Congress Issues Clarification on Conditions for Lobbyist Termination

In our recent newsletter, we summarized some newly revised Lobbying Disclosure Act Guidance from the Secretary of the Senate and the Clerk of the House of Representatives, including their new advice regarding conditions for lobbyist termination. We, along with several other representatives of the LDA regulated community, shared our concerns about the Guidance with the offices of the Secretary and the Clerk. In response, those offices issued a new statement on June 16, 2009 which further revises and clarifies their guidance on the second of the two conditions for lobbyist termination noted in their previous memo.

The June 16th clarification indicates that, as an alternative to exempting individuals under the 20% test, a registrant may also terminate the registration status of an individual federal lobbyist when "that individual does not reasonably expect to make further lobbying contacts." Thus, under this most recent guidance, a registrant can list an individual lobbyist on Line 23 and thereby terminate his/her status as a registered federal lobbyist if either:

1. 1. the individual did not in the current quarter, and will not in the next quarter, spend 20% or more of his/her time engaged in lobbying activities for a client, regardless of the number of lobbying contacts he/she continues to make for the client; or
       

   2. the individual does not reasonably expect to make future lobbying contacts for a client, irrespective of the proportion of time he/she continues to spend engaged in lobbying activities for the client.

At present, to the extent that the Secretary and Clerk's clarification can be relied on as the standard for lobbyist termination, we believe it is good news for LDA registrants and lobbyists. Under the clarification, individuals can terminate their registration status once they cease making lobbying contacts, without limiting the degree of their involvement in "lobbying activity." Senior executives and managers, for example, who have been registered as lobbyists based on their overall responsibilities for a corporation's government relations department or a nonprofit's advocacy program now may be able to terminate their registrations as lobbyists once they no longer reasonably expect to participate in "lobbying contacts." To the extent these individuals limit their communications with covered officials to those which are exempt from the definition of lobbying contact, and instead focus on development of strategy, coalition building, or other work which does not involve lobbying contacts, under the new guidance they can expect no objection from the Clerk or the Secretary should they terminate their registrations.

That said, while we appreciate the Secretary and the Clerk efforts to interpret the definition of "lobbyist" so as not to unreasonably limit deregistration of individual lobbyists, we remain concerned that this interpretation may not easily align itself with the text of the statute. Furthermore, the new guidance may over time open other potentially difficult interpretive and practical questions, such as:

1. 1. Whether the standard for termination applies retroactively, and
   
   
   
   
    
   3. Whether and how the "does not reasonably expects to make future contacts" standard coheres with the "whether future contacts are contemplated" suggested in the guidance for the similar judgment of whether to treat background research and monitoring work as lobbying activity.

Finally, it is worth bearing in mind that it is ultimately the Department of Justice which enforces the LDA, and which may eventually weigh in on the Clerk's and the Secretary's interpretation of the lobbyist termination rules. We will keep you updated on these or other related developments.


For more information on LDA compliance, please contact an attorney in the Political Activity Law Group.

Trevor Potter: 202-862-5092 or tp@capdale.com
Matthew T. Sanderson: 202-862-5046 or mts@capdale.com


Caplin & Drysdale
Washington, D.C. Office: One Thomas Circle N.W., Suite 1100
Washington, D.C., USA 20005
PH: +1 202-862-5000 FX: +1 202-429-3301

New York Office: 375 Park Avenue, 35th Floor
New York, New York, USA 10152
PH: +1 212-319-7125 FX: +1 212-644-6755
www.caplindrysdale.com

© 2009 Caplin & Drysdale, Chartered
All Rights Reserved.


<sup>About Caplin & Drysdale
A leading law firm, Caplin & Drysdale provides political activity law counseling and a full range of tax and legal services to companies, organizations, and individuals throughout the United States and around the world. The firm also provides employee benefits counseling, corporate law counseling, exempt organization counseling, white collar defense, and complex civil litigation services.


This alert is intended as a summary of legal issues for your general information. It does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose.</sup>