When May Lobbyists Terminate Their Registration?

Posted June 15, 2009 at 1:53pm

Q: In the lobbying firm where I work, we are growing increasingly anxious about the litany of rules that we face as registered lobbyists. One of the questions we have discussed is whether we all need to go through the formal registration process. The thought is that if we have some employees who might not be required to register, perhaps at least they could be freed from all of the rules and obligations that apply to registered lobbyists. But we are unsure of the termination requirements. Once registered, when may lobbyists terminate their registration?

[IMGCAP(1)]A: Ever since the Lobbying Disclosure Act of 1995 created the lobbying registration system, the list of reasons someone would not want to register has continued to grow. For example, in 2007 the Honest Leadership and Open Government Act greatly expanded lobbyists’ disclosure obligations and also made it illegal for lobbyists to violate the Congressional gift and travel rules. More recently, President Barack Obama imposed additional restrictions on registered lobbyists, prohibiting them from joining his administration and limiting the contacts they may have with executive branch officials.

All of these restrictions have one thing in common. They only apply to registered lobbyists. The question on the minds of registered lobbyists like you, then, is: Is there any way I can terminate my registration and free myself of these legal risks?

It is a timely question as there is recent cause for hope. Guidance published just last week appears to relax the criteria governing when lobbyists must register and when they may terminate their registration. But, before getting to that guidance, let’s quickly review the criteria requiring registration.

Lobbyists must register four times per year — once in each quarter — for each client where the registration criteria are met for that quarter. Thus, a lobbyist has no choice but to be a “registered lobbyist— unless there is no client during a given quarter for whom the lobbyist meets the registration criteria. Conversely, a lobbyist may terminate his or her registration altogether only if, in a given quarter, the criteria are no longer met for any client.

There are two basic registration criteria, both of which must be met for registration to be required. First, of the total time that the lobbyist works for the client, at least 20 percent must be spent on “lobbying activities.— The definition of the term “lobbying activities— can be quite complicated and goes well beyond merely communicating with a government official on a client’s behalf. You should consider seeking further guidance for specific applications. Generally, however, an activity probably qualifies as a lobbying activity if its purpose is to support ongoing or future lobbying communications with government officials. This criterion applies on a quarterly basis to both the previous quarter as well as the upcoming one. The criterion is met either if the lobbyist exceeded the 20 percent mark in the previous quarter or if he reasonably expects to exceed the mark in the upcoming quarter.

The second registration criterion is that the lobbyist makes more than one “lobbying contact— on behalf of the client. Again, this term is not easily defined, so you should study the rules for specific applications. Broadly though, a lobbying contact is a communication with a legislative or executive branch official regarding official government actions such as the formulation of federal legislation, regulations and policies. While there is a long list of exceptions, the upshot is that most communications whose purpose is to influence officials regarding an official matter will qualify.

Until recently, there had been some uncertainty about the period of time during which the “one contact— limit applies. This is where the recent guidance comes in. Last week, the Clerk of the House and the Secretary of the Senate published guidance that appears to remove the uncertainty. It states that a lobbyist may terminate registration if he “did not in the current quarter and does not reasonably expect in the upcoming quarter to make more than one lobbying contact per quarter.—

For lobbyists who make many lobbying contacts per quarter on behalf of each client, this guidance is of little significance. However, for lobbyists who limit (or could afford to limit) their lobbying contacts on behalf of each client to just one per quarter, this guidance appears to allow a way out of registration and all the legal risks that come with it. Simply put: If you are a registered lobbyist and you have no client for whom you make more than one lobbying contact per quarter, you may be able to terminate your registration altogether.

But don’t rush off to terminate quite yet, because there may be a catch. Just as soon as this escape route has been opened, it may be closed off. Rumors abound that, as early as this week, the Clerk of the House and the Secretary of the Senate may revise the guidance regarding the “one contact— limit and adopt a more stringent standard. This is significant because the Clerk and the Secretary are responsible for administering the lobbying registration system.

Lobbyists considering terminating their registration would be wise to keep their eyes open. While open, the Clerk’s lobbying disclosure Web site would be a good place to look: lobbyingdisclosure.house.gov.

C. Simon Davidson is a partner with the law firm McGuireWoods LLP. Click here to submit questions. Readers should not treat his column as legal advice. Questions do not create an attorney-client relationship.