Friday, July 18, 2008, 5:03 PM

Political GPS: Never Mind! Congress’s Eleventh-Hour Retreat on the LD-203

On Wednesday, July 16, just two weeks before federal lobbyists and their employers must file a new semi-annual report, Congressional officials changed the rules, narrowing the kinds of contributions and payments that must be reported. These changes supersede guidance published just six weeks ago. And as we reported in the July 3 Political GPS, the semi-annual form itself has only been available to filers since June 30.

This last-minute frenzy is hard to explain: the law the ethics committees are implementing was passed in September 2007. The shifting guidance also adds to the consternation of filers who may need to justify their reports in newly-authorized random audits, and who face civil and criminal penalties for false or misleading statements.

The July 16 changes follow a wave of criticism that earlier instructions strayed far from the text of the law and imposed severe burdens on companies and other organizational filers. The changes are reflected mostly through a long list of hypothetical situations, with little
explanation as to why Congressional officials have attempted to redraw the lines the way they have. Other hypothetical situations that appeared in earlier iterations of the guidance document have simply disappeared.

So what are the takeaways from this latest gyration?

  • Fewer contributions have to be reported, but the line is unclear. Filers must report the cost of events (or the cost of attendance at events) where the filer either
    sponsored
    the event or paid the sponsors directly, and where the filer knew at the time payment was made that covered officials would be receiving an honor or award at the event. Gone is the view that an event “honors” or “recognizes” an official merely because he or she speaks at the event, appears as an honored guest, or is mentioned on an invitation. The guidance cautions, however, that “supplemental facts” could change this
    conclusion.

  • Buying tickets might not trigger a reporting obligation. But for filers who purchase “enough” tickets or tables for an event - that’s Congress’s word, not ours - you may be viewed as paying the costs of the event and therefore more than just a
    ticket-buyer. In these circumstances, the payments must be reported.

  • “Designation” redefined, sort of. For a contribution to be “designated” by an official, the official must do more than offer a “statement of support or solicitation.” But what
    more is required? Two examples are provided: a covered official directs a charitable contribution in lieu of honoraria or directs the contribution to an entity for which the official is a member of the board.

  • Some relief for lobbyists who manage PACs. Lobbyists who are also PAC treasurers or sit on PAC boards need not list on their own reports all the contributions made by the PAC, so long as the PAC is “connected” to the organization that employs the lobbyist. But the lobbyist must “note” on the LD-203 that he or she is a PAC treasurer or board member.


As noted above, questions obviously still abound, and many areas, such as how to identify a certifying official for the organization, have not been addressed. Nonetheless, the latest (and probably last) word from Congress before the July 30 filing represents a relaxing of some of the more extreme reporting burdens.

Larry Norton Provides Insider FEC Advice at Upcoming Audioconference
Larry Norton is a speaker at an upcoming audio-conference on July 29th from 2:00-3:00 p.m. (EDT) titled, "Get Insider Advice on Leveraging Campaign Funds: Plus, ask your specific questions to FEC experts." Sponsored by Lobbyist.info, an on-line service of Columbia Books, this program will address leveraging funds for political advertising and other activities, as
well as using PACs beyond traditional "contribution" roles. The panel is composed of former FEC professionals who will provide insider advice to mitigate confusion over campaign finance rules, and provide real-world tips to avoid legal or PR hits. This 90-minute session is sure to help maximize effective spending leading up to election day. For more information, click here.

If you have any questions or would like more information, please feel free to contact Larry (LNorton@wcsr.com, (202) 857-4429) or Jim (JKahl@wcsr.com, (202) 857-4417).

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