The Government Accountability Office (“GAO”) has begun a new wave of audits of corporations, associations, and firms that are registered under the federal Lobbying Disclosure Act (“LDA”).  These periodic audits are required under legislation enacted in 2007, the Honest Leadership and Open Government Act (“HLOGA”).  HLOGA requires that registrants be selected for audit on a “random” basis.  GAO issues a report each March or April aggregating and summarizing its findings and listing the firms audited in an appendix.  But GAO generally does not otherwise single out particular firms in those reports.  (An exception to that rule is that GAO has in the past identified by name firms that have refused to cooperate with GAO by submitting to an audit.)

This year, there is a new twist.  Instead of just arranging a meeting with the audited firm, GAO is asking firms to first complete an online survey within just 5 days of their notifying GAO that they received the audit letter.  Among other things, the survey asks the registrants whether they have documentation to support their having lobbied on each of the issues listed on the audited report.  “I’m still looking into it,” is not an available option for a response, notwithstanding the tight timeline.  It is imperative that audited LDA registrants take care to ensure that their responses to the questions in this survey are accurate.  With just 5 days to verify this information, that will not always be easy.

After several years of these random audits, we have a pretty good sense of the approach that GAO takes, and the best practices for firms that are audited.  If your firm is contacted by GAO for an audit, you should conduct, or have counsel conduct, a pre-audit, in which you review the report or reports that GAO has indicated that it will audit.  If issues are identified in the pre-audit, it generally makes sense to prepare an amended report, advise GAO of your own findings, and then file the amendment.  The optimal approach will depend on the facts and circumstances, and you should consult counsel.  In the case of an audit of a Form LD-203 (the twice yearly form on which federal lobbyists and LDA-registered firms disclose political contributions and certify to gift rule compliance), it makes sense to compare your filed LD-203 to the FEC’s contribution database in order to identify any discrepancies.

Most GAO audits are brief and efficient.  The auditors will expect to see orderly records that provide factual support for the information contained in your LDA filings.  You should have a system in place to create and maintain appropriate backup for your LDA reports, and you should maintain the backup materials so that they can be accessed and shared with GAO auditors as needed.

Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

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