Lawyers’ complaints spur lobbying guidance review

Ethics and campaign finance lawyers around Washington are questioning new guidance issued by Congress on when lobbyists can terminate their registrations.

The lawyers believe guidance for the Lobbying Disclosure Act (LDA) issued by the House clerk and Senate secretary opens a new loophole for denizens of K Street to avoid lobbying restrictions imposed by the Obama administration. They also see the guidance as conflicting with the actual LDA.

“The guidance is not consistent with the plain wording of the statute,” said Kenneth Gross, partner at Skadden, Arps, Slate, Meagher & Flom, who advises clients on election and ethics law.

The complaints have led the two offices to review the new guidance, and Washington ethics lawyers are advising lobbyists not to de-register as lobbyists until the House clerk and Senate secretary complete their review.

The debate centers on when the LDA allows someone to de-register as a lobbyist. Under the new guidance, a lobbyist could de-register if he or she had not made more than one contact with government officials, including congressional aides or administration officials as well as members of Congress, over two consecutive quarters.

According to the LDA, lobbyists cannot de-register as long as they spend 20 percent of their time lobbying, even if they have less than two contacts during that same time period. An individual must register as a lobbyist if he spends 20 percent of his working time lobbying and contacts two or more government officials for a client.

Several lawyers believe the new guidance is in conflict with the LDA and could lead to many more terminations by lobbyists.

“When you make the two contacts for a client, even if they are 10 years apart, you have met the basic definition of being a lobbyist,” said Joe Birkenstock, a partner at Caplin & Drysdale.

“The guidance said basically if you stopped making contacts then you can de-register,” he said. “The problem is the statute does not say that.”

The question of when an individual can terminate his or her lobbying registration has become more pertinent since the Obama administration has taken its tough stance against lobbyists.

Soon after taking office, Obama issued an executive order that new hires could not work for agencies or on issues they lobbied on during the past two years. Obama also issued an executive memorandum ruling that any contacts between lobbyists and administration officials regarding stimulus funds had to be disclosed online to the public.

The target of both those moves were lobbyists registered under the LDA. Since then, lobbyists on K Street have begun to terminate their registrations in order to avoid running up against Obama’s new restrictions.

If the congressional guidance holds, it is expected that more and more lobbyists would terminate their registrations in order to obscure their activities.

“If the guidance holds, you could become a Svengali behind the scenes. You could direct the lobbying without registering and tell others what to do even if you are organizing the strategic lobbying effort,” Gross said.

Both the Senate secretary and House clerk said they are now reviewing the guidance because of the concerns from outside attorneys.

“These new questions have prompted us to review the guidance to ensure that there are no inadvertent loopholes,” said Beth Provenzano, deputy chief of staff for the Senate secretary’s office. She added that the guidance was thoroughly vetted with Senate and House institutional attorneys before it was issued.

“We are actively reviewing the issue to see if there is a problem,” said the House clerk’s office in a statement.

Because of the confusion resulting from the guidance, blue-chip law firms in Washington are advising their clients to wait for the House and Senate attorneys to complete their review before de-registering.

“The Obama administration’s restrictions on registered lobbyists has made the question of when a lobbyist can de-register more important than ever,” said Covington & Burling’s Political Law Update, published June 11. “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.”

Birkenstock, a former chief counsel for the Democratic National Committee, is doing the same and is advising his clients not to act on the guidance for now.

“You would have a tough set of circumstances. If someone de-registered based on that guidance, they could be exposed legally,” Birkenstock said.

Gross expects congressional lawyers will offer further clarification on the guidance once the review is complete.