Federal Lobbying Disclosure

On this episode, we have issued ourselves a challenge… to make a relatively dry topic interesting for our listeners… What is that topic, you ask? The Federal Lobbying Disclosure Act (LDA)! We’ll talk about what it is, why you may NOT need to worry about it (unless you do), strategies for compliance, and how it all fits into earlier episodes in our lobbying series, at least for you 501(c)(3)s.      Our Lawyers  Tim Mooney  Natalie Ossenfort  Leslie Barnes     Quick Preamble   Lobbyists are not all mustache twirling villains you read about!   They’re civil rights groups trying to fight back against attempts to restrict voting for partisan gain  They’re environmental groups trying to improve water quality  They’re women’s and LGTQ health groups fighting for access to healthcare  So remember that anytime there are proposed changes in the laws for lobbying disclosure – the selling point is often the mustache twirling oil corporations and financial institutions… but these laws impact progressive champions too.     Overview of the FLDA  The FLDA requires individuals and organizations that lobby various federal officials, to register and report their lobbying activities once they meet designated thresholds.   Important thing 1: this is a totally different law than the tax code  Important thing 2: most nonprofits don’t trigger the thresholds  Important thing 3: this generally only covers direct lobbying of federal officials, so no state lobbying and no grassroots lobbying of any kind goes into the analysis. If you don’t directly lobby members of the federal government, keep listening and enjoy our witty banter, but don’t worry about having to register and report under this law.     Registration thresholds  An employee will make more than one lobbying contact on behalf of the organization;  An employee will spend more than 20% of their time on lobbying over any calendar three-month period; and  The organization will spend more than $14,000 on lobbying in a calendar quarter.  All three of these criteria must be met before the organization is required to register. For example, if an organization has an employee who makes multiple lobbying contacts and spends more than 20% of her time on lobbying between January and March, but the organization only spends $10,000 over that same period, the organization will not need to register.     Lobbying contacts – what counts toward that 20% and $14k?  Drafting/amending/writing/introducing any federal law (email, calls, meeting, tweets, etc)  Preparation for direct lobbying contacts such as strategizing on legislation that you are engaging on or monitoring legislation that you are activley engaging on.   But just routine monitoring of legislation w/o a plan to engage does not count toward to 20%  Nominations before the US Senate  Same thing for federal regulations (but let’s put a pin in that for you 501(c)(3)s!)   Administration of federal programs (awards, contracts, grants, loans, permits, etc.) (same pin for (c)(3)s!)    What counts as a lobbying expenditure?  In-house employee compensation spent on direct lobbying of federal covered officials  Portion of organization overhead attributed to federal lobbying  Payments to outside lobbying firms for federal lobbying   Part of membership dues that goes to federal lobbying    What doesn’t count for anyone?  Grassroots lobbying* (pin in this)  Testimony before Congress that is in the public record  Comments on regulations that’s part of ordinary notice and comment procedures       What about that pin for (c)(3)s?  You’ll notice for you 501(h) electors that the definitions of lobbying don’t really match… under the FLDA there’s registration and reporting requirements for advocacy before executive branch and military officials that don’t count under the IRS rules.  Special rule! If you’re a 501(h) elector you can use the 501(h) rules you know and love… that means you don’t have to count military or executive branch contacts unless they’d otherwise count under 501(h). And that’s a pretty high bar… remember it counts only if the executive branch official is “participating in the formulation” of a bill. So no regs count and really only super-high ranking officials are part of the discussion… POTUS when signing/vetoing, cabinet level officials who are writing bills that impact their portfolio. That’s about it.  If you opt to use the (h) election for the FDLA, then you also have to report your state and local lobbying and grassroots lobbying.     I’m a 501(c)(4)… can we use that exception too?   NO. You have to use the broader definitions under the FLDA! This means counting your lobbying contacts with executive, administrative and military branch officials.     Lobbying Activities – are we hitting that 20%/14k threshold?  The $14,000 threshold is organization-wide  The 20% threshold is for each individual. But only direct lobbying counts toward the 20%  What counts? Lobbying plus prep time/work for lobbying  That’s a pretty high bar… 1 in 5 working hours in a calendar quarter have to be lobbying in order to need to register/report  once you register, you report every quarter until you no longer work at the organization (delisting is a bit of a thing)  Strategy: if it’s an unusual time for federal lobbying outreach and you don’t foresee hitting the thresholds in the future, consider spreading the load out amongst staff. If this is a one-time effort, you won’t have to file quarterly with zeros in the fields until the end of time!     How do we register and report?  All electronic! LD-1 to register within 45 days of first hitting the thresholds  LD-2 and LD-203 for quarterly and semi-annual reports.   The quarterly reports are all about those lobbying contact details  Semi-annual reports – registered lobbyists are required to disclose a lot about which candidates they individually donate to.   We won’t go too much into this – the House and Senate LDA sites have reasonably decent instructions.   Trivia: you report your lobbying to the nearest $10k – so it’s not a super precise report!     Anything else we need to know?  The threshold dollar amount is increased every 4 years… we just had the latest increase in January so don’t look for a new one until 2025.  Some portions of HR1/S1 include lowering the thresholds but it’s not clear if this will pass as is. Stay tuned.     Resources  https://lobbyingdisclosure.house.gov  https://bolderadvocacy.org/2021/04/16/federal-lobbying-disclosure-act-registration-threshold-increased/  https://bolderadvocacy.org/resource/understanding-the-lobbying-disclosure-act-2/  https://bolderadvocacy.org/resource/lobbying-disclosure-act-thresholds/