Lobbying Under Pres. Clinton

August 25th, 2016 by Matthew Barnes

Lobbyists have started to explore what a Hillary Clinton presidency would mean for the industry. So far, signs have pointed to a thawing of the relationship between a future Clinton Administration and lobbyists, especially in comparison to President Obama’s 2008 presidential election campaign when he pledged not to accept contributions from registered lobbyists.  Moreover, once President Obama was elected the administration issued an “executive order [which] imposed strict rules about lobbyist participation that went farther than previous administrations. It barred political appointees in his administration, if they were registered lobbyists within the previous two years, from working for agencies they’d lobbied during the previous two years,” according to the Washington Post.

In a Time report discussing the difference between President Obama’s policies and Secretary Clinton’s, lobbyists Heather Podesta of Heather Podesta + Partners said, “During Obama Administration I couldn’t give money to the Democratic National Committee, the President, and if the Democratic Senatorial Campaign Committee was having an event with him I couldn’t go even though I was a maxed-out donor,” she continued. “This year, I’m helping to raise money for Hillary. I’ve known her a long time. I’m really excited about her campaign. I raised for her in 2008 and I’m ready for her to go all the way. So my money is now good.”

So far, according to the Washington Post, “lobbyists have raised about $7 million for the 2016 Clinton campaign so far, and Clinton campaign chairman John Podesta co-founded what became one of Washington’s top lobby firms with his brother, prominent Democratic lobbyist Tony Podesta — a top Clinton bundler.” A Clinton White House may also issue a new executive order on lobbying which would supersede President Obama’s executive order. “There is some speculation that Obama could lift or loosen the restrictions on lobbyists before leaving office, which would save Clinton the political trouble of having to do it herself,” The Washington Post reports.

Earlier this year the Democratic National Committee (DNC) reversed the lobbying donation prohibition policies it adopted under President Obama in 2008.  The Hill reports that Mark Paustenbach, Deputy Communications Director for the DNC said, “The DNC’s recent change in guidelines will ensure that we continue to have the resources and infrastructure in place to best support whoever emerges as our eventual nominee.”

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Decreasing Membership is Increasingly a Problem for the Coal Lobby

August 18th, 2016 by Matthew Barnes

A new report by the Climate Investigations Center outlines the declining support for the coal mining industry. According to the report, the coal industry’s “growing isolation is reflected in the declining lobbying spending of the US coal industry’s principal lobby groups, the National Mining Association (NMA) and the American Coalition for Clean Coal Electricity (ACCCE).”

ACCCE is a non-profit, non-partisan partnership of companies involved in producing electricity from coal. ACCCE was most active lobbying from 2005-2012, with a peak of $9.9 million dollar spent on lobbying in 2008 according to the Center for Responsive Politics. In comparison, this year ACCCE has only spent $10,000 on lobbying. Furthermore, “Seven of the twelve companies that gave ACCCE $1 million or more in 2008 are no longer listed as members,” according to the Climate Investigations Center report.  The Huffington Post reports that major membership departures from ACCCE have included Ameren, DTE Energy, Alstom and Duke Energy.

The NMA has also had a shortfall in lobbying, spending only $579,448 so far in 2016 according to the Center for Responsive Politics. This figure is down over $4 million from last year’s lobbying spending.  Like ACCCE, the NMA has also dealt with some big departures. According to The Huffington Post “The carmaker Volvo made a public split last December, calling the group’s position on policies to address climate change “quite crazy.” And the report confirms that one of the world’s largest mining companies, Anglo American, has left ― which the company attributed to both budgeting issues and its decision to move away from mining coal. The bank Wells Fargo and insurance company Zurich have also left the association.”

According to the report there are several reasons why companies have been opting out of their coal lobby memberships including:Increased public awareness of coal’s contribution to dangerous levels of air pollution has also highlighted the broad benefits of a transition away coal. …low natural gas prices and the rapid growth of renewable energy have cut into coal’s market share in the United States; …major banks have curtailed financing for coal mining companies…[and] finally, the Obama administration, many state and local governments, and some major companies have pursued a wide variety of measures to address climate change, reduce air pollution, and promote renewable energy, which have increased these trends.”

Number of registered lobbyists numbers shrinking away as spending decreases

August 10th, 2016 by Vbhotla

 The lobbying sector is now facing impending obstacles due to the decrease in reported spending for their respective services. According to the Huffington Post, “325 fewer lobbyists registered in the second quarter of 2016 than in the first.” This decrease is showcased as the biggest drop in the past four years, and marks the number of registered lobbyists at its west point record wise. In the past, records have indicated that the total account of registered lobbyists have never dipped below 10,000 since 1988. The Huffington Post displays a graphic overview of how these numbers have changed from 2007 to 2016. This year’s average of registered lobbyists have decreased to a shocking 9,726, a major contrast to 2007’s account of 15,000 registered lobbyists.

According to the Huffington Post, a contributing factor for this decease could point to a “set of policies designed to curb lobbying put in place by President Obama, or gridlock Congress”. Apart from this speculation, another contributing factor may be that there are fewer people registering as recognized lobbyists. That’s not to say that fewer people are enacting in lobbying efforts. There is just a decrease in the trend of accurate lobbyist’s registration, feeding into the “shadow lobbying” concept.

The amount of lobbying spending has ultimately decreased in relative to the decreasing accounts of registered lobbyists. According to Huffington Post, “from April through June, lobbying outlays decreased to just more than $779 million, compared to almost $824 million spent in the first quarter of this year”. In conclusion, if lobbying accounts for this year follows past recent quarterly trends, speculations and experiments dictate that 2016’s total lobbying spending and relations will mark at about 3.1 billion, also about 3 percent less than 2015.

Zika Funding Stuck in Congress

August 9th, 2016 by Matthew Barnes

By: Lily McManus, Lobbyists.info

Congress failed to authorize $1.1 billion in Zika funding before its seven-week recess after disagreement on a host of measures included in the latest version of an appropriations bill prevented its passage.

A conference report approved by the U.S. House of Representatives, “Military Construction and Veterans Affairs and Zika Response Appropriations Act Final Conference Report” (H. Rept. 114-640), proposed to reconcile disagreements between the Senate and House on pending legislation (H.R. 2577) by allocating $1.1 billion to Zika-related activities, including $476 million to the Department of Health and Human Services (HHS), Centers for Disease Control and Prevention (CDC). However, the proposal included several contentious measures that prevented its passage in the Senate before the July 15 recess, including the reallocation of $107 million of Ebola funding, $540 million from Affordable Care Act programs and the lifting of environmental restrictions on pesticide use in order to kill Zika-carrying mosquitoes.

The Zika virus is primarily spread through bites from an infected Aedes species mosquito (which bite during the day and are present in southern and eastern states), but may also be spread through sexual activity, and has been linked to serious birth defects, including microcephaly. Ongoing outbreaks in Puerto Rico and throughout Central and South American and the Caribbean have caused public health officials to plead for federal funding before the disease hits the United States, which is more likely now that mosquito season has arrived. As of August 3, 1,818 travel-acquired infections in the United States had been reported to CDC, and six that had been transmitted locally. In U.S. territories, 5,525 locally acquired cases and 23 travel-associated cases have been reported.

Emergency Appropriations

The Obama administration originally requested that Congress pass a $1.9 billion bill to fight Zika. Although Obama’s proposal would have redirected $600 million from Ebola funding, the bulk of the money would have been authorized as “emergency appropriations,” rather than repurposed from funds that had already been authorized for other uses. The funding would have supported efforts to develop vaccines, study the effects of the virus, eradicate mosquitoes and educate people on how to protect themselves.

The Senate approved a $1.1 bill in May, but the text of the bill has since undergone several changes — including budget cuts and policy revisions — that have prompted Democrats to block the bill from passing. A $622 million House bill, which was strongly opposed by the Administration, also was passed in May; the House bill would have pulled the majority of the funding from other programs like Ebola.

Boeing and Airbus’s prospective deals with Iran stirring opposing lobbying campaigns

August 5th, 2016 by Vbhotla

In recent events, the U.S Treasury Department have spent a considerable amount of time on contemplating a very controversial business deal: to license sales, via Boeing and Airbus, in funding commercial aircraft to Iran. According to Reuters, the mere contemplation has created controversy in the congressional arena, as opponents of last year’s aircraft deal with Iran step forward to lobby against this prospective deal.

Certain members of Congress have openly opposed this prospect, proposing that the department should ultimately block $50 billion of sales, equaling the manufacturing and selling of approximately 200 jetliners. Controversial arguments have highlighted that there is a strong possibility that this business deal would only internally strengthen Tehran, Iran’s capital and fundamentally growing city. There has also been a concern of how these American purchased aircrafts could be used against U.S troops or other countries and their militia in times of war.

The strike against this deal looks successful at one glance. According to Reuters, the House of Representatives passed two amendments last month that aimed to stop the sales. However, the bill cannot become a law until it is approved by the Senate and signed by President Barack Obama, whose position on the deal has not been stated yet. Democratic Party candidate Hilary Clinton openly supports the deal, contrasting with her counterpart Republican Party candidate Donald Trump.

In addition congressional lobbying and contrasting efforts, the Foundation for Defense of Democracies has pushed its energy against the prospective deal. According to Reuters, the foreign policy research group has collective and dispersed a number of letters that advocates for tougher sanctions on Iran in order to mitigate or halt the Boeing/Airbus dealings. The letters, supported and signed by national security figures, openly express public concerns, and promises to increase pressure on Congress. The letters were directly sent to Dennis Muilenburg, Boeing’s Chairman, as well as Fabrice Brégier, Chief Executive of Airbus’ plane manufacturing department. According to Reuters, the letters main points stated that “this deal represents a legitimization of a State Sponsor of Terror and a direct benefit for a ruling regime responsible for gross human rights abuses, support for terrorism including threats against the U.S. and its allies”.

An overview of the latest filing disclosures and functions within the lobbying arena

July 28th, 2016 by Vbhotla

As the second quarter of 2016 came to its final stretch towards the finish line, countless lobbying disclosures and statements have piled in compliance with federal regulations. Under the Lobbying Disclosure Act of 1995, all lobbying firms and active corporations are required to file quarterly reports that details an array of internal and external financial information. The second quarterly report, covering all lobbying incomes and external spending on lobbying functions between April 1st and June 30th, came to its end on July 20th. The numbers, conveniently provided by Politico Influence, showcase a various palette of incomes received by lobbying firms, top government and corporal lobby spending, and trends in recent and new contracts.

It’s no wonder why so many firms experience such great incomes and fund flows, as they serve as an important messenger and influencer between their clientele and different government relations and persons. Second quarterly reports display the gross incomes received by some of the nation’s top lobbying firms. According to Politico, top firm Akin Gump Strauss Hauer & Feld LLP accumulated around $9.53 million, a slight decrease from its 1st quarter income of $9.54 million. The ever growing Podesta Group observed a slight increase from last quarter’s $5.94 million to this quarter’s income average of $5.96 million. BGR Government Affairs, who observed an average income of $4.19 million for the last quarter, observed a warming increase of incomes that ranged up to $4.46 million.

Apart from these recorded incomes, the Lobbying Disclosure Act of 1995 requires that all corporations and government associations and departments must release the amount of lobbying funds that they spend. According to Politico, Some government branches and major corporations have taken it up notch on lobbying spending. The U.S Chamber of Commerce spent around $22.7 million, a huge increase from their last quarter’s spending amount of $15.75 million. Boeing, who’s spending funds accumulated up to $4.48 million, amped up their lobbying spending up to $4.75 million. In contrast, other establishments and companies have lessened their lobbying efforts. Comcast decreased their spending from last quarter’s $3.72 million to their current spending record of $3.38 million. The same applies for AT&T, who decreased their spending amount from $4.48 million to $4.07 million.

Among the reports and information, lobbying contracts also seem to have some trends in comparison from the first and second quarter for 2016. Akin Gump Strauss Hauer & Feld LLP joined with the Gila River Indian Community $690,000 in a uniform contract back in the 1st quarter. While the two have joined under legal contract once again, the amount ultimately decreased to $520,000. Covington & Burling, who formed a contract with Qualcomm for $630,000 has reduced its amount to a whopping $450,000. Other contracts that were seen in the duration of the last quarter have not made an appearance this quarter, such as the Baker Donelson: Toshiba contract and the Washington Tax & Public Policy Group: Tax Reform Coalition contract.

Google aims to appease European public with soft lobbying

July 20th, 2016 by Vbhotla

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.”

Lyft faces commissioned fines for lobbying discretions

July 14th, 2016 by Vbhotla

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 Vbhotla

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 Vbhotla

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.