BP's changing lobbying disclosure amount? It figures.
Thursday, July 22, 2010
What good is being a multinational corporation if you don't know how to make the most of loopholes in the law? BP filed a lobbying report shortly before the second quarter deadline on Tuesday night, saying it spent $1.7 million influencing the government last quarter, an increase of 8 percent from the previous quarter.
That's hardly surprising -- but what's more notable is the fact that it also reported its first-quarter lobbying decreased by 55 percent. Back in April, when the first-quarter report was due, BP said it had spent $3.5 million. On Tuesday, it filed an amendment saying it really only spent $1.6 million.
A company spokesman said the reason the figures changed is that one trade association, the American Petroleum Institute, revised how it calculated the amount of dues that BP would need to report. Corporations and trade associations have always had the option of using an IRS definition of lobbying or one created under the Lobbying Disclosure Act, which requires the filings.
"BP has always included in its lobbying disclosure the dollar amounts it pays to trade associations that are attributable to lobbying," the company said in a statement. "Beginning in 2010, API provided this figure to BP using a different definition of lobbying contained in the LDA."
That's not what the API says. "We've always offered both figures," a spokesman said.
The IRS definition, which is often used by trade associations, includes state-level lobbying and grass-roots lobbying, including expensive television ads and local campaigns. The LDA definition excludes state and grass-roots lobbying but includes a more exhaustive definition of executive-branch lobbying.
The API files its congressional reports using the LDA definition of lobbying. When API files to the IRS, it uses the tax-code definition. Member companies can then choose which way they want to report their dues. The IRS definition is almost always more.
The disclosure system relies on good-faith estimates of lobbying expenses, and both definitions are legally correct for BP to use.
"It's possible that they changed it due to the public sensitivity to all their activities at this juncture," said Kenneth Gross, a lawyer with Skadden, Arps, Slate, Meagher & Flom who represents corporations and trade associations on lobbying and political issues.
Such a large amendment is far from unusual. A review of a lobbying disclosure database shows that companies have made amendments of at least $500,000 to a report 50 times since the House and Senate adopted quarterly reporting in 2008.
Sometimes the amendments are clearly meant to fix mistakes, such as when Teach for America amended its third-quarter 2008 filing from $183,624,496 to $183,624.
But other times the amendments are less transparent. In April, Royal Dutch Shell amended three separate 2009 quarterly reports. Each was $800,000 and was amended to more than $2 million. A Shell lobbyist forwarded questions to a company spokesman, who did not return the call.