Disclosure of Lobbying Activities

Published by the Government Accountability Office on 1977-08-02.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                         DOCUIENT   BISUMI

02837 - [A21532733
Disclosure of LobbyiLg Activities. August 2, 1977. 15 pp.
Testimony before the Senate Cmaittee on Governental Affairs;
by Robert F. Keller, Deputy Comptrcller General.
Contact: Office of the Comptroller General.
Budget Function: General Governuent (800)..
Congressional RBlevance: Senate Coaaittee on Governmental
Authority: Federal Regulation -a Lobbying Act. S. 1785 (95th
    Cong.) .
         The proposed bill S. 1785 would eliminate most of the
ineffectiveness of the present Federal Regulation of Lobbying
Act. Various threshold tst would define the organizations that
must register and report as lobbyists and the information they
must disclose. Th3 aost important provisions of the bill for
eliminating weaknesses in the present law deal with enforcement.
The Cmptroller General would have nvestigatory authority and
limited authority to go to court to enforce subpoenas and orders
and to correct apparent ivil iolations of the law by informal
rethods of conference and conciliation. Vesting civil
,enforcement powers iu the Comptroller Geneal will not only
place the enforcement of the legislative branch's information
gathering pover witbin the legislative brunch where it should be
but will also eliminate oteti.al conflict between the
Comptroller General and the ttorney General, who would retain
authority for any criminal prosecution. . 1785 should be
amended to authorize the Comptroller eneral to defend advisory
opinions and to initiate civil enfcrcment action unhampered by
a 60-day waiting period. (Djfl)
/    l Urnited States General Accounting Office
       Washington. D.C. 20548
                                              FOR LLEASE ON DELIVERY
                                              Expected at 10:00 A.M.
                                              August 2. 1977
I~                            Statement of
             RObLRT F. KELLER. Deputy Comptroller General
                          of the United St.ates
                                Before the
                   Committee on Governmental Affairs
                          United States Senate
                   On Disclosure of Lobbying Activities

      Mr. Chairman and Members of the Committee:
            I appreciate the opportunity to present our views on S. 1785.
           As you kr.ow. on April 2, 1975, GAO issued a report
      entitled "The Federal Regulation of Lobbying Act--Difficulties
      in Enforcement and Administration."    Since its enactment in

      1946. the Federal Regulation of Lobbing Act has been       he sub-

      ject of continual congressional scrutiny and generally has
      been judged tc be ineffective.    In our report. we confirmed
      this judgment.    We found the enforcement and administration
      of the Act to be woefully inadequate and, in 1975. testified
       to this effect before this Committee. I believe the necessity
       for change in the present law is now almost universally
                             S.   1785
     We believe that S. 1785 is a marked improvement over

the current lobbying act. and should eliminate most of the

difficulties that have arisen under the present law. I would

like to makes some comments about suggested changes in the

bill or areas of the legislation that we believe should be


                       Scope of Co,erag

     S. 1785 would replace the present lobbying law with a

comprehensive new statute defining the organizations that

must register and report as lobbyists and specifically des-

cribinq the information those organizations must disclose.

The bill would apply to any "organization" whose lobbying

activities during a "guarterly filing periods satisfied one

of several so-called threshold tests.

Threshold 1:     Oral Contacts Test

     An organization which. acting through its paid officers,

directors, and employees. makes 15 or more oral lobbying com-

munications in a quarter would be required to register and

report   as a lobbyist.   Lobbying organizations should be able

to determine when this threshold has been crossed with com-

parative ease.     However. it should be recognized tnat it will

be difficult tor a third party to police.

     The oral contacts test also does not take into account

an organization's written    lobbying communications. Under this

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threshold, an organization could conceivably escape the require-
ments of a new lobbying law, by communicating in writing with
Members of Congress.     We recommend the Committee consider

extending the threshold's coverage to written as well as oral
lobbying communications.
Threshold 2:     Hours Spent on Lobbying Test
     Another S. 1785 threshold test is that at least one paid

officer, director, or employee of an organization spends 24
hours or more drafting or making oral or written lobbying

communications.     This threshold can also be crossed if two
or more employees each spei:d at least 12 hours lobbying.
     We have no recommendation on the number of hours employ-
ees should spend lobbying before the employer organization
must register and report as a lobbyist. From a recordkeeping
standpoint, however, it may be difficult for an organization
to determine, and for the administering agency to verify,
precisely when an employee has spent the prescribed number
of hours engaged in lobbying activity.
         Further, an organization could employ 12 individuals to
 send 11 hours of their time making written lobbying commu-
 nications and escape the bill's registration and reporting
 provisions.     But if just 2 employees were to spend 12 hours

 lobbying, the employer organization would be required to
 regir     r and report as a lobbyist.

Threshold 3:   Retained Lobbyist Quarterly Expenditure Test
     Still another S. 1785 threshold would apply to organiza-
tions that spend a minimum of $1,250 in a quarter to retain,
rather than employ, others to draft and make written or oral
lobbying communications on the retaining organization's behalf.
     Although we have no opinion   n the appropriate minimum

expenditure that should be renuired before an organization
must register and report, a quarterly expenditure threshold
applicable to retained lobbyists does seem desirable.
     Expenditures to retained lobbyists should not be diffi-
cult for the retaining organization to determine or for the
administering agency to verify.    A quarterly expenditure
threshold is also preferable, in our view, to an annual
expenditure requirement.   With only an annual expenditure

requirement, an organization could delay the obligation to
resister for 1 year simDly by delaying payment to the person
retained to loboy.
     We have one reservation, however, with S. 1785's retained
lobbyist threshold. As presently drafted the threshold arguably
cannot be crossed if just one of the organization's retained
lobbyists who receives $1,250 fails to make an oral or written
lobbying communication. We recommend the Committee clarify
the threshold's intended operation in such a situation.
Threshold 4:   Indirect or Grassroots Lobbying
     The registration and reporting requirements of S. 1785
will apply to organizations whose exclusive lobbying activity
                           - 4 -
is an indirect or grassroots campaign costing in excess of
$5,00O.  Indirect or grassroots lobbying generally means
encouraging he general public to communicate to the Congress
or to certain executive branch officials by, for example;
mass mailings.
     Certain organizations generate mass letter- writing
campaigns through solicitations to the general public.       As a
result, some criticism has focused on the exclusion of       rass-
roots lobbying from the disclosure provisions of the current
lobbying law.    We consider the S. 1785 indirect lobbying
threshold an important addition to the bill.
     We think it especially important to note, from a consti-
tutional standpoint, that the indirect lob'y'ng threshold in
no way imposes a registration o reporting requirement on
citizens who receive a solicitation and who, as a result,
communicate with their Congressmen.
Threshold 5: Contracts, Grants, and Other Benefits

     A separate section of the bill would apply to organi-
zations that submit a written bid or proposal to obtain a
"contract" "grant," or "other benefit" from the United States
involving an obligation of $1,000,600 or more.   Unlike other
thresholds in the bill, the contract threshold can be crossed
without regard to the degree of the organization's award-
seeking lobbying effort.   Once it is determined that the
obligation of the United States could exceed $1,000,000,

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offerors and bidders must file a report disclosing certain
of their award-seeking activities.
     The section's disclosure requirements apply to "contracts,'
"grants," and "other benefits" exceeding a certain dollar
amount.   The disclosure requirements may not apply to subcon-

tracts, even though particular subcontracts may involve $1
million or more. We think the section should apply to prime

contracts with the United States and to subcontracts for $1
million or more. In addition, we are not sure what is intended
to be covered by the term   other benefit."   We assume that an

"other benefit" could be a Government subsidy for $1 nillion or
more; it might lso apply to Government assistance to a private
organization, such as the Federal loan guarantees provided pri-
vate corporations. We recommend the intended scope of this term
be defined with greater descriptive clarity.
Coverate of Executive Branch Lobbying
      S. 1785 would apply to lobbying organizations *nat attempt
 to influence certain executive branch oi icials with respect
 to issues before the Congress. The present law only applies
 to lobbying that is directed toward the Congress. We think
 it especially wise that S. 1785 presently covers the lobbying
 of executive btanch officials on legislative matters.
      Other aspects of executive branch lobbying. such as
 attempts to influence the content of executive oruers. rules,
 and oolicy decisions, are not covered by the bill. These latter
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activities, like legislation, may directly affect the public.
And we see no convincing reason why the executive branch is
less susceptible than the legislative branch to the pressure
of special interest groups seeking favored treatment.
    We believe the Congress should also consider disclosure
legislation that covers the lobbying of issues that are not

legislative, but instead are matters of administration or
activities peculiar to the executive branch.
     Adding the dimension of all aspects of executive branch
lobbying to lobbying disclosure, however, will require time and
careful study.   We recognize that this Committee may prefer
to study and cover lobbying on nonlegislative issues through
a vehicle other than S. 1785.
Communications to "Federal officers and employees"
     Only communications to "Federal officers and employees,"
count as lobbying communications. All Congressmen and all
employees of the House and Senate are included in tne bill's
definition of "Federal officer or employee." Others are also
included, namely, executive branch employees paid at levels
I through V of the Executive Schedule who are listed in
sections 5312 through 5316 of title 5, United States Code;
executive branch employees who hold a position at GS-15 and
above; and military officers holding a commission within the
scope of grade 0-6 and above.

     We wish to point out, however, that the bill does not

cover lobbying of legislative branch agencies such as the
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Genera2 Accounting Office. the Cost Accounting Standards

Board, the Office of Technology Assessment, the Congraessional

Budget Office, and others. I cannot speak for others, but as

far as the General Accounting Office and the Cost Accounting

Standards Board are concerned, we recommend they be covered

by the bill.

Exempt Lobbying Communications

     Certain communications that would otherwise qualify as

"lobbying communications" are specifically excluded from the

coverage of    . 1785.   For example, communications directed to

the two Senators and the Representative that represent the

State and the congressional district, respectively, where

the lobbying organization maintains its principal place of
business are exempt both from a threshold tally and from dis-

closure, Communications to Senators ani Representatives who

represent     n part the Standard Metropolitan Statistical Area

where the organization has its principal place of business

are a'so exempt.

     The latter part of this exemption has an important advan-

tage in that it recognizes that because of the highly inter-

6dpendent nature of many areas of our country, an organization

may in a sense be a constituent of Members of Congress other

than those that represent its congressional district.      On the

other hand, we might point out that organizations locate      in

a large Standard Metropolitan Statistical Area covering parts

                               - 8 -
of sever'l States will be able to communicate with mre Senators
and Representatives without registering or reporting than an
organization whose principal place of business is located in a
smaller Standard Metropolitan Statistical Area.
                      Lobbying Records
     S. 1785 would require lobbying organizations ad persons
retained by lobbying organizations to       aintain records relat-
ing to their lobbying activities.       The fact that persons
retained by a lobbying organization will also be required to
maintain and preserve records should facilitate verification
of the lobbying organizatien's registration and reports.
     Regulations governing the maintenance of records would be
issued by the Comptroller General.       And the records would
be preserved for a period of at least 5 years.       The author-
ity to issue regulations governing the maintenance of records
is essential, in our opinion, to establish fair, realistic,
and necessary recordkeeping requirements as experience is
accuired in administering a new lobbying disclosure law.
           Registration and Quarterly Reports
     S. 1785 would require lobbying organizations that
satisfy a threshold other than the contracts threshold to
file a registration statement and quarterly reports with the
Comptroller General. The loLhying activity information required
to be disclosed in an orga.         ;ion's quarterly report will be
considerably more detailed     ean the information required for
                              - 9
    The bill establishes a two-tier system for registering

and reporting. Organizations that engage in comparatively
minor lobbying and thus cross only the oral contacts threshold
will be required to file a "short-form" registration

and quarterly report.     Organizations that engage in more exten-

sive lobbying activity and cros       a threshold other than the
oral contacts test will file a "long-form" registration

ment and report, giving a more detailed picture of their

lobbying activities and related expenditures.

     We believe the two-tier approacP to registration and
                                                      gaps we
reporting would be more workable and effective if the
noted earlier in the threshold tests are closed.
major lobbying organizations conceivably would not meet

threshold tests for the long-form registration and reporting
requirements, but instead, would satisfy only the

threshold to which the long-form registration and reporting

requirements do not apply.
         On balance. S. 1785 would require organizations subject
 the bill to disclose a considerable amount of information
 their lobbying activities.

         Howe:-er, the bill would not require lobbyists to report
 their tJtal expenditure for each issue they sought to

 ence.     The amount of money expended by a lobbyist on a parti-

 cular issue may be of interest to Congress and the public,

 at least where the amount expended exceeds a certain dollar

                               -   10 -
minimum.     For example. if a lobbying organization   pent a
total cf $50.000 to directly lobby 10 separate issues during
a quarterly filing period. and if $40,000 of that amount was
spent on one issue, we think it appropriate for the Congress
and te public to know that $40.000 was spent to influence
the outconw of just one of the 10 lobbied issues. and what
that one issue was.
         Powers and Dutie   of the ComptrollerGeneral
        S. 1785 would designate the Comproller General as the
official with primary responsibility for administering and.
to a somewhat lesser extent, enforcing the new lobbying law.
        The duties imposed on the Comptroller General would
include maintaining and making- available to the public, for
inspection and copying. lobbyist registration statements and
reports, and compiling and summarizing the information con-
tained in these reports in a meaningful anu useful way. In
addition, the Comptroller General would be empowered to issue
rules     nd regulations; conduct investigations; administer
oaths and affirmations; take testimony by deposition; issue
subpoenas and orders; initiate civil actions for the purpose
of compelling complianct with a     ubpoena or order; and render
advisory opinions concerning the bill's registration. record-
keeping, and reporting requirements.
        -ire powers and procedures should significantly improve
the effectiveness of lobbying disclosure and eliminate my
of the weaknesses o     the current law identified in our report.

    Finally, we would like to discuss the enforcement provi-
sions in S. 1785.   The methods of enforcement contemplated by
S. 175 should eliminate many of the enforcement weaknesses
identified in our report.
     Under the bill, the Comptroller General would have inves-
tigative authority and limited authority to go to Court to
enforce subpoenas and orders.       In addition, the Comptroller
General would have aur.hority to try to correct an apparent
civil violation of the law by informal methods of conference
and conciliation. In our opinion, these provisions, together
with the advisory opinion mechanism, afford lobbying organiza-
tions optimum opportunities to bring themselves into compli-
ance with the provisions of the lobbying law before a civil
or crimina] action is initiated.
     If the Comptroller General determines that civi'      or
criminal prosecution may be warranted, the alleged violation
is to be referred to the     ttorney General for prosecution.
     S. 1785 includes a provision authorizing the Comptroller
General to bring a civil action in Federal court whenever,
after initially referring a case to the Attorney General,
the Attorney General fails to bring a civil suit or criminal
action within a 60-day period following referral. This provision
is similar to one contained in S. 2477, a lobbying disclosure
measure passed by the Senate during the 94th Congress.

                           - 12 -
     It is clearly the Attorney General, however, who, at least
initially, would have the exclusive authority to enforce the
substantive provisions of the new lobbying law through civil
and criminal enforcement proceedings.   The Attorney General
would apparently also be empowered to defend civil declaratory
actions that challenged advisory opinions rendered by the
Comptroller General.
     Disclosure of lobbying activities must be timely to be
effective. We believe the Cmptroller General should be
empowered to defend the advisory opinions he issues and
authorized to initiate a civil enforcement action without
     Advisory opinions issued by the Comptroller General
could be made meaningless if the Attorney General failed
to defend a declaratory action filed by a lobbyist against
the Comptroller General.   In such a case, the Comptroller
General would be placed in the awkward position of having
his actions effectively overruled by the Attorney General.
Moreover, although the Comptroller General would have pri-
mary responsibility for implementing the law in a timely and
effective manner, for a period of 60 days following each
case's referral only the Attorney General would have author-
ity to go to court to compel compliance.
     It is for these rsons that we have consistently stated
that the agency responsible for administering a new lobbying

                           - 13 -
disclosure law should be given civil enforcement authority.

This should include the authority to go to court to defend

civil challenges to the Comptroller General's advisory opin-

ions and to compel ccmnpliance with the civil provisions of

any new lobbying disclosure law. We do not believe the exer-

cise of this authority should be conditioned on a 60-day

waiting period.

     There is ample statutory precedent for authorizing the

Comptroller General to go to court in his own right or on

behalf of the Congress.   Specifically, the Energy Policy

and Conservation Act directs the Comptroller General to

collect energy information for the Congress and empowers

him, through attorneys of his own selection, to institute

a civil action to collect civil penalties or enforce sub-

poenas he isues under the Act.    Similarly, the Federal

Energy Administration Act of 1974 authorizes the Comptroller

General to institute a civil action to compel compliance

with subpoenas he issuer under that Act. And the Impoundment

Control Act of 1974 authorizes the Comptroller General to

bring a civil action in Federal court, again through attor-

neys of his own selection, to compel release of impounded

budget authority.

     In short, we believe that vesting civil enforcement

powers in the Comptroller General will not only place the

enforcement of the legislative branch's information gathering

                            - 14 -
power within the legislative branch where it should be, but
would, in our view, eliminate potential conflict between the
Comptroller General and the Attorney General.
    We recommend, therefore, that S. 1785 be amended to
authorize the Comptroller General to defend advisory opinions
and to initiate a civil enforcement action unhampered by a
60-day waiting period.
    We do not believe, however, that the Comptroller General
should be given criminal enforcement powers. Enforcement of
the Federal criminal laws through formal criminal proceedings
is a function of the Attorney General. We can see no reason
fcr departing from this principle in the proposed lobbying
     Mr. Chairman and Members of the Committee, this concludes
our statement.   We will be glad to respond to any questions
you have.

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