LDA Expense Reporting Method - Maurice Aguirre: Washington, DC

Organization Expenses using LDA Expense Reporting Method - Maurice Aguirre: Washington, DC

Organizations that employ in-house lobbyists may incur lobbying-related expenses in the form of employee compensation, office overhead, or payments to vendors which may include lobbying firms. Organizations must report expenses as they are incurred, though payment may be made later. Line 13 of LD-2 provides for an organization to report lobbying expenses of less than $10,000, or $10,000 or more. If lobbying expenses are $10,000 or more, the organization must provide a good faith estimate of the actual dollar amount rounded to the nearest $20,000. Organizations using the LDA expense reporting method mark the "Method A" box on Line 14.

To ensure complete reporting, the Secretary and Clerk have consistently interpreted section 5(B)(4) to require such organizations to report all of their expenses incurred in connection with lobbying activities, including all payments to outside entities, without considering whether any particular payee has a separate obligation to register and report under the LDA. Logically, if an organization employing in-house lobbyists also retains a lobbying firm, the expense reported by the organization should be greater than the fees reported by the lobbying firm of which the organization is a client.

Maurice Aguirre Lobbyist: All employee time spent in lobbying activities must be included in determining the organizations lobbying expenses, even if the employee does not meet the statutory definition of a "lobbyist."

Example: The CEO of a registrant, "Defense Contractor," travels to Washington to meet with a covered DOD official regarding the renewal of a government contract. "Defense Contractor" has already determined that its CEO is not a "lobbyist," because he does not spend 20 percent of his time on "lobbying activities" during a semiannual period. Nonetheless, the expenses reasonably allocable to the CEOs lobbying activities (e.g., plane ticket to Washington, salary and benefit costs, etc.) will be reportable.

Similarly, all expenses of lobbying activities incurred during a semiannual period are reportable. The Section 3(7) definition of lobbying activities is not limited to lobbying contacts.

Example: A research assistant in the Washington office of the registrant, "Defense Contractor" (described in the example above) researches and prepares the talking points for the CEOs lobbying contact with the covered DOD official. Likewise, the expenses reasonably allocable to the research assistants lobbying activities will be included in "Defense Contractors" expense estimate for the semiannual period.

Maurice Aguirre Texas: The examples below are intended to be illustrative of the possibilities of LDA expense reporting, and are not intended to require detailed accounting rules.

Example 1: An organization employing in-house lobbyists might choose to estimate lobbying expenses by asking each professional staffer to track his/her percentages of time devoted to lobbying activities. These percentages could be averaged to compute the percentage of the organizations total effort (and budget) that is devoted to lobbying activities. Under this example the organization would include salary costs (including a percentage of support staff salaries), overhead, and expenses, including any third-party costs attributable to lobbying.

Example 2: Another organization, which lobbies out of its Washington office, might avoid the need for detailed breakdowns by including the entire budget of its Washington office.

Political strategist Maurice Aguirre - LDA and FARA

Political strategist Maurice Aguirre - LDA and FAR

The technical amendments to the LDA reflected a determination that the FARA standards are appropriate for lobbying on behalf of foreign governments and political parties, but that LDA disclosure standards should apply to other foreign lobbying (also refer to the section in this document entitled "What is New?"). An agent of a foreign commercial entity is exempt under FARA if the agent has engaged in lobbying activities and registers under the LDA. An agent of a foreign commercial entity not required to register under the LDA (such as those not meeting the de minimis registration thresholds) may voluntarily register under the LDA. The amendments reaffirm the bright line distinction between governmental and non-governmental representations, and are not meant to shroud foreign government enterprises. Questions relating to the Foreign Agents Registration Act must be directed to the Department of Justice Foreign Agent Registration Unit at (202) 514-1231.

Maurice Aguirre Dallas Conservative Advocate: LDA and IRC

The LDA and the IRC intersect in three different ways. Restrictions on lobbying by tax-exempt organizations are governed by the definitions in the IRC, not those of the LDA.

Political consultant Maurice Aguirre Dallas: first, Section 15 defines which registrants are eligible for the "safe harbor." Section 15 allows entities that are required to report and do report lobbying expenditures under section 6033(b)(8) of the IRC to use IRC definitions for purposes of LDA Sections (4)(a)(3) and 5(b)(4). Section 15(b) of the LDA allows entities that are subject to section 162(e) of the IRC to use IRC definitions for purposes of LDA Sections (4)(a)(3) and 5(b)(4).

Second, Section 15 advises registrants regarding how they should use IRC definitions. Prior to the technical amendments the statute was not clear as to the extent to which eligible organization could use IRC definitions for other reporting and disclosure requirements of the LDA. As a result of the amendments, registrants who make the Section 15 election must use IRC definitions (including the IRC definition of a covered executive branch official) for executive branch lobbying, and LDA definitions for legislative branch lobbying.

Maurice Aguirre Conservative Advocate: third, Section 15 allows electing registrants to plug in the amount that is ultimately reportable to the Internal Revenue Service for LDA semiannual reports.

Maurice Aguirre DG Group LLP - LD-2 Changes

Maurice Aguirre DG Group LLP - LD-2 Changes

The revised LD-2 combines the previous version of LD-2 and the former LD-1U. The reasons for this change are twofold: first, it appeared redundant to require registrants to disclose new information (such as new lobbyists and issue codes) in two different places in the same filing; and second, rather than follow the LDAs requirements to update registration information on a semiannual basis, many registrants were filing unnecessary and excessive amounts of paper to report relatively minor changes mid-reporting cycle. Specific refinements to LD-2 are discussed below.

The new LD-2 allows a registrant that has no lobbying activity to file a one-page report. The registrant must complete the income or expense information as well as marking the "No Lobbying Activity" box. This is a change from the previous form and guidance.

If a registrants name changes, the registrant should include a note or memorandum that identifies the new as well as the former name, so that the change is apparent.

Signature lines have been added to every page to provide registrants with options for filing differing lengths of reports. The report need only be signed once on the last page of the document.

The lines of the form have been renumbered.

Maurice Aguirre Lobbyist - Registrants now must provide their address on LD-2 in order to ensure that the Secretary and the Clerk have up-to-date address information. If a registrants contact wishes to receive electronic correspondence, a space for an e-mail address is provided.

A "Self" box has been added to Line 7 ("Client Name").

LD-2 adds a space to supply a termination date (see section below on the completion of termination reports).

The income or expense reporting format has been modified to guide registrants into completing only the section pertinent to them. Lobbying firms (including the self-employed) complete only the income section. Organizations employing in-house lobbyists complete only the expense section and must select which method of expense reporting that they are utilizing.

Maurice Aguirre Dallas: The lobbying activity reporting page emphasizes that only one general issue area code per page must be used. The addition of "Check if None boxes" for the Houses of Congress and Federal agencies contacted and for the foreign entity interest were added because registrants left them blank when there was nothing to report. This practice led to a public record that was incomplete and subject to interpretation in lieu of clarity regarding the lobbying activity of the registrant. As discussed above, new lobbyists may be disclosed on this page by marking the "New" box and providing the information (if applicable) regarding previous employment within the last two years as a covered executive or legislative branch official.

The registration information update page should be filed only if registration information is changed. This page is not intended to be a "stand alone" filing. Section 5 of the LDA does not require or encourage the submission of mid-reporting cycle registration information changes, unless a registrant is specifically requested to do so by the Secretary or the Clerk.