Common LDA Compliance Mistakes

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.

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