2010 Lobbying Disclosure: Observations on Lobbyists' Compliance with Disclosure Requirements
Published: 2011-04-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Honest Leadership and Open Government Act of 2007 requires that GAO annually (1) determine the extent to which lobbyists can demonstrate compliance with disclosure requirements, (2) identify any challenges that lobbyists report to compliance, and (3) describe the resources and authorities available to the U.S. Attorney's Office for the District of Columbia (the Office), and the efforts the Office has made to improve its enforcement of the Lobbying Disclosure Act of 1995 as amended (LDA). This is GAO's fourth report under the mandate. GAO reviewed a stratified random sample of 100 lobbying disclosure reports filed from the fourth quarter of calendar year 2009 through the third quarter of calendar year 2010. GAO also selected two random samples totaling 160 reports of federal political campaign contributions from year-end 2009 and midyear 2010. This methodology allowed GAO to generalize to the population of 55,282 disclosure reports with $5,000 or more in lobbying activity. GAO also met with officials from the Office regarding efforts to focus resources on lobbyists who fail to comply. GAO provided a draft of this report to the Attorney General for review and comment. The Assistant U.S. Attorney for the District of Columbia responded on behalf of the Attorney General that the Department of Justice had no comments on the draft of this report.
section_title: What GAO Found
paragraphs: Lobbyists were generally able to provide documentation to support the amount of income and expenses reported; however, less documentation was provided to support other items in their disclosure reports. This finding is similar to GAO's results from prior reviews. There are no specific requirements for lobbyists to create or maintain documentation related to disclosure reports they file under the LDA. For income and expenses, two key elements of the reports, GAO estimates that lobbyists could provide documentation for approximately 97 percent of the disclosure reports for the fourth quarter 2009 and the first three quarters of 2010. According to the documentation lobbyists provided for income and expenses, we estimate the amount disclosed was supported for 68 percent of disclosure reports. After GAO's review, 21 lobbyists stated that they planned to amend their disclosure reports to make corrections on one or more data elements. As of March 2011, 12 of the 21 amended their disclosure reports. For political contributions reports, GAO estimates that a minimum of 2 percent of reports failed to disclose political contributions that were documented in the Federal Election Commission database. 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 2009 and first three quarters of 2010 filed required disclosure reports for that period. GAO could identify corresponding reports on file for lobbying activity for 90 percent of registrants. The majority of lobbyists felt that the terms associated with disclosure reporting were clear and understandable. For the few lobbyists who stated that disclosure reporting terminology remained a challenge, areas of potential inconsistency and confusion in applying the terms associated with disclosure reporting requirements have been highlighted. Some lobbyists reported a lack of clarity in determining lobbying activities versus non-lobbying activities. A few lobbyists stated that they misreported on their disclosure reports because they carried information from old reports to new reports without properly updating information. The Office is responsible for enforcement of the LDA and has the authority to pursue a civil or criminal case for noncompliance. 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. For calendar years 2008 and 2009, the Office sent 1,597 noncompliance letters for disclosure reports and political contributions reports. About half of the lobbyists who received noncompliance letters are now compliant. In response to an earlier GAO recommendation, the Office has developed a system to better focus enforcement efforts by tracking and recording the status of enforcement activities. The system allows the Office to monitor lobbyists who continually fail to file the required disclosure reports. The Office stated that they plan to institute procedures to formalize data review, refine summary data, and ensure data are accurate and reliable in the next few months.

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) amended the  Lobbying Disclosure Act of 1995 (LDA) to require lobbyists to file  quarterly lobbying disclosure reports and semiannual reports on certain  political contributions. HLOGA also increased civil penalties and added  criminal penalties for failure to comply with LDA requirements. GAO is  mandated to audit the extent of lobbyists’ compliance with the  requirements of the LDA by reviewing publicly available lobbying  registrations and a random sampling of reports filed during each calendar  year. GAO’s report shall include any recommendations related to  improving lobbyists’ compliance with the LDA and report on resources  and authorities available to the Department of Justice (DOJ) for effective  enforcement of the LDA. This is GAO’s fourth 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, as  amended, by providing documentation to support information contained in  reports filed under the LDA; (2) identify any challenges that lobbyists  report to compliance and potential improvements; and (3) describe the  resources and authorities available to the U.S. Attorney’s Office for the  District of Columbia (the Office) in its role in enforcing compliance with  the LDA, and the efforts the Office has made to improve its enforcement of  the LDA.
To fulfill our audit requirement in HLOGA, we did the following:    Selected a stratified random sample of 100 quarterly lobbying activity  disclosure reports (commonly referred to as LD-2 reports) with income  and expenses of $5,000 or more filed during the fourth quarter of  calendar year 2009 and the first, second, and third quarters of calendar  year 2010, with 25 LD-2 reports in each quarter. 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 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, lobbying issue  areas, lobbyists reported as having worked on the issues, 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 2009 and midyear 2010  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 80 LD-203 reports selected that have contributions listed, and  the second sample contains 80 LD-203 reports selected 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 FEC database could  not be confirmed by information reported in the LD-203, because the  contribution was not disclosed on the LD-203, as required, 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 2009 and the first three quarters of 2010 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 in the first quarter in which they first registered.
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.
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 capabilities of the system they established to track and  report compliance trends and referrals and other practices they have  established to focus resources on enforcement of the LDA; the extent to  which they have implemented data reliability checks into their tracking  system; and the level of staffing and resources dedicated to lobbying  disclosure enforcement. The Office provided us with reports from the  tracking system on the number and status of referrals.
The mandate does 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 2010 to March 2011 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 HLOGA, requires lobbyists to register with the  Secretary of the Senate and the Clerk of the House and file quarterly  reports disclosing their lobbying activity. No specific requirements exist  for lobbyists to create or maintain documentation in support of the reports  they file. However, LDA guidance issued by the Secretary of the Senate  and the Clerk of the House recommends lobbyists retain copies of their  filings and supporting documentation for at least 6 years after their reports  are filed. 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 (as opposed to separately with the Secretary  of the Senate and the Clerk of the House as was done prior to HLOGA).  Registrations and reports must be publicly available in downloadable,  searchable databases from the Secretary of the Senate and the Clerk of the  House.
The LDA requires that the Secretary of the Senate and the Clerk of the  House of Representatives provide guidance and assistance on the  registration and reporting requirements of the LDA and develop common  standards, rules, and procedures for compliance with the LDA. The  Secretary and the Clerk are to review the guidance semiannually, with the  latest revision having occurred in June 2010 and the latest review having  occurred in December 2010. The guidance provides definitions of terms in  the Act, Secretary and Clerk interpretations of the LDA as amended by  HLOGA, specific examples of different scenarios, and an explanation of  why the scenarios prompt or do not prompt disclosure under LDA. In  meetings with the Secretary and Clerk, they stated that they consider  information we report on lobbying disclosure compliance when they  periodically update the guidance.
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.
2 U.S.C. § 1602(9). for lobbying activities. Lobbyists are also required to submit a quarterly  report, also known as 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    whether any lobbyists served as covered executive branch or legislative  branch officials in the previous 20 years, known as a “covered official”  position;  the name of and further information about the client, including a general  description of its business or activities;  information on the general issue areas and corresponding issue codes  used to describe lobbying activities;    any foreign entities that have an interest in the client;    whether the client is 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, as amended, also requires lobbyists to report certain  contributions semiannually in the contributions report, also known as 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;  report contributions made to presidential library foundations and  presidential inaugural committees;  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; and    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.
The Secretary of the Senate and the Clerk of the House of Representatives,  along with the U.S. Attorney’s Office for the District of Columbia (the  Office) are responsible for the enforcement of the LDA. The Secretary and  the Clerk notify lobbyists or lobbying firms in writing that they may be in  noncompliance with the LDA, and subsequently refer those lobbyists who  fail to provide an appropriate response to the Office. The Office researches  these referrals and sends additional noncompliance notices to the  lobbyists, requesting that the lobbyists file reports or correct reported  information. If no response is received after 60 days, the Office decides  whether to pursue a civil case against referred lobbyists which could  result in penalties up to $200,000 or a criminal case against lobbyists who  knowingly and corruptly fail to comply with the act that could lead to a  maximum of 5 years in prison.
section_title: Documentation Supporting Disclosure Reports Varied and Newly Registered Lobbyists Largely Met Reporting Requirements
subsections: section_title: Lobbyists for Most LD-2 Reports Provided Documentation to Support the Amount of Income and Expenses Reported, but Provided Less Documentation to Support Other Elements of the LD- 2
paragraphs: While no specific requirements exist for lobbyists to create or maintain  documentation in support of the reports they file, LDA guidance issued by  the Secretary of the Senate and Clerk of the House recommends lobbyists  retain copies of their filings and supporting documentation for at least 6  years after their reports are filed. As in our prior reviews most lobbyists  reporting $5,000 or more in income or expenses were able to provide  documentation to varying degrees for the reporting elements in their  disclosure reports.
Lobbyists for an estimated 97 percent of LD-2 reports were able to provide  documentation for income and expenses for the fourth quarter of 2009 and  the first three quarters of 2010. The most common forms of  documentation provided included invoices for income and payroll records  for expenses. According to the documentation lobbyists provided for  income and expenses, we estimate that the amount disclosed was  supported for 68 percent (65 of 96) of the LD-2 reports; differed by at least  $10,000 from the reported amount in 13 percent (13 of 96) of LD-2  reports; and had rounding errors in 19 percent (18 of 96) of LD-2  reports. Lobbyists for an estimated 90 percent of the LD-2 reports filed  year-end 2009 or midyear 2010 LD-203 contribution reports for all of the  lobbyists and the lobbying firm listed on the report as required. All  individual lobbyists and lobbying firms 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.
Figure 1 illustrates the extent to which lobbyists were able to provide  documentation to support selected elements on the LD-2 reports.
Of the 100 LD-2 reports in our sample, 52 disclosed lobbying activities at  executive branch agencies with lobbyists for 28 of these reports providing  documentation to support lobbying activities at all agencies listed. These  results are consistent with our findings from last year’s Lobbying  Disclosure report. Based on this we estimate that approximately 54  percent of all reports disclosing executive branch activities could be  supported by documentation.
The LDA requires lobbyists to disclose previously held covered positions  when first registering as a lobbyist for a new client, either on the lobbying  registration (LD-1) or on the first LD-2 quarterly filing when added as  new. Of the 100 reports in our sample, 15 reports listed lobbyists who did  not disclose covered positions when they first lobbied on behalf of the  client as required or on subsequent disclosure reports.  We therefore  estimate that a minimum of 9 percent of all LD-2 reports, list lobbyists who  never properly disclosed one or more previously held covered positions.
Table 1 lists the common reasons why lobbyists we interviewed stated  they did not have documentation for some of the elements of their LD-2  report.
section_title: Some Lobbyists Indicated They Planned to Amend Their LD-2 Reports
paragraphs: For 21 of the LD-2 reports in our sample, lobbyists indicated they planned  to file an amendment as a direct result of our review. As of March 2011, 12  of those 21 lobbyists had filed amended LD-2 reports. Reasons for filing  amendments varied, but included reporting lobbyists covered positions,  changing the income or expense amounts previously reported, and  removing lobbyists who did not lobby on behalf of the client during the  quarter under review. In addition to the 21 reports that lobbyists stated  they were going to file an amendment following our review, lobbyists filed  amendments for 8 of the reports in our sample after being notified their  report was selected as part of our random sample but prior to our review.  Specific reasons lobbyists filed amendments to change the original filing  were to:    Report no lobbying activity, reduce the amount of lobbying income from  $21,000 to less than $5,000, and remove the previously reported lobbying  contact with the Senate and the House, which the lobbyists stated did not  occur during the quarter.
Add a lobbying contact with the Senate and lower the income reported  from $10,000 to less than $5,000.
Add the client’s interest in a foreign entity.    Change the client’s name, remove and add the name of the federal  agencies lobbied, remove the earlier reported lobbying contact with the  Senate, and remove a lobbyist.
Add a lobbying contact with the House and add a lobbyist.    Add lobbyists.    Add a federal agency and remove a bill number.    Change the point of contact.
section_title: Some LD-203 Contribution Reports Omitted Political Contributions Listed in the FEC Database
paragraphs: We estimate that a minimum of 5 percent of all LD-203 reports with  contributions omit one or more FEC-reportable contributions. The sample  of LD-203 reports we reviewed contained 80 reports with political  contributions and 80 reports without political contributions. We compared  those reports against the contribution reports in the FEC database to  identify any instance when the FEC database listed political contributions  made by the lobbyists that were not disclosed on the lobbyist’s LD-203  report.
Of the 80 LD-203 reports sampled with contributions reported, 7 sampled  reports failed to disclose one or more political contributions that were  documented in the FEC database. Of the 80 LD-203 reports sampled with  no contributions reported, 1 of the sampled reports failed to disclose  political contributions that were documented in the FEC database. We  estimate that among all reports a minimum of 2 percent failed to disclose  one or more political contributions.
section_title: Most Newly Registered Lobbyists Filed Disclosure Reports as Required
paragraphs: Of the 4,553 new registrations we identified from fiscal year 2010 we were  able to match 4,132 reports filed in the first quarter in which they were  registered, which is a match rate of more than 90 percent of registrations,  similar to our prior reviews. To determine whether new registrants were  meeting the requirement to file, we matched newly filed registrations in  the last quarter of 2009 and the first three quarters of 2010 from the Senate  and House Lobbyists Disclosure Databases to their corresponding  quarterly disclosure reports using an electronic matching algorithm that  allowed for misspelling and other minor inconsistencies between the  registrations and reports.
section_title: A Few Lobbyists Continue to Report Challenges in Complying with the Act
subsections: section_title: LD-2 Reporting Requirement Terminology Remains a Challenge for a Few
paragraphs: While most lobbyists we interviewed told us they thought that the  reporting requirements were clear, a few lobbyists highlighted areas of  potential inconsistency and confusion in applying some aspects of LDA  reporting requirements. Several of the lobbyists said that the Secretary of  the Senate and Clerk of the House staff were helpful in providing  clarifications when needed.
As part of our review, lobbyists present during reviews were asked to rate  various terms associated with LD-2 reporting as being clear and  understandable, not clear and understandable, or somewhat clear and  understandable. Figure 2 shows the terms associated with LD-2 reporting  that the lobbyists we interviewed in our sample of reports were asked to  rate and how they responded to each term.
Table 2 summarizes the feedback we obtained from the lobbyists in our  sample of reports that rated the lobbying terms as either not clear and  understandable or somewhat clear and understandable.
section_title: A Few Lobbyists Cited Other Filing Challenges
paragraphs: Sixty-nine lobbyists in our sample of LD-2 reports said that they found the  reporting requirements easy to meet. However, 10 lobbyists we  interviewed told us that they found meeting the deadline for filing  disclosure reports difficult because of the short time frame between the  end of the reporting period and the deadline for filing reports. For  example, one lobbyist mentioned that they have to estimate the income for  the final month of the reporting period because bills are prepared after the  filing deadline. 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 HLOGA, the deadline  for filing disclosure reports was 45 days after the end of each reporting  period.
While the electronic filing system used for lobbying reports may reduce  the amount of time filers must spend on data entry, a few lobbyists stated  that they misreported on their LD-2 reports because they carried  information from old reports to new reports without properly updating  information. As a result, some lobbyists now have to amend their LD-2  reports to accurately reflect the lobbying activity for the quarter under  review.
section_title: The U.S. Attorney’s Office Has Taken Steps to Improve Its Enforcement of the LDA
subsections: section_title: Status Update on Enforcement for the 2008 and 2009 Reporting Periods
paragraphs: Since the enactment of HLOGA, quarterly referrals for noncompliance  with the LD-2 requirements have been received from both the Secretary of  the Senate and the Clerk of the House. From June 2009 to July 2010, the  Office received referrals from both the Secretary and the Clerk for  noncompliance with reports filed for the 2008 and 2009 reporting  periods. The Office received a total of 418 referrals of lobbying firms for  the 2008 filing period and 457 referrals of lobbying firms from the 2009  filing period for noncompliance with the quarterly LD-2 reporting  requirements. The Office has not yet received all referrals from the  Secretary of the Senate and the Clerk of the House for the 2010 reporting  period.
In addition, the Office has received referrals from the Secretary  Clerk for noncompliance with LD-203 contribution reports. For  noncompliance in the 2008 calendar year, the Office has to date received  LD-203 referrals from the Secretary of the Senate for 1,324 lobbying firms,  and 126 LD-203 referrals from the Clerk of the House. The Office mailed  962 noncompliance letters to the registered lobbying firms and included  the names of the individual lobbyists who were not in compliance with t requirement to report federal campaign and political contributions and  certify that they understand the gift rules. However, the Office stated that  there is confusion among the lobbying community as to whether the  individual or organization is responsible for responding to letters of  noncompliance with LD-203 requirements. To date, the Office has receive 765 lobbying firm LD-203 referrals from the Secretary of the Senate, and  195 referrals from the Clerk of the House for the 2009 calendar year. The  Office has not yet sent letters of noncompliance with the LD-203 referrals  for the 2009 calendar year. d  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. Not all referred lobbyists are sent  noncompliance letters because some of the lobbyists have terminated  their registrations, or lobbyists may have complied by filing the report  before the Office sends noncompliance letters. 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 by filing the reports or terminating their lobbying status.
As of January 25, 2011, about 47 percent (758 of 1,597) of the lobbyists  sent letters for noncompliance with 2008 and 2009 referrals are now  considered compliant because the lobbyists in question have either filed  reports or they have terminated their registrations as lobbyists.  Additionally, about 49 percent (776 of 1,597) are pending action because  the Office did not receive a response from the lobbyist and plans to  conduct additional research to determine if they can locate the lobbyist or  close the referral because the lobbyist cannot be located. The remaining 4  percent (63 of 1,597) of the referrals did not require action because the  lobbyists were found to be compliant when the Office received them. This  may occur when lobbyists have responded to the contact letters from the  Secretary of the Senate and Clerk of the House after the referrals have  been received by the Office. Other referrals did not require action because  the lobbyist or client was no longer in business or the lobbyist was  deceased. Figure 3 shows the status of enforcement actions as a result of  noncompliance letters sent to registrant organizations for 2008 and 2009  referrals.
Since the LDA was passed in 1995, the Office has settled with three  lobbyists and collected civil penalties totaling about $47,000. All of the  settled cases involved a failure to file. The settlements occurred before the  enactment of HLOGA, which increased the penalties for offenses  committed after January 1, 2008, to 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  LDA.
As we reported previously, the Office identified six lobbyists whose names  appeared frequently in the referrals and sent them letters more targeted  toward repeat nonfilers. However, the Office has decided not to pursue  action against any of them because they determined the lobbyists were  unaware of the need to file, and therefore did not intentionally avoid  compliance with the requirements of the LDA. In all of those cases, the  lobbyists terminated or filed once they were made aware of the  requirements. In addition, in the summer of 2010, six additional lobbyists  were identified as repeat nonfilers and to date, no action has been taken  against any of them. Three of these cases have been resolved because the  Office decided not pursue further action due to lobbyists’ illness, inability  to pay, or lobbyists’ stating the failure to file was the result of an  inadvertent oversight. In an additional case, the Office determined the  level of noncompliance was not sufficiently significant for further action.  The Office continues to consider further enforcement actions for the  remaining two, and has forwarded these matters to the Assistant United  States Attorney for Civil Enforcement for further review. In addition, the  Office plans to identify additional cases for civil enforcement review in the  coming months.
section_title: The U.S. Attorney’s Office Has Established a System to Track Lobbying Enforcement Activities
paragraphs: In a prior report, we raised issues regarding the tracking, analysis, and  reporting of enforcement activities for lobbyists whom the Secretary of the  Senate and the Clerk of the House identify as failing to comply with LDA  requirements. Our report recommended that the Office complete efforts  to develop a structured approach for tracking referrals when they are  made, recording reasons for referrals, recording the actions taken to  resolve them, and assessing the results of actions taken. The Office has  developed a system to address that recommendation. The current system  provides a foundation that allows the Office to better focus its lobbying  compliance efforts by tracking and recording the status and disposition of  enforcement activities. In addition, the system allows the Office to monitor  lobbyists who continually fail to file the required disclosure reports.
Under HLOGA, the Attorney General 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 DOJ  took under the act during the semiannual period and, by case, any  sentences imposed. On September 6, 2009, the Attorney General filed his  report for the semiannual period ending June 30, 2009. We found  information provided in the enforcement report generally matched  information the system provided to GAO. In cases where we identified  inconsistencies, they were very minor. For example, the differences in the  number of noncompliance letters sent were less than 10 out of several  hundred letters sent. In addition, there were small inconsistencies  regarding the dates referrals were received from the Secretary of the  Senate and Clerk of the House. There were also inconsistencies in the  number of referrals received regarding individual lobbyists and registrant  organizations. These inconsistencies totaled less than 10 out of more than  a thousand referrals received. We brought these minor errors to the  attention of the Office and asked them about their processes for ensuring  data accuracy. Officials from the Office stated that they do not have formal  procedures for ensuring that data are entered into the system in a timely  fashion. In addition, they stated that there are no formal processes in place  to review, validate, or edit the system data after they are entered to help  ensure that accurate data are entered into the system and to help ensure  that erroneous data are identified, reported, and corrected. The Office  stated that they plan to formalize data review, refine summary data, and  institute procedures to ensure data are accurate and reliable in the next  few months. As part of this effort, they plan to establish periodic quality  checks and verification of data as we suggested when we met with them in  January 2011.
section_title: The U.S. Attorney’s Office’s Resources and Authorities to Enforce the LDA
paragraphs: Officials from the Office stated that they have sufficient civil and criminal  statutory authorities to enforce LDA. The Office has increased the number  of staff assigned to assist with lobbying compliance issues from 6 to 17.  All of the staff continue to work on lobbying disclosure enforcement part- time and primarily in an administrative capacity. Some of their  administrative activities include researching the Senate and House  databases to determine if referrals have been resolved, or mailing  noncompliance letters. In addition to those 17 part-time staff members,  one contractor was hired in September 2010 to work on lobbying  compliance issues on a full-time basis.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Attorney General for review and  comment. We met with the Assistant U.S. Attorney for the District of  Columbia, who on behalf of the Attorney General responded that DOJ had  no comments.
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 J. Christopher Mihm at (202) 512-6806 or mihmj@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 audit requirements in the Honest Leadership and Open  Government Act of 2007, our objectives were to:    determine the extent to which lobbyists are able to demonstrate  compliance with the Lobbying Disclosure Act of 1995 (LDA), as amended  by providing documentation to support information contained on reports  filed under the LDA;  identify any challenges that lobbyists report to compliance and potential  improvements; and    describe the resources and authorities available to the U.S. Attorney’s  Office for the District of Columbia (the Office), and the efforts the Office  has made to improve enforcement of the LDA, including identifying trends  in past lobbying disclosure compliance.
To respond to our mandate, we used information in the lobbying  disclosure database maintained by 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 thorough 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 has told us during previous reviews 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; and House staff told us during previous reviews 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 Senate and House systems would  vary substantially. While we determined that both the Senate and House  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 2009, first three quarters of 2010, as well as for sampling year- end 2009 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 consulted 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 stratified random  sample of 100 LD-2 reports from the fourth quarter of calendar year 2009  and the first, second, and third quarters of calendar year 2010, with 25  reports selected from each quarter. We excluded reports with no lobbying  activity or with income less than $5,000 from our sampling frame and  drew our sample from 55,282 activity reports filed for the last quarter of  2009 and the first three quarters of 2010 available in the public House  database, as of our final download date for each quarter. There is 1 LD-2  report in the sample that amended their LD-2 after notification of being  selected for the sample but prior to our review. The amended LD-2 report  decreased lobbying activity income for that quarter from $21,000 to less  than $5,000. Further, that report was amended to show no lobbying  contact, whereas the original LD-2 activity report showed lobbying contact  with the Senate and House. We conducted a review of this report because  they amended to no activity with lobbying income of less than $5,000  following notification of inclusion in the sample. Since “no lobbying  activity” was indicated on the amended LD-2 activity report, lobbyists  were not required to provide information for all reporting elements on the  LD-2. Therefore, in certain calculations this 1 report is excluded from the  sample. Our sample is based on a stratified random selection, and it is only  one of a large number of samples that we may 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 10.0 percentage points or less 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 those lobbyists listed in the report,  the houses of Congress and federal agencies that they lobbied, and  the issue codes that they had lobbied.
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 extensive open-source search of Leadership  Directories, Who’s Who in American Politics, and U.S. newspapers through  Nexis for lobbyists’ names and variations on their names. We then  examined the current LD-2 report under review, prior LD-2 reports, and  the client registration to determine if the identified covered positions were  disclosed properly. Finally, we 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 that we had not found  disclosure of to determine whether covered official positions had been  appropriately disclosed or whether there was some other acceptable  reason for the omission (such as 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 year-end 2009 and midyear 2010 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 2009 and the first,  second, and third quarters of 2010, 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 4,132 of the 4,553,  or 90.8 percent, of newly filed registrations. We began by standardizing  client and registrant names in both the report and registration files  (including removing punctuation and standardizing words and  abbreviations such as “Company and CO”). We then matched reports and  registrations using the House identification number (which is linked to a  unique registrant-client pair), as well as the names of the registrant and  client. For reports we could not match by identification number and  standardized name, 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 stratified  random samples of LD-203 reports from the 32,893 total LD-203 reports.  The first sample contains 80 reports of the 10,956 reports with political  contributions and the second contains 80 reports of the 21,937 reports  listing no contributions. Each sample contains 40 reports from the year- end 2009 filing period and 40 reports from the midyear 2010 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  7.1 percentage points or less, and to within 3.5 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 Federal Elections Commission’s (FEC) political  contribution database. For our fiscal year 2009 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 in the FEC database had been reported  on an LD-203.
We compared the FEC-reportable contributions reported on the LD-203  reports with information in 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. For contributions reported in the FEC database  and not on the LD-203, we asked the lobbyists or organizations to provide  an explanation of why the contribution was not listed on the LD-203 report  or to provide documentation of those contributions. 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. We did not  estimate the percent of other non-FEC political contributions that were  omitted (such as honoraria, or gifts to presidential libraries).
We obtained views from lobbyists included in our sample of reports on  any challenges to compliance.
To describe the processes used by the Office in following up on referrals  from the Secretary of the Senate and the Clerk of the House, data  reliability in the Office’s tracking system for referrals, 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 and obtained information on the capabilities of the system they  established to track and report compliance trends and referrals and other  practices they have established to focus resources on enforcement of the  LDA; the extent to which they have implemented data reliability checks  into their tracking system; and the level of staffing and resources  dedicated to lobbying disclosure enforcement. The Office provided us with  reports from the tracking system on the number and status of cases  referred, pending, and resolved.
The mandate does 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 2010  through March 2011 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: The random sample of lobbying disclosure reports we selected was based  on unique combinations of registrant lobbyists and client names (see table  3).
section_title: Appendix III: Full List of Sampled Lobbying Contribution Reports with Contributions and No Contributions Listed
paragraphs: See table 4 for a list of lobbyists and lobbying firms from our random  sample of lobbying contribution reports with contributions. See table 5 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: Acknowledgements
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; Megan Taylor; and Greg Wilmoth  made key contributions to this report.
Assisting with lobbyist file reviews and interviews were Sarah Arnett,  Sandra Beattie, Colleen Candrl, Irina Carnevale, Jeffrey DeMarco, Nicole  Dery, Shannon Finnegan, Robert Gebhart, Meredith Graves, Lauren  Grossman, Amanda Harris, Lois Hanshaw, Angela Leventis, Blake Luna,  Patricia MacWilliams, Stacy Ann Spence, Jonathan Stehle, and Daniel  Webb.