LAW PRACTICE

Federal lobbying reform law touches state lawyers

By ROBERT E. LEIDIGH


A law firm is hired to obtain an environmental permit for a development project. After months of preparation, progress is slowed by intractable federal bureaucrats.

So an attorney from the firm phones the local member of Congress seeking help. The attorney follows up with a letter outlining the client's proposal and efforts to satisfy environmental requirements.

Depending on how much time the attorney spent on this client's behalf and how much the client was billed in a six-month period, the law firm may have to register as a lobbying firm and file regular reports under a broad new law that took effect Jan. 1 -- the Federal Lobbying Disclosure Act of 1995 (LDA) (Public Law 104-65, U.S.S. 1601 et seq.).

Most who know about the new statute are looking at its impact "inside the beltway" on Washington, D.C., law and lobbying firms. But this first major federal lobbying reform law in half a century could also have far-reaching effects on California law firms.

Its most notable feature is that it covers virtually all types of federal agency action -- not simply proposed legislation or regulation.

The law's coverage is comprehensive and includes "the formulation, modification, or adoption of a federal rule, regulation, executive order, or any other program, policy or position of the United States government . . . and the administration or execution of a federal program or policy (including the negotiation, award, or administration of a federal contract, grant, loan, permit or license . . ." (Pub. Law 104-65, 3(B)).

Three-part threshold

Law firms representing clients must be aware of the LDA's three-part threshold triggering registration and reporting obligations.

1. Did any attorney in the firm have two or more "lobbying contacts" for a client?

Such contact can be oral or written and include electronic communications to a "covered" executive or legislative branch official.

Such officials can include members of Congress or their staffs; covered executive branch officials essentially include anyone exempt from competitive service and any military officer with a rank of general or admiral.

The two lobbying contacts that meet this test can be a letter followed by a phone call.

2. Did the same attorney spend 20 percent or more of his or her time for that client during a six-month period engaged in lobbying activities?

This covers much more than lobbying contacts. It involves preparation, research, planning and other background work intended for use in lobbying contacts as well as coordinating lobbying activities of others.

The measurement

The 20 percent is measured against all work for the client, not the attorney's work for all of his or her clients. If the law firm is hired to push a permit through the process, all of its attorneys' time may be devoted to research, planning and other activities aimed at influencing covered federal decision-makers.

Assuming the attorney made at least two lobbying contacts and spent more than 20 percent of his or her time working for that client on lobbying activities, then the third test must be examined.

3. Will the client be billed $5,000 or more in any semi-annual period for the law firm's services involving lobbying activities? Litigation and unrelated legal services would not be counted in such a calculation.

The registration process

If all three thresholds are met, the law firm must register with the clerk of the House of Representatives and the secretary of the Senate within 45 days of either the first lobbying contact or the point in time when it first expects to meet the three tests, whichever occurs first.

The firm must name its attorneys who will qualify as lobbyists and the clients and subjects for which the lobbying is occurring.

Semi-annual reports are required naming the specific matters being lobbied, the house of Congress or federal agency being lobbied, the lobbyists as well as payments received for lobbying activities -- and which clients made these payments.

It should be noted that some type of contacts are exempt from this law and judicial and enforcement proceedings are not covered by it. However, failure to comply with the new statute can be subject to civil prosecution by the U.S. Department of Justice, with fines up to $50,000.


Robert E. Leidigh, partner in the Sacramento law firm of Olson, Hagel, Fong, Leidigh, Waters & Fishburn, is a former senior staff counsel with the California Fair Political Practices Commission and current vice president of the California Political Attorneys Association.

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