Nov 26, 2007 -- Reform Groups Call on House Clerk and Senate Secretary to Implement New Lobbying Law Consistent with the Language and Purpose of the Statute

Reform groups sent a letter last week urging House Clerk Lorraine C. Miller and Secretary of the Senate Nancy Erickson to implement the new lobbying disclosure reforms in the Honest Leadership and Open Government Act (HLOGA) "in a manner that is consistent with the language and purpose of the statute, and with the intent of Congress to provide the public with broad disclosure of the money being raised and spent by lobbyists to influence Congress."

The reform groups include the Campaign Legal Center, Common Cause, Democracy 21, the League of Women Voters, Public Citizen and U.S. PIRG.

The House Clerk and Senate Secretary are expected to issue new rules and forms to implement the HLOGA in December.

The letter from the reform groups addresses a number of issues involved in properly interpreting and implementing the new law.

Disclosure Required of Both Direct and Indirect Spending on Financial Favors

According to the letter, "A key reform adopted in HLOGA amends the LDA [Lobbying Disclosure Act] to require lobbyists to disclose a broad range of financial benefits and favors that they provide to assist members of Congress."

The letter states, "The legislation recognizes that lobbyists influence Members of Congress not only through spending on 'lobbying activities,' which is already subject to disclosure, but also by providing financial benefits and favors to assist Members. As a result of the HLOGA, the LDA, for the first time, now requires public disclosure of these other ways in which lobbyists organize and spend money to assist Members."

According to the letter, disclosure is required "not only of contributions and disbursements directly made by a registrant to benefit a Member for these purposes, but also of contributions and disbursements indirectly made by a registrant through a third person to benefit a Member for such purposes."

Disclosure of Spending for Events and Entities Involving More than one Member

The letter states, "Subsection (i) of section 1604(d)(1)(E) requires lobbyists to disclose payments they make for 'the cost of an event to honor or recognize a covered legislative branch official' or executive branch official."

The letter continues, "Subsection (ii) requires disclosure of contributions or disbursements 'to an entity that is named for a covered legislative branch official 'or executive branch official,' or to a person or entity in recognition of such official."

The letter adds, "Subsection (iii) requires lobbyists to disclose funds contributed or disbursed to 'an entity established, financed, maintained or controlled by a covered legislative branch official' or executive branch official, or to 'an entity designated by such official.'"

According to the letter, "In each instance, this disclosure requirement applies with regard to any entity or event involving one Member, or two or more Members, and it is incumbent upon you to make this clear in the rules and forms you issue to ensure proper compliance with the new law."

The letter adds:

For example, with regard to subsection (i), which requires disclosure of money spent by a lobbyist for an event held to honor a covered legislative branch official, it is clear that disclosure is required if the event is held to honor two or more Members, or a state delegation of Members or Members who serve on a House Committee, or a group of Members (such as, for example, the "Blue Dogs"). No other interpretation of the statute makes any sense.

The letter continues, "A huge loophole and an easy path for circumventing and evading the new disclosure requirement would be created if lobbyists could avoid disclosure of payments made for an event to honor a Member simply by including a second Member in the event. There is no evidence and no reason to believe that Congress wrote this provision in a manner that would license wholesale evasion and circumvention of the new disclosure requirement."

The letter adds:

The same holds true in the case of payments made by lobbyists to an entity controlled or established by two or more Members (subsection iii) or for payments made by lobbyists to an entity that is named for two or more Members (subsection ii). Thus, for example, payments made by lobbyists to a foundation that is established, financed, maintained or controlled by two or more Members of a House caucus are required to be disclosed under this provision.

According to the letter:

Any effort to restrict these disclosure requirements to cases where only one Member is involved would be in direct conflict with the language, meaning and purpose of the statutory provision and with its goal of providing the public with broad disclosure of the financial benefits and favors provided by lobbyists to assist members of Congress. Such a restriction would open a massive loophole in the law and severely limit the scope of the disclosure to the public, thereby frustrating the purpose of Congress in enacting the provision.

Reporting Requirements

The letter notes that the new disclosure reports about the financial benefits provided by lobbyists to assist Members are required to be filed on a semi-annual basis.

According to the letter:

However, under section 203(c) of HLOGA, you are required to submit a report within one year "on the feasibility of requiring the reports to be made on a quarterly, rather than a semi-annual, basis." This reflects the "sense of Congress" set forth in section 203(d) that after the first two years of the section 1604(d)(1) semi-annual reports, those reports "should be made on a quarterly basis if it is practicably feasible to do so."

The letter states, "We strongly urge you to take all steps necessary to implement the goal of Congress and ensure that quarterly reporting can be instituted in the House and Senate after the two-year initial period for semi-annual reporting."

Adequate Resources to Implement HLOGA

The letter adds, "We also strongly urge you to take the steps necessary to ensure that your offices have adequate resources to fully and effectively implement the additional public disclosure obligations imposed on your offices by the HLOGA. If you do not currently have sufficient resources to carry out your new disclosure obligations under the statute in a timely manner, it is essential that you immediately request that such resources be provided by the House and Senate."

The letter states, "A principal goal of HLOGA, furthermore, is to make the information required to be disclosed by lobbyists available to the public on the Internet in an easily accessible and timely manner. The availability of this information to the public on the Internet in a 'searchable, sortable and downloadable manner' is a core provision of the new law."

The letter continues, "In order to provide assurances to the public that your offices have, or will have, adequate resources and funding to carry out your new responsibilities, we call on you to inform the public about whether you have adequate resources and funding to meet your new disclosure obligations under HLOGA. If you do not, we call on you to inform the public whether you have requested such resources and funding from the House and Senate."

Disclosure Requirements for Stealth Coalitions

The letter states, "Section 207, 'Disclosure of Lobbying Activities by Certain Coalitions and Associations,' is a simple and straightforward section to strength the disclosure requirements of the Lobbying Disclosure Act of 1995 (LDA)."

According to the letter, "Originally, a number of organizations were able to evade the disclosure requirements by establishing a coalition in name only, and then exploiting a provision in the old LDA that required only the coalition - and none of the groups behind the coalition - to register and report its lobbying activities. As a result, the public was aware that a coalition named, for example, the Policy & Taxation Group, was making expenditures to influence legislation without knowing who the key players were in funding and running the coalition."

The letter adds:

Section 207 does not change the definition of who has to register as a lobbying entity ("client") with the House Clerk or Senate Secretary. Rather, it simply amends the disclosure requirements for groups that are already registered. So, under the section a coalition or trade association that is already registered must now disclose any organization that both contributes at least $5,000 toward the coalition or trade association's lobbying activities and "actively participates in the planning, supervision or control of such lobbying activities."

The letter further states:

The new provision exempts a registered coalition or trade association from reporting any individuals who are members of the coalition or trade association. Furthermore, organizational members of a registered coalition or trade association who pay membership dues to support the coalition's efforts, but who do not actively participate in the "planning, supervision or control" of the coalition's lobbying activities, also are exempt from the disclosure requirement.

The letter continues, "Section 207 of the new lobbying and ethics legislation has been carefully drafted to close a disclosure loophole in LDA involving stealth lobbying coalitions and impose limited new reporting burdens on registered coalitions and trade associations, while at the same time protecting the associational rights of individuals and organizations."

The letter concludes, "We strongly urge you to interpret and implement the HLOGA to carry out the intent and purpose of Congress to provide the public with timely and easily accessible broad new disclosures about the ways in which lobbyists and lobbying organizations spend money to influence members of Congress."

To read the letter sent by reform groups, click here.