oversight

Federal Lobbying: Differences in Lobbying Definitions and Their Impact

Published by the Government Accountability Office on 1999-04-15.

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

                United States General Accounting Office

GAO             Report to Congressional Committees




April 1999
                FEDERAL LOBBYING
                Differences in
                Lobbying Definitions
                and Their Impact




GAO/GGD-99-38
GAO   United States
      General Accounting Office
      Washington, D.C. 20548

      General Government Division



      B-276377

      April 15, 1999

      The Honorable Fred Thompson, Chairman
      The Honorable Joseph I. Lieberman, Ranking Minority Member
      Committee on Governmental Affairs
      United States Senate

      The Honorable Henry J. Hyde, Chairman
      The Honorable John Conyers, Jr., Ranking Minority Member
      Committee on the Judiciary
      House of Representatives

      The Honorable Charles T. Canady, Chairman
      The Honorable Melvin L. Watt, Ranking Minority Member
      Subcommittee on the Constitution
      Committee on the Judiciary
      House of Representatives

      To increase public disclosure of the identity and extent of the efforts of
      lobbyists who are paid to influence decisionmaking by federal legislative
      and executive branch officials, Congress enacted the Lobbying Disclosure
                          1                   2
      Act of 1995 (LDA). LDA, as amended, requires paid lobbyists to register
      with Congress and semiannually report on their lobbying activities. LDA
      also requires us to review the reporting of lobbying activities by
      organizations that have employees who lobby on the organizations’ behalf
      and have the option to report their lobbying expenses under LDA using the
      definitions of lobbying in either (1) LDA or (2) the applicable Internal
      Revenue Code (IRC) provision—IRC sections 4911 or 162(e)—that they
                            3
      use for tax purposes. Section 4911 imposes taxes on lobbying
      expenditures over certain limits incurred by certain IRC section 501(c)(3)
                                                                                 4
      tax-exempt nonprofit organizations, commonly known as public charities.
      IRC section 162(e) generally concerns the denial of income tax deductions
      by businesses for lobbying.

      1
          Pub. L 104-65.
      2
          Lobbying Disclosure Technical Amendments Act of 1998, Pub. L 105-166.
      3
       We are not required to review the reporting of lobbying activities by lobbying firms that are hired to
      represent clients.
      4
       Public charities include entities organized and operated exclusively for religious, charitable, scientific,
      public-safety testing, literary, or educational purposes; for the prevention of cruelty to children or
      animals; or to foster amateur sports. Churches and their integrated auxiliaries cannot use IRC section
      4911.




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                     As agreed with your offices, our objectives for this report were to

                   • describe the differences between the LDA and IRC section 4911 and 162(e)
                     definitions of lobbying;
                   • determine the impact that differences in the definitions may have on
                     registration and reporting under LDA, including information on the
                     number of organizations using each definition and the expenses they have
                     reported; and
                   • identify and analyze options, including harmonizing the three definitions,
                     that may better ensure that the public disclosure purposes of LDA are
                     realized.

                     The LDA definition of lobbying differs significantly from the definitions of
Results in Brief     lobbying under IRC sections 4911 and 162(e). Most significantly, the LDA
                     definition covers only contacts with federal officials. The IRC definitions
                     cover contacts with federal, state, and local officials as well as attempts to
                     influence the public through grassroots lobbying, such as television
                     commercials on a bill under debate in Congress or a state legislature. Also,
                     the definitions differ in their coverage of contacts with federal officials,
                     depending on whether the contact concerns a legislative or nonlegislative
                     matter. For example, for contacts with federal executive branch officials
                     about nonlegislative matters, LDA covers about 4,600 officials, or 10 times
                     the number of such officials that IRC section 162(e) covers; IRC section
                     4911 does not cover contacts with officials in such circumstances.

                     The differences in the lobbying definitions can affect whether
                     organizations register under LDA. An organization that engages or expects
                     to engage in certain lobbying activities during a 6-month period, including
                     incurring at least $20,500 in lobbying expenses, is required to register
                     under LDA. The definition an organization uses in calculating its lobbying
                     expenses determines the expenses it counts toward the $20,500 threshold.
                     When using the LDA definition would result in expenses of more than
                     $20,500, an organization may be able to use the applicable IRC definition to
                     keep its lobbying expenses below $20,500 or vice versa. However, no data
                     exist to determine (1) the number of organizations that met the threshold
                     under LDA’s definition but are not registered as a result of using an IRC
                     definition or (2) whether any registered organizations that may have met
                     the threshold under an IRC definition did not do so under the LDA
                     definition.

                     In addition to affecting whether an organization is required to register
                     under LDA, the lobbying definition an organization uses affects the
                     information it must disclose on its semiannual lobbying report. An



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organization can switch between the LDA definition and the applicable
IRC definition from one year to another, and it can choose the definition
that enables it to disclose the least information.

When using an IRC definition, an organization must report its total
lobbying expenses for all activities covered by that definition, including
grassroots lobbying and federal, state, and local government lobbying.
However, all of these expenses are reported in one total amount, so the
lobbying reports do not indicate the amount related to different levels of
government and types of lobbying activities. Also, when organizations
report information other than expenses, such as the issues on which they
lobbied, they are required to report only information related to federal
government lobbying, regardless of whether they use the LDA definition or
one of the IRC definitions to calculate expenses. Thus, when using an IRC
definition, organizations can report expenses that do not relate to other
information disclosed on their lobbying reports.

Because of the differences in definitions, information disclosed on
lobbying reports filed by organizations using the IRC definitions is not
comparable to information on reports filed by organizations using the LDA
definition. Further, the information that is reported under the IRC
definitions, particularly expense data, can be unrelated to LDA’s purpose
of disclosing efforts to influence federal decisionmaking—e.g., when the
information includes expenditures for state and local lobbying. Under the
IRC definitions, organizations can also disclose less information than
under the LDA definition, such as for contacts with officials in the
executive branch about nonlegislative matters. On the other hand, if
organizations contact lower level executive branch officials about
legislation, then using an IRC definition could result in more information
being disclosed than under the LDA definition

Of the organizations that lobbied on their own behalf and had the option of
using an IRC definition for reporting expenses under LDA, most used the
LDA definition. Less than a third elected to use the IRC definitions.
Specifically, for the July through December 1997 reporting period, 1,306
used the LDA definition; 157 and 361 used the IRC section 4911 and 162(e)
definitions, respectively. The organizations that reported using the IRC
                                                                       5
section 162(e) definition had the highest mean and median expenses.


5
 The mean is the sum of all the expenses of organizations using a particular lobbying definition divided
by the total number of organizations using the definition. The median is the midpoint of all expenses
reported by organizations using a particular lobbying definition, when those expenses are arranged in
order from lowest to highest.




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             Because the differences among the three lobbying definitions can
             significantly affect who registers and what they report under LDA, the use
             of the IRC definitions can conflict with LDA’s public disclosure purpose.
             Options exist for reducing or eliminating these potential conflicts with
             LDA’s purpose. These options include (1) harmonizing the definitions,
             (2) eliminating the authorization to use the IRC definitions for LDA
             purposes, or (3) requiring those organizations that choose an IRC
             definition to include only expenses related to federal lobbying under that
             IRC definition when they register and report under LDA. The options, in
             varying degrees, could improve the comparability of reports filed by
             lobbyists and the alignment of registrations and reporting with LDA’s
             purpose of increasing public disclosure of efforts to lobby federal officials
             in order to influence their decisionmaking. However, each option includes
             trade-offs between better ensuring LDA’s purpose and other public policy
             objectives and could result in additional reporting burden in some cases.

             Congress passed LDA and IRC sections 4911 and 162(e) at different times
Background   and for different purposes. LDA, which was enacted in 1995 and became
             effective on January 1, 1996, requires organizations that lobby certain
             federal officials in the legislative and executive branches to register with
             the Secretary of the Senate and the Clerk of the House of Representatives.
             It also requires lobbying organizations that register to semiannually report
             expenditures and certain other information related to their lobbying
             efforts. Congress intended LDA’s registration and reporting requirements
             to provide greater public disclosure of attempts by paid lobbyists to
             influence decisions made by various federal legislative and executive
             branch officials.

             Unlike LDA, neither IRC section 162(e) nor section 4911 was intended to
                                                          6
             facilitate the public disclosure of lobbying. IRC section 4911, which was
             enacted in 1976, provides for a limit on the amount of lobbying by
                                      7
             501(c)(3) organizations and thereby helps clarify the extent to which these
             public charities can lobby without jeopardizing their tax-exempt status.
             Section 162(e), as amended in 1993, denies the federal income tax
             6
              When tax-exempt organizations use IRC section 4911 to calculate their lobbying expenses for tax
             purposes, they report those expenses on their Form 990 federal tax returns. Because these tax returns
             are available to the public on request, IRC section 4911 also facilitates some public disclosure of
             lobbying, albeit not in the same manner or to the same extent that Congress requires under LDA.
             7
              IRC section 4911 applies to 501(c)(3) organizations that elect to report their lobbying expenses under
             the provisions of IRC section 501(h), which provides for specific dollar limits on lobbying expenses.
             IRC section 501(h) is a safe harbor for 501(c)(3) organizations that lobby. Those 501(c)(3)
             organizations that do not elect to report under 501(h) must limit their lobbying activities to an
             insubstantial portion of their total activities, but the test for determining if amounts are insubstantial is
             less precise than the test used under IRC section 501(h).




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               deductibility of certain lobbying expenses for businesses. It does not
               otherwise place restrictions on lobbying activities.

Registration   LDA requires lobbying organizations, such as lobbying firms, to register
               with the Secretary of the Senate and the Clerk of the House of
               Representatives no later than 45 days after they first make a lobbying
               contact on behalf of a client. Also, organizations that have employees who
               lobby on behalf of the organizations—the organizations on which this
                                                           8
               report focuses—must register under LDA. The lobbying registration
               includes such information as the registering organization’s name and
               address; the client’s name and address; the names of all individuals acting
               as lobbyists for the client; the general and specific issues to be addressed
               by lobbying; and organizations substantially affiliated with the client,
               including foreign organizations. An organization that has employees who
               lobby on the organization’s behalf must identify itself as both the
               registering organization and the client, because the organization’s own
               employees represent the organization.

               LDA includes minimum dollar thresholds in its registration requirements.
               Specifically, an organization with employees who lobby on the
               organization’s behalf does not have to register under LDA unless its total
                                                                               9
               lobbying expenses exceed or are expected to exceed $20,500 during the 6
               month reporting period (i. e., January through June and July through
                                         10
               December of each year). LDA also includes minimum thresholds for
               determining which employees must be listed as lobbyists in the lobbying
               registration. Under LDA, to be listed as a lobbyist, an individual must make
               more than one lobbying contact and must spend at least 20 percent of his
               or her time engaged in lobbying activities on behalf of the client or
               employing organization during the 6 month reporting period. An
               organization must have both $20,500 in lobbying expenses and an
               employee who makes more than one lobbying contact and spends at least
               20 percent of his or her time lobbying before it is required to register under
               LDA.



               8
                Individual lobbyists register only if they are self-employed, in which case, the self-employed lobbyist is
               considered to be a lobbying firm.
               9
               LDA provides that the minimum dollar thresholds for registration will be adjusted every 4 years based
               on the Consumer Price Index, which measures the changes in the prices of goods and services.
               10
                  A lobbying firm receives and reports income and must use the LDA definition. Such a firm also does
               not have to register on behalf of a client unless the firm’s total income for lobbying on behalf of the
               client exceeds or is expected to exceed $5,000 during the 6 month reporting period.




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Reporting                All organizations that register under LDA must file lobbying reports with
                         the Secretary of the Senate and Clerk of the House of Representatives for
                         every 6 month reporting period. The lobbying reports filed under LDA by
                         organizations that lobby on their own behalf must include the following
                         disclosures:

                       • total estimated expenses relating to lobbying activities (total expenses are
                         reported either by checking a box to indicate that expenses were less than
                         $10,000 or by including an amount, rounded to the nearest $20,000, for
                                                         11
                         expenses of $10,000 or more);
                       • a three-digit code for each general issue area (such as AGR for Agriculture
                         and TOB for Tobacco) addressed during lobbyists’ contacts with federal
                         government officials;
                       • specific issues, such as bill numbers and references to specific executive
                         branch actions that are addressed during lobbyists’ contacts with federal
                         government officials;
                       • the House of Congress and federal agencies contacted;
                       • the name of each individual who acted as a lobbyist; and
                       • the interest of the reporting organization’s foreign owners or affiliates in
                         each specific lobbying issue.

                         Unless it terminates its registration, once a lobbying organization registers,
                         it must file reports semiannually, regardless of whether it has lobbied
                         during the period.

Option of Using IRC      Under LDA, lobbying firms that are hired to represent clients are required
                         to use the LDA lobbying definition. However, LDA gives organizations that
Lobbying Definitions     lobby on their own behalf and that already use an IRC lobbying definition
                         for tax purposes the option of using the applicable IRC lobbying definition
                         (IRC sections 4911 or 162(e)), instead of the LDA lobbying definition, for

                       • determining whether the LDA registration threshold of $20,500 in
                         semiannual lobbying expenses is met and
                       • calculating the lobbying expenses to meet the LDA reporting requirement.



                         11
                            Organizations are to include those expenses associated with their efforts to lobby as well as payments
                         to third parties, such as lobbying firms. When discussing lobbying expenses, this report focuses on
                         expenses directly incurred by organizations lobbying on their own behalf. Organizations lobbying on
                         their own behalf are to include payments made to lobbying firms in their report to Congress, and
                         lobbying firms are to report their income from such payments in their separate reports to Congress. As
                         a result, some overlap exists between the reporting of organizations lobbying on their own behalf and
                         lobbying firms they may have hired.




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                          For all other purposes of the act, including reporting issues addressed
                          during contacts with federal government officials and the House of
                          Congress and federal agencies contacted, LDA provides that organizations
                          using an IRC definition must (1) use the IRC definition for executive
                          branch lobbying and (2) use the LDA definition for legislative branch
                          lobbying.

                          By allowing certain organizations to use an IRC definition to calculate
                          lobbying expenses, LDA helps those organizations avoid having to
                          calculate their lobbying expenses under two different lobbying
                          definitions—the LDA definition for reporting under LDA and the applicable
                          IRC definition for calculating those expenses for tax purposes. An
                          organization that chooses to use the applicable IRC definition, instead of
                          the LDA definition to calculate its lobbying expenses, must use the IRC
                          definition for both lobbying reports filed during a calendar year. However,
                          from one year to the next, the organization can switch between using the
                          LDA definition and using the applicable IRC definition.

                          Under LDA, we are required to report to Congress on (1) the differences
Objectives, Scope and     among the definitions of certain lobbying-related terms found in LDA and
Methodology               the IRC, (2) the impact that any differences among these definitions may
                          have on filing and reporting under the act, and (3) any changes to LDA or
                          to the appropriate sections of the IRC that the Comptroller General may
                          recommend to harmonize the definitions.

                          As agreed with your offices, our objectives for this report were to

                        • describe the differences between the LDA and IRC section 4911 and 162(e)
                          definitions of lobbying;
                        • determine the impact that differences in the definitions may have on
                          registration and reporting under LDA, including information on the
                          number of organizations using each definition and the expenses they have
                          reported; and
                        • identify and analyze options, including harmonizing the three definitions,
                          that may better ensure that the public disclosure purposes of LDA are
                          realized.

                          To identify the differences among the LDA and IRC lobbying definitions,
                          we reviewed the relevant statutory provisions. We also reviewed related
                          regulations and guidance, including guidance issued by the Secretary of
                          the Senate and the Clerk of the House of Representatives. We also
                          reviewed journal articles and an analysis of the definitions of lobbying and
                          met with registered lobbyists, representatives of nonprofit and business



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  organizations, and other parties who were knowledgeable about the
  different statutory definitions and their effect on lobbying registrations.

  To determine the differences among the LDA and IRC lobbying definitions
  regarding the number of federal executive branch officials covered for
  contacts dealing with nonlegislative matters, we reviewed the LDA and
  IRC statutory definitions of covered executive branch officials that apply
  for lobbying contacts on nonlegislative matters. To determine the number
  of officials covered by these definitions, we counted the number of
  Executive Schedule Levels I through V positions listed in sections 5312
  through 5316 of Title 5 of the United States Code. In several cases, these
  sections of Title 5 list federal boards and commissions as having Executive
  Schedule positions but do not specify the number of such positions. In
  these cases, we did not attempt to determine the number of positions and
  counted only one position for each such listed board or commission. Thus,
  our estimate of the number of Executive Schedule Levels I through V
  positions is understated. Further, to determine the number of officials
  covered, we obtained data from

• The United States Government Manual 1998/1999 on cabinet-level officials
  and the number of offices in the Executive Office of the President;
• the Department of Defense (DOD) on military personnel ranked 0-7 and
  above as of September 30, 1997;
• the U.S. Coast Guard, the Public Health Service, and the National Oceanic
  and Atmospheric Administration (NOAA) on the number of commissioned
  corps ranked 0-7 and above as of February 1999;
• the Office of Personnel Management’s (OPM) Central Personnel Data File
  on the number of Schedule C officials as of September 30, 1997; and
• Budget of the United States Government, Appendix, Fiscal Year 1999 on
  the actual full-time-equivalent employment for fiscal year 1997 in each
  office of the Executive Office of the President.

  To determine the impact that differences in the definitions may have on
  registration and reporting under LDA, we first had to define how we would
  measure impact. We defined impact as (1) the way differences among the
  definitions can affect who must register with the Secretary of the Senate
  and the Clerk of the House of Representatives and what lobbying expenses
  and related information must be included in those reports; (2) the number
  of organizations that reported using the LDA and IRC section 4911 and
  162(e) definitions when reporting lobbying expenses and related
  information for July through December 1997; and (3) the lobbying
  expenses reported under each of the three definitions for this period.




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To determine the way differences among the definitions can affect who
must register and what they must report, we reviewed, analyzed, and
categorized the general effects of the differences that we found among the
definitions under our first objective. We also looked for possible effects
during our reviews of statutes, regulations, guidance, and journal articles.
Finally, we discussed the possible effects of the differences among the
definitions with registered lobbyists, representatives of nonprofit and
business organizations, and other knowledgeable parties.

To identify the number of organizations that reported using the definitions
of lobbying in LDA or IRC to calculate their lobbying expenses for July
through December 1997 and to determine the lobbying expenses reported
under LDA that were calculated using one of the three definitions, we
obtained data on all lobbying reports filed with the Secretary of the Senate
during this period from the new lobbying database of the Senate Office of
Public Records. Only the lobbying reports for one semiannual period—July
through December 1997—were available from the new database when we
began our analysis in October 1998. Using the database, we identified the
number of organizations that lobbied on their own behalf and filed reports
for the period July through December 1997. We also analyzed the reported
expenses of these organizations and determined the mean and median
expenses reported under each of the three definitions. Because lobbyists
did not round their lobbying expenses to the nearest $20,000 in some
cases, as required by LDA, we rounded all reported expenses to the
nearest $20,000 before conducting our analysis.

Officials from the Senate Office of Public Records said that they had not
verified the data in the database, and we did not perform a reliability
assessment of the data contained in this database. However, we reviewed
the lobbying reports of all organizations whose lobbying expenses were
recorded in the database as being less than $10,000, which is the minimum
amount required to be recorded on the lobbying form, but had erroneous
Senate Office of Public Records codes. We corrected any errors we found
before conducting our analysis.

To identify and analyze options that may better ensure that the public
disclosure purposes of LDA are realized, we relied on (1) information we
collected from our review of the relevant literature on lobbying, including
statutory provisions, regulations, and guidance; and (2) our findings for
our first two objectives.

We did our work during two periods. From November 1996 through April
1997, we reviewed the differences in the LDA and IRC definitions of



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                          lobbying-related terms. As agreed by the Senate Committee on
                          Governmental Affairs and the House Subcommittee on the Constitution,
                          Committee on the Judiciary, we postponed completing our review until
                          data on lobbying expenses became available. The second period of our
                          review was from October 1998 through January 1999, after we obtained
                          data on lobbying expenses from the new lobbying database of the Senate
                          Office of Public Records. We did our work in Washington, D.C., and in
                          accordance with generally accepted government auditing standards. We
                          obtained technical comments on a draft of this report from the Internal
                          Revenue Service and incorporated changes in the report as appropriate.
                          The Clerk of the House of Representatives, the Secretary of the Senate,
                          and the Department of the Treasury had no comments on the report.

                          The contacts, activities, and expenses that are considered to be lobbying
Significant Differences   under the LDA lobbying definition differ in many ways from those covered
Exist Among LDA and       by the IRC definitions. Most significantly, LDA covers contacts only with
IRC Definitions           federal officials; the IRC definitions cover contacts with officials in other
                          levels of government as well as attempts to influence the public through
                          grassroots lobbying. Also, the definitions differ in their coverage of
                          contacts with federal officials depending on whether the contact was on a
                          legislative or nonlegislative matter.

                          Table 1 and the following sections present some of the key differences in
                          coverage under the different definitions. Appendix I discusses these
                          differences in more detail; and appendix II provides a detailed table of the
                          differences among the definitions concerning coverage of the federal,
                          state, and local levels of government.




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Table 1: Key Differences in Coverage of
Contacts, Activities, and Expenses        Contacts, activities, and                                  Covered under
Under the Three Definitions of Lobbying   expenses                                  LDA            IRC section 4911        IRC section 162(e)
                                          Contacts with state                        No                   Yes                     Yes
                                          government officials
                                          Contacts with local                        No                     Yes                     Yesa
                                          government officials
                                          Grassroots lobbying—                       No                     Yes                     Yes
                                          attempts to influence the
                                          public on legislative
                                          subjects
                                          Contacts with federal
                                          government officials
                                           In the legislative branch
                                             Regarding legislative                  Yes                     Yes                     Yes
                                             subjects
                                             Regarding nonlegislative               Yes                      No                      No
                                             subjects
                                           In the executive branch
                                             Regarding legislative                  Yes                     Yes                     Yes
                                             subjects
                                             Regarding nonlegislative               Yes                      No                     Yesa
                                             subjects
                                          Note: Yes and no indicate whether an activity or expense is counted in any manner under each
                                          definition. However, if an activity or expense is covered by two or more definitions, substantial
                                          differences may exist in the specifics of what is covered in each definition. See appendices I and II for
                                          more detailed explanations of these differences.
                                          a
                                           Although IRC section 162(e) covers these types of contacts in some circumstances, the coverage is
                                          limited, as discussed in the following sections.
                                          Source: GAO analysis of LDA and IRC sections 4911 and 162(e).


Lobbying State and Local                  LDA covers only the lobbying of federal government officials, so
                                          organizations using the LDA definition would not include any information
Officials                                 in their lobbying reports about lobbying state and local officials. But both
                                          IRC lobbying definitions cover contacts with state government officials to
                                          influence state legislation. In addition, both IRC definitions cover contacts
                                          with local government officials to influence local government legislation,
                                          but IRC section 162(e) provides an exception for contacts with local
                                          legislative officials regarding legislation of direct interest to the
                                          organization.

Grassroots Lobbying                       The LDA lobbying definition covers only lobbying of federal government
                                          officials, so organizations using the LDA definition would not include in
                                          their lobbying reports any information related to attempts to influence
                                          legislation by affecting the opinions of the public—that is, grassroots
                                          lobbying. Both IRC lobbying definitions cover grassroots lobbying, such as
                                          television commercials; newspaper advertisements; and direct mail



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                       campaigns to influence federal, state, and local legislation, including
                       referenda and ballot initiatives.

Lobbying Federal       To determine if a lobbyist’s contact with a federal government official is
                       covered by one of the three lobbying definitions, one must (1) have certain
Government Officials   information about the government official, such as whether the official is
                       in the legislative or executive branch; and (2) know whether a legislative
                       or nonlegislative subject was addressed during the contact. The three
                       definitions differ in many ways regarding the officials and subjects they
                       cover.

                       The LDA definition does not distinguish between covered legislative and
                       executive branch officials on the basis of whether the subject of the
                       lobbyist’s contact is legislative or nonlegislative in nature. The IRC
                       definitions define covered officials differently, depending on whether the
                       subject of the lobbying contact was legislative or nonlegislative in nature.
                       When the subject of a lobbyist’s contact concerns a nonlegislative matter,
                       such as a regulation, grant, or contract, LDA covers more officials than the
                       IRC definitions cover. When the subject of a lobbyist’s contact is a
                       legislative matter, both IRC definitions potentially cover more levels of
                       executive branch officials than the LDA definition does.

                       Under LDA, lobbying organizations’ contacts with all Members of Congress
                       and employees of Congress and approximately 4,600 executive branch
                       officials are covered for either legislative or nonlegislative subjects. In
                       contrast, under IRC section 4911, contacts with legislative or executive
                       branch officials, including Members of Congress and the President, about
                       any nonlegislative subject do not count as lobbying. Also, under IRC
                       section 162(e), contacts with Members of Congress and other legislative
                       branch officials do not count as lobbying if they deal with a nonlegislative
                       subject; and very few executive branch officials are covered if contacts are
                       about nonlegislative matters. As table 2 shows, LDA covers 10 times the
                       number of executive branch officials that IRC section 162(e) covers for
                       nonlegislative matters; it also contrasts with IRC section 4911, which does
                       not cover federal officials for nonlegislative contacts.




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Table 2: Approximate Number of
Executive Branch Officials With Whom                                                                      Approximate number
Contacts About Nonlegislative Matters                                                                        covered under
Could Be Counted as Lobbying Under                                                                       LDA    IRC section IRC section
the Three Lobbying Definitions          Levels of officials and/or offices                                            4911       162(e)
                                        President, Vice President; Executive Schedule                     50              0          50
                                        level I, cabinet-level officials, and their
                                        immediate deputies
                                        Executive Schedule levels II through V                            610                   0                0
                                        (excluding cabinet-level officials and their
                                        immediate deputies)
                                        Uniformed Services at or above O-7                               960                    0               0
                                        Officials serving in a confidential, policymaking,             1,420                    0               0
                                        or advocating position (Schedule C
                                        appointees)a
                                        Entire office of the Executive Office of the                   1,180                    0               20
                                        President (excluding the White House Office)
                                        White House Office of the Executive Office of                     380                   0           380
                                        the President
                                        Total                                                          4,600                    0           450
                                        Note: Numbers in the table are a mixture of (1) authorized positions, which may or may not be filled at
                                        any given time; (2) filled positions; and (3) full-time-equivalent employment, which represents one full-
                                        time employee or one or more part-time employees who collectively complete 2,080 work hours in a
                                        given year. All numbers are rounded and approximate. The estimate of the number of authorized
                                        positions at Executive Schedule levels II through V is understated because it does not include
                                        estimates of the number of members of federal boards and commissions when 5 U. S. C. 5313-5316
                                        does not specify the number of such members.
                                        a
                                         Schedule C appointees are political appointees (graded GS/GM-15 and below) in positions that
                                        involve determining policy or require a close confidential relationship with the agency head or other
                                        key officials of the agency.
                                        Source: 5 U. S. C. 5312-5316; U.S. Government Manual; OPM; DOD; U. S. Coast Guard; Public
                                        Health Service; NOAA; Budget of the United States Government, Fiscal Year 1999—Appendix.


                                        For contacts on legislation, LDA covers contacts with Members of
                                        Congress, employees of Congress and the approximately 4,600 executive
                                        branch officials shown in table 2. In contrast, for contacts on legislation,
                                        the IRC definitions cover Members of Congress, employees of Congress,
                                        and any executive branch officials who may participate in the formulation
                                        of the legislation. Therefore, for contacts addressing legislation, the IRC
                                        definitions potentially cover more levels of executive branch officials than
                                        the LDA definition does.

Exceptions to the Lobbying              LDA contains 19 exceptions to the definition of lobbying; however, for the
                                        most part, these exceptions make technical clarifications in the law and do
Definitions                             not provide special exceptions for particular groups. The IRC section
                                        162(e) definition has one exception in the statute, which is for contacts
                                        with local government legislative branch officials on legislation of direct
                                        interest to the organization. In addition, IRC section 162(e) has seven




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                       exceptions, which are provided for by Treasury Regulations and which are
                       technical clarifications of the statutory provisions.

                       IRC section 4911 has five exceptions, and two of these could allow a
                       significant amount of lobbying expenses to be excluded from IRC section
                       4911 coverage. The first is an exception for making available the results of
                       nonpartisan analysis, study, or research. Due to this exception, IRC section
                       4911 does not cover 501(c)(3) organizations’ advocacy on legislation as
                       long as the organization provides a full and fair exposition of the pertinent
                       facts that would enable the public or an individual to form an independent
                       opinion or conclusion. The second significant exception under IRC section
                       4911 is referred to as the self-defense exception. This exception excludes
                       from coverage lobbying expenses related to appearances before, or
                       communications to, any legislative body with respect to a possible
                       decision of such body that might affect the existence of the organization,
                       its powers and duties, tax-exempt status, or the deduction of contributions
                       to the organization.

                       According to IRS officials, this exception provides that a 501(c)(3)
                       nonprofit tax-exempt organization can lobby legislative branch officials on
                       matters that might affect its tax-exempt status or the activities it can
                       engage in without losing its tax-exempt status, and such lobbying will not
                       be counted under the IRC section 4911 definition. According to IRS
                       officials, this exception does not cover lobbying on state or federal
                       funding.

                       For those organizations that lobby on their own behalf, the choice of using
Differences in         either the LDA definition or the applicable IRC definition can significantly
Definitions Can        affect whether they must register with the Secretary of the Senate and the
Significantly Affect   Clerk of the House of Representatives. In addition, the lobbying definition
                       an organization uses can materially affect the information, such as federal-
Registration and       level lobbying, it must disclose on its semiannual lobbying report. Allowing
Reporting Under LDA    organizations to use an IRC definition for LDA reporting can result in
                       organizations disclosing information that may not be comparable, is
                       unrelated to LDA’s purpose, or that falls short of what LDA envisions.
                       However, of the 1,824 organizations that lobbied on their own behalf and
                       filed reports under LDA from July through December 1997, most reported
                       using the LDA definition. Those organizations that used the IRC section
                       162(e) definition had the highest mean and median expenses reported.




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Differences in Definitions   The lobbying definition an organization uses, which governs how it
                             calculates lobbying expenses, can affect whether the organization is
Can Affect Who Must          required to register under LDA. If (1) the actual or expected expenses of
Register                     an organization lobbying on its own behalf exceed or are expected to
                             exceed the $20,500 LDA threshold for a 6-month period, and (2) the
                             organization has an employee that makes more than one lobbying contact
                             and spends at least 20 percent of his or her time lobbying during the same
                             6-month period, then the organization must register. Lobbying activities
                             and contacts that count toward the $20,500 and 20 percent thresholds
                             depend on which lobbying definition—LDA, IRC section 4911, or IRC
                             section 162(e)—an organization uses. If an activity is not covered under a
                             particular definition, then the expenses related to that activity do not
                             count toward the lobbying expenses of an organization using that
                             definition.

                             In some cases, allowing organizations to use an IRC definition instead of
                             the LDA definition could result in the organization having covered
                             lobbying expenses below the $20,500 threshold and no employees who
                             spend 20 percent of their time lobbying; however, if the organization used
                             the LDA definition, its lobbying expenses and activities could be above the
                             LDA registration thresholds. For example, for an organization that
                             primarily focuses its lobbying efforts on lobbying federal officials about
                             nonlegislative matters, using an IRC definition is likely to result in lower
                             covered lobbying expenses than using the LDA definition and, therefore,
                             could result in an organization not meeting the $20,500 registration
                             threshold. This could occur because any contacts with legislative branch
                             officials about nonlegislative matters are not covered under either IRC
                             sections 4911 or 162(e). Also, for contacts on nonlegislative matters, IRC
                             section 4911 does not cover executive branch officials, and IRC section
                             162(e) covers only about one-tenth of the executive branch officials that
                             LDA covers. Thus, an organization could spend over $20,500 lobbying
                             federal officials who are covered by LDA for nonlegislative matters, with
                             the possibility that none of these expenses would count toward the
                             registration requirement if the organization used an IRC definition.

                             It is also possible that an organization could have over $20,500 in lobbying
                             expenses and one or more employees spending 20 percent of their time
                             lobbying by using an IRC definition, when using an LDA definition would
                             put its covered expenses below $20,500 and put its lobbying employees
                             under the 20-percent threshold. For example, the IRC definitions
                             potentially cover contacts with more executive branch officials than LDA
                             covers when those contacts are about legislation. So, if an organization
                             lobbies executive branch officials not covered under LDA in order to



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                             influence legislation, those contacts would count as lobbying under the
                             IRC definitions but not under the LDA definition. This could result in the
                             organization’s covered lobbying expenses being above the $20,500
                             threshold and in an employee’s time spent on lobbying being above the 20
                             percent threshold.

                             However, no data exist to determine the number of organizations (1) that
                             are not registered under LDA as a result of using an IRC definition or (2)
                             that met the thresholds under an IRC definition but not under the LDA
                             definition.

                             Similarly, the individuals who must be listed as lobbyists on an
                             organization’s lobbying registration can be affected by the choice of
                             definition. Individuals must be listed as lobbyists on the registration if they
                             make more than one lobbying contact and spend at least 20 percent of
                             their time engaged in lobbying activities for their employers during the 6
                             month reporting period. Using an IRC definition instead of the LDA
                             definition could result in an individual not being listed as a lobbyist on his
                             or her organization’s registration or subsequent semiannual report. For
                             example, this could occur if a lobbyist spends most of his or her time
                             lobbying high-level officials at independent federal agencies about
                             regulations, contracts, or other nonlegislative matters, because the IRC
                             definitions do not consider such contacts as lobbying.

Differences in Definitions   Just as the choice of definition affects whether an organization must
                             register under LDA with the Secretary of the Senate and the Clerk of the
Can Affect What Must Be      House of Representatives, the choice of definition also can materially
Reported                     affect the information that is reported semiannually. Because an
                             organization can switch from using the LDA definition one year to using
                             the applicable IRC definition another year and vice versa, organizations
                             can use the definitions that enable them to minimize what they must
                             disclose on their lobbying reports.

                             The three definitions were written at different times for different purposes,
                             so what they cover differs in many ways, both subtle and substantial.
                             These differences result in organizations that use one definition reporting
                             expenses and related information that organizations using another
                             definition would not report. The reported expenses and other information
                             may provide less disclosure and may be unrelated to what is needed to
                             fulfill LDA’s purpose of publicly disclosing the efforts of lobbyists to
                             influence federal officials’ decisionmaking.




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Whether an organization uses the LDA definition or the applicable IRC
definition, it is required to disclose on its lobbying report its total
estimated expenses for all activities covered by the definition. Thus,
organizations using the LDA definition must report all expenses for
lobbying covered federal government officials about subject matters
covered by LDA. Similarly, organizations using an IRC definition must
disclose on their lobbying reports all expenses for activities that are
covered by the applicable IRC definition, including federal, state, and local
government lobbying and grassroots lobbying.

However, organizations report only their total expenses, so the lobbying
reports do not reveal how much of the reported expenses were for
individual activities and for what level of government. Thus, even if an
organization using the LDA definition reported the same total lobbying
expenses as an organization using an IRC definition, it would be
impossible to tell from the lobbying reports how similar the two
organizations’ federal lobbying efforts may have been. In addition, an
organization reporting under an IRC definition would be, in all likelihood,
including expenses that are not related to LDA’s focus on federal lobbying
because the IRC definitions go beyond lobbying at the federal level. An
organization reporting under an IRC definition could also be reporting less
information on federal level lobbying than would be provided under the
LDA definition, which Congress wrote to carry out the public disclosure
purpose of LDA. For example, the IRC definitions include far fewer federal
officials in their definitions for lobbying on nonlegislative matters.

Also, an organization using the IRC section 4911 definition could exclude
considerable lobbying expenses from its lobbying report, if its lobbying fell
under the IRC section 4911 exception for nonpartisan analysis or the self-
defense exception. For example, in 1995, a 501(c)(3) tax-exempt nonprofit
organization lobbied against legislation that would have sharply curtailed
certain activities of charities. On its 1995 tax return, the organization,
which used the IRC section 4911 definition to calculate its lobbying
expenses for tax purposes, reported about $106,000 in lobbying expenses.
However, in a letter to a congressional committee, the organization stated
that its 1995 lobbying expenses totaled over $700,000; it cited the self-
defense exception as a reason for excluding about $594,000 in lobbying
                                12
expenses from its tax return.


12
   This example occurred before LDA took effect on January 1, 1996, but it illustrates how using the IRC
section 4911 definition can result in an organization not reporting lobbying expenses. In this case, an
unknown part of the $700,000 was for grassroots lobbying, which would not be reportable under the
LDA definition.




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                         In contrast to reporting expenses, when reporting information other than
                         expenses on the LDA lobbying reports, organizations are required to report
                         only information related to federal lobbying. This information includes
                         issues addressed during lobbying contacts with federal government
                         officials and the House of Congress and federal agencies contacted.
                         Therefore, if an organization uses an IRC definition and includes expenses
                         for state lobbying and grassroots lobbying in its total lobbying expenses, it
                         is not required to report any issues or other information related to those
                         nonfederal expenses.

                         Further, LDA provides that for reporting information other than expenses
                         for contacts with federal executive branch officials, organizations using an
                         IRC definition to calculate their expenses must use the IRC definition for
                         reporting other information. But for contacts with federal legislative
                         branch officials, organizations using an IRC definition to calculate their
                         lobbying expenses must use the LDA definition in determining what other
                         information, such as the issues addressed during lobbyists’ contacts and
                         the House of Congress contacted, must be disclosed on their reports.
                         Because of this latter provision, organizations that use an IRC definition
                         and lobby legislative branch officials about nonlegislative matters are
                         required to disclose the issues addressed and the House of Congress
                         contacted, even though they are not required to report the expenses
                         related to this lobbying.

Most Organizations       For the July through December 1997 reporting period, lobbying firms that
                         had to use the LDA definition to calculate lobbying income filed reports for
Reported Using the LDA   9,008 clients. In addition, for this reporting period, 1,824 organizations that
Definition               lobbied on their own behalf and were able to elect which definition to use
                         in calculating their lobbying expenses filed lobbying reports. Of the 1,824
                         organizations, 1,306 (71 percent) used the LDA definition to calculate their
                         lobbying expenses. Another 157 organizations (9 percent) elected to use
                         the IRC 4911 definition. Finally, 361 organizations (20 percent) used the
                         IRC 162(e) definition to calculate their lobbying expenses. (See table 3.)




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Table 3: Number of Organizations That
Used One of the Three Lobbying                                                   Number of organizations that used definition
Definitions to Calculate the Lobbying   Lobbying expenses                                                   IRC               IRC
Expenses Reported Under LDA From        reported                                        LDA        section 4911     section 162(e)
July to December 1997                   Less than $10,00013                              433                  15               20
                                        $10,000 or more                                  873                142               341
                                        Total                                         1,306                 157               361
                                        Source: GAO analysis of the Secretary of the Senate lobbying database.


                                        Data do not exist that would enable us to estimate the number of
                                        organizations that may not be registered because they used an IRC
                                        definition but would have had to register had they used the LDA definition.
                                        Because computerized registration data were available only for one 6-
                                        month period when we did our analysis, we did not analyze changes in
                                        registrations over time. Thus, we do not know whether, or to what extent,
                                        organizations switch between definitions from year to year as allowed by
                                        LDA.

Reported Expenses Were                  Organizations that lobbied on their own behalf and reported using the IRC
                                        section 162(e) definition had the highest mean and median expenses
Highest Under IRC Section               reported. These organizations had 87 percent higher mean lobbying
162(e) Definition                       expenses than organizations that reported using the LDA definition and 58
                                        percent higher mean lobbying expenses than those using the IRC section
                                        4911 definition. Organizations that reported using the IRC section 162(e)
                                        definition had $180,000 in median expenses; organizations that reported
                                        using the LDA definition and those that reported using the IRC section
                                        4911 definition each had median expenses of $80,000.

                                        It is possible that some of the differences among the mean and median
                                        expenses of organizations using the different definitions could reflect more
                                        extensive and expensive lobbying efforts by those organizations that used
                                        the IRC section 162(e) definition. However, it is not possible to determine
                                        how much of the differences are due to what is covered by each definition
                                        or the extent of the lobbying efforts by the organizations using the
                                        different definitions. The main reason for this, as discussed earlier, is that
                                        although the lobbying reports filed under LDA show total lobbying
                                        expenses, they do not show the amount spent on different lobbying


                                        13
                                           Organizations that lobby on their own behalf do not have to register if their lobbying expenses for the
                                        6 month reporting period are below $20,500. However, until a registered organization terminates its
                                        registration, it must file lobbying reports, even if its lobbying expenses are below the $20,500
                                        registration threshold.




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                                         activities. Therefore, data do not exist that would help explain the reasons
                                         for the differences.

                                         Table 4 shows the total, mean, and median expenses for organizations
                                         using each of the three lobbying definitions that reported having $10,000 or
                                         more in lobbying expenses from July to December 1997.

Table 4: Total, Mean, and Median
Lobbying Expenses for Organizations                                                              Calculated under
That Reported Having $10,000 or More                                                                           IRC             IRC
in Lobbying Expenses From July to        Lobbying expenses                               LDA         section 4911    section 162(e)
December 1997                            Total                                   $258,060,000         $49,700,000     $188,520,000
                                         Mean                                       $295,601              $350,000        $552,845
                                         Median                                       $80,000              $80,000        $180,000
                                         Source: GAO analysis of the Secretary of the Senate data.


                                         Table 4 includes only data on organizations reporting lobbying expenses of
                                         $10,000 or more, because organizations with less than $10,000 in expenses
                                         check a box on the LDA reporting form and do not include an amount for
                                         their expenses. Because, as shown in table 3, many more of these
                                         organizations used the LDA definition than used either of the IRC
                                         definitions, it follows that the largest total amount of all expenses reported
                                         was under the LDA definition.

                                         Because the differences among the three lobbying definitions can
Options That May                         significantly affect who registers and what they report under LDA, the
Better Ensure That the                   current statutory provisions do not always complement LDA’s purpose. As
Public Disclosure                        discussed earlier, allowing organizations to use an IRC definition for LDA
                                         purposes can result in organizations (1) not registering under LDA, (2)
Purposes of LDA Are                      disclosing information that may not be comparable, and (3) disclosing
Realized                                 information that is unrelated to LDA’s purpose or that falls short of what
                                         LDA envisions. Options for revising the statutory framework exist; LDA
                                         requires us to consider one option, harmonizing the definitions; and we
                                         identified two other options on the basis of our analysis. Those options are

                                       • eliminating the current authorization for businesses and tax-exempt
                                         organizations to use the IRC lobbying definitions for LDA reporting and
                                       • requiring organizations that use an IRC lobbying definition to include only
                                         expenses related to federal lobbying covered by that IRC definition when
                                         the organizations register and report under LDA.

                                         The options address, in varying degrees, the effects of the differences on
                                         registration and reporting, but all have countervailing effects that must be
                                         balanced in determining what, if any, change should be made.



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Harmonizing the Definitions   In addition to charging us with analyzing the differences among the three
                              lobbying definitions and the impact of those differences on organizations’
                              registration and reporting of their lobbying efforts, LDA charges us with
                              reporting any changes that we may recommend to harmonize those
                              definitions. Harmonization implies the adoption of a common definition
                              that would be used for LDA’s registration and reporting purposes and for
                              the tax reporting purposes currently served by the IRC definitions.
                              Harmonizing the three lobbying definitions would ensure that
                              organizations would not have the burden of keeping track of their lobbying
                              expenses and activities under two different definitions–one for tax
                              purposes and another for LDA registration and reporting purposes.
                              Requiring the use of a common definition would also mean that no
                              alternative definitions could be used to possibly avoid LDA’s registration
                              requirement and that all data reported under the common definition would
                              be comparable.

                              However, developing a lobbying definition that could be used for the
                              purposes of LDA, IRC section 4911, and IRC section 162(e) would require
                              Congress to revisit fundamental decisions it made when it enacted each
                              definition. For example, if a common definition included state lobbying
                              expenses that are included under the current IRC definitions, then the
                              current objective of LDA to shed light on efforts to influence federal
                              decisionmaking would essentially be rewritten and expanded. On the other
                              hand, if a common definition did not include state lobbying expenses,
                              fundamental decisions that were made when the statutes containing the
                              IRC definitions were written would be similarly modified. Adopting a
                              harmonized definition of lobbying could result in organizations disclosing
                              less information on lobbying reports, if the new definition covered less
                              than what is covered by the current LDA definition. In addition, a new
                              definition would not be used only by organizations lobbying on their own
                              behalf, which currently have the option of using an IRC definition for LDA
                              reporting, but also by lobbying firms, which currently must use the LDA
                              definition for their clients’ lobbying reports.

Eliminating the Current       Eliminating the current authorization for using the IRC lobbying
                              definitions for LDA purposes would mean that consistent registration and
Authorization for Using an    reporting requirements would exist for all lobbyists, and the requirements
IRC Lobbying Definition for   would be those developed by Congress specifically for LDA. This would
LDA Purposes                  result in all organizations following the LDA definition for LDA purposes;
                              thus, only the data that Congress determined were related to LDA’s
                              purposes would be reported. However, this option could increase the
                              reporting burden of the relatively small number of organizations currently
                              using the IRC definitions under LDA, because it would require them to



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                           track their lobbying activities as defined by LDA while also tracking the
                           activities covered under the applicable IRC lobbying definition.

Requiring Organizations    The last option we identified would require organizations that elected to
                           use an IRC definition for LDA to use only expenses related to federal
Using IRC Definitions to   lobbying efforts as defined under the IRC definitions when they determine
Use Only Expenses for      whether they should register and what they should report under LDA. This
Federal Lobbying for LDA   would improve the alignment of registrations and the comparability of
Registration and Expense   lobbying information that organizations reported, because organizations
                           that elected to use the IRC definitions would no longer be reporting to
Reporting                  Congress on their state, local, or grassroots lobbying. The reporting of
                           expenses under this option would be similar to the reporting of all other
                           information required under LDA, such as issues addressed and agencies
                           contacted, which are based on contacts with federal officials.

                           However, this option would only partially improve the comparability of
                           data being reported by organizations using different definitions.
                           Differences in the reported data would remain because the LDA and IRC
                           definitions do not define lobbying of federal officials identically. LDA
                           requires tracking contacts with a much broader set of federal officials than
                           do the IRC definitions when lobbying contacts are made about
                           nonlegislative matters.

                           In addition, because differences would remain between the LDA and IRC
                           definitions of lobbying at the federal level under this option, organizations
                           might still avoid registering under LDA and might still report information
                           that would differ from that reported by organizations using the LDA
                           definition. For example, because the IRC lobbying definitions include
                           fewer federal executive branch officials when a contact is about a
                           nonlegislative matter, organizations using an IRC definition might still have
                           expenses under the $20,500 threshold for lobbying; whereas, under the
                           LDA definition they might exceed the threshold. Finally, this option could
                           impose some additional reporting burden for the relatively small number
                           of organizations currently using IRC definitions for LDA purposes.
                           Reporting only federal lobbying when they use an IRC definition could
                           result in some increased recordkeeping burden if these organizations do
                           not currently segregate such data in their recordkeeping systems.

                           The three lobbying definitions we reviewed were adopted at different
Conclusions                times to achieve different purposes. What they cover differs in many subtle
                           and substantial ways. LDA was enacted to help shed light on the identity
                           of, and extent of effort by, lobbyists who are paid to influence
                           decisionmaking in the federal government. IRC section 4911 was enacted



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to help clarify the extent to which 501(c)(3) organizations could lobby
without jeopardizing their tax-exempt status, and IRC section 162(e) was
enacted to prevent businesses from deducting lobbying expenses from
their federal income tax. Because the IRC definitions were not enacted to
enhance public disclosure concerning federal lobbying, as was the LDA
definition, allowing organizations to use the IRC definitions for reporting
under LDA may not be consistent with achieving the level and type of
public disclosure that LDA was enacted to provide.

Allowing organizations to use an IRC definition instead of the LDA
definition for calculating lobbying expenses under LDA can result in some
organizations not filing lobbying registrations, because the use of the IRC
definition could keep their federal lobbying below the LDA registration
thresholds. On the other hand, under certain circumstances, organizations
could meet the thresholds when using the IRC definition but would not do
so if they used the LDA definition. We do not know how many, if any,
organizations are not registered under LDA that would have met the
registration thresholds under LDA but not under the applicable IRC
definition.

Giving organizations a choice of definitions to use each year can
undermine LDA’s purpose of disclosing the extent of lobbying activity that
is intended to influence federal decisionmaking, because organizations
may disclose very different information on lobbying reports, depending on
which definition they use. When an organization can choose which
definition to use each year, it can choose the definition that discloses the
least lobbying activity. Further, if an organization uses an IRC definition
for its lobbying report, the report can include expenses for state, local, and
grassroots lobbying that are unrelated to the other information on the
report that only relates to federal lobbying. Also, if an organization uses an
IRC definition, its lobbying report can exclude expenses and/or other
information about lobbying that is not covered under the selected IRC
definition (e.g., contacts about nonlegislative matters) but that
nevertheless constitutes an effort to influence federal decisionmaking. In
this situation, less information would be disclosed than LDA intended.

Because the differences among the LDA and IRC lobbying definitions can
significantly affect who registers and what they report under LDA, the use
of the IRC definitions can conflict with LDA’s purpose of disclosing paid
lobbyists’ efforts to influence federal decisionmaking. Options for reducing
or eliminating these conflicts exist. These options include (1) harmonizing
the definitions, (2) eliminating organizations’ authorization to use an IRC
definition for LDA purposes, or (3) requiring those that use an IRC



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definition to include only expenses related to federal lobbying under the
IRC definition when they register and report under LDA. The options, to
varying degrees, could improve the alignment of registrations and the
comparability of reporting with Congress’ purpose of increasing public
disclosure of federal lobbying efforts. However, each option includes
trade-offs between better ensuring LDA’s purposes and other public policy
objectives and could result in additional reporting burden in some cases.

In our opinion, the trade-offs involved in the option of harmonizing the
definitions are disproportionate to the problem of LDA registrations and
reporting not being aligned with LDA’s purpose. Harmonizing the
definitions would best align registrations and reporting with LDA’s
purposes if LDA’s definition is imposed for tax purposes as well, which
would significantly alter previous congressional decisions about how best
to define lobbying for tax purposes. Adopting a common lobbying
definition that includes activities, such as state lobbying, that are covered
under the current IRC definitions would require a rewrite and expansion of
LDA’s objective of shedding light on efforts to influence federal
decisionmaking. Such major changes in established federal policies that
would be required to harmonize the definitions appear to be unwarranted
when only a small portion of those reporting under LDA use the IRC
definitions.

The trade-offs for the other two options are less severe. Eliminating
organizations’ authorization to use a tax definition for LDA purposes
would ensure that all lobbyists register and report under the definition that
Congress wrote to carry out LDA’s purpose. However, eliminating the
authorization likely would impose some additional burden on the relatively
small number of organizations currently using IRC definitions for LDA.
Requiring that only expenses related to federal-level lobbying under the
IRC definitions be used for LDA purposes would not align reporting with
LDA’s purposes as thoroughly as eliminating the authorization to use an
IRC definition for LDA would. Under this option organizations could still
avoid registering under LDA when the use of an IRC definition results in
total expenses falling below the LDA registration threshold. The option
also could impose some additional recordkeeping burden for the relatively
small number of organizations currently using the IRC definitions.




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                      If Congress believes that the inclusion of nonfederal lobbying expenses
Matters for           and the underreporting of lobbying efforts at the federal level due to the
Congressional         optional use of the IRC lobbying definitions seriously detract from LDA’s
Consideration         purpose of public disclosure, then it should consider adopting one of two
                      options. Congress could remove the authorization for organizations to use
                      an IRC definition for reporting purposes. In this case, data reported to the
                      Senate and House would adhere to the LDA definition, which Congress
                      enacted specifically to achieve LDA’s public reporting purpose.
                      Alternatively, Congress could allow organizations to continue using the
                      IRC definitions but require that they use only the expenses related to
                      federal-level lobbying that those definitions yield when they register and
                      report under LDA. The data reported would be more closely aligned with
                      LDA’s purpose of disclosing federal level lobbying efforts, but some
                      differences would remain between the data so reported and the data that
                      would result from applying only the LDA definition. If either of these
                      options were considered, Congress would need to weigh the benefit of
                      reporting that would be more closely aligned with LDA’s public disclosure
                      purpose against the additional reporting burden that some organizations
                      would likely bear.

                      On February 11, 1999, we sent a draft of this report for review and
Agency Comments and   comment to the Clerk of the House of Representatives, the Secretary of the
Our Evaluation        Senate, the Secretary of the Treasury, and the Commissioner of the
                      Internal Revenue Service. Representatives of the Clerk of the House of
                      Representatives, the Secretary of the Senate, and the Secretary of the
                      Treasury told us that no comments would be forthcoming. On February 17,
                      1999, we met with officials from the Internal Revenue Service, and they
                      provided technical comments on a draft of this report. On the basis of their
                      comments, we made changes to the report as appropriate. In a letter dated
                      March 5, 1999, the Chief Operations Officer of the Internal Revenue
                      Service stated that IRS had reached general consensus with us on the
                      technical matters in the report.




                      Page 25                               GAO/GGD-99-38 Federal Lobbying Definitions
B-276377




We are sending copies of this report to Senator Carl Levin; Senator Ted
Stevens; Senator William V. Roth, Jr., Chairman, and Senator Daniel P.
Moynihan, Ranking Minority Member, Senate Committee on Finance;
Representative Bill Archer, Chairman, and Representative Charles B.
Rangel, Ranking Minority member, House Committee on Ways and Means;
the Honorable Gary Sisco, Secretary of the Senate; the Honorable Jeff
Trandahl, Clerk of the House of Representatives; the Honorable Robert E.
Rubin, Secretary of the Treasury; and the Honorable Charles O. Rossotti,
Commissioner of Internal Revenue. Copies will also be made available to
others upon request.

The major contributors to this report are listed in appendix IV. Please call
me on (202) 512-8676 if you have any questions.



Michael Brostek
Associate Director,
Federal Management and Workforce Issues




Page 26                               GAO/GGD-99-38 Federal Lobbying Definitions
Page 27   GAO/GGD-99-38 Federal Lobbying Definitions
Contents



Letter                                                                                              1


Appendix I                                                                                         30
                        Comparison of LDA and IRC Definitions                                      30
Comparisons of LDA      Grassroots Lobbying                                                        30
and IRC Definitions     Lobbying State and Local Officials                                         31
                        Differences Based on the Federal Officials Contacted                       31
                        Differences Based on Subjects Addressed During                             35
                          Lobbying Contacts
                        Exceptions to the Lobbying Definitions                                     36


Appendix II                                                                                        39

Coverage of Different
Contacts, Activities,
and Expenses Under
the Three Definitions
of Lobbying
Appendix III                                                                                       46
                        Exceptions to the LDA Lobbying Definition                                  46
Exceptions to the LDA   Exceptions to the IRC Section 4911 Lobbying Definition                     48
and IRC Lobbying        Exceptions to the IRC Section 162(e) Lobbying Definition                   49

Definitions
Appendix IV                                                                                        50

Major Contributors to
This Report
Tables                  Table 1: Key Differences in Coverage of Contacts,                          11
                          Activities, and Expenses Under the Three Definitions
                          of Lobbying
                        Table 2: Approximate Number of Executive Branch                            13
                          Officials With Whom Contacts About Nonlegislative
                          Matters Could Be Counted as Lobbying Under the
                          Three Lobbying Definitions




                        Page 28                             GAO/GGD-99-38 Federal Lobbying Definitions
Contents




Table 3: Number of Organizations That Used One of the                         19
  Three Lobbying Definitions to Calculate the Lobbying
  Expenses Reported Under LDA From July to December
  1997
Table 4: Total, Mean, and Median Lobbying Expenses for                        20
  Organizations That Reported Having $10,000 or More in
  Lobbying Expenses From July to December 1997
Table I.1: Approximate Number of Executive Branch                             32
  Officials With Whom Contacts About Nonlegislative
  Matters Could Be Counted as Lobbying Under the
  Three Lobbying Definitions
Table II.1: Coverage of Federal Lobbying                                      39
Table II.2: Coverage of State Lobbying                                        44
Table II.3: Coverage of Local Lobbying                                        45




Abbreviations

DOD           Department of Defense
IRC           Internal Revenue Code
LDA           Lobbying Disclosure Act of 1995
NOAA          National Oceanic and Atmospheric Administration
OPM           Office of Personnel Management
U.S.C.        United States Code




Page 29                                GAO/GGD-99-38 Federal Lobbying Definitions
Appendix I

Comparisons of LDA and IRC Definitions


                        The types of activities and contacts that are covered by the Lobbying
Comparison of LDA       Disclosure Act of 1995 (LDA) lobbying definition are significantly different
and IRC Definitions     from those covered under the Internal Revenue Code (IRC) definitions.
                        First, LDA does not cover grassroots lobbying. The IRC lobbying
                        definitions cover grassroots lobbying, such as television advertisements
                        and direct mail campaigns, that are intended to influence legislation at the
                        federal, state, or local levels. Second, LDA covers lobbying only at the
                        federal level. However, both IRC definitions cover lobbying of federal
                        officials, as well as state and local government officials.

                        The IRC definitions potentially cover contacts with more levels of
                        executive branch officials than LDA covers when those contacts are about
                        legislation. However, when contacts are about nonlegislative subject
                        matters, such as regulations or policies, LDA covers contacts with a
                        broader range of federal officials than the IRC definitions. Further, LDA’s
                        definition of lobbying includes legislative matters and an extensive list of
                        nonlegislative matters. IRC section 4911 only covers lobbying contacts that
                        address specific legislative proposals. IRC section 162(e) covers lobbying
                        contacts on legislative and nonlegislative subjects, but its coverage of
                        legislative subjects is somewhat more limited than LDA’s coverage, and its
                        coverage of nonlegislative subjects is not clearly defined.

                        Grassroots lobbying—efforts to influence legislation by influencing the
Grassroots Lobbying     public’s view of that legislation—is covered under the IRC definitions but
                        not under the LDA definition. Grassroots lobbying campaigns can use such
                        means as direct mailings and television, radio, and newspaper
                        advertisements and can be very expensive. Both IRC section 4911 and IRC
                        section 162(e) cover grassroots lobbying at the federal, state, and local
                        levels. However, IRC section 4911 has a narrower definition of grassroots
                        lobbying than IRC section 162(e) does.

                        Under IRC section 4911, grassroots lobbying is defined as any attempt to
                        influence legislation through an attempt to affect the opinions of the
                        general public or any segment thereof. To be considered grassroots
                        lobbying under IRC section 4911, a communication with the public must

                      • refer to a specific legislative proposal,
                      • reflect a view on such legislative proposal, and
                      • encourage the recipient of the communication to take action with respect
                        to such legislative proposal.

                        IRC section 162(e) does not have the same stringent tests that IRC section
                        4911 has for determining if a communication with the public is grassroots



                        Page 30                               GAO/GGD-99-38 Federal Lobbying Definitions
                        Appendix I
                        Comparisons of LDA and IRC Definitions




                        lobbying. Under IRC section 162(e), communications with the public that
                        attempt to develop a grassroots point of view by influencing the general
                        public to propose, support, or oppose legislation are considered to be
                        grassroots lobbying. To be considered as grassroots lobbying under IRC
                        section 162(e), a communication with the public does not have to
                        encourage the public to take action with respect to a specific legislative
                        proposal. Therefore, the IRC section 162(e) grassroots lobbying provision
                        is likely to encompass more lobbying campaigns than IRC section 4911
                        does.

                        The LDA lobbying definition covers only contacts with federal government
Lobbying State and      officials and does not require lobbyists to report any expenses for contacts
Local Officials         with state and local government officials. This is consistent with LDA’s
                        overall purpose of increasing public disclosure of the efforts of lobbyists
                        paid to influence federal decisionmaking. The IRC lobbying definitions
                        also cover contacts with federal government officials. However, in contrast
                        to LDA, the IRC lobbying definitions require that expenses for contacts
                        with state officials to influence state legislation be included in lobbying
                        expenses. Further, both IRC lobbying definitions cover contacts with local
                        government officials to influence local government legislation; but
                        coverage of local government contacts is limited under IRC section 162(e),
                        because that section has an exception for contacts with local councils on
                        legislation of direct interest to the organization. (Contacts with state and
                        local government officials to influence something other than legislation,
                        such as a state or local policy or regulation, are not covered by either of
                        the IRC definitions.)

                        The amounts spent lobbying state governments can be significant. For
                        example, in 1997, under state lobbying disclosure laws, reported spending
                        on lobbying state government officials was $144 million in California, $23
                        million in Washington, and $23 million in Wisconsin.

                        Whether a lobbyist’s contact with a federal government official counts as
Differences Based on    lobbying under any of the three lobbying definitions depends, in part, on
the Federal Officials   whether the contact is with a covered official. Covered officials are
Contacted               defined by several factors, such as their branch of government, the office
                        they work in, and their rank. All three definitions include as lobbying
                        lobbyists’ contacts with legislative branch officials—Members and
                        employees of Congress—to influence legislation. However, for contacts
                        with executive branch officials to influence legislation and contacts with
                        either legislative branch or executive branch officials on legislative
                        matters, such as regulations and contracts, the definitions of what is
                        counted as lobbying differ significantly.



                        Page 31                                  GAO/GGD-99-38 Federal Lobbying Definitions
                                        Appendix I
                                        Comparisons of LDA and IRC Definitions




                                        Under LDA, contacts with any covered government officials about any
                                        legislative or nonlegislative matters covered by LDA are considered
                                        lobbying contacts, and their associated expenses must be reported.
                                        However, under the IRC definitions, whether the contact is on legislative
                                        or nonlegislative matters determines which officials are covered. For
                                        contacts to influence legislation, any executive branch officials who may
                                        participate in the formulation of legislation are covered under both IRC
                                        definitions. But, for nonlegislative matters, IRC section 4911 covers no
                                        executive branch officials, and IRC section 162(e) covers very few
                                        executive branch officials.

Covered Executive Branch                Many of the executive branch officials covered by LDA for contacts on any
                                        lobbying subject are not covered by IRC section 162(e) when contacts are
Officials for Contacts on               intended to influence nonlegislative matters. Also, none of the executive
Nonlegislative Matters                  branch officials covered by LDA are covered by IRC section 4911 for
                                        contacts on nonlegislative matters, because IRC section 4911 covers only
                                        contacts to influence legislation.

                                        For contacts to influence the official actions or positions of an executive
                                        branch official on nonlegislative matters, IRC section 162(e) provides a list
                                        of covered executive branch officials. LDA’s list of covered executive
                                        branch officials includes all the officials on the IRC section 162(e) list, plus
                                        several more categories of officials. LDA’s list applies to contacts on any
                                        matter covered by LDA—legislative or nonlegislative. Table I.1 shows that
                                        LDA covers about 10 times the number of officials that IRC section 162(e)
                                        covers for nonlegislative matters.

Table I.1: Approximate Number of
Executive Branch Officials With Whom                                                                Approximate number
Contacts About Nonlegislative Matters                                                                 covered under
Could Be Counted as Lobbying Under                                                                LDA IRC section IRC section
the Three Lobbying Definitions          Levels of officials and/or offices                                  4911       162(e)
                                        President, Vice President; Executive Schedule              50           0          50
                                        level I, cabinet-level officials, and their immediate
                                        deputies
                                        Executive Schedule levels II through V (excluding         610             0             0
                                        cabinet level officials and their immediate
                                        deputies)
                                        Uniformed Services at or above O-7                         960            0             0
                                        Officials serving in a confidential, policymaking, or    1,420            0             0
                                        advocating position (Schedule C appointees)a
                                        Entire office of the Executive Office of the             1,180            0            20
                                        President (excluding the White House Office)
                                        White House Office of the Executive Office of the         380             0           380
                                        President
                                        Total                                                    4,600            0           450




                                        Page 32                                         GAO/GGD-99-38 Federal Lobbying Definitions
Appendix I
Comparisons of LDA and IRC Definitions




Note: Numbers in the table are a mixture of (1) authorized positions, which may or may not be filled at
any given time; (2) filled positions; and (3) full-time-equivalent employment, which represents one full-
time employee or one or more part-time employees who collectively complete 2,080 work hours in a
given year. All numbers are rounded and approximate. The estimate of the number of authorized
positions at Executive Schedule levels II through V is understated because it does not include
estimates of the number of members of federal boards and commissions when 5 U. S. C. 5313-5316
does not specify the number of such members.
a
 Schedule C appointees are political appointees (graded GS/GM-15 and below) in positions that
involve determining policy or require a close confidential relationship with the agency head or other
key officials of the agency.
Source: 5 U. S. C. 5312-5316; U.S. Government Manual; OPM; DOD; U. S. Coast Guard; Public
Health Service; NOAA; Budget of the United States Government, Fiscal Year 1999—Appendix.


As shown in table I.1, LDA and IRC section 162(e) include contacts with
the President and Vice President and Cabinet Members and similar high-
ranking officials and their immediate deputies. In the Executive Office of
the President, LDA includes all contacts with all offices; IRC section 162(e)
includes only all officials in the White House Office and the two most
senior level officers in the other agencies of the Executive Office of the
President. Further, LDA includes contacts with officials in levels II through
V of the Executive Schedule, which includes agency heads and deputy and
assistant secretaries; IRC section 162(e) does not. Also, LDA includes
contacts with officials at levels O-7 and above, such as Generals and
Admirals, in the uniformed services. Finally, LDA includes contacts with
all Schedule C appointees, who are political appointees (graded GS/GM-15
and below) in positions that involve determining policy or require a close,
confidential relationship with the agency head or other key officials of the
agency.

The narrow scope of IRC section 162(e)’s list of covered executive branch
officials can result in organizations not including on their lobbying reports
expenses or other information, such as issues addressed, relating to
contacts with very high-ranking officials. For example, if an organization
made contacts to influence an official action or position with the top
official at most independent agencies, including the National Aeronautics
and Space Administration, the General Services Administration, the
Export-Import Bank, and the Federal Communications Commission, these
contacts would not be considered as contacts with covered executive
branch officials and therefore would not be covered by the IRC section
162(e) definition. Similarly, contacts on nonlegislative matters with the
heads of agencies within cabinet departments, such as the heads of the
Internal Revenue Service, the Occupational Safety and Health
Administration, the Bureau of Export Administration, and the Food and
Drug Administration, would not be considered as contacts with officials at
a high enough level for the list of covered executive branch officials under
the IRC section 162(e) definition. However, contacts with all of these
officials would be covered under the LDA definition of lobbying.


Page 33                                              GAO/GGD-99-38 Federal Lobbying Definitions
                             Appendix I
                             Comparisons of LDA and IRC Definitions




Covered Executive Branch     The two IRC definitions generally provide the same coverage of contacts
                             with executive branch officials for influencing legislation. The two
Officials for Contacts on    definitions provide that a contact with “any government official or
Legislation                  employee who may participate in the formulation of legislation” made to
                                                                                               1
                             influence legislation must be counted as a lobbying expense. Thus, these
                             definitions potentially cover many more levels of executive branch
                             officials than are included on LDA’s list of covered executive branch
                             officials. LDA’s list of covered officials is shown in table I.1 and applies to
                             both legislative and nonlegislative matters. Therefore, contacts with
                             officials in the Senior Executive Service or in grades GS/GM-15 or below
                             who are not Schedule C appointees would generally count as lobbying
                             contacts under the IRC definitions if such contacts were for the purpose of
                             influencing legislation and those officials participated in the formulation of
                             legislation. But such contacts would not count as lobbying contacts under
                             the LDA definition, because LDA does not include these officials as
                             covered executive branch officials.

Covered Legislative Branch   Neither IRC section 162(e) nor IRC section 4911 covers contacts with
                             legislative branch officials on nonlegislative matters. The two IRC
Officials for Contacts on    definitions cover only legislative branch officials in regard to contacts to
Nonlegislative Matters       influence legislation. However, LDA counts as lobbying any contacts with
                             Members of Congress and congressional employees on any subject matter
                             covered by LDA. Therefore, a lobbyist who contacts Members of Congress
                             to influence a proposed federal regulation would be required to count
                             these contacts in lobbying expenses calculated under the LDA definition
                             and to disclose the issues addressed and the House of Congress contacted.

Covered Legislative Branch   LDA and the two IRC definitions cover the same federal legislative branch
                             officials for contacts made to influence legislation. LDA covers contacts
Officials for Contacts on    with any Member or employee of Congress for contacts on any legislative
Legislation                  or nonlegislative subject matter covered by the act. Both IRC definitions
                             cover contacts with any Member or employee of Congress for contacts
                             made to influence legislation.




                             1
                              IRC section 4911 differs somewhat from IRC section 162(e) concerning contacts with executive
                             branch officials for influencing legislation. Specifically, according to the Treasury Regulations for IRC
                             section 4911, contacts with executive branch officials to influence legislation only count as lobbying if
                             the principal purpose of the contact is to influence legislation. However, under IRC section 162(e), the
                             principal purpose of a contact does not have to be for influencing legislation for a contact with an
                             executive branch official to be counted under that section’s provisions regarding contacts to influence
                             legislation.




                             Page 34                                              GAO/GGD-99-38 Federal Lobbying Definitions
                          Appendix I
                          Comparisons of LDA and IRC Definitions




                          The subject matters for which contacts with officials count as lobbying are
Differences Based on      different under the three lobbying definitions. LDA provides a
Subjects Addressed        comprehensive list of subjects about which contacts with a covered
During Lobbying           official are considered to be lobbying. For example, for nonlegislative
                          matters, the list includes, in part, “the formulation, modification, or
Contacts                  adoption of a federal rule, regulation, Executive order, or any other
                          program, policy, or position of the United States Government.” Under IRC
                          section 4911, the only subject covered by lobbying contacts is “influencing
                          legislation.” Under IRC section 162(e), the subjects covered are
                          “influencing legislation” and “influencing official actions or positions” of
                          executive branch officials. The phrase “official actions or positions”
                          applies to contacts on nonlegislative matters.

                          Further, more specific information about what was covered in a lobbyist’s
                          contact is needed under IRC sections 4911 and 162(e) than is needed under
                          LDA to determine if the contact should count as lobbying.

Coverage of Legislative   For legislative matters, LDA covers “the formulation, modification, or
                          adoption of Federal legislation (including legislative proposals).” In
Matters                   contrast, for legislative matters, the IRC lobbying definitions list only
                          “influencing legislation,” which, according to the Treasury Regulations,
                          refers to contacts that address either specific legislation that has been
                          introduced or a specific legislative proposal that the organization supports
                                       2
                          or opposes.

                          Under both IRC definitions, a contact to influence legislation is a contact
                          that refers to specific legislation and reflects a view on that legislation.
                          Therefore, a lobbyist’s contact with a legislative branch official in which
                          the lobbyist provides information or a general suggestion for improving a
                          situation but in which the lobbyist does not reflect a view on specific
                          legislation would not be considered to be a lobbying contact under the IRC
                          definitions. For example, the Treasury regulations for IRC section 162(e)
                          provide an example of a lobbying contact in which a lobbyist tells a
                          legislator to take action to improve the availability of new capital. In this
                          example, the lobbyist is not referring to a specific legislative proposal, so
                          the contact does not count as lobbying. However, according to the
                          Treasury Regulations, a lobbyist’s contact with a Member of Congress in
                          which the lobbyist urges a reduction in the capital gains tax rate to
                          increase the availability of new capital does count as lobbying, because the
                          2
                           According to IRS officials, contacts to influence the nomination and confirmation of officials subject
                          to Senate confirmation are considered to be contacts to influence legislation under the IRC lobbying
                          definitions. For the purposes of this report, the LDA provision relating to nominations and
                          confirmations is treated as a nonlegislative matter.




                          Page 35                                             GAO/GGD-99-38 Federal Lobbying Definitions
                               Appendix I
                               Comparisons of LDA and IRC Definitions




                               contact refers to a specific legislative proposal. In contrast, because LDA
                               covers legislation from its formulation to adoption, the fact that a specific
                               legislative proposal was not addressed during a lobbyist’s contact with a
                               government official does not prevent the contact from being counted as a
                               lobbying contact.

Coverage of Nonlegislative     LDA’s list of nonlegislative matters under its definition of “lobbying
                               contact” seems to include most activities of the federal government. The
Matters                        list includes

                             • the formulation, modification, or adoption of a federal rule, regulation,
                               executive order, or any other program, policy, or position of the United
                               States Government;
                             • the administration or execution of a federal program or policy (including
                               the negotiation, award, or administration of a federal contract, grant, loan,
                               or permit, or license); and
                             • the nomination or confirmation of a person for a position subject to
                               confirmation by the Senate.

                               IRC section 4911 does not include any nonlegislative matters in its
                               lobbying definition.

                               The only nonlegislative matter included under the IRC section 162(e)
                               lobbying definition is “any direct communication with a covered executive
                               branch official in an attempt to influence the official actions or positions of
                               such official.” However, neither IRC section 162(e) nor its regulations
                               define what is meant by “official actions or positions,” thus leaving the
                               interpretation of what activities to count up to the lobbyist. Some lobbyists
                               might consider an official action to be almost anything a federal official
                               does while at work, while others might consider that official actions must
                               be more formal actions, such as those requiring the signing of official
                               documents.

                               LDA contains 19 exceptions to the definition of lobbying and IRC sections
Exceptions to the              4911 and 162(e) contain 5 and 7 exceptions, respectively. These exceptions
Lobbying Definitions           are listed in appendix III.

                               Although LDA includes an extensive list of exceptions, for the most part
                               these exceptions make technical clarifications in the law and do not
                               provide special exceptions for particular groups. Many of the LDA
                               exceptions are for contacts made during the participation in routine
                               government business, and some of these are for contacts that would be
                               part of the public record. For example, these include (1) contacts made in



                               Page 36                                  GAO/GGD-99-38 Federal Lobbying Definitions
Appendix I
Comparisons of LDA and IRC Definitions




response to a notice in the Federal Register soliciting communications
from the public and (2) a petition for agency action made in writing and
required to be a matter of public record pursuant to established agency
procedures. Other exceptions are for contacts dealing with confidential
information, such as contacts “not possible to report without disclosing
information, the unauthorized disclosure of which is prohibited by law.”

LDA includes four exceptions for particular groups, including an exception
for contacts made by public officials acting in an official capacity; an
exception for representatives of the media making contacts for news
purposes; an exception for any contacts made by certain tax-exempt
religious organizations; and an exception for contacts made with an
individual’s elected Member of Congress or the Member’s staff regarding
the individual’s benefits, employment, or other personal matters.

Of the five exceptions to the IRC section 4911 lobbying definition, two
could allow a significant amount of lobbying expenses to be excluded from
IRC section 4911 coverage. The first is an exception for making available
the results of nonpartisan analysis, study, or research. Due to this
exception, IRC section 4911 does not cover 501(c)(3) organizations’
advocacy on legislation as long as the organization provides a full and fair
exposition of the pertinent facts that would enable the public or an
individual to form an independent opinion or conclusion.

The second significant exception under IRC section 4911 is referred to as
the self-defense exception. This exception excludes from coverage
lobbying expenses related to appearances before, or communications to,
any legislative body with respect to a possible decision of such body that
might affect the existence of the organization, its powers and duties, tax-
exempt status, or the deduction of contributions to the organization.
According to IRS officials, this exception provides that a 501(c)(3)
nonprofit tax-exempt organization can lobby legislative branch officials on
matters that might affect its tax-exempt status or the activities it can
engage in without losing its tax exempt status, and such lobbying will not
be counted under the IRC section 4911 definition. According to IRS
officials, this exception does not cover lobbying on state or federal
funding.

The IRC section 162(e) definition has one exception in the statute, which is
for contacts with local government legislative branch officials on
legislation of direct interest to the organization. In addition, IRC section
162(e) has seven exceptions, which are provided for by Treasury
Regulations. These seven exceptions provide technical clarifications to the



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Appendix I
Comparisons of LDA and IRC Definitions




statutory provisions and do not appear to exclude a significant amount of
expenses that would be counted as lobbying expenses under the other
lobbying definitions. For example, the IRC section 162(e) exceptions
include (1) any communication compelled by subpoena, or otherwise
compelled by federal or state law; and (2) performing an activity for
purposes of complying with the requirements of any law.




Page 38                                  GAO/GGD-99-38 Federal Lobbying Definitions
Appendix II

Coverage of Different Contacts, Activities,
and Expenses Under the Three Definitions of
Lobbying
                                                   This appendix contains detailed information about which contacts,
                                                   activities, and expenses are covered under the definitions of lobbying for
                                                   LDA, IRC section 4911, and IRC section 162(e). Table II.1 shows the
                                                   coverage of federal lobbying. Table II.2 shows the coverage of state
                                                   lobbying, and table II.3 shows the coverage of local lobbying.

Table II.1: Coverage of Federal Lobbying

Contacts, activities, and expenses                                                     Covered under
                                                                 LDA                  IRC section 4911          IRC section 162(e)
Efforts in support of lobbying contacts,                       Yes                        Yes                         Yes
including preparation and planning activities,                 2 U.S.C. 1602 (7)          Treas. Reg. §               26 U.S.C.
research, and other background work                                                       56.4911-3(a)                162(e)(5)(C)
Contacts to influence legislation
  Contacts with legislative branch officials
   Members of Congress                                         Yes                        Yes                         Yes
                                                               2 U.S.C.                   26 U.S.C.                   26 U.S.C.
                                                               1602(8)(A)(i) &            4911(d)(1)(B)               162(e)(1)(A) &
                                                               (4)(A)                                                 (4)(A)
  Employees of Congress                                        Yes                        Yes                         Yes
                                                               2 U.S.C.                   26 U.S.C.                   26 U.S.C.
                                                               1602(8)(A)(i) &            4911(d)(1)(B)               162(e)(1)(A) &
                                                               (4)(C) & (D)                                           (4)(A)
 Contacts with executive branch officials
                                                                                              a                           a
  President, Vice President; Executive                         Yes                        Yes                         Yes
  Schedule level I, cabinet-level officials, and               2 U.S.C. 1602(8)           26 U.S.C.                   26 U.S.C.
  their immediate deputies                                     (A)(i) & (3)(A), (B)       4911(d)(1)(B)               162(e)(1)(A) &
                                                               & (D)                                                  (4)(A)
                                                                                              a                           a
  Executive Schedule levels II, III, IV, and V                 Yes                        Yes                         Yes
  (excluding cabinet-level officials and their                 2 U.S.C. 1602(8)           26 U.S.C.                   26 U.S.C.
  immediate deputies)                                          (A)(i) & (3)(D)            4911(d)(1)(B)               162(e)(1)(A) &
                                                                                                                      (4)(A)
                                                                                              a                           a
  Uniformed services at or above O-7                           Yes                        Yes                         Yes
                                                               2 U.S.C.                   26 U.S.C.                   26 U.S.C.
                                                               1602(8)(A)(i) &            4911(d)(1)(B)               162(e)(1)(A) &
                                                               (3)(E)                                                 (4)(A)
                                                                                              a                           a
  Officials serving in a confidential,                         Yes                        Yes                         Yes
  policymaking, or advocating position                         2 U.S.C.                   26 U.S.C.                   26 U.S.C.
  (Schedule C appointees)                                      1602(8)(A)(i) &            4911(d)(1)(B)               162(e)(1)(A) &
                                                               (3)(F)                                                 (4)(A)
                                                                                              a                           a
  Entire office of the Executive Office of the                 Yes                        Yes                         Yes
  President                                                    2 U.S.C.                   26 U.S.C.                   26 U.S.C.
                                                               1602(8)(A)(i) &            4911(d)(1)(B)               162(e)(1)(A) &
                                                               (3)(C)                                                 (4)(A)
                                                                                              a                           a
  White House Office of the Executive Office of                Yes                        Yes                         Yes
  the President                                                2 U.S.C.                   26 U.S.C.                   26 U.S.C.
                                                               1602(8)(A)(i) &            4911(d)(1)(B)               162(e)(1)(A) &
                                                               (3)(C)                                                 (4)(A)
                                                                                              a                           a
  The two most senior officers of each agency                  Yes                        Yes                         Yes
  in the Executive Office of the President                     2 U.S.C.                   26 U.S.C.                   26 U.S.C.
                                                               1602(8)(A)(i) &            4911(d)(1)(B)               162(e)(1)(A) &
                                                               (3)(C)                                                 (4)(A)




                                                   Page 39                                 GAO/GGD-99-38 Federal Lobbying Definitions
                                                   Appendix II
                                                   Coverage of Different Contacts, Activities, and Expenses Under the Three Definitions of
                                                   Lobbying




Contacts, activities, and expenses                                                          Covered under
                                                                  LDA                      IRC section 4911             IRC section 162(e)
                                                                       b
   Contacts with any executive branch officials                  Maybe                         Yes                            Yes
   who may participate in the formulation of                                                   26 U.S.C.                      26 U.S.C.
   legislation                                                                                 4911(d)(1)(B)                  162(e)(1)(A) &
                                                                                                                              (4)(A)
Contacts to influence rules, regulations,
or executive orders
 Contacts with legislative branch officials
   Members of Congress                                           Yes                           No                             No
                                                                 2 U.S.C.
                                                                 1602(8)(A)(ii) &
                                                                 (4)(A)
   Employees of Congress                                         Yes                           No                             No
                                                                 2 U.S.C.
                                                                 1602(8)(A)(ii) &
                                                                 (4)(C) & (D)
 Contacts with executive branch officials
                                                                                                                                     c
  President, Vice President; Executive                           Yes                           No                             Maybe
  Schedule level I, cabinet-level officials, and                 2 U.S.C.                                                     26 U.S.C.
  their immediate deputies                                       1602(8)(A)(ii) &                                             162(e)(1)(D) &
                                                                 (3)(A), (B) & (D)                                            (6)(A),(B) & (D)
   Executive Schedule levels II, III, IV, and V                  Yes                           No                             No
   (excluding cabinet-level officials and their                  2 U.S.C.
   immediate deputies)                                           1602(8)(A)(ii) &
                                                                 (3)(D)
   Uniformed services at or above O-7                            Yes                           No                             No
                                                                 2 U.S.C.
                                                                 1602(8)(A)(ii) &
                                                                 (3)(E)
   Officials serving in a confidential,                          Yes                           No                             No
   policymaking, or advocating position                          2 U.S.C.
   (Schedule C appointees)                                       1602(8)(A)(ii) &
                                                                 (3)(F)
   Entire office of the Executive Office of the                  Yes                           No                             No
   President                                                     2 U.S.C.
                                                                 1602(8)(A)(ii) &
                                                                 (3)(C)
                                                                                                                                     c
   White House Office of the Executive Office of                 Yes                           No                             Maybe
   the President                                                 2 U.S.C.                                                     26 U.S.C.
                                                                 1602(8)(A)(ii) &                                             162(e)(1)(D) &
                                                                 (3)(C)                                                       (6)(C)
                                                                                                                                     c
   The two most senior officers of each agency                   Yes                           No                             Maybe
   in the Executive Office of the President                      2 U.S.C.                                                     26 U.S.C.
                                                                 1602(8)(A)(ii) &                                             162(e)(1)(D) &
                                                                 (3)(C)                                                       (6)(C)
Contacts regarding the administration of a
program or policy
 Contacts with legislative branch officials
   Members of Congress                                           Yes                           No                             No
                                                                 2 U.S.C.
                                                                 1602(8)(A)(iii) &
                                                                 4(A)




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                                                   Lobbying




Contacts, activities, and expenses                                                          Covered under
                                                                   LDA                     IRC section 4911             IRC section 162(e)
   Employees of Congress                                         Yes                           No                             No
                                                                 2 U.S.C.
                                                                 1602(8)(A)(iii) &
                                                                 (4)(C) & (D)
 Contacts with executive branch officials
                                                                                                                                     c
  President, Vice President; Executive                           Yes                           No                             Maybe
  Schedule level I, cabinet-level officials, and                 2 U.S.C.                                                     26 U.S.C.
  their immediate deputies                                       1602(8)(A)(iii) &                                            162(e)(1)(D) &
                                                                 (3)(A), (B) & (D)                                            (6)(A), (B), & (D)
   Executive Schedule levels II, III, IV, and V                  Yes                           No                             No
   (excluding cabinet-level officials and their                  2 U.S.C.
   immediate deputies)                                           1602(8)(A)(iii) &
                                                                 (3)(D)
   Uniformed services at or above O-7                            Yes                           No                             No
                                                                 2 U.S.C.
                                                                 1602(8)(A)(iii) &
                                                                 (3)(E)
   Officials serving in a confidential,                          Yes                           No                             No
   policymaking, or advocating position                          2 U.S.C.
   (Schedule C appointees)                                       1602(8)(A)(iii) &
                                                                 (3)(F)
   Entire office of the Executive Office of the                  Yes                           No                             No
   President                                                     2 U.S.C.
                                                                 1602(8)(A)(iii) &
                                                                 (3)(C)
                                                                                                                                     c
   White House Office of the Executive Office of                 Yes                           No                             Maybe
   the President                                                 2 U.S.C.                                                     26 U.S.C.
                                                                 1602(8)(A)(iii) &                                            162(e)(1)(D) &
                                                                 (3)(C)                                                       (6)(C)
                                                                                                                                     c
   The two most senior officers of each agency                   Yes                           No                             Maybe
   in the Executive Office of the President                      2 U.S.C.                                                     26 U.S.C.
                                                                 1602(8)(A)(iii) &                                            162(e)(1)(D) &
                                                                 (3)(C)                                                       (6)(C)
Contacts with executive branch officials to
influence official actions or positions of the
officials
                                                                      d
   President, Vice President; Executive                          Yes                           No                             Yes
   Schedule level I, cabinet-level officials, and                2 U.S.C.                                                     26 U.S.C.
   their immediate deputies                                      1602(8)(A) &                                                 162(e)(1)(D) &
                                                                 (3)(A), (B) & (D)                                            (6)(A), (B), & (D)
                                                                      d
   Executive Schedule levels II, III, IV, and V                  Yes                           No                             No
   (excluding cabinet-level officials and their                  2 U.S.C.
   immediate deputies)                                           1602(8)(A) &
                                                                 (3)(D)
                                                                      d
   Uniformed services at or above O-7                            Yes                           No                             No
                                                                 2 U.S.C.
                                                                 1602(8)(A) &
                                                                 (3)(E)
                                                                      d
   Officials serving in a confidential,                          Yes                           No                             No
   policymaking, or advocating position                          2 U.S.C.
   (Schedule C appointees)                                       1602(8)(A) &
                                                                 (3)(F)




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                                                   Coverage of Different Contacts, Activities, and Expenses Under the Three Definitions of
                                                   Lobbying




Contacts, activities, and expenses                                                          Covered under
                                                                   LDA                     IRC section 4911             IRC section 162(e)
                                                                     d
   Entire office of the Executive Office of the                  Yes                           No                             No
   President                                                     2 U.S.C.
                                                                 1602(8)(A) &
                                                                 (3)(C)
                                                                     d
   White House Office of the Executive Office of                 Yes                           No                             Yes
   the President                                                 2 U.S.C.                                                     26 U.S.C.
                                                                 1602(8)(A) &                                                 162(e)(1)(D) &
                                                                 (3)(C)                                                       (6)(C)
                                                                     d
   The two most senior officers of each agency                   Yes                           No                             Yes
   in the Executive Office of the President                      2 U.S.C.                                                     26 U.S.C.
                                                                 1602(8)(A) &                                                 162(e)(1)(D) &
                                                                 (3)(C)                                                       (6)(C)
Contacts to influence the nomination or
confirmation of official subject to
                              e
confirmation by the Senate
 Contacts with legislative branch officials
  Members of Congress                                            Yes                           Yes                            Yes
                                                                 2 U.S.C.                      26 U.S.C.                      26 U.S.C.
                                                                 1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (4)(A)                                                       (4)(A)
   Employees of Congress                                         Yes                           Yes                            Yes
                                                                 2 U.S.C.                      26 U.S.C.                      26 U.S.C.
                                                                 1602(8)(A)(iv)                4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 &(4)(C) & (D)                                                (4)(A)
 Contacts with executive branch officials
                                                                                                    a                             a
  President, Vice President; Executive                           Yes                           Yes                            Yes
  Schedule level I, cabinet-level officials, and                 2 U.S.C.                      26 U.S.C.                      26 U.S.C.
  their immediate deputies                                       1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (3)(A), (B) & (D)                                            (4)(A)
                                                                                                    a                             a
   Executive Schedule levels II, III, IV, and V                  Yes                           Yes                            Yes
   (excluding cabinet-level officials and their                  2 U.S.C.                      26 U.S.C.                      26 U.S.C.
   immediate deputies)                                           1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (3)(D)                                                       (4)(A)
                                                                                                    a                             a
   Uniformed services at or above O-7                            Yes                           Yes                            Yes
                                                                 2 U.S.C.                      26 U.S.C.                      26 U.S.C.
                                                                 1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (3)(E)                                                       (4)(A)
                                                                                                    a                             a
   Officials serving in a confidential,                          Yes                           Yes                            Yes
   policymaking, or advocating position                          2 U.S.C.                      26 U.S.C.                      26 U.S.C.
   (Schedule C appointees)                                       1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (3)(F)                                                       (4)(A)
                                                                                                    a                             a
   Entire office of the Executive Office of the                  Yes                           Yes                            Yes
   President                                                     2 U.S.C.                      26 U.S.C.                      26 U.S.C.
                                                                 1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (3)(C)                                                       (4)(A)
                                                                                                    a                             a
   White House Office of the Executive Office of                 Yes                           Yes                            Yes
   the President                                                 2 U.S.C.                      26 U.S.C.                      26 U.S.C.
                                                                 1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (3)(C)                                                       (4)(A)
                                                                                                    a                             a
   The two most senior officers of each agency                   Yes                           Yes                            Yes
   in the Executive Office of the President                      2 U.S.C.                      26 U.S.C.                      26 U.S.C.
                                                                 1602(8)(A)(iv) &              4911(d)(1)(B)                  162(e)(1)(A)&
                                                                 (3)(C)                                                       (4)(A)




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                                          Appendix II
                                          Coverage of Different Contacts, Activities, and Expenses Under the Three Definitions of
                                          Lobbying




Contacts, activities, and expenses                                                         Covered under
                                                            LDA                           IRC section 4911                  IRC section 162(e)
 Attempts to influence the general public                  No                                 Yes                                 Yes
 regarding legislation, referenda, ballot                                                     26 U.S.C.                           26 U.S.C.
 initiatives, constitutional amendments, and                                                  4911(d)(1)(A) &                     162(e)(1)(C) &
 treaties                                                                                     (e)(2)                              (4)(B)

                                                                                                                                    26 U.S.C.
                                                                                                                                    4911(e)(2)
                                          a
                                           IRC sections 4911 and 162(e) do not specify which executive branch officials are covered when
                                          contacts are made to influence legislation. However, under IRC sections 4911(d)(1)(B) and
                                          162(e)(4)(A), if contacts are made to influence legislation with any government official or employee
                                          who may participate in the formulation of legislation, then those contacts fall under the IRC definitions
                                          of lobbying.
                                          b
                                           Contacts with executive branch officials are covered under LDA if the officials are on LDA’s list of
                                          covered executive branch officials. LDA has no requirement that executive branch officials must
                                          participate in the formulation of legislation for contacts with them to be covered.
                                          c
                                           IRC section 162(e) includes as lobbying “any direct communication with a covered executive branch
                                          official in an attempt to influence the official actions or positions of such official.” However, unlike LDA,
                                          this IRC section does not specifically name nonlegislative matters about which contacts with covered
                                          officials will be considered as lobbying. Further, it does not define what “official actions or positions”
                                          are.
                                          d
                                           LDA specifically names several nonlegislative matters, such as federal rules, regulations, executive
                                          orders, and the administration or execution of a federal program or policy, about which contacts with
                                          covered executive branch or legislative branch officials will be considered as lobbying. The provision
                                          that defines as lobbying “any direct communication with a covered executive branch official in an
                                          attempt to influence the official actions or positions of such official” is from IRC section 162(e).
                                          e
                                           According to IRS officials, contacts to influence the nomination or confirmation of an official subject to
                                          confirmation by the Senate are considered to be contacts to influence legislation under IRC sections
                                          4911 and 162(e). See Treasury Regulations 1.162-20(b)(ii)(3) and 56.4911-2(b)(4)(ii)(B) example 6.




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                                                Coverage of Different Contacts, Activities, and Expenses Under the Three Definitions of
                                                Lobbying




Table II.2: Coverage of State Lobbying
Contacts, activities, and expenses                                                      Covered under
                                                                LDA                    IRC section 4911             IRC section 162(e)
Efforts in support of lobbying contacts,                        No                          Yes                           Yes
including preparation and planning activities,                                              Treas. Reg. §                 26 U.S.C.
research, and other background work                                                         56.4911-3(a)                  162(e)(5)(C)
Contacts to influence legislation
  Contacts with legislative branch officials
   Members of state legislature                                 No                          Yes                           Yes
                                                                                            26 U.S.C.                     26 U.S.C.
                                                                                            4911(d)(1)(B) &               162(e)(1)(A) &
                                                                                            (e)(2)                        (4)(A)
  Employees of state legislature                                No                          Yes                           Yes
                                                                                            26 U.S.C.                     26 U.S.C.
                                                                                            4911(d)(1)(B) &               162(e)(1)(A) &
                                                                                            (e)(2)                        (4)(A)
 Contacts with executive branch officials who                   No                          Yes                           Yes
 may participate in the formulation of legislation                                          26 U.S.C.                     26 U.S.C.
                                                                                            4911(d)(1)(B) &               162(e)(1)(A) &
                                                                                            (e)(2)                        (4)(A)
Contacts to influence rules, regulations, or                    No                          No                            No
executive orders
Contacts regarding the administration of a                      No                          No                            No
program or policy
Contacts with executive branch official to                      No                          No                            No
influence official actions or positions of the
official
  Attempts to influence the general public                      No                          Yes                           Yes
  regarding legislation, referenda, ballot                                                  26 U.S.C.                     26 U.S.C.
  initiatives, and constitutional amendments                                                4911(d)(1)(A) &               162(e)(1)(C ) &
                                                                                            (e)(2)                        (4)(B)

                                                                                                                          26 U.S.C.
                                                                                                                          4911(e)(2)




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                                                Lobbying




Table II.3: Coverage of Local Lobbying
Contacts, activities, and expenses                                                                  Covered under
                                                                        LDA                      IRC section 4911                  IRC section 162(e)
Efforts in support of lobbying contacts,                           No                              Yes                                 Yes
including preparation and planning activities,                                                     Treas. Reg. §                       26 U.S.C.
research and other background work                                                                 56.4911-3(a)                        162(e)(5)(C)
Contacts to influence legislation
                                                                                                                                                a
  Contacts with legislative branch officials                       No                                Yes                                Maybe
                                                                                                     26 U.S.C.                          26 U.S.C.
                                                                                                     4911(d)(1)(B) &                    162(e)(1)(A) &
                                                                                                     (e)(2)                             (e)(4)(A) & (e)(2)
                                                                                                                                               a
  Members of local council                                         No                                Yes                                Maybe
                                                                                                     26 U.S.C.                          26 U.S.C.
                                                                                                     4911(d)(1)(B) &                    162(e)(1)(A) &
                                                                                                     (e)(2)                             (e)(4)(A) & (e)(2)
                                                                                                                                               a
  Employees of local council                                       No                                Yes                                Maybe
                                                                                                     26 U.S.C.                          26 U.S.C.
                                                                                                     4911(d)(1)(B) &                    162(e)(1)(A) &
                                                                                                     (e)(2)                             (e)(4)(A) & (e)(2)
 Contacts with executive branch officials who                      No                                Yes                                Yes
 may participate in the formulation of legislation                                                   26 U.S.C.                          26 U.S.C.
                                                                                                     4911(d)(1)(B)                      162(e)(1)(A) &
                                                                                                                                        (e)(4)(A)
Contacts to influence rules, regulations, or                       No                                No                                 No
executive orders
Contacts regarding the administration of a                         No                                No                                 No
program or policy
Contacts with executive branch official to                         No                                No                                 No
influence official actions or positions of the
official
Attempts to influence the general public                           No                                Yes                                Yes
regarding legislation, referenda, ballot                                                             26 U.S.C.                          26 U.S.C.
initiatives, and constitutional amendments                                                           4911(d)(1)(A) &                    162(e)(1)(C)&
                                                                                                     (e)(2)                             (e)(4)(B)

                                                                                                                                        26 U.S.C.
                                                                                                                                        4911 (e)(2)
                                                a
                                                 IRC section 162(e)(2) includes an exception for lobbying local government legislative branch officials
                                                concerning legislation that is of direct interest to the taxpayer. Therefore, only contacts with local
                                                government legislative branch officials about legislation that is not of direct interest to the taxpayer are
                                                covered by the IRC section 162(e) lobbying definition.




                                                Page 45                                               GAO/GGD-99-38 Federal Lobbying Definitions
Appendix III

Exceptions to the LDA and IRC Lobbying
Definitions

                                                           1
                        Title 2 of the United States Code contains 19 exceptions to LDA’s lobbying
Exceptions to the LDA   definition. Under Title 2, the term “lobbying contact” does not include a
Lobbying Definition     communication that is:

                        1. made by a public official acting in the public official’s official capacity;

                        2. made by a representative of a media organization if the purpose of the
                        communication is gathering and disseminating news and information to
                        the public;

                        3. made in a speech, article, publication, or other material that is
                        distributed and made available to the public, or through radio, television,
                        cable television, or other medium of mass communication;

                        4. made on behalf of a government of a foreign country or a foreign
                        political party and disclosed under the Foreign Agents Registration Act of
                              2
                        1938;

                        5. a request for a meeting, a request for the status of an action, or any other
                        similar administrative request, if the request does not include an attempt to
                        influence a covered executive branch official or a covered legislative
                        branch official;

                        6. made in the course of participation in an advisory committee subject to
                        the Federal Advisory Committee Act;

                        7. testimony given before a committee, subcommittee, or task force of
                        Congress, or submitted for inclusion in the public record of a hearing
                        conducted by such committee, subcommittee, or task force;

                        8. information provided in writing in response to an oral or written request
                        by a covered executive branch official or a covered legislative branch
                        official for specific information;

                        9. required by subpoena, civil investigative demand, or otherwise
                        compelled by statute, regulation, or other action of Congress or an agency,
                        including any communication compelled by a federal contract, grant, loan,
                        permit, or license;


                        1
                            2 U.S.C. 1602(8)(B).
                        2
                            22 U.S.C. 611 et seq.




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Appendix III
Exceptions to the LDA and IRC Lobbying Definitions




10. made in response to a notice in the Federal Register, Commerce
Business Daily, or other similar publication soliciting communications
from the public and directed to the agency official specifically designated
in the notice to receive such communications;

11. not possible to report without disclosing information, the unauthorized
disclosure of which is prohibited by law;

12. made to an official in an agency with regard to—(1) a judicial
proceeding or a criminal or civil law enforcement inquiry, investigation, or
proceeding; or (2) a filing or proceeding that the government is specifically
required by statute or regulation to maintain or conduct on a confidential
basis–if that agency is charged with responsibility for such proceeding,
inquiry, investigation, or filing;

13. made in compliance with written agency procedures regarding an
adjudication conducted by the agency under section 554 of Title 5 or
substantially similar provisions;

14. a written comment filed in the course of a public proceeding or any
other communication that is made on the record in a public proceeding;

15. a petition for agency action made in writing and required to be a matter
of public record pursuant to established agency procedures;

16. made on behalf of an individual with regard to that individual’s
benefits, employment, or other personal matters involving only that
individual, except that this clause does not apply to any communication
with—(1) a covered executive branch official, or (2) a covered legislative
branch official (other than the individual’s elected Members of Congress or
employees who work under such Member’s direct supervision)–with
respect to the formulation, modification, or adoption of private legislation
for the relief of that individual;

17. a disclosure by an individual that is protected under the amendments
                                                     3
made by the Whistleblower Protection Act of 1989 under the Inspector
                     4
General Act of 1978 or under another provision of law;




3
    5 U.S.C.A. sec. 1211 et seq.
4
    5 U.S.C.A. App. 3.




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                        Appendix III
                        Exceptions to the LDA and IRC Lobbying Definitions




                        18. made by (1) a church, its integrated auxiliary, or a convention or
                        association of churches that is exempt from filing a federal income tax
                        return under paragraph (2)(A)(i) of such section 6033(a) of Title 26, or (2)
                        a religious order that is exempt from filing a federal income tax return
                        under paragraph (2)(A)(iii) of such section 6033(a); and

                        19. between (1) officials of a self-regulatory organization (as defined in
                        section 3(a)(26) of the Securities Exchange Act) that is registered with or
                        established by the Securities and Exchange Commission as required by
                        that act or a similar organization that is designated by or registered with
                        the Commodities Future Trading Commission as provided under the
                        Commodity Exchange Act; and (2) the Securities and Exchange
                        Commission or the Commodities Future Trading Commission,
                        respectively, relating to the regulatory responsibilities of such organization
                        under the act.
                                                               5
                        Title 26 of the United States Code contains five exceptions to the lobbying
Exceptions to the IRC   definition in IRC section 4911. Under IRC section 4911, the term
Section 4911 Lobbying   “influencing legislation”, with respect to an organization, does not include:
Definition
                        1. making available the results of nonpartisan analysis, study, or research;

                        2. providing technical advice or assistance (where such advice would
                        otherwise constitute influencing of legislation) to a governmental body or
                        to a committee or other subdivision thereof in response to a written
                        request by such body or subdivision, as the case may be;

                        3. appearances before, or communications to, any legislative body with
                        respect to a possible decision of such body that might affect the existence
                        of the organization, its powers and duties, tax-exempt status, or the
                        deduction of contributions to the organization;

                        4. communications between the organization and its bona fide members
                        with respect to legislation or proposed legislation of direct interest to the
                        organization and such members, other than communications that directly
                        encourage the members to take action to influence legislation;

                        5. any communication with a government official or employee, other than
                        (1) a communication with a member or employee of a legislative body
                        (where such communication would otherwise constitute the influencing of


                        5
                            26 U.S.C. 4911(d)(2)




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                        Appendix III
                        Exceptions to the LDA and IRC Lobbying Definitions




                        legislation), or (2) a communication the principal purpose of which is to
                        influence legislation.
                                                                          6
                        Title 26 of the United States Code contains a single exception to the
Exceptions to the IRC   lobbying definition in IRC section 162(e):
Section 162(e)
Lobbying Definition     1. appearances before, submission of statements to, or sending
                        communications to the committees, or individual members, of local
                        councils or similar governing bodies with respect to legislation or
                        proposed legislation of direct interest to the taxpayer.

                        In addition, the Treasury Regulations contain eight exceptions:

                        2. any communication compelled by subpoena, or otherwise compelled by
                                             7
                        federal or state law;

                        3. expenditures for institutional or “good will” advertising which keeps the
                        taxpayer’s name before the public or which presents views on economic,
                        financial, social, or other subjects of a general nature but which do not
                                                                                             8
                        attempt to influence the public with respect to legislative matters;

                        4. before evidencing a purpose to influence any specific legislation—
                        determining the existence or procedural status of specific legislation, or
                        the time, place, and subject of any hearing to be held by a legislative body
                                                             9
                        with respect to specific legislation;

                        5. before evidencing a purpose to influence any specific legislation—
                        preparing routine, brief summaries of the provisions of specific legislation;

                        6. performing an activity for purposes of complying with the requirements
                        of any law;

                        7. reading any publications available to the general public or viewing or
                        listening to other mass media communications; and

                        8. merely attending a widely attended speech.

                        6
                            26 U.S.C. 162(e)(2)(B)(i).
                        7
                            Treasury Regulation section 1.162-29(b)(3).
                        8
                            Treasury Regulation Section 1.162-20(a)(2).
                        9
                         This exception and the following four exceptions are from Treasury Regulation Section 1.162-
                        29(c)(3).




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Appendix IV

Major Contributors to This Report


                        Richard W. Caradine, Assistant Director, Federal Management and
General Government      Workforce Issues
Division, Washington,   Terry L. Draver, Assignment Manager
D.C.                    Kathleen M. Peyman, Evaluator-in-Charge
                        Mary F. Ernsberger, Evaluator
                        Kiki Theodoropoulos, Evaluator

                        Alan N. Belkin, Assistant General Counsel
Office of the General   Rachel DeMarcus, Assistant General Counsel
Counsel                 Jessica A. Botsford, Senior Attorney




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