More on Lobbyist De-listing

Covington’s Political Law Update (hat tip again to Rick Hasen) also discusses the “de-listing” of lobbyist issue, stating as follows: 

“Many in Washington had interpreted the structure of the statute to mean that the 3-month period applies to the 20% time threshold, but not to the two-or-more-contacts requirement. The Clerk and Secretary apparently read this definition to mean that a lobbyist is an individual employed or retain for services that include more than one lobbying contact per quarter. If the Clerk and the Secretary stick to this view, individuals who have not had more than one contact in two consecutive quarters (and do not plan to in the future) can de-list, even if they still spend more than 20% of their time on lobbying activities. The Obama Administration’s restrictions on registered lobbyists has made the question of when a lobbyist can de-register more important than ever. Because the statutory basis for the Clerk and Secretary’s interpretation is somewhat dubious, it may be prudent to hold off a bit on de-listings until it is clear that they intend to stand by their interpretation.” 

Although the language of the new guidance seems quite clear, I think Covington’s caution is well-advised—it would be prudent to see if the Clerk and Secretary decide to reconsider this issue.

Lobbying Loophole?

            The Clerk of the House and Secretary of the Senate last week released new guidance on the requirements of the Lobbying Disclosure Act.  Among other things, this guidance addressed when a registrant may “terminate” a lobbyist (i.e., remove an individual from the list of persons who act as lobbyists on that registrant’s reports).  This is an issue that has become important only in the last couple of years, as being a “registered lobbyist” now involves both regulatory burdens and restrictions on one’s ability to obtain employment in the Obama Administration.   

            The new guidance states: “A registrant may remove a lobbyist only when (i) that individual’s lobbying activities on behalf of that client did not constitute at the end of the current quarter, and are not reasonably expected in the upcoming quarter to constitute, 20 percent of the time that such employee is engaged in total activities for that client; or (ii) that individual did not in the current quarter and does not reasonably expect in the upcoming quarter to make more than one lobbying contact per quarter.” 

            As pointed out by the law firm of Caplin and Drysdale (hat tip: Rick Hasen’s Election Law Blog), this guidance is problematic because “[t]he LDA, as well as prior House and Senate guidance, make clear that an individual qualifies as a lobbyist by spending 20% of his/her time engaged in lobbying activities for a client in a calendar quarter and making two or more lobbying contacts over the course of services provided for that client (even if the second contact occurs in a later quarter). Thus, an individual qualifies as a lobbyist if he/she made two or more lobbying contacts at any point during their work for a client, and not merely in the current or subsequent calendar quarter.”   

            Under the new guidance, someone who has made more than one lobbying contact for a client in the past, and continues to spend more than 20 percent of his or her time on lobbying activities, could apparently be de-listed if he or she made no more than one lobbying contact in the current quarter and did not expect to make more than one in the upcoming quarter.  This would essentially mean that one could be an unregistered lobbyist so long as one is careful to limit one’s lobbying contacts to one per quarter, though this would seem contrary to the language and prior interpretation of the LDA. 

            This would seem to open up a very significant new loophole in the LDA.