The oft discussed and long-anticipated unregistered federal lobbyist investigation may be occurring as we speak. The recently released 2014 first quarter report of the Office of Congressional Ethics (OCE) disclosed that one "entity" had been referred to the U.S. Attorney's Office for the District of Columbia for "failure to register under the Lobbying Disclosure Act."
Ever since the lobbyist de-registration craze began, set-off by the tougher Lobbying Disclosure Act (LDA) penalties contained in the Honest Leadership and Open Government Act of 2007 (HLOGA) and the Obama-Biden 2008 campaign and later Obama Administration restrictions on registered lobbyists, there has been speculation that a large number of individuals were lobbying in Washington without registering under the LDA. Of course, unregistered lobbyists most likely have existed since enactment of the LDA in 1995, but the fascination with "stealth" lobbyists seemed to peak during 2007 to 2009. Until now, the discussion was purely hypothetical and centered upon famous (for Washington) non-lobbyist "strategic advisors," "consultants" and "historians" who from all outward appearances seemed to be lobbying but were not registered under the LDA.
Am I a Lobbyist?
The answer may surprise you. If you make more than one lobbying contact and spend 20 percent or more during a given calendar quarter on lobbying activities (lobbying contacts and related support activities) and your employer has more than de minimis lobbying expenses or income (currently $12,500 for in-house lobbyists/lobbyist employers and $3,000 for outside lobbyists/lobbying firms), then you are a lobbyist according to the LDA and your employer must register and disclose you as a lobbyist. There are no exceptions for certain professions (e.g., lawyers or retired Generals) or for non-profits (there is no distinction between "good" or "evil" lobbying). The LDA is conduct based and if you meet the definition of a lobbyist, you ought to be registered. If you are unsure about your status, consult with counsel and/or with the House Clerk or Secretary of the Senate.
Other Potential Cases
The OCE unregistered lobbyist case almost inevitably arose because of an unrelated investigation. It is hard to imagine how else such a case would come about, since unregistered lobbying is so difficult to prove without a smoking gun such as emails, expense reports, or an eye witness/whistleblower. This time it was an OCE investigation, but next time it could be discovery during litigation, an audit, or a Congressional or Inspector General Investigation. This is the first known unregistered lobbyist case, but it is unlikely to be the last.
In 2007, Congress passed HLOGA, which increased civil penalties for violations of the LDA from $50,000 to $200,000 and, for the first time, provided criminal penalties of up to five years in prison for certain violations. So, for the first time since the LDA was enacted in 1995, the lobbying statute had teeth, which means that the U.S. Attorney's Office may finally be interested in pursuing LDA enforcement cases.
Over 13,000 LDA Referrals
It appears clear there has been no shortage of potential LDA cases for the U.S. Attorney's Office to consider. The Secretary of the Senate has referred a total of 13,325 LDA violations to the U.S. Attorney since 1995 and the Government Accountability Office (GAO) has audited over 1,500 LDA filings since 2007.
Stepped Up Enforcement
Since passage of HLOGA, the U.S. Attorney's Office has increased their LDA enforcement activities. In 2014, it filed a civil complaint against a lobbyist and a lobbying firm alleging violations of the LDA that could result in a fine of over $5 million. In December of 2013, the U.S. Attorney's Office secured a default judgment of $200,000 for LDA violations. Prior to that, the U.S. Attorney's Office entered into negotiated settlements three times — twice in 2012 for $50,000 and $30,000 and once in 2011 for $45,000. The next step in LDA enforcement may be a criminal case, and, according to a GAO LDA report issued in April 2013, the U.S. Attorney's Office is considering pursuing criminal penalties for LDA violations for the first time.
If your organization comes into contact with Congress or the executive branch, the LDA should be part of your internal compliance program. If you as an individual communicate with Congress or the executive branch as part of your job, you should seek the advice of counsel and/or contact the Clerk of the House or Secretary of the Senate to determine whether you meet the definition of a lobbyist. If you determine that registration is necessary, you should submit a complete, accurate, and timely LDA registration and subsequent reports. Any missing or late LDA filings should be submitted as soon as possible and all filings moving forward should be submitted in a timely fashion. Any deficient filings should be amended with complete and accurate information. And never, ever, ignore LDA communications from the Clerk of the House, Secretary of the Senate, or the U.S. Attorney's Office.