Friday, January 11, 2008

Lobbying Questions & Answers

1. Who is a lobbyist?
2. When should they file?
3. What are lobbying firms and organizations required to put in disclosure forms?
4. Are there penalties for improper filing?
5. What expenditures should organizations include in the disclosure form?
6. Can nonprofit groups lobby the federal government?
7. What are the lobbying differences among different nonprofit groups?
8. Where can I find how much nonprofits spent on lobbying?
9. How many nonprofits are there in the United States?


1. Who is a lobbyist?

A lobbyist is an individual who has contacted a covered official at least twice in an attempt to influence him or her and who spends 20 percent or more of time engaged in lobbying activities _ such as research, reporting or monitoring _ in a 3-month period, according to the Lobbying Disclosure Act, which became law on Dec. 19, 1995 and amended in 2007. The individual must register with the House and Senate.

2. When should they file?

Each registered lobbying firm or organization must file a disclosure form no later than 45 days after the end of the six-month period beginning on Jan. 1 and July 1 of each year. Lobbying firms file separate reports for each client during a six-month period, while organizations _ including corporations, nonprofit and trade groups, unions or professional associations _ employing in-house lobbyists file their own report covering lobbying activities and expenditures.

3. What are lobbying firms and organizations required to put in disclosure forms?

They must list specific issues lobbied upon, including bill numbers, references to specific executive branch actions and employees who acted as lobbyists. They must also provide a "good faith estimate" of the total amount of all income or spending related to lobbying activities. If it's more than $10,000, it can be rounded to the nearest $20,000 of all lobbying-related expenditures in each six month period. If it's less than $10,000, then the filer doesn't have to report the exact expenditures and just checks a box on the form indicating that.

4. Are there penalties for improper filing.

A filer who does not correct a defective filing within 60 days after the Senate or House provides notice of the error or comply with any other part of the law is subject to a civil fine of not more than $200,000. A criminal penalty _ up to 5 years in prison or fine _ may also apply.

5. What expenditures should organizations include in the disclosure form?

They should include salaries _ or a percentage thereof based on time spent lobbying _ of their in-house lobbyists, part of their support staff salaries supporting lobbying activities, office overhead expenses and all payments to hired outside lobbying firms. An organization's total lobbying expenses should be greater than the income reported by a hired outside lobbying firm or firms. Expenses of company employees _ who are not registered lobbyists, but contacted a covered official in an attempt to influence him or her _ should also be included in a disclosure report.

6. Can nonprofit groups lobby the federal government?

Yes. There are several types of non-profits _ such as 501(c)(3), 501(c)(4) and 501(c)(6) _ but, depending on their status, they have certain lobbying limits.

7. What are the lobbying differences among different nonprofit groups?

Public charities, such as the American Red Cross or a children's hospital designated 501(c)(3)s, are allowed to spend a percentage of their budgets on grassroots and direct lobbying, which is capped at $1 million combined for very large organizations. Generally, groups can't spend more than 25 percent of permitted lobbying funds on grassroots campaigns. If groups exceed their lobbying spending, it may jeopardize their tax exemption status. Such charitable groups are also barred from participating in political campaigns from donating money to endorsing a candidate. Contributions to these groups are tax-deductible. As of 2006, there are more than 1 million public charities and private foundations with a 501(c)(3) status, according to the National Center for Charitable Statistics.

However, civic or business leagues, social welfare groups, chambers of commerce and real estate boards _ which are either designated a 501(c)(4) or a 501(c)(6) _ can spend up to 100 percent of their money on direct and grassroots lobbying, if they want. Contributions to these groups are not tax-deductible. As of 2006, there are nearly 190,000 groups with these two designations.

8. Where can I find how much nonprofits spent on lobbying?

Separate from the Senate lobbying database, all nonprofits must file Form 990s with the Internal Revenue Service. 501(c)(3) groups file a Schedule A listing what they spent on lobbying, while 501(c)(4) and 501(c)(6) groups file a Schedule B. While groups list donors names and the amounts, the IRS redacts such information from public view.

9. How many nonprofits are there in the United States?

There are a total of nearly 1.5 million as of 2006.

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