Wednesday, July 2, 2008, 4:37 PM

Political GPS: What to Make of the New Semi-Annual Lobbying Report Form

Only in our nation’s capital could the release of a form be the subject of such breathless anticipation. On Monday, June 30, 2008, the Congressional ethics committees released the new semi-annual reporting form, which under the new lobbying law must be filed by every organization that employs federal lobbyists and by individual lobbyists.

The obligation to file applies not only to individuals who currently lobby, but also to anyone who was listed on an organization’s previous disclosure report and who did not terminate as a lobbyist before January 1, 2008. The form requires disclosure of an array of political, charitable, and other payments and donations, as well as a sworn certification of compliance with Congressional gift rules.

The release of the form was accompanied by a 67-page user’s manual and online instructional tutorials. In our initial analysis of these materials, here are just a few things that stand out:

  • Anyone who last lobbied in 2007 or earlier, but who lingered in active status into 2008, must file a semi-annual report. In other words, if a lobbyist’s employer did not affirmatively terminate an individual lobbyist in its 2007 year-end filing (or an earlier filing), then the individual lobbyist must file a semi-annual report, certifying familiarity and compliance with Congressional ethics rules, and reporting certain donations and payments over the first six months of this year.
  • The same goes for individuals who were listed as a lobbyist on a prior report filed by their employer, but who are no longer employed with the organization. A lobbyist who remained in active status into 2008 must file the semi-annual report. The catch is that unless the lobbyist is still employed as such, he or she will only receive filing instructions if the former employer enters a new email address into the new system created for this report or if the lobbyist contacts the Hill directly.
  • The form is confusing in regard to the certification required of an organization because the language is written entirely in the first person. This makes it appear as if the certifying official is attesting only to his or her own familiarity with Congressional ethics rules, and his or her own compliance. This does not mirror the requirement stated in the law.
  • The form itself sheds little light on which contributions and payments must be disclosed. However, guidance previously published by the ethics committees explains that the new law's disclosure obligation is interpreted broadly and offers helpful examples.
  • There is an optional section on the semi-annual report for comments. No suggestion is offered as to what kind of comments the ethics committees have in mind.

Strict New Jersey Pay-to-Play Law Survives First Judicial Test

On June 30, 2008, a New Jersey appellate court upheld the state's pay-to-play law against a number of First Amendment challenges and narrowly interpreted a provision allowing contributors to "cure" violations by obtaining a refund.

The case involved the president of a highway contractor, who bought three tickets for a total of $1500 to a cocktail party sponsored by the Monmouth County Republican Committee. Based on these contributions, the State Department of Treasury notified the contractor that it was disqualified from the award of a highway contract.

The company president argued that he had requested and received a refund of the contribution, and therefore the violation was cured under New Jersey law. The court rejected the argument. While New Jersey allows a contributor to cure a violation by obtaining a refund within 30 days, in this case the refund was requested within a 30 day period, but was not received by the contractor's president until 41 days after the date of the contribution.

Meanwhile. . . Waiting and Watching in the Land of Lincoln
While New Jersey contractors are immersed in pay-to-play compliance (or at least should be), Illinois is deciding whether to take the plunge.

On June 30, the General Assembly sent its version of "pay-to-play," HB 824, to Governor Blagojevich. The law would prohibit companies that have or seek state contracts in excess of $50,000 from making political contributions to the incumbent Governor, Lieutenant Governor, Attorney General, Secretary of State, and Treasurer, and in some instances their challengers. Further, the law covers contributions by individuals affiliated with the contractor or prospective contractor, such as owners, executives, and their spouse and minor children. Violations can result in contract cancellation; multiple violations could bar a contractor from receiving a state contract for three years.

Governor Blagojevich, who has 60 days in which to sign or veto the bill, has previously expressed reservations. But the pressure on the Governor from reform groups to sign the bill has been intense, and the Governor's administration has itself been plagued by investigations into contract irregularities and payoffs. So Illinois may soon join the growing list of state that have "pay-to-play" legislation.

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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