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

Letter

Background

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.

Documentation Supporting Disclosure Reports Varied and Newly Registered Lobbyists Largely Met Reporting Requirements

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

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.

Some Lobbyists Indicated They Planned to Amend Their LD-2 Reports

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.

Some LD-203 Contribution Reports Omitted Political Contributions Listed in the FEC Database

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.

Most Newly Registered Lobbyists Filed Disclosure Reports as Required

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.

A Few Lobbyists Continue to Report Challenges in Complying with the Act

LD-2 Reporting Requirement Terminology Remains a Challenge for a Few

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.

A Few Lobbyists Cited Other Filing Challenges

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.

The U.S. Attorney’s Office Has Taken Steps to Improve Its Enforcement of the LDA

Status Update on Enforcement for the 2008 and 2009 Reporting Periods

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.

The U.S. Attorney’s Office Has Established a System to Track Lobbying Enforcement Activities

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.

The U.S. Attorney’s Office’s Resources and Authorities to Enforce the LDA

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.

Agency Comments

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.

Appendix I: Objectives, Scope, and Methodology

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.

Appendix II: List of Registrants and Clients for Sampled Lobbying Disclosure Reports

The random sample of lobbying disclosure reports we selected was based on unique combinations of registrant lobbyists and client names (see table 3).

Appendix III: Full List of Sampled Lobbying Contribution Reports with Contributions and No Contributions Listed

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.

Appendix IV: GAO Contact and Staff Acknowledgments

Acknowledgements

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.