Federal Lobbying

Differences in Lobbying Definitions and Their Impact Gao ID: GGD-99-38 April 15, 1999

To increase public disclosure about lobbyists who seek to influence Congress and the executive branch, the Lobbying Disclosure Act of 1995 requires paid lobbyists to register with Congress and report semiannually on their lobbying activities. GAO is required to review the reporting of lobbying activities by groups that have employees who lobby on their behalf and have the option of reporting their lobbying expenses using the definitions of lobbying provided by either the act or the applicable Internal Revenue Code provision--sections 4911 or 162(e) that they use for tax purposes. Section 4911 imposes taxes on lobbying expenses exceeding certain limits paid by tax-exempt, nonprofit groups, known as public charities. Section 162(e) generally concerns the denial of income tax deductions by businesses for lobbying. This report (1) describes the differences in how lobbying is defined by the act and sections 4911 and 162(e); (2) determines the impact that differences in the definitions may have on registration and reporting under the act, including information on the number of groups using each definition and the expenses they have reported; and (3) identifies and analyzes options, including harmonizing the three definitions, to better ensure that the act's public disclosure goals are achieved.

GAO noted that: (1) the LDA definition covers only contacts with federal officials; (2) the IRC definitions cover contacts with federal, state, and local officials as well as attempts to influence the public through grassroots lobbying; (3) the definitions differ in their coverage of contacts with federal officials, depending on whether the contact concerns a legislative or nonlegislative matter; (4) the differences in the lobbying definitions can affect whether organizations register under LDA; (5) an organization that engages or expects to engage in certain lobbying activities during a 6-month period, including incurring at least $20,500 in lobbying expenses, is required to register under LDA; (6) the definition an organization uses in calculating its lobbying expenses determines the expenses it counts toward the $20,500 threshold; (7) when using the LDA definition would result in expenses of more than $20,500, an organization may be able to use the applicable IRC definition to keep its lobbying expenses below $20,500 or vice versa; (8) the lobbying definition an organization uses affects the information it must disclose on its semiannual lobbying report; (9) when using an IRC definition, an organization must report its total lobbying expenses for all activities covered by that definition; (10) however, all of these expenses are reported in one total amount, so the lobbying reports do not indicate the amount related to different levels of government and types of lobbying activities; (11) when organizations report information other than expenses, they are required to report only information related to federal government lobbying, regardless of whether they use the LDA definition or one of the IRC definitions to calculate expenses; (12) because of the differences in definitions, information disclosed on lobbying reports filed by organizations using the IRC definitions is not comparable to information on reports filed by organizations using the LDA definition; (13) under the IRC definitions, organizations can disclose less information than under the LDA definition; (14) of the organizations that lobbied on their own behalf and had the option of using an IRC definition for reporting expenses under LDA, most used the LDA definition; (15) the organizations that reported using the IRC section 162(e) definition had the highest mean and median expenses; and (16) because the differences among the three lobbying definitions can significantly affect who registers and what they report under LDA, the use of the IRC definitions can conflict with LDA's public disclosure purpose.


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