OMB Watch has proposed a revised version of the grassroots lobbying disclosure provision that was dropped from S. 1, the Senate's ethics and lobbying reform bill. The text of the proposed amendment to the Lobbying Disclosure Act (LDA) follows a short explanation.
The most obvious change is re-naming the terms "grassroots lobbying" and "paid efforts to stimulate grassroots lobbying." The terms in the S. 1 are so different from the Internal Revenue Service (IRS) and most state disclosure definitions confusion would be inevitable. Specifically, "paid efforts to stimulate grassroots lobbying" is what the IRS considers to be grassroots lobbying (a message to the general public to take action on specific legislation), and "grassroots lobbying" is what the IRS would consider to be direct lobbying by grassroots people. To reduce confusion we propose the term "paid grassroots lobbying" to describe what would be covered by LDA, and what the bill described as "grassroots lobbying" to be exempted from that definition.
A great deal of misunderstanding stems from the language in Sec. 220 (b)(2), which is intended to ensure that paid grassroots lobbying does not count toward the threshold for LDA registration. But despite the stated intent of the sponsors, the Congressional Research Service has interpreted this to mean it "Excludes paid efforts to stimulate grassroots lobbying from the exemption from the registration requirement (thus, requiring LDA registration for such activities, regardless of low income or expenses)." (emphasis added) (See the CRS document here.) We have attempted to clarify this by moving the language to LDA Sec. 1603(a)(1) the General Rule, rather than 1603(a)(3), which has the exemptions.
The next biggest source of confusion is the definition of "grassroots lobbying firm." S. 1 makes a major distinction between grassroots lobbying firms and an organization that lobbies on its own behalf. However, use of the word 'client' as defined in Sec. 1602(2) sweeps organizations using their own staff into the definition of grassroots lobbying firm. The consequences are significant. Note that the definition of a lobbying firm in 1602(9) is limited to entities that lobby "on behalf of a client other than that person or entity." (Emphasis added) Our proposed clarification inserts this language into the definition of a grassroots lobbying firm, thereby limiting its application to entities that accept fees to conduct grassroots lobbying activities on behalf of another. This means that only clients, not donors, would be disclosed.
We hope this proposal makes it clear that a nonprofit would not have to register and report its grassroots lobbying expenditures just because it makes two lobbying contacts and communicates with more than 500 people who are not members, employees, officers or shareholders. The group would only have to register if:
- one or more of its employees spends more than 20 percent of his or her time on direct lobbying in a six month period and
- it spends $10,000 per quarter on direct lobbying.
Even for groups that must register under the LDA, the sponsors of S. 1 intended that groups must spend more than $25,000 per quarter on grassroots lobbying activities before reporting such activity. Our amendment also seeks to clarify this.
Proposed OMB Watch Revisions to Grassroots Lobbying Amendments to the Lobbying Disclosure Act
Based on Sec. 220 of S. 1
Note: new language is in italics.
To provide greater transparency in the legislative process.
SEC. 217. DISCLOSURE OF LOBBYING ACTIVITIES BY CERTAIN COALITIONS AND ASSOCIATIONS.
(a) In General- Section 4(b)(3)(B) of the Act (2 U.S.C. 1603(b)(3)(B)) is amended to read as follows:
(B) participates in a substantial way in the planning, supervision or control of such lobbying activities;.
(b) No Donor or Membership List Disclosure- Section 4(b) of the Act (2 U.S.C. 1603(b)) is amended by adding at the end the following:
`No disclosure is required under paragraph (3)(B) if it is publicly available knowledge that the organization that would be identified is affiliated with the client or has been publicly disclosed to have provided funding to the client, unless the organization in whole or in major part plans, supervises or controls such lobbying activities. Nothing in paragraph (3)(B) shall be construed to require the disclosure of any information about individuals who are members of, or donors to, an entity treated as a client by this Act or an organization identified under that paragraph.'.
SEC. 220. DISCLOSURE OF PAID GRASSROOTS LOBBYING.
(a) Definitions- Section 3 of the Act (2 U.S.C. 1602) is amended--
(1) in paragraph (7), by adding at the end of the following: `Lobbying activities include paid grassroots lobbying, but do not include grassroots lobbying.; and
(2) by adding at the end of the following:
(17) PAID GRASSROOTS LOBBYING-
(A) IN GENERAL- The term paid grassroots lobbying means any paid attempt in support of lobbying contacts on behalf of a client to influence the general public or segments thereof to contact one or more covered legislative or executive branch officials (or Congress as a whole) to urge such officials (or Congress) to take specific action with respect to a matter described in section 3(8)(A), except that such term does not include any communications by an entity directed ot its members, employees, officers, or shareholders.`
(B) PAID ATTEMPT TO INFLUENCE THE GENERAL PUBLIC OR SEGMENTS THEREOF- The term paid attempt to influence the general public or segments thereof' does not include an attempt to influence directed at less than 500 members of the general public.`
(C) EXCEPTION: PAID GRASSROOTS LOBBYING- The term 'paid grassroots lobbying' does not include
(i) voluntary efforts of members of the general public to communicate their own views on an issue to Federal officials or to encourage other members of the general public to do the same or
(ii) any communications by a entity directed to its members, employees, officers, or shareholders.
(iii) For purposes of this paragraph, a person or entity is a member of an entity if the person or entity--
(i) pays dues or makes a contribution of more than a nominal amount to the entity;
(ii) makes a contribution of more than a nominal amount of time to the entity;
(iii) is entitled to participate in the governance of the entity;
(iv) is 1 of a limited number of honorary or life members of the entity; or
(v) is an employee, officer, director or member of the entity.
(18) GRASSROOTS LOBBYING FIRM- The term `grassroots lobbying firm' means a person or entity that--
(A) is retained by 1 or more clients to engage in paid efforts to stimulate grassroots lobbying on behalf of such clients other than itself; and
(B) receives income of, or spends or agrees to spend, an aggregate of $25,000 or more for such efforts in any quarterly period.'.
(b) Registration- Section 4(a) of the Act (2 U.S.C. 1603(a)) is amended:
(1) at the end of (1) General rule add "Paid grassroots lobbying costs, other than by a grassroots lobbying firm, shall not be used to determine whether an entity meets this registration requirement."
(2) in the flush matter at the end of paragraph (3)(A), by adding at the end the following: `For the purposes of clauses (i) and (ii), the term 'lobbying activities' shall not include paid efforts to stimulate grassroots lobbying. and
(2) by inserting after paragraph (3) the following:
`(4) FILING BY GRASSROOTS LOBBYING FIRMS- Not later than 45 days after a grassroots lobbying firm first is retained by a client other than itself to engage in paid grassroots lobbying, such grassroots lobbying firm shall register with the Secretary of the Senate and the Clerk of the House of Representatives.'.
(c) Separate Itemization of Paid Grassroots Lobbying- Section 5(b) of the Act (2 U.S.C. 1604(b)) is amended--
(1) in paragraph (3), by--
(A) inserting after `total amount of all income' the following: `(including a separate good faith estimate of the total amount of income relating specifically to paid grassroots lobbying and, within that amount, a good faith estimate of the total amount specifically relating to paid advertising)'; and
(B) inserting `or a grassroots lobbying firm' after `lobbying firm';
(2) in paragraph (4), by inserting after `total expenses' the following: `(including a good faith estimate of the total amount of expenses relating specifically to paid grassroots lobbying and, within that total amount, a good faith estimate of the total amount specifically relating to paid advertising)'; and
(3) by adding at the end the following:
`Subparagraphs (B) and (C) of paragraph (2) shall not apply with respect to reports relating to paid grassroots lobbying activities.'.
(4) Paragraph (2) shall not apply with respect to reports on paid grassroots lobbying where the costs are less than $25,000, except for grassroots lobbying firms.
(d) Good Faith Estimates and De Minimis Rules for Paid Grassroots Lobbying-
(1) IN GENERAL- Section 5(c) of the Act (2 U.S.C. 1604(c)) is amended to read as follows:
`(c) Estimates of Income or Expenses- For purposes of this section, the following shall apply:
`(1) Estimates of income or expenses shall be made as follows:
`(A) Estimates of amounts in excess of $10,0000 shall be rounded upward to the nearest $20,000.
(B) In the event income or expenses do not exceed $10,000, the registrant shall include a statement that income or expenses totaled less than $10,000 for the reporting period.
(2) Estimates of income or expenses relating specifically to paid efforts to stimulate grassroots lobbying shall be made as follows:
`(A) Estimates of amounts in excess of $25,000 shall be rounded upward to the nearest $20,000.
`(B) In the event income or expenses do not exceed $25,000, the registrant shall include a statement that income or expenses totaled less than $25,000 for the reporting period.'.
(2) TAX REPORTING- Section 15 of the Act (2 U.S.C. 1610) is amended--
(A) in subsection (a)--
(i) in paragraph (1), by striking `and' after the semicolon;
(ii) in paragraph (2), by striking the period and inserting `; and'; and
(iii) by adding at the end the following:
`(3) in lieu of using the definition of paid efforts to stimulate grassroots lobbying in section 3(18), consider as paid efforts to stimulate grassroots lobbying only those activities that are grassroots expenditures as defined in section 4911(c)(3) of the Internal Revenue Code of 1986.'; and
(B) in subsection (b)--
(i) in paragraph (1), by striking `and' after the semicolon;
(ii) in paragraph (2), by striking the period and inserting `; and'; and
(iii) by adding at the end the following:
`(3) in lieu of using the definition of paid efforts to stimulate grassroots lobbying in section 3(18), consider as paid efforts to stimulate grassroots lobbying only those activities that are grassroots expenditures as defined in section 4911(c)(3) of the Internal Revenue Code of 1986.'.
