SWEARING COMPLIANCE UNDER THE NEW FEDERAL LOBBYING LAW: ARE YOU READY? Larry Norton and Jim Kahl Womble Carlyle Sandridge & Rice PLLC Washington, D.C.

SWEARING COMPLIANCE UNDER THE SWEARING COMPLIANCE UNDER THE NEW FEDERAL LOBBYING LAW:NEW FEDERAL LOBBYING LAW:

ARE YOU READY?ARE YOU READY?

Larry Norton and Jim KahlLarry Norton and Jim KahlWomble Carlyle Sandridge & Rice PLLCWomble Carlyle Sandridge & Rice PLLC

Washington, D.C. Washington, D.C.

AGENDAAGENDA

I. NEW LOBBYING LAWI. NEW LOBBYING LAW Overview Overview

II. THE NEW REPORT II. THE NEW REPORT OverviewOverview Who FilesWho Files How to FileHow to File

III. COMPLETING THE LD-203III. COMPLETING THE LD-203

IV. QUESTIONSIV. QUESTIONS

HONEST LEADERSHIP & OPEN HONEST LEADERSHIP & OPEN GOVERNMENT ACT GOVERNMENT ACT

OF 2007OF 2007

• Gift rules apply to Gift rules apply to private sectorprivate sector

• Gift ban for registrants Gift ban for registrants andand individual lobbyists individual lobbyists

• Quarterly reportsQuarterly reports

• ““Sarbanes-Oxley type” Sarbanes-Oxley type” certificationcertification

COMPLIANCE WITH THE COMPLIANCE WITH THE GIFT BANGIFT BAN

• Old RuleOld Rule: $50/gift and $100/year: $50/gift and $100/year

• New RuleNew Rule: No gifts from lobbyists, : No gifts from lobbyists, and organizations that employ or and organizations that employ or retain themretain them

• Exceptions are available; must Exceptions are available; must meet one of themmeet one of them

WHAT IS A GIFT?WHAT IS A GIFT?

• Anything of valueAnything of value• Meals, Hospitality, EntertainmentMeals, Hospitality, Entertainment• Tickets to events, galas, games, Tickets to events, galas, games,

dinnersdinners• Valuable commemorative items, such Valuable commemorative items, such

as expensive pens; designer desk as expensive pens; designer desk accessories; wine/spirits; clothingaccessories; wine/spirits; clothing

• Transportation and lodgingTransportation and lodging

TOUGHER SANCTIONSTOUGHER SANCTIONS

• Raised the stakes Raised the stakes

• Random AuditsRandom Audits

• Increased civil Increased civil penalties penalties

• Felony – intentional Felony – intentional violationsviolations

FORMAL SANCTIONS MAY FORMAL SANCTIONS MAY NOT BE THE WORST THING NOT BE THE WORST THING

THAT CAN HAPPENTHAT CAN HAPPEN

• Information is in the public domain Information is in the public domain

• Will be scrutinized by press, Will be scrutinized by press, competitors, and watchdog groupscompetitors, and watchdog groups

• Damage to reputationDamage to reputation

RISK MANAGEMENTRISK MANAGEMENT

Compliance Compliance

Program Program

Involve relevant Involve relevant personnelpersonnel

Encourage Encourage questionsquestions

THE NEW FORM: THE NEW FORM: LD-203 OVERVIEWLD-203 OVERVIEW

• Registrants Registrants andand lobbyist must file lobbyist must file separateseparate reports reports

• Disclose political contributions and other Disclose political contributions and other expenses expenses

• Certify (registrant and lobbyist): Certify (registrant and lobbyist): ““read and familiar with” gift rules read and familiar with” gift rules ““have not provided” gifts that violate have not provided” gifts that violate

House & Senate rulesHouse & Senate rules

FILING THE FORMFILING THE FORM

• Electronic filing requiredElectronic filing required

• Filing deadlinesFiling deadlines

July 30July 30: covers Jan 1 to June 30: covers Jan 1 to June 30

January 30January 30: covers July 1 to Dec 31: covers July 1 to Dec 31

HOW TO FILE: HOW TO FILE: REGISTRANTSREGISTRANTS

• Access system using Access system using (https://ld.congress.gov:4433/LC/)(https://ld.congress.gov:4433/LC/) & & enter Senate user ID and enter Senate user ID and passwordpassword

• System is interactive – create new System is interactive – create new filings, open saved filings, and filings, open saved filings, and amend a previous filingamend a previous filing

• One click - form is filed with House One click - form is filed with House & Senate & Senate

HOW TO FILE: HOW TO FILE: LOBBYISTSLOBBYISTS

• The registrant (i.e., employer) must The registrant (i.e., employer) must verify lobbyist’s information – verify lobbyist’s information – correct e-mail addresscorrect e-mail address

• E-mail is automatically sent to E-mail is automatically sent to individual lobbyistsindividual lobbyists

• Lobbyist verifies information & Lobbyist verifies information & creates own account passwordcreates own account password

BUT I DIDN’T LOBBY THIS BUT I DIDN’T LOBBY THIS YEAR . . .YEAR . . .

• If you are “active” in the reporting If you are “active” in the reporting period, you must file LD-203period, you must file LD-203

• If no longer employed as a If no longer employed as a lobbyist, must file for any reporting lobbyist, must file for any reporting period for which you were active period for which you were active

DIDN’T GET AN E-MAIL?DIDN’T GET AN E-MAIL?

• Current or former employer did not Current or former employer did not activate your accountactivate your account

• Contact and request activationContact and request activation

• Don’t want to contact old boss? Don’t want to contact old boss? Call the House Legislative Call the House Legislative Resource Center - 202-226-5200Resource Center - 202-226-5200

CAUTION!CAUTION!

• Registrant can add a new lobbyist Registrant can add a new lobbyist on LD-203on LD-203

• Lobbyist can update own LD-203 Lobbyist can update own LD-203 account to reflect new employeraccount to reflect new employer

• But -- neither change is effective But -- neither change is effective until an LD-1 or LD-2, as until an LD-1 or LD-2, as appropriate, is filed by registrantappropriate, is filed by registrant

NEW OBLIGATIONSNEW OBLIGATIONSNEW INFORMATIONNEW INFORMATION

• Registrants and lobbyists disclose Registrants and lobbyists disclose contributions and payments in contributions and payments in separate filingsseparate filings

• New information: disclosure not New information: disclosure not previously requiredpreviously required

DISCLOSURE OF POLITICAL DISCLOSURE OF POLITICAL CONTRIBUTIONSCONTRIBUTIONS

Political contributions $200 + to:Political contributions $200 + to:• Federal candidates and officeholdersFederal candidates and officeholders• Political party committeesPolitical party committees• Leadership PACs Leadership PACs • Presidential libraries Presidential libraries • Presidential inaugural committeesPresidential inaugural committees

DISCLOSURE OF NON-DISCLOSURE OF NON-POLITICAL COSTS AND POLITICAL COSTS AND

DONATIONSDONATIONS

• Event to honor or recognize covered Event to honor or recognize covered leg/exec officialleg/exec official

• Entity named for covered leg officialEntity named for covered leg official• Entity established, financed, maintained Entity established, financed, maintained

or controlled by covered leg/exec officialor controlled by covered leg/exec official• Entity designated by leg/exec official Entity designated by leg/exec official • Meetings held by or in the name of a Meetings held by or in the name of a

covered leg/exec official covered leg/exec official

WHO ARE COVERED WHO ARE COVERED LEGISLATIVE OFFICIALS?LEGISLATIVE OFFICIALS?

• Members of CongressMembers of Congress• Any employee of Member of Any employee of Member of

Congress, committee of House or Congress, committee of House or Senate, working group or caucus Senate, working group or caucus providing assistance to membersproviding assistance to members

• Elected officers Elected officers • Position described in Ethics in Position described in Ethics in

Government Act of 1978Government Act of 1978

WHO ARE COVERED WHO ARE COVERED EXECUTIVE OFFICIALS?EXECUTIVE OFFICIALS?

• President and Vice-PresidentPresident and Vice-President

• Officer/Employee in Executive Officer/Employee in Executive Office of the PresidentOffice of the President

• Executive Schedule I-VExecutive Schedule I-V

• Uniformed Services above O-7Uniformed Services above O-7

• Confidential or policy-making Confidential or policy-making position (Schedule C)position (Schedule C)

FECA CONTRIBUTIONSFECA CONTRIBUTIONS

• Contributions Contributions ≥ $200 to ≥ $200 to federal federal candidate or officeholder, candidate or officeholder, leadership PAC, or political party leadership PAC, or political party committeecommittee

• Date and amountDate and amount

• PAC contributions includedPAC contributions included

• Presidential inaugural committeesPresidential inaugural committees

TIPS FOR FECA TIPS FOR FECA CONTRIBUTIONSCONTRIBUTIONS

• Contributions Contributions equal toequal to $200 or $200 or greater (disclose greater (disclose to FEC only if to FEC only if overover $200) $200)

• Lobbyists who Lobbyists who serve as PAC serve as PAC treasurers or on treasurers or on PAC boardsPAC boards

TIP – VERY BROAD READING OF TIP – VERY BROAD READING OF “HONOR OR RECOGNIZE” “HONOR OR RECOGNIZE”

PROVISIONPROVISION• Costs of event Costs of event

where Member of where Member of Congress is speaker Congress is speaker or panelistor panelist

• Cost of tickets for Cost of tickets for event where event where Member is identified Member is identified on invitation, even on invitation, even as honorary co-hostas honorary co-host

• Local officials may Local officials may be there, toobe there, too

WHAT CATEGORY FITS?WHAT CATEGORY FITS?

• Ethics committees say must report Ethics committees say must report honoree and amount of funds paid honoree and amount of funds paid for a meeting, retreat, conference, for a meeting, retreat, conference, or other similar event held by, or in or other similar event held by, or in name of, 1 or more covered name of, 1 or more covered leg/exec branch officialsleg/exec branch officials

• Is this a “meeting expense” or an Is this a “meeting expense” or an “honorary expense?”“honorary expense?”

IS SOMETHING MISSING?IS SOMETHING MISSING?

• Payments to entities designated by Payments to entities designated by or established, financed, or established, financed, maintained or controlled by maintained or controlled by covered personscovered persons

• Not clear which category fits Not clear which category fits

THE “READ AND IS THE “READ AND IS FAMILIAR” REQUIREMENTFAMILIAR” REQUIREMENT

• LobbyistsLobbyists• Non-LobbyistsNon-Lobbyists• What kind of What kind of

training?training?• In what form?In what form?• Making updates Making updates

availableavailable• In-house or with In-house or with

outside supportoutside support

WHO WILL CERTIFY FOR WHO WILL CERTIFY FOR THE ORGANIZATION?THE ORGANIZATION?

• Certification Certification written entirely in written entirely in the first personthe first person

• Certifying on Certifying on behalf of which behalf of which employees?employees?

• No place on No place on form to sign and form to sign and take take responsibilityresponsibility

GOOD RECORDKEEPING IS GOOD RECORDKEEPING IS ESSENTIAL ESSENTIAL

• Must disclose even nominal Must disclose even nominal donations and event costs donations and event costs

• Covers payments to all sources, Covers payments to all sources, including charities, schools, including charities, schools, hotels, printers, other vendorshotels, printers, other vendors

• For each contribution, must For each contribution, must report date, recipient, and report date, recipient, and amountamount

• Pre-approval systemPre-approval system

COMPREHENSIVE COMPREHENSIVE COMPLIANCE PROGRAMCOMPLIANCE PROGRAM

• One size does not fit all! One size does not fit all!

• System to track legal System to track legal developmentsdevelopments

• Regular training & materials Regular training & materials updatedupdated

CONTACT INFOCONTACT INFO

Larry Norton: (202) 857-4429Larry Norton: (202) [email protected]@wcsr.com

Jim Kahl: (202) 857-4417Jim Kahl: (202) [email protected]@wcsr.com

Womble Carlyle Sandridge & Rice, PLLC Womble Carlyle Sandridge & Rice, PLLC Washington, D.C.Washington, D.C.