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.