New Federal Lobbying and Ethics Law
September 10, 2007
Robert Bradner - Washington
In the next few days, President Bush is expected to sign S.1, the Honest Leadership and Open Government Act, into law.
The new law makes substantial changes to:
• the Lobbying Disclosure Act
• federal campaign finance laws
• the federal criminal code
• the congressional gift and travel rules
• other congressional rules governing legislative procedures and ethics
Significantly, the law exposes those who lobby the federal government to criminal and enhanced civil penalties for certain violations of the law, including any act that would cause a member of Congress, Senator or congressional staffer to violate the revised House and Senate rules governing the acceptance of gifts and travel.
The overview below provides a more detailed review of the significant changes made by S.1.
Overview: The Honest Leadership and Open Government Act
This overview provides a summary of the key provisions of S.1.
Changes to the Lobbying Disclosure Act (LDA)
• Quarterly Electronic Filing of Lobbying Disclosure Reports. Starting in 2008, reports will be due 20 days after the end of the quarter instead of 45 days after the end of the semiannual period (with relevant dollar amount thresholds and reporting amounts halved). Reports will also be required to be filed electronically. The House and Senate clerks are further required to use the same filing software and to make reports Internet accessible.
• Changes to Required LDA Information. Changes have been made to the information required in the LDA Registrations and Reports, including:
- Disclosure of Status as Unit of Government. Filers will need to indicate on their reports whether a client is a state, local government, or a department, agency, special purpose district or other instrumentality controlled by one or more state or local governments.
- Disclosure of Past Covered Employment for 20 Years After Separation. Presently, a registrant lobbyist lists their prior employment in a covered position if they begin lobbying for a client within two years of separating from covered federal service. The new law changes this to 20 years. Under cur rent law, the LDA defines “covered” employees as any member, officer, or employee of Congress or the President, Vice President, officers and employees of the Executive office of the President, and various high-level officials and uniformed officers in the executive branch.
- Coalition and Association Disclosure. Current disclosure rules regarding affiliated entities are amended to clarify that an entity that provides more than $5,000 in a quarter to support the lobbying activities of a registrant and actively participates in the planning, supervision or control of such activities must be disclosed. This requirement can be met by providing a Web site address where the members of, or contributors to, a registrant are disclosed unless that organization “in whole or in major part plans, supervises or controls such lobbying activities.” Information regarding individual donors need not be disclosed to comply with this requirement.
•Lobbyists Must Disclose Federal Political Contributions Semiannually. Effective in 2008, within 30 days after December 31 and June 30, LDA registrants and their employees listed as lobbyists on LDA reports are required to file with the House and Senate information related to certain political contributions:
- Each federal candidate, leadership PAC, political party committee, Presidential library or inaugural committee to whom aggregate contributions equal to or exceeding $200 were made by the LDA registrant or their employees listed as lobbyists or by a PAC controlled by either and the date and amount of the contribution; and
- Date, recipient, and amount of all contributions or disbursements (regardless of amount) made by the LDA registrant or their employees listed as lobbyists or by a PAC controlled by either (when not otherwise reported to the FEC):
o Payment of the cost of an event to honor or recognize a covered official;
o Payment to an entity named after a covered legislative branch (but not executive branch) official or in their recognition;
o Payment to an entity run by or designated by a covered official; or
o Payment of the cost of a meeting, retreat, conference or similar event held by, or in the name of, one or more covered officials.
• Statutory Prohibition on Lobbyist Gifts in Violation of House and Senate Rule; Required Semiannual Certification. S. 1 amends the LDA to specify that it is a violation of the act for a lobbyist, any organization that employs one or more lobbyists and is required to register under the LDA, or any employee listed as a lobbyist by such registrant to make a gift or provide travel to a covered legislative branch official with knowledge that the gift or travel may not be accepted under the rules of the House or the Senate (as the case may be). In addition, lobbyists must provide a semiannual written certification that they have read and are familiar with the gift and travel rules of the House and Senate and that they have not provided, requested or directed a gift with knowledge that receipt would violate the House or Senate gift/travel rules. Note below that most gifts from lobbyists are now banned under House and Senate rules.
• Enhanced Enforcement Disclosure and Civil/Criminal Penalties. The House and Senate must disclose all referrals they make to the U.S. Attorney for the District of Columbia for non-compliance with the LDA. The Attorney General must provide a semiannual report to certain congressional committees regarding aggregate enforcement information and specific information on sentences imposed (to the extent already a matter of public record). Knowing violations of the Act may now be punished by fines of up to $200,000 (formerly $50,000) and imprisonment for up to five years for knowingly and corruptly failing to comply with the LDA.
Changes to the Federal Election Campaign Act
• Bundled Lobbyist Contribution Disclosure. Campaign committees, leadership PACs and party committees must disclose to the FEC “bundling” by registered lobbyists totaling more than $15,000 during a semiannual period. This requirement applies to bundling by LDA registrants, individuals listed as lobbyists on LDA Reports and to any political committee controlled or established by such individuals. The amount is indexed for inflation and does not include contributions by the lobbyist or the lobbyist’s spouse. Bundling is defined as the forwarding of contributions to a committee or crediting a person with securing contributions. The FEC is directed to promulgate regulations to implement these requirements within six months of the date of enactment of the new law and to provide for public disclosure of the information.
• Use of Private Aircraft. These rules differ depending on the status of the traveler. As a general rule, fair market value must now be paid for all travel on private aircraft by federal candidates and officeholders. Previously, federal candidates and officeholders needed to only reimburse the cost of a first class ticket. These new restrictions do not apply to aircraft owned or leased by the candidate, officeholder, or immediate family members so long as the aircraft is not used more than allowed by the proportionate share of ownership.
- U.S. House of Representatives: Candidates may not use campaign or leadership PAC funds to fly on private aircraft. Current members may not use personal, campaign, or office funds to pay for flights on private aircraft.
- U.S. Senate: Candidates using campaign funds must pay fair market value (the appropriate charter or rental rate pro-rated by the number of candidates aboard the aircraft) for travel on private aircraft. Current members, officers, or employees of the Senate must pay fair market value (the appropriate charter or rental charge divided by the number of members, officers, or employees) for flights on private aircraft.
Senate Gift and Travel Reform
The Senate changed its gift and travel rules to largely bring them into alignment with changes adopted by the House at the beginning of 2007:
• No Gifts From Registered Lobbyists, Foreign Principals or Organizations That Employ Them. For all others, the pre-existing rule permitting a single gift of a value of less than $50, aggregating to less than $100 in a single year and not counting gifts valued at less than $10 remains. The ban on gifts from lobbyists, foreign principals and those who employ them is subject to the same exemptions as the regular gift rule (including campaign contributions, gifts from state and local governments, gifts based on personal friendship, participation in widely attended events, and many others). The Senate also adds a new gift rule exemption for free attendance at a “constituent event” and defines the terms and conditions of such events (the House has no such exemption).
• Ticket Valuation. Event tickets without a face price are to be valued at the price of the highest face value ticket for the event unless an alternative proposed valuation is accepted by the Senate Ethics Committee following the submission of appropriate information (the House does not allow for this process).
• Private Travel Reform. The Senate amended its rules in a manner similar to a rule change adopted by the House at the beginning of the 2007. The Senate rules, as amended, ban the acceptance of private travel (subject to the otherwise applicable travel rules) from a private entity that retains or employs one or more registered lobbyists or agents of a foreign principal. An exception exists for one-day events and events paid for by 501(c)(3) organizations (this provision varies significantly from the House rule limiting the exception to institutions of higher education). Where the one day event exception applies, a registered lobbyist cannot accompany for any segment of the trip. In all other situations, lobbyists are banned from accompanying at any point during a trip. The rule also bars accepting privately paid travel for any trip planned, organized or requested by a registered lobbyist or foreign agent. The Senate will also create a private travel Web site to disclose travel authorization and expense information.
“Revolving Door” Reform
S. 1 contains a package of statutory and rules changes to ad dress issues presented by federal officials and staff transitioning from public to private employment.
• Criminal Code Lobbying Ban Provisions. The law amends U.S. Criminal Code making the following prohibitions on lobbying communications with former colleagues:
- Senior Executive branch employees – including the Vice President – are prohibited from lobbying Executive branch officers or employees for two years.
- Senators are prohibited from lobbying both houses of Congress for two years.
- Members of the House of Representatives are prohibited from lobbying both houses of Congress for one year as under current law.
- Officers of the Senate and all highly compensated Senate staff are prohibited from lobbying any Senator, officer, or employee of the Senate for one year.
- Officers of the House of Representatives are prohibited from lobbying any member, officer, or employee of the House of Representatives for one year as under current law.
- Highly compensated House of Representatives personal office staff are prohibited from lobbying their former member of Congress and that member’s staff for one year; highly compensated House of Representatives committee staff are prohibited from lobbying any member or staff of that committee; and highly compensated House of Representatives leadership staff are prohibited from lobbying any member of the leadership or leadership staff for one year (as under current law).
A staff member is considered “highly compensated” if their basic pay is equal to or greater than 75 percent of the salary earned by a member of Congress. The Clerk of the House or Secretary of the Senate (as the case may be) are required to notify departing members and staff of the applicable lobby ban period upon their termination of employment with Congress and to post that information on a public Web site. The Senate Rules are also amended to conform to the prohibitions above.
• Criminal Code Provision Regarding Private Hiring. The law amends Title 18 to make it a criminal offense for an elected member of Congress or staff to engage in an official act or withholding thereof with the intent to influence the hiring decisions or practices of a private entity on the basis of partisan political affiliation. The Senate Rules are also amended to impose a corresponding rule. The House made a similar rule change at the beginning of 2007.
• Disclosure of Employment Negotiations. Effective upon enactment, House and Senate members and staff compensated above 75 percent of a member’s rate of pay must file a notification when they are negotiating for outside employment or have agreed to outside employment and must recuse themselves from matters that would present a conflict.
• Elimination of Floor Privileges for Former Senators. Subject to certain potential exceptions, the floor privileges of former Senators who are registered lobbyists or agents of foreign principals, or who are employed by or represent a party or organization for the purpose of directly or indirectly influencing legislation, are revoked. The House adopted a corresponding rules change in early 2007.
Other Ethics-Related Changes to House and Senate Rules
The House and Senate changed their rules with similar provisions to address a number of issues:
• Spouses of Members May Not Lobby the Member or the Member’s Office. House members and any staff employed by them on personal, committee or leadership staff may not have any lobbying contact (as defined in the LDA) with the spouse of member who is a registered lobbyist. The Senate provision is a little broader: Senators must prohibit all staff employed or supervised by them from having any lobbying contact (as defined in the LDA) with their spouse or immediate family member who is a registered lobbyist, employed by a registered lobbyist, or employed by an organization that hires or retains registered lobbyists. The Senator and staff employed by the Senator are prohibited from having lobbying contacts with the spouse of a Senator except in the case of an individual who was a registered lobbyist for a year or more prior to becoming married to a Senator.
• Public Posting of Travel and Financial Disclosure Information. The Clerk of the House will post required travel authorizations in downloadable, searchable, and sortable format and disclosures as well as annual financial disclosure reports required of members and senior staff under the Ethics in Government Act. As mentioned above, the Senate will similarly create a private travel Web site.
• Ban on Lobbyist Funded Events at National Political Conventions. A member of the House may not participate in an event honoring the member during a national political party convention that is paid for by a registered lobbyist or a private entity that employs a lobbyist (unless the member is being honored in his or her capacity as a candidate). A Senator may not participate in an event honoring the Senator during a national political party convention that is paid for by a registered lobbyist or a private entity that employs a lobbyist (unless the Senator is a presidential or vice presidential nominee/presumptive nominee).
• Expanded Ban on Lobbying by Committee Consultants. The House (but not the Senate) amended its rules to clarify that, if an individual is employed to provide consulting services to a congressional commit tee, the individual and the entire firm that employs the individual is banned from lobbying the committee. Previously only the individual was subject to this lobbying ban.
Changes to Senate Legislative Rules
The Senate adopted a package of changes to its rules governing the consideration of legislation, including “earmark” reform provisions that are similar to those adopted by the House earlier in the year.
• Scope Rule Change. Matters included in a conference report but not included in either bill committed to conference, or matters excluded from a conference report that were contained in both the House- and Senate-passed version of the bill (other than via the use of substitute) would be subject to a point of order requiring a 3/5ths vote to waive.
• 48-Hour Public Availability of Conference Reports. A point of order, waiveable by a 3/5ths vote, will lie against any conference report not made available to the general public (via posting on a Web site) for 48 hours prior to its consideration.
• No Secret “Holds.” The Senate leadership shall not recognize a notice of intent to object to proceeding on a piece of legislation (commonly known as a hold) unless the notice is submitted in writing and the Senate publishes the notice (and reason therefore) in the Congressional Record within six legislative session days.
• Public Availability of Committee Meetings. Committee and subcommittee meetings – other than closed meetings – must be made publicly available within 21 days via the posting of an audio recording, video recording or transcript.
• Amendments and Motions to Recommit Must Be Submitted in Writing. Current Senate practice does not require this.
• “Earmark” Reform. It will not be in order to consider a motion to proceed on a bill or joint resolution (whether reported by a committee or not) or a conference report unless the committee chairman, Majority Leader (or designee) certifies that each congressionally directed spending item, limited tax benefit and limited tariff benefit in the bill or report has been identified together with the name of the Senator requesting such item and that this information has been available on a publicly accessible congressional Web site for at least 48 hours prior to the vote. This requirement can be waived by a 3/5ths vote. In the case of a floor amendment adding such items, the required information must be printed in the Congressional Record as soon as practicable. Senators who request such items shall provide a written statement to the committee of jurisdiction indicating the name and location of the intended recipient (or the intended location of the activity) or the individuals or entities reasonably believed to benefit from a limited tax benefit and a certification that neither the senator nor their immediate family has a “pecuniary interest” in the item. A point of order will also lie against a conference report containing a congressionally directed spending item that was not contained in either the House or Senate versions of the legislation as committed to conference. If sustained, the item would then be stricken from the report unless retained by a 3/5ths vote. This rule could be waived with respect to an entire conference report by a 3/5ths vote. These changes are similar to changes the House made at the beginning of 2007 except that the House does not create a point of order against earmarks added in conference committee and the House requires its members to certify that they do not have a “financial interest” in any earmark request (as opposed to a “pecuniary” interest).
No Pensions for Some Congressional Felons
The statutes governing the Civil Service Retirement System and the successor Federal Employee Retirement System are amended to prohibited elected members from receiving credit for years of service as a Senator or member of Congress if they are convicted of certain delineated felonies.
For more information, email Robert Bradner or Chris DeLacy at robert.bradner@hklaw.com or chris.delacy@hklaw.com, respectively, or call toll free, 1-888-688-8500.