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Under the federal Lobbying Disclosure Act (“LDA”), an organization or lobbying firm must register if it employs an individual who meets the definition of a “lobbyist” and if its total expenses or income for lobbying activities meet certain monetary thresholds.  The two non-monetary thresholds determining when an individual becomes a “lobbyist,” discussed below, are usually the main factors driving when an organization or lobbying firm must register.  However, the monetary thresholds, one of which was recently increased from $13,000 to $14,000, may affect the registration obligations of entities engaged in only a de minimis amount of lobbying.

Under the LDA, the test for determining if an employee of an organization or lobbying firm qualifies as a lobbyist is two-pronged:

  1. Has the individual made two or more federal lobbying contacts on behalf of the organization (for in-house employees) or a firm client (for lobbying firms) at any time? and
  1. Has that individual spent 20% or more of his or her work time for the organization (for in-house employees) or that particular client (for lobbying firms) engaged in federal lobbying activities during any three-month period?

If both prongs of the test are satisfied, the individual qualifies as a “lobbyist” for LDA purposes and the organization or lobbying firm likely must register under the LDA, listing that lobbyist and the organization/client on its registration and disclosure reports.

Although employing a lobbyist usually leads to registration by the employer, the LDA provides an exemption from registration for organizations employing in-house lobbyists that spend no more than $14,000 (recently increased from $13,000) on lobbying activities in a quarterly period.  For lobbying firms, this threshold is $3,000 (unchanged from previous levels) in income from a client for lobbying activities in a quarterly period.  These thresholds are indexed for inflation every four years and rounded to the nearest $500.  The new $14,000 threshold for organizations is effective as of January 1, 2021.

Because these monetary thresholds are low, compensation associated with employees who meet the relatively high threshold of becoming a “lobbyist” will almost always cross these thresholds.  But for certain smaller organizations or non-profits, this threshold may be a factor in the LDA registration decision, as it may be for lobbying firms with a de minimis amount of activity on behalf of a particular client.  In addition, it is these monetary thresholds that exempt lobbying firms from triggering registration on behalf of certain pro bono clients.

The application of the LDA’s registration thresholds and triggers involves a detailed analysis of the activities of an organization or a firm, which must consider the broad and multi-factored definition of a “lobbying contact,” and the even broader definition of “lobbying activities.”  Covington has advised numerous clients on LDA registration requirements as applied to those clients’ activities.  If you have any questions on whether your organization is required to register under the LDA, please reach out to a member of our Election and Political Law Group.

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Photo of Derek Lawlor Derek Lawlor

Derek Lawlor is of counsel in the firm’s Election and Political Law Practice Group. Derek advises corporations, nonprofit organizations, and trade associations on compliance with federal and state lobbying, campaign finance, and government ethics laws.

Clients regularly rely on Derek to assist with…

Derek Lawlor is of counsel in the firm’s Election and Political Law Practice Group. Derek advises corporations, nonprofit organizations, and trade associations on compliance with federal and state lobbying, campaign finance, and government ethics laws.

Clients regularly rely on Derek to assist with their complex questions related to activities and projects that implicate all of these laws. Derek advises federal and state candidates and super PACs on campaign finance and disclosure issues. Derek also represents clients in government investigations and inquiries conducted by the Federal Election Commission, Office of Congressional Ethics, and Congressional Committees and Commissions.

Derek’s representation of clients covers the full range of important political law issues that they face, including:

  • Advising clients on their registration and reporting obligations under the federal Lobbying Disclosure Act, as well as state and local lobbying laws, including helping client organizations evaluate the core questions that arise in this space:
    • Has the organization or any of its employees triggered lobbying registration requirements?
    • What lobbying income, expenditures, issues, or contacts need to be disclosed on lobbying reports?
    • Does procurement or sales activity directed at governmental entities trigger lobbying registration in a particular jurisdiction?
    • What are the best practices for designing a lobbying compliance program?
  • Assisting corporations and trade associations with the establishment and operation of connected PACs, which frequently entails evaluating the following questions:
    • What steps does the organization need to take to start up and register a connected PAC?
    • What are the ongoing reporting requirements under the Federal Election Campaign Act (“FECA”) or state campaign finance laws?
    • Which employees can the organization solicit and what are the rules on conducting a solicitation campaign?
    • What are the limits on making contributions to federal, state, or local candidates, party committees, or other political committees?
    • What are the best practices for designing a PAC compliance program?
  • Evaluating whether a client’s proposed activities might trigger registration under the Foreign Agents Registration Act (“FARA”), and if so, advising on registration and ongoing reporting obligations;
  • Advising federal and state candidates, super PACs, and other political committees on compliance with FECA, FEC regulations and reporting requirements, state campaign finance laws, rules on disclaimers placed on communications, and other political law compliance topics;
  • Counseling individuals who are entering government service, including Senate-confirmed positions, on the various financial disclosure requirements, conflicts of interest considerations, and other ethics law issues they may face;
  • Helping clients establish politically active or policy-focused nonprofit organizations, and proving ongoing support related to tax and political law issues that might arise from their activities; and
  • Advising corporations, nonprofits, and individuals on their proposed donations to candidates, political committees, and other politically active outside groups.

Derek is a Professorial Lecturer in Law at the George Washington University Law School.

Prior to receiving his law degree, Derek worked in the Office of General Counsel at the U.S. House of Representatives.