How not to land yourself in jail

January 11th, 2011 by Autumn

You have probably heard by now that Paul Magliocchetti, the founder of the now-defunct PMA Group, was sentenced to 27 months behind bars for his role in organizing a campaign finance scheme.  In addition to the prison sentence, which will be served at a North Carolina federal prison hospital, the former House Appropriations Committee staffer was fined $75,000.

The sitting judge, the Honorable T.S. Ellis, issued the sentence as a warning to other lobbyists, and simultaneously expressed his displeasure with prosecutors who seek only fines in similar cases.  He did not grant the 57 month prison term and $629,000 fine the prosecutors sought initially, and told Magliocchetti that his good works were not obliterated, he was not responsible for a PMA Group-favorite donor’s suicide in light of the investigations, and said he should make amends with his son, who plead guilty to charges related to the case.

So what can be drawn from the Magliocchetti case?  First, people are seeking to make examples of lobbyists, so tread lightly.  Make sure you are in compliance with HLOGA and all of its developments, and be sure to carefully review your LD-203 filings for errors, remembering that your signature is “under penalty of perjury.”

Make sure that you disclose any campaign donations, be they to PACs, independent expenditure groups, political parties, or candidates and their election committees, on the form.

Bundle with care.  You will need to be aware of the limits and follow them closely.  Citizens United opened the door for unlimited giving, but did not take away the reporting requirements.

A good rule of thumb: if you can’t report it, don’t give it.  Recent cases have shown that prosecutors are looking and will find any missteps.  Repercussions may not be immediate, but they are coming.  US News & World Report found that only 20% of companies properly disclose their political donations, and only 14% actually have indirect disclosure policies.

If you find yourself overwhelmed by the LD-203′s reporting requirements, it is not too late to join today’s LD-203 bootcamp, which will be held at 2p.

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George Clooney: Hollywood front man and…lobbyist?

January 10th, 2011 by Autumn

Known for his role in some of Hollywood’s top blockbusters, George Clooney is no stranger to Washington.  While Clooney himself is not actually a registered lobbyist, he has visited the White House to discuss his favorite issue: the genocide in Darfur.  Just over a month after President Obama was inaugurated, Clooney visited the president and Vice President Biden to discuss the crisis in the region.

While not as outwardly vocal as other celebrity lobbyists, including Lady Gaga, Clooney, through “Not on Our Watch,” a monitoring organization he co-founded along with fellow Ocean’s trilogy actors Don Cheadle and Matt Damon, and Brad Pitt, David Pressman, and Jerry Weintraub, seeks “to focus global attention and resources towards putting an end to mass atrocities around the world,” according to the organization’s website.

The organization is a grassroots organization, urging citizens to contact elected officials, including President Obama, and encourage the US to take action on these issues.

What to Expect in a GAO Audit

January 5th, 2011 by Brittany

January marks the beginning of the new year, and the beginning of the sending out of audit letters by the Government Accountability Office. Below are some tips that organizations should keep in mind if they happen to receive an audit letter.

The GAO sought documentation for the following information on the LD-2 reports:

  • Lobbying income/expenses
  • Specific issues worked on and the lobbyists working on those issues
  • Disclosure of “active participants” in lobbying activities of a coalition or association
  • Disclosure of foreign organizations with a financial stake in an organization
  • Lobbyists who are no longer affiliated with client/issue
  • The congressional house or executive branch agency lobbied on each issue
  • Disclosure of “prior government service” for individual lobbyists listed on the reports

It is imperative to provide additional evidence to show how the numbers, names and other information contained in the reports were collected and that the correct information was submitted.

In addition to the previously mentioned findings of the GAO, the report also mentions some of the bad habits that were reflected on the LD-2 reports. Some of the reports contained dollar amounts that were not correctly rounded to the right number. An example of this would be that if an association spent $23,000 on lobbying activities during a reporting period, instead of reporting that $20,000 was allocated to lobbying expenditures by rounding to the nearest $10,000, as required by the LDA, the association may have rounded up to $30,000 and report that figure on the LD-2.

Another common mistake seen by the GAO was reporting the same people and lobbying figures on their reports for consecutive quarters, even if the information had changed. A related problem that the GAO discovered is that organizations would “over-report” the lobbying figures and the lobbyists working on issues to cover all of their bases. Although the GAO accepted verbal explanations for these, written documentations of these decisions should be kept in the future.

With these possible inconsistencies in mind, it would be mindful to keep accurate records of the items reported on the LD-2. The following are some methods to ensure that lobbying activities are correctly reported:

  1. Explain the decision process for what will be reported.
  2. Standardize the review process for the information in the reports.
  3. Keep any documents related to any of the lobbying reports.

For more information or to purchase the Lobbying Compliance Handbook click here.

Ethics Tip: Travel edition

January 4th, 2011 by Autumn

Lobbying firms and individual registered lobbyists are not permitted to sponsor any trips for Congressional members or staff unless an exception for the payment exists under the gift rules.  Typically, the only exemptions are for personal friends, relatives and significant others where significant history of the relationship can be proven.

Organizations that employ lobbyists, however, may sponsor one-day trips for members of Congress or staffers.  They may also offer local transportation for “widely attended events” or to the event site.  Ground transportation must be only occasional, and must be related to the event, not outside entertainment, and must be provided by the event sponsor, not a lobbyist.  Lobbyist involvement in the planning of the trip must be de minimis.  A 501(c)(3) organization may sponsor a multi-day trip for a senator, as long as no lobbyist accompanies the senator on any part of the trip.  There is no such multi-day provision for House representatives.

Private higher education institutions, whether they employ lobbyists or not, can provide three-day domestic trips and seven-day foreign trips, as long as staff lobbyists do not participate in the trip in any way.

Payment for travel is typically only approved to/from Washington, and not for other stopovers not related to the purpose of the trip.  Alcoholic beverages and flights on private or chartered aircrafts are not considered “reasonable expenses,” and therefore cannot be paid for by event sponsors.  Senate rules do not allow for payment of travel expenses for aides or assistants, but do allow for spouses and children to travel on the sponsor.  The House has similar provisions, but does not specify which “relative” can be paid for.

Top Headlines of 2010

January 3rd, 2011 by Autumn

Last year saw Executive Orders and court rulings and legislative movements and the passing of some of the profession’s most dearly-loved members.  Here is a look back at the top headlines of 2010:

  1. Trials, convictions and releases – Kevin Ring was convicted on five counts of corruption November 15 and awaits sentencing, after a 2009 trial resulted in a hung jury.  Paul Magliocchetti pleaded guilty in September to making illegal campaign contributions.  The justice department is seeking a 57 month imprisonment for what prosecutors are calling “one of the largest criminal schemes in U.S. history to violate federal campaign finance laws.”  Jack Abramoff, initially sentenced to six years for  fraud, tax evasion, and conspiracy to bribe public officials, was released from federal prison in June, and his term at a work-release-like program at a Baltimore pizzeria ended in early December.
  2. Court rulings – In January, the Supreme Court ruled in Citizens United v. Federal Elections Commission corporate funding of independent campaign ads could not be limited under the First Amendment.  Many consider the March Speechnow ruling to be a follow-up to Citizens United; the spring case allowed for unlimited giving to “independent expenditures committees.”  Both cases, however, upheld disclosure requirements while lifting spending restrictions.
  3. Legislative Bullying - Congress sought to “fix” the Citizens United ruling with the DISCLOSE Act, which would require organizations that back federal election campaigns to disclose the names of large donors, as well as list said donors in any campaign ads the organizations run, and ban foreign governments, government contractors, and TARP recipients from donating to campaigns.  The act passed in the House in June, but failed in the lame duck session in the Senate.  In addition, a proposed ban on earmarks failed in the Senate November 30.
  4. Executive Orders – In June, President Obama issued an order banning lobbyists from advisory boards of federal departments and agencies.  It also banned all gifts from lobbyists to executive branch appointees, appointees-turned-lobbyists from lobbying the branch for the duration of his administration, and tightened revolving door policies.
  5. Deaths – Patti Jo Baber, executive director of the American League of Lobbyists, passed in December.  She was described as the “backbone” of the organization and a prominent member of the lobbying community.

Lobbyists are your friends

January 3rd, 2011 by Autumn

2010 saw a proliferation as “lobbying PR,” representing a shift to a more offensive, proactive approach to controlling the profession’s image, as opposed to a defensive, reactive stance it currently takes.  Perhaps it is because anti-lobbyist rhetoric has been at an all-time high since the 2008 election.  Or maybe it is in response to executive orders banning lobbyists from the Obama Administration and other restrictive policies that have made it more difficult for lobbyists to do their jobs.

Whatever the cause, we took a look at the top five pro-lobbying videos circulating around the internet to kick the year off right and examined what each was trying to say about the profession.

  • Billy Wants a Dog, Hill & Knowlton’s Dick and Jane-esque explanation of why corporate interests retain lobbyists is more of a marketing piece for the firm than an advocate for the profession.  Still, by default, it does include some pro-lobbying points, reminding us that “there are unintended consequences when governments act,” suggesting that “experts help you communicate with the government.”  The very simple, no-frills animation reveals that lobbyists aren’t scoundrels after all, but experts in their chosen fields.
  • This is Tracy Sherman. Tracy is a lobbyist. follows a woman on her way to her office, where it is revealed that she is a lobbyist (cue dramatic music).  Tracy goes on for seven minutes to discuss what it is that she and other lobbyists do.
  • In his animation, How It Happens: Lobbyists., David Gillette attempts to showcase the need for lobbyists: “Poof! Welcome to a world without lobbyists!  You may not believe it, but we just lost a tremendous amount of legislative expertise…as a result, our government is now almost entirely driven by the limited knowledge of our elected officials,” he says.   Gillette breifly explores the age old question: Are lobbyists evil, adding “What we think about them probably rests more on the issues they represent than the actual existence of the profession.”
  • What is Lobbying and Why is it Important? is the American League of Lobbyists’ explanation of lobbying as “your first amendment right” that needs exercising and protection, featuring several prominent DC-area lobbyists.
  • The Rap on Lobbyists begins “If you want city hall to take your call, if you want the state to legislate, if you advocate for the grassroots, be honest. Who else is going to get your words heard in Congress?”

Industry Moves & Changes

January 3rd, 2011 by Autumn

Gary Karr will join the Medical Technology Association (AdvaMed) as executive vice president for public affairs.

Michael Glassner has been named senior vice president of G.R. Seppala & Associates and president of its government affairs division. Glassner had been senior vice president for external affairs at IDT Corp.

John Engler is leaving the National Association of Manufacturers to become the president of the Business Roundtable.

Jay Timmons has been named president and CEO of the National Association of Manufacturers (NAM).

Marty Russo, chief executive at Cassidy & Associates, took a buyout Wednesday amid a staff shakeup at the lobbying firm.

Compliance Q&A: Registration Termination

December 30th, 2010 by Autumn

Q: Is it true that once a nonprofit has registered under the LDA, it will have to continue to register indefinitely regardless of whether it meets the monetary quarterly threshold for lobbying?

A:  No. When there is an agreement that no future lobbying activity is expected for the next quarter or thereafter, or otherwise reasonable expectation that your company will no longer be lobbying on the issue, you would file your LD-2 as a termination.  The absence of activity during a quarter does not relieve the obligation to file.  If there is reasonable expectation that you will commence lobbying in another quarter, you will file an LD-2 form indicating that there was no activity in that period.  If, however, you continued to lobby during that period at a level beneath the amount needed to trigger registration once you are already registered, you will need to indicate the amount spent in that period, because registration has already been triggered and there is a reasonable expectation that your organization will continue to lobby on the issue.

You want to ensure that you DO actually file a termination, as opposed to simply ceasing filings, because failure to file will result in follow-up action by the House Clerk and Secretary of the Senate, who may choose to refer your organization to the Department of Justice.

2010 in Review: The quotes that defined the profession

December 29th, 2010 by Autumn

As 2010 comes to a close and we begin to look forward to the new year, we would be remiss if we did not look back on the year that was.  We have counted down our top ten lobbying quotes of 2010.  Enjoy!

10. It is good for guys like us.  I think you will see instead of a flattening or retrenchment of lobbying, you will see an uptick.”Marc Lampkin, a Republican lobbyist with Quinn Gillespie & Associates and former aide to Speaker-elect John Boehner (R-Ohio) on what the 112th Congressional agenda means for lobbyists.

9. “What I don’t want to see happen to transparency is what happened to break dancing…A brief commercial success that becomes not hip in 2012.” – Sunlight Foundation president John Wonderlich.

8. “Some of us are joking that the next proposal [to curb lobbyist influence] will be to put RFD tracking chips in lobbyists’ necks so they know where we are at all times.” – Rich Gold, partner, Holland & Knight

7. “There is no nefarious handshake meeting that is being kept secret.” – Scott E. Talbott, a lawyer and lobbyist for the Financial Services Roundtable.

6.  “The rhythm of the town is going to switch. You walk through the hallways. The rooms are all the same, a lot of people are the same, but there’s a lot of change…You can’t put too much stock in the old ways. There’s going to be a powerful current of change, and you’ve got to adapt to that.” – Jack Howard, lobbyist and former aide to Newt Gingrich on the post-swearing-in changes lobbyists can expect on the Hill.

5. “He exaggerates our power, but he increases demand for our services,” Democratic lobbyist Tony Podesta says of President Obama.  Not only does the president’s agenda include a number of deeply divisive issues, but the exaggerated power “makes people who don’t have a lobbyist want one,” Podesta says.

4. “We have to take action on both ends of Pennsylvania Avenue — to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve.”- President Obama in the January State of the Union address on the remedy to the “deep and corrosive thoughts about how Washington works” he believes politicians face.

3. “This is not sexy at all. It is a different kind of lobbying…Halftime is over. The legislators have left the field and the regulators have taken over” -Talbott again on the new environment lobbyists will face approaching the executive branch and regulatory agencies.

2.  “Whatever they’re gonna do, they’ll do,” he said. “They can ban lobbyists from having drivers licenses. We’ll all get cars and drivers.” - Podesta again on the increased scrutiny and executive orders banning lobbyists in the Obama Administration and the perseverance lobbyists exhibit in the face of such orders.

1. “Next to God, faith, and country, nothing is more important than influence.” – Jack Abramoff, as portrayed by Kevin Spacey in 2010′s “Casino Jack.”  It’s true.  Influence shapes country and faith.  And for some, maybe even God.

Tuesday Ethics Tip: New Year’s Eve Fundraisers

December 28th, 2010 by Autumn

New Year’s Eve provides a good fundraiser occasion.  Virtually no one wants to sit at home, and people are willing to pay to see and be seen as the ball drops on Times Square.

The gift rules for food and entertainment still apply to members of Congress and their staff at charity events and fundraisers.

For charity and political fundraisers, the value of a ticket for Congressional members is the cost of the meal. Note that invitations should come from the event sponsor and not a lobbyist who is buying a ticket from the sponsor to give to the Member.

Other rules of thumb for charity and political fundraisers:

  • When listing Congressmen as honorary hosts, make sure that if a member of the House, other non-House members are also listed as honorary hosts.
  • Representatives from the House can neither be honored nor offered an exclusive ceremonial role not offered to others; Senators may be honored if the title as Senator is excluded and the charity is not receiving any money from a lobbying entities earmarked for the event.
  • Invitations must come from the organization, not individual lobbyists.
  • Meals are allowed.
  • Entertainment can be provided, as long as it is offered to all attendees.  VIP sessions for the member/staffer are not permissible.
  • No tangible gift or goodie bags may be provided.

LDA Compliance Q&A

December 23rd, 2010 by Autumn

Q: Would a firm that makes $13,000 on lobbying in a quarter have to register, if none of its employees spends more than 20% of their time lobbying?

A: The short answer is no, but the 20% rule is tricky to a lot of people.  Twenty percent of time includes all lobbying activity– time spent in preparation for lobbying, beyond just lobbying contacts.  It is also broken down on a per client basis, meaning that the figure is not calculated relative to your total time in a quarter (meaning you may have to register on behalf of more than one client).  If 20% of your billable hours for that client are spent on lobbying activities, the answer becomes yes, you must file an LD-1.

Affiliated organizations — “an entity other than the client that contributes in excess of $5,000 towards the registrant’s lobbying activities in a quarterly period, and actively participates in the planning, supervision, or control of such activities” — must be disclosed on the report as well.

Tuesday Ethics Tip: Holiday Party Edition

December 21st, 2010 by Autumn

This time of year, everyone is throwing parties and receptions to commemorate the holiday season.  And, especially in Washington circles where everyone seems to know everyone else, it may be tempting to invite members of Congress or staffers to these functions.  As innocent as this may be (not everyone is inviting Hillers with hopes to gain favor, some are just being nice), there are still several things to look out for when planning the functions.

  • Follow the “toothpick rule” when planning the menu.  If it can’t fit on a toothpick, it may be consider a meal, and therefore members and their staff are unable to eat.  The good-intentioned gesture that was the invitation turns sour when invited guests are unable to eat.
  • The entertainment should be of a minimal nature.  A jazz trio, harpist, etc are acceptable.  A headliner concert….probably not.
  • Valet, coat check, party favors and gift bags can be accepted by a member or staffer only if the value of the items does not exceed $10.

It is important to note that a holiday reception would not fall under the “widely attended event” exception to the gift rules relative to meals.  A widely attended event must be related to the staffer’s official duties.  A good way to make sure you’re in the clear is to indicate that “light hors d’oeuvres and cocktails” will be provided on the invitation.  Just be sure to make sure the event is not transformed into a lavish party, which could get both you and the member/staffer in trouble.

Tax legislation K Street cash cow?

December 20th, 2010 by Autumn

Washington insiders project that tax code discussions could be to 2011 what healthcare was to 2009 and financial regulatory reform was to 2010: a nationally divisive issue that provides a chance for lobbyists to cash in.  No matter what the political allegiance, this debate has a “something for everyone” feel that will engage lobbyists across party lines scrambling to weigh in on deductions and withholdings.

Though Congress voted to extend the Bush-era tax cuts for two more years, some determination needs to be made regarding what will happen not only in the meantime, but after the cuts expire again (in line, incidentally, with another major election year).  Businesses and associations favor a simplified tax code, but no one is sure about the best way to implement it.  President Obama has also voiced support for a simplified code, but also is not sure of what the best practices would be.

With varied interests at stake, and no one, even Congressmen, sure where to start, there is a unique opportunity for lobbyists to take up almost any issue to promote on the Hill.  And as was the case with healthcare reform and financial industry regulation, no matter what happens, no one will be satisfied, and lobbyists can be sure they will have their hands full peddling for any myriad of deductions (or elimination thereof).

“Superlobbyist” may face imprisonment

December 20th, 2010 by Autumn

Paul Magliocchetti, is seeking home confinement, a $10,000 fine, and probation for his role in what prosecutors are calling “one of the largest criminal schemes in U.S. history to violate federal campaign finance laws,” according to a sentencing memo filed by the Justice Department.

Magliocchetti, who pleaded guilty in September to channeling $380,000 to members of the House in an attempt to secure defense contracts for clients, believes that the sought sentence is more in line with similar crimes than the penalty suggested by the district attorney’s office.  Prosecutors in the case have requested 57 months of imprisonment, saying his greed significantly impugned the image and integrity of the American political process.

American League of Lobbyists loses executive director

December 20th, 2010 by Autumn

Patti Jo Baber, executive director of the American League of Lobbyists, died last week after a valiant battle with cancer.  Patti Jo had been a constant presence with the ALL and the lobbying community at large, “the one constant through all of the [league’s] Boards and Presidents, and [she] gave her all to the lobbying profession,” current president Dave Wenhold said in a statement on the ALL website.

Patti Jo was often described as the “backbone” and “heart and soul” of the ALL.  She will be most remembered for her sense of humor, generosity, “friendly and knowledgeable presence” and ability to uplift those around her.  The memorial service was held Friday in Arlington.  In lieu of flowers, memorial contributions may be made to Last Chance Animal Rescue, 4499 Leonardtown Road, Waldorf, MD 20601.