Recent Changes to Lobbying and Campaign Finance Rules

• Do you know the rules that govern a Congressional reception, meal, or fact-finding trip?
• Do you know that ignoring these rules could expose you and your organization to the possibility of large fines and even imprisonment?
• Do you understand the circumstances whereby a campaign contribution could be considered a bribe by federal law enforcement authorities?
• Do you know that a 501(c)(3) organization may not engage in any political campaign activity (including any PAC or candidate fundraising)?
• Will you have a system in place on January 1, 2008, to monitor the compliance of your employees with rules barring illegal gifts to Congress and the reporting of political contributions?

Recent changes to the federal lobbying, ethics, campaign finance and criminal laws take full effect on January 1, 2008. These changes significantly raise the legal stakes for organizations active in federal advocacy. Specifically, the Honest Leadership and Open Government Act of 2007 increases penalties for violations of the Lobbying Disclosure Act of 1995 (LDA) from $50,000 to $200,000, makes it a violation of federal law to give a gift to a congressional official or employee in violation of the rules, and includes the possibility of prison time for “knowingly and corruptly” failing to comply with the statute. And, as we approach a federal election year, the Federal Election Commission (FEC) has set a record for civil fines and the Department of Justice (DOJ) has identified public corruption cases as a top criminal enforcement priority.

Now is a good time to evaluate your organization’s internal policies and procedures related to federal campaign, lobbying, and ethics laws and to implement a political compliance program. Some of the questions regarding your organization’s compliance should include:

1) Is my organization registered under the Lobbying Disclosure Act? If not, should it be?

2) Is my organization prepared to meet the LDA’s new quarterly reporting requirements and deadlines only 20 days after the close of the quarter?

3) How does my organization track lobbying expenses? Is the tracking accurate and valid for federal tax and LDA purposes?

4) Is my organization familiar with the House and Senate gift and travel rules? Have I provided these rules to my employees and put in place steps intended to prevent inadvertent or reckless violations of these rules?

5) Is my organization prepared to begin tracking political contributions on January 1, 2008, and to report them in mid-2008?

6) Does my organization and its employees understand the restrictions on using corporate resources for political activity? Do I have an education and compliance program in place to avoid violating these rules?

7) Does my tax-exempt organization have a firm understanding of the limits on its lobbying or political activities? Do I have a system in place to avoid exceeding those limits?

Seeking the advice of outside counsel can be an important component of a political compliance program. If you are unsure about any of the questions in this alert, experienced counsel can help you reduce the chances of a violation.