Friday, August 1, 2008, 3:34 PM

Political GPS: LD-203: With The First One In, What Did We Learn?

The new semi-annual reports were filed by lobbyists and their employers on July 30, 2008, following a month of shifting guidance and a late-released form. There have been more than a few surprises, and probably more to come as the House and Senate continue to grapple with problems and concerns that arose with this first filing. Some initial observations:
  • The certification requirement – For organizations filing the LD-203, Congress surprisingly failed to require that one person certify compliance with House and Senate gift rules. Filers simply had to use the organization’s password and press the “submit” key. Nonetheless, guidance published by Congress warns that a “signatory” of the LD-203 must be “a person responsible for the accuracy of the information contained in the filing.” More importantly, even without a formal “signer,” a person who submits a false certification on behalf of a company can still be held criminally liable under laws prohibiting false statements to the government.

  • More on the name game - If you search the House and Senate databases for a filed LD-203 report, you will find a line inserted that did not appear on the online form. It states: “Digitally Signed By:” Underneath these words, the House has taken the liberty of inserting the name of the “Contact Person” whose name appears near the top of the form, while the Senate has inserted the name of the organization. This language only muddies the question of just who is certifying what on the LD-203.

  • Establish, finance, maintain, or control – We can’t help but recall from our tenure at the FEC how much attention the agency devoted to defining the terms “established, financed, maintained, or controlled,” which appear in both the new lobbying law and the Federal Election Campaign Act. Congress chose a different course: ignore the language. Even though the new lobbying law requires filers to report payments to entities established, financed, maintained, or controlled by a covered official, Congress offered no explanation as to how these terms should be applied. Moreover, there’s no drop-down menu on the LD-203 for reporting this category of disbursements. So what do you do about payments to organizations where a Member of Congress sits on the executive committee or serves as vice-chair? Does the Member “control” the organization?

  • Random audits are coming – Please remember that the new law subjects LD-203 reports to random audits by the Comptroller General. For organizations that may not have felt as prepared as they would have liked, the next six months provide an opportunity to implement appropriate record-keeping policies, systems for approval, and training on gift rules. For those who have already done these things, it is important that lobbyists and compliance officials receive annual training and timely updates as the House and Senate issue additional guidance. And remember not to throw away the supporting documents for your LD-203 filings. You should save copies of checks, invitations, solicitations – all records reflecting your due diligence efforts – for six years. Audit your own systems before the Feds do!

What Happened To The New Bundling Provisions?

The new federal lobbying and ethics law called for disclosure of contributions that are “bundled” by federal lobbyists. The notion was to expose the influence gained by encouraging others to contribute to a favored candidate. But the law hasn’t taken effect – and won’t before the November election.

Under the new lobbying law, the bundling provisions do not take effect until three months after the FEC adopts implementing rules. The problem is that shortly after the law passed, the FEC became hobbled by a stalemate over nominations and for over six months lacked a quorum for adopting new rules. FEC Chairman Donald McGahn said this week that it would be practically impossible for the FEC to adopt new rules in time to affect the 2008 elections.

Millionaires: Burdened No More By McCain-Feingold Law

Following a Supreme Court decision last month, the FEC announced earlier this week that it will not enforce the so-called “Millionaire’s Amendment” of the McCain-Feingold law. The law allowed opponents of wealthy, self-funded candidates to receive contributions in excess of the usual limits. The Supreme Court held that it was unconstitutional to deprive wealthy candidates of their spending advantage by making the opposing candidate more competitive. The FEC has also announced that it will not pursue individual contributors who made increased contributions prior to the Supreme Court’s ruling.

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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