Another Example of Why Companies Must Take Steps to Ensure All Information Submitted to Congress Is Complete and Accurate

On April 14, 2011, the Department of Justice (DOJ) announced that the CEO of a newspaper publishing company pled guilty to a federal felony for submitting a Private Sponsor Travel Certification Form to the House of Representatives that contained false statements. The certification claimed that the company alone paid for members’ travel expenses to an annual business conference in the Caribbean – and failed to mention that the source of the funds included the foreign host country and a private corporation. The company executive faces up to five years in prison and a $250,000 fine when he is sentenced in July.*

What does this mean for my company?

Your company must take steps to ensure all information submitted to Congress is complete and accurate. The federal criminal law (18 U.S.C. § 1001) prohibiting the making of material false statements to the federal government’s legislative or executive branches is used frequently by prosecutors in a variety of contexts. It applies to not only congressional testimony, but to all information submitted in response to congressional information requests and subpoenas, lobbying disclosure reports, semi-annual House and Senate gift and travel rule certifications, and any information provided to the House and Senate Ethics Committees regarding potential gifts, including travel, site-visits, receptions and meals.

What is the Private Sponsor Travel Certification Form?

The Honest Leadership and Open Government Act of 2007 (HLOGA) made changes to the House and Senate travel rules. Entities that employ or retain registered lobbyists may only pay for “one day event trips.” Entities that do not employ or retain registered lobbyists may still pay for “officially connected travel,” which can be for more than one day. Privately paid congressional travel that conforms with the applicable House or Senate rules is considered a reimbursement to the House or Senate and not a gift. All privately funded trips must be pre-approved by the House and Senate Ethics Committees using the Private Sponsor Travel Certification Form.

What is the LDA gift and travel rule certification?

The Lobbying Disclosure Act of 1995 (LDA) requires registered entities to submit at least six LDA filings per year – four Quarterly LD-2 Reports and at least two Semiannual LD-203 Reports and Certifications. The Semiannual LD-203 Report and Certification includes a statement that the registered entity or registered lobbyist “has read and is familiar with those provisions of the Standing Rules of the Senate and Rules of the House of Representatives relating to the provision of gifts and travel, and has not provided, requested, or directed a gift, including travel, to a Member of Congress or an officer or employee of either House of Congress with the knowledge that receipt of the gift would violate” the Senate and House gift and travel rules. When making Semiannual Certifications on behalf of a registered entity, the company representative signing the form must realize that they are speaking not only for the company, but for the company’s employees – whose actions will be attributed to the company. Please note that this certification applies to all employees of the registered entity, not just employees who are registered lobbyists.

In order to ensure that the person signing the form has a reliable basis for the certification they are making, companies registered under the LDA need to be able to demonstrate they have compliance policies and procedures in place to support making the House and Senate Gift and Travel rule certification.

Where can I read the DOJ Press Release on the false statements plea agreement?

The DOJ Press Release is available on the Department’s website.

* Following are relevant documents from this case, United States of America v. Karl B. Rodney, filed with the U.S. District Court for the District of Columbia:

Criminal Information Factual Proffer Plea Agreement