Google aims to appease European public with soft lobbying

July 20th, 2016 by Samantha Cherukuri

In the past few years, the mega search base and global tech company Google has financed culturally and educationally enriching programs in various parts of Europe. According to The New York Times, projects include the recently showcased Belgian virtual reality exhibit, as well as digital training courses and financial prospects in startup offices and businesses.  In the clutches of financial and regulatory issues, Google is now more than ever striving to give its image in Europe a major face lift.

European statements and interactions have hinted at Google’s declining reputation amongst the continent’s industry experts and enthusiasts. The corporation now aims to ease their image with the concept of soft lobbying. According to The New York Times, soft lobbying revolves around the ideology of a company influencing and changing the perspectives of the general public, rather than paying off registered lobbyists for government and social influences and image rehabilitation.

Perhaps the endorsements and the public maneuvers serve as a response to the recent accusations and claims against the company. The claims classify Google as a company that does not “fully protect European’s privacy rights online”. The claims also suggest that the company broke anti-trust rules in multiple situations. In retaliation, Google has now added an enormous $450 million funding pool to further mold a new reputation and a new face for the European public.

Global Google operator Matt Brittin stated that their vast array of programs “are important for their partners, for them, and for the countries of where they work”. It proves necessary to recognize the potential and positive feedback about Google’s endorsements and implementations. According to The New York Times, chief executive of Euronews Michael Peters offered his insight. “Of course, Google has its own agenda to show to Europe’s political powers that they aren’t bad guys,” said Peters. “But this gives organizations like ours the chance to do these types of projects. It wouldn’t have happened without Google”.

Contrasting opinions present a much less welcoming demeanor. European critics and industrial overseers and enthusiasts are concerned over Google’s overwhelming arrival and forceful representation. The idea that Google will have more digital and technological influence amongst many different programs, which will be obtained from their endorsements and contributions, is just too much. Retired elementary teacher and film star Sue Hughes reported her dismay to The New York Times. “It’s like they used to say in the war. American companies like Google are oversexed, overpaid and over here.”

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Lyft faces commissioned fines for lobbying discretions

July 14th, 2016 by Samantha Cherukuri

The reputable and every-growing transportation corporation, Lyft Inc., is now facing some trouble on the legislative front. Lyft has recently agreed to pay a $6,000 fine for not disclosing their many lobbying connections and influences that have been used consistently to persuade and attract the attention of California State officials. “Companies that hire lobbyists to advocate with state government are required to file timely reports detailing the amount of payments. Lyft has failed to file the reports by the given deadline,” reports LA Times.

The accusation and primary investigation was brought to light by the Fair Political Practices Commission. They aimed to acknowledge and showcase the anti-procedural act by the large transportation establishment, in accordance with 1995 Lobbying Disclosure Act. While Lyft has accepted all accusations and has shown compliance with the law, the commission will decide and discuss more on the matter on July 21st.

According to LA Times. Lyft spent over $217,000 on lobbying partnerships during the 2013-3014 legislative session. During that time, their connections generally lobbied and worked in certain political areas that aimed to influence transportation-regulating bills. As of now, Lyft reports that “the late filing was an oversight caused by their reliance on its firms to file reports and their lack of experience as a lobbyist employer”.  While Lyft has acknowledged their mistake, they stand strong on the principles and integrity of their company, and affirm that they did not report their lobbying interests and connections in hopes of concealing their government relations and influences. 

Lyft is not the only corporation that has faced fines for not meeting lobbyists and government regulation restrictions. According the Washington Post, the Carmen Group also faced the same situation at the end of summer 2015. The company faced a fine of $125,000 for not reporting their lobbying contributions and influences. The enforcement on both corporations only further signify the intervention and limitation of corrupt and grossing lobbying connections. According to the Washington Post, Acting U.S. Attorney of the District Vincent H. Cohen, Jr. stated that “the American public has a right to know about the efforts of paid lobbyists to influence legislative and executive decision-making”.

Trump’s presence causing a decrease in Lobbyist attendance for GOP Convention?

July 7th, 2016 by Samantha Cherukuri

While the upcoming Republican convention in Cleveland proves as a long anticipated political event, attendance amongst Republican lobbyists and corporations may decline in retrospect to previous attendance records. “Lobbyists typically act as the Republican Party elders at political conventions, ensuring that the program runs smoothly and coordinating many of the festivities surrounding the official events,” reports Wall Street Journal. However, hesitating companies have expressed some possibilities in opting out of this year’s GOP convention.

Republican presidential nominee Donald Trump is said to be responsible for some of these absences. According to Wall Street Journal, many lobbyists are driven by the attendance of their respective clients. However, a lot of those clients are practicing caution, as they are concerned with the ambiguity and uncertainty that tends to accompany Trump throughout his campaign. There’s no surprise that the relationship between a handful of lobbyists and Trump isn’t very solid. According to Hive, Trump has repeatedly bragged about his wealth and power, and has implied that he is, because of this immense wealth, impervious to lobbyist and corporate financial influences. With Trump focusing his own finances on his campaign, some lobbying circles may not be so thrilled to attend a convention that headlines Trump.

Statistics showcase that there is a decline in lobbying conventions funding as well.  According to Wall Street Journal, Motorola, who had previously donated $621,000 to the GOP convention, has stated that this year they are instead focusing on “supporting their public safety customers in the cities where the conventions are taking place.”  The Coca-Cola Co. has donated $75,000 to both conventions this year, in contrast to its generous payment of $666,200 towards the 2012 GOP convention. “Other companies have dramatically reduced their donations this year,” reported Wall Street Journal.

In respect to the situation, there have also been lobbyists that declare that there are just “burned out” from raising millions earlier this year for previous candidates such as former Florida Governor Jeb Bush and Florida Senator Marco Rubio.  But while there is uncertainty when it comes to lobbyist attendance and participation, there is a strong theory that Trump’s “free of special interests and lobbyist influence” mind set will prove as a hindrance for his campaign trail. “Trump has a tough road ahead of him”, reported The Hill. “He’s going to have a hard time coalescing support that the business community has typically given to the nominee.”

Common LDA Compliance Mistakes

June 30th, 2016 by Matthew Barnes

By: Robert Lenhard, Covington & Burling LLP

Each year, the Government Accountability Office (GAO) reports on how well lobbyists are complying with the Lobbying Disclosure Act (LDA), based on its audits of their reports and discussions with the U.S. Attorney’s Office for the District of Columbia.  This spring’s report provides a useful snapshot of where lobbyists are having the greatest trouble, and what happens to them when they do.

The good news is that the overwhelming majority of lobbyist are getting it right.  Compliance exceeded 80% by most measures and enforcement was limited to those who habitually or defiantly refuse to file reports.  So while the overall news is good, here are three key take-aways.

One:    Civil and criminal enforcement remains focused on “chronic offenders” who repeatedly fail to file reports.  While cases can often be resolved with a late filing or deregistration, the U.S. Attorney’s Office is expected to announce up to five LDA enforcement actions soon.  The GAO also notes that a civil settlement of $125,000 last year is the largest ever for noncompliance.  So while the Secretary of the Senate and Clerk of the House continue to refer more noncompliant lobbyists to the U.S. Attorney’s Office for potential enforcement, the focus remains on non-filers rather than the quality of disclosure by those who have filed.

Two:    Compliance is not as easy as it looks.  While only 10% of lobbyist found the reports “somewhat or very difficult” to file, the GAO found that between 10 and 20% of registrants made mistakes in some compliance areas.  Another measure of soft compliance: almost 10% of the lobbyist who got an audit letter immediately amend the report at issue.  Thus, even those who think they are in close compliance may have missed some things.  The most common mistakes include:

  • Former Positions. 21% of LD-2 reports may not have properly disclosed a lobbyists’ prior government work.  The GAO searches public sources like LinkedIn to review work history to find unreported positions to discuss in the audit.  Paid congressional internships and executive branch positions were highlighted by GAO as frequent trouble spots.
  • Missing LD-203 Reports. 15% of registrants failed to file a semi-annual LD-203 report,  which is required whether a lobbyist made a covered contribution or not.
  • Missing Q1s. 12% of lobbyists who register for a new client then proceeded to miss the first quarterly lobbying disclosure report.
  • Rounding. 31% of LD-2 reports did not round to the nearest $10,000. GAO notes that the LD-2 form can be read to request an exact dollar figure, while the statute and Guidance require rounding.

Three:  The GAO and the U.S. Attorneys’ Office use social media and the web to cross-check LDA reports and track down non-filers.  For example,  GAO’s auditors check FEC reports to spot contributions missing from the LD-203 reports and the U.S. Attorney’s Office uses LinkedIn, Lexis/Nexis, Glass Door, Facebook and Sunlight Foundation websites to locate lobbyists who fail to file an LD-203 report after leaving their employer.

LDA compliance remains overall quite good, but even those who think they are doing a good job can find that when tested, their internal data-capture system is not producing accurate reports.  While to date, enforcement has focused on those who refuse to comply, attention to these reports has grown over time and they remain a formal filing with the federal government on which a lobbyist represents the accuracy of the information.  All of this speaks to the value of a periodic pre-audit review to check up on the way data is being collected and incorporated into the report, and ensure that it is consistent with information that is on the public record.

Brexit’s Impact on U.S. Corporate Lobbying

June 29th, 2016 by Samantha Cherukuri

The business and trade relationships between the U.S. and the U.K. have long remained fortified and consistent. Some of the biggest U.S. corporations have settled business and corporal assets in the U.K., particularly in the London area. According to The Hill, the region has also served as a network for lobbying connections and establishments. This special relationship however may now face some hurdles on a business and global trade scale. Brexit, the latest reference to the recent referendum by British voters to leave the European Union, has been noted as a potential hindrance. “With the U.K. exiting the European Union, companies based in London jeopardize their relations with top EU officials and policy makers and risk losing influence in Brussels,” reports The Hill. With the process of Brexit, there is a high risk that the U.S. could remain in an economic and trade stalemate. In the past, U.S. corporations and associations have generally conducted business with other EU members through their acquaintance with the U.K. Now that Brexit has come into play, there is a moderate risk that the U.S. will lose some influence and control over these trading relationships with the other EU states.

Apart from the United States, EU lobbyists are said to gain from Brexit. Politico reports that there will be a number of lobbyists that will benefit from Brexit, as it gives “them a chance to get back to their core work: influence legislation.” American lobbyists and clients are concerned about what the absence of the U.K. will spawn in different fields, particularly in the entertainment industry. Copyright laws may be affected by the changing EU political arena, and may establish a much more tedious process. “They fear that the EU political climate will become more Franco-German, meaning more protectionist and less welcoming to American audio-visual content,” reports Politico.

Corporations that have a substantial influence in Brussels, the remarked EU center of politics, tend to have an upper hand in government relations and business contacts. Firms and corporations that establish themselves in the Belgian capital produce a more accessible relationship with global contacts, as well as obtain access to government connections and influences (big plus for participating lobbyists). According to The Hill, if U.S. lobbyists and major companies desire to hold their position tight in the global trade arena, then their best bet is to invest more influences and transactions in the globally recognized EU center. “So far U.S. companies were able to get away with operating politically from outside Brussels,” reported The Hill. “They need to look at Brussels as they look at Washington, D.C. and act accordingly.”

Developers in Los Angeles Spend Heavily on Local Lobbying

June 23rd, 2016 by Matthew Barnes

In Los Angeles developers are investing heavily in lobbying. KPCC reports that, “In the first three months of this year, businesses of all kinds seeking support for their projects spent $13.5 million on lobbying, according to a new report from the city Ethics Commission. Nearly half the money was concentrated among ten lobbying firms. The ethics commission analysis of the top-spending ten clients shows nine of them spent a collective $1.4 million on lobbyists to contact city officials about building projects.”

According to the city Ethics Commission’s first quarter lobbying report Liner LLP was the highest paid lobbying firm bringing in $1,266,009 in revenue. Linner LLP represents several developers including Greenland LA Metropolis Development II LLC, Harridge Development Group, LLC, and LaTerra Development, LLC. Curbed LA has reported that the developers of the Crossroads of the World complex have spent the most money lobbying for so far this year spending $220,660. According to the report “this massive project would completely revamp Hollywood’s historic Crossroads of the World complex, adding eight new buildings including a hotel and two residential towers. It was the most-lobbied project during the first quarter of 2016 by a pretty wide margin.”

The $13.5 million spent on lobbying in the first quarter almost met the record for lobby spending, which was set in the last quarter of 2015 at $14 million.  However, if lobbying spending continues at the same level, “the annual total could top $54 million, a half-million dollars more than last year’s total,” reports KPCC.

New York & Daily Fantasy Sports

June 17th, 2016 by Matthew Barnes

In New York, the decision to legalize fantasy sports is coming down to an end-of-session deadline this week. According to the Boston Globe, “The legislation would regulate and tax fantasy games while clarifying that they are not considered illegal gambling under state law. But if the bill isn’t passed before the Legislature adjourns June 16, then New York Attorney General Eric Schneiderman will likely resume his legal battle to permanently block DraftKings and FanDuel from the state.” Major fantasy sports companies DraftKings and FanDuel have been unable to operate in the state since November 2015.

Since its ban there has been an immense lobbying push to legalize fantasy sports in New York. The Boston Globe reports that “An industry lobbying group, Fantasy Sports for All, said fantasy enthusiasts had sent nearly 72,000 e-mails to legislators urging the state to pass the law. Moreover, the Wall Street Journal reported earlier this year that the fantasy sports “lobbying effort is being coordinated by the Fantasy Sports Trade Association and FanDuel Inc. and DraftKings Inc., the industry’s two biggest players. It involves 78 lobbyists in 34 states, up from four lobbyists a year ago, according to a person familiar with the matter. The companies are spending between $5 million and $10 million on the lobbying effort this year and are hoping to pass bills exempting fantasy sports from state gambling laws in at least six to eight states.”

Around the country fantasy sports industry is mounting an enormous lobbying campaign to pass favorable legislation. The efforts have so far succeeded in six states: Colorado, Indiana, Mississippi, Missouri, Tennessee, and Virginia. However, in Alabama, Arizona, Idaho, Iowa, Louisiana, Mississippi, Montana, Nevada, New York and Washington all, or almost all, fantasy sports operators are not permitted to take customers according to Legal Sports Report. Legislative success in New York would be seen as a crucial victory for those in favor of fantasy sports as the Boston Globe reports, “New York is the industry’s second-largest market, producing an estimated $267 million in entry fees in 2015, according to industry analyst firm Eilers & Krejcik Gaming.”

Senate Staff Dependent on Lobbying

June 2nd, 2016 by Matthew Barnes

On Thursday, May 19th the Senate Appropriations Committee unanimously approved the FY2017 Legislative Branch Appropriations Bill. However, unlike the amendment that was passed in the House, the Senate Bill did not address raising salaries for the chamber’s staff. The House Appropriations Committee approved an amendment that would “provide an additional $8.3 million to the Members Representational Allowance account, which funds official office expenses including staff, mail and travel. The provision would give each member’s office an additional $18,821 that members could use to raise their staff salaries. Lawmakers backing the proposal lamented the constant turnover of personnel leaving for better paying opportunities,” reports Roll Call.

As a result of the Senate’s failure to address the raising of staff salaries, Vox argues that “staff turnover will remain high, and that the staffers who inform and advise the senators on policy will remain younger and more inexperienced than private lobbyists, and will be stretched far too thin to do much of their own research. This means that the staffers will remain heavily dependent on lobbyists to explain policy to them, to give them ideas for legislation, to write bills for them and get co-sponsors for those bills, and to draft talking points for senators’ letters, op-eds, and speeches.”

In response to the approval of funding, U.S. Senator Shelley Moore Capito (R-W.Va.), chair of the Legislative Branch Appropriations Subcommittee said, “As the Appropriations Committee continues its consideration of each subcommittee bill, I am pleased to present a bill that is bipartisan and fiscally responsible.  In it, we seek to provide resources that enable the Legislative Branch of the government to do its job for the American people, and ensure the safety and security of the thousands of men and women who work in and visit our Capitol Complex every day,” according to a Appropriations Committee press release.

The Office of Government Ethics’ Rulemaking on Federal Executive Branch Gift Rules

June 1st, 2016 by Matthew Barnes

By:  Joseph M. Birkenstock & Josh Rosenstein  - Sandler Reiff Lamb Rosenstein & Birkenstock, P.C.

Since the 1970’s, regulations of the Office of Government Ethics, codified at 5 CFR part 2635, have established a broad set of ethics standards for employees of the executive branch of the federal government. These regulations focus on several specific areas: gifts from outside sources; gifts between employees; conflicting financial interests; impartiality in performing official duties; seeking outside employment; misuse of official position; and permissible outside activities.

Since the issuance of Executive Order 13490 by President Obama the day after he took office in 2009, OGE has now twice proposed broad new amendments to those executive branch ethics rules – and yet so far no new rules have been promulgated in the wake of either proposal. First in 2011 the OGE proposed mirroring the ban on gifts from lobbyists to presidential appointees imposed in EO 13490 in the overall gift rules applicable to all federal executive branch employees.

No final action was taken on that proposal, but in November 2015, OGE released another proposed rule that would revise the standards as they applied to the solicitation and acceptance of gifts from outside sources.  This most recent set of proposed changes would, among other things:

- Clarify the factors employees should use when evaluating whether they can accept an otherwise permissible gift;

  • In fact, the proposed regulations emphasize that the question of technical legal permissibility should not end an agency’s or an employee’s consideration of whether to accept a particular gift.

- Provide amended definitions of the term “gift” to permit, among other things, the acceptance of items of little intrinsic value given primarily for presentation;

- Explicitly permit the acceptance of free attendance at an event at which an employee is speaking;

- Permit the acceptance of certain membership fees, frequent flier miles, honorary degrees, and the like;

- Require written authorization from the agency ethics designee for employees to attend “widely-attended gatherings”

  • Broader limits on involvement by government contractors or other “prohibited sources” in the organization or execution of the gathering would still apply.
    • For example, if an association is hosting a widely attended gathering, a contractor that is a member of that association may not direct funds to the association for the purposes of inviting government officials.
    • However, that contractor may provide funds to sponsor the event generally, even if that sponsorship means that some additional government employees could attend at the invitation of the association as the sponsor.

- Specify that an employee can accept an invitation to attend a social event permitted under the current rule only when that invitation is unsolicited, and clarifying that the gift exception includes food, refreshments, and entertainment that are provided to the employee’s spouse or other accompanying guests.

  • When the sponsor of the event is an organization (rather than individual), however, the agency must provide specific authorization to attend.
  • The proposed rules contain a change that would be particularly meaningful to events like holiday parties or convention receptions relating to the availability of alcoholic beverages. As drafted, a new example to be added by the new rules would specify that “alcoholic beverages are not modest items of food and refreshments,” and that consequently it would be impermissible for an employee to even attend an event where alcohol is served, regardless of whether that employee does or doesn’t accept any alcoholic drinks at the event.

- Confirm that informational materials are generally exempt from the gift prohibition, similar to House and Senate rules.

- Codify the “prohibited source” list, which includes contractors and entities doing business before the official who is being offered the gift; anyone seeking official action by the agency; anyone who has interests regulated by the agency; anyone who has interests that may be substantially affected by the performance or nonperformance of the official’s duties; and any organization a majority of whose members are prohibited sources.

So, where is the regulation?

Despite being published in November, with a call for final comment in January 2016, no final rule has yet been issued.  Given the timing, even if the final rule does issue, it may not be issued prior to the new administration being sworn in next January. In fact, it’s worth considering whether the Congressional Review Act, which provides that Congress may disapprove any major agency regulations, might impact the timing of the regulations. This may be unlikely, since a given regulation needs to have an annual economic impact in excess of $100M to be considered a “major” regulation for this purpose, and the Notice of Proposed Rulemaking did not indicate that OGE considers these regulations to be subject to Congressional review and potential disapproval under the CRA.

Efforts to contact OGE about the status of this rulemaking have provided no new guidance.  The comment period, now closed for four months, makes one wonder whether the regulations—which languished for months initially—will be forthcoming.

Nevertheless, the political and advocacy worlds are already deep into the planning process for the major party national nominating conventions, election season, and the eventual January inauguration. These and other events always involve opportunities for private-sector sources (including those currently categorized as prohibited under existing regulations or the Obama executive order) to interact with executive branch employees in ways that can involve potential issues under the OGE gift & ethics rules.

Consequently, it’s worth bearing in mind that while new rules may or may not appear in the foreseeable future, the current regulations remain in place, so industry—particularly prohibited sources—should be sure to comply with existing guidance while retaining flexibility, to the extent possible, in their planning going forward to adapt to potentially significant new ethics rules.

 

New York State Advisory Opinion Broadens Definitions of Lobbying

June 1st, 2016 by Matthew Barnes

By: Jason Torchinsky – Holtzman Vogel Josefiak Torchinsky PLLC

In a January 2016 Advisory Opinion, the New York Joint Commission on Public Ethics (JCOPE) clarified reporting obligations for those individuals and entities compensated for consulting services in connection with lobbying activity. The Advisory Opinion, referred to as AO 16-01, specifically addresses grassroots lobbying, “door-opening” lobbying, and the presence of a consultant at a lobbying meeting.

Following the release of AO 16-01, several public relations firms filed suit in federal court to prevent the JCOPE from enforcing the portion of AO 16-01 that would require individuals who are being paid to discuss legislation with editorial writers to register and report with JCOPE as lobbyists.

The following summary will focus on the new advisory opinion and the ensuing litigation.

1.      Grassroots Lobbying

Although New York’s lobby law already covered “grassroots lobbying”, this type of lobbying required a “call to action” in addition to a reference to specific legislation and a clear position on legislation. As a result of AO 16-01, however, public relations professionals working on matters that directly or indirectly involve communicating with public officials are now considered to be engaged in these lobbying activities. A communication is considered to be grassroots lobbying when it:

(1)   References, suggests, or implicates a state or local “government action”;

(2)   Takes a clear position on the issue in question; and

(3)   Is an attempt to influence a public official through a call to action.

For example, a solicitation, exhortation, or encouragement to the public or a segment of the public to contact a public official is considered grassroots lobbying. Further, an individual or organization that participates in the formation of the content and delivery of such a communication may be considered to be lobbying. In other words, public relations discussions with editors about current or pending legislation may require registration if the discussions involve the formation of content and delivery of a communication.

Individuals engaged in grassroots lobbying must register with JCOPE as a lobbyist if they or their employer receives or expends more than $5,000 for this and/or any activity that New York State considers lobbying. JCOPE has noted, however, that public relations consultants would not need to disclose “the content or details of specific communications with reporters or others.”

2.      “Door Opening” Lobbying

Preliminary contact by a consultant with a covered official is lobbying if it is intended to enable or facilitate the ultimate advocacy.

Under AO 16-01, certain activities by a consultant may constitute reportable direct lobbying. Specifically, a paid consultant engages in reportable direct lobbying under this opinion when the consultant has preliminary contract with a public official to enable or facilitate lobbying by a client or has any direct interaction with a public official in connection with lobbying by a client. As a result, a person who makes introductions between a covered official and his/her client may need to register as a lobbyist even if he/she does not engage in any substantive discussion of an issue if his/her employer receives or expends more than $5,000 for this and/or any activity that NY State considers lobbying.

3.      Consultants Attending Meetings

According to AO 16-01, merely attending a meeting with a covered official may be sufficient to trigger registration. To be clear, an individual who has direct interaction with a public official in connection with lobbying must register. These interactions include, but are not limited to:

(1)   Verbal or written communications, including communications made for the purpose of facilitating access to a public official;

(2)   Attendance at a meeting with a public official; and

(3)   Presence on a phone call with a public official.

AO 16-01 does confirm the long-standing exemption that individuals who attend meetings with public officials to address technical questions are not considered to be lobbying. This includes individuals such as architects, scientists, and engineers among others. 

Examples of Lobbying Which Trigger Registration

Considering the broad scope and application of AO 16-01, it is worth noting certain examples that would trigger registration by an individual. Consider actions and communications like the following:

  • Rallies to “get involved”
  • Billboards with a call to “Contact the Governor”
  • Radio or television ads stating  “Tell your Senator”
  • Websites/online petitions to “click here to sign this petition to our Assemblyperson”
  • Letter writing campaigns organized to oppose a regulation before a State agency
  • Speaking to a trade group to encourage them to contact a public official about a specific government action
  • Appearing on television to support the client’s position with respect to a government action
  • Contacting a newspaper to encourage editorial board to support the client’s position

Pending Litigation

In March 2016, a group of five public relations firms filed a lawsuit in the Southern District of New York seeking to prevent JCOPE from enforcing the portion of AO 16-01 that would require public relations professionals, who are paid to discuss legislation with editorial writers, to register and report with JCOPE as lobbyists. The group claims that AO 16-01 violates the First and Fourteenth Amendments of the U.S. Constitution by unlawfully subjecting public relations firms to a disclosure and punishment regime designed for true lobbyists, when in fact, public relations professionals only speak to the press about public issues. The group further argues that the result of AO 16-01 is that public relations firms, their clients, and members of the press are deterred, chilled, and silenced in violation of their First Amendment rights. The plaintiffs are seeking a temporary restraining order that would prevent JCOPE from taking action to enforce AO 16-01. The Southern District of New York has authorized a temporary stay of enforcement of AO 16-01 as applied to the group of plaintiffs. However, litigation is ongoing and the parties will be filing briefs in opposition to, or in support of, the various motions before the Court in the coming weeks.  A decision in expected this summer.

Termination of a Registered Lobbyist

June 1st, 2016 by Matthew Barnes

By: Cleta Mitchell - Foley & Lardner LLP

The most common error experienced by my clients is properly terminating a lobbyist registration when a lobbyist leaves the firm or the organization or falls below the 20% threshold for lobbying registration for two consecutive quarters.   A full explanation of the procedures to follow can be found in the Lobbying Compliance Handbook, in addition to some sample forms and letters.

Below is a short checklist of the steps to follow when any person who is a registered lobbyist departs from the organization or ceases to be a lobbyist for the client or the organization:

1.  The LD-2 report is the key report reflecting termination.   Suppose Susan Lobbyist leaves the organization at the end of March, having worked on 3 clients (or 3 issues) during the first quarter.    The First Quarter LD-2 report, filed in April, must reflect the issues or clients on which Susan Lobbyist worked during the first quarter.   But, in addition, the organization/firm must complete Line 23, “Lobbyist Update”,  which asks for the names of ‘each previously reported lobbyist who is no longer expected to act as a lobbyist for the client.”  Susan Lobbyist’s name should be reported on Line 23 on the first LD-2 after ceasing to act as a lobbyist or departing from the firm or organization.

2.  Susan Lobbyist must still file an LD-203 for the January – June reporting period.  When Susan Lobbyist leaves the firm or organization, it is important to document that Susan must still file an LD-203 in July because she was a registered lobbyist for at least a portion of the reporting period.    The firm or organization should send written reminder before Susan leaves the firm/organization, which contains a statement that the LD-203 must be filed no later than July 20 (if Susan has departed at the end of March).  If Susan is leaving the lobbying industry altogether and is not planning to remain as a registered lobbyist,  the best practice is to have Susan file her LD-203 before she leaves her present position.   If Susan is planning to continue as a registered lobbyist in her next employment, providing a written document of the filing obligation is sufficient to protect the current employer from liability is Susan fails to file as required by law.

3.  Letters from the Secretary of the Senate and the House Clerk for failure to file.  If Susan fails to file the LD-203 as required, her last employer will be notified by the Senate Secretary and/or the House Clerk.   When those letters arrive, it is important to be able to respond with a copy of the written directive that had been provided to Susan prior to her departure.   However, the Secretary of the Senate and the House Clerk will also look to the last employer for whom Susan was registered to correct any problems with reporting.  Failure to have listed Susan on Line 23 of the first LD-2 following Susan’s departure will require an amended LD-2 to reflect her status as no longer lobbying for the organization or the client.

4.  Failure to respond to letters from the Secretary of the Senate or the House Clerk may result in a subsequent communication from the Department of Justice.  It is important to realize that simply because someone has departed from the organization or has stopped serving as a lobbyist does not relieve the registrant OR the organization from properly reporting all such changes.   Ignoring the letters from the Secretary of the Senate or the House Clerk will trigger letters from the Department of Justice – and ignoring letters from the DOJ can result in a lawsuit filed by DOJ seeking substantial penalties for disregarding the filing and reporting obligations.

It is not difficult to ensure that the lobbyist termination forms are properly completed and that all reports are duly and timely filed.   But it is important that steps are taken to know what is required and to proceed in the proper manner.

Too many firms, lobbyists and organizations simply fail to follow the simple process and face letters from the Department of Justice and threats of litigation and civil penalties.

Questions?   Refer to the Lobbying Compliance Handbook for more thorough explanation and suggested form letters.

Record Lobbying Donations in 2016 Campaigns

May 27th, 2016 by Matthew Barnes

As previously discussed in Lobby Blog, we are experiencing an election cycle filled with much anti –lobbying rhetoric from leading presidential candidates on both sides of the aisle like Sen. Bernie Sanders (I-Vt.) and Donald Trump. Nevertheless, lobbyists have come to play a significant role supporting many of the 2016 presidential campaigns through direct donations and fundraising. Lobby Blog has previously reported that Democratic presidential candidate Hillary Clinton “received more than $600,000 from more than 300 different registered lobbyists and PACs in the first half of 2015.”

The support for candidates from lobbyists has continued into 2016. According to the Hill, “Lobbyists may well give more in 2016 than they did in previous cycles… And with control of the Senate in play, it’s increasingly difficult for lobbyists from both parties to resist fundraising pleas.” Already in this election cycle “the top 20 givers among registered federal lobbyists, as identified by the nonpartisan Center for Responsive Politics, have collectively donated more than $2.5 million.”

The Hill argues that on the Democratic side one explanation of the increase in lobbying contributions is because of “new arrangements such as joint fundraising committees have also driven up the requests for money. And registered Democratic lobbyists, who for two presidential cycles were blocked by President Barack Obama from donating to his campaigns, have now been liberated. They have made Democratic front-runner Hillary Clinton the top recipient of K Street cash among White House hopefuls this election cycle. The Democratic National Committee is also once more welcoming lobbyist checks.”

Lobbyists, such as Pat Raffaniello, who runs Raffaniello & Associates, also argue that while there may be an increase in spending from the industry, it is nothing compared to the millions of dollars raised and donated to PACs by highroller groups such as hedge funds. According to Raffaniello “Unless you are raising hundreds of thousands of dollars, it seems like a wasted effort from a lobbying point of view…You don’t get on anybody’s radar screen.”  However, some like Nick Penniman, Executive Director of Issue One, argue that “direct donations from lobbyists to lawmakers and congressional candidates have special value, even if they’re comparatively low…Lobbyists don’t have the big checks, but lobbyists’ money, because it’s going directly to the campaigns, is pure gold…It’s the highest currency in political giving.”

 

Hedge Funds Launch New Lobbying Arm

May 19th, 2016 by Matthew Barnes

A new Washington D.C. based trade association has been created a select group of hedge funds. The new association is named the “Council for Investor Rights and Corporate Accountability,” or “CIRCA.” According to the Wall Street Journal, “it is the first coordinated effort by activists to make their case to lawmakers and the American public that their investment strategy helps, rather than harms, companies and the U.S. economy.”

CIRCA is supported by a consortium of five different activist firms, but does not name them in the press release. However, Reuters reports that, “According to a person with direct knowledge of the matter, the group’s backers are: William Ackman of Pershing Square, Carl Icahn, Daniel Loeb of Third Point, Paul Singer of Elliott Associates and Barry Rosenstein of Jana Partners.” The five backers manage approximately $90 billion according to the Wall Street Journal.

In recent weeks activist investors have come under fire and have attracted the attention of politicians. In March Senators Tammy Baldwin (D-Wis.) and Jeff Merkley (D-Ore.) introduced S.2720, “The Brokaw Act.” The act was cosponsored by Senators Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).

According to Sen. Baldwin’s press release on The Brokaw Act, “The problem of short-termism is real and there is growing chorus who believe short-termism is holding America back from reaching its full potential to create stronger economic growth for our nation. Put simply, short-termism—also known as “quarterly capitalism”—is the focus on short time horizons by both corporate managers and financial markets. It results in corporate funds being used for payouts to shareholders in the form of dividends and buybacks rather than investment in workers, R&D, infrastructure, and long-term success. Activist hedge funds are leading the short-termism charge in our economy. They abuse lax securities laws to gain large stakes in public companies. Once there, they make demands to benefit themselves at the expense of the company’s long-term interests. The most common demands are for more debt, stock buybacks, reduced R&D, cost-cutting, layoffs, and general reduction any investment in long-term growth.”

In CIRCA’s press release Senior Advisor Rob Collins argues, “CIRCA was founded on the widely accepted idea that a well-functioning system of checks and balances between boards of directors and shareholders is fundamental to long term economic growth and U.S. prosperity,”  according to the Reuters report.

Contractor’s Return on Government Relations Spending

May 11th, 2016 by Matthew Barnes

New analysis of lobbying spending and government spending from MapLight has revealed that in the past decade U.S. government contractors have received $1,171.00 in taxpayer dollars for every $1.00 that they contribute to lobbying and PACs. MapLight reports, “The 25 largest federal contractors, as ranked by value of contracts received during the 2014 fiscal year, have received almost $1.6 trillion for their work since October 2005. These companies spent about $1.2 billion on lobbying and contributed more than $150 million to PACs during that time, according to MapLight’s analysis of federal procurement data and lobbying and PAC contributions from the Center for Responsive Politics.”

The return for every dollar invested in political influence between October 2005 and September 2015 by the three largest government contractors is listed below. All figures are provided by MapLight.

  • Lockheed Martin Corp. – Spent at least $140 million on lobbying and political contributions and received $331 billion in federal dollars, yielding a $2,366 return on every $1 invested.
  • Boeing Co.- Spent $150 million on lobbying and political contributions and received $201 billion in federal dollars, yielding a $1,341 return for every $1 invested.
  • General Dynamics Corp. Spent $96 million on lobbying and political contributions and received $136 billion in federal dollars, yielding a $1,421 return for every $1 invested.

Interestingly, MapLight reports that not all major government contractors have relied on heavy spending on lobbying. “The consulting firm Booz Allen Hamilton, based in the Washington, D.C., suburb of Tysons Corner, Virginia, has earned $29 billion in government contracts since October 2005. During the same period, it spent $80,000 on lobbying and none on political contributions, giving it a return of $362,564 for every $1 spent on political influence.”

The Push for Self-Driving Cars

April 27th, 2016 by Matthew Barnes

Taking a big step forward for self-driving cars, Ford Motor Co., Google, Lyft, Uber Technologies Inc. and Volvo Cars joined together to form “The Self-Driving Coalition for Safer Streets.” The goal of the group, according to Automotive News is to “work with lawmakers, regulators, and the public to realize the safety and societal benefits of self-driving vehicles…The five companies, which all are working on self-driving cars, say one of the group’s first tasks is to ‘work with civic organizations, municipalities and businesses to bring the vision of self-driving vehicles to America’s roads and highways.’” Reuters reports that in “2014 there were 32,675 fatalities and 2.3 million injured in 6.1 million crashes on U.S. roads. NHTSA says about 94 percent of all traffic crashes are caused by human error.”

The coalition will retain David Strickland as its counsel and spokesman. In a statement Strickland said, “”The best path for this innovation is to have one clear set of federal standards and the coalition will work with policymakers to find the right solutions that will facilitate the deployment of self-driving vehicles.”

Strickland is a Partner in Venable’s Regulatory Group. Before that he “served as the fourteenth Administrator of the National Highway Traffic Safety Administration (NHTSA).  As the top automotive safety official in the United States, he was responsible for executing the agency’s mission to reduce crash-related fatalities and injuries while insuring the highest standards of safety on the nation’s roads.”

Strickland has experience lobbying for auto industry groups according to his lobbying disclosures. He also represents Cox Automotive and the Association of Global Automakers.

The lobbying push for self-driving vehicles has started to grow in recent weeks with other prominent organizations such as General Motors hiring lobbyists to represent their interests on the issue. GM “brought on The Fritts Group, a boutique lobbying firm, to advocate on self-driving cars, connected cars and cybersecurity privacy, according to a disclosure filed” in early-April reports The Hill.

One possible reason for the lobbying push is that U.S. Secretary of Transportation Anthony Foxx has previously announced that he planned to develop policy for autonomous cars by this summer. In January, The Verge reports, Secretary Foxx announced that, “within six months, his agency will work with states, manufacturers, and others to develop a “model” state policy for autonomous cars with the goal of creating a consistent national policy.”