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Disclosure Form Makes It Hard for Lobbyists to Disclose

By Jeffrey H. Birnbaum
Tuesday, July 8, 2008

Congress passed an ethics law last year that was meant to force lobbyists to reveal more about what they do.

Unfortunately, the law's newest disclosure form, unveiled last week, contains a few loopholes -- and some just plain holes -- that are making that task a real challenge.

Lawyers dealing with the form -- dubbed LD-203 -- say they are working overtime to field questions and complaints from lobbying groups eager to fill the thing out correctly by the July 30 deadline. But they are not sure exactly how to do so.

"Our clients want to comply. They have a lot of questions," said Benjamin L. Ginsberg of the law firm Patton Boggs. "It's going to be a busy month."

Jan W. Baran of Wiley Rein notes that the new law asks lobbyists to report any contributions they make to groups established, financed, maintained or controlled by members of Congress or their staff. Such groups include charities and schools named for sitting lawmakers. But he said there is no specific place on the form to list such expenditures.

Corporations and trade associations have to use the form to certify that they understand, and have complied with, tough new gift-giving restrictions that apply to members of Congress. But Kenneth A. Gross of Skadden, Arps, Slate, Meagher & Flom said there is no place on the form where one person from such organizations can sign and take responsibility for the certification.

That's a potentially serious omission, given the stiffened civil and criminal penalties that now cover gift-rule violations. Who's to blame if the regulations are not followed, Gross asks?

Several lawyers also cite ambiguity in the form's instructions. For instance, it demands that lobbyists disclose payments they make in connection with events at which lawmakers and their aides are honored or recognized.

Does that mean a lobbyist has to list cab fare to a Kiwanis Club luncheon at which a congressman stops by and is introduced? Or, if a lawmaker visits a lobby group's multiday conference, must the cost of the whole meeting be reported, or just the cost of the single event?

"It's confusing and imperfect," Baran said. "But there's increased hope that the clerk of the House and the secretary of the Senate will fix these problems quickly, and perhaps provide some additional guidance that can be practically followed."

A spokeswoman for the secretary of the Senate said the form is easier to understand than lawyers allege. But in the meantime, the secretary's office has been answering questions that have cropped up, she said.

Loopy Loophole?

Democratic senators Charles E. Schumer (N.Y.) and Claire McCaskill (Mo.) want to close a little-noticed "loophole" that allows representatives of foreign companies to register as domestic lobbyists and not as foreign agents.

Skeptics might dismiss their plan as a political ploy. After all, the presidential campaign of John McCain-- which both senators are trying to defeat -- is heavy with former lobbyists for foreigners.

Still, their proposal would have real impact if enacted. Registration as a foreign agent requires compliance with stricter disclosure rules.

But at least one lobbyist says the measure would close a loophole that doesn't really exist.

Todd M. Malan is president of the Organization for International Investment, the lobby for foreign companies with U.S. subsidiaries -- companies such as Michelin and Nestlé.

He has been telling lawmakers that the senators' Closing the Foreign Lobbying Loophole Act would make U.S. lobbyists for Nortel, the Canada-based cellphone maker, register as foreign agents, while Washington reps for Nortel's competitor, U.S.-based Motorola, could register under the less demanding domestic-lobbying statute.

Both companies are international firms with shareholders all over the world and substantial business in the United States, Malan said, but they just happen to have headquarters across a common border.

"I would be surprised," Malan said by e-mail, "if either of them [the senators] really want to discriminate against constituent companies or their employees."

Maybe. Maybe not. This is an election year after all.

A New Voice (Un)heard From

The housing legislation moving through Congress contains a section that establishes a stronger agency to oversee companies known as government sponsored enterprises (GSEs).

Most people think of the companies in that category (to the extent they think of them at all) as Fannie Mae and Freddie Mac. They are congressionally chartered giants that finance home mortgages.

In fact, a large network of banks called Federal Home Loan Banks are also GSEs (they, too, are congressionally chartered) and they are as worried about the legislation as are Fannie and Freddie.

The banks and their members are the largest sources of residential mortgage and community development credit in the United States. There are 12 Federal Home Loan Banks, each with a president and board of directors, located in different regions of the country. The system has 8,100 member lenders.

It turns out that the banks also are lobbying on the housing bill, almost as hard as Fannie and Freddie. But what they want is, well, narrow. Instead of having an agency with a single director, as the pending bills now envision, the banks want a five-person panel to oversee the GSEs.

The banks "support a board structure for the new regulator rather than an individual as the head of the single regulator," said Larry Parks, the senior vice president of legislative and regulatory affairs for the bank in San Francisco.

Sadly for Parks, no lawmakers in authority are seriously talking about expanding the governance of the new agency, at least for now.

Hire of the Week

Hill & Knowlton, the public relations firm, has a new general manager of its Washington office.

Michael Kehs, 47, will not only lead the D.C. office but also head the firm's U.S. public affairs operations, the company said.

Prior to joining Hill & Knowlton, Kehs worked for Porter Novelli, also a PR firm, for nearly a decade, and before that he was with Burson-Marsteller for 12 years.

His clients have included Hewlett-Packard, Motorola, Shell Oil, Wyeth and the U.S. Department of Health and Human Services.

Kehs replaces Kelli Parsons, who has been doing double duty as general manager for Hill & Knowlton in New York and Washington. She will retain that job in the Big Apple after Kehs arrives for work this month.

Please send e-mail to kstreet@washpost.com.

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