More Light Is Shed on Requirements for Lobbying Registration
Q: As the president of a small local lobbying firm, I read with interest your last column about how it has recently become easier for lobbyists to terminate their registration. We are looking into whether any of our lobbyists can take advantage of the ruling you discussed allowing lobbyists to end their registration if they limit their government contacts to one per quarter for each client.
[IMGCAP(1)]My question, however, concerns the other criterion for registration. As I understand it, lobbyists can terminate registration if they spend less than 20 percent of their time on “lobbying activities.— We are unsure whether this limit applies to each of our employee’s total amount of work or on a client-by-client basis. Some of our employees spend less than 20 percent of their total time on “lobbying activities.— Does this mean they don’t need to register at all?
A: Thank you for your question. If the response to my previous column is any indication, there are quite a few lobbyists out there who are considering terminating their registration. This trend would not be surprising, given the increasing number of legal restrictions that apply to registered lobbyists but not to anyone else.
Before turning to your question, I need to make one important clarification, which has just occurred and will directly affect your plans. Under recently amended guidance, it is no longer the case that lobbyists can avoid registration merely by limiting their government contacts to one per quarter for each client.
To review, the Lobbying Disclosure Act requires you to remain registered as a lobbyist so long as you meet both of two criteria. The act’s first criterion is that you are “employed or retained by a client for financial or other compensation for services that include more than one lobbying contact.— Until recently, it was not clear what the applicable time period is for this limit of one lobbying contact. For example, what if you had two contacts for a client but they were several years apart?
The Secretary of the Senate and the Clerk of the House, who are each responsible for administering the registration process, have recently had a lot to say about this ambiguity. First, shortly before my last column, they issued guidance stating that the one-contact limit applies on a quarterly basis. Under that guidance, lobbyists could terminate their registration for a client if they did not have more than one lobbying contact in the previous quarter for that client and did not reasonably expect to have more than one in the upcoming quarter.
This guidance caused quite a stir in the legal community, as some political lawyers thought it conflicted with the very language of the Lobbying Disclosure Act. The guidance would have allowed lobbyists to avoid registration by strategically timing their lobbying contacts for each client so only one fell in each quarter of the year. The Secretary of Senate and Clerk of the House subsequently reconsidered the guidance and have now issued what they called a “clarification,— but what is in fact altogether new guidance.
This new guidance states that lobbyists may terminate their registration under the first criterion if they do not “reasonably expect to make further lobbying contacts.—
Your question, however, concerns not the first but the second criterion. As to this, the act states that you need not register for a given client if lobbying activities constitute less than 20 percent of your time. Under the act, “lobbying activities— means “lobbying contacts and efforts in support of such contacts, including preparation and planning activities, research and other background work that is intended, at the time it is performed, for use in contacts, and coordination with the lobbying activities of others.—
You have asked whether the 20 percent limit applies to your employees on a per-client basis or across all of the activities of each employee. If it were to apply across all of an employee’s activities, each employee would not need to register unless 20 percent or more of all of the time that the employee works for your firm is devoted toward lobbying activities. If, on the other hand, it were to apply on a per-client basis, each employee would need to register for any client for whom 20 percent or more of the time the employee devotes toward that one client consists of lobbying activities.
On this issue, the guidance is actually quite clear. As with the one-contact limit, the 20 percent threshold applies on a client-by-client basis. The guidance states that an individual must remain registered for a given client if lobbying activities “constitute at least 20 percent of the individual’s time in services for that client over any three-month period.— The guidance even bolds the word “that— to drive home the point.
As you well know, keeping track of whether your employees exceed the 20 percent limit for each of your firm’s clients requires good record-keeping. In an ideal world, your employees would record all of the time that they spend for each client, and someone would take care to distinguish between time spent on lobbying activities and all other time. This might be a pain in the neck. But, as I am sure you know, it would be a much bigger pain to be found to have violated the Lobbying Disclosure Act.
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.