Lobbying Restrictions on Federal Grantee or Contractor Activities

Testimony was given on lobbying restrictions on Federal grantee or contractor activities. Although the First Amendment establishes the right of groups to lobby, groups are not entitled to public funds to exercise that right. In promulgating its initial version of Circular A-122, the Office of Management and Budget came close to a violation of the First Amendment. However, that version has been withdrawn, and the revised costing principles do not punish lobbying activities, but treat them as any other unallowable cost which grantees are required to separate from reimbursable costs when submitting their vouchers to a granting agency. GAO believes that there is no constitutional problem with the proposed Uniform Lobbying Cost Principles Act of 1984, but would prefer a delay in the introduction of the legislation until there has been some operating experience with the revised OMB Circular A-122. Grantees, contractors, agencies, and their auditors need comprehensive and consistent guidance on which activities may be federally funded and which constitute unallowable lobbying. There are some differences between commercial procurement and a grant or contract with a nonprofit organization, but none would justify differential treatment for lobbying costs.