Lobbying Disclosure: Observations on Lobbyists' Compliance with New Disclosure Requirements
Published: 2008-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Honest Leadership and Open Government Act (HLOGA) of 2007 amends the Lobbying Disclosure Act of 1995 by doubling the frequency of lobbyists' reporting and increasing criminal and civil penalties. This is GAO's first report in response to the Act's requirement for GAO to annually (1) determine the extent to which lobbyists can demonstrate compliance with the Act by providing support for information on their registrations and reports, (2) describe challenges identified by lobbyists to complying with the Act, and (3) identify the process for referring cases to the Department of Justice and the resources and authorities available to effectively enforce the Act. GAO reviewed a random sample of 100 reports filed by lobbyists during the first quarter of calendar year 2008. This methodology allowed GAO to generalize to the population of 17,801 reports filed. GAO also met with lobbyists regarding their filings and with Department of Justice officials regarding resources and authorities
section_title: What GAO Found
paragraphs: GAO estimates that lobbyists could provide accurate supporting information--in either written or verbal form--on income or expenses for at least 95 percent of all first quarter reports filed requiring this information. The legislation and guidance do not contain requirements for lobbyists to create or maintain documentation in support of the registrations or reports they file. Nonetheless, lobbyists were able to provide written or oral support for all required elements of individual reports GAO examined. However, the extent to which lobbyists could provide written documentation varied for different aspects of the reports. GAO estimates that lobbyists have written documentation to support income or expenses for approximately 91 percent of first quarter reports that required this information. In contrast, for a separate element listing the person who acted as a lobbyist, GAO estimates that lobbyists have written documentation for 35 percent of reports that required this information. Also, the majority of lobbyists newly registered with the Secretary of the Senate and Clerk of the House in the first quarter of 2008 also filed required disclosure reports for the period. However, for about 7 percent of the registrants, GAO could not identify a clear, corresponding report on file for their lobbying activity, likely because a report was not filed or because of a mismatch of information in reports that were filed. While a number of lobbyists felt that existing guidance for filing required registrations and reports was sufficient, others believed additional clarifications, such as on issue area activity codes and on how to report various pieces of information about their organizations and lobbying activity, were needed. Several lobbyists also expressed uncertainty about what constitutes reportable lobbying activity under the law and how much detail they needed to provide on the specific lobbying issues for each client. The Act included the sense of Congress that the lobbying community should create an organization to develop training and standards for lobbying. GAO's work reinforces that such an organization would be beneficial and could share best practices and provide training on the types of records to support filings and report annually on opportunities to clarify existing guidance. The United States Attorney's Office for the District of Columbia assigns its resources for lobbying compliance issues based on competing priorities within the Office. The Office has five staff members, including a Deputy Chief, three assistant U.S. attorneys, and one investigator who perform lobbying non-compliance follow-up, among other duties. Officials from the Office told us they have sufficient civil and criminal statutory authorities to enforce the Act. The department's lobbying compliance workload has increased in recent years. However, it currently lacks a structured approach for targeting its resources to the most significant noncompliance cases. Such an approach will require the Office to track the referrals when they are made, record reasons for the referrals, record the actions taken to resolve them, and assess the results of actions taken. The Office has recently begun to redesign its computer database to more accurately track referrals received in past years to identify trends in past compliance matters.

section_title: Letter
paragraphs: Recent incidents involving the lack of transparency and unlawful actions  of individuals and organizations paid to influence public policy have  focused public and congressional attention on the interactions between  government officials and lobbyists. The Honest Leadership and Open  Government Act of 2007 (HLOGA), signed into law on September 14, 2007,  amends the Lobbying Disclosure Act of 1995 (the Act), by doubling the  frequency of lobbyists’ reporting from semiannually to quarterly,  increasing civil penalties, and adding criminal penalties. The law also  requires GAO to use a random sample to annually determine the extent to  which lobbyists are able to provide support for information contained in  their reports and registrations, provide recommendations related to  improving compliance by lobbyists with the Act, and report on resources  and authorities available to the Department of Justice (DOJ) for effective  enforcement of the Act. GAO’s initial report is to cover registrations and  reports filed during the first calendar quarter of 2008. Subsequent GAO  reports will be submitted annually by the beginning of April and will  include a review of registrations and reports filed during the preceding  calendar year.
Protecting the integrity of governmental processes and procedures from  corruption and undue influence is vital to upholding the principles and  public trusts of the U.S. government. Lobbying regulations began with the  Federal Regulation of Lobbying Act of 1946, which required lobbyists to  register with the Secretary of the Senate and the Clerk of the House of  Representatives (Clerk of the House), disclose the identities of their  clients, report the receipts and expenses involved, and describe the nature  of the legislative objectives that were pursued for each client. Lobbying  was interpreted under the 1946 Act as being limited to direct  communication with a member of Congress and attempting to influence  the passage or defeat of any proposed or pending legislation by Congress.  Congress replaced this law with the Lobbying Disclosure Act of 1995. The  Act expanded the definition of lobbying to include communications with  covered employees in both the legislative and executive branch regarding  legislation, regulations, policies or the nomination or confirmation of a  person for a position subject to confirmation by the Senate. The Act  required lobbyists to file registrations with the Secretary of the Senate and  the Clerk of the House and to report semiannually on their lobbying  activities, which include both lobbying contacts and work done in  preparation for lobbying contacts. In 2007, HLOGA amended the Act by  requiring more frequent filings and lowering thresholds for disclosures,  increasing penalties for noncompliance, and requiring new semiannual  reports detailing certain political contributions. The sense of Congress as  stated in HLOGA was that the lobbying community should propose  organizations to develop standards for the profession and provide training.  HLOGA became effective in January 2008.
Consistent with the audit and report requirements of HLOGA, our  objectives were to:    determine the extent to which lobbyists can provide support for  information on registrations and reports filed in response to requirements  of the amended Lobbying Disclosure Act;  identify the challenges lobbyists cite in complying with the Act and  suggestions for improving compliance; and    describe the process of referring noncompliance cases to the DOJ and the  resources and authorities available to DOJ in its role in enforcing  compliance with the Act.
To respond to the requirements of HLOGA, we selected a random sample  of 100 reports filed by lobbyists for the first quarter of calendar year 2008.  We selected our sample from the public downloadable database of  lobbying registrations and reports maintained by the Clerk of the House.  Based on our sample review, we are able to estimate characteristics of this  population of 17,801 first quarter reports filed by lobbyists. Our sample is  based on random selection, and it is only one of a large number of samples  that we might have drawn. 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.
We contacted each lobbyist in our sample and asked them to provide  support for key elements of these reports, including the amount of money  received for lobbying activities, the names of the people who acted as  lobbyists, and the issues being lobbied. For our purposes, the term  lobbyist refers to lobbying entities, which run the gamut from sole  practitioners to small associations to large organizations or lobbying firms.  Our work focused on examining lobbyists’ compliance with the Act’s  requirements by reviewing support—which included both documentation  and verbal explanations—they provided for the information contained in  their reports. We also compared new registrations filed in the first quarter  of calendar year 2008 to first quarter reports on file with the Secretary of  the Senate and the Clerk of the House to determine whether new  registrants met the requirement to file a quarterly report after registration.  We asked lobbyists in our sample about their experiences under the new  legislation, including any challenges to compliance, and asked them how  such challenges might be addressed. To provide information on the  resources and authorities used by DOJ in its role in enforcing compliance  with HLOGA, we interviewed DOJ officials, obtained information from  those involved in the referral process, and requested data on the number  of cases referred, pending, and resolved.
Our objectives did not include identifying lobbyist organizations that failed  to register and report in accordance with HLOGA requirements, or  whether, for those lobbyists that did register and report, the lobbying  activity disclosed represented the full extent of lobbying activities that  took place. Consistent with the language of the mandate, our work did not  cover the operations of 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. We were asked to examine first quarter filings for this  initial report, which excludes Form LD-203 (covering certain contributions  and payments for event costs) because that report was due for the first  time on July 30, 2008.
We conducted this performance audit from March 2008 through  September 2008 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, please see appendix I.
subsections: section_title: Background
paragraphs: Lobbying registrations and reports are required under the Lobbying  Disclosure Act of 1995 (the Act) as amended by the Honest Leadership and  Open Government Act of 2007 (HLOGA) to disclose the identities of  people attempting to influence the government, the subject matters of  their attempts, and the amounts of money they spend to accomplish their  goals.  The Act requires that lobbyists register with the Secretary of the  Senate and the Clerk of the House and file periodic reports disclosing their  activities. The Act was amended by HLOGA to make those reports due  quarterly (they had previously been due semiannually).  HLOGA requires  lobbyists to disclose whether they held an official covered position in the  past 20 years (rather than the 2 years the Act had previously required),  whether the client is a state or local government, and whether any  members of a coalition or association actively participated in the lobbying  activities. Under HLOGA, lobbyists are required to file these registrations  and reports electronically with Congress through a single entry point (as  opposed to separately with the Secretary of the Senate and the Clerk of  the House as was done prior to HLOGA). The Act, as amended by HLOGA,  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 Act defines “lobbyists” and “lobbying activities” and imposes  requirements on the reporting of those activities. Under the Act, a lobbyist  can be an individual, a lobbying firm, or an organization that has  employees lobbying on its own behalf, depending on the circumstances.  Lobbyists are required to file a registration with the Secretary of the  Senate and the Clerk of the House for each client on whose behalf a  lobbying contact is made if a minimum dollar threshold is passed. The  registration must list the name of the organization, lobbying firm, or self- employed individual lobbying on that client’s behalf.  In addition, the  registration and subsequent reports must list the individuals who acted as  lobbyists on behalf of the client during the reporting period. For reporting  purposes, a lobbyist is defined as a person who has made two or more  lobbying contacts and whose lobbying activities represent at least 20  percent of the time that he or she spends on behalf of the client during any  quarter. Registrations and reports must also identify any covered official  positions a lobbyist held in the previous 20 years.
The registration and subsequent quarterly reports must also disclose the  name of and further information about the client. The lobbyist is required  to disclose any foreign entities with interest in the client. The lobbyist  must report if the client is a state or local government. When the client is a  coalition or association, the lobbyist must identify any constituent  organization that contributes more than $5,000 for lobbying in a quarter  and actively participates in the planning, supervision, or control of  lobbying activities. The registration and subsequent reports may either  list each organization or make the list available on the coalition’s or  association’s Web site and disclose the Web address in the report.
Lobbying registrations and reports must include lobbying activity details  such as the general issue area and the specific lobbying issues. The  lobbyist must also disclose which federal agencies and house(s) of  Congress the lobbyist contacted on behalf of the client during the  reporting period.
Finally, the registrant must report the amount of money that was spent on  lobbying for the client during the reporting period. The lobbying income or  expenses disclosed on the reports are to be rounded to the nearest  $10,000. A lobbying firm, or any other organization that is hired to lobby  on behalf of an entity other than itself, must report the amount of income  related to lobbying activities received from the client during the quarter.  An organization that has employees who lobby on its behalf must report  the expenses incurred in relation to lobbying activities during the quarter.  Organizations may use one of three accounting methods to determine their  expenses: the Act’s definitions of lobbying expenses; the Internal Revenue  Code definitions for non-deductible business expenses; or, if they are a  501(c) nonprofit organization, the definitions under that portion of the  Internal Revenue Code.
section_title: Most Registered Lobbyists Could Provide Support for Their Filings and Newly Registered Lobbyists Largely Met Reporting Requirements
paragraphs: We estimate that lobbyists could provide accurate supporting  information—in either written or verbal form—on income or expenses for  at least 95 percent of all first quarter reports filed that required this  information. Neither the Act nor lobbying guidance specifies any  standards or requirements for lobbyists to maintain records or  documentation to support information disclosed in their reports.  Nonetheless, lobbyists were able to provide written or oral support for all  required elements of individual reports we examined. However, the extent  to which lobbyists could provide written documentation varied for  different aspects of the reports. The extent to which lobbyists could  provide written documentation to support elements of their filings was  quite high for some elements such as income or expenses, but notably  lower for other elements such as the individuals who acted as lobbyists.  The Act requires lobbyists to make a good faith estimate of either all  income received from the client or total expenses of lobbying activities.  Although the Act does not contain any special record-keeping provisions,  guidance from both the Secretary of the Senate and Clerk of the House  recommends that lobbyists retain copies of their filings and supporting  documentation for at least 6 years after reports are filed.
We estimate that lobbyists have written documentation to support income  or expenses for approximately 91 percent of first quarter reports that  required this information. We also estimate that lobbyists could provide  written support for issues lobbied for approximately 58 percent of reports  and for 47 percent of report information on which house of Congress or  agencies were lobbied. Lobbyists had written documentation to support  information about the individuals who acted as a lobbyist for 35 percent of  reports. Sample sizes for affiliated organizations, foreign entity interests,  and the names of individuals no longer acting as lobbyists were too small  to provide reliable estimates of levels of written documentation and verbal  explanations in support of first quarter reports that required this  information.
Our estimates of the levels of lobbyists’ documentation are based on our  review of 100 reports, which included 93 reports of lobbying activity and 7  “no activity” reports. Table 1 provides the actual numbers from our sample  that formed the basis for our estimates.
In our meetings with lobbyists, the types of documentation we were  provided and processes to track lobbying activity to support filings varied  widely among lobbyists, with some of the lobbyists in our sample  providing comprehensive written documentation supporting information  in the reports they filed and others providing less or no documentation,  often adding verbal explanations.
Most lobbyists supported their reported information on lobbying income  with billing statements, invoices, or contracts.
Some lobbyists supported their reported information on lobbying contacts  and issues using e-mails or summaries of meetings with Congress or  federal agencies.
Lobbyists who had little or no written documentation provided verbal  explanations to support the reported information.
Our sample also showed that just one of the disclosure reports did not  match the information provided for one of the specific elements we  examined during our review. In this case, the lobbyists we visited realized  that the lobbying expenses dollar amount had been reported incorrectly.  That lobbyist subsequently filed an amended report to correct the amount  of expenses disclosed.
Although the legislation and guidance do not require lobbyists to maintain  records or documentation to support information disclosed in their  reports, several of the lobbyists we spoke to during our review expressed  interest in obtaining advice or information on documentation that would  best support their filings. Some lobbyists, for example, told us they would  like information from other firms on how to set up tracking and  compliance systems before filing deadlines. Some felt that a checklist of  useful information and documentation to consider when filing would be  helpful.
Lobbyists had systems to track lobbying contacts and the amount of time  spent on lobbying activities for an estimated 49 percent of first quarter  reports. Some lobbyists had detailed tracking and accounting systems.  One large lobbying firm, for example, provided us with a demonstration of  a database system that they developed to track their lobbying activity in  detail. The system captured data provided by the firm’s many lobbyists  about their contacts, time charges, issues lobbied, and clients and  generated monthly e-mail reports for lobbyist so that they could verify the  information and report any discrepancies. Other firms used lobbying  activity tracking systems that were integrated with their billing systems. Of  these, some told us that they had recently augmented their billing codes to  better track lobbying activity to report under HLOGA.
In contrast, the other lobbyists we spoke to did not have detailed tracking  or accounting systems for lobbying activity. These lobbyists estimated  elements of their lobbying activity as necessary in preparing their reports.  Lobbyists who lobbied and performed non-lobbying consulting services  for clients for the same monthly retainer estimated the amount of time  spent lobbying versus providing consulting services in preparing their  reports. In addition, a number of firms reported they were uncertain of  whether to track the time and involvement of volunteers or members of  their boards of directors.
Six of the lobbyists within our sample reported some aspects of lobbying  activity that did not take place. Some lobbyists told us that they  reported individuals as lobbyists even though the individuals were not  involved in any lobbying activities for the client in question during the  reporting period;  reported that they had lobbied certain federal agencies even though they  indicated during our visits that such activity did not take place during the  reporting period; and  filed reports but stated that they actually had not engaged in any lobbying  activity for the client in question during the reporting period.
In addition, three lobbyists rounded the amount of their lobbying income  up to the next $10,000, rather than to the nearest $10,000 as instructed.
A few of the lobbyists cited unclear and vague law and guidance as a  reason for reporting more information than their lobbying activity  required. But other lobbyists told us that they added information as part of  a cautious approach to the filing process, to lessen the chances that they  would fail to fully report. Another reason for reporting additional data was  that lobbyists did not want to edit their reports each quarter to reflect  what they perceived to be minor changes—such as changes in the names  of individuals acting as lobbyists on specific issues or in lists of federal  agencies lobbied—and chose to leave this kind of information in their  report in case it should become applicable again for a future reporting  period.
subsections: section_title: Most Newly Registered Lobbyists Met Reporting Requirements
paragraphs: Lobbyists who registered in the first quarter of 2008 largely filed disclosure  reports for the reporting period as required. To determine whether new  registrants were meeting the requirement to file, we matched newly filed  registrations from the House Lobbyists Disclosure Database to their  corresponding first quarter disclosure reports using an electronic  matching algorithm that allowed for misspelling and other minor  inconsistencies between the registrations and reports. Our analysis of the  1,460 new registrations showed that the majority (1,358) had a clearly  corresponding disclosure report on file, indicating that the requirement for  these lobbyists to file reports for specific clients was generally met.  However, we could not identify corresponding first quarter reports of  lobbying activity for 102 (approximately 7 percent) of the 1460 new  registrations.
We brought this matter to the attention of the Secretary of the Senate and  Clerk of the House so that they could follow up with the lobbyists to  resolve any potential compliance issues. Staff of the Secretary of the  Senate and Clerk of the House told us that while the newly registered  lobbyists for whom we could not identify corresponding reports may not  have filed a report, it is possible that they filed reports with information  that did not fully match their registrations. For example, if a client’s name  did not precisely match the name listed on the lobbyist’s registration, it  would be difficult to match the registrants to their corresponding reports.  Figure 1 below illustrates the number of registrations for which we were  unable to find a corresponding report.
section_title: Some Lobbyists Reported Challenges to Complying with the Act
paragraphs: Some lobbyists identified certain challenges to their compliance with the  Act, including uncertainty about how to report various pieces of  information about their organizations and lobbying activity. Our random  sample of 100 quarterly reports included 86 separate lobbyists (some  lobbyists had reports for more than one client in our sample). About half  (41 out of 86) of these lobbyists said that they needed further information  specific to their own situations, in addition to the law and the guidance  provided by the Secretary of the Senate and the Clerk of the House. Many  lobbyists told us that when they had questions or needed clarification  regarding the law and associated guidance, the staffs of the Secretary of  the Senate and the Clerk of the House were helpful at providing needed  assistance. For example, some lobbyists told us:    They were confused about whether and under what circumstances  members of a trade association had to be listed under the requirement to  report certain affiliated organizations.
They did not know how to report foreign entity interest in the client if the  client is a U.S. corporation with an international parent company.
The issue area codes used to indicate types of lobbying activity are not  well defined and may overlap, requiring them to use their judgment to  choose between codes that were not entirely applicable to their individual  situations.
They were not sure which of their activities constituted “lobbying activity”  as defined in the Act.
They did not know how much detail they needed to provide on the specific  lobbying issues for each client.
Some lobbyists also cited certain administrative constraints as challenges  to their compliance with the Act. Under HLOGA, 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 HLOGA, the deadline for filing disclosure reports was 45 days after the  end of each reporting period. Some lobbyists told us:    The new 20-day deadline was difficult to meet because of limitations of  their own internal billing or record-keeping systems.
The increased frequency of reporting presented an administrative burden.    They found the increased frequency of reporting to be beneficial for their  own record-keeping.
Some lobbyists told us they took added steps to help ensure their  compliance with the new requirements of HLOGA. These actions included  conducting internal training sessions for their staff, hiring outside counsel  to give presentations and provide training, and attending training seminars  and workshops offered by other lobbying organizations, law firms, and  membership organizations in the lobbying community.
In this regard, a vehicle for lobbying organizations to share information  may assist some lobbyists in better ensuring the accuracy and  completeness of information in their lobbying disclosure reports. HLOGA  includes the sense of Congress that the lobbying community should  develop proposals for multiple organizations that could provide a number  of programs to assist compliance with lobbying disclosure, such as  creating standards for the organizations appropriate to the type of  lobbying and individuals to be served and providing training and  educational materials on reporting and disclosure requirements. The  creation of such organizations may assist the lobbying community with  minimizing confusion and clarifying the information needed to comply  with the Act.
section_title: The United States Attorney’s Office for the District of Columbia Assigns Resources Based on Competing Demands and Has Sufficient Authorities to Enforce Lobbying Compliance
paragraphs: Officials from the United States Attorney’s Office for the District of  Columbia (the Office) informed us that resources are assigned to lobbying  compliance issues based on competing priorities within the Office. In  addition to responding to referred cases of lobbyist noncompliance, the  Office is responsible for prosecuting all criminal cases in the District of  Columbia including cases that would be otherwise prosecuted by state  authorities in other jurisdictions. The Office also prosecutes and defends  all civil cases in the District of Columbia in which the United States is a  party, and initiates legal process to collect debts owed to the federal  government. It is the largest U.S. Attorney’s Office with more than 350  Assistant U.S. Attorneys and more than 350 support personnel for carrying  out the multitude of the Office’s responsibilities.
Officials from the Office stated that most tasks on referred lobbying  compliance cases are administrative, such as researching and responding  to referrals and sending notices to the lobbyists requesting that they file  reports or correct reported information. The Office has five staff members  who work on lobbying noncompliance issues in addition to other duties: a  deputy chief, three assistant U.S. Attorneys, and an investigator. Officials  stated that the Office’s other resources in its civil work are dedicated to  higher priority activities with a higher return to the taxpayer, such as  health care fraud.
If the Office decides to pursue a case against a referred lobbyist, penalties  may be imposed on lobbyists who intentionally fail to (1) remedy a  defective filing within 60 days after notice of such a defect by the Senate  Secretary or House Clerk’s Office and the U.S. Attorney’s Office or (2)  comply with any other provision of the Act. Penalties, recently increased  by HLOGA for offenses committed after January 1, 2008, involve a civil  fine of not more than $200,000 and criminal penalties of not more than 5  years in prison. Criminal penalties may be imposed against lobbyists who  knowingly and corruptly fail to comply with the Act. Officials from the  Office stated that they have sufficient civil and criminal statutory  authorities to enforce the Act.
The Office receives referrals of noncompliance from the Secretary of the  Senate and Clerk of the House. The Secretary of the Senate and Clerk of  the House send referrals after they have twice contacted the lobbyists by  letter to inform them of the need to remedy an error or file a missing  report. Extended periods of time may lapse between when the Secretary  of the Senate and the Clerk of the House send the first contact letter and  when they make referrals to the U.S. Attorney’s Office. For example, the  most recent referrals were received in April 2008 for the filing period that  ended in 2006. According to the Office, lobbyists often respond to a  contact letter from the Secretary of the Senate and Clerk of the House  after referrals have been received by the Office.
Before the Office sends out its own letters requesting compliance to  lobbyists once referrals are received, its staff first reviews the Secretary of  the Senate and Clerk of the House databases to determine if that lobbyist  has already resolved the compliance issue. Once this has been done, the  Office will send a letter to each lobbyist informing the lobbyist of the need  to correct the problem or file reports. The Office attempts to verify the  lobbyist’s address where letters were returned or no response was  received after 60 days. Thereafter, the Office makes a determination  whether to pursue a case of noncompliance with HLOGA. Office officials  told us that the work involved in this entire process takes a considerable  amount of time and resources. For an overview of the referral process, see  figure 2.
Referrals have increased in recent years, and as a result, the Office’s  workload relative to lobbying disclosure has increased. The Secretary and  Clerk automated their referral process in 2004, and began transmitting  referrals to the Office electronically in 2006. According to Office officials,  the automation of the referral process likely contributed to a significant  increase in the number of referrals. Since 2004, the Office has received  more than 4,000 referrals from the Secretary of the Senate and Clerk of the  House. Because of a lack of consistent records in past years, the Office  was unable to provide complete and accurate data for each reporting  period prior to 2006 to indicate the number of letters it sent to lobbyists  asking them to comply with the Act, and the number of lobbyists who  complied after the referral was received. Office officials indicated that  such information would be useful to help them better track their workload  and make resource decisions.
The Office has not received referrals for the 2007 reporting period. The  Office received more than 1,000 for the 2003, 2004, and 2005 reporting  periods. In September 2007, the Office received 449 referrals for the mid- year 2006 reporting period. The most recent set of referrals was sent by  the Secretary of the Senate in April 2008 and totaled approximately 330  referrals, all of which were for the 2006 year-end reporting period. Office  officials provided additional information on these referrals, and explained  that they consolidated the 2006 year-end referrals for lobbyists that have  more than one report that is noncompliant, leaving 268 lobbyists with one  or more filings. Officials researched the Senate database and determined  that 16 of the 268 lobbyists filed a report after the Office received the  referrals from the Senate. As a result, the Office has recently sent 252  letters to lobbyists asking them to comply with the Act by promptly filing a  report or an amendment to correct an issue that has been identified.
The Office does not have a formal, structured approach that enables them  to readily prioritize matters that should be the focus of its resources. For  example, it does not identify those lobbyists who continually fail to file or  otherwise do not comply with requirements of the Act. In commenting on  a draft of this report, Office officials stated they have recently begun to  redesign their computer database to more accurately track referrals and  identify trends in past compliance matters in order to create a more  structured approach for assigning its resources. Office officials believe  that once this is accomplished it should provide a foundation that will  allow the Office to better focus its lobbying compliance efforts. Such a  structured approach becomes increasingly important in light of the  Office’s growing workload.
The Office has been primarily focused on sending letters to lobbyists who  have potentially violated the Act, requesting that they comply with the law  and promptly file the appropriate disclosure documents. Resolution  typically involves the lobbyists coming into compliance. Office officials  told us that since the Act was passed in 1995, they have settled with three  lobbyists and collected civil penalties totaling about $47,000. All of the  settled cases involved a failure to file.
Under HLOGA, DOJ is required to file an enforcement report with  Congress after each semiannual period beginning on January 1 and July 1,  detailing the aggregate number of enforcement actions taken by DOJ  under the Act during the semiannual period and, by case, any sentences  imposed. On September 18, 2008, DOJ filed its first report for the  semiannual period ending June 30, 2008.
section_title: Conclusions and Observations
paragraphs: Most registered lobbyists could provide support for their filings and newly  registered lobbyists largely met the reporting requirements. However,  several lobbyists in our sample reported some lobbying activity that did  not occur, a circumstance that diminishes the value of information  reported to Congress. In addition to a lack of clarity in the available  guidance, the absence of documentation requirements and the fact that  some lobbyists estimate amounts to be included in their reports may have  resulted in some inaccurate information reported to Congress.
Based on these observations, we believe that the lobbying community  could benefit from creating an organization to    share examples of best practices of the types of records maintained to  support filings and use this information gathered over an initial period to  formulate minimum standards for recordkeeping;    provide training for the lobbying community on reporting and disclosure  requirements, intended to help the community comply with the Act; and  report annually to the Secretary of the Senate and the Clerk of the House  on opportunities to clarify existing guidance and ways to minimize sources  of potential confusion for the lobbying community.
The recent increase in public and congressional attention on lobbyists and  their interactions with government officials and the increase in disclosure  requirements indicate the importance of enforcing the Act. To better  address potential issues of noncompliance, the Department of Justice and  the U.S. Attorney’s Office’s limited resources need to be targeted toward  the most significant and repeated cases of noncompliance. Without a  structured approach, the Office does not have the assurance that it is  investing its limited resources in the most useful manner. Office officials  believe that the recently initiated effort under way to redesign its  computer database to more accurately track referrals should provide a  structured approach to address problem filers.
section_title: Recommendation
paragraphs: We recommend the U.S. Attorney for the District of Columbia    Complete efforts to develop plans for a structured approach to focus  limited resources on those lobbyists that continually fail to file as required  or are otherwise not in compliance. Such an approach should require the  Office to track the referrals when they are made, record reasons for the  referrals, record the actions taken to resolve them, and assess the results  of actions taken.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Attorney General for the  Department of Justice (DOJ) for review and comment. On behalf of the  DOJ, the U.S. Attorney for the District of Columbia provided us with  written comments (see app. III). The U.S. Attorney for the District of  Columbia concurred with our recommendation and stated that the office  has devoted appropriate attention to enforcing the Act and plans to  continue to develop an approach to focus limited resources on lobbyists  that continually fail to file as required or otherwise fail to comply with the  Act. The U.S. Attorney noted that his office is taking or planning to take  actions that should allow the office to develop a more structured approach  as we recommended. Specifically, the U.S. Attorney indicated that the  office plans to enhance its database to improve tracking and has  assigned an additional staff member to assist with lobbying compliance  matters. The Office of the U.S. Attorney also provided technical  comments, which we have incorporated as appropriate.
We are sending copies of this report to the Attorney General, Secretary of  the U.S. Senate, Clerk of the U.S. House of Representatives, and other  interested congressional committees and members. Copies of this report  will be made available to others upon request. In addition, this report is  available at no charge on the GAO Web site at http://www.gao.gov.
Please contact George Stalcup at (202) 512-9490 or stalcupg@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.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Consistent with the requirements of the Honest Leadership and Open  Government Act (HLOGA), 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 (the  Act);  identify the challenges lobbyists cite in complying with the Act and  suggestions for improving compliance; and    describe the process of referring noncompliance cases to the Department  of Justice (DOJ) and the resources and authorities available to DOJ in its  role in enforcing compliance with the Act.
To respond to the requirements of HLOGA, we used information in  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;  however, we do not have reason to believe that the content of the two  systems would vary substantially. While we determined that the both the  House and Senate disclosure data were sufficiently reliable for identifying  a sample of first quarter reports and for assessing whether newly filed  registrants also filed required reports, we chose to use data from the Clerk  of the House for ease of processing. 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.
To assess the extent to which lobbyists’ could provide evidence of their  compliance with reporting requirements, we examined a random sample  of 100 of the 19,861 first quarter reports filed by the April 21 deadline and  available in the House database as of our download date of May 12, 2008.  We later determined that a portion of the reports in the database were  amendments or test cases, and thus 17,801 first quarter reports were in  scope for our sample. Our sample is based on random selection, and it is  only one of a large number of samples that we might have drawn. 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 11 percentage points of the estimate  itself, unless otherwise noted.
We contacted each lobbyist in our sample and asked them to provide  support for eight key elements in their reports, including  the amount of money received for lobbying activities;  the amount of money spent on lobbying activities;  the specific issues on which they lobbied;  the houses of Congress and federal agencies which they lobbied;  the names of individuals who acted as lobbyists for the client listed on the  report;  the names of foreign entities with interest in the client;  the names of individuals no longer acting as a lobbyist 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.
Our work to examine lobbyists’ compliance was limited to reviewing  support provided by the lobbyists, which included both documentation  and oral explanations. Neither the law nor guidance currently specifies  any documentation requirements in relation to information reported under  the Act.
To determine if the Act’s requirement for registrants to file a report in the  quarter of registration was met during the first quarter of 2008, we  matched the 1460 records in the House’s first quarter registration file as of  May 13, 2008, to those in the first quarter report filings using House ID,  Senate ID, and text matching procedures. We examined all first quarter  registrations filed and signed on March 31, 2008, or before. We deleted 31  duplications of multiple registrations and selected only the most recent  registration each lobbyist filed for each particular client. We electronically  matched registrations with reports using House and Senate identification  numbers, lobbyist organization name, and client name. We identified 94  perfect matches, then relaxed our criteria to allow for minor typos and  missing identification codes, and identified an additional 1233 registrations  with corresponding reports in the first quarter filings. We could not readily  identify matches in the report database for the remaining 102 registrations.
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 Department of  Justice and provide information on the resources and authorities used by  the department in its role in enforcing compliance with HLOGA, we  interviewed department officials, 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 that failed to register  and report in accordance with HLOGA requirements, or whether for those  lobbyists that did register and report, all lobbying activity was disclosed.  We conducted this performance audit from March 2008 through  September 2008 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: Full List of Sampled Registrants and Clients
paragraphs: The random sample of lobbying disclosure reports we selected was based  on client names.
section_title: Appendix III: Comments from the Department of Justice
section_title: Appendix IV: GAO Contacts and Staff Acknowledgments
subsections: section_title: Acknowledgments
paragraphs: In addition to the contacts named above, Robert Cramer, Associate  General Counsel; Bill Reinsberg, Assistant Director; Michael Volpe,  Assistant General Counsel; Katrina Taylor, Analyst-in-Charge; Christopher  Backley; Ellen Grady; Anna Maria Ortiz; Melanie Papasian; Sabrina  Streagle; and Greg Wilmoth made key contributions to this report.
Assisting with lobbyist’s file reviews and interviews were Stephen Ander,  Amy Bowser, Dewi Djunaidy, Daniel Dunn, Karin Fangman, Melanie  Helser, Ashleigh Kades, Olivia Leonard, Andrea Levine, Ryan Little, Mary  Martin, Jeff McDermott, Jackie Pontious, Wes Sholtes, A.J. Stephens, and  Tammy Stenzel.