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New Rule Trips Up Lobbyist-Tied PACs

Apparent computer glitches and confusion over new reporting rules for political action committees have ensnared some of the nation’s biggest lobbying organizations, which missed a campaign finance deadline by more than seven months.

Under new rules enacted by the Federal Election Commission this year, PACs are required to report before the end of March whether they are controlled by an entity that is registered to lobby. But such well-known lobbying groups as the National Mining Association, the Motion Picture Association of America and the National Community Pharmacists Association were among more than 800 PACs that failed to report their K Street ties by the deadline, according to an analysis by CQ MoneyLine.

Campaign finance experts say the lack of disclosure makes it hard to find out how much lobbying-related money is donated to Congressional candidates. Tracking those connections was a key part of the Honest Leadership and Open Government Act, which called for the new disclosures.

“Clearly what is going on here is that they don’t understand the law,” said Craig Holman, a lobbyist for Public Citizen, who worked for the HLOGA’s passage. “I would expect the FEC to send out a series of letters in response to these findings that all the disclosure reports are not being properly filed.”

Among the PACs that did not disclose their lobbying ties are some of the biggest spenders on lobbying in the past decade, including the Air Transportation Association of America, which has spent more than $39.2 million on lobbying since 1998, and the MPAA, which has reported almost $16.5 million over the decade.

K Street firms that did not disclose their PACs’ lobbying connections include Sidley Austin, which has lobbied on behalf of 40 clients and billed almost $3.8 million so far this year; Nelson Mullins Riley & Scarborough, which billed $3.6 million so far this year; and Crowell & Moring, which has taken in $3.3 million in lobbying fees this year.

Altogether, the 800-plus groups that did not file the proper forms with the FEC spent more than $1.7 billion lobbying the government since 1998. But campaign finance experts say it is unlikely that any of these PACs will be fined for not disclosing properly.

“There was never any intent to avoid registering a certain way,” said Andrew Paven of the lobbying firm O’Neill and Associates. The firm did not list its PAC as one controlled by a lobbying organization. O’Neill and Associates has received $1.6 million so far this year to lobby the federal government on behalf of various clients.

Paven said he was unaware of the technicalities of the new rules and would refile any missing paperwork. “The PAC is registered and so are all of us that lobby. ... It’ll get fixed,” he said.

Others said they filed the proper forms but somehow the information got lost in the shuffle when they were submitted to the FEC.

For instance, the science and technology company SAIC has spent more than $20 million on 35 contract lobbying firms since 1998, but the FEC had no record of SAIC’s lobbying ties. When contacted for this story, SAIC, the nation’s ninth-largest federal contractor, produced copies of forms that were dated and signed on March 19.

“SAIC was and is fully aware of the requirement under the Honest Leadership and Open Government Act of 2007 to file the amended FEC Form 1 by March 29 of this year,” SAIC spokeswoman Melissa Koskovich said in a written statement. “When we learned ... there was no record of this form, we worked immediately to refile.”

SAIC, the Air Transportation Association of America, the National Community Pharmacists Association and several other organizations filed new registration forms to bring their PACs into compliance after being contacted for this story.

SAIC, whose PAC donated $702,000 during the 2008 election cycle, used a computer-filing software service called Vocus to submit its documents to the FEC.

The National Mining Association, which has spent $35.2 million on lobbying in the past decade, also had a problem with Vocus, according to organization spokeswoman Carol Raulston.

“Apparently, Vocus got an error message saying that the material had been submitted but had not been filed,” she said. “But that error message was not seen or not communicated to us ... so we have refiled.”

But Frank Strong, director of public relations for Vocus, said his firm has not heard any such complaints.

“To the best of our knowledge, we have no record of any customer, including the two you mentioned, reporting an issue,” Strong said. “If you don’t push the send button, it doesn’t go through,” he added.

Other groups that missed the filing deadline by more than seven months have donated a significant amount of money so far this year to lawmakers, campaigns and other PACs. For instance, the National Community Pharmacists Association’s PAC has contributed $959,000, and the Chicago Mercantile Exchange Group’s PAC contributed $426,000 this cycle.

David Wenhold, president of the American League of Lobbyists, said the large number of missing FEC disclosure forms indicates a “systemic problem” in understanding the law by PACs.

“I don’t think there is anything nefarious going on out there,” said Wenhold, whose organization has spent much of the past two years educating lobbyists about the new filing requirements. “There will be an adjustment period, and once people understand what they need to do, all of the lobbyists will comply.”

Of course, some lobbying organizations did comply. Those that did acknowledge their lobbying ties donated more than $115 million — or 65 percent of all PAC money contributed — during the 2010 election cycle, according to a CQ MoneyLine analysis. That makes it clear, even with the 800 missing forms, that the majority of PAC money comes from groups that retain lobbyists to influence legislation and policy.

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