The Rules Are the Same; So Are the Worries

Posted January 22, 2009 at 2:21pm

The 111th Congress will march forward largely under the ethics regime enacted by the previous Congress — and that may be a good thing, according to private-sector attorneys who specialize in ethics compliance. That’s because lobbyists, corporations and even Members are still grappling with how exactly to comply with the gift rules and disclosure requirements Congress imposed last year.

“Notwithstanding the fact that it is not as much in the news as it was last year, the message did get through to the private sector,” said Stefan Passantino, head of political law at McKenna Long & Aldridge. “All of those issues are still very much front of mind with the general counsels.”

The detailed new lobbying reporting requirements and gift regulations have created an active market for firms offering ethics counseling to lobbying firms and companies that hire lobbyists, as well as House and Senate offices, several attorneys said.

“My sense is there is a compliance industry that sprang up in the wake of the changes in the last Congress, and a lot of Members and staff availed themselves of that training and guidance,” said attorney Lee Blalack, a partner in the firm O’Melveny & Myers, who has represented several lawmakers including then-Sen. Bill Frist (R-Tenn.), then-Sen. Pete Domenici (R-N.M.) and former Rep. Duke Cunningham (R-Calif.).

Because Capitol Hill denizens adjusted to the new rules in the 2007-2008 cycle, Blalack said, he receives fewer “garden variety” questions, but he said he has yet to see a significant drop-off in ethics-regulation-related inquiries.

“While some of the issues changes have now been internalized … there’s still regular and frequent outreach from Members and staff, certainly with us and others,” Blalack said.

A Roll Call analysis of campaign spending records filed with the Federal Election Commission and provided by CQMoneyLine found House Members and Senators have increased spending on legal services more than 20 percent from the 2006 cycle to the 2008 cycle.

Based on expenditures identified by campaigns as “legal fees” or “legal services,” campaigns have increased spending from an average of $26,600 in 2004-2005, before more stringent ethics rules were enacted, to $33,600 in 2006-2007. Figures include only those candidates who won a seat in the 110th and 111th Congresses, respectively.

In addition, the conviction of former Sen. Ted Stevens (R-Alaska) for failing to report gifts on his annual financial disclosure forms and the ethics committee inquiry into errors on Rep. Charlie Rangel’s (D-N.Y.) disclosures have brought new attention to the Members’ reporting obligations.

Passantino said his sense is that while some Members may have previously delegated this reporting chore to lower-level staff, now they are “tasking their chief of staff to make sure that this gets done right.”

But Blalack noted that disclosure forms have long been subject to scrutiny, suggesting no increase in the number of offices newly seeking assistance on the documents.

“The fact that it got a lot of public attention because of those two particular cases is not unusual or new. Normally when there is an ethics compliance question, it typically does surround a particular financial issue,” he said.

The inauguration of President Barack Obama has also brought a whole new raft of questions as organizations tried to determine the rules for sponsoring inaugural celebrations. “People are still concerned about toothpicks,” Passantino said, a reference to the confusion over the new rules prohibiting Members of Congress and staff from eating more than light appetizers at sponsored events.

Cleta Mitchell, with the law firm Foley & Lardner, said lobbyists and corporations “have institutionalized” the rule changes that went into effect in the 110th Congress. “It may not be newsworthy but now it is the cost of doing business.”

The new rules passed in the Honest Leadership and Open Government Act “have changed the very nature of lobbying disclosure — before it was a disclosure law and now it is a regulatory framework,” she said, complete with mandatory random audits by the Government Accountability Office. Mitchell said any lobbying firms that are not at this point taking the new disclosure requirements seriously will snap to attention “when they get their GAO audit letters.”