Congress Passes Sweeping Lobbying and Ethics Reforms

by Sam Kim, 8/7/2007

After a year-long debate and negotiations over enacting lobbying and ethics reforms, Congress finally passed the Honest Leadership and Open Government Act of 2007 (S. 1). While not an ideal set of reforms, the new law is the most significant lobbying and ethics reform in a decade and should make important strides in increasing accountability and transparency in Washington.The reform package, which overwhelmingly passed the House on July 31 (411-8) and the Senate on Aug. 2 (83-14), strengthens the Lobbying Disclosure Act and includes important earmark disclosure provisions that will allow the public to view the sponsors of congressional earmarks on the Internet. The legislation also requires the disclosure of coalitions that control lobbying efforts but protects the identity of donors and members, bans lobbyists from paying for travel or gifts for members of Congress and staff, strips pensions of members convicted of certain felonies, and contains a cooling-off period for staff and members of Congress before they can lobby their old offices again.
This bill was the top priority for Democratic leaders this year in Congress. After winning a majority in both the House and Senate in the wake of numerous bribery, earmarking and lobbying scandals in 2006, the Democrats made these reforms the first piece of legislation they undertook in the Senate, passing it 96-2 in January. A similar measure passed overwhelmingly in the House by a 396-22 margin on May 24.
Yet the momentum to pass the law stalled during the summer as the issues of bundling campaign contributions and the cooling off period for members and staff before moving into the private sector became highly contentious. Further complicating the negotiations, Sen. Jim DeMint (R-SC) wanted assurances that the conference between the House and Senate would keep strong earmark disclosure provisions, and when he did not receive them, he blocked appointment of conferees, effectively stalling, if not killing, the legislation.
While the Senate's earmark disclosure language was stronger than previously passed House rules, DeMint's actions forced Majority Leader Harry Reid (D-NV) and Speaker of the House Nancy Pelosi (D-CA) to compile a compromise bill outside of the conference committee structure and pass it again in both chambers. By passing identical bills, Congress did not need a conference and could send the legislation directly to the president for his signature. While this strategy ultimately succeeded, it removed some transparency from the drafting process and led to minor changes in legislative language in the bill that weakened it slightly.
The provision to have lobbyists disclose bundling of campaign contributions was softened by raising the dollar threshold and by reporting every six months instead of quarterly. The Senate agreed to have a two-year cooling off period from lobbying Congress when moving to the private sector; the House kept the current one-year period. There was also some additional controversy with DeMint and Sen. Tom Coburn (R-OK) claiming that the secret bill writing process resulted in weakening the earmarks provision.
Nonetheless, the final bill is a major step forward in reducing the "culture of corruption" that the Democrats talked about in last year's election. The bundling provision and two other provisions — a new database providing public access to data about lobbying and ethics, and an elimination of secret holds in the Senate — could have a significant impact on the way Washington operates.
At the same time, the new law is not perfect. One of the most glaring omissions from the lobbying and ethics reforms are provisions to require reporting of big money grassroots lobbying expenditures from lobbying campaigns. These disclosure rules would have revealed not only large spending campaigns seeking to influence legislation, but also the identity of groups or individuals who were behind the campaigns. Despite attempts in both the House and the Senate to pass tough grassroots lobbying provisions, neither chamber included the disclosure of this valuable information due in part to a misinformation campaign about the impact of the proposals.

Below are short descriptions of the major reforms in the legislation.
Stealth Coalitions
The new law addresses the problem of "stealth coalitions" — front groups with sympathetic sounding names that do not actually represent grassroots, community-based activism — by requiring registered lobbyists to disclose who is behind groups that:

  • contribute more than $5,000 to the registrant or their client in a quarterly period, and
  • "actively participates in the planning, supervision, or control of such lobbying activities".

The information disclosed includes the name, address and principal place of business of the organization behind the coalition. No disclosure of members or donors is required. In addition, if the organization being identified as affiliated with the client a registered lobbyist represents is publicly identified on the client's website, only the Internet address with that information needs to be disclosed, unless the affiliated group "in whole or in major part plans, supervises, or controls such lobbying activities."

Secret Holds
Ends the use of extended secret holds in the Senate by requiring a senator wishing to block a piece of legislation from going forward to identify him/herself within six session days.
Earmarks
One of the new reforms enacted with this law concerns earmark transparency and disclosure. All earmarked spending items and tax expenditures in bills, resolutions, conference reports and managers' statements must be identified and posted on the Internet at least 48 hours before a vote on the underlying legislation. Legislators must also certify that they and their immediate family will not financially benefit from any earmarks they've requested. Earmarks that suddenly appear in a conference report — i.e., not approved by either chamber — are now subject to a 60-vote point of order in the Senate. The new point of order rules are critical because they allow for the underlying bill to continue to be considered even when striking a specific provision. This is a vast improvement over the old rules where attempting to strike one small provision would send the entire legislation back to the conference committee.

Lobby Disclosure/Bundling of Campaign Contributions
Strengthens the Lobbying Disclosure Act by requiring quarterly rather than semi-annual filing of lobby disclosure reports, disclosure of contributions from lobbyists to federal candidates and leadership PACs, and increasing civil and criminal penalties for failure to comply with disclosure requirements and the Lobbying Disclosure Act. Lobbyists are required to file reports electronically.
The new law creates a searchable website containing all registrations and reports required by the Lobbying Disclosure Act with the data being downloadable. The searchable website must also provide links or "other appropriate mechanisms" to have users obtain data from the Federal Election Commission on campaign contributions. (The Attorney General is required to develop a similar searchable database for information collected from lobbyists for foreign governments.)

One of the most controversial provisions requires congressional and presidential candidates to report when lobbyists arrange donations and deliver them as bundled contributions. The reports are required when the bundles reach $15,000 during a six-month period, thresholds that are weaker than earlier versions of the House bill.
Revolving Door
The bill extends from one to two years the "cooling off" period during which senators must wait before they can lobby their colleagues (the House will retain a one-year moratorium on such activities). It also requires all members to publicly disclose any job negotiations while serving in Congress and requires senior staff to disclose to the Ethics Committee any employment negotiations. The bill would also ban senior House and Senate staff (anyone making 75 percent of their boss's salary) from lobbying anyone in Congress for one year, not just his/her former office or committee.
Gifts and Travel
Senators, House members and presidential candidates would have to start paying the equivalent of charter fares for rides on private planes (and require pre-approval of privately funded travel), and representatives, senators and staff members would be barred from accepting gifts and meals from lobbyists. Further, the legislation bans lobbyists from hosting parties in honor of members at national party conventions.
Other Key Items
The House will create a searchable website with data that can be downloaded on travel and financial disclosure.
The Senate requires all committee and subcommittee meetings to be publicly available through the Internet — in the form of a video recording, audio recording or transcript — within 21 business days of the meeting. Additionally, there is a nonbinding sense of the Senate that all conference committees should be open to the public and that conferees should be given adequate notice of time and place of the meetings.