When is lobbying lobbying and when is it merely "legislative liaison"?

Anyone who can define the difference, kindly advise Secretary of Defense Caspar W. Weinberger, who is betting he can draw a line somewhere in the regulatory fog, make it stick and save taxpayers millions of dollars in the process.

Weinberger has issued a directive designed to end the long-standing practice in which the government reimburses defense contractors for their lobbying costs.

Public watchdog groups, who helped bring the matter to the secretary's attention, are delighted by his willingness to take on the industry. It's his execution that has them worried.

They fear Weinberger has leaped head first into the trap that has short-circuited all previous efforts to reform the system. By defining "lobbying" as an unallowable expense and "legislative liaison" as an allowable one, and then by not establishing specific standards to distinguish between the two, Weinberger has produced nothing more than an "open hunting license" for continued abuse, charges Gordon Adams, author of a recent study of defense contracting.

While any company that does business with the federal government is theoretically free to build its lobbying expenses into its bid price, the practice has become particularly controversial in the defense industry, where a small handful of giant firms dominate the market, lobby heavily, and are often the sole provider of a given weapons system.

Adams and Common Cause, which this summer released a government audit that documented at least $2 million in lobbying costs submitted in 1974-75 by the Washington offices of 10 major defense contractors, fear the new regulations are so loosely worded that they will sanctify business-as-usual.

One man's nightmare, of course, is another's dream. The defense industry, which for years has been resisting efforts to curb its lobbying reimbursements, has been conspicuously silent on the new directive.

Spokesmen for two major industry associations, the Council of Defense and Space Industry Associations and the Aerospace Industries Association, had no comment on the new regulations. Neither did spokesmen for Boeing, Grumman and McDonnell Douglas.

Richard Cook, head of Lockheed's Washington office, did respond to questions about the directive, and he was hardly ringing an alarm bell. "I have no problem with the regulation," he said. "I don't think our unallowable costs will materially increase as a result of it."

That's just what has the watchdogs worried. "The regulation recognizes there is something wrong in concept," said Fred Wertheimer, president of Common Cause, "but they don't provide much solace and comfort that the problem will be taken care of."

The nub of the issue has to do with definitions. Weinberger's new directive, an amendment to the Defense Acquisition Regulation, defines lobbying as any activity designed to directly or indirectly influence Congress.

It defines "legislative liaison" as attending committee hearings, gathering information on pending legislation and analyzing the effect of pending legislation. Expenses for legislative liaison are allowable while those for lobbying are not--except, the regulation says, if "lobbying" is performed at the invitation of a congressional staffer or a member of the executive branch.

That last exception, complains Adams, "means that all a contractor has to do is to get someone from DOD to ask him to go up to the Hill, then everyone is okay."

But even without the exception, the regulation is still shot through with loopholes, says Wertheimer. For example, he notes that in the 1974-75 period, Rockwell International charged the government $10,000 to put together a study of the economic impact of production of the B1 bomber. The study was broken down by congressional districts.

"Now if that isn't lobbying, I don't know what is," said Wertheimer. "But I suppose someone could try to argue it's an allowable expense because it is an analysis of pending legislation."

The definition muddle is not new. After the revelations in 1975 that defense contractors were entertaining military and congressional personnel at hunting lodges and on yachts, Sen. William Proxmire (D-Wis.) began demanding that lobbying costs not be charged against government contracts.

"There is enough favoritism and behind-the-scenes influence on large defense contracts without the added insult of having the taxpayer foot the bill," he said.

While the industry was willing to concede that lavish entertainment should not be considered part of routine overhead, it vehemently defended its right (some argued the issue on First Amendment grounds) to charge more conventional lobbying costs.

The DOD studied the matter for more than two years. A sheaf of memos were written. A good deal of momentum built up in the department behind the notion that there ought to be some restrictions. But ultimately, no one could agree on a definition of lobbying, and the whole subject was unceremoniously dropped by DOD last year.

Now Weinberger has jumped into the fray, with language that is watered down more, Adams contends, than the proposals that had been circulating at DOD last year. A Pentagon spokesman declined to comment on Adams' charges, or to provide a more explicit definition of the difference between lobbying and legislative liaison.

Meanwhile, the watchdogs are moving on other fronts. Sen. David Pryor (D-Ark.), with an assist from Common Cause, is getting ready to introduce legislation that, he says, will nail down a definition of lobbying once and for all.

He's hoping to introduce a bill next month--just as soon as he works out the language.