Under the federal Lobbying Disclosure Act (“LDA”), an organization or lobbying firm must register if it employs an individual who meets the definition of a “lobbyist” and if its total expenses or income for lobbying activities meet certain monetary thresholds. The two non-monetary thresholds determining when an individual becomes a “lobbyist,” discussed below, are usually the main factors driving when an organization or lobbying firm must register. However, the monetary thresholds, one of which was recently increased from $13,000 to $14,000, may affect the registration obligations of entities engaged in only a de minimis amount of lobbying.
Under the LDA, the test for determining if an employee of an organization or lobbying firm qualifies as a lobbyist is two-pronged:
- Has the individual made two or more federal lobbying contacts on behalf of the organization (for in-house employees) or a firm client (for lobbying firms) at any time? and
- Has that individual spent 20% or more of his or her work time for the organization (for in-house employees) or that particular client (for lobbying firms) engaged in federal lobbying activities during any three-month period?
If both prongs of the test are satisfied, the individual qualifies as a “lobbyist” for LDA purposes and the organization or lobbying firm likely must register under the LDA, listing that lobbyist and the organization/client on its registration and disclosure reports.
Although employing a lobbyist usually leads to registration by the employer, the LDA provides an exemption from registration for organizations employing in-house lobbyists that spend no more than $14,000 (recently increased from $13,000) on lobbying activities in a quarterly period. For lobbying firms, this threshold is $3,000 (unchanged from previous levels) in income from a client for lobbying activities in a quarterly period. These thresholds are indexed for inflation every four years and rounded to the nearest $500. The new $14,000 threshold for organizations is effective as of January 1, 2021.
Because these monetary thresholds are low, compensation associated with employees who meet the relatively high threshold of becoming a “lobbyist” will almost always cross these thresholds. But for certain smaller organizations or non-profits, this threshold may be a factor in the LDA registration decision, as it may be for lobbying firms with a de minimis amount of activity on behalf of a particular client. In addition, it is these monetary thresholds that exempt lobbying firms from triggering registration on behalf of certain pro bono clients.
The application of the LDA’s registration thresholds and triggers involves a detailed analysis of the activities of an organization or a firm, which must consider the broad and multi-factored definition of a “lobbying contact,” and the even broader definition of “lobbying activities.” Covington has advised numerous clients on LDA registration requirements as applied to those clients’ activities. If you have any questions on whether your organization is required to register under the LDA, please reach out to a member of our Election and Political Law Group.