At a glance: government lobbying in USA

Regulation of lobbying

General

Is lobbying self-regulated by the industry, or is it regulated by the government, legislature or an independent regulator? What are the regulator’s powers? Who may issue guidance on lobbying? What powers of investigation does the regulator have? What are the regulators’ or other officials’ powers to penalise violators?

At the federal level, lobbying is regulated pursuant to two statutes: the Lobbying Disclosure Act (LDA), which is the primary source of regulation over individuals, corporations and other entities seeking to influence the direction of policy by the legislative and executive branches; and the Foreign Agents Registration Act (FARA), which was enacted in the run-up to World War II to ensure that the agents of certain foreign entities (most notably Nazi Germany) acting in a ‘political or quasi-political capacity’ register with the US Department of Justice and provide detailed reports on their efforts to influence US policy. Most foreign corporations that engage lobbyists on their behalf or that engage in lobbying activities directly register under the LDA rather than FARA pursuant to an exception in the law that allows them to do so when they are advancing their commercial interests. 

As a result of a major scandal, Congress substantially strengthened the LDA in 2007 through enactment of the Honest Leadership and Open Government Act, which among other things increased the frequency for filing required reports, increased civil and criminal penalties for noncompliance, put in place limitations on gifts Members of Congress and their staff could receive from lobbyists, and mandated that the Government Accountability Office annually audit a sample of registrants to encourage compliance. The Office of the Clerk of the House of Representatives and the Secretary of the Senate (jointly) have regularly published non-binding guidance to help individuals and entities understand what is required of them to comply with the law. Our law firm regularly advises clients to ensure that they understand and can meet their obligations under the LDA.

Registrants under the LDA are required to provide quarterly reports on their activities, which at a very high level describe their general interests and the amount of money they received or that was otherwise spent on reportable activities.

The US Department of Justice is responsible for enforcing both the LDA and FARA, with the authority to seek civil and criminal penalties. In recent years, the Department has begun to somewhat more aggressively implement both laws, charging individuals with failing to register or properly report their activities under applicable laws and regulations. 

Lobbying at the state level is regulated pursuant to state law. The laws vary from state to state, but essentially seek to capture the same information as at the federal level under the LDA: who is acting on behalf of whom, on what kinds of matters with what desired outcome and for what level of remuneration.

Definition

Is there a definition or other guidance as to what constitutes lobbying?

Yes, under the Lobbying Disclosure Act, a lobbyist is an individual who is employed or retained by a client for financial or other compensation who makes more than one lobbying contact during any three-month period and spends more than 20 per cent of his or her time for that client on lobbying activities (such as preparing for lobbying contacts). Subject to a variety of exceptions, a ‘lobbying contact’ is an oral or written communication (including an electronic one) to a ‘covered executive branch official’ or a ‘covered legislative branch official’ with respect to the formulation, modification or adoption of federal legislation or federal rules or regulations, Executive Orders, or other programmes, policies, or positions of the US Government. The registration exceptions include, among other typical activities, licensed lawyers filing comments in a regulatory proceeding on behalf of a law client, individuals and companies responding to a request for information by an executive agency or witnesses appearing at a formal hearing on proposed legislation at the request of a congressional committee.

Registration and other disclosure

Is there voluntary or mandatory registration of lobbyists? How else is lobbying disclosed?

Although there are variations in the applicable statutes at the federal and state levels, registration is mandatory. At the federal level, registration is simple, requiring little more than the name of the lobbyist or lobbying entity, their contact information, general subject matter interest (eg, trade policy, tax policy or healthcare policy), specific lobbying issues and the extent to which, where applicable, a foreign entity has an interest in and is providing financial support for the lobbying efforts to be undertaken pursuant to the registration. All of the initial registration filings (and subsequent quarterly reports) filed by lobbyists, lobbying firms and corporations are publicly available. Registrants are not required to disclose any of this information in seeking meetings with covered officials or at the outset of meetings with them, no doubt in part because the information is publicly available and because policymakers understand the role of lobbyists in the formulation of policy. (In contrast, ‘foreign agents’ registered under FARA are subject to stringent reporting requirements, including disclosing upfront their foreign principal when seeking a meeting and submitting copies of all their written and electronic materials shared with policymakers, all of which becomes public.) Under FARA, registrants must also file for public inspection the contract or other written agreement by which they have agreed to provide their services.

The lobbying disclosure rules vary at the state level, with some states requiring the equivalent of ‘hall passes’ and lobbyists to wear standardised name tags.

Activities subject to disclosure or registration

What communications must be disclosed or registered?

Under the LDA, lobbyists are not required to disclose any of their specific communications with or the dates of their meetings with covered officials in the legislative and executive branches. Nor are they required to file copies of any materials they provide in those meetings or in follow-up communications. In their quarterly reports, they only must identify the nature of their general interests, specific bills and related issues (eg, support or opposition to a particular bill and what in the bill was of interest) and the entities they contacted (eg, the House of Representatives, the White House or the US Department of Transportation). 

On a semi-annual basis, lobbyists also must file a report identifying campaign contributions made to sitting Members of Congress and candidates seeking election to the House of Representatives and the Senate. (This reporting obligation is separate and distinct from the federal election law filing obligations applicable to candidates for federal office, who must report to the Federal Election Commission the name, address and occupation and employer of any individual contributing more than US$200 to the candidate per election (primary and general elections are distinct elections).)

Registration under FARA is required of persons who, within the United States, attempt to influence US government policy or US public opinion on behalf of a non-US company, government or political party. Because FARA generally exempts those who lobby on behalf of foreign companies and register under the LDA for that purpose, most FARA registrants represent or advocate on behalf of foreign governments, foreign political parties or other foreign entities that are subsidised or act as proxies for a foreign government or political party.

To register under FARA, a registrant must submit a copy of its contract with its client and disclose political contributions made in the preceding 60 days. Once registered, FARA registrants must take a number of steps, including placing a legend on any written communications they send (including emails) that seek to influence US government policy that the sender is a FARA-registered foreign agent; identify themselves as FARA-registered foreign agents at the outset of any FARA-registrable conversation; and file electronically with the FARA Unit any such written communications disseminated to or intended for two or more persons. Documents submitted to the Justice Department’s FARA Unit are available for public inspection. Most of them are posted on the FARA Unit’s website.

Entities and persons subject to lobbying rules

Which entities and persons are caught by the disclosure rules?

Under the Lobbying Disclosure Act, a lobbyist is an individual who is employed or retained by a client for financial or other compensation for services who makes more than one ‘lobbying contact’ during any three-month period and spends more than 20 per cent of his or her time for that client on lobbying activities (such as preparing for lobbying contacts). Subject to a variety of exceptions, a ‘lobbying contact’ is an oral or written communication (including an electronic one) to a ‘covered executive branch official’ or a ‘covered legislative branch official’ with respect to the formulation, modification or adoption of federal legislation or federal rules or regulations, Executive Orders or other programmes, policies or positions of the US Government. ‘Covered executive branch officials’ include only those individuals who are subject to Senate confirmation and other ‘political’ officials. Non-political, career staff, who comprise the bulk of the executive branch, are not covered. In contrast, Members of Congress and anyone who works for them in their individual offices or on congressional committees are ‘covered legislative branch officials’.

Registration is required if the compensation for the services to be…