Lobbying law misses some K St. numbers

February includes an annual Washington ritual apart from the Presidents Day recess: the tallying of lobbying revenue totals. In the highly competitive world of K Street, firms anxiously await to see how they did in relation to their rivals.

But while firms act like ambitious law students checking class rank, some critics believe that the Lobbying Disclosure Act (LDA), the law that defines what activities a firm must report annually to Congress, hasn’t kept pace with the industry’s evolution. Firms now have public relations, strategic consulting, grassroots and federal marketing arms — all of which have the potential to influence public officials, but which often take place outside the public eye.

“The Lobbying Disclosure Act is a good starting point to understand how much money is being spent,” said Alex Knott, a political editor at the Center for Public Integrity, which maintains several lobbying databases. “But there are huge amounts of money that don’t get reported.”

The firms themselves are sympathetic to complaints about the limitations of the LDA, albeit for different reasons. Believing annual revenue rankings are a potential marketing tool for their own businesses, firms are quick to note other revenue streams that aren’t included in LDA figures — particularly if it’s been a bad year for lobbying.

The Senate has passed a bill to update the LDA, enacted in 1995, but — aside from a new requirement that lobbyists detail fundraising activities — the changes do not include expanding what type of activity should be reported.

The LDA defines “lobbying activities” to include lobbying contact with anyone working for Congress and certain high-ranking executive-branch officials. The definition includes activities to support such contacts, like research and “planning activities,” when the intention is to influence the formulation of legislation.

The statue’s lack of specificity makes for varied interpretations, said Larry Noble, the former executive director for the Center for Responsive Politics.

“You do have a real need out there for some bright lines and education,” said Noble, now a lawyer at Skadden, Arps, Slate, Meagher & Flom.

“There’s always a question of where an activity falls along these lines. When you have room for interpretation, some people are going to read the law more strictly than others.”

It is not clear under the LDA, for example, how much an association or firm spends on “issue advertising” (of the type found in this publication or on local television), even though it is intended to influence policy.

Associations that pay for such advertising would include it on expenses in tax forms, but these forms do not make plain what the issue is or which legislation the ad was trying to affect.

Federal marketing efforts — the pitching of a client’s product to a federal agency — are also undisclosed.

Lobbying at federal agencies should be included on LDA forms, but federal marketing activities are often not required by disclosure rules unless, said Pam Gavin, superintendent of Public Records, the firm is making a pitch to a senior political figure within the administration.

Meetings with procurement officials probably don’t fall under the LDA’s purview. While this activity is regulated by government procurement rules, agencies have different policies that determine, for example, whether public comments to proposed rules are posted online.

Grassroots efforts, too, are not reported on an LDA form. An effort in Congress to force greater disclosure of grassroots activity did not make the Senate’s LDA reform bill.

The Senate bill would require firms and other lobbying entities to file lobbying reports quarterly rather than semiannually. The bill also would require lobbyists to report campaign fundraising.

Gavin, who oversees LDA compliance, said the law was intended to provide the public with a general look at lobbying activities.

Requiring too-specific information presents a forest-and-trees problem, she said. Lobbying efforts could be obscured in an itemized list that includes a $10 cab ride to Capitol Hill.

“The whole idea is if my 16-year-old son wanted to do a report on who was lobbying [on an FDA bill], he should be able to go on the Internet and find out who is doing that,” Gavin said.

But government watchdogs contend that imprecise rules about what activities must be disclosed lead to less valuable information being reported on how special interests try to influence policy.

“There’s a lot of gray areas and, certainly, people who are willing to exploit it,” said Steve Ellis, vice president for programs at Taxpayers for Common Sense.

Lobbying firms are not necessarily hiding what they do. But firms often have different definitions of what to include in an LDA form. Some firms over-report.

“The firms ... have an incentive to inflate their numbers” to impress clients and chasten competitors, said Tim LaPira, of the Center for Responsive Politics.

If LDA numbers are down, firm representatives often point to the other areas of their public-policy business that are up.

Akin Gump Strauss Hauer & Feld’s lobbying revenues dipped nearly 9 percent last year from 2005, but its overall public-policy practice grew by 10 percent. The difference came from undertaking regulatory work that falls outside the LDA and from helping clients prepare for congressional oversight and investigations, a growth area for several firms under a new Democratic majority.

Cassidy & Associates made $24.6 million on lobbying in 2006, a drop of more than 11 percent year to year. (Its affiliate, The Rhoads Group, made another $4.8 million.)

But Cassidy also made nearly $1 million in what gets lumped as “other revenue” that is not included in LDA numbers. That includes money from its strategic-communications practice as well as its federal marketing work.

While all the firm’s revenues should be considered to get a picture of Cassidy’s business, however, lobbyists there don’t believe disclosure rules should be toughened.

“If you help them market to a federal agency, you are not advocating, you are marketing,” said Gregg Hartley, Cassidy vice chairman and chief operating officer.

Another big source of revenue for firms trying to influence public policy is lobbying on behalf of foreign governments. Firms report these revenues largely under the Foreign Agents Registration Act. But the reports are not as readily available online as LDA reports are, and there can be months-long lags between when a firm registers to lobby for a client and when the public could know.

“The LDA is just the tip of the iceberg,” the Center for Public Integrity’s Knott said.