Even if you have nothing to report, you still need to file: that is the lesson from last week's Lobbying Disclosure Act (LDA) settlement. Late last week, DC-based lobbying firm Carmen Group reached an agreement with the United States Attorney's Office for the District of Columbia in the amount of $125,000 for failing to timely file quarterly reports of lobbying activities and semiannual reports regarding political contributions. Our review of the now-filed reports shows that the bulk of the violations stemmed from individual lobbyists' failure to file their "LD-203 Semiannual Report of Certain Contributions." Many of these previously unfiled reports are "no contribution" reports. The Carmen Group asserted in its defense that the company's former General Counsel was responsible for filing the reports, but that argument is difficult to reconcile with the LDA's requirement that each individual lobbyist is responsible for certifying their compliance and electronically signing the report.
In addition to the missing LD-203 reports, the lobbying firm also failed to file a number of quarterly lobbying activity reports (LD-2's), many of which were "no activity" reports or termination reports. The firm also amended a large number of LD-2 reports to remove inactive lobbyists, presumably to relieve them of their LD-203 obligations.
A $125,000 penalty and the public relations fallout is a high price to pay for failing to file straightforward reports that, for the most part, required the filer to check one box and hit the "submit" button. This settlement, the second this year involving the Lobbying Disclosure Act and the largest civil fine levied on a lobbyist registrant through settlement, reflects the importance of properly de-registering lobbyists who are no longer active, and ensuring that all LD-2 and LD-203 reports are filed, even where there is no activity to report. This lesson is not limited to lobbying firms; it is equally imperative for corporations, trade associations and other organizations that employ in-house lobbyists to have a robust LDA compliance program in place.
The $125,000 penalty is also a wake-up call in terms of what has historically been relatively lax enforcement, even after the 2007 "Honest Leadership and Open Government Act" changes to the LDA. The violations, although numerous, were not especially egregious and deprived the public of little meaningful disclosure. In this context, the penalty and public relations fallout are sobering and could signal a commitment to more rigorous future enforcement by the Department of Justice.