2009 Lobbying Disclosure: Observations on Lobbyists' Compliance with Disclosure Requirements
Published: 2010-04-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Honest Leadership and Open Government Act of 2007 amended the Lobbying Disclosure Act of 1995 (LDA). This is GAO's third report in response to the LDA's requirement for GAO to annually (1) determine the extent to which lobbyists can demonstrate compliance with the LDA by providing support for information on their registrations and reports, (2) identify challenges and potential improvements to compliance for registered lobbyists, and (3) describe the efforts the U.S. Attorney's Office for the District of Columbia (the Office) has made to improve its enforcement of the LDA. GAO reviewed a random sample of 134 lobbying disclosure reports filed from the fourth quarter of calendar year 2008 through the third quarter of calendar year 2009. GAO also selected two random samples of federal political campaign contributions reports from year-end 2008 through midyear 2009. GAO sampled 100 reports listing contributions and 100 reports listing no contributions. This methodology allowed GAO to generalize to the population of 53,756 disclosure reports, 10,928 contributions reports, and 22,572 reports with no contributions. GAO also met with officials from the Office regarding efforts to focus resources on lobbyists who fail to comply with the LDA.
section_title: What GAO Found
paragraphs: While there are no specific requirements for lobbyists to create or maintain documentation related to disclosure reports they file under the LDA, GAO's review showed that lobbyists were generally able to provide documentation, although in varying degrees, to support items in their disclosure reports. This finding is similar to GAO's results from last year's review. For income and expenses, two key elements of the reports, GAO estimates that lobbyists could provide written documentation for approximately 89 percent of the disclosure reports. After GAO's review, 15 lobbyists stated that they planned to amend their disclosure reports to make corrections on one or more data elements. As of March 18, 2010, 7 of the 15 amended their disclosure reports to make these corrections. For political contribution reports, GAO estimates that 82 percent of the reports listing contributions could be supported by Federal Elections Commission (FEC) data or documentation provided by lobbyists. Among reports with no contributions listed, an estimated minimum of 3 percent of reports omitted one or more contributions that should have been reported. All of the lobbyists said that they did not report the information listed in the FEC database because of an oversight and plan to amend their reports. The majority of lobbyists who newly registered with the Secretary of the Senate and Clerk of the House of Representatives in the last quarter of 2008 and first three quarters of 2009 filed required disclosure reports for the period. GAO could not identify corresponding reports on file for lobbying activity for about 11 percent of the registrants, likely because either reports were not filed or the reports that were filed contained information, such as client names, that did not match the registrations. The Secretary of the Senate and Clerk of the House routinely review the completeness of registrations and reports and follow up with lobbyists. Most lobbyists felt that existing guidance for filing required registrations and reports was sufficient. However, GAO's review of documentation and lobbyists' statements indicates some opportunities to strengthen lobbyists' understanding of the requirements. The Secretary of the Senate and Clerk of the House update guidance periodically to respond to issues and comments as they arise. In response to an earlier GAO recommendation, the Office developed a system to help monitor and track enforcement efforts. The Office continues to refine the system to meet the requirements conveyed in GAO's recommendation. To enforce compliance, the Office primarily focuses on sending letters to lobbyists who potentially violated the LDA by not filing disclosure reports. No civil actions or settlements with lobbyists have been pursued by the Office since 2005, although it is following up on hundreds of referrals each year.

section_title: Letter
paragraphs: Questions regarding the influence of special interests in the formation of  government policy have led to a move toward more transparency and  accountability with regard to the lobbying community. The Honest  Leadership and Open Government Act of 2007 (HLOGA),  signed into law  on September 14, 2007, amended the Lobbying Disclosure Act of 1995  (LDA) by doubling the frequency of lobbyists’ reporting from  semiannually to quarterly, increasing civil penalties, and adding criminal  penalties. The LDA as amended requires GAO to audit the extent of  lobbyists’ compliance with the requirements of the LDA by reviewing a  random sampling of publicly available lobbying registrations and reports  filed during each calendar year. GAO’s report must also include  recommendations related to improving lobbyists’ compliance with the  LDA and report on resources and authorities available to the Department  of Justice for effective enforcement of the LDA. This is GAO’s third  mandated review of lobbyists’ disclosure reports filed under the LDA.
Consistent with our mandate, our objectives were to (1) determine the  extent to which lobbyists can demonstrate compliance with the LDA by  providing support for information on registrations and reports filed under  the LDA; (2) identify challenges and potential improvements to  compliance for lobbyists, lobbying firms, and registrants; and (3) describe  the efforts the U.S. Attorney’s Office for the District of Columbia (the  Office) has made to improve its enforcement of the LDA, including  identifying trends in past lobbying disclosure compliance.
To respond to the audit requirements in HLOGA, we did the following:    Selected a random sample of 134 quarterly lobbying activity disclosure  reports (commonly referred to as LD-2 reports) with income and  expenses of $5,000 or more filed by lobbyists during the fourth quarter  of calendar year 2008 and the first, second, and third quarters of  calendar year 2009 from a total of 53,756 activity reports filed for those  quarters. The randomly sampled reports were selected from the  publicly downloadable database maintained by the Clerk of the House  of Representatives. This methodology allows us to generalize to the  population of these activity reports.
Contacted each lobbyist in our sample by sending a letter by e-mail  describing our review and asking each lobbyist to provide supporting  documentation for key elements of the disclosure report, including the  amount of money received for lobbying activities, the houses of  Congress or federal agencies lobbied, prior covered official positions  held by lobbyists, and whether the lobbyists filed a report of federal  political contributions. All lobbyists in our sample responded to our  requests for supporting documentation.
Analyzed two random samples of year-end 2008 and midyear 2009  semiannual reports of federal political contributions (commonly  referred to as LD-203 reports) disclosing certain contributions,  comparing the contributions reported to information contained in the  Federal Elections Commission’s (FEC) database. The first sample  contains 100 LD-203 reports selected from a total of 10,928 reports that  have contributions listed, and the second sample contains 100 LD-203  reports selected from a total of 22,572 reports that list no contributions.  The randomly sampled reports were selected from the publicly  downloadable contributions database maintained by the Clerk of the  House. In instances where an entry in the LD-203 report could not be  confirmed by information reported in the FEC database, either because  the data did not match or the contribution was not required to be  disclosed to the FEC, we contacted lobbyists and asked them to  provide documentation, information, or both to clarify differences we  observed. All lobbyists complied with our request to provide  documentation, information, or both. This methodology allows us to  generalize to the population of LD-203 reports both with and without  contributions.
Compared new registrations (commonly referred to as LD-1s) filed in  the fourth quarter of 2008 and the first three quarters of 2009 to the  corresponding LD-2 reports on file with the Clerk of the House to  determine whether registrants were meeting the requirement to file an  LD-2 report after registering.
To identify challenges and potential improvements to compliance, we used  structured interviews to obtain views from lobbyists included in our  sample of reports on any challenges to compliance and how the challenges  might be addressed.
To describe the efforts the Office has made to improve its enforcement of  the LDA, we interviewed officials from the Office and obtained  information on the results of their new system to track past compliance  trends and referrals and other practices they have established to focus  resources on enforcement of the LDA.
Our objectives did not include identifying lobbyist organizations that failed  to register and report in accordance with LDA requirements, or whether  for those lobbyists who did register and report the lobbying activity or  contributions disclosed represented the full extent of lobbying activities  that took place.
We conducted this performance audit from April 2009 to March 2010 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives. For more details on our methodology, see  appendix I.
subsections: section_title: Background
paragraphs: The LDA, as amended by the HLOGA, requires lobbyists to register with  the Secretary of the Senate and the Clerk of the House and file quarterly  reports disclosing their activities. No specific requirements exist for  lobbyists to create or maintain documentation in support of the  registrations or reports they file. Under the LDA, lobbyists are required to  file their registrations and reports electronically with the Secretary of the  Senate and the Clerk of the House through a single entry point. The LDA  also provides that registrations and reports must be available in  downloadable, searchable databases from the Secretary of the Senate and  the Clerk of the House.
The LDA defines a “lobbyist” as an individual who is employed or retained  by a client for compensation who has made more than one lobbying  contact (written or oral communication to a covered executive or  legislative branch official made on behalf of a client) and whose lobbying  activities represent at least 20 percent of the time that he or she spends  on behalf of the client during the quarter. Lobbying firms are persons or  entities that have one or more employees who are lobbyists on behalf of a  client other than that person or entity.
Lobbying firms are required to file a registration with the Secretary of the  Senate and the Clerk of the House for each client if the lobbying firm  receives over $3,000 in income from that client for lobbying activities.  Lobbyists are also required to submit a quarterly report, an LD-2 report,  for each registration filed. The registration and subsequent LD-2 reports  must disclose  the name of the organization, lobbying firm, or self-employed individual  that is lobbying on that client’s behalf;    a list of individuals who acted as lobbyists on behalf of the client  during the reporting period;    whether any lobbyists served as covered executive branch or  legislative branch officials in the previous 20 years;  the name of and further information about the client, including a  general description of its business or activities;  information on the general issue area and specific lobbying issues;    any foreign entities that have an interest in the client;  the client’s status as a state or local government;  information on which federal agencies and house(s) of Congress the  lobbyist contacted on behalf of the client during the reporting period;  the amount of income related to lobbying activities received from the  client (or expenses for organizations with in-house lobbyists) during  the quarter rounded to the nearest $10,000; and    a list of constituent organizations that contribute more than $5,000 for  lobbying in a quarter and actively participate in planning, supervising,  or controlling lobbying activities, if the client is a coalition or  association.
The LDA also requires lobbyists to report certain contributions  semiannually in the contributions report, or the LD-203 report. These  reports must be filed 30 days after the end of a semiannual period by each  organization registered to lobby and by each individual listed as a lobbyist  on an organization’s lobbying reports. The lobbyists or organizations must  list the name of each federal candidate or officeholder, leadership political  action committee, or political party committee to which they made  contributions equal to or exceeding $200 in the aggregate during the  semiannual period. The lobbyists or organizations must also report  contributions made to presidential library foundations and presidential  inaugural committees. In addition, the lobbyists or organizations must  report funds contributed to pay the cost of an event to honor or recognize  a covered official, funds paid to an entity named for or controlled by a  covered official, and contributions to a person or entity in recognition of  an official or to pay the costs of a meeting or other event held by or in the  name of a covered official. Finally, the LD-203 report requires lobbyists or  organizations to certify that they have read and are familiar with the gift  and travel rules of the Senate and House and that they have not provided,  requested, or directed a gift or travel to a member, officer, or employee of  Congress that would violate those rules. Each individual lobbyist and  organization must file a LD-203 report each period and certify compliance  with the gift and travel rules, even if there are no contributions to report.
The Office is responsible for the enforcement of the LDA. The Office  fulfills its administrative responsibilities by researching and responding to  referrals of noncomplying lobbyists submitted by the Secretary of the  Senate and Clerk of the House. The Office sends additional noncompliance  notices to the lobbyists, requesting that the lobbyists file reports or correct  reported information. The Office also has the authority to pursue a civil or  criminal case for noncompliance.
An electronic system has been developed and implemented in response to  a recommendation in our prior report, specifically to address issues we  raised regarding the tracking, analysis, and reporting of enforcement  activities for lobbyists who were referred to the Office for failure to  comply. The officials said that the new system is designed to provide a  more structured approach for assigning resources and to better focus  lobbying disclosure compliance enforcement efforts. The new system is  intended to track and record enforcement activities, record the status and  disposition of lobbyists’ cases, provide automated alerts to ensure timely  follow-up and monitoring, provide the ability to track those who  continually fail to comply with the LDA, and use data to report statistical  trends to track the effectiveness of enforcement activities.
section_title: Documentation Supporting Reporting Requirements Varied
paragraphs: Neither the LDA nor guidance requires lobbyists to maintain records or  documentation to support information disclosed in their reports. However,  similar to our findings in last year’s review, most lobbyists reporting  $5,000 or more in income or expenses were able to provide written  support for certain elements of individual activity reports we examined.  For example, most lobbyists were able to provide documentation to  support income or expenses related elements of their reports. We estimate  that lobbyists could provide written documentation for income or  expenses for an estimated 88 percent of the disclosure reports for the  fourth quarter of 2008 and the first three quarters of 2009. Lobbyists for  all but 11 of the 112 reports that we reviewed from our sample that  reported income and all but 5 of the 22 sampled reports with lobbying  expenses provided some form of documentation for the dollar amounts  reported. The most common form of income documentation provided was  invoices (an estimated 68 percent of all reports with income), followed by  contracts (an estimated 24 percent of all reports with income). Also, we  estimate that lobbying firms were able to provide documentation that all  lobbyists listed on the disclosure report were employed as lobbyists at the  lobbying firm during the reporting period for an estimated 89 percent of  reports that required this information.
More than half of lobbyists in our sample were able to provide  documentation to support all of the entities they reportedly lobbied during  the reporting period. Lobbyists are required to disclose if they lobbied  covered officials at the House of Representatives, the Senate, one or more  executive branch agencies, or a combination of these entities. For close to  three quarters of reports disclosing House or Senate lobbying activity (an  estimated 70 percent), lobbyists had documentation to support the House  and Senate lobbying contacts they disclosed. However, lobbyists that  reported contacts with agencies were only able to provide documentation  for about half of reports (31 of 66 reports we reviewed) to support the  agency lobbying contacts they reported in the disclosure reports. Too few  reports in our sample disclosed foreign entities, affiliated organizations,  and the names of individuals no longer acting as lobbyists to provide  reliable estimates of levels of written documentation in support of the  reports that required this information.
Lobbyists did not disclose covered official positions previously held by  individual lobbyists on at least 6 of the 131 applicable reports we  reviewed. Based on this information, we estimate that a minimum of 2  percent of all disclosure reports fail to fully disclose whether the  individual lobbyists for a specific client held a covered official position.  Lobbyists gave several reasons for not including previously held covered  official positions, typically indicating that they misunderstood the  requirements or did not realize the position held qualified as a covered  official position.
To correct errors or omissions, 12 lobbyists amended 12 of the 134  disclosure reports in our sample prior to our review. Additionally, 15  lobbyists indicated that they planned to amend their disclosure reports  after our review. As of March 18, 2010, 7 of the 15 lobbyists had amended  their disclosure reports. Indicating that a lobbyist held a covered official  position, changing income or expense amounts, or disclosing a foreign  entity were the most commonly cited reasons for filing amendments.
Although the LDA and guidance do not require lobbyists to maintain  records or documentation to support information disclosed in their  reports, many of the lobbyists we spoke with had systems to track  lobbying contacts and the amount of time spent on lobbying activities. In  an estimated 79 percent of reports (106 of 134 we reviewed), lobbyists  reported having a method or system in place to track lobbying contacts  and activities. We estimate that 57 percent of all reports with tracking  methods monitored actual time spent lobbying on behalf of the client as a  means of tracking lobbying activities. In addition, we estimate that  meetings were tracked to support the information in 75 percent of reports  where a tracking system was used, e-mails for 53 percent of reports where  a tracking system was used, and telephone conversations to identify and  document the work the lobbyist performed on behalf of a client for 49  percent of reports where a tracking system was used.
As previously noted, all individual lobbyists and organizations reporting  specific lobbying activity are required to file LD-203 reports each period,  even if they have no contributions to report, because they must certify  compliance with the gift and travel rules. As part of our LD-2 report  analysis, we checked the House database to ensure that each lobbyist and  organization listed on the LD-2 report filed an LD-203 report during the  reporting period. For an estimated 84 percent of lobbying reports where  this information was required (110 of the 131 applicable reports in our  sample), the LD-203 reports were filed as required by both the lobbyists  and the lobbying firms during the reporting periods in question. Some  lobbyists told us that the guidance on the LD-203 report was confusing.  For example, several lobbyists told us that they were confused regarding  whether to file an LD-203 report if the lobbyist or lobbying firm did not  make any political contributions during the reporting period.
subsections: section_title: Most Contribution Reports Could Be Supported by FEC Data or Documentation
paragraphs: Individual lobbyists and lobbying organizations are required to file federal  campaign and political contributions reports, even if they did not make  any contributions during the reporting period. In addition to the brief  check of LD-203 compliance listed above, we conducted a detailed  analysis of LD-203 reports, sampling 100 reports that list contributions and  100 reports that list no contributions made during the reporting period.  Lobbyists or lobbying firms could support all listed contributions with  documentation for approximately 82 percent (82 of 100) of the  contribution reports listing contributions that we reviewed. Of the 100  contribution reports in our sample listing no contributions, we confirmed  that 97 did not have clearly corresponding contributions listed in the FEC  database during the reporting period, while 3 (or 3 percent) of the reports  we reviewed that did not list any contributions failed to list at least one  donation that should have been disclosed. Documentation includes data  from the FEC disclosure database, canceled checks, invoices, or letters.  Table 1 shows the number of LD-203 reports with contributions that were  supported in the FEC database and LD-203 reports that were missing  contributions.
Based on the 18 reports that failed to report all contributions in our  sample of reports with contributions, we estimate that at least 12 percent  of all reports listing contributions are missing one or more contributions.  For example, 11 filers said that they did not report the information we  found in the FEC database because of an oversight. Of the 18 LD-203  reports with contributions we reviewed that failed to list at least one  contribution, only 9 were missing more than one contribution. All of the  lobbyists said that they did not report the information listed in the FEC  database because of an oversight and plan to amend the reports. Overall,  we estimate that a minimum of 5 percent of all LD-203 reports—whether  they listed contributions or not—omitted one or more donations that were  required to have been disclosed.
section_title: The Majority of New Registrants Filed Disclosure Reports as Required
paragraphs: To determine whether new registrants were meeting the requirement to  file, we matched newly filed registrations in the fourth quarter of 2008 and  the first, second, and third quarters of 2009 from the House and Senate  Lobbyist Disclosure Databases to their corresponding quarter disclosure  reports using an electronic matching algorithm that allowed for  misspelling and other minor inconsistencies between the registrations and  reports. Our analysis showed that of the 6,184 new registrations we  identified in fiscal year 2009, the majority (5,489 or 89 percent) had clearly  corresponding disclosure reports on file, indicating that the requirement  for these lobbyists to file reports for specific clients was generally met. We  could not readily identify corresponding reports of lobbying activity for  695 (approximately 11 percent) of the 6,184 new registrations, likely  because either a report was not filed or reports that were filed contained  information, such as client names, that did not match. The Clerk of the  House and Secretary of the Senate routinely review the completeness of  registrations and reports and follow up with lobbyists.
section_title: Some Lobbyists Continue to Report Challenges in Complying with the LDA
paragraphs: Similar to our findings in prior reviews of lobbying disclosure, some  lobbyists may not fully understand the law and therefore did not properly  disclose information. Some lobbyists said that they thought the reporting  requirements were clear and the Secretary of the Senate and Clerk of the  House staff were helpful in providing clarifications when needed.  However, our review of lobbyists’ documentation and some lobbyists’  statements highlights areas of inconsistency in reporting information on  the LD-2 report and the LD-203 report. For example, our review identified  that lobbyists in our sample inconsistently reported “covered official  positions” previously held by individuals. As stated earlier, covered official  positions are either an elected member of either house of Congress, an  employee of a member or a committee, or certain high-level positions in  the executive branch.
Guidance published by the Clerk of the House and Secretary of the Senate  advises registrants to disclose new lobbyists who are not listed on a client  registration on the quarterly disclosure report and include any covered  executive or legislative branch official positions the new lobbyists held  within 20 years of that filing. Several lobbyists in our sample disclosed  their covered official positions in a variety of ways. While guidance only  directs filers to list the covered official positions on forms denoting the  lobbyists as new lobbyists, in several reports in our sample lobbyists  reported covered official positions on more than one LD-2 report, even if a  lobbyist was not listed as “new.” A few other lobbying firms amended the  lobbying LD-1 to include new lobbyists in addition to new or previously  undisclosed covered official positions and therefore left subsequent  quarterly disclosure reports blank. Lobbyists told us that they were  unclear about the frequency with which they had to disclose their covered  official position, specifically, whether they had to disclose the covered  official position on the LD-1, the LD-2 report, or both. The LDA and  lobbying guidance direct lobbyists to disclose covered official positions on  either the initial client registration (LD-1) or on subsequent LD-2 quarterly  reports as lobbyists are added. In addition, some lobbyists cited difficulty  determining whether the previous positions held within the executive or  legislative branches were covered positions.
In addition, several lobbyists told us that they were unsure about when  and how to terminate lobbyists from LD-2 reports. House and Senate  guidance directs registrants to list terminated lobbyists, or lobbyists no  longer expected to act as lobbyists for a given client, in line 23 of the LD-2  report. Several lobbyists indicated that they were not sure if they needed  to terminate a lobbyist who did not actively lobby on behalf of a client for  a given reporting period, or if they only needed to terminate lobbyists  when they were certain the lobbyists would not lobby for the client at all  in the future. The guidance states that a lobbyist can be left off an LD-2  report (without being terminated) if the lobbyist did not meet the LDA’s  definition of lobbyist for that client in the current or next quarter. The  guidance advises that lobbyists should be terminated if the lobbyists are  no longer expected to lobby on behalf of that client in the future, as the  lobbyists job duties, assignment, or employment status changes.
Lobbyists also told us that they found meeting the deadline for filing  disclosure reports difficult because of administrative constraints. The  deadline for filing disclosure reports is 20 days after each reporting period,  or the first business day after the 20th day if the 20th day is not a business  day. Prior to enactment of the HLOGA, the deadline for filing disclosure  reports was 45 days after the end of each reporting period. The lobbyists  cited limitations of their own record-keeping systems and in some cases  the large volume of disclosure reports that needed to be filed as the  specific reasons why meeting the deadline was challenging.
The LDA requires the Secretary of the Senate and Clerk of the House to  provide guidance and assistance on registration and reporting  requirements and to develop common standards, rules, and procedures for  compliance. The guidance is revised every 6 months based on comments  the Secretary of the Senate and Clerk of the House receive. The guidance  may also be revised when issues arise as a result of statutory and  administrative responsibilities.
section_title: The U.S. Attorney’s Office for the District of Columbia Continues to Make Progress on Focusing Resources to Track and Enforce Lobbying Disclosure Compliance
paragraphs: The Office fulfills its responsibility for enforcing compliance with the LDA  by researching and responding to referrals of noncomplying lobbyists  forwarded from the Secretary of the Senate and the Clerk of the House.  The Office reviews these referrals and sends additional noncompliance  notices to the lobbyists, when warranted, requesting that they file reports  or correct reported information. Continued failure to comply may lead the  Office to prosecute.
Officials from the Office have made progress in developing an electronic  system to address issues we raised in our prior report regarding the  tracking, analysis, and reporting of enforcement activities. Our prior  report recommended that the Office complete efforts to develop a  structured approach that would require it to track referrals when they are  made, record reasons for referrals, record the actions taken to resolve  them, and assess the results of actions taken. The new tracking system  became operational in April 2009, and officials from the Office stated that  the system has enhanced their ability to enforce lobbyists’ compliance  with the LDA. The system allows officials from the Office to track referral  and enforcement actions and to monitor lobbyists who continually fail to  file the required disclosure reports.
The Office has completed entering referral data from prior years and is  continuing to update the system by inputting referral data received from  the Secretary of the Senate and the Clerk of the House. The information is  used to produce referral actions, referral summaries and summary reports  of chronic offenders who are found repeatedly out of compliance with the  LDA. Officials from the Office stated that the system has provided easy  access to reporting data since it became operational in 2009 and has the  potential to target enforcement actions. However, the system and  summary information are still being refined and the Office has not  instituted procedures to ensure data are accurate and reliable. One such  procedure may be to establish reliability checks to ensure that data added  to the system are accurate and run system tests to ensure that there are no  programming errors. Officials from the Office stated that they recognize  the importance of establishing reliability checks and plan to institute such  assessments in the next few months.
The number of lobbyists referred to the Office has increased, as expected,  because of the LDA’s new requirement to disclose federal campaign and  other political contributions by filing LD-203 reports in addition to  disclosing lobbying activity on LD-2 reports. In 2009 the Office received  referrals from both the Secretary of the Senate and the Clerk of the House  for noncompliance with reports filed for the 2007 and 2008 reporting  periods. In addition, the Office received referrals for the first three  quarters of 2009 from the Secretary of the Senate. In January 2010, the  Office received referrals for quarters one and two of the 2009 reporting  period, but the data has not been entered into the system and the numbers  are not yet known. As of March 4, 2010, the Office has not received  referrals from the Clerk of the House for the third quarter of the 2009  reporting period. The Clerk of the House takes longer to send referrals  because this office uses different referral procedures, such as reviewing  the data for duplicate referrals before they are sent to the Office. Referrals  are not made immediately after the filing period. There is a minimum of  120 days between the end of the filing period and the date referrals are  sent because the Secretary of the Senate and Clerk of the House send  referrals after they have reviewed their respective databases for missing or  erroneous reports, twice contacted lobbyists by letter to inform them of  the need to remedy errors or file a missing reports, and allowed 60 days  for lobbyists to respond to each letter.
The Office received a total of 368 referrals for noncompliance with  disclosure requirements from the Secretary of the Senate and Clerk of the  House for the 2007 calendar year. The 2007 referrals were for LD-2 reports  that were disclosed before the enactment of the HLOGA and therefore  were submitted semiannually instead of quarterly and did not include  referrals for LD-203 reports. Table 2 shows the number of LD-2 referrals  received from the Secretary of the Senate and Clerk of the House as well  as the number of noncompliance letters the Office sent to lobbyists as a  result of these referrals. According to the Office, the number of referrals  from the Secretary of the Senate is larger than the number from the Clerk  of the House because of differences in their referral procedures.
The Office received a total of 1,099 referrals from the Secretary of the  Senate and the Clerk of the House for noncompliance with the quarterly  LD-2 reporting requirements for periods after the enactment of the  HLOGA. As of March 26, 2010, the Office has received 730 LD-2 referrals  for calendar year 2008 from the Secretary of the Senate and the Clerk of  the House. Additionally, the Office has received 369 LD-2 referrals for first  three quarters of 2009 from the Secretary of the Senate. As previously  stated, the Office received referrals from the Clerk of the House for the  first two quarters of 2009 in January 2010, but the data has not been  entered into the system and the numbers are not yet known. The Office  has not received referrals from the Clerk of the House for the third quarter  2009 reporting period. The Clerk of the House takes longer to send  referrals because the office uses different referral procedures, such as  reviewing the data for duplicate referrals before they are sent to the  Office. Table 3 shows the number of referrals received from the Secretary  of the Senate and Clerk of the House as well as the number of  noncompliance letters the Office sent to lobbyists as a result of these  referrals.
The Office has also received referrals for noncompliance with the HLOGA  requirement to file LD-203 reports. To date, the Office has received 2,486  LD-203 noncompliance referrals for the 2008 calendar year and 194 LD-203  noncompliance referrals for the first half of the 2009 calendar year.  Officials from the Office stated that similar to the LD-2 referrals, the  number of LD-203 referrals from the Secretary of the Senate is larger than  the number from the Clerk of the House because of differences in their  referral procedures. Letters of noncompliance with the LD-203  requirement have not been sent by the Office. Officials from the Office  stated that they plan to send the letters for noncompliance with LD-203  reporting requirements in May 2010. Table 4 shows the number of LD-203  noncompliance referrals received from the Secretary of the Senate and the  Clerk of the House.
To enforce LDA compliance, the Office has primarily focused on sending  letters to lobbyists who have potentially violated the LDA by not filing  disclosure reports as required. The letters request that the lobbyists  comply with the law and promptly file the appropriate disclosure  documents. Resolution typically involves the lobbyists coming into  compliance. In response to the 653 letters sent by the Office in 2007, 2008,  and 2009, 163 lobbyists have come into compliance. Because there is a  time lapse between when the Secretary of the Senate and the Clerk of the  House send the first contact letters and when they make referrals to the  Office, lobbyists may have responded to the contact letters from the  Secretary of the Senate and Clerk of the House after referrals have been  received by the Office. As a result, the Office reviews the Secretary of the  Senate and Clerk of the House databases to determine whether a lobbyist  has already resolved the compliance issue before sending out its own  letters. In addition, the Office attempts to verify the lobbyist’s address  when letters are returned or no response is received. Table 5 shows the  status of enforcement actions as a result of noncompliance letters the  Office sent to lobbyists.
In our 2008 lobbying disclosure report, we noted that the Office had  settled with three lobbyists and collected civil penalties totaling about  $47,000 in 2005. All of the settled cases involved a failure to file. Since then  no additional settlements or civil actions have been pursued, although the  Office is following up on hundreds of referrals each year. Also in our 2009  lobbying disclosure report, we reported that the Office had identified six  lobbyists whose names appeared frequently in the referrals and sent them  letters more targeted toward repeat nonfilers. Four of these lobbyists have  resolved their noncompliance issues, and the Office continues to consider  further enforcement actions for the other two. Officials from the Office  stated that they plan to begin using information from the Chronic  Offenders Report generated by their tracking and monitoring system to  begin targeting additional repeat nonfilers in the summer.
section_title: Agency Comments
paragraphs: We provided a draft statement of the facts contained in this report to the  Department of Justice (DOJ) for review and comment. We met with the  Assistant U.S. Attorney for the District of Columbia, who on behalf of DOJ  provided us with technical comments, which we incorporated as  appropriate, but did not otherwise comment on the report.
We are sending copies of this report to the Attorney General, Secretary of  the Senate, Clerk of the House of Representatives, and interested  congressional committees and members. This report also is available at no  charge on the GAO Web site at http://www.gao.gov.
Please contact Laurie Ekstrand at (202) 512-6845 or ekstrandl@gao.gov if  you or your staffs have any questions about this report. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to  this report are listed in appendix IV.
The Honorable Edolphus Towns  Chairman  The Honorable Darrell Issa  Ranking Member  Committee on Oversight and House of Representatives  The Honorable John Conye Chairman  The Honorable Lamar Smith  Ranking Member  Committee on the Judiciary  House of Represen rs, Jr.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Consistent with the requirements of the Honest Leadership and Open  Government Act of 2007, our objectives were to    determine the extent to which lobbyists can demonstrate compliance  by providing support for information on registrations and reports filed  in response to requirements of the amended Lobbying Disclosure Act  of 1995 (LDA);  identify the challenges and potential improvements to compliance by  lobbyists, lobbying firms, and registrants; and    describe the efforts the U.S. Attorney’s Office for the District of  Columbia (the Office) has made to improve its enforcement of the LDA,  including identifying trends in past lobbying disclosure compliance.
To respond to our mandate, we used information in the lobbying  disclosure databases maintained by the Secretary of the Senate and the  Clerk of the House of Representatives. To assess whether these disclosure  data were sufficiently reliable for the purposes of this report, we reviewed  relevant documentation and spoke to officials responsible for maintaining  the data. Although registrations and reports are filed through a single Web  portal, each chamber subsequently receives copies of the data and follows  different data cleaning, processing, and editing procedures before storing  the data in either individual files (in the House) or databases (in the  Senate). Currently, there is no means of reconciling discrepancies between  the two databases that result from chamber differences in data processing.  For example, Senate staff told us that they set aside a greater proportion  of registration and report submissions than the House for manual review  before entering the information into the database, and as a result, the  Senate database would be slightly less current than the House database on  any given day pending review and clearance. House staff told us that they  rely heavily on automated processing, and that while they manually review  reports that do not perfectly match information on file for a given  registrant or client, they will approve and upload such reports as originally  filed by each lobbyist even if the reports contain errors or discrepancies  (such as a variant on how a name is spelled). Nevertheless, we do not have  reason to believe that the content of the House and Senate systems would  vary substantially. While we determined that both the House and Senate  disclosure data were sufficiently reliable for identifying a sample of  quarterly disclosure reports (LD-2 reports) and for assessing whether  newly filed registrants also filed required reports, we chose to use data  from the Clerk of the House for sampling LD-2 reports from the last  quarter of 2008, first three quarters of 2009, as well as for year-end 2008  and midyear 2009 contributions reports (LD-203 reports), and finally for  matching quarterly registrations with filed reports. We did not evaluate the  Offices of the Secretary of the Senate or the Clerk of the House—both of  which have key roles in the lobbying disclosure process—although we met  with officials from each office, and they provided us with general  background information at our request and detailed information on data  processing procedures.
To assess the extent to which lobbyists could provide evidence of their  compliance with reporting requirements, we examined a systematic  random sample of 134 LD-2 reports. We excluded reports with no income  or with income and expenses less than $5,000 from our sampling frame  and drew our sample from 53,756 activity reports filed for the last quarter  of 2008 and the first three quarters of 2009 available in the public House  database, as of our final download date for each quarter. There are 3 LD-2  reports in the total sample that indicated “no lobbying activity” but listed  lobbying income for the quarter. We conducted reviews of these reports  because the income was disclosed in accordance with LDA reporting  requirements, but since “no lobbying activity” was indicated, lobbyists  were not required to provide information for all reporting elements on the  LD-2 report. Therefore, in certain calculations these 3 reports are excluded  from the sample. Our sample is based on a systematic random selection,  and it is only one of a large number of samples that we might have drawn.  We sorted firms by the number of LD-2 reports they filed and then drew a  systematic sample of LD-2 reports to ensure that our sample contained  reports from firms of all sizes. Because each sample could have provided  different estimates, we express our confidence in the precision of our  particular sample’s results as a 95 percent confidence interval. This is the  interval that would contain the actual population value for 95 percent of  the samples that we could have drawn. All percentage estimates in this  report have 95 percent confidence intervals of within plus or minus 9.7  percentage points of the estimate itself, unless otherwise noted. When  estimating compliance with certain of the elements we examined, we base  our estimate on a one-sided 95 percent confidence interval to generate a  conservative estimate of either the minimum or maximum percentage of  reports in the population exhibiting the characteristic.
We contacted all the lobbyists and lobbying firms in our sample and asked  them to provide support for key elements in their reports, including  the amount of income reported for lobbying activities,  the amount of expenses reported on lobbying activities,  the names of lobbyists who had held covered official positions,  the houses of Congress and federal agencies that they lobbied,  the names of foreign entities with interest in the client,  the names of individuals no longer acting as lobbyists for the client,  and  the names of any member organizations of a coalition or association  that actively participated in lobbying activities on behalf of the client.
In addition, we determined whether each individual lobbyist listed on the  LD-2 report had filed a semiannual LD-203 report.
Prior to interviewing lobbyists about each LD-2 report in our sample, we  conducted an open-source search to determine whether each lobbyist  listed on the report appeared to have held a covered official position  required to be disclosed. For lobbyists registered prior to January 1, 2008,  covered official positions held within 2 years of the date of the report must  be disclosed; this period was extended to 20 years for lobbyists who  registered on or after January 1, 2008. Lobbyists are required to disclose  covered official positions on either the client registration (LD-1) or on the  first LD-2 report for a specific client, and consequently those who had held  covered official positions may have disclosed the information on a LD-2  report filed prior to the report we examined as part of our random sample.  To identify likely covered official positions, we examined lobbying firms’  Web sites and conducted an extensive open-source search of Leadership  Directories, Who’s Who in American Politics, Carroll’s, and U.S.  Newspapers through Nexis and Google for lobbyists’ names and variations  on their names. We then asked lobbying firms and organizations about  each lobbyist listed on the LD-2 report that we had identified as having a  previous covered official position to determine whether the LD-2 report  appropriately disclosed covered official positions or whether there was  some other acceptable reason for the omission (such as its having been  disclosed on an earlier registration or LD-2 report). Despite our rigorous  search protocol, it is possible that our search failed to identify omitted  reports of covered official positions. Thus, our estimate of the proportion  of reports with lobbyists who failed to appropriately disclose covered  official positions is a lower-bound estimate of the minimum proportion of  reports that failed to report such positions.
In addition to examining the content of LD-2 reports, we confirmed  whether midyear LD-203 reports had been filed for each firm and lobbyist  listed on the LD-2 reports in our random sample. Although this review  represents a random selection of lobbyists and firms, it is not a direct  probability sample of firms filing LD-2 reports or lobbyists listed on LD-2  reports. As such, we did not estimate the likelihood that LD-203 reports  were appropriately filed for the population of firms or lobbyists listed on  LD-2 reports.
To determine if the LDA’s requirement for registrants to file a report in the  quarter of registration was met for the fourth quarter of 2008 and the first,  second, and third quarters of 2009, we used data filed with the Clerk of the  House to match newly filed registrations with corresponding disclosure  reports. Using direct matching and text and pattern matching procedures,  we were able to identify matching disclosure reports for 5,489 of the 6,184,  or 89 percent, of the newly filed registrations. We first matched reports  and registrations using both the registrant and client identification  numbers. For reports we could not match by identification number, we  also attempted to match reports and registrations by client and registrant  name, allowing for variations in the names to accommodate minor  misspellings or typos. We could not readily identify matches in the report  database for the remaining registrations using electronic means.
To assess the accuracy of the LD-203 reports, we analyzed two random  samples of LD-203 reports from the 33,500 total LD-203 reports. The first  sample contains 100 reports of the 10,928 reports with political  contributions and the second contains 100 reports from the 22,572 reports  listing no contributions. Each sample contains 50 reports from the year- end 2008 filing period and 50 reports from the midyear 2009 filing period.  The samples allow us to generalize estimates in this report to either the  population of LD-203 reports with contributions or the reports without  contributions to within a 95 percent confidence interval of plus or minus  7.7 percentage points or less, and to within 2.9 percentage points of the  estimate when analyzing both samples together. We analyzed the contents  of the LD-203 reports and compared them to contribution data found in  the publicly available the Federal Elections Commission’s (FEC) political  contribution database. In our prior report, we interviewed staff at the FEC  responsible for administering the database and determined that the data  reliability is suitable for the purpose of confirming whether a FEC- reportable disclosure listed on an LD-203 report had, in fact, been reported  to the FEC.
We compared several factors of contributions reported on both the FEC  database and the LD-203 reports, including the number of contributions,  the dollar amount of contributions, date contributions were made, and to  whom contributions were made. We were able to readily verify the  majority of listed contributions using the FEC database. The verification  process required text and pattern matching procedures, and we used  professional judgment when assessing whether an individual listed is the  same individual filing an LD-203. Given the lag time between when a  lobbyist or organization might make a contribution and when a political  action committee (PAC) or campaign might cash or report the  contribution, some flexibility had to be built into the analysis when  examining the dates of entries. As with covered positions on LD-2  disclosure reports, we cannot be certain that our review identified all  cases of FEC-reportable contributions that were inappropriately omitted  from a lobbyist’s LD-203 report.
For FEC-reportable contributions that could not be readily matched in the  FEC database (perhaps as a result of a delays in a PAC’s or campaign’s  filing of the contribution or discrepancies between the name on the LD-203  report and the name on the FEC filing), we contacted each lobbyist to ask  for documentation of the contribution. In several cases, the contribution  reported had not been processed by the campaign or had been refunded to  the donor and therefore did not appear in a campaign’s FEC filing.  Additionally, we also asked lobbyists to document reports of honorary and  meeting expenses that were not reported to the FEC. Lobbyists were able  to provide supplementary documentation for most honorary and meeting  expenses, as well as the majority of other contributions we asked about, in  the form of invoices, acknowledgment letters, and canceled checks or  other financial records.
We obtained views from lobbyists included in our sample of reports on  any challenges to compliance and how the challenges might be addressed.  To describe the process used in referring cases to the Office and to  provide information on the resources and authorities used by the Office in  its role in enforcing compliance with the LDA, we interviewed officials  from the Office; obtained information from those involved in the referral  process; and obtained data on the number of cases referred, pending, and  resolved.
Our objectives did not include identifying lobbyists who failed to register  and report in accordance with LDA requirements, or whether for those  lobbyists that did register and report all lobbying activity or contributions  were disclosed. We conducted this performance audit from April 2009  through March 2010 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
section_title: Appendix II: List of Registrants and Clients for Sampled Lobbying Disclosure Reports
paragraphs: We used each report’s filing identification number to select our random  sample of lobbying disclosure reports (see table 6). Each identification  number is linked to a unique pair of registrant and client names.
section_title: Appendix III: Full List of Sampled Lobbying Contribution Reports with Contributions and with No Contributions Listed
paragraphs: See table 7 for a list of lobbyists and lobbying firms from our random  sample of lobbying contribution reports with contributions. See table 8 for  a list of lobbyists and lobbying firms from our random sample of lobbying  contribution reports without contributions.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: In addition to the contacts named above, Robert Cramer, Associate  General Counsel; Bill Reinsberg, Assistant Director; Shirley Jones,  Assistant General Counsel; Crystal Bernard; Amy Bowser; Anna Maria  Ortiz; Melanie Papasian; Katrina Taylor; Greg Wilmoth; and Michelle  Loutoo Wilson made key contributions to this report.
Assisting with lobbyist file reviews and interviews were Vida Awumey,  Colleen Candrl, John Dell’Osso, Scott Doubleday, Jessica Drucker, Justin  Dunleavy, Robin Ghertner, Ellen Grady, Lois Hanshaw, Jeff Heit, Alison  Hoenk, Lina Khan, Alicia Louks, Jeff McDermott, Adam Miles, James  Murphy, AJ Stephens, Sabrina Streagle, and Esther Toledo.