engage in a specified amount of lobbying activities and contacts through personnel that receive financial or other compensation are required to register and file disclosure reports under the Lobbying Disclosure Act of 1995, as amended (most recently by the Honest Leadership and Open Government Act of 2007). Other than religious orders, tax-exempt churches, and their integrated auxiliaries, all social sector organizations, nonprofit as well as for-profit, which otherwise meet the thresholds on lobbying contacts and overall expenses (discussed below) must register and file reports.
The federal Lobbying Disclosure Act is intended to reach “professional lobbyists”—those paid to lobby on behalf of an employer or client. Thus, if a social sector organization engages in covered “lobbying contacts” through its own staff that exceed the statutory thresholds, that organization must register as a lobbying entity, and must register its individual employee-lobbyists. If, however, a social sector organization employs lobbyists only from an outside lobbying firm, the outside lobbying firm must register itself (and identify its social sector client) if its lobbying exceeds the statutory thresholds, but the social sector organization itself is not required to register.
All federal lobbying registrations and reports must be filed electronically at a single location, http://lobbyingdisclosure.house.gov/index.html, which covers registration for both the Secretary of the Senate’s Office and the Office of the Clerk of the House.
A social sector organization is required to register its employee-lobbyists if it meets the following two conditions:
First, the organization must have one or more compensated employees who (a) make more than one “lobbying contact” on behalf of the organization and (b) spend at least 20% of their total time for the organization on “lobbying activities” over a given quarterly reporting period. A “lobbying contact” is a written, oral or electronic communication to a “covered” federal official, (which includes a Member of Congress, congressional staff, and certain senior executive branch officials), with respect to the formulation, modification or adoption of a federal law, regulation, rule, or policy.
“Lobbying activities” include not only “lobbying contacts” but also background activities, research, and other efforts that support lobbying contacts. Note that lobbying contacts do not include the acts of testifying or submitting written testimony, and do not include lobbying of state or local legislators or governmental bodies. A Section 501(c)(3) organization that has elected the safe harbor formula under Section 501(h) of the Code has the option of using the Lobbying Disclosure Act’s definition of “lobbying activities” or the Internal Revenue Code’s definition of “influencing legislation” to determine the organization’s reporting obligation.
Second, the organization must have spent $11,500 or more in a quarterly reporting period on “lobbying activities.” The $11,500 includes salaries, overhead, and other expenses, as well as payments to an outside lobbyist during the three-month reporting period.
If an organization hires an outside lobbyist or a lobbying firm, then the outside lobbyist and his/her lobbying firm must register on behalf of the client/organization if he/she (a) makes more than one lobbying contact with a covered official on behalf of that client/organization, (b) spends at least 20% of his/her time for that client/organization in a given quarterly reporting period on lobbying activities, and (c) his/her/its total income from that client/organization for lobbying exceeds $3,000 in that quarterly reporting period.
Lobbyists are required to be registered within 45 days after either (a) being hired by a client with the inent that the lobbyist will make more than one lobbying contact and meet the 20% threshold, or (b) making a second lobbying contact (if the intent to make a second contact did not exist at the outset of the engagement) and meeting (or intending to meet) the 20% threshold. Information on the registration form, known as the LD-1 form, includes: identification of the lobbyist(s); the client or employer of the lobbyist(s); identification of any foreign entity and its contributions over $5,000 (if the foreign entity owns 20% of the client or controls, plans or supervises its activities); and a list of the general issue areas on which the registrant expects to lobby.
Registrants under the Act are required to file both quarterly and semi-annual reports.
Quarterly reports, also known as LD-2 reports, are to be filed within 20 days after the end of each calendar quarter. Among other items, these reports must include not only the issues lobbied upon, but the bill numbers and earmarks lobbied upon and the Houses of Congress and federal agencies contacted. Reports must also include a good faith estimate of either lobbying expenditures (for reports filed by organizations who employ in-house lobbyists), or income received from clients (for reports filed by outside lobbyists). Amounts in excess of $5,000 are to be rounded to the nearest $10,000.
Semi-annual reports, also known as LD-203 reports, are due on January 30 and July 30. The required disclosures in these reports include: the names of all political committees established or controlled by the lobbyist or registered organization; disclosures of contributions by each lobbyist of more than $200 to federal candidates or officeholders, political committees, or leadership PACs; and funds disbursed for events to honor covered government officials, to entities that are named for or “in recognition” of such officials and to entities that are controlled or designated by such officials. The name of each presidential library and inaugural committee to which contributions of at least $200 were made during the semi-annual period must also be reported. Additionally, registrants are required to provide a certification that the organization or person filing the report has read and is familiar with the rules of the House and Senate regarding gifts and travel, and that they are compliant with the rules.
Registrants can download forms by following instructions on this site: http://lobbyingdisclosure.house.gov/index.html
Amendments in 2007 to the Lobbying Disclosure Act increased the civil penalties for violations of the Act and for failing to remedy a defective filing to $200,000. In addition, the amendments imposed criminal penalties for “knowingly and corruptly” failing to comply with the Act, with a maximum of five years’ imprisonment.
The Lobbying Disclosure Act only applies to “direct” lobbying—direct communications with covered federal officials, and the “lobbying activities” that the person making the direct communication engages in to prepare for those contacts. “Grassroots” lobbying is not covered. An organization that engages only in grassroots lobbying will not be required under the Act to register and report.
Congressional Gift and Travel Rules
The Lobbying Disclosure Act, as amended, imposes civil and criminal penalties on registered lobbyists (or organizations that employ them) for violations of congressional gift and travel rules. The Act expressly prohibits any registered lobbyist, any organization that employs them (and is required to register), and any employee required to be listed as a lobbyist from making a “gift” or providing “travel” to a member or staffer (and other “covered officials”) if the registrant “has knowledge that the gift or travel may not be accepted” under House and Senate rules.
The congressional gift and travel rules, and the numerous exceptions to those rules, are extremely detailed and particularly restrictive with regard to registered lobbyists. No attempt will be made here to summarize those rules. Any questions concerning the applicability of the congressional gift and travel rules to specific situations should be addressed to counsel with specific expertise in this area of law.
Federal Funds and Grants
Grant money and funds under federal contracts may not be used by nonprofits and other organizations for lobbying or for other advocacy or political activities unless authorized by Congress. These restrictions apply to both direct and grassroots lobbying at the federal, state and local levels.