Federal Lobbying:

Differences in Lobbying Definitions and Their Impact

GGD-99-38: Published: Apr 15, 1999. Publicly Released: Apr 15, 1999.

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George H. Stalcup
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Pursuant to a legislative requirement, GAO reviewed the reporting of lobbying activities by organizations that have employees who lobby on the organizations' behalf and have the option to report their lobbying expenses under the Lobbying Disclosure Act (LDA) of 1995 or applicable Internal Revenue Code (IRC) provisions that they use for tax purposes, focusing on: (1) the differences between the LDA and IRC section 4911 and 162(e) definitions of lobbying; (2) the impact that differences in the definitions may have on registration and reporting under LDA, including information on the number of organizations using each definition and the expenses they have reported; and (3) identifying and analyzing options, including harmonizing the three definitions, that may better ensure that the public disclosure purposes of LDA are realized.

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.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: As of June 2005, Congress has neither considered nor acted on the recommendation.

    Matter: If Congress believes that the inclusion of nonfederal lobbying expenses and the underreporting of lobbying efforts at the federal level due to the optional use of the Internal Revenue Code (IRC) lobbying definitions seriously detract from the Lobbying Disclosure Act's (LDA) purpose of public disclosure, then it should consider adopting one of two options. Congress could remove the authorization for organizations to use an IRC definition for reporting purposes. In this case, data reported to the Senate and House would adhere to the LDA definition, which Congress enacted specifically to achieve LDA's public reporting purpose. Alternatively, Congress could allow organizations to continue using the IRC definitions but require that they use only the expenses related to federal-level lobbying that those definitions yield when they register and report under LDA. The data reported would be more closely aligned with LDA's purpose of disclosing federal level lobbying efforts, but some differences would remain between the data so reported and the data that would result from applying only the LDA definition. If either of these options were considered, Congress would need to weigh the benefit of reporting that would be more closely aligned with LDA's public disclosure purpose against the additional reporting burden that some organizations would likely bear.


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