Sunlight Foundation

The GAO is bound by law under the Honest Leadership and Open Government Act of 2007 to file an annual review of compliance with lobbying disclosure requirements. A review of last year’s disclosure compliance was released yesterday. For the review, the GAO randomly audited 100 lobby shops to determine their level of compliance. The contains statistics on those 100 lobby shops and estimations for the statistical level of disclosure across all lobby shops. Here are some of the noteworthy estimated statistics:

• 6 percent of all lobbyist disclosures “erroneously report the amount of income or expenses for lobbying activity.”
• 7 percent, at minimum, of all lobbyist disclosures “list lobbying activity that did not actually happen.”
• 3 percent, at minimum, of all lobbyist disclosures “fail to fully disclose whether the individual lobbyists for a specific client held an official covered position.”
• 4 percent, at minimum, of all lobbyist contribution disclosures “omit donations that should have been reported.”

And these are statistics based on the 100 randomly audited lobby shops:

• 14 percent of lobbyist disclosures were contradicted by documentation provided by lobbyists.
• 65 percent of lobbyist contribution disclosures “could be supported by FEC data or documentation provided by lobbyists.”
• 16 percent of lobbyist contribution disclosures (LD-203) “contained erroneous entries or failed to disclose required contributions.”
• 13 percent of registrants could not be linked to “a corresponding report… likely because either a report was not filed or reports that were filed contained information, such as client names, that did not match.”

You can read the full report here.

Yesterday, the Washington Times reported that various pharmaceutical companies and trade groups have contributed $172,500 to the Utah Families Foundation, a nonprofit closely connected to Sen. Orrin Hatch. The Times article notes that the contributions to the Utah Families Foundation “provides fresh evidence that the campaign-finance limits and transparency reforms that President Obama demanded and that Congress enacted still leave avenues for interests to route large sums of money to lawmakers’ favorite causes without disclosure.” While there are certainly still loopholes in the ethics and transparency reforms the example presented by the Times appears to not only be false, but to invert the actual effect of the transparency reforms.

Let’s look at the whole story. The Times states that the information about the contributions to the Utah Families Foundation came from a “normally confidential” IRS disclosure form was accidentally released. That form covered the year 2007, the year that the ethics reforms the Times mentions were enacted, but before they were put into operation. Contributions to nonprofits connected to members of Congress were only required to be disclosed in 2008 and in no years prior. It would have done the Times well to have looked at the legislative history of the reforms they were mentioning. Also, simply by delving into the lobbying contribution databases operated by the Clerk of the House and the Secretary of the Senate we can see that contributions, labeled Honorary or Meeting Expenses, to the Utah Families Foundation for 2008 were disclosed.

In 2008, four pharmaceutical companies contributed a total of $47,500 to the Utah Families Foundation, labeling these contributions as Honorary Expenses for Sen. Orrin Hatch. These companies include Cephalon, Abbot Laboratories, Johnson & Johnson, and Baxter Healthcare Corporation. Also making reporting Honorary or Meeting Expenses were Pfizer and PhRMA, the lobbying arm of the industry. PhRMA spent $75,000 on Honorary and Meeting Expenses for Sen. Hatch, while Pfizer spent only $10,000.

While the Washington Times does help to illuminate the connections between the pharmaceutical industry and a powerful senator, their assertion that the lack of disclosure surrounding the Utah Families Foundation in 2007 is a failure of transparency reforms enacted in 2007 is not based in reality. In fact, if we believe that the laws are followed and companies disclosures are accurate than there is a very different story to be told here.

A comparison of the contributions made to the Utah Families Foundation in 2007 and 2008 clearly show that the pharmaceutical industry has greatly reduced their contributions since the transparency reforms were enacted. The contributions to the Utah Families Foundation have gone down from $172,500 to $47,500. Perhaps the fear of disclosure led these companies to reduce their pursuit of alternate avenues of influence. After all, sunlight is the best disinfectant.

New contribution disclosure rules provide some transparency in the world of “soft” influence seeking. In this case, these disclosure rules require the disclosure of contributions made “in honor of” a covered official, a lawmaker, executive branch or military official. A Seattle Times article looking into these contributions in honor of Washington state lawmakers shows Rep. Norm Dicks, a senior member of the Defense Appropriations Subcommittee, as a frequent honoree for contributions made by corporations seeking defense contracts.

Boeing gave $10,000 earlier this year to one of Congressman Norm Dicks’ favorite charities, the National Guard Youth Foundation.

So did Boeing’s archrival, EADS, the parent company of Airbus.

But that’s small change compared to another defense contractor, TriWest Healthcare Alliance, which gave $100,000 to the youth foundation’s gala dinner in February honoring Dicks, a Bremerton Democrat, for his staunch support of the charity.

TriWest followed that up with a $50,000 contribution to another charity event hosted by Dicks and four other members of the powerful defense-appropriations subcommittee that doled out $459 billion in contracts this year.

Giving money to a charity favored by a lawmaker isn’t quite like giving to their campaign committee, but it will likely gain you brownie points when money for your business is on the table. In this case, the desire to influence behavior, while denied by all parties involved, is plain as day for anyone looking from the outside.

Keith Ashdown of Taxpayers for Common Sense is quoted in the article saying, “There’s nothing outrageous at all about giving to something that helps a National Guard entity … I think it’s a soft lobbying tactic that can make lawmakers think you’re in their camp and loyal to their interests.”

Back in July, the New York Times and the New York Post appeared in competition for which publication could roll out the most damaging story about House Ways and Means Committee Chairman Charles Rangel. Four months later and they’re back at it.

Yesterday, the Post reported the Rangel receives a tax benefit on his home in D.C. that is intended for home owners and residents of the District of Columbia. Unfortunately for Rangel, he also receives perks in his Harlem home district, where he owns multiple rent-stabilized apartments. Both benefits require that the resident operate their home as a “primary residence.” So, where is it that you live congressman? Harlem? Or Washington? (FYI, we don’t have congressional representation here. So, if it was Washington, you’d be out of a job.)

The Times adds the pile-on today, with a much more serious story. Rangel, a long time opponent of off shore tax shelters, has, in recent years, sought to protect the tax shelter status of an oil-drilling company whose chief executive promised $200,000 to help fund the creation of the Charles Rangel School of Public Service at C.C.N.Y.:

Congressional records and interviews show that Mr. Rangel was instrumental in preserving a lucrative tax loophole that benefited an oil-drilling company last year, while at the same time its chief executive was pledging $1 million to the project, the Charles B. Rangel School of Public Service at C.C.N.Y.

The company, Nabors Industries, was one of four corporations based in the United States that were widely criticized in 2002 and 2003 for opening offices in the Caribbean to reduce their federal tax payments. Mr. Rangel was among dozens of representatives from both parties who bitterly opposed those offshore moves and, in 2004, pushed unsuccessfully for legislation to make the companies pay more tax.

But in 2007, when the United States Senate tried to crack down on the companies, Mr. Rangel, who had recently been sworn in as House Ways and Means chairman, fought to protect them. The tax shelter for the four companies was preserved, saving Nabors an estimated tens of millions of dollars annually and depriving the federal treasury of $1.1 billion in revenues over a decade, according to a Congressional analysis by the nonpartisan Joint Committee on Taxation.

Rangel is already facing an ethics investigation targeting his solicitation for funding for the Rangel Center and his rent stabilized apartments. This revelation, while the congressman claims there is “no quid pro quo,” could do great harm to his stature in Congress. The Politico goes as far as to ponder whether President Obama will want to work through a scandal tarred committee chairman.

Back to the allegations in the Times article. Members of Congress and private interests have long stated that contributions by the latter to charitable interests connected to the former are nothing but simple good will. The understanding, as evidenced by the Times’ reporting, that these contributions constitute an unregulated form of influence seeking led Congress to finally establish some disclosure requirements.

The biannual lobbyist contribution forms mandated under the Honest Leadership and Open Government Act require the disclosure of contributions to entities if they are named after, in recognition of, established, maintained, or controlled by an elected representative. If that is the case, then the Rangel School has not received any contributions so far this year. Unless, of course, some groups are skirting the disclosure requirements.

While there’s much room for improvement, the 110th Congress has made a stab at providing a few rays of Sunlight into the mercenary culture of Washington. For example, in 2008, for the first time, federally registered lobbyists are required to file a new disclosure, called an LD-203, listing the contributions they make to federal candidates, among other things. Those disclosures have been released to the public, but in a form that’s so garbled that contributions are double, triple, quadruple counted or more. My colleague Anupama Narayanswamy painstakingly reviewed 107,000 records, finding the 14,000 individual contributions to federal candidates, and adding up who’s benefited the most from the personal checks of individual lobbyists. The headline above tells you that; read the rest here.

Not everyone has that kind of appetite apparently. Businesses and lobbying firms are still complaining about the disclosure of contributions - both campaign and honorary - required in the new lobbying disclosure forms (LD-203). “This is insanity. It is grossly overreacting on the part of the Hill,” says one senior vice president of government relations.

The new lobbying reports are available online (you can search them here) and CQ Politics went through and picked out some of the contributions: (Read More…)

The Clerk of the House and the Secretary of the Senate are loosening their interpretation of lobbyist disclosure provisions on gifts to lawmakers and staff members and on PAC contributions. The new rules will be put in place after lobbyists and ethics lawyers launched a lobbying campaign to loosen disclosure requirements in the new LD-203 form - a new disclosure document requiring disclosure of campaign contributions and gifts.

The two offices initially ruled that lobbyists must disclose the fee of events where a “covered official” is in attendance. This rule no longer applies:

The new revisions require lobbyists and lobbying organizations to report the fee or contribution for an event if a covered official is honored or receives an award and they are a “sponsor” as defined by the Senate and House gift rules.

The House and Senate’s gift rules take a narrow view of sponsor, requiring that a person or group not only make a financial contribution to an event but have primary responsibility for the event’s organization.

The new ruling also reduce disclosure for lobbyist spending through political action committees (PACs):

The previous guidance stated that lobbyists sitting on a PAC board would have to list all donations of the PAC on their personal LD-203 form. This could require a single lobbyist to list all the donations of several PACs they were involved with.

Under the new guidance, lobbyists are required to list only that they are on the board of the connected PAC, not document the individual contributions made by the PAC.

While certain lobbyists were complaining to force these changes, Sunlight’s John Wonderlich filed his LD-203 and had this to say about it on twitter, “lobbying disclosure was really painless.” Onerous disclosure requirements are in the eye of the beholder, I guess.

As of July 30 lobbyists will have to report some interesting new information: any campaign contributions, including those from a political action committee controlled by the lobbyist or organization; honorary expenses linked to lawmakers; expenses for meetings involving lawmakers; and donations to presidential libraries. The Honest Leadership and Open Government Act of 2007 required this new disclosure that lobbyists will file twice a year, with the first deadline being July 30th.  The new forms, LD-203, are here. The Center for Responsive Politics says they plan to capture all these reports. Should be some interesting material in these new reports.

But I was struck by the lack of timeliness of these new reports. Being filed only twice a year raises the question: how much transparency will these forms actually provide?  With all the online tools we have access to today, why not have instantaneous disclosure?  Why wait six months, when the money changing hands is affecting legislation being written today?  It seems to me that this new requirement will give us some more information about the role of the power lobbyist, it does little to deal with the most critical problem - the timeliness of reporting.

Hat tip: Amanda Adams at OMB Watch’s Advocacy Blog.