Last month the Chicago Board of Ethics made headlines when it fined former Obama administration official David Plouffe $90,000 for failing to register as a lobbyist after communicating with city officials by email.
But the story did not end there. According to the Chicago Tribune, the city’s ethics board is now looking into potential lobbying registration violations by dozens of individuals and companies. As with the Plouffe matter, these potential violations trace back to messages sent to Mayor Rahm Emanuel’s personal email accounts, which were released in response to a pair of open records lawsuits.
These developments in Chicago serve as a potent reminder of the penalties and reputational risks from ignoring state and local lobbying registration laws.
Becoming a “Lobbyist”
It is not always apparent whether a communication is covered by a state or local lobbying law. Many states and localities define “lobbying” quite broadly, covering attempts to obtain or renegotiate contracts, encouraging persons outside the government to contact government officials, and even cultivating goodwill. Also, in most jurisdictions, attorneys do not have a special status under the lobbying law and must register when they engage in an activity subject to lobbying registration.
The legal and public relations implications for being a “lobbyist” are significant, and federal, state, and local laws vary widely on the requirements that trigger registration. Many lobbying laws also impose ancillary restrictions on lobbyists and their employers, such as stringent limits on gifts that may be given to public officials, and on political contributions and fundraising.
A Single Email or Call Can Trigger Registration
In November 2015, David Plouffe sent a single email to Mayor Emanuel, requesting the Mayor’s help with regulatory issues facing his then-employer.
Plouffe’s email was made public in response to a pair of open records lawsuits seeking email from the Mayor’s personal accounts. Although the email cost Plouffe nothing to send, it ended up costing him $90,000. Just months after the public release of the email, the Chicago Board of Ethics concluded that by sending the email Plouffe was “lobbying” under Chicago law and should have registered as a lobbyist within five business days.
In Chicago, There Is No Such Thing as a De Minimis Contact
Under Chicago’s lobbying law, once five days have elapsed after an initial lobbying contact, an unregistered lobbyist is subject to fines at a rate of $1,000 per day. Total fines continue to add up until he or she finally registers, regardless of whether the individual lobbies every day or whether the initial contact was the first and last communication with a public official. The ethics board acknowledged that this fine structure for individual lobbyists, who bear responsibility for registering under Chicago’s lobbying law, “could lead to ‘massive fines for a single instance of unregistered lobbying,’ [but] that is precisely what the Ordinance says, and how it promotes transparency.” As explained by the Board: “At the core of Chicago’s lobbying laws, and at the core of all such laws, is the prompt and public disclosure of lobbying activity.”
Plouffe’s employer paid a more modest fine of $2,000, which under Chicago law is the maximum penalty for employing a lobbyist who fails to register. In some jurisdictions, however, the fine on a lobbyist’s employer or principal may equal or exceed the fine on the individual lobbyist.
Important Reminders for Government Relations Professionals
This story provides important lessons for those who reach out to public officials for assistance, and those who retain and employ such persons:
- Minimal contacts with government officials – even a single phone call or email – can trigger lobbying registration and reporting laws;
- These contacts with officials (and thus the failure to register) can become public in various ways, including through requests made of government agencies through open records laws; and
- Fines for failing to register can add up quickly and can lead to negative publicity.
The most prudent course is to consult lobbying registration laws before picking up the phone or sending an email. Once a call is placed or email is sent, it may be too late to avoid the fallout.