2014 Lobbying Disclosure: Observations on Lobbyists' Compliance with Disclosure Requirements
Published: 2015-03-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: LDA requires lobbyists to file quarterly lobbying disclosure reports and semiannual reports on certain political contributions. The law also requires that GAO annually audit lobbyists' compliance with the LDA. GAO's objectives were to (1) audit the extent to which lobbyists can demonstrate compliance with disclosure requirements, (2) identify challenges to compliance that lobbyists report, and (3) describe the resources and authorities available to USAO in its role in enforcing LDA compliance, and the efforts USAO has made to improve enforcement. This is GAO's eighth report under the mandate.
GAO reviewed a stratified random sample of 100 quarterly disclosure LD-2 reports filed for the third and fourth quarters of calendar year 2013 and the first and second quarters of calendar year 2014. GAO also reviewed two random samples totaling 160 LD-203 reports from year-end 2013 and midyear 2014. This methodology allowed GAO to generalize to the population of 46,599 disclosure reports with $5,000 or more in lobbying activity, and 30,524 reports of federal political campaign contributions. GAO also met with officials from USAO to obtain status updates on its 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 Department of Justice provided a technical comment, which GAO incorporated as appropriate.
section_title: What GAO Found
paragraphs: For the 2014 reporting period, most lobbyists provided documentation for key elements of their disclosure reports to demonstrate compliance with the Lobbying Disclosure Act of 1995 as amended (LDA). For lobbying disclosure (LD-2) reports and political contributions (LD-203) reports filed during the third and fourth quarter of 2013 and the first and second quarter of 2014, GAO estimates that
90 percent of lobbyists filed initial LD-2 reports as required for new lobbying registrations (lobbyists are required to file LD-2 reports for the quarter in which they first register).
93 percent could provide documentation for income and expenses. However, 21 percent of these LD-2 reports were not properly rounded to the nearest $10,000 and 6 percent of those reports listed the exact amount.
94 percent filed year-end 2013 reports as required.
14 percent of all LD-2 reports did not properly disclose one or more previously held covered positions (certain positions in the executive and legislative branches) as required.
4 percent of all LD-203 reports omitted one or more reportable political contributions that were documented in the Federal Election Commission database.
These findings are generally consistent with prior reports GAO issued for the 2010 through 2013 reporting periods and can be generalized to the population of disclosure reports.
Over the past several years of reporting on lobbying disclosure, GAO has found that most lobbyists in the sample rated the terms associated with LD-2 reporting as “very easy” or “somewhat easy” to understand with regard to meeting their reporting requirements. However, some disclosure reports demonstrate compliance difficulties, such as failure to disclose covered positions or misreporting of income or expenses. In addition, lobbyists amended 19 of 100 original disclosure reports in GAO's sample, changing information previously reported.
The U.S. Attorney's Office for the District of Columbia (USAO) stated it has sufficient resources and authority to enforce LD-2 and LD-203 compliance with LDA. It has one contract paralegal working full time and six attorneys working part time on LDA enforcement issues.
USAO continued its efforts to follow up on referrals for noncompliance with lobbying disclosure requirements by contacting lobbyists by e-mail, telephone, and letter. Also, USAO has finalized a settlement with a lobbyist to resolve multiple instances of noncompliance and is in the process of finalizing another settlement.

section_title: Letter
paragraphs: The Honest Leadership and Open Government Act of 2007 (HLOGA)  amended the Lobbying Disclosure Act of 1995 to require lobbyists to file  quarterly lobbying disclosure reports and semiannual reports on certain  political contributions. HLGOA also increased civil penalties and added  criminal penalties for failure to comply with lobbying disclosure  requirements. In addition, HLOGA requires us to annually audit the extent  of lobbyists’ compliance with the Lobbying Disclosure Act of 1995 as  amended (LDA) by reviewing publicly available lobbying registrations and  other matters. This is our eighth report under this mandate.
Our objectives were to (1) determine the extent to which lobbyists can  demonstrate compliance with the requirements for registrations and  reports filed under the LDA; (2) identify any challenges and potential  improvements to compliance by lobbyists, lobbying firms, and registrants;  and (3) describe the resources and authorities available to the U.S.  Attorney’s Office for the District of Columbia (USAO) in its role in  enforcing LDA compliance and the efforts it has made to improve that  enforcement.
To determine the extent to which lobbyists can demonstrate compliance,  we examined a stratified random sample of 100 quarterly lobbying  disclosure (LD-2) reports with income and expenses of $5,000 or more  filed during the third and fourth quarters of calendar year 2013 and the  first and second quarters of calendar year 2014. We selected the  randomly sampled reports from the publicly downloadable database  maintained by the Clerk of the House of Representatives (Clerk of the  House). A complete description of our methodology can be found in  appendix I. This methodology allows us to generalize some elements to  the population of LD-2 reports. We then contacted each lobbyist or  lobbying firm in our sample. We asked them to provide written  documentation for key elements of their LD-2 reports, including the  amount of income reported for lobbying activities, the amount of  expenses reported, the houses of Congress or federal agencies lobbied,  lobbying issue areas, and the names of lobbyists listed in the report. We  also reviewed whether lobbyists listed on the LD-2 reports properly  disclosed prior covered official positions, and whether the lobbyists filed  the semiannual report of federal political contributions. All lobbyists in our  sample responded to our requests to meet with us to review  documentation. Appendix II contains a list of lobbyists and clients whose  LD-2 reports we randomly selected for our review.
To determine whether lobbyists reported their federal political  contributions as required by the LDA, we analyzed stratified random  samples of year-end 2013 and mid-year 2014 semiannual political  contributions (LD-203) reports. The samples contain 80 LD-203 reports  that have contributions listed and 80 LD-203 reports that list no  contributions. We selected the randomly sampled reports from the  publicly downloadable contributions database maintained by the Clerk of  the House. (See appendix III for a list of lobbyists and lobbying firms  randomly selected for our review of LD-203 reports.) We then checked  the contributions reported in the Federal Election Commission’s (FEC)  database against the contributions identified in our sample to determine  whether all contributions reported in the FEC database were also  reported on the LD-203s as required. We contacted lobbyists and asked  them to provide documentation to clarify differences we observed. All  lobbyists contacted complied with our request to provide documentation.  This methodology allows us to generalize to the population of LD-203  reports both with and without contributions.
To determine whether lobbyists were meeting the requirement to file an  LD-2 report for the quarter in which they registered, we compared new  registrations (LD-1) filed in the third and fourth quarters of 2013, and the  first and second quarters of 2014 to the corresponding LD-2 reports on  file with the Clerk of the House.
To assess the reliability of the data used, we reviewed available  documentation and interviewed knowledgeable officials. We found the  data to be sufficiently reliable for our purposes. The details of the data  reliability assessments are available in appendix I.
To identify challenges and potential improvements to compliance, we  used a structured web-based survey to obtain views from lobbyists  included in our sample of reports.
To describe the resources and authorities available to USAO and their  efforts to improve LDA enforcement, we interviewed USAO officials and  obtained information about their system’s capabilities to track  enforcement and compliance trends and referral data that it receives from  the Secretary of the Senate and Clerk of the House.
The mandate does not require us to identify lobbyist organizations that  failed to register and report in accordance with LDA requirements. The  mandate also does not require us to determine whether reported lobbying  activity or political contributions represented the full extent of lobbying  activities that took place.
We conducted this performance audit from June 2014 to March 2015 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.
subsections: section_title: Background
paragraphs: The LDA requires lobbyists to register with the Secretary of the Senate  and the Clerk of the House and to file quarterly reports disclosing their  lobbying activity. 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. Registrations and reports must be  publicly available in downloadable, searchable databases from the  Secretary of the Senate and the Clerk of the House. No specific statutory  requirements exist for lobbyists to generate or maintain documentation in  support of the information disclosed in the reports they file. However,  guidance issued by the Secretary of the Senate and the Clerk of the  House recommends that lobbyists retain copies of their filings and  documentation supporting reported income and expenses for at least 6  years after they file their reports.
The LDA requires that the Secretary of the Senate and the Clerk of the  House provide guidance and assistance on the registration and reporting  requirements and develop common standards, rules, and procedures for  LDA compliance. The Secretary of the Senate and the Clerk of the House  review the guidance semiannually. It was last reviewed December 15,  2014. The last revision was on February 15, 2013, to (among other  issues) update the reporting thresholds for inflation. The guidance  provides definitions of terms in the LDA, elaborates on the registration  and reporting requirements, includes specific examples of different  scenarios, and provides explanations of why certain scenarios prompt or  do not prompt disclosure under the LDA. The Secretary of the Senate and  Clerk of the House’s Offices told us they continue to consider information  we report on lobbying disclosure compliance when they periodically  update the guidance. In addition, they told us they e-mail registered  lobbyists quarterly on common compliance issues and reminders to file  reports by the due dates.
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 lobby on behalf of a client  other than that person or entity.
Lobbying firms are required to register with the Secretary of the Senate  and the Clerk of the House for each client if the firms receive or expect to  receive over $3,000 in income from that client for lobbying activities. Lobbyists are also required to submit a quarterly report, also known as an  LD-2 report (LD-2), for each registration filed. The LD-2s contain  information that includes:  the name of the lobbyist reporting on quarterly lobbying activities and  the name of the client for whom the lobbyist lobbied; a list of individuals who acted as lobbyists on behalf of the client  during the reporting period; whether any lobbyists served in covered positions in the executive or  legislative branch in the previous 20 years;  codes describing general issue areas, such as agriculture and  education; a description of the specific lobbying issues; houses of Congress and federal agencies lobbied during the reporting  reported income (or expenses for organizations with in-house  lobbyists) related to lobbying activities during the quarter (rounded to  the nearest $10,000).
The LDA also requires lobbyists to report certain political contributions  semiannually in the LD-203 report. These reports must be filed 30 days  after the end of a semiannual period by each lobbying firm registered to  lobby and by each individual listed as a lobbyist on a firm’s lobbying  report. The lobbyists or lobbying firms 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, along with  USAO are responsible for ensuring LDA compliance. The Secretary of the  Senate and the Clerk of the House notify lobbyists or lobbying firms in  writing that they are not complying with the LDA reporting. Subsequently,  they refer those lobbyists who fail to provide an appropriate response to  USAO. USAO researches these referrals and sends additional  noncompliance notices to the lobbyists or lobbying firms, requesting that  they file reports or terminate their registration. If USAO does not receive a  response after 60 days, it decides whether to pursue a civil or criminal  case against each noncompliant lobbyist. A civil case could lead to  penalties up to $200,000 for each violation, while a criminal case—usually  pursued if a lobbyist’s noncompliance is found to be knowing and  corrupt—could lead to a maximum of 5 years in prison.
section_title: Lobbyists Filed Disclosure Reports as Required for Most New Lobbying Registrations
paragraphs: Generally, under the LDA, within 45 days of being employed or retained  to make a lobbying contact on behalf of a client, the lobbyist must register  by filing an LD-1 form with the Clerk of the House and the Secretary of  the Senate. Thereafter, the lobbyist must file quarterly disclosure (LD-2)  reports detailing the lobbying activities. Of the 2,950 new registrations we  identified for the third and fourth quarters of 2013 and first and second  quarters of 2014, we matched 2,659 of them (90 percent) to  corresponding LD-2 reports filed within the same quarter as the  registration. These results are consistent with the findings we have  reported in prior reviews. We used the House lobbyists’ disclosure  database as the source of the reports and used an electronic matching  algorithm that allows for misspellings and other minor inconsistencies  between the registrations and reports. Figure 1 shows lobbyists filed  disclosure reports as required for most new lobbying registrations from  2010 through 2014.
subsections: section_title: For Most LD-2 Reports, Lobbyists Provided Documentation for Key Elements but for Some LD-2 Reports, Lobbyists Rounded Their Income or Expenses Incorrectly
paragraphs: For selected elements of lobbyists’ LD-2 reports that can be generalized  to the population of lobbying reports, unless otherwise noted, our findings  have been consistent from year to year. We used tests that adjusted for  multiple comparisons to assess the statistical significance of changes  over time.
Most lobbyists reporting $5,000 or more in income or expenses provided  written documentation to varying degrees for the reporting elements in  their disclosure reports. For this year’s review, lobbyists for an estimated  93 percent of LD-2 reports provided written documentation for the income  and expenses reported for the third and fourth quarters of 2013 and the  first and second quarters of 2014. Figure 2 shows that for most LD-2  reports, lobbyists provided documentation for income and expenses for  sampled reports from 2010 through 2014.
Figure 3 shows that for some LD-2 reports, lobbyists rounded their  income or expenses incorrectly. We identified 21 percent of reports as  having rounding errors. We have found that rounding difficulties have  been a recurring issue for LD-2 reports from 2010 through 2014.lobbyists who reported expenses told us that based on their reading of  the LD-2 form they believed they were required to report the exact  amount. While this is not consistent with the LDA or the guidance, this  may be a source of some of the confusion regarding rounding errors. In  2014, 6 percent of lobbyists reported the exact amount of income or  expenses.
section_title: For Most Lobbying Disclosure Reports (LD-2), Lobbyists Filed Political Contribution Reports (LD-203) for All Listed Lobbyists
paragraphs: Lobbyists for an estimated 94 percent of LD-2 reports filed year-end 2013  reports for all lobbyists listed on the report as required. All but two  lobbying firm filed LD-203s for the lobbying firm itself before we  preformed our check. The firm that had not filed an LD-203 filed one as  soon as we brought it to the firm’s attention. The other firm did not  respond to our request for the information about filing the LD-203. Figure  8 shows that lobbyists for most lobbying firms filed contribution reports as  required in our sample from 2010 through 2014. All individual lobbyists  and lobbying firms reporting lobbying activity are required to file LD-203  reports semiannually, even if they have no contributions to report,  because they must certify compliance with the gift and travel rules.
section_title: For Some LD-2 Reports, Lobbyists Failed to Disclose Their Previously Held Covered Positions
paragraphs: The LDA requires a lobbyist to disclose previously held covered positions  when first registering as a lobbyist for a new client. This can be done  either on the LD-1 or on the LD-2 quarterly filing when added as a new  lobbyist. This year, we estimate that 14 percent of all LD-2 reports did not  properly disclose one or more previously held covered positions as  required. Figure 9 shows the extent to which lobbyists failed to properly  disclose one or more covered positions as required from 2010 through  2014.
section_title: Some Lobbyists Amended Their Disclosure Reports After We Contacted Them
paragraphs: Lobbyists amended 19 of the 100 LD- 2 disclosure reports in our original  sample to make changes to previously reported information after we  contacted them. Of the 19 reports, 10 were amended after we notified the  lobbyists of our review, but before we met with them. An additional 9 of  the 19 reports were amended after we met with the lobbyists to review  their documentation. We consistently find a notable number of amended  LD-2 reports in our sample each year following notification of our review.  This suggests that sometimes our contact spurs lobbyists to more closely  scrutinize their reports than they would have without our review.
Table 1 lists reasons lobbying firms in our sample amended their LD-1 or  LD-2 reports.
section_title: Most LD-203 Contribution Reports Disclosed Political Contributions Listed in the FEC Database
paragraphs: As part of our review, we compared contributions listed on lobbyists’ and  lobbying firms’ LD-203 reports against those political contributions  reported in the FEC database to identify whether political contributions  were omitted on LD-203 reports in our sample. The sample of LD-203  reports we reviewed contained 80 reports with contributions and 80  reports without contributions. We estimate that overall for 2014, lobbyists  failed to disclose one or more reportable contributions on 4 percent of  reports. Table 2 illustrates that from 2010 through 2014 most lobbyists  disclosed FEC reportable contributions on their LD-203 reports as  required. In 2014, nine LD-203 reports were amended in response to our  review.
section_title: Most Lobbying Firms Found It Easy to Comply with Disclosure Requirements and Understood Lobbying Terms
paragraphs: As part of our review, 93 different lobbying firms were included in our  2014 sample of LD-2 disclosure reports. Consistent with prior reviews,  most lobbying firms reported that they found it “very easy” or “somewhat  easy” to comply with reporting requirements. Of the 93 different lobbying  firms in our sample, 16 reported that the disclosure requirements were  “very easy,” 54 reported them “somewhat easy,” and 13 reported them  “somewhat difficult” or “very difficult”. (See figure 10).
Most lobbying firms we surveyed rated the definitions of terms used in  LD-2 reporting as “very easy” or “somewhat easy” to understand with  regard to meeting their reporting requirements. This is consistent with  prior reviews. Figures 11 through 15 show what lobbyists reported as  their ease of understanding the terms associated with LD-2 reporting  requirements from 2010 through 2014.
section_title: U.S. Attorney’s Office for the District of Columbia (USAO) Actions to Enforce the LDA
subsections: section_title: USAO’s Resources and Authorities to Enforce LDA Compliance
paragraphs: USAO officials stated that they continue to have sufficient personnel  resources and authority under the LDA to enforce reporting requirements,  including imposing civil or criminal penalties for noncompliance.  Noncompliance refers to a lobbyist’s or lobbying firm’s failure to comply  with the LDA. According to USAO officials, they have one contract  paralegal specialist assigned full time, as well as five civil attorneys and  one criminal attorney assigned part time for LDA compliance work. In  addition, USAO officials stated that the USAO participates in a program  that provides Special Assistant United States Attorneys (SAUSA) to the  USAO. Some of the SAUSAs assist with LDA compliance by working with  the Assistant United States Attorneys and contract paralegal specialist to  contact referred lobbyists or lobbying firms who do not comply with the  LDA.
USAO officials stated that lobbyists resolve their noncompliance issues  by filing LD-2s, LD-203s, LD-2 amendments, or by terminating their  registration, depending on the issue. Resolving referrals can take  anywhere from a few days to years, depending on the circumstances.  During this time, USAO uses summary reports from its database to track  the overall number of referrals that are pending or become compliant as a  result of the lobbyist receiving an e-mail, phone call, or noncompliance  letter. Referrals remain in the pending category until they are resolved.  The category is divided into the following areas: “initial research for  referral,” “responded but not compliant,” “no response /waiting for a  response,” “bad address,” and “unable to locate.” USAO focuses its  enforcement efforts primarily on the responded but not compliant group.  USAO attempts to review pending cases every 6 months, according to  officials.
Officials told us that after four unsuccessful attempts have been made,  USAO confers with both the Secretary of the Senate and the Clerk of the  House to determine whether further action should be taken. In some  cases where the lobbying firm is repeatedly referred for not filling  disclosure reports but does not appear to be actively lobbying, USAO  suspends enforcement actions. USAO monitors these firms, including  checking the lobbying disclosure databases maintained by the Secretary  of the Senate and the Clerk of the House. If the lobbyist begins to lobby  again, USAO will resume enforcement actions.
section_title: Status of LD-2 Enforcement Efforts from 2009 through 2014 Reporting Periods
paragraphs: As of February 26, 2015, USAO has received 2,308 referrals from both  the Secretary of the Senate and the Clerk of the House for failure to  comply with LD-2 reporting requirements cumulatively for filing years  2009 through 2014. Table 3 shows the number and status of the referrals  received and the number of enforcement actions taken by USAO in its  effort to bring lobbying firms into compliance. Enforcement actions include  the number of letters, e-mails, and calls made by USAO. About 52  percent (1,196 of 2,308) of the total referrals received are now compliant  because lobbying firms either filed their reports or terminated their  registrations. In addition, some of the referrals were found to be compliant  when USAO received the referral. Therefore no action was taken. This  may occur when lobbying firms respond to the contact letters from the  Secretary of the Senate and Clerk of the House after USAO has received  the referrals. About 48 percent (1,101 of 2,308) of referrals are pending  further action because USAO was unable to locate the lobbying firm, did  not receive a response from the firm, or plans to conduct additional  research to determine if it can locate the lobbying firm. The remaining 11  referrals did not require action or were suspended because the lobbyist or  client was no longer in business or the lobbyist was deceased.
section_title: Status of LD-203 Enforcement Actions from 2009 through 2014 Reporting Periods
paragraphs: LD-203 referrals consist of two types: LD-203(R) referrals represent  lobbying firms that have failed to file LD-203 reports for their lobbying  firm; and LD-203 referrals represent the lobbyists at the lobbying firm who  have failed to file their individual LD-203 reports as required. As of  February 26, 2015, USAO had received 1,551 LD-203(R) referrals and  2,745 LD-203 referrals from the Secretary of the Senate and Clerk of the  House for lobbying firms and lobbyists for noncompliance with reporting  requirements cumulatively for calendar years 2009 through 2014.
LD-203 referrals may be more complicated than LD-2 referrals because  both the lobbying firm and the individual lobbyists within the firm are each  required to file a LD-203. However, according to USAO, lobbyists  employed by a lobbying firm typically use the firm’s contact information  and not the lobbyists personal contact information. This makes it difficult  to locate a lobbyist who may have left the firm. USAO reported that, while  many firms have assisted it by providing contact information for lobbyists,  they are not required to do so. According to officials, USAO has difficulty  pursuing LD-203 referrals for lobbyists who have departed a firm without  leaving forwarding contact information with the firm. While USAO utilizes  web searches and online databases including LinkedIn, Lexis/Nexis,  Glass Door, Facebook and the Sunlight Foundation websites to find these  missing lobbyists, it is not always successful. When USAO is unable to  locate lobbyists because it does not have forwarding contact information  to find a lobbyist who has left a firm, USAO has no recourse to pursue  enforcement action, according to officials.
Table 4 shows the status of LD-203 (R) referrals received and the number  of enforcement actions taken by USAO in its effort to bring lobbying firms  into compliance. About 46 percent (714 of 1,551) of the lobbying firms  referred by the Secretary of the Senate and Clerk of the House for  noncompliance from 2009 through 2014 reporting periods are now  considered compliant because firms either have filed their reports or have  terminated their registrations. About 54 percent (836 of 1,551) of the  referrals are pending further action.
Table 5 shows that as of February 26, 2015, USAO had received 2,745  LD-203 referrals from the Secretary of the Senate and Clerk of the House  for lobbyists who failed to comply with LD-203 reporting requirements for  calendar years 2009 through 2014. It also shows the status of the  referrals received and the number of enforcement actions taken by USAO  in its effort to bring lobbyists into compliance. In addition, table 5 shows  that 44 percent (1,211 of 2,745) of the lobbyists had come into  compliance by filing their reports or are no longer registered as a lobbyist.  About 56 percent (1,525 of 2,745) of the referrals are pending further  action because USAO was unable to locate the lobbyist, did not receive a  response from the lobbyist, or plans to conduct additional research to  determine if it can locate the lobbyist.
Table 6 shows that as of February 26, 2015, USAO had received LD-203  referrals from the Secretary of the Senate and Clerk of the House for  3,841 lobbyists who failed to comply with LD-203 reporting requirements  for any filing year from 2009 through 2014. Table 6 shows the status of  compliance for individual lobbyists listed on referrals to USAO. Table 6  shows that 48 percent (1,861 of 3,841 of the lobbyists had come into  compliance by filing their reports or are no longer registered as a lobbyist.  About 52 percent (1,980 of 3,841) of the referrals are pending action  because USAO could not locate the lobbyists, did not receive a response  from the lobbyists, or plans to conduct additional research to determine if  it can locate the lobbyists.
USAO officials said that many of the pending LD-203 referrals represent  lobbyists who no longer lobby for the lobbying firms affiliated with the  referrals, even though these lobbying firms may be listed on the lobbyist’s  LD-203 report.
section_title: Status of Enforcement Settlement Actions
paragraphs: According to USAO officials, lobbyists who repeatedly fail to file reports  are labeled chronic offenders and referred to one of the assigned  attorneys for follow-up. According to officials, USAO monitors and reviews  chronic offenders to determine appropriate enforcement actions, which  may lead to settlements or other successful civil actions.  However,  instead of pursuing a civil penalty, USAO may decide to pursue other  actions such as closing out referrals if the lobbyist appears to be inactive.  According to USAO, in these cases, there would be no benefit in pursuing  enforcement actions.
USAO finalized a settlement in the amount of $30,000 for Alan Mauk &  Alan Mauk Associates, Ltd to address failure to file for several years.  According to officials USAO is close to finalizing a settlement with another  firm for repeated failure to file.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Attorney General for review and  comment. The Department of Justice provided a technical comment,  which we incorporated into the draft as appropriate.
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. In addition, this report is  available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-6806 or mihmj@gao.gov. 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: Our objectives were to determine the extent to which lobbyists are able to  demonstrate compliance with the Lobbying Disclosure Act of 1995 as  amended (LDA) by providing documentation to support information  contained on registrations and reports filed under the LDA; to identify  challenges and potential improvements to compliance, if any; and to  describe the resources and authorities available to the U.S. Attorney’s  Office for the District of Columbia (USAO), its role in enforcing LDA  compliance, and the efforts it has made to improve enforcement of the  LDA.
We used information in the lobbying disclosure database maintained by  the Clerk of the House of Representatives (Clerk of the House). To  assess whether these disclosure data were sufficiently reliable for the  purposes of this report, we reviewed relevant documentation and  consulted with knowledgeable officials. 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 caused by the differences in data processing. For example,  Senate staff told us during previous reviews they set aside a greater  proportion of registration and report submissions than the House for  manual review before entering the information into the database. As a  result, the Senate database would be slightly less current than the House  database on any given day pending review and clearance.
House staff told us during previous reviews that they rely heavily on  automated processing. In addition, while they manually review reports  that do not perfectly match information on file for a given lobbyist or client,  staff members 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  reasons to believe that the content of the Senate and House systems  would vary substantially. For this review, we determined that House  disclosure data were sufficiently reliable for identifying a sample of  quarterly disclosure (LD-2) reports and for assessing whether newly filed  lobbyists also filed required reports. We used the House database for  sampling LD-2 reports from the third and fourth quarters of 2013 and the  first and second quarters of 2014, as well as for sampling year-end 2013  and mid-year 2014 political contributions (LD-203) reports. We also used  the database 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.  However, we did consult with officials from each office. 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 stratified random  sample of 100 LD-2 reports from the third and fourth quarters of 2013 and  the first and second quarters of 2014. We excluded reports with no  lobbying activity or with income or expenses of less than $5,000 from our  sampling frame. We drew our sample from 46,599 activity reports filed  for the third and fourth quarters of 2013 and the first and second quarters  of 2014 available in the public House database, as of our final download  date for each quarter.
Our sample of LD-2 reports was not designed to detect differences over  time. However, we conducted tests of significance for changes from 2010  to 2014 for the generalizable elements of our review and found that  results were generally consistent from year to year and there were few  statistically significant changes after using a Bonferroni adjustment  to  account for multiple comparisons. These changes are identified in the  report. While the results provide some confidence that apparent  fluctuations in our results across years are likely attributable to sampling  error, the inability to detect significant differences may also be related to  the nature of our sample, which was relatively small and was designed  only for cross-sectional analysis.
A Bonferroni adjustment is a statistical adjustment designed to reduce the chance of  making a type 1 inferential error, that is, concluding that a difference exists when it is  instead an artifact of sampling error. The adjustment raises the threshold for concluding  that any single difference is “statistically significant” so that overall the chance of making  at least one type-1 error when making multiple comparisons does not exceed a specified  level. population value for 95 percent of the samples that we could have drawn.  The percentage estimates for LD-2 reports have a 95 percent confidence  intervals of within plus or minus 12.1 percentage points or less of the  estimate itself.
We contacted all the lobbyists and lobbying firms in our sample and,  using a structured web-based survey, asked them to confirm key  elements of the LD-2 and whether they could provide documentation 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 listed to describe their lobbying activity.
After reviewing the survey results for completeness, we conducted  interviews with the lobbyists and lobbying firms to review documentation  they reported as having on their online survey for selected elements of  their LD-2 report.
Prior to each interview, we conducted a search to determine whether  lobbyists properly disclosed their covered position as required by the  LDA. We reviewed the lobbyists’ previous work histories by searching  lobbying firms’ websites, LinkedIn, Leadership Directories, Legistorm, and  Google. Prior to 2008, lobbyists were only required to disclose covered  official positions held within 2 years of registering as a lobbyist for the  client. The Honest Leadership and Open Government Act of 2007  amended that time frame to require disclosure of positions held 20 years  before the date the lobbyists first lobbied on behalf of the client. Lobbyists  are required to disclose previously held covered official positions either on  the client registration (LD-1) or on an LD-2 report. Consequently, those  who held covered official positions may have disclosed the information on  the LD-1 or a LD-2 report filed prior to the report we examined as part of  our random sample. Therefore, where we found evidence that a lobbyist  previously held a covered official position, and it was not disclosed on the  LD-2 report under review, we conducted an additional review of the  publicly available Secretary of the Senate or Clerk of the House database  to determine whether the lobbyist properly disclosed the covered official  position on a prior report or LD-1. Finally, if a lobbyist appeared to hold a  covered position that was not disclosed, we asked for an explanation at  the interview with the lobbying firm to ensure that our research was  accurate.
In previous reports, we reported the lower bound of a 90 percent  confidence interval to provide a minimum estimate of omitted covered  positions and omitted contributions with a 95 percent confidence level.  We did so to account for the possibility that our searches may have failed  to identify all possible omitted covered positions and contributions. As we  have developed our methodology over time, we are more confident in the  comprehensiveness of our searches for these items. Accordingly, this  report presents the estimated percentages for omitted contributions and  omitted covered positions, rather than the minimum estimates. As a  result, percentage estimates for these items will differ slightly from the  minimum percentage estimates presented in prior reports.
In addition to examining the content of the LD-2 reports, we confirmed  whether the most recent 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 lobbyists to file a report in the  quarter of registration was met for the third and fourth quarters of 2013  and the first and second quarters of 2014, we used data filed with the  Clerk of the House to match newly filed registrations with corresponding  disclosure reports. Using an electronic matching algorithm that includes  strict and loose text matching procedures, we identified matching  disclosure reports for 2,659, or 90 percent, of the 2,950 newly filed  registrations. We began by standardizing client and lobbyist 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 lobbyist-client pair), as well as the  names of the lobbyist 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  lobbyist name, allowing for variations in the names to accommodate  minor misspellings or typos. For these cases, we used professional  judgment to determine whether cases with typos were sufficiently similar  to consider as matches. 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 stratified  random samples of LD-203 reports from the 30,524 total LD-203 reports.  The first sample contains 80 reports of the 9,787 reports with political  contributions and the second contains 80 reports of the 20,737 reports  listing no contributions. Each sample contains 40 reports from the year- end 2013 filing period and 40 reports from the midyear 2014 filing period.  The samples from 2014 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 9.5 percentage points or less. Although our sample of LD-203  reports was not designed to detect differences over time, we conducted  tests of significance for changes from 2010 to 2014 and found no  statistically significant differences after adjusting for multiple  comparisons.
While the results provide some confidence that apparent fluctuations in  our results across years are likely attributable to sampling error, the  inability to detect significant differences may also be related to the nature  of our sample, which was relatively small and designed only for cross- sectional analysis. 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. We  consulted with staff at FEC responsible for administering the database.  We determined that the data is sufficiently reliable for our purposes.
We compared the FEC-reportable contributions reporting on the LD-203  reports with information in the FEC database. The verification process  required text and pattern matching procedures so 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 report, we asked the lobbyists or  organizations to explain 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 percentage of other non-FEC political contributions that were  omitted because they tend to constitute a small minority of all listed  contributions and cannot be verified against an external source.
To identify challenges to compliance, we used a structured web-based  survey and obtained the views from 93 different lobbying firms included in  our sample on any challenges to compliance. The number of different  lobbying firms total 93 and is less than our sample of 100 reports because  some lobbying firms had more than one LD-2 report included in our  sample. We calculated our responses based on the number of different  lobbying firms that we contacted rather than the number of interviews.  Prior to our calculations, we removed the duplicate lobbying firms based  on the most recent date of their responses. For those cases with the  same response date, the decision rule was to keep the cases with the  smallest assigned case identification number. To obtain their views, we  asked them to rate their ease with complying with the LD-2 disclosure  requirements using a scale, of “very easy,” “somewhat easy,” “somewhat  difficult,” or “very difficult.” In addition, using the same scale we asked  them to rate the ease of understanding the terms associated with LD-2  reporting requirements.
To describe the resources and authorities available to the U.S. Attorney’s  Office for the District of Columbia (USAO) and its efforts to improve its  enforcement of the LDA, we interviewed officials from USAO. We  obtained information on the capabilities of the system officials established  to track and report compliance trends and referrals, and other practices  established to focus resources on enforcement of the LDA. USAO  provided us with updated reports from the tracking system on the number  and status of referrals and chronically noncompliant lobbyists and  lobbying firms.
The mandate does not require us to identify lobbyists who failed to  register and report in accordance with the LDA requirements, or  determine for those lobbyists who did register and report whether all  lobbying activity or contributions were disclosed.
We conducted this performance audit from June 2014 to March 2015 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 Lobbyists and Clients for Sampled Lobbying Disclosure Reports
paragraphs: The random sample of lobbying disclosure reports we selected was  based on unique combinations of lobbyist and client names (see table 7).
section_title: Appendix III: List of Sampled Lobbying Contribution Reports with and without Contributions Listed
paragraphs: See table 8 for a list of the lobbyists and lobbying firms from our random  sample of lobbying contributions reports with contributions. See table 9  for a list of the 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: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Bill Reinsberg (Assistant  Director), Shirley Jones (Assistant General Counsel) and Katherine Wulff  (analyst-in-charge) supervised the development of this report. Amy  Bowser, Crystal Bernard, Kathleen Jones, Davis Judson, Stuart Kaufman,  and Anna Maria Ortiz made key contributions to this report.
Assisting with lobbyist file reviews were Dawn Bidne, Linda Collins,  Joseph Fread, Ricky Harrison Jr, Shirley Hwang, Melissa King, Barbara  Lancaster, Courtney Liesener, Heidi Nielson, Patricia Norris, Alan Rozzi,  Karissa Schafer, Sarah Sheehan, Angela Smith, Natalie Swabb, and Nell  Williams.
section_title: GAO Related Products
paragraphs: Lobbying Disclosure: Observations on Lobbyists’ Compliance with New  Disclosure Requirements. GAO-08-1099. Washington, D.C: September  30, 2008.  2008 Lobbying Disclosure: Observations on Lobbyists’ Compliance with  Disclosure Requirements. GAO-09-487. Washington, D.C: April 1, 2009.  2009 Lobbying Disclosure: Observations on Lobbyists’ Compliance with  Disclosure Requirements. GAO-10-499. Washington, D.C: April 1, 2010.  2010 Lobbying Disclosure: Observations on Lobbyists’ Compliance with  Disclosure Requirements. GAO-11-452. Washington, D.C: April 1, 2011.  2011 Lobbying Disclosure: Observations on Lobbyists’ Compliance with  Disclosure Requirements. GAO-12-492. Washington, D.C: March 30,  2012.  2012 Lobbying Disclosure: Observations on Lobbyists’ Compliance with  Disclosure Requirements. GAO-13-437. Washington, D.C: April 1, 2013.  2013 Lobbying Disclosure: Observations on Lobbyists’ Compliance with  Disclosure Requirements. GAO-14-485. Washington, D.C: May 28, 2014.