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�S. Hrg. 102-377
T E F D R L L B YN DS L S R L W
H E E A O B I G IC OU E A S
HEARINGS
BEFORE THE
SUBCOMMITTEE O OVERSIGHT OF
N
GOVERNMENT MANAGEMENT
OF THE
COMMITTEE O
N
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SECOND CONGRESS
FIHST SESSKjN
JUNE 20, 1991
ENFORCEMENT AND ADMINISTRATION OF THE FOREIGN AGENTS
REGISTRATION ACT (FARA)
JULY 16. 1991
OVERSIGHT OF LEGISLATIVE AND EXECUTIVE BRANCH LOBBYING
DISCLOSURE
0
SEPTEMBER 25. 1991
DISCLOSURE OF EXECUTIVE BRANCH LOBBYING
Printed for the use of the Committee on Gove7.imental Affaire
5^
U.S. GOVERNMENT PRINTING OFFICE
45-051 ^
WASHINGTON : 1901
For sale by the U.S. Governmeni Priming Office
Superimendem of Documents. Congressional Sales Office. Washington. DC :<V^.C
ISBN 0-16-037232-6
�CONTENTS
Opening statements:
Senator Levin
Senator Cohen
Par
_ 1,53,111
_
£, 01
WITNESSES
THURSDAY, JUNE 20,
1991
Hon. Dan Glickman, a U.S. Representative from the State of Kansas
Peter K. Levine, Counsel, Subcommittee on Government Oversight and Management
William H. Barringer, Partner, Willkie Farr & Gallagher
—
Denis M. Neill, President, Neill and Company, Inc
Mark M. Richard, Deputy Assistant Attorney General, Criminal Division,
U.S. Department of Justice, accompanied by Joseph E. Garkson, Chief,
Registration Unit
TUESDAY. JULY 16,
4
9
19
23
38
1991
Milton J. Socolar, Special Assistant to the Comptroller General, U.S. General
Accounting Office, accompanied by James Campbell, Assistant Director and
Terry Draver, Senior Evaluator. General Government Division
—
58
Thomas M. Susman, Esq., Ropes & Gray, Chairman, Committee on Legislative
Process and Lobbying, American Bar Association
—
63
Thomas Hale Boggs, Jr., Patton, Boggs & Blow
—
50
Lloyd Meeds, Preston Gates Ellis and Rouvelas Meeds
?1
Howard D. Marlowe, Marlowe & Company
—
S2
Dona O'Bannon, O'Bannon & Gibbons
—
id
Ann McBride, Senior Vice President, Common Cause
—
SH
Leslie Harris, Chief Legislative Counsel, American Civil Liberties Union _
99
Jeffrey H. Joseph, Vice President, Domestic Policy, United States Chamber of
Commerce
—
103
WEDNESDAY, SEPTEMBER 25,
1991
Hon. Derek J. Vander Schaaf, Deputy Inspector General, U.S. Department of
Defense
_
Bernard L. Ungar, Director for Federal Human Resource Management Issues,
General Government Division, U.S. General Accounting Office, accompanied by Terry Draver, Senior Evaluator, General Government Division _
Allan V. Burman, Administrator, Office of Federal Procurement Policy,
Office of Management and Budget
—
Shelley A. Longmuir, Deputy General Counsel, Office of General Counsel,
Department of Housing and Urban Development
—
Pete A. Bryan, Director, Contract Policy and Administration. Office of the
Secretary of Defense
:
—
117
122
133
135
139
ALPHABETICAL LIST OF WITNESSES
Barringer, William H.:
Testimony
Prepared statement
Boggs, Thomas Hale Jr.:
Testimony
Prepared statement
_.
—
—
_
(in)
19
165
id
'299
�OVERSIGHT OF LEGISLATIVE AND EXECUTIVE
BRANCH LOBBYING DISCLOSURE
TUESDAY, JULY 16, 1991
U.S. SENATE,
SUBCOMMITTEE ON OVERSIGHT OP GOVERNMENT
MANAGEMENT, COMMITTEE ON GOVERNMENTAL AFFAIRS,
Washington, DC.
The Subcommittee convened, pursuant to notice, at 9:35 a.m., in
room SD-342, Dirksen Senate Office Building, Honorable Carl
Levin, Chairman of the Subcommittee, presiding.
Present: Senators Levin and Cohen.
Staff Present: Linda J. Gustitus, Staff Director and Chief Counsel; Peter K. Levine, Counsel; Frankie de Vergie, Chief Clerk; Kim
Corthell, Minority Staff Director; Lisa Baldacci, Minority Counsel;
and John Phieffer.
OPENING STATEMENT OF SENATOR LEVIN
Senator LEVIN. Good morning everybody. Today our Subcommittee holds the second of three oversight hearings on the Federal lobbying disclosure laws. At our first hearing we focused on the disclosure of foreign lobbying under FARA, the Foreign Agents Registration Act, and we learned, as one witness who is registered under
FARA succinctly put it, that FARA is "anachronistic, incomprehensible and unenforceable."
At a later hearing, which will be scheduled in September, we will
focus on the disclosure of executive branch lobbying and the Byrd
Amendment.
Today's testimony will examine the problems with the Lobbying
Regulation Act. A 1986 report by the Congressional Research Service found that the 50-year old Lobbying Act was a hastily considered law which was subject to no hearings, little committee consideration, and almost no Floor debate. That Congressional Research
Service report said, "Questions arose immediately about who was
covered under its definitional standards, the extent of its reporting
requirements, and liability under its criminal enforcement provisions. Rather than settling the issue of lobbyist influence, the Act
only served to make things more confusing."
The biggest problem with the Lobbying Act is that it has been
interpreted over the years to cover almost nobody. In 1954, the Supreme Court ruled in the Harriss case that a narrow construction
of the Lobbying Act was required to avoid unconstitutional vagueness. Consequently, the Court ruled that the Act applies only to
(53)
�54
lobbyist who undertake for pay, "direct communications with Members of Congress on pending or proposed Federal legislation."
That interpretation has created several significant gaps which
taken together could mean that only a lobbyist who spends a majority of his or her working time in direct contact with Members of
Congress seems to be actually required to register, and there may
not be any lobbyists who fit all of those requirements.
Another flaw in the Lobbying Act is a set of disclosure requirements that require too much disclosure of the wrong kinds of information and not enough disclosure of the right kinds of information.
A review of the lobbying disclosures of 10 of the biggest and best
known Washington lobbying firms show that such firms report
startlingly low lobbying receipts and expenditures. In 1989, the
Legal Times estimated that the gross lobbying revenues for these
10 firms added up to more than $60 million. A review of the lobbying reports filed by the firms reveals that they reported combined
lobbying receipts from air clients totaling less than $2 million and
total lobbying expenditures of less than $35,000. One of those firms,
a major law firm, reported no lobbying expenditures at all for any
client in 1989.
Although the Legal Times estimates of gross lobbying revenues
did not purport to be much more than educated guesses, few people
would believe that the actual lobbying receipts and expenditures of
these firms were as low as the reported numbers. Staff interviews
with registered lobbyists revealed that the reason for the low reported numbers is the narrow definition of lobbying as it is used in
the Act. The problem does not appear to be that these firms are
defying the law, rather the problem is that disclosure in full compliance with the law is not very revealing.
There are similar problems with the disclosure of the lobbyists"
activities or objectives. While many lobbyists comply with the Lobbying Act by providing lists of specific bills that are of interest ic
each quarterly reporting period, others provide descriptions of their
areas of interest that are so general that they reveal just about
nothing. For example, a Bell Atlantic representative stated that he
would lobby on, "all issues in Congress that affect business operations of the client."
These problems are compounded by the total inadequacy of the
administrative and enforcement provisions in the Act. There is no
published guidance available on how to comply with the Act and
no definitive written or oral advice on how to interpret its provisions. The Act makes no provision for the review of registrations to
determine whether they are accurate or complete, and it contains
only criminal penalties, which have never been enforced.
In sum, the Lobbying Act is a phantom law. It has the appearance of requiring meaningful disclosure but in reality there is
nothing there. Under seme interpretations of the Act, there is not
one person in America who is technically required to register as a
lobbyist. Disclosure under this law poorly serves the public and it
is unfair to those lobbyists who make a good faith effort to disclose
their activities while others avoid any disclosure at all without
being subject to any sanction.
�55
We look forward to the views of all our witnesses here this morning on these and other problems with the Act and how they may
best be addressed.
PREPARED STATEMENT OF SENATOR LEVIN
Today the Subcommittee on Oversight of Government Management holds the
second of three oversight hearings on the Federal lobbying disclosure laws; this
time, we will focus on the 1946 Lobbying Regulation Act. The fundamental purpose
of this law, and of other lobbying disclosure laws, is to ensure that the public. Federal officials, and other interestec . parties are aware of the pressures that are brought
to bear on public policy. We are here today to determine how well the statute is
serving this purpose.
At our first hearing, on June 20, we focused on the disclosure of foreign lobbying
under FARA (the Foreign Agents Registration Act), and we learned that unclear
statutory language and an absence of guidance as to who is required to register and
what they are required to disclose have combined to prevent effective disclosure
under that Act. One witness, who is registered under FARA, succinctly described
FARA as "anachronistic, incomprehensible, and unenforceable."
At a later hearing, to be scheduled in September, we will focus on the Byrd
Amendment and the disclosure of executive branch lobbying.
Today's testimony will show that the problems with the Lobbying Regulation Act
are at least as great as those with FARA. The Lobbying Act requires registration by
any person who is engaged for pay for the "principal purpose" of attempting to influence the passage or defeat of legislation in the Congress. Covered lobbyists are
required to disclose the names of their clients; how much they are paid; how such
money is expended, to whom it is paid and for what purposes; and the particular
legislation that they are have been hired to support or oppose.
Lobbying registration forms are required to be filed with the Clerk of the House
and the Secretary of the Senate prior to engaging in lobbying, and updated in the
first ten days of each calejdar quarter so long as lobbying activity continues. Violation of the Act is a misdemeanor punishable by a fine of up to $5,000 or a sentence
of up to 12 months. Any person convicted of this offense is prohibited from lobbying
for three years. As far as we know, nobody has ever been tried and convicted under
this provision.
A 1986 Report by the Congressional Research Service, found the Lobbying Act to
be a hastily considered law, which was subject to no hearings, little committee consideration, and almost no floor debate. The Report states:
Questions arose immediately about who was covered under its definitional
standards, the extent of its reporting requirements, and liability under its
criminal enforcement provisions. Rather than settling the issue of lobbyist influence, the act served only to make things more confusing.
The biggest problem with the Lobbying Act is that it has been interpreted over
the years to cover almost nobody. In 1954, the Supreme Court ruled in the case of
U.S. v. Harriss that a narrow construction of the Lobbying Act was required to
avoid unconstitutional vagueness. Consequently, the Court ruled that the Act applies only to lobbyists who undertake (for pay) "direct communications with members of Congress on pending or proposed Federal legislation".
That interpretation has created several significant gaps. For example:
• The Act covers only efforts to influence the passage or defeat of legislation in
Congress—not other activities of Members and staff.
• The Act covers only efforts to lobby Members of Congress directly, not efforts
to lobby congressional staff.
• The Act covers only persons whose "principal purpose" is lobbying—language that has been interpreted by some lobbyists to mean that the Act applies
only to people who spend a majority of their time lobbying.
Taken together, these gaps in the coverage of the Act could mean that only a lobbyist who spends a majority of his or her working time in direct contact with Members of Congress is actually required to register. There may not be lobbyists who fit
all of these requirements.
Another flaw in the Lobbying Act is a set of disclosure requirements that require
too much disclosure of the wrong kinds of information and not enough disclosure of
the right kinds of information.
For example, the Lobbying Act requires "a detailed report under oath of all
money received and expended by [a obbyist]" during each calendar quarter, to
�56
whom it ia paid, and for what purpose. The forms expand upon this requirement by
requiring reporting of specific expenditures such as printed or duplicated matter,
rent, supplies, telephone, travel, food, lodging, and other items. Lobbyists are supposed to list the recipient, date; and amount of each such expenditure. Lobbyists
who comply with this requirement provide lists of the names of restaurants where
they have paid for lunch and landlords to whom they have paid rent. It is not clear
what public purpose is served by these lists.
On the other hand, the Act appears to fall short of requiring the most basic types
of information about lobbying: how much the client spends and for what purpose.
Although the Act requires a detailed accounting of all money received and expended in lobbying activities, the narrow definition of lobbying in the Act has resulted in minimal disclosure. Since lobbying (as defined in the Act) is generally considered to include only time spent in meetings with Members, many lobbyists disclose only receipts and expenditures directly associated with such meetings. For example, suppose that a lobbyist bills a client for 5,000 hours of work at $200 an hour.
The client's total bill would come to $1 million, but if that work included only 2
hours of meetings with Members, manv lobbyists would report not the $1 million,
but just $400 in receipts (for $200/hour X 2 hours).
As a result, a review of the lobbying disclosures of ten of the biggest and bestknown Washington lobbyingfirmsshows that suchfirmsreport startlingly low lobbying receipts and expenditures. In 1989, the Legal Times estimated that the gross
lobbying revenues for these tenfirmsadded up to more than $60 million. A review
of the lobbying reportsfiledby thefirmsreveals that they reported combined lobbying receipts (for all clients) totalling less than $2 million, and total lobbying expenditures of less than $35,000. One of thesefirms—amajor lawfirm—reportedno lobbying expenditures at all for any client in 1989.
Although the Legal Times estimates of gross lobbying revenues did not purport to
be much more than educated guesses, few people would believe that the actual lobbying receipts and expenditures of thesefirmswere as low as the reported numbers.
Staff interviews with registered lobbyists reveal that the reason for the low reported
numbers is the narrow definition of "lobbying", as it is used in the Act. The problem does not appear to be that thesefirmsare defying the law—rather, the problem
is that disclosure in full compliance with the law is not very revealing.
There are similar problems with the disclosure of the lobbyists' activities or objectives. While many lobbyists comply with the Lobbying Act by providing lists of specific bills that are of interest in each quarterly reporting period, others provide descriptions of their areas of interest that are so general that they reveal almost nothing. For example:
• a Bell Atlantic representative stated that he would lobby on "All issues in
Congress that affect business operations of the client."
• a TWA representative said that he would be lobbying on "General legislative
interests."
• an Aetna Life and Casualty representative stated that "Interests involve all
legislation affecting the insurance industry."
• a Consolidated Rail Corporation representative stated that "Interests involve
all legislation affecting the railroad industry."
These problems are compounded by the total inadequacy of the administrative
and enforcement provisions in the Act. There is no published guidance available on
how to comply with the Act, and no definitive written or oral advice on how to interpret its provisions. The Act makes no provision for thereviewof registrations to
determine whether they are accurate or complete, and it contains only criminal
penalties, which have never been enforced.
In fact, the Department of Justice, which is responsible for enforcing the Lobbying Act, told the Governmental Affairs Committee in 1983 that the Department
viewed the statute as "ineffective, inadequate and unenforceable". In a letter sent to
the Subcommittee last week, the Secretary of the Senate—who is responsible for administering the Act—recommended that we consider clarifying the coverage of the
Act; refining the definition of "lobbying"; establishing an independent office to provide general guidance and interpretation; and establishing an efficient complaint
procedure for enforcement.
In sum, the Lobbying Act is a phantom law—it has the appearance of requiring
meaningful disclosure, but in reality, there is nothing there. Under some interpretations of the Act, there is not one person in America who is technically required to
register as a lobbyist. Disclosure under this law poorly serves the public, which gets
a distorted picture of lobbying activities, and it is unfair to those lobbyists who
�57
make a good faith effort to disclose their activities, while others avoid any disclosure at all without being subject to any sanction.
I look forward to hearing the views of our witnesses on these problems and how
they may best be addressed.
Senator LEVIN. Senator Cohen.
OPENING STATEMENT OF SENATOR COHEN
Senator COHEN. Thank you, Mr. Chairman. I have a prepared
statement which I would like to submit for the record, and I will
just offer a couple of observations.
There are at least two ways to breed contempt for the law. One
is a situation where laws go unenforced, and secondly, where laws
are unenforceable. In the particular case of the Lobbying Regulation Act we seem to have achieved both.
As the Chairman has indicated, we have a disclosure law which
is, number one, ambiguous in coverage. There are no published regulations. There are no guidelines. There is no provision for civil
remedy. There is no enforcement, and there have been no criminal
prosecutions.
I think the basic question the public would like to know is who is
paying how much to whom for what. That is basically what the
public's interest is. What we have to do is try and determine who is
covered by the law, who should be covered, and what information
is really important. If we draw a law so narrowly it becomes, in
this case, meaningless. If we draw it too broadly, it may in fact
become unconstitutional.
Mr. Chairman, I think that we have two choices here. We can
either fix this law to make it enforceable or we can forget it and
abolish it from the books. But to leave it on the books as it is, I
think only breeds contempt for the rule of law because it is meaningless. You call it a phantom law. We could call it a stealth law,
illusory. It is a charade. So we either ought to fix it or forget it,
and hopefully our witnesses this morning can help us resolve that
particular dilemma.
PREPARED STATEMENT OF SENATOR COHEN
Mr. Chairman, I want to commend you for holding this second in a series of hearings on the administration and enforcement of Federal lobbying laws.
The importance of ensuring effective public disclosure of lobbying activities
cannot be understated. As this Subcommittee's investigation of the Wedtech Corporation illustrated, allegations of high-paid, "hired guns" gaining access to high-ranking Federal officials in an attempt to improperly influence the decision making
process seriously undermines the public's confidence in its government. The public's
suspicions concerning what is happening behind the closed doors of government offices can be significantly reduced or eliminated when there is adequate disclosure of
these activities.
There is considerable evidence, however, that our lobbying laws are not serving
the intended purpose of ensuring public disclosure. The hearing this Subcommittee
conducted last month on the Foreign Agents Registration Act (FARA) revealed that
broad exceptions in that law provide gapping loopholes through which substantial
foreign lobbying goes undisclosed. Today's hearing focusing on the Lobbying Regulation Act, which governs the disclosure of legislative branch lobbying, will also show
problems with the effectiveness of this law.
This is an important subject that should be of concern to all of us, particularly
those who serve in the executive and legislative branches of government. The current situation contributes to the tack of confidence that the American people have
in how government policy is made and implemented, and any effort to reotore that
�58
confidence must address the kinds of issues and questions that are being raised in
these hearings.
I look forward to hearing the views of the witnesses today on the administration
of the Federal lobbying disclosure laws, and to receiving their suggestions on how
these laws can and should be reformed to achieve meaningful and effective public
disclosure of lobbying activities.
Senator LEVIN. Thank you, Senator Cohen.
Mr. Socolar, you are our first witness.
Milton Socolar, Special Assistant to the Comptroller General;
and he is accompanied by Jim Campbell, who is the Assistant Director, and by Terry Draver, senior evaluator.
We welcome you all.
1
TESTIMONY OF MILTON J. SOCOLAR, SPECIAL ASSISTANT TO
THE COMPTROLLER GENERAL, U.S. GENERAL ACCOUNTING
OFFICE; ACCOMPANIED BY JAMES CAMPBELL, ASSISTANT DIRECTOR AND TERRY DRAVER, SENIOR EVALUATOR, GENERAL
GOVERNMENT DIVISION
Mr. SOCOLAR. Thank you, Mr. Chairman.
Wa are pleased to have the opportunity to testify on the Federal
Regulation of Lobbying Act. I have a detailed statement which I
would ask to have put into the record and proceed with a relatively
brief summary.
Senator LEVIN. We appreciate your doing that. As a matter of
fact, we hope all of our witnesses will try to abbreviate their statements because we have got a long hearing ahead of us, and, of
course, your full statement will be made part of the record.
Mr. SOCOLAR. My summary will in many respects reiterate some
of the comments that you and Senator Cohen made in your opening statements, but let me proceed.
Senator LEVIN. Do reiterate them, because we need all the help
we can get on this.
Mr. SOCOLAR. Yes, sir. The Federal Regulation of Lobbying Act
has been largely ineffective since its enactment in 1946. Its purpose, stated briefly, is to provide for disclosure of those interested
parties who finance lobbyists' efforts to influence the course of Federal legislation. The Act requires any organization or person who is
paid to influence legislation to register with the Clerk of the House
of Representatives and the Secretary of the Senate, to report who
is being represented, and to report the receipts and expenses involved and the legislative objectives pursued.
To avoid constitutional infirmity, the Supreme Court in 1954 construed the Act as requiring reporting only where the principal purpose of compensation or the principal activity of the recipient is to
influence legislation through direct communication with Members
of Congress. Other significant activity clearly recognized as lobbying within the broad purpose of the Act is therefore not in fact covered by the Act.
The Act provides no enforcement authority to Senate and House
offices designated to receive registrations and reports. These offices
have issued no regulations to implement the Act. The Act provides
only criminal penalties for noncompliance. The Clerk of the House
1
The prepared statement of Mr. Socolar appeara on page 262.
�59
does follow up on incomplete reports and provides some assistance
to filers. The Secretary of the Senate's actions are more limited.
Neither those offices nor the Department of Justice takes routine
enforcement action for late or incomplete filing or nonfiling.
You asked that we determine the amount of receipts and expenditures reported under the Act, whether persons engaged in lobbying are registering and reporting as required, whether reports filed
are timely and complete, and whether there are measures that
would improve compliance and administration of the Act.
About 6,000 individuals or organizations registered and filed reports for 1989. Information required of registered lobbyists was
often submitted late and incomplete. The 6,000 lobbyists reported
total receipts of $234 million and expenses of $76 million for 1989.
Some 62 percent of required reports were filed late in varying degrees, and over 90 percent were incomplete. We could not determine the extent to which required filings were not made, but interviews we conducted suggested that there may be a significant
number of nonfilers.
Before getting into the matter of measures that could be taken to
improve compliance and administration of the Act, let me say that
the registration form and information provided to lobbyists who
seek instruction concerning requirements of the Act are models of
confusion. The written instructions provided by the Clerk of the
House are arcane and based upon interpretations of the Act that
predate the defining Supreme Court case of United States v. Harriss. To compensate for the instructions being outdated, the Clerk
provides inquirers a copy of the Harriss case. The Secretary of the
Senate generally provides only copies of the Act and of the Harriss
decision.
The registration form is confusing in that it uses the term "employer" to mean just that in one context and to mean "client" in
another. If we could turn for a minute to the form itself, we can
see that in block A of the form where an organization or an individual is going to fill it out, that it seems relatively clear. The
name of the organization is placed in block A and then any of its
employees or agents is also included. But when we get to block B,
there is confusion as to just what "employer" means. One would
think that "employer" would mean the client of the firm that is
doing the hiring for the purpose of lobbying, but if we go to the
bottom of the form, there is an instruction that states that if the
form is being completed by an employer, the employer should write
"none" in block B. So therefore, if an organization files, you have
no indication of who the client of that organization really is.
I might point out here that Canada has recently in 1988 issued
or promulgated its own lobbying law, and I would like to contrast
our form with that that the Canadians use. The Canadians divide
their lobbyists into what they term two tiers. A Tier I lobbyist is
one who lobbies as an individual. The form clearly requires that
the individual state his name, address and so forth, and then another block is provided for him to identify his client. The Tier II
lobbyist under the Canadian system is the lobbyist who lobbies for
his own firm. For example, if Mobil Oil has an employee who lobbies for Mobil Oil, that lobbyist would be a Tier II lobbyist. He
simply files his name, address, other data, and then designates who
�60
his employer is. So that under the Canadian system we know exactly who the lobbyists are and whom they are lobbying for. That is
not universally the case under our own system and that does constitute a measure of some confusion.
That reminds me that the Clerk has sought to address that confusion, and it would seem to me that the explanation itself adds to
rather than clarifies the matter. His memorandum states, "Another common problem is understanding the term "employer" on
the reporting forms. This term is often defined by registrants to include only the entity that pays the full-time salary. However, such
a definition is incorrect. "Employer" should indicate the entity
that is compensating the registrant as well as whose interests are
represented by the registrant's lobbying efforts. A regular salaried
employee of a trade association would indicate the trade association as the employer. Whereas a self-employed registrant would
complete this section with the entity whose interests are being represented. Moreover, an attorney may have two entities listed as
employers—the law firm of the registrant and the lawfirm'sclient.
Although the attorney is being compensated by the firm, the lobbying activities are being performed on behalf of the client. And then
you go back to the form and the instructions tell you that if you
are filing as an employer write "none" in block B, again indicating
that there are no clients.
Measures to improve compliance and administration of the Act
should begin, it seems to me, by clarifying the instructions and revising the registration form under the Act as now written and interpreted. Further improvement would include amending the Act
to provide a better definition of lobbying to include contacts with
Congressional staff, to authorize examination and informal resolution of apparent violations, to require copies of written contracts
between lobbyists and their clients, to authorize promulgation of
regulations, and to provide civil penalties for late or incomplete filings and for nonfilings. It seems to me with those kinds of measures we could go some way in improving the compliance and the
implementation of the Act.
That completes my statement and we would be happy to respond
to your questions.
Senator LEVIN. Thank you, Mr. Socolar.
Your prepared testimony indicates that probably most of the
people who are engaged in lobbying-type activities are not registered. Here are the statistics. I don't know if you will acknowledge
that that's the conclusion, but let me give you the statistics in any
event. Of 13,500 individuals in the organizations that are listed in
the book, Washington Representatives for 1990, 9,800 were not registered as lobbyists.
Mr. SOCOLAR. That is correct.
Senator LEVIN. SO we start with that figure. Then of the 16—you
tried to interview 50, as I understand, of the 9,800 to take just a
cross section of the 9,800 to talk to them about what their activities
are. And you were able to interview 16 of the 50 that you sought to
interview. So that is your universe. It is a small sample.
Mr. SOCOLAR. Very small, yes.
Senator LEVIN. But nonetheless the best sample you could get,
16. Of the 16 unregistered Washington Representatives that you
�61
interviewed, 12—three-quarters—said that they contact members of
the staff of Congress, deal with Federal legislation, seek to influence actions of either Congress or the executive branch. So if that
sample is typical, it would mean that most of the people who don't
register who are listed in Washington Representatives should register, or let me phrase it a different way. I don't want to get involved
in criminal liability or anything else, that is not the point of this
hearing- That 12 of the 16 unregistered Washington representatives that you interviewed engage in the kind of activities which it
is the intent of this law, obviously, to try to disclose publicly.
Mr. SOCOLAR. Well unfortunately it is not quite as clear as that,
because the people that we talked with indicated that they engaged
in activities that wouldn't necessarily require registration.
Senator LEVIN. No, I am not saying that they should register
technically under the law. I am talking about the intent of the law,
that they are engaging in the type of activity that you would want
to have disclosure about.
Mr. SOCOLAR. I agree with that, yes.
Senator LEVIN. I am not saying that 12 of the 16 are in violation
of the law. I am saying that they are engaging in the type of activity that that law is intended to have disclosed.
Mr. SOCOLAR. Yes. The reason we went to the Washington Representatives to draw our sample was because the individuals listed in
that publication, generally one would expect a sizable portion to be
engaged in those kinds of activities, and indeed the 12 that we ultimately were narrowed down to did so indicate.
Senator LEVIN. All right. Now your conclusion is that many persons who engage in lobbying-type activity are not registered. That's
an exact quote.
Mr. SOCOLAR. Exactly.
Senator LEVIN. Are you able to say that most persons who
engage in lobbying-type activity are not registered, or do you want
to just settle with the "many."
Do you have an estimate as to whether it might be most?
Mr. SOCOLAR. NO, we couldn't determine that. The best we could
determine was that there is a significant number of people that we
think are not registering who should.
Senator LEVIN. One of the problems with reaching conclusions as
to the percentages here, whether it is 25, 50 or 75 percent of the
people who lobby being unregistered, is the lack of a clear definition of lobbying in the law itself which makes it very difficult to
make that determination; is that right?
Mr. SOCOLAR. That is correct.
Senator LEVIN. One widely accepted interpretation of the law, for
example, provides that the disclosure of lobbying only applies to
lobbying of Members of Congress; is that correct?
Mr. SOCOLAR. Yes, that was determined by the Supreme Court in
the Harriss case.
Senator LEVIN. And a restrictive reading of the principal purpose
test as well?
Mr. SOCOLAR. Yes.
Senator LEVIN. All right. Those two interpretations have significantly narrowed the applicability of this statute; is that correct?
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Mr. SOCOLAR. Mostly the direct communication with the Congress I would say is the most significant limiting factor.
Senator LEVIN. When you put together the two, the principal
purpose test and the direct lobbying of Members of Congress, isn't
it a reasonable reading that almost any unregistered lobbyist has a
strong argument that he or she is not required to register?
Mr. SOCOLAR. Those arguments can be made and they certainly
are made.
Senator LEVIN. And are they not a reasonable argument given
those 2 interpretations?
Mr. SOCOLAR. Yes.
Senator LEVIN. And is that why the Department of Justice has
concluded that this statute is unenforceable?
Mr. SOCOLAR. I think that that has a great deal to do with it,
)lus the fact that there are no means available for making any
und of determinations or doing any kind of examinations to determine whether people who should be registering are in fact registering. One could, for example, through a review of newspapers accounts, trade publications and so forth get some sense of persons
who perhaps should be registering who are not and doing some examination, but that is not done.
Senator LEVIN. Can you describe to us the problems with the
principal purpose test and any recommendations specifically that
j'ou have relative to it?
Mr. SOCOLAR. It seems to me that it is important to require that
a principal purpose of any contribution or a principal purpose of
any communication that might be described as lobbying be a part
of the definition. I don't think that very incidental matters that
might be concluded to have some peripheral connection with lobbying should require registration. It doesn't seem to me though that
it should be too difficult to deve'op some guidelines as to where
that line should be drawn and to suggest that if anyone is close to
the line that the better view to take would be to register rather
than not.
Senator LEVIN. You state in your prepared testimony that 85 percent of the initial registrations and 95 percent of the quarterly filings that you reviewed are incomplete.
Mr. SOCOLAR. Or 85 percent are late and over 90 percent, some
95 percent, are incomplete, yes.
Senator LEVIN. My question here is that this seems to indicate
that there is a substantial compliance problem even for people who
are registering and reporting their activities.
Mr. SOCOLAR. That's correct, yes.
Senator LEVIN. That would lead me to the conclusion that the
policy of voluntary compliance isn't working. Is that your conclusion?
Mr. SOCOLAR. Well, certain
Senator LEVIN. I mean, you have got people who want to comply,
who are trying to comply, yet the vast majority of them have incomplete registrations. Something is wrong. Not only is the system
not working in that perhaps most of the people who are lobbying
aren't registered, but most of the people who are registering are
filing incomplete registrations.
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Mr. SOCOLAR. That's correct, but I think that that could readily
be taken care of if there were better administration. Well, 1
shouldn't say better administration, but provision in the Act for administration of the requirements themselves. Right now lobbyists
register and very, very little is done to assure that they achieve
full compliance with the Act.
Senator LEVIN. YOU also found that 58 percent of those who are
registering report no expenditures on behalf of their clients.
Mr. SOCOLAR. Well, that suggests either that they need not be reporting, or that if they are required to report, something is wrong
with their report.
Senator LEVIN. IS that possible? Again, I am not trying to say
these reports are illegal at all, because the law is so full of holes
that it is I think unenforceable. I happen to agree with Senator
Cohen. The current law is just simply a shambles. It is a sham, so I
am not trying to say that people are evading or people are violating the law. I am saying the law is useless as it now stands on the
books.
But trying to make that point, we have got people who are registering who again may represent the minority of the people who
lobby, but people who are registering in 58 percent of the cases say
they didn't spend any money, any money at all, on behalf of their
client—any salaries, any rent, anything at all.
Now doesn't that reflect a law which is absolutely not working,
not functioning?
Mr. SOCOLAR. Well it suggests that, but in any specific case the
form may be correct.
Senator LEVIN. And I am not getting into specific cases, I am just
talking about in toto.
Another problem here is that many lobbyists have told us that
they only report receipts or expenditures that are directly connected with meetings with members of Congress. In other words, they
don't report either receipts, fees, or expenditures that they make
associated with time spent developing strategies, which may be
most of the time that they spend, preparing lobbying materials,
meeting with Congressional staff—I know that most of the meetings that go on on the Hill between lobbyists and our offices are
not with us individually but with our staff.
So that is another reason why I believe they aren't reporting expenditures or receipts, because if those three big items, among
others, are excluded in a broadly accepted interpretation, there is
not a lot left.
Would you agree with that?
Mr. SOCOLAR. Yes, I would.
Senator LEVIN. I just have one more question and then I will
turn it over to Senator Cohen. You made reference to a number of
suggestions in your testimony. One of them was the possibility that
we require that a contract between the lobbyist and his or her
client be attached in some way to the disclosure form, and I see
real problems in that.
Mr. SOCOLAR. Well, we took that from the Foreign Agents Registration Act, and in the administration of that Ac* copies of contracts are in fact filed.
Senator LEVIN. Is that the total contract?
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Mr. SOCOLAR. That's correct.
Senator LEVIN. But say there is no written contract?
Mr. SOCOLAR. If there is no written contract, then there would
not be any copy to file. The problem that we are addressing with
that is the vagueness, I think that you alluded to in your opening
statement, of the purposes that are indicated on the registration
form that is filed. A copy of the contract would much more clearly
we think spell out what the purposes are.
Senator LEVIN. Well, I see some real problems in requiring contracts, private contracts, to be disclosed in full. It sc-ems to me what
we have a right to certain information, but I would think there is
much information, if there is a written contract, that might be
privileged, and that indeed may involve purposes and strategy to
which the public is not entitled. So I was a little taken aback by
the suggestion.
Mr. SOCOLAR. YOU know, you may be right in regard to that recommendation. It is certainly not the cornerstone of what we are
suggesting. Fundamentally, I think what we are suggesting is that
there be provisions in the law for some kind of incentive to require
timely filings, to require complete filings, and that could be accomplished by simply providing by statute a penalty for late filings and
incomplete filings and for nonfiling. And also providing
Senator LEVIN. Civil penalties?
Mr. SOCOLAR. That is correct. And providing also for those who
administer the Act to have some authority with regard to examining and reviewing these forms as they are filed and assuring that
whatever failures in the filings that exists are corrected.
Senator LEVIN. Thank you, Mr. Socolar.
Senator COHEN.
Senator COHEN. Mr. Socolar, if I can summarize, what you are
saying is we need to either simplify or clarify the existing law to
give it greater definition in terms of coverage, in terms of activities, and expand the group of people who would be covered; is that
right?
Mr. SOCOLAR. That is correct, yes.
Senator COHEN. The devils are always, they say, in the details,
and I would like to talk about a little bit of the details. One of the
recommendations you make is that the lobbying definition should
be clarified to include contact with Congressional staff.
Mr. SOCOLAR. Yes.
Senator COHEN. DO you mean all Congressional staff or would
you draw distinctions? Is there a difference in your mind whether a
lobbyist has a communication or a contact with my receptionist or
with a legislative assistant?
Mr. SOCOLAR. I would say that the contact would have to be a
contact related to a lobbying effort. Certainly the receptionist
r/ould not be included in that.
Senator COHEN. What about a caseworker who the lobbyist happens to know but who has no direct activities in the office related
to the legislation under consideration?
Mr. SOCOLAR. I would include only those contacts which are in
furtherance of the lobbying purpose.
Senator COHEN. Under the form that I am looking at now, let me
assume a hypothetical. There was an article written in the Nation-
�65
al Journal several weeks ago about the so-called "superlawyers;"
for example, a former chairman of an important committee m the
House, or a former Chief of Staff under the Administration. They
then go out and practice law and become, "superlawyers". A superlawyer receives a large fee from a particular company that has
an interest before Congress, and that superlawyer sits back in his
office and he makes one telephone call to the chairman of the committee that is considering legislation just before its markup. The
telephone call probably cost less than a dollar to make in terms of
time used.
Is there any reporting of such activities on this form that we currently have?
Mr. SOCOLAR. I don't know whether that lawyer would in fact
report, but it would seem to me that if a principal purpose of that
ca 1 to the Congressman was to influence the course of legislation,
that it should be reported.
Senator COHEN. But where on this form would he or she report
it? In other words, the report is filed, I received a million dollars
from X company or country and one phone call is made. How is
that disclosed in terms of expenditures? What activities are in fact
disclosed on this form?
Mr. SOCOLAR. There would be nothing disclosed on that form.
Senator COHEN. Precisely. So one of the problems I have is—and
Senator Levin mentioned this in his opening statement—that we
are getting too much of the wrong information. We are getting a
list here of how much is spent for public relations, wages, salaries,
gifts, printed or duplicated matter, telephone, telegraph, travel,
food, and lodging; all under expenditures. You can get overloaded
with that kind of detail and yet the major activity that the "superlawyer" may in fact perform for his client would be a phone
call at a critical time to a critical Member of Congress which would
never be reported or disclosed and would involve the expenditure
of virtually no funds.
Mr. SOCOLAS. That is correct.
Senator COHEN. All right. One of the complaints that I am sure
the lobbyists who will testify later will raise is that there is a confusion of laws on the books, a proliferation. We have got the Foreign Agents Registration Act, we have got the Federal Regulation
of Lobbying Act, we have got the Byrd Amendment.
Do you have any recommendation as far as whetner those all
should be consolidated into one uniform reporting act with simple,
clear guidelines as to what is required to be reported?
Mr. SOCOLAR. That I think is certainly worthy of consideration. It
might well be necessary in promulgating such a universal law to
set up a separate organization to administer all of them, or to perhaps have various portions of them administered by different agencies. But certainly with regard to dealing with the issue of lobbying
in one law to cover all of the kinds of lobbying that the interests of
the public requires getting information on would be a useful thing
to do.
Senator COHEN. We are going to hear some testimony later about
the growing influence of associations or coalitions or ad hoc groups.
Do you think that, number one, they should be covered under a
Lobbying Act?
�SSSBSB
66
Mr. SOCOLAR. Yes, I think they should.
Senator COHEN. Should the distinction between these groups or
associations be whether one is paid or is volunteering his or her
time?
Mr. SOCOLAR. Yes.
Senator COHEN. SO if you are unpaid you would not be required
to register, and you would be required to register if you are paid,
correct?
Mr. SOCOLAR. That is correct, yes.
Senator COHEN. That would apply throughout, whether it is associations or ad hoc groups or law firms?
Mr. SOCOLAR. Yes. I think the fundamental principle that is now
contained in the Act is one that should be carried forward, and
that is to find out who is being hired to influence legislation.
Senator COHEN. Some of these associations or coalitions may be
communicating with Congress indirectly, for example, through
news letters. Now, if an association puts out a newsletter and asks
its member' to call their Congressman or Senator immediately on
H.R. 1253, is that something that should be covered? And, let's
then assume the association has an executive director that gets a
nominal amount cf money to answer mail, et cetera; for the association or to put out a newsletter.
Mr. SOCOLAR. My inclination is to respond negatively. I think
that those organizations are well known, and, again, are not functioning for hire.
Senator COHEN. IS the distinction one of direct communication
with a Member of Congress or his or her staff, or indirect? If they
contact the Member directly would that make a difference, as opposed to going through a newsletter and saying, I want all 10,000 of
the members of such and such association to call immediately on
the Gun Registration Act of 1991?
Mr. SOCOLAR. Well, I think the direct communication stems
really from the vagueness of the current act and the interpretation
that the Supreme Court provided to avoid that. A new law I would
assume would go beyond direct communication.
Senator COHEN. What I am asking you is do you think it should
be direct and indirect?
Mr. SOCOLAR. I would like to respond to you separately for that,
give some thought to it, because I don't know where that ultimately might take you.
Senator COHEN. One of the problems we have is that if it becomes indirect then you have a potential problem as far as the
right of individual citizens who happen to be associated with a coalition or association or an ad hoc group
Mr. SOCOLAR. That is correct.
Senator COHEN. —to lobby and petition their elected officials
without any burden being imposed upon them to file any kind of
form at all.
So while we are objecting to the narrowness of the law as it is
currently interpreted, we have to also be careful as we try to
expand it that we not run afoul of the Constitution itself.
Mr. SOCOLAR. I agree with you.
�67
Senator COHEN. Your suggestions are simplify, clarify, define and
expand. It sounds terrific except when you get down into the details, and that is where the problem comes about.
That is all I have, Mr. Chairman.
Senator LEVIN. Thank you, Senator Cohen.
Let me just summarize one part of your written testimony here
and then excuse you.
These are some statistics to show just how much of a shambles
this statute is. First, you did some survey work of persons who
were listed in Washington Representatives but who don't register.
In that survey, as scientific as you could with your resources, you
talked to 16 people who were in that book but who aren't registered, three-quarters of whom do what is normally considered lobbying activity. We start with that. Not claiming that is a perfect
cross section. We don't know. But we start with that.
If that is a good cross section, it would mean that most people
who engage in lobbying activities aren't registered as lobbyists. I
say if that sample is indeed scientific, that would be the result of
that.
Second, of the people who do register, 95 percent of the filings
are incomplete. That is your statistic, correct?
Mr. SOCOLAR. That is correct.
Senator LEVIN. And 80 percent, for instance, didn't list employees who lobby.
Mr. SOCOLAR. That is correct.
Senator LEVIN. That is a pretty dismal picture of a law that just
isn't functioning as a law, and that has been festering on the books
too long. We either ought to clean it up and make it relevant or get
rid of it. That seems to me to be the inevitable conclusion.
How we clean it up is complicated, and I think this is what Senator Cohen was getting to in terms of the details. How do you
achieve your goal, which is the registration of people who are
indeed engaging in activities which most people would understand
to be lobbying activities? Not just direct contact was Members but
contacts with Members' staff on substantive issues. Not just contacts with Members of Congress and their staff but strategizing lobbying activities, preparing lobbying materials, and a host of other
things which are ordinarily understood to be lobbying activities.
That is our challenge, to try to devise a major repair job for a
law which isn't functioning. But it is clear that we have got to act
one way or the other, either clear away the underbrush of a statute
which is nonfunctioning and replace it hopefully with something
which is relevant to what people s concerns are, or in any event get
it off the books, because it is a mistake to have this kind of a law
on the books.
Is there any other law that we know of where we would tolerate
these kind of statistics? Can you think of any other law which most
people are ignoring, perhaps very legally ignoring, but where 95
percent of them are incomplete in their filings?
I mean, I don't know of too many other laws that are like that.
Mr. SOCOLAR. I might make a point here. To me, the fundamental purpose of the law is to find out or to disclose who it is that is
seeking to influence legislation for hire. And on'- of the problems
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Senator LEVIN. And paid on behalf of whom?
Mr. SOCOLAR. And on behalf of whom. And one of the problems
insofar as compliance is concerned I think is seeking to get too
much information, I think as you have mentioned earlier. If you
make it too complicated to file, it becomes more difficult to administer. And it would seem to me that what we should be seeking in
the filing is the basic fundamental information that we are looking
for as simply presented as we can make it so that everybody will
know who is actually doing the lobbying and for whom.
Senator LEVIN. Mr. Socolar, you and your colleagues, we thank
you. If Senator Cohen has no more questions, then we will excuse
you.
Mr. SOCOLAR. Thank you.
Senator LEVIN. Our next witness is Tom Susman, a partner ?.t
the law firm of Ropes & Gray, Chairman of the Committee on Legislative Process and Lobbying of the American Bar Association,
and in your former life a Senate aide working for Senator Kennedy
on the Senate Judiciary Committee.
Mr. Susman we welcome you.
1
TESTIMONY OF THOMAS M. SUSMAN, ESQUIRE, ROPES & GRAY,
CHAIRMAN, COMMITTEE ON LEGISLATIVE PROCESS AND LOBBYING, AMERICAN BAR ASSOCIATION
Mr. SUSMAN. Thank you, Mr. Chairman.
It is a great pleasure to be here today before this Subcommittee.
I certainly want to commend the Subcommittee for taking on a
complicated and obviously very difficult challenge. It has been
taken on before, at least once every decade or so, and I think there
are many of us who believe it is past time that something be finally accomplished. While I certainly developed my interest in this
subject and have been working with the American Bar Association's section on Administrative Law and Regulatory Practice to
try to provide some assistance to lawyers in complying with the
Lobbying Act, I want to disclaim that my testimony today does not
represent the views of the American Bar Association or any of its
entities.
Senator LEVIN. YOU want to disclaim that it does not?
Mr. SUSMAN. It does not, because they have a formal process for
reviewing testimony, and based on the time available I wanted the
freedom to be able to present my own views.
Would you like to excuse me now, orSenator LEVIN. NO, no, not at all. I am just worrying about the
double negative.
Mr. SUSMAN. It does not represent the views of the American
Bar Association.
Senator LEVIN. It does not. OK. I think that I follow that one
now. That is like our registration form almost, that statement.
Mr. SUSMAN. That is, of course, what got me interested in this
subject. Nine years ago when I left the Hill to enter private practice and was asked by a client of our firm to give them a hand with
some legislation, I began the process of trying to find out how to
1
The prepared statement of Mr. Susman appears on page 289.
�69
register. Even though I had worked on the Hill, I hadn't paid any
attention to lobbying disclosure requirements. And what I went
through then is the same thing I had a colleague of mine do within
the last couple of days just to see if things have changed. That is,
talked to the House and Senate, obtained materials from them, and
tried to figure out how does one comply.
I want to avoid for a moment delving into the great constitutional and historic disputes over lobbying regulation. I am a lawyer in
private practice, I respect Congress and its laws, and I believe in
the disclosure of lobbying and the good that it serves our society. I
would like to comply. Now how do I do it?
Well, the Senate gives you, as Mr. Socolar indicates, the forms
and a copy of the Act. But we weren't even lucky enough to get a
copy of the Harriss decision. The House provides the forms, a copy
of the Act, and two cover letters, one that gives filing dates and the
other—again that Mr. Socolar referred to—has certain instructions, which are not themselves very clear but refer you to the
form, which in turn has instructions.
And, of course, the form—I won't try to duplicate the testimony
of the GAO—the form is impossible to understand. It doesn't even
tell you that you file identical forms with the House and Senate. In
conversations with staff in the House Clerk's office, I learned that
apparently some lobbyists will fill out for the House forms disclosing contributions and expenditures relating to House-side lobbying,
and will do the same thing for the Senate relating to Senate-side
lobbying. And when they reconcile the two for publication in the
Congressional Record they find two different forms. WelL in fact,
there is nothing on the form that tells you that this is the wrong
thing to do. It simply says return one original to the House and
return one original to the Senate.
Mr. Socolar mentioned the problem with what the word "employer" means, and it has more than one meaning on the form. The
same thing applies with words like "contributions." Very basic
terms have different meanings in different places, and in my written testimony I go through a number of the steps of trying to
figure out what you do with the form. There is no instruction that
plainly tells you; it is not self-evident.
So, of course, you call back to the House and Senate offices to
find out: "Well, OK, would you give me some advice on this subject? I am a lawyer, I work with a law firm. We have at least one
client, hopefully we will have others, I will be doing the principal
lobbying, but other colleagues of mine will be assisting. What do
we do? Do we fill out the form as individual lawyers, or does the
law firm fill out the form?"
Well, no one seems to really know. The House office will say that
most large law firms fill it out institutionally for the firm, put on
the form that it is filing for the firm, and if they want to, in parentheses, they will indicate individuals' names. But you have got to
use those parentheses because, I later learned during the course of
my own foibles in filing, that if you don't use parentheses but put
your own name out to the side under "A," the offices expect that
you will file separate registrations for the lawyer as well as the law
firm.
�70
Now, you call the Senate side and the staff says, we urge the individuals to file. And there is some discussion about whether the
lobbying is "incidental", but by and large there is no way to conclude that there is a preferred way, one standard way, a uniform
way of approaching something so simple as a law firm or lobbying
firm trying to figure out who should register.
The implications of that decision are not minor, because if the
lawyer registers as an employee and lists the firm as well as the
client as employer, which the instructions say, and then the law
firm registers also as an organization and lists the client as the employer and the lawyer as the employee, then you wind up with a
double reporting system. If I am going to be flying off to speak to a
Congressman or her staff somewhere and have the expense of that
flight that is a lobbying expense, this is what happens: The first
quarter I pay for the airplane ticket on my own charge card; then I
file it as an expenditure under my lobbying report. Then the next
quarter the IPW firm reimburses me. These things always take
time. So then x file that as a contribution received by me, and the
law firm has an expenditure. Then it sends a bill out to the client.
And the next quarter the client pays the lawfirm'sbill, so the law
firm then files that it has this same amount as a receipt.
Now, if anyone thinks that those kinds of filings provide useful
information to the press, the public, or the Congress about what
lobbyists are up to, it is fairly ludicrous. What you have is a lot of
extra recordkeeping and multiple filings, which only underlines, I
believe, the clear conclusion that there is no straightforward way
of doing things in terms of the forms and the instructions. The
House and Senate offices really have their hands tied from providing any kind of formal or definitive guidance, and that prevents
someone who in good faith, in fact enthusiastically, would like to
be complying faithfully with the Lobbying Act from doing so easily.
That just addresses the basics of filling out the form and figuring
where to put your name, how many forms to file. When you get
into issues like staff contacts, an even greater morass is found.
Here the House and Senate offices are together. If you ask them,
"are staff contacts lobbying", House and Senate staff in the
Records offices will say "yes". The justice Department in informal
conversations will also say yes, and these days most lobbyists
agree. But it wasn't always that way. I looked back in my notes
and 9 years ago when I was first starting out lobbying I called a
bunch of law firms, because after all I couldn't get guidance anyplace else, and I found that the consensus view was staff contacts
are not lobbying, not reportable separately. This was based on the
Supreme Court's language in the Harriss case referring to direct
communications with Members.
Now things seem to be quite different. When there are public reports relating to staff contacts and the conclusion that staff contacts are reportable, that doesn't seem to raise any eyebrows. Even
so, after a recent report relating the tentative conclusion of this
ABA Manual we are putting together, I got on outraged phone call
from another lawyer with a large prestigious law firm in town
saying: "This is ridiculous, we don't register and never have when
all we are doing is making staff contacts, and we don't advise our
�71
clients to do so either. Are you calling us liars? Are you saying that
we are violating the law?"
And I guess I have to say what Mr. Socolar said, what Senator
Cohen said. I mean, the answer is, who knows? My own personal
view is that staff contacts would be covered. I can't imagine anyone
who has worked around the Congress concluding that one doesn't
talk to staff when one's objective is influencing legislation. And
yet, I can't say that the contrary view is irresponsible or illogical,
or even illegal.
I go through this same kind of analysis in my testimony on coalitions and grassroots lobbying. In both cases, I note that there are
constitutional issues about where to draw the line. And we only
have so much time and energy; I didn't enter that fray. But it does
seem to me that the law was intended to cover certain kinds of lobbying outside of the hired gun who is paid by one client to come in.
If a group of businesses or organizations get together and create a
coalition, that is the name of the game in Washington these days.
If they hire one, or usually more than one, lobbyist—Democrats
and Republicans, former House and Senate people—they have
pretty sophisticated lobbying strategies. And the notion that simply
by setting up a coalition, calling it a coalition and opening a separate bank account, you can avoid any disclosure of the participants
or contributors seems to me stretching somewhat what the Supreme Court has said and what the Constitution requires. That is
the kind of information that ought to be known.
Can I say that the law makes clear what is required on the form?
I think so. That is my interpretation of the word "contributor."
That is my interpretation of the word "employer". But again, no
one at this point can be definitive.
And the same thing can be said for what is historically debated
as grassroots lobbying. Clearly Congress thought that it was covering artificially stimulated letter writing campaigns. The Supreme
Court seems to include artificially stimulated letter writing campaigns in lobbying disclosure requirements. And yet, whether that
would today be considered a constitutionally sound position I am
not certain. But I do know that there is nowhere that one can get
guidance on where to draw the line between direct lobbying involving phone calls and face to face communications, and any kind of
indirect lobbying.
These kinds of problems exist everywhere—some large, some
small, but all of them very troublesome for the lobbyist who would
like to comply, who files these quarterly reports, and who tries to
figure out how to file within 10 days of the close of the quarter. For
example, we have problems getting our computer in our law firm
to generate the detailed reports needed to file on time. I mean, any
bank will give you 30 days grace period. Of course the GAO tells us
so many reports are filed late. If they were not filed late, they
would probably be much less accurate.
I do have three recommendations. One is, of course, that the
report form is in dire need of being changed. This should be done
through a process of notice and public involvement. Whether it is
centered in these committees of Congress, or whether the Secretary
and Clerk want to get together individually and work with these
committees towards a process, that is urgently needed.
�72
The House and Senate offices, I believe, are staffed by well-intentioned, very bright people who at some point or another in the history of the activities of those offices have been told that they
cannot give official advice, that they cannot instruct the public. So
while they will try to be helpful, their hands are tied and they will
give you nothing in writing on which you can rely in trying to set
up some sort of a uniform procedure within a law firm or a lobbying firm or an association or organization.
And finally, there is a lot of extra work and confusion through
having two offices maintain parallel records. I recognize the bicameral nature of the legislature, but it does seem to me that this
is one function that might be centralized in a way that would be
helpful to everyone.
Now, a last footnote. One of the things that vou will note, Mr.
Chairman, Senator Cohen, is that all three of these recommendations can be implemented without legislation. I realize this Committee has the legislative jurisdiction and is intent on doing something more fundamental, and I would support and hope to work
with you towards doing something more fundamental. But in the
interim, some help can be provided in assisting lobbyists to comply
with the law as it is now written. I would urge this Subcommittee
to take the lead in trying to bring this about.
Thank you very much.
Senator LEVIN. Mr. Susman, thank you.
Let me start off by illustrating a point which you made about
what we do require and what we do get in terms of information.
Again, we start with the belief—at least I do—that it is possible,
perhaps likely, that the majority of people who are lobbying, in the
common definition of lobbying, are not even registered. We can't
know that for certain. We have got this little assessment of the
GAO on as many people as they could talk to out of 50, and other
ways of reaching that conclusion.
But we know a heck of a lot of people who are lobbying, and
using a common definition which would include talking to staff,
strategizing, preparing lobbying materials, a common definition of
lobbying, are not even registering. So the law isn't even serving its
primary purpose. That is its primary purpose. It is not serving that
purpose.
Now, the people who do register are giving us information which
in many cases I believe is utterly irrelevant. It must be a total pain
to prepare it just in terms of the amount of hours which are spent
preparing reports which are of no relevance to us. It has got to be
very troublesome to a lot of people and a lot of firms around this
town, because I think we are wasting a whole lot of effort. Let me
just give you some examples. These are actual copies of some of the
reports that are filed with us. I won't name the people who
Mr. SUSMAN. I hope they are not mine.
Senator LEVIN. Well, some of them may be. No.
Senator COHEN. Don't worry. There are no penalties attached to
it, so don't worry.
Senator LEVIN. Here is one with a telephone bill, $98.65. This is a
prorated portion of a telephone bill. What is the conceivable relevance to us that some firm is spending $98.65 pro rata on a telephone bill? For some unidentified client, by the way.
�73
Underneath that is "Taxi fares, zero." Why? "Various carriers,
no single expenditure of $10 or more."
Another firm is trying to pro rate salaries for us, to show how
are apportioned to the covered activities. I won't name the people
whose salaries they are because it is irrelevant. Here is a salary for
a man named Graves. His pro rata salary, $6.56. Someone named
Young, $3.38. Someone named Horton, we are told, the United
States Government is told that a man named Horton was paid
$1.31 in salaries in relation to lobbying activities.
Now, there is something Dickenesque about this. I mean, we
have got a law which is perhaps ignored—and again I add perhaps
very properly so—by a huge percentage of the people who are engaged in lobbying. I say properly because they can reasonably
argue it doesn't apply to them. And then we got a law which is
complied with by other folks who are giving us a mass of irrelevant
information. Just a flood of irrelevant information pours into us.
Something is basically wrong.
Now, I agree with your comment, there may be something we
can do in the interim, but for Heaven's sake, this is going to take
some major surgery. I don't think we ought to just rearrange the
chairs on this Titanic, I think we had better sink the damn Titanic
and build a new ship.
Mr. SUSMAN. I will say, Mr. Chairman, I have been immersed in
this subject for a couple of years now trying to put together a guide
to complying with the lobbying laws, and just over the weekend I
was looking more closely at the form itself. Studying the form and
the law is a little bit like Talmudic studies: every time you look
closely at a word, it takes on new meaning. But here there is no
one who can help you—there is no Rabbi who can give you some
sense of what that meaning is.
Senator LEVIN. May I quickly add though, there are other values
to the Talmud and Talmudic studies. This doesn't have any other
redeeming features.
Mr. SUSMAN. I think that is absolutely right, although as an intellectual
Senator LEVIN. I was hoping you would say that, by the way,
that you would agree with that.
Mr. SUSMAN. AS an intellectual exercise it is kind of fun to look
at, but the fact is, I can understand why lobbyists would file incomplete reports. As the Chairman noted, the idea of trying to figure
out your overhead, including supplies that are allocated to lobbying, simply isn't worth the time. It just isn't worth it.
Senator LEVIN. DO you have any way of assessing whether a majority of the firms believe that the current legislation applies to
staff contacts? Do you think most believe it does?
Mr. SUSMAN. I believe most do now believe that it does. There
are some holdouts, but I think there is a consensus among the lobbying community, and I would certainly be interested in what some
of the subsequent witnesses say.
Senator LEVIN. And on the principal purpose test, do most understand that to mean that more than a majority of the time must be
spent lobbying Members, or where would you say the consensus is?
Mr. SUSMAN. I think here the consensus has been absolutely in
the wrong place. In my own view, opinion has been misled in large
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part by various people who have written and given advice on this
subject. If you go back to the statute, the Act talks about receiving
money or anything of value to be Msed principally to aid or the
principal purpose of which person is to aid in lobbying. OK. So it is
either the money or the person. And then someone says, well the
Harriss case changed that. No it didn't. Look at the Harriss case; it
refers to a prerequisite of coverage being one of the main purposes
of such person—everyone talks about that, that was what your
question was—or one of the main purposes of such contributions,
being to influence legislation. Contributions includes money paid to
the lobbyist.
Mr. Chairman, I don't think there is a lobbyist in town who
doesn't view the principal purpose of payments to him or her by a
client as being for lobbying. So I don't think, in the context of the
so-called hired lobbyist, that this ever ought to come into issue. Of
course it is not the principal purpose of my law firm to lobby, nor
is it my principal purpose to lobby for any single client. I have a
number of clients and I do a lot of work off the Hill, having no relationship to legislation, and under most tests you would say I
don't need to file at all.
But any time I send out a bill to a client for services relating to
influencing legislation, the purpose of the money that they pay my
firm is influencing legislation. So the only place in which it seems
to me this test becomes complicated is when you are dealing with a
trade association or a corporate official.
In fact the trade association has historically been the problem
area, where you have examples of associations that take in millions
of dollars from their members and do substantial lobbying, at least
in terms of the effectiveness and visibility. Those members are
paying for lobbying, they know they are, they want that out of
their association. And yet the association will sit back and say, it is
only 2 percent or 5 percent in the aggregate and so our principal
purpose isn't lobbying.
I would say the principal purpose of that 2 percent that the
members pay is for lobbying. But that, again, is not an unassailable
conclusion. So I believe if you look at the money—the contribution—as well as the person, and both the statute and the Supreme
Court say it is one or the other, then I think you can eliminate a
lot of hand-wringing over whether the principal purpose test applies.
Senator LEVIN. My final question to you is about the disclosure
of expenditures, some of which I have read for specific items like
overhead and telephone and travel.
Do you see any useful public purpose in requiring that kind of
itemization?
- Mr. SUSMAN. It seems to me that what concerned Congress when
passing the law is probably the least disclosed, and that is publications. There are constitutional problems with the disclosure of publications, but, as you know from your hearings on the Foreign
Agents Registration Act, there is extensive publications-disclosure
required by foreign agents. Once you get away from that issue,
gross expenditures might be useful to have, but whether they are
spent on cab fares or meals or pencils doesn't seem very useful at
all.
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Senator LEVIN. I couldn't agree with you more. I am just wondering, why haven't we gotten more protests from lobbyists on that? I
mean, we are lobbied on a lot of things but we haven't gotten too
much protest recently, at least in the last decade, on the kind of
trivia that we seem to be requiring of people who do decide to register.
Mr. SUSMAN. There are two answers to that, Mr. Chairman. One
is that those who believe that the requirements are either unnecessary or overburdensome just don't comply, as the statistics suggest.
The other one is, I think, the fear of opening the flood gates. You
yourself questioned Mr. Socolar's proposal to include a requirement
that the contract between the lobbyist and client be included with
the registration. I mean, that is the kind of slippery slope that I
think a lot of lobbyists see Congress potentially walking down. The
requirement of the details of the relationship, greater rather than
less reporting detail, and potentially a movement into the arena
having greater constitutional implications. That, as we all recall
from the 1970s, sinks the whole ship.
Senator LEVIN. Thank you. Senator Cohen.
Senator COHEN. Mr. Susman, I want to thank you for such a vigorous presentation of the Talmudic theological examinations of this
particular law. As I was listening to your experience over the
weekend, I thought of the very antithesis of a Talmudic scholar
who made the observation if you stare in an abyss long enough
eventually it starts to stare back. I suspect that is the experience
you had over the weekend.
There is also the observation that the one thing that is worse
than having a wish—or in this case a law—go unfulfilled is for it to
be fulfilled too completely. It seems to me that Attorneys—some of
whom will be testifying momentarily, including yourself—can
advise clients that you can either provide them with everything, as
Senator Levin started to detail, or you can give them nothing.
Those are the two courses of action that one could recommend. It
would seem that the overwhelming majority of those who ought to
be covered by the law are recommending do nothing, because, as I
mentioned before, there are no civil penalties and indeed there
have been no criminal prosecutions. So I was interested when you
said, " I learned to my chagrin about my past foibles." There is no
penalty for your foibles so you shouldn't have been too chagrined
or too concerned about it, because nothing is likely to ever be done
over a mistake of whether you filed the wrong form in the House
and a different form in the Senate.
I was curious about your suggestion that we ought to include artificially stimulated letter writing. Now there is a question I am
sure the Justice Department and the courts would love to litigate
in terms of what is real and what is Memorex.
A question I have for you is whether or not we should simpiy
have a disclosure of the total fee and never mind the expenditures,
but just simply the total fee. Is that more enlightening for the
public, rather than detailing phone calls, telecommunications,
printing of letters? What relevance does that information have?
Mr. SUSMAN. I agree that it doesn't have relevance. I don't think
anyone minds recordkeeping thes* days—because you have to for
tax purposes, not to mention business purposes. So you will have
4
�76
some breakdown among wages, salaries, and services rendered, as
opposed to expenses. That is not an unreasonable thing to ask, and
it may be revealing information. But once you get into the nitty
gritty of expenses, it seems to me you get into an area where you
don't get anything useful at all.
Senator COHEN. HOW would you handle the hypothetical that I
raised earlier where the superlawyer sits back in his corner office
down on K Street and picks up the phone, makes one phone call to
a key chairman on a crucial piece of legislation, total cost of the
phone call is 35 Tents.
Mr. SUSMAN. Total cost to whom, Mr. Cohen?
Senator COHEN. TO the attorney.
Mr. SUSMAN. What is the cost to the client?
Senator COHEN. The client has been charged a million dollars.
Mr. SUSMAN. Then that is a million dollars received by the lobbyist for lobbying and must be reported.
Senator COHEN. OK. Not on this form.
Mr. SUSMAN. On the back of the form—it may not be the same
quarter that he made the phone call, but on the back of the form if
he, on line 5, receives for services, e.g. fee, a million dollars for influencing legislation through a direct contact, then he has got to
report that.
Mr. SUSMAN. He doesn't tell you why he
Senator COHEN. It doesn't tell you what he did.
Mr. SUSMAN. Absolutely right.
Senator COHEN. It does not tell you what he did, does it?
Mr. SUSMAN. That is the slippery slope. I am not suggesting you
should require him to tell you what he did. It seems to me if a
Member of Congress wants the public to know that kind of communication, then Members can disclose the details. They can require
logging, they can make public their own conversations, but to go in
and require lobbyists to make those conversations public seems to
me
Senator COHEN. But he doesn't have to disclose the expenditure
of a phone call, does he? Or should he put down 25 cents, 35 cents?
Mr. SUSMAN. In theory, as the Chairman indicated, there is a
place. Line 6 says "telephone and telegraph."
Senator COHEN. Sixty cents.
Mr. SUSMAN. It has to be over $10 to be itemized, I think, but
that is correct, you are absolutely right.
It does seem to me that there are certain reasonable lines that
one can draw. You asked whether if you talk to a receptionist, is
that covered? People are making those decisions every day in complying with all laws about what is reasonably required under the
circumstances if you want to do it right. It seems to me that this is
no different. That is to say, of course not every contact with a
Member is lobbying. Certainly not every contact with staff is going
to be lobbying. Some are, some aren't, and you ought to report
those that are.
Senator COHEN. Should it only be legislative activities? What
about nonlegislative activities, such as lobbyists associating with
Members in social events with no specific legislation pending? Is
that something that should be reported?
�77
Mr. SUSMAN. I hope not. You balance all this against what?
What is the purpose of disclosure? It seems to me that the purpose
is to provide some sort of a useful window on how democratic processes work. That is, what are the influences shaping legislation? I
don't believe that pleasant dinner that I might have with you one
evening is one of those influences shaping legislation that ought be
disclosed. I don't believe that.
It may be that our friendship and my persuasiveness will be so
great that something I will say that evening will lead you to vote
one way on something. But that is the slippery slope that I fear.
On the other hand, when I come up or call or write you or your
staff or your Committee staff, I certainly know when I am trying to
affect legislation.
Senator COHEN. Only formal contacts should be included then?
Formal in a sense when you write, when you call, when you come
up to the Hill. In other words something in a formal capacity
where you are seeking to influence legislation either pending or
about to be considered later during the course of that term. But informal, casual, social types of contacts would be excluded under
your own definition?
Mr. SUSMAN. That is correct. The issue of casualness it seems to
me you have got to exclude, and I don't think you lose a lot doing
that.
Senator COHEN. Social as well, right?
Mr. SUSMAN. Again, I say you know it when you see it. If I call
and say, Senator, let's have lunch, I really need to talk to you
about something, and we go up to the Capitol and have lunch together and I am very concerned about the bill that is coming up
this afternoon, that is not social. I mean, we may be good friends
and we may exchange
Senator COHEN. What if you come up and have lunch with me
and say gee, there is a terrific group out in Colorado or California.
I would love to have you come out and speak to them and I can
make a recommendation to you.
Mr. SUSMAN. I don't view that as influencing legislation.
Senator COHEN. Some might take exception to that, saying that
is an indirect attempt to influence legislation at some point in
time.
Mr. SUSMAN. There is certainly a cynical view out there that
would say that all of us who spend any time trying to influence legislation wind up spending all of our time in that pursuit. I think
that is a cynical view, I think it is a mistaken view, and I think it
is a dangerous view from the standpoint of trying to require disclosures.
Senator COHEN. OK. Would you take a look at the Canadian
form and see if that simplifies your moral examinations over the
weekends in the future?
Mr. SUSMAN. I can guarantee you it couldn't be worse than ours.
I saw it for the first time here. I would be glad to.
Senator COHEN. DO you think we ought to have some kind of a
uniform reporting system that would cover the Foreign Agents
Registration Act as well as the Lobbying Regulation Act?
Mr. SUSMAN. And the Byrd Amendment all in one. I think we
should have a uniform approach, with filings in a single location.
�78
That is useful. On the other hand, I vould be a little careful
mixing foreign agents registrations, under a criminal statute that
people go to jail for violating, with an un reformed Federal Regulation of Lobbying Act. I wouldn't try to consolidate it until we know
that we have a clear, enforceable statute from Congress.
Senator COHEN. I take it you also feel that both the House and
the Senate ought to be at least in the business of giving some kind
of advisory opinions to inquiring lobbyists?
Mr. SUSMAN. I believe they can do that today if only there was a
will within those bodies of Congress that could provide them the
direction and mandate to do that.
Senator COHEN. I might point out that the Senate, and I assume
the House, Ethics Committees do in fact provide that kind of guidance for Members of Congress in terms of what we can do and
can't do.
Mr. SUSMAN. And every regulatory agency at the State and Federal levels do that for people who fall under the laws and regulations that they implement.
Senator COHEN. That is all I have. Thank you, Mr. Chairman.
Senator LEVIN. Whether or not they have the authority to do it
now, what you are saying is that they should do it? We should have
a law
Mr. SUSMAN. Mr. Chairman, I am an administrative lawyer by
calling. I spend a lot of time with regulatory agencies. These are
the offices that have been designated to implement, through whatever means, the statute as it now exists. I think they have that authority.
Senator LEVIN. Would you add also "ahd should have that authority"?
Mr. SUSMAN. Absolutely.
Senator LEVIN. Let me just go back quickly to one possible design
for a new statute. We wo'-ild seek from the lobbyists a total of how
much they received from a client during a period. That seems to
me what we are really after. I am less interested, frankly, on the
detail on the expenditure side where I think we waste a lot of
effort. I am much more interested in how much is received by a
lobbyist from a client to engage in lobbying activities during the
period covered by the form. That to me seems to be a critical issue.
A gross number, an overall number. The problem with my own
approach, which I am trying to struggle with, is how do we then
apportion the lobbying from the non-lobbying activities. Take that
lawyer who makes the phone call who engages in lobbying 20 percent of his or her time and court activities the other 80 percent of
his or her time for the same client. Under my hypothetical that I
just gave you where that lawyer is on a retainer of a million dollars a year for that client, how would you apportion that payment
for the purpose of the disclosure?
Mr. SUSMAN. Well, that i* less of a problem when you are dealing with lawyers who are retained by clients than when you are
dealing with a whole univei-?* r,i' lobbyists wh-.i are trade association and corporate
Senator LEVIN. Take the lawyer first.
1
�79
Mr. SUSMAN. The lawyer is an easy one. Every 15 minutes of my
professional life—and with some lawyers it is 10, with some it is 6
minutes—is measured and recorded, Mr. Chairman.
Senator LEVIN. That is not true with all lawyers, by the way. We
have a pretty well known lawyer in town who is up for confirmation for a particular post who does not apportion his time that way,
who will go unnamed.
Senator COHEN. He may go unconfirmed.
Mr. SUSMAN. Well, in private lawfirms,most lawyers individually keep records even if there is a retainer relationship. That is how
I fill out the forms today. If T have forgotten, as in some cases, to
open a separate account so my computer can keep it as a lobbying
account for a client, I go back and I look at the printouts and I can
do that pretty easily. So that is not a difficult task.
On the other hand, what I think would be misleading, and therefore potentially pernicious, is a reporting system that works well
with hired lobbyists but doesn't give you any information, or comparable information, for staff lobbyists. For those who don't like
the idea of disclosure—I guess it would have a competitive impact
on those of us who do outside hired work; people who want to avoid
disclosure would simply hire their own lobbyists as employees,
unless you have some sort of a reporting requirement for those who
use staff lobbyists. And how you handle that, are you talking about
the salary of the person? Is that the comparable figure to the fee
paid? You know, we can probably work some of these details out.
Senator LEVIN. When you use the word "staff," you are talking
about in-house lobbyists?
M;. SUSMAN. In-house, correct.
Senator LEVIN. Thank you, Mr. Susman. Thank you so much.
Senator COHEN. It has been a pleasure. Thank you for clarifying
everything for us.
Senator LEVIN. Our next panel, we have four witnesses. Tom
Boggs, Jr., partner in the law firm Patton, Boggs & Blow; Lloyd
Meeds, a former Member of the House of Representatives and a
partner at the Preston Gates law firm; Howard Marlowe, President
of Marlowe & Company; and Dona O'Bannon, who is a partner
with O'Bannon & Gibbons.
Senator COHEN. Let the record show that these are the superlawyers I was referring to in my hypothetical.
Ms. O'BANNON. I am not a lawyer.
Senator LEVIN. YOU all have corner offices on K Street; is that
right?
Ms. O'BANNON. I am not a lawyer.
Senator COHEN. And consultants.
Ms. O'BANNON. And happy not to be.
Senator LEVIN. There is fire in your eyes when you said that.
Ms. O'BANNON. Exactly. I'm happy not to be.
Senator LEVIN. Thank you all for coming forward. It is important
that you make this contribution to our deliberations, and we are
jrateful for your willingness to do so.
Mr. Boggs, let's start with you.
�80
1
TESTIMONY OF THOMAS HALE BOGGS, JR., PATTON, BOGGS &
BLOW
Mr. BOGGS. Thank you, Mr. Chairman. I have a prepared statement which I would ask to be inserted in the record and I would
simply like to quickly summarize it.
I basically have three suggestions. I think you have heard them
all already this morning. One, I think you do need a one-stop shopping mechanism where there is one form which covers registration
under FARA, registration under Byrd, registration under the
House and Senate lobbying requirements. I am not sure you need
one agency to maintain that, but at least one form that maybe goes
to different agencies.
Secondly, I do think you need to broaden the definition of activities covered. I think they probably should include contacts with
Federal and staff Members of Members of Congress, as well as just
Members of Congress themselves, and activities other than legislative activities. Certainly much of my activity on the Hill doesn't
relate to pending legislation. It relates to policy and what might
happen, or what could happen at an agency as a result of Congressional activity, but it is really not involving pending legislation.
And then finally, as both the Chairman and Senator Cohen have
said, I think you need to simplify the actual reporting requirements themselves. I mean, an aggregate amount of fees received,
an aggregate amount of expenses incurred certainly ought to be
sufficient to inform the public of what is going on.
I would add a couple of caveats. One, in trying to distinguish lobbying activity from legal activities in a law firm, there is something that I think is worth pointing out because it affects us all the
time, and it is particularly true in the case of the Foreign Agents
Registration Act. When you register under the Foreign Agent Act
there is no distinction. In other words, you have to report under
the Foreign Agents Registration Act all fees you have received
even if those fees, "qualify" for the legal exception. Once you have
stated that the legal exception doesn't apply to all your activities,
then you have to basically file a report saying what your total fees
are.
That does have a big competitive impact on us. That is, if we
have a client that we are doing a million dollars worth of legal
work for and they want us to do $10,000 worth of public policy
work for them, which would require us to register under FARA, we
would then have to report that we received a million dollars. Now
most clients aren't terribly enthused, if they are only doing $10,000
worth of public policy work, to have their name in the paper as
paying a prominent Washington law firm a million dollars to influence public policy.
And the other thing I would suggest to you, I don't know how to
do it, but I do agree that there needs to be some different mechanism of enforcement. I mean, civil penalties are one thing, criminal
penalties are another, but something I think short of both may be
more appropriate, and that is something similar to what would
happen to a lawyer with the Bar Association, some form of disal1
The prepared statement of Mr. Boggs appears on page 299.
�81
lowance of the practice of lobbying for a period of time if the lobbyist engaged in activities which were considered in violation of the
disclosure laws.
Now, I don't know who keeps the register, I don't know who enforces that, but I think that is something that is worth your considering in your consideration of revising the statutes.
Thank you, Mr. Chairman.
Senator LEVIN. Thank you, Mr. Boggs.
Mr. Meeds?
1
TESTIMONY OF LLOYD MEEDS, PRESTON GATES ELLIS AND
ROUVELAS MEEDS
Mr. MEEDS. Thank you, Mr. Chairman, Senator Cohen.
First, while I am a partner in a local law firm and the chairman
of the Ethics Committee of the American League of Lobbyists, I am
here speaking for myself only. Although I might note that many of
the opinions I have and will state are shared by a great number of
the lobbyists with whom I share this profession.
First let me take the opportunity to commend you gentlemen
and Members of this Subcommittee. Generally speaking, institutional issues are not as glitzy as the kind of headline grabbing
issues that Members of the House and Senate can be involved in
each day, but these housekeeping issues of how the institution
functions are every bit as important, and unfortunately we only
hear about them when they go wrong. Things are now going wrong
and have been going wrong for sometime with the legislation with
which you gentlemen are dealing right now, and we are hearing
about them. And as Chairman Levin said, it is very clear that
something needs to be done to correct a system which allows these
things.
First of all, I think, speaking specifically of the Lobbying Act,
that the major problem is that it is in such disarray that it has created a great deal of uncertainty, which in effect really elicits disregard, aiid that is, as the statistics by the GAO pointed out, the Act
and the purposes, at least the general purposes of why we should
have an act, are being disregarded almost wholesale. In fact, it
would be I think proper to say that the requirements are observed
in the breach.
Let me just make a couple of recommendations and observations
with regard to the registration in lobbying. I agree totally with my
colleague Tom Boggs. I think that the statute as interpreted is
much too narrow. It is "interpreted" now to be influence the passage or defeat of legislation. I think it should be much broader and
include all significant efforts to influence governmental action, as
well as not only the passage or defeat of legislation, but when I am
up importuning one of you to write a letter to the Corps of Engineers for me for some purpose, I think that is also lobbying and I
think it should be included, as well as importuning the Corps of
Engineers to do it. So I would have a very broad coverage of the
kind of activities to be covered and include all significant efforts to
influence governmental action.
1
The prepared statement of Mr. Meeds appears on page 304.
�82
While the present requirement appears to only require direct
contact with Members—and I disagree with one of the former witnesses, I think the proper interpretation presently is only direct
contact with Members, although I don't believe it should be that. I
believe that that is a much too narrow interpretation. It should be
again enlarged to include all contacts with staff of committees, personal staff of Members when the major effort or purpose of that
contact is to influence governmental action, which would exclude
some of the kinds of social things that you talked about, and
others. But basically, when the purpose of that contact is to influence governmental action with any person who is in a position to
do that or to assert that kind of influence, I think that is lobbying
and should be included.
I agree with Tom Boggs that I think it could all be in a kind of
one-stop .-hopping. It could be under one statute even though parts
of that statute may have criminal penalties. Again, I am not so certain that that is necessary that there be criminal penalties but that
it could be.
In the event that the FARA statute is included with others, I
think special provisions should be made with regard to filing certain things, certain information under FARA. For instance, I think
that the purpose of individual contacts, while it may be necessary
to file that for governmental action, that that should be restricted
to agencies that need to know that and not available to the public
for anybody who wants to go up and read the FARA reports to
track what I am doing on a given issue that I have filed under
FARA. I don't mind filing it, but I just don't like having it being
made publicly available so it can be used by my opponents.
Finally, I just warn it seems to me that there is no perfection in
this area. It is much like the tax code, no matter what you do
people are going to try to figure out some way to get around it.
And so the first thing I would urge is that you not forego actions
simply because you can't satisfy everyone. As the old saying, the
best is the worst enemy of the better. You are not going to get perfection in this field. You are going to have a moving target and it
will have to be updated and upgraded as people interpret it, courts
interpret and as they move along. But basically all of these laws,
all 3 of them, need to be simplified, they need to be clarified, and
in those instances where it doesn't include all people who are in a
position to influence governmental action and all governmental
action, it needs to be enlarged.
Senator LEVIN. Thank you, Mr. Meeds, very much.
Mr. Marlowe, welcome.
1
TESTIMONY OF HOWARD D. MARLOWE, MARLOWE & COMPANY
Mr. MARLOWE. Thank you, Mr. Chairman.
I appreciate the opportunity to appear before you today, and I
too make a disclaimer with regard to opinions that I express to you
today. They are my own, and not related to my firm or to any organization that I may belong to. I also ask that my prepared statement be entered into the record, and also that three items I re1
The prepared statement of Mr. Marlowe appears on page '-ll!.
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ferred to in my prepared statement which are unpublished also be
entered in the record, copies which I will provide right now.
Senator LEVIN. They will all be made part of the record, as will
all the statements.
Mr. MARLOWE. Thank you. I welcome these hearings. Of the
number of times I have had to testify over the years before Congressional committees or to prepare other people for such testimony, I can think of none which is more important to me personally
than this one. There are, as you have already heard, so many deficiencies. I thought from your opening statement, Mr. Chairman,
that you had just said all that needs to be said about this, and we
have repeated it all in many different ways using different words.
We have called the Lobbying Regulation Act ineffective, defective,
inadequate, woefully inadequate, outdated. I think I can recite a
rather long list of words, each of which is accurate.
The lobbying law needs to be changed. Lobbying ought to be regulated. It ought to be regulated more effectively, if for no other
reason than to help to increase public confidence in and understanding of our representative form of Government. People have a
right to know who is trying to influence what in the policy-making
process and how much they are being paid. And obviously, if I can
slip into it, the current law is woefully inadequate in accomplishing that objective.
The Federal Regulation of Lobbying Act passed in 1946 is outdated. It is ineffective. I apparently have one document that some of
the witnesses before me haven't had before. At one time I picked
up from the House Clerk the Federal Regulation of Lobbying Act
Outline of Instructions for filing reports, and this does provide a
whole bunch of definitions which would further muddle our discussion if I got into it. But it refers to the report and recommendations of the House Select Committee on Lobbying Activities in the
81st Congress as its source of providing definitions, going down to
what we would call grassroots lobbying today, pamphleteering and
other things like that.
Those of us who try to comply with the law have virtually no
iidance, get no guidance or get conflicting guidance from the
ouse Clerk's office and the Secretary of the Senate's office. We
also are faced with the fact that the Harriss decision has effectively
emasculated the intent of the law. And one ought to look back to
what the intent of the law was, and even find out that I am not
quite sure that the purpose of the Congress in adopting the 1946
act was to have full disclosure. It was more to get at what they considered to be misinformation being spread by lobbyists and various
deceptive practices. I don't think we have on the hearing record,
certainly within the last 10 or 20 years that I am familiar w..n. a
record of deceptive practices and misinformation being spread by
lobbyists.
Incidentally, I also think that those of us who are professional
lobbyists in some way become a little bit like public officials. Perhaps, if you can bear with me. we are second class citizens. We
have to disclose more than a citizen does. As Harry Truman said
when he retired, he was promoted back to being a private citizen.
We have extra obligations when we register as lobbyists, and those
obligations do go to issues of disclosure and do probably cross some
S
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very narrow lines of constitutionality. I think, however, as Mr.
Meeds just referred to, we can deal with those issues not by confronting their complexity but by confronting the objectives of getting disclosure of who is doing what under the law.
Clearly it has been my experience that a lot of lobbyists do not
register. I have walked down the the halls of this building, and I
have been accompanied by other lobbyists hired by the same client
doing the same job as I am. They aren't registered and I am. The
law doesn't require them to register, if they take a strict interpretation of the law. I agree with Mr. Meeds, I think that many people
are taking a strict interpretation of the law and only registering if
a substantial portion of their time is devoted to direct contact with
Members of Congress.
I may have left out of my prepared statement—I was going to
leave it out of my oral remarks certainly—reference to the fact
that I recall one time being asked by a prospective client not to
register. As we got down to the details of contract, I had faxed back
a memorandum and I put in the usual statement that we will
comply with Federal laws and register under the Federal Regulation of Lobbying Act. I got back a call rather quickly, "No, you
can't do this. It happened to be a group of lawyers, and they said,
"We don't have to register"—that it is a trade association of lawyers—"We don't have to register and you ought not to." Well, I
said, "you take your counsel's opinion and deal with it as you may,
but the principal purpose of my business is lobbying and therefore
I am going to register." I must say we didn't get that client I
assume that other lobbyists are finding that they are being client
driven very often in what they are asked to do in terms of how
they comply with the law.
I think the issue of expenses is ludicrous. One need not know
how much we spend on taxi fares, and we report how much we
spend on meals and entertainment in our firm. It is intriguing that
the law says that you have to report where you took somebody to
lunch or to dinner but not whom you took. So I put down X Y Z
restaurant and how much the expenditure was, but what public
purpose does that have other than to say that I either have a lousy
taste in restaurants or a very good taste in restaurants?
The general conclusion I draw from that is that most of the information that you get from the lobbying reports is both unreliable
and in large part meaningless. And fourth, there is almost no enforcement of the law. Why should anybody file if they have no fear
of being caught? If they are caught, the worst that can happen is
their name gets printed in an article. And I agree that that is a
sanction, because they are going to be caught by a diligent reporter. They are not going to be caught by the Clerk of the House, Secretary of the Senate, Justice Department, or anybody in the employee of the United States Government.
I would make the following recommendations, in very brief form.
One, I believe that you ought to draft a new Lobbying Regulation
Act and base it on the premise that Congress and the public have a
right to know who is being paid to lobby, what issues they are lobbying, and what position they are advocating in those issues.
Two, anyone who is engaged for any consideration to contact
Members or officers of Congress, Congressional staff aides, execu-
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tive branch or independent agency officials or employees, on any
public policy issue should be required to register. Clearly the law
should not apply to citizen lobbyists in any manner that would infringe upon their First Amendment rights to petition their Government. I do not believe that anyone can claim that the current law
infringes upon those rights or has a chilling effect, and while it
should be a consideration that you clearly deal with, it should not
stop you from acting to deal with those of us who are professional
lobbyists and should be regulated effectively.
Three, all persons engaged in executive branch lobbying ought to
be covered by the law in the same manner as those who are engaged in legislative branch lobbying. In other words, I would suggest that the Byrd Amendment and other laws affecting executive
branch lobbying be put into the same law as legislative branch lobbying.
I would also cover grassroots lobbying of the Executive and Legislative branches of Government with the registration and reporting requirements of the law.
The fifth point is that lobbying registration should remain in
effect for no longer than the duration of the Congress in which
they are filed to require the periodic filing of updated registration
statements. The public interest would be well served i f lobbying reporting forms required only essential information, the type that we
referred to before. Total expenses I think is a useful standard to
use.
On the issue of expenses, should the Subcommittee believe it is
necessary, I recommend the total amount be the sole criteria that
used. And to cut down on paperwork, it is difficult to make filings by the tenth of the month following the quarter. We use a
computerized system in a firm of 5 people. We are struggling away.
I think that this quarter we filed a day late, and according to some
figures I heard you use earlier in the hearing, about a $1.32 short.
We do our best to comply, bui we would fall within the figures of
the GAO of people who sometimes file late. We sometimes mis-add
figures. The House Clerk's office picks that up. If we don't register,
there is no way that they pick that up.
So I suggest semiannual reporting rather than the current quarterly reporting is more than adequate to provide sufficient public
disclosure.
Ninth, since I believe the new Lobbying Regulation Act should
cover both legislative and executive branch lobbying. As I referred
to before. Congress can repeal the Byrd Amendment. This is a wellintentioned piece of legislation which, despite the personal efforts
of Chairman Byrd and his staff, has turned out to be a excellent
example of why legislation should go through a public hearing and
comment process before it is enacted into law.
The one concept of the Byrd Amendment that should be retained
is its flat prohibition on the use of federally appropriated funds to
pay directly or indirectly for lobbying Congress, the executive
branch, or any independent agency. On the other hand, the one
concept of this law that should be relegated to the scrap heap as
quickly as possible is its differentiation between the treatment of
lobbyists in the full-time employ of an organization and independ-
�86
ent lobbyists hired by an organization on a contractual basis. This
is an artificial distinction that represents ill-advised public policy.
Tenth, Mr. Chairman, I would urge the Subcor-u.attee to hold a
hearing to determine if there are in fact any corrupt or unethical
practices related to the various types of contingent lobbying fees,
before outlawing this practice.
Eleventh, most States have adopted lobbying regulation laws of
their own, some of which are quite good. I hope the Subcommittee
will request a review of these statutes by the Law Division of the
Congressional Research Service to determine what we can learn
from their experience, as well as from the Canadian experience,
since the United States and Canada are the only two countries in
the world that regulate lobbying by statute.
Twelfth and last, it is essential that the new Lobbying Regulation Act be firmly and effectively enforced. That means setting
both civil and criminal penalties for violations, but it also means
authorizing and appropriating funds for sufficient staff to initiate
investigations of suspected abuse, as well as to respond to those alleged violations that are brought to their attention.
Thank you once again, Mr. Chairman, for the opportunity, and I
commend your very able staff for the diligence and the professionalism that they have shown in preparing for these series of hearings. I know that I and many of my professional colleagues will be
happy to work with you as you go through your deliberations
coming up and help you achieve more effective regulation of lobbying.
Senator LEVIN. Mr. Marlowe, thank you so much.
Ms. O'Bannon?
1
TESTIMONY OF DONA O'BANNON. O'BANNON & GIBBONS
Ms. O'BANNON. Thank you very much, Mr. Chairman. I am
pleased to be here today.
I too spent a weekend looking up the lobbying laws, just to go
back and read them since I hadn't read them in so long. I also
spent the weekend checking to see whether our lobby registrations
were in order, and they were not, and they are in order as of today.
So I am part of the 95 percent, and I am part of the 85 percent who
file late, and I am probably part of the zero percent that doesn't
put expenditures in when they are supposed to either. But that is
all a part of what I think this Committee is looking into today, and
I think it is an interesting and worthwhile project.
I believe the world of lobbying has changed a lot since 1946 when
the original law was passed, and it certainly has changed since
1953 when the Harriss decision came down, and I think it is really
time—as they say in Florida—they have a sunshine law in Florida—I think it is time to bring lobbying out of the shadows and
shine a little sunshine on it. It is a very honorable profession and
one that I have been in for many years and enjoy very much. Most
of my colleagues in it are as professional as all of us. I think the
stories in the papers sometimes tend to have a slant on lobbyists
that is really not so generally favorable, just as they so often do on
1
The prepared statement of Ms. O'Bannon appears on page 322.
�87
a few Members of Congress that reflect negatively on the whole
body, which I believe is wrong too.
People often concentrate on why there are so many lobbyists
these days, and I think basically there are so many because the
complexity of the Federal Government has changed so much. In
1963, when I began working on the Hill for a Member of Congress,
the total Federal civilian work force was 2,500,000. In 1991, that
same work force has increased by 500,000 to almost 3 million employees. That is, of course, in addition to the over 2 million military
personnel.
In 1963, there were 10 Federal departments and 70 Federal agencies. In 1991, there are 14 Federal departments and 140 Federal
agencies. In 1963, I am pleased to report, there were 535 Members
of Congress and there are still 535 Members of Congress. However,
in 1963 there were 7,700 Congressional aides, both personal and
committee. In 1991, there are 20,062.
These numbers reflect I think the increasing complexity of the
problems facing the country today, and our profession has simply
responded with increased numbers and increased activities.
I think the 1946 Lobby law is actually a pretty good law. It is
very specific, it is very simple, and it includes just about everyone.
I think the problem is no one has paid any attention to it, and
since there has been no enforcement, that has led probably to some
abuses.
First of all, I would support full disclosure. I believe that registration should be triggered at the first contact either by phone or
by letter to any Member of Congress or any member of the staff.
And I would include receptionists, because most of my very good
work is done with the fine receptionists and appointment secretaries on Capitol Hill.
Secondly, I believe associations, coalitions and ad hoc groups
should be required to register and provide a list of their members if
they do any Federal lobbying at all. And I think their registration
should be triggered by the first contact with the first Member of
Congress or the first staff member that they deal with. I also think
these membership lists should be updated every two years if membership has changed by 10 percent or more. Since I have helped
form some of these coalitions and associations in the past, that is
one of the reasons I make this recommendation.
Third, I think all categories of legislation and all actual bill numbers should be listed with every registration, and those registrations should be updated every 2 years. I must tell you honestly that
looking back on my 1974 registration, when I first registered for a
client I currently represent, the exact same issues are listed in
1974 that were listed today, and I have just copied that form every
two years and sent it in every quarter, just like probably everybody
else in this town does too. It does not reflect what I was doing—at
least until yesterday it didn't reflect what I was doing for that
client. With the updated forms that were submitted this morning,
they will be adequately demonstrated.
Senator LEVIN. I think we really ruined your day by requesting
you testify here today.
�88
Ms. O'BANNON. YOU did. I told Peter that when he called. It did
require a lot of work. And let me tell you, I had a very unhappy
staff over the weekend too.
Senator LEVIN. We will promise not to ask you to testify for at
least a year. Tell them it won't happen again.
Ms. O'BANNON. Good. No, I- will keep my registrations current,
thank you sir.
Fourth, I also support—as everyone else has mentioned in this
hearing a uniform reporting system for Congress, the executive
branch and foreign agents. I think the reports should be made
every 6 months, and I think computerized files should be accepted.
I mentioned in earlier discussions with your very able counsel
that my secretary has personally asked me to mention, that it
drives her crazy when she has to file the FARA forms on different
colored paper and type them. She hasn't typed in 10 years, she is
so busy on computers. The fact that she has got to put those forms
on special colored paper and type them drives her crazy, and then
she drives me crazy. So now I can go back to her and tell her that I
have expressed her views today. I believe that enforcement should
be strengthened, and I think that everybody needs to cooperate on
that, including Members of Congress and the staff. The reports
that are not complete should be returned, and there should be penalties if they are not complete and if they are not filed in a timely
fashion.
I think the photo identification cards that lobbyists now can elect
to have or not to have should not be given to any lobbyist who is
not registered. I believe appointment secretaries in Members' offices and staff members who so frequently talk with us—probably
more frequently than they would wish—shouldn't make appointments for you, and I don t think staff members should take appointments, unless they have a registration number from a lobbyist.
I recommend that the Committee look at the various States. In
my firm we have lobbied in 22 different States, and in Canada I
might say, and many of the States have very good lobbying techniques. Some have been well-tried and cast aside as being too burdensome. And there is a book—I brought along today. I didn't provide the hundred copies because I would have probably had to list
it on my registration form. The Council of State Governments has
an excellent book and I provided excerpts of it in my statement.
They chart all the States' lobbying requirements. I will give this to
the Committee because I have another copy back in the office. But
it is a good publication, and I think a summary of the States would
be most in order.
I will conclude by saying I believe the profession of lobbying is a
iroud one. There are lawyers and non-lawyers in it. I am not a
awyer, although there are lawyers in my firm. So often we read of
special interests that we represent, but frankly I believe that if a
lobbyist represents a corporation, he or she is representing the
thousands of employees of that company and the hundreds of
shareholders. I believe an association speaks for tens or hundreds
of thousands of Americans. The unions who all have their own lobbyists speak for their hundreds of thousands of workers. The environmental groups and the conservation groups speak for all the
�89
thousands of people who support their causes and provide membership dues.
So I think if all the lobbyists in the true sense of the word were
lumped together I think you wouldfindthat most of the population
of the United States is actually well - represented in Washington.
Therefore, I believe that the more open lobbying becomes through
fair disclosure the healthier the country will be generally.
I thank the Committee very much for allowing me this time to
testify.
Senator LEVIN. Thank you very much, Ms. O'Bannon.
First, on the question of who should disclose, the definition of
lobbying clearly has to be clarified. I think everything is agreed to
that, but let me just go through the points. First, on the question of
whether or not lobbying of Congressional staff should be included
in the definition of lobbying, I think all of you said yes to that
question, and stop me if I am wrong in any of my summaries here.
Next, on the question of whether or not lobbying should include
more than legislation, should it include, in addition to attempting
to influence legislation, contacts relative to regulations, grants,
contracts, I believe each of you said yes but I am not sure about
you. I think you also support that.
Ms. O'BANNON. Yes, I definitely support that.
Senator LEVIN. So again stop me if I am wrong on this.
Now, on the question of the principal purpose test, here I would
just like you each to comment briefly.
What should be included? Somebody let's say who lobbies once
during a year—let's take a lawyer. Although you are not a lawyer,
I will start with you, Ms. O'Bannon. Should somebody who 99 percent of his or her time is practicing in courts and then makes a
phone call to a Member of Congress once or twice a year, should
that person register?
Ms. O'BANNON. Yes. If they are pursuing legislative business,
yes.
Senator LEVIN. All right. Mr. Marlowe.
Mr. MARLOWE. My answer also as a non-practicing lawyer would
be so long as that person is being paid or getting any benefit for
doing that call, yes.
Senator LEVIN. Mr. Meeds.
Mr. MEEDS. I am not so certain of that. Clearly you have got to
have some principal test or test of principal purpose which would
exclude kind of casual lobbying. But would the telephone call be
made specifically for the purpose of influencing governmental
action?
Senator LEVIN. Yes.
Mr. MEEDS. Well, it should be registered then.
Senator LEVIN. That person should then register?
Mr. MEEDS. Yes.
Senator LEVIN. OK. Mr. Boggs.
Mr. BOGGS. I certainly agree if the person is an agent, Senator
Levin, but if the person making the call is a chief executive officer
of a company and the lobbyist in Washington has suggested that
that chief executive officer make a phone call to the White House
or to the agency or to the Hill and he does so very rarely as part of
�90
his executive function as a chief executive officer, I do not think
that necessarily should require registration.
Mr. MEEDS. I would agree with that.
Senator LEVIN. The example I was giving though was the lawyer
who is 99 percent in court and 1 percent of the time is making a
call
Mr. BOGGS. But I will give you an example back. If that lawyer
happens to be the former law partner of Senator Levin's and I am
really trying to influence Senator Levin and I know that he is a
silver bullet out there that I can use, he should certainly register.
Senator LEVIN. So the answer on the lawyer question that I gave
would be yes?
Mr. BOGGS. Yes.
Senator LEVIN. OK. Now, if the activity is preparing strategy and
materials but no direct contacts at all, this firm simply does the
preparation of strategy and preparation of materials—I know this
doesn't happen that often but I am trying to clarify an issue—
would you say that constitutes a lobbying activity that must require registration, Ms. O'Bannon?
Ms. O BANNON. Yes, I would.
Senator LEVIN. Mr. Marlowe.
Mr. MARLOWE. Yes, I would also, and I do think it happens quite
often.
Senator LEVIN. All right. Well, I'm not sure if it does. Mr. Meeds.
Mr. MEEDS. I don't think it should be if it is preparation of strategy. What I would include would be contacts with people in Government to influence the direction of governmental policy.
Senator LnviN. All right. So if the firm
Mr. MEEDS. If the firm hires somebody to prepare strategy
memos, briefs, other things, which are really the kind of work
product of a person's mind, I don't think that should be covered.
Senator LEVIN. OK. Mr. Boggs.
Mr. BOGGS. Again, I think I would differentiate. If the work product were used in the lobbying activities, then I would suggest they
be included.
Senator LEVIN. By the outside firm?
Mr. BOGGS. No, by the person using the work product. In other
words, if I get a memorandum prepared by an environmental
lawyer in my law firm to lobby on the Clean Air Act and I use that
memorandum in lobbying on the Clean Air Act, I think that work
product cost should be calculated as part of the cost of the lobbying
effort.
Senator LEVIN. My example, in order to try to clarify this issue,
was an outside firm that doesn't contact the Government at all.
Mr. BOGGS. But they give it to me?
Senator LEVIN. YOU strategize with them, they charge you, they
give you materials, but that firm doesn't do any contact at all.
Should thatfirmregister?
Mr. BOGGS. No.
Senator LEVIN.
Now, should the strategizing activities and the
material preparation for lobbying activities be included in the definition of lobbying when it is part of the activities of a firm that
also makes contacts? Is there any doubt in anyone's mind that that
artivitv should then be included?
�91
Mr. MEEDS. In the cost?
Senator LEVIN. Both. Both on the expenditure side and the receipt side. I want to take a firm now that strategizes, prepares materials, and makes contacts, but the contacts are only 5 percent of
the time. Most of the time it is sitting around an officefiguringout
how can we have an impact on this legislation. So should the strategizing and the material preparation be included in the definition
of lobbying for purposes of how much money is received for that
activity and how much money is spent on that activity?
Ms. O'BANNON. I think that would be a reasonable inclusion, yes.
Mr. MARLOWE. I think it definitely has to be included. At least
half of the work that we do, and sometimes more than half, is
spent strategizing.
Senator LEVIN. All right. Here I am putting it inside the firm
that does register. I'm saying it is the samefirmnow.
Mr. MEEDS. I really think that that portion of it would not be
considered in my
Senator LEVIN. Should not?
Mr. MSEDS. Should not be considered in my definition of lobbying. I would go back to—and we have got to draw some lines somewhere to make things enforceable and to simplify them, and my position may not be perfect, I recognize that, but it seems to me that
the definition should be the direct effort to influence the public
policy, and that means the contact, but it should be with everybody. It should be, you know, staff and everybody else, but it
should be a contact.
Senator LEVIN. Yes, we have covered that part of the question.
The fee that is received by this firm obviously includes its effort to
strategize, but you would not list that effort in terms of what is disclosed?
Mr. MEEDS. I don't think that is necessary.
Senator LEVIN. All right. Mr. Boggs.
Mr. BOGGS. Again, Mr. Chairman, any work product that is used
I would list. I mean, if I use an environmental memorandum on
the Clean Air Act that cost a good bit of legal time to prepare, I
would list that. If I am talking with a client and sitting around
with 5 lawyers trying to decide whether or not a project that we
are undertaking for that client is something that should or should
not be brought to the Hill as opposed to filing a lawsuit, and we
spend a good bit of time analyzing whether it makes sense to go a
legislative route versus a strict legal route, and we go a strict legal
route, no, I don't think that should be a reported activity. It is a
slippery slop.? theory as to where you stop, but I would say you
on y include the product that was actually used in the lobbying activity.
Senator LEVIN. That sounds like a rational line. The problem
would come in terms of estimating the fee. Does it not complicate
that issue?
Mr. BOGGS. Sure. I think Mr. Susman's answer is correct; thp
for a law firm it is easier; at least for law firms that go by ine
clock, which most of us do. It gets more complicated if there is one
fee paid to a firm for the general activity, and how you divide that
up between strategy and research and actual lobbvine is more diffik
�92
Senator LEVIN. OK. Now let's talk about fees and expenses. I believe, Mr. Boggs, you said that it would be adequate you believe
that we have an aggregate fee and an aggregate expense, although
I may be putting words in your mouth on the expense. Did you say
both?
Mr. BOGGS. Yes, I am saying that I think you ought to simply file
the fees you have received for the lobbying activities as broadly defined, and you ought to file total expenditures.
Senator LEVIN. OK. So you did say that. That is aggregate fee
received, aggregate expenses. Mr. Meeds.
Mr. MEEDS. I would agree with that.
Senator LEVIN. Mr. Marlowe.
Mr. MARLOWE. The same.
Senator LEVIN. MS. O'Bannon.
Ms. O'BANNON. I agree.
Senator, LEVIN. Nothing below that. That is the point of my question—we just are satisfied with tl\e aggregates and we don t need
detail beyond that.
By the way, you can tell from our questions here that I tend to
agree with that. I think we are requiring a lot of stuff here that we
don't need and missing a whole lot of stuff that we do, and some of
the stuff that we are getting is these details that go into the cab
fares and what restaurants you ate at.
Mr. Boggs, you look like you want to add something.
Mr. BOGGS. I would even go a little bit beyond you. I would say
that with actual fees and expenses, at least in our case, it is extremely hard to be precise to the penny. I mean, it just really is. I
don't see why you wouldn't consider doing what Congress does for
itself, and that is having ranges of fees. For example if my fees
were between $10,000 and $15,000, that is what I report. If they are
15 and 25, that is what I report. That would make the enforceability, in my opinion, far more justifiable if somebody is misreporting.
Senator LEVIN. Let me push you a bit on that, because some of
our ranges are so broad that frankly
Mr. BOGGS. I didn't suggest your ranges, I said a similar system.
Ms. O'BANNON. I think your ranges are good.
Senator LEVIN. We have one range I think that says over a million dollars. It covers everything from a million one to and 101 million.
Ms. O'BANNON. I support that, Senator Levin. I think that is
very good.
Senator LEVIN. Let me push you though a bit on that. Would you
agree that an estimate of the fee would serve that purpose, and
round it off to some nearest number rather than a range? For instance, estimate your fee to the nearest thousand?
Mr. BOGGS. That would be helpful, yes.
Senator LEVIN. Who you are lobbying for, that issue, we have got
I think pretty good testimony on that in terms of coalitions, working groups. I believe it was you, Ms. O'Bannon, who said we ought
to have the list of the members of those coalitions and working
groups, but it may have been Mr. Marlowe.
Mr. MARLOWE. No, Ms. O'Bannon.
Senator LEVIN. So let me then ask the others. Do you agree with
�93
Mr. MEEDS. I think I would tend to say no, but I am not certain
about that. I would have to give it some thought.
Senator LEVIN. All right. You can supplement.
Mr. MEEDS. The situation here is the basic purpose is to try to
determine who is affecting public policy. Who? And if these people
really are and their names are being used, they really are affecting
public policy and probably should be listed.
Senator LEVIN. All right.
Mr. BOGGS. I think I would say no, Mr. Chairman. I think that
what you are trying to determine is who is paying you to influence
public policy, and I think you would disguise that i f you listed 25
people and only two of them were paying you. I think, frankly, you
would be deceiving the Congress as to who you actually are reprebcnting
Mr. MARLOWE. Mr. Chairman, let's take a slightly different case.
Our firm does pro bono representation on the Hill for a client, absolutely no reimbursement whatsoever. We register, even though
there is no compensation ever received, because, one, when I go
into an office I always identify myself as the registered lobbyist for
X Y Z. I don't see any problems to that, and I do agree that we
don't want to hide the fact of who may be really behind a coalition
in that instance, but I don't also want to see us let out those instances where quite frankly the pro bono representation—I could
say I am doing it out of the goodness of my heart, and somebody
else could say I am getting advantage out of it by representing a
client before Members of Congress and currying their favor, et
cetera.
Senator LEVIN. All right. The issue of what you are lobbying on,
I would like to get each of your thoughts on that. We get statements in some of the forms that are filed like, "lobbying on matters of interest to the client." [Laughter.]
I have had some clients who probably would have been reassured
by that statement, as a matter of fact. We weren't really sure until
you said that publicly whether you were in our interest. Levin, we
are glad to hear it.
Let's start with you, Mr. Boggs. How can we address that issue to
get some specificity?
Mr. BOGGS. Well, I have given it some thought in terms of sort of
a one-stop form, and how do you put on one form, if you are lobbying the Corps of Engineers on a wetlands regulation issue as opposed to lobbying a member of the Senate to get him to lobby the
Corps of Engineers for you? It is complicated, and I think, frankly,
that your preliminary statement should indicate general areas that
you are being retained by the company or the client to do, and
then probably your reporting statements ought to have sort of a
category of activities where you have to actually list specific activities that you engaged in in the previous quarter. So it would be a
look back, not a look forward.
Senator LEVIN. Let's take the look back approach. I think there
is some appeal to that in terms of process. But when you look back
how specific do you get?
Mr. BOGGS. Certainly ! don't think you ought to have to list contacts.
|
Senator LEVIN. NO, I am talking now in terms of the subject.
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Mr. MARLOWE. Definitely. I have one case of a coalition that I
have had for years that we have never been required to and it
never occurred to me to list the 40 members of that organization. I
don't see why not We have supplied that list with every piece of
testimony that we give anyway.
Senator LEVIN. All right. Mr. Meeds.
Mr. MEEDS. I think you probably should list every member of a
coalition who has any kind of substantial influence on it. But the
Sierra Club, are you going to list all the members of the Sierra
Club?
Senator LEVIN. NO, I think this is a coalition of groups. In other
words, if the Sierra Club is part of an umbrella group
Mr. MEEDS. OK. But you could probably get some coalitions that
have a lot of members. There would have to be some kind of reasonable curtain where you didn't have to list everybody. But anybody, say you take a coalition that is trying to influence the Clean
Air Act and you have got the auto makers and several other
people, I think they all should be listed, because they have a substontial portion in it. But if you get into a coalition where you have
some people that really run it and a whole bunch of others who
don't, I don't know. Maybe the best way to do it is to list them all
so you have certainty about it, but it seems to me you are getting
into in some instances a lot of detail.
Senator LEVIN. All right. Now, your answer to this raises a question which I want to just ask all of you. If you have any additional
thoughts after today's testimony that you would like to supply to
us, please feel free to do so. Because these are very difficult questions of drawing lines, and you may want to qualify something that
you said, or add to something you said. Just send it to us and we
will make it part of the record.
On this issue of coalition members, Mr. Boggs, do you have any
thought on that?
Mr. BOGGS. Well, Mr. Chairman, we interpret the present law to
require you to report under the receipts column any member of a
coalition that you have received more than $500 from in the quarter to lobby for, and that is an aggregate amount. If it is throughout the year and you reach 500, you are supposed to list that
person on your form. I frankly think that is too onerous. I mean, it
is a real bookkeeping hassle for us. I would much prefer a system
that I think is being described here, and that is simply a listing of
the members of a coalition at the beginning of the reporting period
or the end of the reporting period or periodically or what have you,
rather than trying to every time you file add to the list people that
you have received in that quarter more than $500 from in that coalition.
Senator LEVIN. Do you think you should list members of a coalition that you are lobbying for that you haven't received funds
from, any fee from? For instance, if 10 people hire you and say we
got a coalition but there is 20 people in this coalition and the fact
their names are in the coalition are very helpful to us in terms of
the impact on the Congress, but none of the foes are coming from
them but in fact you are representing them, should they be listed?
Ms. O'BANNON. I would say yes.
Mr. MARLOWE. I very clearly would say yes.
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Mr. BOGGS. Activity, I agree. I think that you clearly do need to
list the general nature of the activity and your advocacy. I mean if
you are for it or against it. I think just to list I am interested in
H.R. 1234 and not say I'm for the provision which deals with such
and such doesn't tell you very much. I think you have to list your
advocacy as well as the actual general subject matter. Again, I
think that you could handle it pretty much by regulation. I don't
think it ought to be complicated, because if it is complicated you
are going to get what you get now. It ought to be categories* it
ought to be simplified, and it should be one form where you can list
everything on that form.
Senator L E V I N . By the way, one of the advantages of the look
back approach is that you can be more specific looking back than
you can looking forward.
Mr. MEEDS. I think I agree very generally with what he is saying.
I think the initial filing should be relatively specific, like with
regard to a certain bill what you are trying to accomplish with
regard to that bill, if it is an amendment or whatever. But I also
think that there should be some kind of protective mechanism like
matters of general interest to the client in the prospective one, and
then you would have the look back, which, incidentally, should be
and has to be updated relatively regularly. I agree, I think 6
months is fine, but it can be more accurate.
But, you know, you get into some things and you get carried in
directions that you really didn't even anticipate even though you
know the legislative process pretty well. So I don't think people
should be punished if they go off and do those things and then on
the look back report it.
Senator L E V I N . OK. Mr. Marlowe.
Mr. MARLOWE. Precisely, Lloyd, I agree. So long as you are
taking a look back approach you can be very specific as to what
you did in the last 6 months with regard to bill numbers and what
advocacy position you took. Right now the tendency of the law is to
say matters of general interest, if that in fact is what you are hired
to do, by the client.
Senator L E V I N . OK. Ms. O'Bannon.
Ms. O'BANNON. I think you need areas of general interest. At the
beginning of a Congress you really don't know what if any bills are
introduced. If you had filings every 6 months for example, at the
sixth month filing you could put in the bill numbers. Many of the
States take care of this matter when they require a report at the
end of say of the Congress, usually it is the end of their session, in
which you have to list all the issues you lobbied on. So that sort of
takes care of it for that State and that is something you might
want to look at.
Senator L E V I N . Just a final question for this panel, and that is
the question of whether we should have one law, one form, one-stop
shopping, however you want to phrase it. I believe you all said yes
on that question.
For instance, you would have executive, legislative and foreign
agents all on one form. We may want to ask some additional information for part of that form kind of, particularly on the foreign
agent issue I would think. But putting that aside—well let me just
ask you. Do you want to comment on that?
�96
Mr. BOGGS. I totally agree. I would say though with the foreign
agent provision that I don't see any distinction between my lobbying for a foreign principal who is a corporation. I mean, I don't see
any distinction between my lobbying for the Shell Corporation
versus Exxon Corporation, and I don't think the reporting requirements should be very different, if different at all.
I do see as a matter of public policy some concern up here that if
I were lobbying on behalf of a political entity or a government that
you may then want additional information. But I sure don't see
why there is a distinction with commercial clients.
Senator LEVIN. OK. Does anyone else want to add a comment on
that?
Ms. O'BANNON. I do. I have a comment I would like to add on
that. I believe that there should be uniform standards so long as
they are not the FARA standards. I think the FARA standards are
complete to a fault. I think they require too much information, and
as a professional working lobbyist, they require information that
could divulge your strategy, and I think that is very important. As
corporations have trade secrets, believe it or not, lobbying really is
a profession and there really are some trade implications for ourselves. What we do in our foreign agents registration is we just
don't write anything down. That is very burdensome and cumbersome sometimes. I would also recommend to this Committee that
as you put together a uniform reporting procedure, should you
decide to do that, that you keep it to what you need to know and
what the public needs to know, and that should not include filing
of all strategy documents, contractual agreements, things of that
nature which really do disclose a great deal of information on
strategy.
Senator LEVIN. One of the things that FARA requires is that foreign agents or foreign lobbyists, or lobbyists for foreign interests,
disclose their political contributions. Should this be required of all
lobbyists? Let's start with you, Ms. O'Bannon.
Ms. O'BANNON. Well hopefully if we are very good lobbyist we
won't have a lot of money coming out of our pockets, it will be
other people's money through PACs, et cetera. However, we all do
contribute. I don't have any objection to that. It is part of the
public record anyway so what difference does it make.
Mr. MARLOWE. I think in my prepared statement I proposed that
the solicitation of registered lobbyists by Members of Congress be
made illegal. I think that would make all of our lives a lot better.
Senator LEVIN. You want contributions to be made illegal to
Members?
Mr. MARLOWE. Solicitation of registered lobbyists.
Senator LEVIN. Oh, I got you. OK. By us you mean?
Mr. MARLOWE. Yes.
Senator LEVIN. Oh, God. Now you are really—it is time for a
recess here. [Laughter.]
Mr. MARLOWE. I thought that would get your attention.
Other than that, I have no problem in disclosing. I think you
have to be very careful in how you draft it, because there are ways
to get around that very easily.
Senator LEVIN. OK. Mr. Meeds.
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Mr. MEEDS. I have no problem with it. The information is available right now.
Senator LEVIN. Yes, but it is not on that disclosure form.
Mr. Boggs.
Mr. BOGGS. I would have no problem with it, Mr. Chairman.
Mr. MARLOWE. Mr. Chairman, I would just make one other point
very quickly. When we were talking a lot about the one-stop shopping, the revolutionary part of your suggestion that there be onestop shopping for regulation really applies to the executive branch.
The Byrd Amendment, despite the fact I clearly have some misgivings about its content, only touches one portion of the executive
branch, and there is a lot of other lobbying going on, and we find
that it is not a matter of universal acceptance among our colleagues that executive branch lobbying ought to be covered. So I
think that is the revolutionary part.
Mr. BoGGd. Let me make an addendum to my statement. We do
have a serious problem with FARA reporting political contributions in the sense that we have 200 and some odd lawyers in the
law firm and they are scattered through four States, and to try to
pull that information together is difficult. I would suggest if you
are going to have the contnbutioi..s listed, it ought to be listed by
the person who is the actual registered lobbyist on the case.
Senator LEVIN. Again, we thank all of you for your contribution.
We are going to take a 5 minute recess. We will take up again at a
quarter after 12:00.
[Brief recess.]
Senator LEVIN. Thank you everybody for your patience.
The final panel that we have today is made up of Ann McBride,
Senior Vice President of Common Cause; Leslie Harris, Chief Legislative Counsel, American Civil Liberties Union, and Jeffrey Joseph,
Vice President, Domestic Policy, for the United States Chamber of
Commerce.
Ms. McBride?
1
TESTIMONY OF ANN McBRIDE, SENIOR VICE PRESIDENT,
COMMON CAUSE
Ms. MCBRIDE. Mr. Chairman, I would like to thank you so much
for the opportunity to testify today.
I appear on behalf of Common Cause, which is a registered citizens obbying organization with more than 270,000 members, and I
appear also as an individual who has been a registered lobbyist
since 1975.
Before I talk about the specific recommendations that Common
Cause proposes in the area of lobbying, I just want to take a
minute to talk about what in our view this exercise is about, what
is important about strong lobby disclosure legislation.
Common Cause believes deeply that citizens and organizations
can perform a valuable role in petitioning their Government, and
of course this role is expressly protected by the Constitution. But
we also believe that citizens have a right to know how their Government works, including how Government decisions may be influ1
The prepared statement of Ms. McBride appears on page 338.
�98
enced by significant lobbying efforts. There are three reasons. One
is that such information is at the core of citizens' ability to hold
their Government accountable. We believe that lobby disclosure is
also important for Government officials themselves to understand
and to evaluate the pressures being brought to bear on them. And
finally, we believe the knowledge that this information is being disclosed is crucial to protecting and strengthening public confidence
in Government.
The American people, are deeply concerned about private
monied interests and their role in Congress. In 1990, 71 percent, according to a New York Times/CBS poll, believed that Government
was controlled by big interests, compared with only 21 percent who
saw Government run for the people. In your opening statement on
June 20th, Mr. Chairman, you cited just one example, the Wedtech
case, in which the public's suspicion of behind-the-scenes lobbying
was fully justified. We think that the public has a right to be concerned. Unfortunately the Federal Regulation of Lobbying Act has
proven to be wholly inadequate in terms of providing real and
meaningful disclosure.
Before I comment specifically, I do want to note that there are
other critical issues outside the purview of this Committee that we
believe are terribly important to helping to end special interest influence and restoring confidence in Congress. One is enactment of
comprehensive campaign finance reform legislation, and the other
is to end the Senate honoraria system.
A large section of my testimony details why we believe the need
for a new lobby disclosure law is very important. I think the testimony here today has made clear that the law that we are operating under is really not working, and in the words of one former
Justice Department official, is a meaningless joke. We believe, for
instance, that the principal purpose test is being overused. We believe that grassroots lobbying should be disclosed. We believe that
staff lobbying should be disclosed under the Act. In fact, we have
45 years of this law not working, 45 years of this system not working, and we believe basically a fundamental overhaul of the law is
needed.
We believe that not only do these things need to be corrected
that have been we believe misunderstood, but the gaps in the Act,
such as the executive branch not being covered must be closed. I
think the question you asked earlier, Mr. Chairman, is the central
one, and it is one I can't quite understand—how this law has been
so widely ignored for so many years. But the fact is that it has, and
we believe fundamental changes need to be made.
We think that as we look at drafting a new law, that an appropriate balance must be struck between the right of individuals and
groups to lobby and the public's right to know about the influences
on the legislative process. We, however, believe that such a balance
can be struck. We have some general principles we would like to
talk about, but we also want you to know that we are not wedded
to a specific proposal at this time and would look forward very
much to working with you and your staff to strike this balance and
to come up with legislation that can really work.
Let me outline a few principles before I close, because we think
they are important. One, we favor registration and reporting by or-
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ganizations which do significant lobbying and by any outside individuals groups they retain to lobby for them. Second, we believe
that an objective test must be established for triggering registration so that we are not in this interpretive question involving principal purpose or another vague standard. We believe that there
must be meaningful disclosure including disclosure of grassroots efforts to stimulate grassroots lobbying and major organizational contributors. We believe that staff lobbying should be explicitly covered under any new law, and we believe that disclosure of executive branch lobbying must be required. And finally, and perhaps
most importantly, we think that a reasonable civil penalty system
must be imposed. We must have legitimate enforcement and monitoring of any new act so not only are the requirements clear but
that there will be enforcement of any new law in a reasonable way
that works.
Mr. Chairman, you are very brave to undertake this issue. I
worked on this issue for 10 years in the 1970s and it was a fascinating prospect. It united every lobby in town against reform, and it
was that combination of forces allied against the bill which I think
ultimately caused the act never to be enacted. I appreciate your
asking us to testify, as well as getting views of others, so hopefully
this time we can arrive at a bill that will be real, that will be
meaningful, which will strike an appropriate balance and which
can be enacted into law.
Thank you very much.
Senator LEVIN. Thank you, Ms. McBride.
Ms. Harris?
1
TESTIMONY OF LESLIE HARRIS, CHIEF LEGISLATIVE COUNSEL,
AMERICAN CIVIL LIBERTIES UNION
Ms. HARRIS. I appreciate the opportunity to testify before you. As
you know, the ACLU has a special interest in the First Amendment and the right to petition. I also represent an organization
that lobbies and I am a registered lobbyist.
Frankly, I think I am here to be the skunk in the garden party.
For too long when any law aimed at improving Government ethics
has been considered, it is our experience that there has been very
little consideration given to First Amendment values, and I must
say I am now on panel number 4 and there have been passing references to those values, but for the most part they have been
brushed aside. We are mindful of the interest in ethical Government. We affirmatively support and believe the people have a right
to know how Government is working, and we think it is possible to
reconcile those values. But, frankly, we worry that the hearings
may be a prelude not to just cleaning up these laws but to an expansion of the lobby disclosure laws.
Ms. McBride spoke about the unified opposition in the 1970s to
those proposals. Well, frankly, those proposals were overbroad and
outrageous. If there is a way to take a look at the ambiguities in
these laws, to rectify them, to deal with the Foreign Agents Registration Act, which we believe should be junked and folded into this
1
The prepared statement of Ms. Harris appears on page 360.
�100
law, then we will support that effort. But in the past at the end of
the day the First Amendment has really not emerged as the victor
in these discussions.
Lobbying really is a very important First Amendment activity. It
is also an integral part of the speech and debate clause. You have a
right to receive information from whatever source, and that right
has been very broadly interpreted over the years. It is important to
keep our eye on the prize here. What is it that we are trying to
prevent? Lobbying in and of itself is a protected activity, not a
criminal act, and what I heard this morning was concern that
every twist and tum in the process may not be disclosed to the
public. It is not clear to me that every twist and turn need be disclosed to the public. People need a snapshot. They need to know
generally who is lobbying on what general issues and on whose
jehalf. Beyond that, it is not entirely clear to us that we are doing
anything more than looking for punitive ways to go after people
who lobby. I know that is not your intent and we just urge somehow that if the First Amendment is kept strongly in minr] in this
process we can avoid what happened in the late 1970s.
The freedom of association even to participate in ways that are
anonymous and collective in petitioning the Government is a very
core right. You know, the early cases had to do with groups like
the NAACP being forced to disclose their memberships in Alabama. Since that time the Court has consistently recognized that
right. We are not just trying to lobby superlawyers here, not just
trying to regulate them. We are trying to regulate interest groups,
many of whom support controversial causes and the people involved with them through their memberships have chosen to do
that in a collective fashion. There is nothing wrong with that. That
is the core of the democratic process and we have to tread I think
extremely lightly before we undertake a path that broadens those
disclosure obligations.
Before I mention some of the, I think specific concerns that we
have, I want to talk a little bit about the philosophy that drives
ethics laws, disclosure laws, and it is here that Ms. McBride and I
probably clash most often, and that is where do you start. It seems
to us that deliberations over these laws have been guided by a good
government philosophy, I think it is one principally set by Common
Cause, that views ethical Government as the paramount and sole
public value. It affords no weight for the countervailing constitutional concerns, and it assumes that people associated with Government, whether they are employees, elected officials or lobbyists,
will act with evil intent unless restrained.
From that basic set of philosophical principles, a set of rules
emerges. There has to be absolute parity between the branches;
there does not have to be a separate substantive record before you
legislate on a different branch; requirements should be intrusive;
and enforcement as strong as possible. In large part, that set of
principles conflicts directly with the need for a substantive record
and narrow enforcement that the First Amendment demands. And
over the years, whether it is post-employment lobbying, or whatever is before Congress, we find ourselves in the position of coming
in late when that agenda has already structured what the law is
going to look like and asking members to chip away around the
�101
edges. And I think what we are just asking this time is that we
start afresh, that we do it differently. We think we can come out
with a better set of laws
Senator LEVIN. YOU are not late now, by the way. .
Ms. HARRIS. Well I know, and that is why we appreciate being
here. The specifics that I want to mention. I did not work on this
issue the last time around, and I read through the testimony, and
we are debating the same issues in large part. The questions of
whether' or not we define lobbying so broadly that we sweep within
the scope of regulation what some people are calling indirect lobbying, grassroots efforts to educate the general public or to gain support for a particular legislative stance. Previous Congresses proposed bills that very broadly dragged this activity into the scope of
regulation, and we believe the chilling effect of that sort of disclosure would be for organizations like ours, for all sorts of groups
that have any kind of controversy really overwhelming, and the reporting burden overwhelming. It is not at all clear to us that if I
send to my 275,000 members a notice telling them—they may be
the only people who know this—what is in the crime bill, for example, and urge them to do something about it, they may or may not
respond. What I am doing is giving them information that they
may use to choose to exercise their right of petition. They may not.
I have no control over that.
To me that is core First Amendment activity and doesn't go at
all to what we are trying to tell the people about how Congress
works. And particularly if you do that and then do hot put together with it some kind of de minimis requirement or some nexus that
it also be an organization that directly lobbies, then you are, as in
the 94th and 95th Congress, reaching into activity such as a senior
citizens center in your State which sends a letter out to its members because something is going on on the Hill in terms of Social
Security. I don't think we want those people to have to worry about
registering under the lobby laws. But Congress did that the last
time around, very clearly, and it is just an example of why we have
to be very, very careful.
Senator L E V I N . You say Congress did it, you mean
Ms. HARRIS. Well, I tried to reconstruct this. Certainly bills were
passed at one point on both sides, and I was not around to know
whether—and I suppose Ms. McBride may have the answer to
this
Senator L E V I N . We ended up not doing it.
Ms. HARRIS. You ended up not passing those laws, but clearly
things went through on both sides that were that broad when there
were less intrusive options that were also on the table. We also believe there should be no requirements that organizations broadly
disclose the names of contributors or members. Now. I understand
that there is a problem with some organizations, at least in the corporate world, forming coalitions or somehow getting around their
own registration requirements. I think those things can be dealt
with.
We are not opposed to disclosure when a contributor is in fact a
client when it rises to a level of substantiality, but, frankly, we
think the current law is unconstitutional. We" don't believe that
anybody who gives the ACLU $500 ought to have their name dis-
�102
closed to the public unless they choose to do so. They don't have
the control over our activities incividually, and in fact it is the
reason my organization principally opposes these laws. And I think
that that is the problem. The more you make disclosure overbroad,
the more you go after something that is in no way what you seek
to regulate, the more you do make these laws both unenforceable
and disapproved.
It may well be that at some point substantial contributors who
give directly to lobbying activities, even in organizations like ours,
but I must admit we don't have them, could assume a level of control over those activities that they become de facto clients. But
short of that, the doctrine of associational privacy we think very
strongly urges against disclosure of membership lists and contributor lists. And I think we have to be very careful. For many citizens,
that is the only way that they participate in the political process,
and I think we have to tread very lightly.
Let me mention for a moment foreign agents and the Foreign
Agents Registration Act. We have never liked that law, but, of
course, there are a lot of laws we don't like. We think it ought to
be junked. We don't see a distinction that is important for purposes
of disclosure, perhaps with the exception of foreign governments,
that requires the complicated, arcane and burdensome system that
the Foreign Agents Registration Act imposes. We would like to see
it combined with this law, provided that this law can be recrafted
in a way that remains narrow, and certainly think that that is a
charge that the Subcommittee ought to undertake.
Executive branch coverage. Again, I am the skunk in the garden
party. We understand the Wedtech scandal. In fact, that was disclosed. Nobody got away with anything in Wedtech. Our general
view is that unless we establish a record for the executive branch
as a whole and take a careful look at what constitutes lobbying
there versus lobbying here in Congress, and we can say with some
certainty what the activities are that we are seeking to disclose,
and then we either decide this is the right law, or because of the
nature of the executive branch it has to be slightly different, then
we are not at all sure that the law ought to be extended.
Certainly it should not be extended simply because of parity or
the term that was thrown around a lot during the post-employment
debate, "level playing field." If there is a record, and there may
well be one, particularly when it comes to contracts and those sorts
of activities, then a law can be fashioned, but not simply because
disclosure ought to be the same in all three branches.
I concur with the people who have said before that we have to
take a different tack when it comes to enforcement. We believe
civil penalties are appropriate, and there probably should be some
kind of mandatory conciliation mechanism. I think the Federal
election laws have this where there is a way to work out on the
front end the disagreements about how people are interpreting law
and to stay as far away as possible from criminal statutes.
There are some things in the law right now that I assume have
never been applied to anybody, including disbarment from lobbying
or appearing in front of a Committee, that it is clear to us is unconstitutional. There are also proposals from earlier Congresses that
would have vested broad investigatory powers in the Comptroller
�103
General and the Justice Department, subpoenaing documents, compelling testimony, that would have for the first time provided the
Government with very broad access to records about lawful activities, and frankly, about strategy and tactics. We recognize this is a
very hard area to figure out how to enforce, and it hasn't worked.
The problem is most of the alternatives out there tread very heavily on First Amendment rights.
I will be happy to answer your questions.
Senator L E V I N . Mr. Joseph?
1
TESTIMONY OF JEFFREY H. JOSEPH, VICE PRESIDENT,
DOMESTIC POLICY, UNITED STATES CHAMBER OF COMMERCE
Mr. JOSEPH. Thank you, Mr. Chairman.
As you indicated, I am Vice President for Domestic Policy at the
U.S. Chamber where I have been employed for about the last 17
years. I am also an adjunct professor at George Washington Graduate School of Business where for the last 13 years I have been
teaching courses in business representation and lobbying and business/government relations. And, like Ms. McBride, I participated
in the 1970s' legislative lobbying efforts over the lobby reform bill
and will concur that if a piece of legislation goes forward that tries
to address every possible problem someone can think of that the
whole world will unite against it for the reasons the ACLU just
enunciated. Because you do get into very important First Amendment rights, the right to associate and the right to petition the
Government and the right to protect your membership lists in the
above.
The debate we have here is nothing new. It goes back to organized society. The Federalist Papers debated this issue. James
Madison in Federalist No. 10 wrote about the role of the factions,
today's lobbyists or special interest groups, and came to the conclusion that any possible cure was much worse than anything that
could happen by having an open Government where groups could
try to do their best to influence Government.
But ever since Congress and the courts have begun to formally
address the regulation of lobbying, they have continually run into
First Amendment conflicts. Individuals and organizations are constitutionally permitted to exercise their right to petition the Government. We all know that. But still, the degree of regulation that
exists today, when balanced against constitutional safeguards, is insufficient to some critics. Yet it is our belief that balancing these
two concerns, the right to petition the Government and the public's
right to know, has been equitably handled.
And I think that, listening to the panels earlier this morning,
you got what I perceive as a false impression of how easy it will be
to fix some of these things. There seemed to be much to much
agreement on how simple it would be to put one form together that
we could sort of shove all of these laws in one form. If you are
going to have criminal penalties on it, you better believe that there
has got to be a very clear enunciation pf what you are filling out.
And so while we are all in favor of paperwork reduction and sim' The prepared statement of Mr. Joseph appears on page 377.
�104
plification of forms, you have these three acts plus you have four
other disclosure acts that deal with Federal contractors, which
easier said than done of putting them all in one form.
Furthermore, it is my further belief that current and future advances in telecommunications capabilities will make further regulation of lobbying even more difficult and even less appropriate.
Now, the lobbying process itself hasn't changed much over the
last decade or two, but it has become more sophisticated, and the
refinement of the practices and'technologies used by advocacy organizations, quickened with the realization of the extraordinary role
this Federal Government plays in the everyday business of America. If you think about it, you are talking about almost one dollar
out of four in our economy is a Federal dollar, 25 percent of GNP
just about.
So there are so many Federal actions out there, there are so
many people who are affected everyday by Federal Government
programs, that it becomes almost mind boggling to try and capture
the input by every citizen who is affected in one way or another by
some action of Government. And while direct lobbying or direct
contact between Washington-based lobbyists and Members of Congress is, of course, essential to any lobbying campaign, it is my
belief that the ultimate success or failure of most major efforts
where we are really trying to change public policy in this country
lies with the ability of the grassroots to respond vocally to elected
officials. And current efforts to reach those grassroots and motivate
them have taken lobbying technic'ies into direct mail, door-to-door
solicitations, teleconferences and interactive satellite transmissions.
In addition, the use of personal computers and FAX machines to
deliver mail electronically has become standard operating procedure for lobbying groups, and, of course, this raises an entirely new
set of questions on how to further regulate lobbying in light of
First Amendment protections, and raises the specter of big brother
trying to find out what everyone is faxing everyone else that is a
duly constituted member of an interest group.
Now, another lobbying technique that I will happen, it is just a
matter of time, I will refer to as teledemocracy, where advantages
in communications technology could lead to the purest form of Republican democracy ever. I mentioned this in testimony in 1983
before this Committee, and I don't think it was as easily imagined.
But with C-SPAN today, which everyone now knows reaches all
throughout the country, it is just a matter of time until there is a
Neilsen-type meter that is put on C-SPAN watchers, and you can
break out by State who is watching in Michigan, and as they watch
the House or the Senate debate something, they can tabulate how
the voters or the viewers in Michigan or Louisiana or New York
care to cast their impressions. So Members of Congress will have
the potential to know what a sampling of their constituency thinks
before they vote, almost scientifically. It is certainly technologically
feasible and it has been experimented with in a number of parts of
the world over the last 10 years.
Now, when a system like this is more fully developed, lobbying
activities are very clearly going to focus on the grassroots where
special interest groups' primary focus will be on making those
�105
people out there who have the ability to sit in their homes and
watch television push the button the right way. And while all the
problems and promises of teledemocracy need to be ironed out
down the road, we must never forget that in the passion for reform
:hat the right to petition the Government is the most basic of constitutional rights, the big number one, and it should also be emphasized that the public's right to know, the major justification for lobbying legislation, is an inferred right, which unlike the right to petition the Government, has not received specific constitutional protection and sanction.
Now, in our full statement, which I would like to have introduced for the record, we list six different criteria which we feel
need to be considered to any effort to rewrite the lobbying laws.
We believe that failure to admit any one of them would be justification for rejection. And I mentioned in passing the Byrd Amendment, because there has been some discussion about that. Our testimony also identifies four other recently passed, over the last 3 or 4
years, disclosure statutes that affect Government contractors that
all conflict with each other. And so the logic of trying tofigureout
how, whether it is the 1946 act or the Foreign Agents Act or these
other acts, how they conflict and how they can be simplified,
streamlined, we support you.
If you want to get more people to register, you will simplify the
process. If you want to bring the wrath of every interest group
down on Congress in terms of trying to stop it, you will try and fix
every problem you can identify. And with that sort of somber note
at the end, I still suggest that we would like to work with you in
anything you may do.
Thank y.u.
Senator LEVIN. Thank you Mr. Joseph.
Do you all agree that the present statutory system is broken?
Ms. MCBRIDE. Yes.
Senator LEVIN. It is not performing any useful function particularly?
Mr. JOSEPH. I wouldn't say it is broken, I would say it is not appropriately utilized..
Senator LEVIN. Well, the old saying, if it ain't broke don't fix it.
That is the sense I am using it here. Is the present statutory
system clear? Does it carry out its intent? Do people abide by it?
I mean, most of us are law abiding and like to abide by the law.
We have got a community out here that really can't figure out
what this law means, I think. Now, do you agree that there is basically a problem in our current legislation either being confusing or
ignored because it is so ambiguous? Do you start with that common
premise or not? I think you are probably the furthest from that
premise, Mr. Joseph, but I don't want to put words in your mouth.
Mr. JOSEPH. I would agree with your characterization, but I don't
think it is ambiguous, I think it is very clear. I think that under
the standards as established by the Supreme Court, that those
people who believe that their principal purpose is to directly influence legislation have a mechanism by which they proceed to register and let people know, and if they don't then they may be subject
to criminal sanctions and the FBI putting them in jail.
�106
Senator JUEVIN. When you say it is clear, for instance, is it clear
that that definition which you just stated includes contacts with
staff; is that clear?
Mr. JOSEPH. I read it to say it does not include contacts with
staff.
Senator LEVIN. And others read that it does?
Mr. JOSEPH. Right, but I read that it doesn't.
Senator LEVIN. SO that is hardly clear. I mean, both of those are
reasonable interpretations I think, so that is not clear.
Mr. JOSEPH. Right.
Senator LEVIN. Is it clear if only—if 40 percent of 3'our time is
spent contacting Congress and 60 percent is arguing cases in front
of courts, do you think you are supposed to register under this existing law?
Mr. JOSEPH. I don't think they have to.
Senator LEVIN. DO you think you do?
Ms. HARRIS. I think they do. But, I mean, one of the thJngs that I
find most remarkable this morning, since I come from an organization that doesn't like this law, is that I apparently dis :lose far
more than most of the lobbyists who came before you this morning.
It never occurred to me to make a lot of the distinctions that I
heard.
Senator LEVIN. I think there is a basic ambiguity on some very
fundamental
Mr. JOSEPH. Well, there is an ambiguity, but it depends how you
want to read it. It la /ery clear the way you choose to read it. It
depends on how you read it.
Senator L E V I N . IS the Chamber recommendirig thut we no' attempt to address what is perceived I think in the lobbying community as being great ambiguity? Would you rather just maintain the
status quo or see us address it?
Mr. JOSEPH. NO. I think that given the passage of the other statutes over the lasr few years, and the interest in the foreign agents
angle, that I think tht.t there is merit in trying to simplify and
clarify. I mean, I think that that is clear, but the problem you get
into no matter how well intentioned you are, i f you go too far then
suddenly the car turns around on you.
Senator LEVIN. I would agree. There are a lot of efforts at reform
which end up creating more of a problem than they cure. I think
iha*- we have seen that frequently. But you have to start with a
premise at least that something is wrong and then try to fix it, understanding your limits, that you may create a bigger problem in
the process than you are curing. I think we all understand that.
But I think most of us agree with the sense of the lobbying community cut there, which is that something is wrong with a system
where probably most people who lobby in the common understanding don't register, and most who do are confused by what they are
supposed to disclose, that there is something wrong in the system
and then that breeds disrespect for law, which is not heaithy in a
democracy.
Can you overdo it? You darn well you can. Can you tread on the
First Amendment? You could if you go too far. But there is something wrong with the status quo here, and I think we sense that,
and I just was curious as to whether the Chamber senses that. I
�107
gather your answer is yes, but just be darn careful jou don't dig
yourself into a deeper hole. I sort of sense that is your
Mr. JOSEPH. Correct.
Senator LEVIN. From the ACLU perspective, you said that you
urge us to tread extremely lightly, is your language. Why tread at
all? Why shouldn't the ACLU take a position that we should stay
out of this area, that we have got no more reason to know that so
and so is representing so and so as a paid lobbyist than you have to
know that Joe Blow out there in the hinterland is lobbying Washington through a letter? I f he can do it by himself, or she can write
a letter, by God why can't he or she hire a lobbyist to represent
them? Why do we have to know that?
So my question to you is why tread at all, from the ACLU perspective?
Ms. HARRIS. Well, there is part of me that wishes lhat I could
just say don't tread at all because of the concern I have about
where these things go once opened up. But the ACLU does recognize the right to know, and actually we do view it as a serious constitutional interest. And therefore we think you can tread a little.
Senator LEVIN. Why do I have a right to know that a citizen has
hired and has paid a lobbyist to represent his or her interest if I
don't have a right to know that that citizen is lobbying on his or
her own?
Ms. HARRIS. Well, to the extent that we think you have that
right to know, it is to get a broad snapshot and no more.
Senator LEVIN. No, but I am not talking about to the extent. I
want to get to the philosophical issue. Why, if you can lobby from
your home State by sending me a letter, by visiting me, by whatever, and I don't have a right to know that, my colleagues don't
have a right to know that, why do they and I have a right to know
that you hired a paid lobbyist to represent your position? Philosophically why does the ACLU accept that jump?
Ms. HARRIS. Well, I think because we accept that jump because
we accept the view that at some point the payment changes the
power, that there are interests that are bigger and more powerful
and that we also care a lof about those people who don't have that
power to do that, and that in some ways that knowledge—and, I
mean, very narrowly that knowledge—does provide the lesser
voices with some ability to respond. But I am not urging a level
playing field or that every strong voice has to be perfectly balanced
by the weak ones. I think we simply recognize that a very narrow
disclosure does go to providing information that in fact might enhance the right to petition for weaker voices.
Senator LEVIN. Ms. McBride, does Common Cause acknowledge
that the current level of detail, which seems to be required, such
as—I don't know if you were here earlier when I started reading
about cab fares, restaurant payments, $1.98 salary apponionments,
that that does not contribute to a useful public interest.
Ms. MCBRIDE. Of course, i f you look at the law, as you pointed
out, you often get no disclosure or you get this overbroad level of
detail. We would certainly in terms of looking at a specific law look
at a system of aggregating expenses, but we think it is very important that significant lobbying expenses be disclosed. For instance, I
strongly disagree with my old friend, Tom Susman, that entertain-
�108
ing, wining and dining Members of Congress is not very often part
and parcel of lobbying, even if a specific issue is not discussed. I
think if you asked an average citizen what is lobbying about, they
would look at a table ih La Colline with lobbyists and Senators or
House Members as a central part of a lobbying effort.
Senator LEVIN. But does it tell us anything when we get on a
form "La Colline, S83.12? Does that tell us anything?
Ms. MCBRIDE. Well, I think it is important that this be disclosed
if in fact it is deducted as a business expense or reimbursed by a
client.
Senator LEVIN. Disclosed by the lobbyist?
Ms. MCBRIDE. By the lobbyist. I think this is obviously not a total
way that lobbying is done. That is why we believe that the stimulation of grassroots should be disclosed. I think there is a way
Senator LEVIN. I just want to keep focusing on that restaurant If
there is a strategy session at that restaurant, no Member of Congress, should that be disclosed?
Ms. MCBRIDE. In terms of who it was spent on, I think they could
put what was spent in an aggregated way. I do not think we
need
Senator LEVIN. Total expenses for lobbying, one number per
quarter, per half, whatever it is?
Ms. MCBRIDE. NO, J think that it should beSenator LEVIN. You want it broken down by what categories?
Ms. MCBRIDE. Well, again, we can look at that. We think that
there are expenses for stimulating grassroots, there are other expenses in terms of the lobbying that should be disclosed.
Senator LEVIN. Would you say restaurant expenses for the half,
for the quarter, whatever?
Ms. MCBRIDE. You mean for the individual lobbyist?
Senator LEVIN. For the person registering.
Ms. MCBRIDE. YOU khow, again, we can look at what would be
appropriate. We don't think we need the level of detail of $1.98. We
also think that once one gets into categories, that there have to be
categories that are meaningful and that tell you something about
the way this money is being spent to influence legislation. We
think, again, there is a balance. You don't need $1.98, but one large
category that says "lobbying" in a category of over a million is obviously not appropriate. These are the kind of things that must be
worked out, but as I said at the outset, there is a way to do this
that will provide citizens with information without being overly
burdensome on the lobbyist or the organization disclosing. We believe this can be done.
Senator LEVIN. We hope so, because it is our intent to try it The
present system is unacceptable. I frankly would rather repeal it
than leave it on the books.
Ms. HARRIS. We wouldn't oppose you, not withstanding our
Senator LEVIN. I understand that. I would literally rather have
nothing there than what we have when it is ignored and confusing
and unfair and irrelevant. It is not achieving a purpose, a social
purpose. It is breeding disrespect, I believe, for the legislative process, for Government, for law, and I would rather not have it there.
I would rather substitute for it with something that is simple, if we
can do it, straightforward, relatively non-intrusive, but which is
�109
relevant. I think we ought to know who is paid to lobby for whom
on what subjects, how much are they paid, at least in an aggregate
way, and how much money are they laying out for the process.
That to me is the road map.
I think we might have a fairly good consensus on that statement.
Not necessarily unanimity, but something of a consensus on that.
And as we get into the specifics we, of course, will run into more
and more difficulty. But I really believe we have to try. This
system doesn't make any sense.
We are going to have another hearing on the Executive part, and
then we are going to try our hard at making sense of all of this.
Because most people—I think the public wants it, I think the
media wants it, I think interest groups want it. Frankly, I think
lobbyists want it. It is unfair to leave them with the current
system.
Mr. JOSEPH. Mr. Chairman, could I pose a question to you?
Senator LEVIN. Sure.
Mr. JOSEPH. I was just thinking in terms of the proliferation of
cable television, how do you record Pat Robertson on the 700 Club
doing a show tonight about whatever and putting up the names
and addresses of Members of Congress who need to be contacted
right away and encouraging that to happen? Is that a lobbying activity?
Senator LEVIN. I don't think you can. I don't think there is any
way you can. You would have to get every talk show.
Mr. JOSEPH. Well, but with public access to cable, I am just
saying that the technology down the road is going to put you in a
situation where what is going to happen is the inside the beltway
organizations that work by and large with shoe leather lobbying
are caught up in a regulatory trap where they are recording certain things, and the rest of the world is on a completely different
standard.
Senator LEVIN. I think that that is true. There is a real problem
there. I don't have an answer to that. There is a lot—we don't
know that that lobbying reaches Members or staff. It is tough, but
it obviously does reach some Members and some staff. We can't
reach social contacts, informal contacts, and perhaps the most important of all contacts, that kind of media contact. I don't know of
any way to reach it or that I would want to reach it if I could.
On the other hand, I think there is an interest where you have
lobbying done for pay, probably for the reasons that Ms. Harris
mentioned, although I think there is even uncertainty about that
premise.
Ms. HARRIS. I am more uncertain than my organization.
Senator LEVIN. Yes, but nonetheless, I think there is enough
reason to do that, because here you have got the clear presentation
by paid lobbyists to Members and their staff. There is no uncertainty as to whether the message is reaching him through airwaves.
You have a certain focussed presentation by an interest that is sufficiently powerful to hire somebody to present it, and the question
then is should we find some logical or some fair unintrusive, nonburdensome way to disclose that? My answer is it is worth trying
to do. It is a lot better than what we are doing now, that is for
darn sure.
�110
Mr. JOSEPH. Let me encourage you to proceed. Unlike the effort
in the 1970s, the premise was that Congress knew exactly everything that needed to be done and proceeded to come out with a
crazy quilt pattern, and your openmindedness in these hearings I
think will be very helpful.
Senator LEVIN. Well, if there is one thing we know for sure, it is
that Congress does not have the answers as to what has to be done
here. We may come up with the best of a number of bad alternatives down the road. I intend to try that and to walk down that
road, but we sure don't start out with certainty at all. At least I
don't, and I doubt very much that too many Members of Congress
would say that they have the answers.
I think most of us would agree though with a road map, a general statement as to what should be done, but the specifics here are
absolutely crucial and open. So please send to us any additional
thoughts that you have. These hearings will continue this fall with
the executive branch, and then we will set our hands at trying to
do something in terms of a statute.
We will stand adjourned. Thank you.
[Whereupon, at 1:10 p.m., the hearing was adjourned subject to
the call of the Chair.]
�DISCLOSURE OF EXECUTIVE BRANCH
LOBBYING
WEDNESDAY, SEPTEMBER 25, 1991
U.S. SENATE,
SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT
MANAGEMENT, COMMITTEE ON GOVERNMENTAL AFFAIRS,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:34 a.m., in room
SD-324, Dirksen Senate Office Building, Hon. Carl Levin, Chairman of the Subcommittee, presiding.
Present: Senator Levin.
Staff Present: Linda J. Gustitus, Staff-Director and Chief Counsel; Peter K. Levine, Counsel; Frankie de Vergie, Chief Clerk; Kim
Corthell, Minority Staff Director; Lisa Baldacci, Minority Counsel,
and Earl Newman, Majority Staff Legislative Fellow.
OPENING STATEMENT OF SENATOR LEVIN
Senator LEVIN. Good morning, everybody. The Subcommittee will
begin the hearing.
This is our third and final oversight hearing on the Federal lobbying disclosure laws. Today we are going to look at the Byrd
Amendment and other laws that require disclosure of executive
branch lobbying.
Our first two hearings covered legislative branch lobbying and
lobbying by foreign agents and demonstrated that we have failed to
ensure the public that such lobbying would be in fact disclosed.
Witnesses from groups as diverse as the Chamber of Commerce,
the ACLU, Common Cause, and the American League of Lobbyists
all agreed that these statutes are seriously flawed. They are nothing more than phantom laws because, although they are on the
books, when you look behind them there is little or nothing there.
Today's hearing will show that the same is true of executive
branch lobbying disclosure laws. The fundamental problem with
these laws is that they cover only a few types of executive branch
lobbying and require no disclosure at all of the rest. Even in the
areas that these statutes do cover, wey impose ambiguous and confusing requirements.
The Byrd Amendment, the HUD Reform Act, and other executive branch disclosure provisions cover only lobbying on contracts,
grants and loans. They don't cover lobbying on other executive
branch actipns such as regulations, policies, licenses and permits,
which can have every bit as much impact as lobbying on direct financial assistance.
(ill)
�112
The result is that a few types of lobbying have to be disclosed
several times, often in several different formats, while the vast majority of executive branch lobbying doesn't have to be disclosed at
all.
A Subcommittee staff review of the lobbying expenditures of six
major detense contractors dramatically demonstrates just how ineffective the lobbying disclosure statutes are. The staff obtained lobbying expenditures reported to the Department of Defense pursuant to contract requirements which are not made public and compared those to the figures publicly reported under the Lobbying
Regulation Act and the Byrd Amendment.
As shown on the chart, six major contractors stated in their filings to the Department of Defense that they had spent a total of
almost $8 million lobbying Congress in 1989. The 1990 numbers are
slightly lower because they are incomplete.
We have aggregated the numbers of these six contractors to protect the confidentiality of the individual companies' filings since
the information that isfiledwith the Department of Defense is proprietary.
So we know what was filed with the Department of Defense—
that is shared with us—we have aggregated it and come up with
that total for the six companies for their lobbying. Then we look at
their public reports. And by comparison, the public reportsfiledby
lobbyists for those sue same contractors listed a total of $388,000 in
receipts and $135,000 in expenditures.
Only one of the six contractors filed a single disclosure under the
Byrd Amendment disclosing a total of $3,500 in lobbying expenditures.
In other words, almost none of the lobbying that the contractors
themselves acknowledged in their filings with the Department of
Defense is disclosed to the public under the requirements of the
lobbying disclosure laws. As a matter of fact, well over 90 percent
of the lobbying which is acknowledged in the privatefilingsis not
made public under our lobbying disclosure laws.
Moreover, numerous exceptions and limitations on coverage have
severely limited lobbying disclosures, even in the narrow areas that
are covered by existing provisions. In the first 16 months the Byrd
Amendment was in effect, only 257 disclosure statements were
filed. Almost one-third of these disclosures did not list any lobbyist,
indicating that the recipient was probably not required to file at
all. And many contained express statements that the recipient did
not engage in lobbying activities.
In thefirstfilingperiod under the statute, only one company reported lobbying the Department of Defense for a DOD contract. By
the way, that was by a lobbyist who is reported to have contacted
my office. Thus, if we believe the disclosures made to the Department of Defense, my staff and I are the only Federal officials who
were lobbied by outside lobbyists about DOD contracts in that 4month period, and we were only contacted by one lobbyist. And
that is not credible.
Other agencies received even fewer disclosures than the Department of Defense. For example, the Department of Energy received
three disclosures in the first 16 months the statute was in effect.
The Treasury Department received one disclosure. Twenty agen-
�113
cies, including NASA, the Small Business Administration, the National Science Foundation, and the TVA, did not receive any disclosures at all.
Overall, the rate of disclosures has gone down in each period the
statute has been in effect. As we stated in our previous hearings,
the Subcommittee has not attempted to determine whether or npt
individual lobbyists or contractors are violating the disclosure statutes—and I emphasize th«s—we are not here judging lobbyists or
their clients as to whether or not they have complied with disclosure laws. What we are judging is the effectiveness of the disclosure laws.
We determined that the public disclosure statutes are so weak
and so full of holes that they result in virtually no disclosure at all.
In fact, there is an argument that even the $3,547 disclosed by
these contractors under the Byrd Amendment did not have to be
disclosed under the law as it has been interpreted.
At our earlier hearings, several lobbyists testified that legislative
and executive branch lobbying are, in their words, "two sides of the
same coin". The same can be said for the two sets of disclosure
laws. The executive branch lobbying provisions, like the statutes
covering legislative branch lobbying, are phantom laws which
result in no meaningful disclosure of lobbying activities.
In sum, the executive branch lobbying disclosure laws are a
series of "rifle-shot" laws that miss their target. These laws don't
serve the public's interest because they don't result in any meaningful disclosure. They don't serve the lobbyists' interests because
they are confusing and overlapping and create a misleading picture
of lobbying activities. They don't serve anybody's interest, and they
need a totally fresh look.
PREPARED STATEMENT OF SENATOR LEVIN
Good morning. Today the Subcommittee on Oversight of Government Management holds its third and final oversight hearing on the Federal lobbying disclosure
laws. Today's hearing is on the Byrd Amendment and other laws requiring the disclosure of executive branch lobbying.
Our first two hearings covered legislative branch lobbying and lobbying by foreign
agents. We have learned that existing statutes have failed in their purpose of ensuring public disclosure of these types of lobbying activities. Witnesses from groups as
diverse as the Chamber of Commerce, the ACLU, Common Cause, and the American
League of Lobbyists all agreed that these statutes are seriously flawed. In my view,
they're phantom laws—they're on the books, but they have no discernible impact.
Today s hearing will show that the same is true of the executive branch lobbying
disclosure laws. Executive branch lobbying disclosure provisions include the Byrd
Amendment, the HUD Reform Act, and several other statutes and regulations. The
Byrd Amendment, which was enacted in October 1989 as part of an Interior Appropriations bill, requires the recipients of Federal assistance to disclose each lobbyist
they pay to influence the award of a contract, grant, or loan, subject to certain exceptions. The HUD Reform Act, which was enacted two months after the Byrd
Amendment, contains two separate provisions—Sections 112 and 401—creating
slightly different sets of disclosure requirements for persons attempting to influence
awards of financial assistance by HUD and the Farmers Home Administration.
The fundamental problem with these laws is that they overlap in a few areas and
leave huge gaps in others. The Byrd Amendinent, The HUD Reform Act, and other
executive branch disclosure provisions cover only lobbying on contracts, grants and
loans. They don't cover lobt>ying on other executive branch actions—such as l i censes, permits, policies and regulations—which can have every bit as much impact
as lobbying on direct financial assistance. The result is that a few types of lobbying
have to be disclosed several times and in several different formats, while the vast
majority of executive branch lobbying doesn't have to be disclosed at all.
�114
Moreover, numerous exceptions and limitations on coverage have severely limited
lobbying disclosure even in the narrow areas that are covered by existing provisions.
For example:
—The Byrd Amendment and the HUD disclosure provision cover only lobbying by
independent contractors and consultants, not by "regular employees". As a result,
full-time lobbyists are not required to disclose their activities.
—The Byrd Amendment and the HUD provisions do not apply to lobbying on programs or budgets, only to efforts to influence specific awards of Federal assistance.
For example, lobbying to obtain continued funding for a major defense program
would not be covered, because it doesn't relate to a specific contract.
—OMB's guidance interpreting the Byrd Amendment states that lobbying does
not relate to a specific contract unless it takes place after the issuance of a solicitation for that contract. This means that any lobbying prior to the issuance of a solicitation is not covered.
—The Byrd Amendment excludes "routine agency and legislative liaison activities"—which has been interpreted in the OMB guidance to exempt discussions of
the merits of a particular product or service and the agency's needs.
Some of these exceptions and limitations are written into the statutes themselves.
Others have been added or expanded by the OMB and agency implementing guid. ance. Regardless of the source of the limitations, they have had the effect of excluding virtually all lobbying from the coverage of the disclosure requirements. Although there is not yet a significant track record under the HUD disclosure provisions—which became effective in June of this year it is already clear that we are
getting no meaningful disclosure of lobbying activities under the Byrd Amendment.
In the first 16 months the Byrd Amendment was in effect, only 257 entities filed
disclosure statements. Almost a third of these disclosures did not list any lobbyii,.
(indicating that the recipient was probably not required to file at all), and many
contained express statements that the recipient did not engage in lobbying activities.
In the first filing period under the statute, only one company reported lobbying
the Department of Defense for a DOD contract diy a lobbyist who was reported to
have contacted my office, by the way). Thus, if we believed the disclosures made to
DOD. my staff and I are the only Federal officials who were lobbied about DOD contracts in that four month period, and this was the only time we were lobbied. That's
just not credible.
Other agencies received even fewer disclosures than DOD. For example, the Dejartment of Energy received three disclosures in the first 16 months the statute was
n effect. The Treasury Department received one disclosure. Twenty agencies—including NASA, the Small Business Administration, the National Science Foundation, and the TVA—did not receive any disclosures at all.
Overall, the rate of disclosures has gone down in each period the statute has been
in effect.
• In the first, 4-month disclosure period, there were 91 disclosures—an average of
22.75 disclosures per month;
• In the second, 6-month disclosure period, there were 95 disclosures—an average
of 15.83 disclosures per month; and
• In the third, 6-month disclosure period, there were 7! disclosures—an average
of 11.83 disclosures per month.
A Subcommittee staff review of the reported lobbying expenditures of major defense contractors shows how little lobbying by major defense contractors gets disclosed under the Byrd Amendment. As shown "on the chart, six major contractorsMcDonnell Douglas. General Dynamics, General Electric. United Technologies,
Martin Marietta, and Lockheed—stated in filings to DOD that thev had spent a
total of almost $8 million lobbying Congress in 1989. (The 1990 numbers are slightly
lower because they are incomplete.) We have aggregated the numbers to protea the
confidentiality of the individual companies, since the information filed with the Department of Defense is proprietary.
By comparison, public reports filed by lobbyists for the same six contractors under
the Lobbying Regulation Act listed a total of 5388,727 in receipts and $135,346 in
expenditures, and only one of the contractors filed a single disclosure under the
Byrd Amendment, disclosing a total of $3,547 in lobbying expenditures. In other
words, almost none of the lobbying that the contractors themselves acknowledge in
their filings with DOD is disclosed to the public under the requirements of the lobbying disclosure laws.
Disclosure under other provisions does not appear to be much better. For example, we surveyed three DOD procurement commands to determine how many contractors had disclosed lobbying under the contingent fees provision. We asked each
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command for contingent fees certifications filed on contracts over $10 million over a
six-month period in 1990. We learned that of 82 bidders on 37 contract actions, only
two bidders filed contingent fees disclosures indicating that they had hired consultants to help solicit or obtain the contract.
In addition. Subcommittee staff reviewed two defense contracts on which extensive lobbying has been reported in the press to determine whether any disclosures
were filed by the contractors. In the first case, the Washington Post reported that
Gulfstream Aerospace had engaged in extensive lobbying to earmark $90 million in
DOD funds for the purchase of three executive-style jets and to ensure that the contracts for these jets were awarded to Gulfstream. In the second case, the Navy
awarded a $700 million contract to General Dynamics Electric Boat Division to
build a Seawolf <SSN-2:> submarine. Newport News Shipbuilding & Drydock, the
losing bidder, filed a complaint alleging that the award was the result of an extensive lobbying campaign by General Dynamics.
A review of the two contracts revealed that Gulfstream Aerospace, General Dynamics Electric Boat Division, and Newport News Shipbuilding had all certified
under the Byrd Amendment and the contingent fees provision that they had not
employed anybody to influence the contract award or to solicit or obtain the contracts on their behalf. In short, even when there is significant lobbying activity related to a contract award, it is not disclosed under the relevant disclosure provisions.
As was the case with our review of FARA and the Lobbying Act, we have not
attempted to determine whether any of these contractors have violated the lobbying
disclosure laws. Rather, we have determined that the public disclosure statutes are
so weak and so full of holes that they result in virtually no disclosure at all. In fact,
there is an argument that even the $3,547 disclosed by the six major contractors
under the Byrd Amendment did not have to be disclosed under the law, as it has
been interpreted.
This is not the only problem with the executive branch lobbying laws. For those
few areas that are covered by these statutes, the existing laws create an overlapping
patchwork of provisions imposing different sets of requirements on the same lobbying activities. A comparison of the Byrd Amendment to Sections 112 and 401 of the
HUD Reform Act shows that anybody who seeks Federal assistance from either
HUD or the Farmers' Home Administration is required to disclose lobbying activities on two separate forms under two different statutes, each with its own reporting
dates, disclosure requirements, and exceptions. For example:
The Byrd Amendment requires disclosure only by the client; Section 401 of
the HUD Reform Act requires disclosure only by the lobbyist; and Section 112
of the HUD Reform Act requires disclosure by both the lobbyist and the client.
The Byrd Amendment requires a list of all contacts with Federal officials;
Section 112 requires a detailed report of all money received and expended; and
Section 401 requires both a list of contacts and a detailed report of money received and expended.
The Byrd Amendment exempts regular employees who are on the payroll for
at least 130 days after the application for Federal assistance; Section 112 exempts employees who are on the payroll for 130 days before the application for
assistance; and Section 401 contains no exemption at all for regular employees.
The confusion caused by these overlapping requirements is only compounded by
the existence of yet another set of disclosure requirements which, like the Byrd
Amendment, are applicable to contractors on a government-wide basis. First, regulations implementing a statutory prohibition on the payment of contingent fees in lobbying for Federal contracts require contractors to identify each person lother than a
full-time employed whom the contractor has paid or agreed to pay to solicit or
obtain the contract, whether or not a contingent fee was paid.
Second, the consultants registration requirements implemented by the Office of
Federal Procurement Policy pursuant to the Pryor Amendment require prime contractors on contracts in excess of .'5200.000 to identify each •'marketing consultant"
employed in connection with the acquisition. "Marketing consultants" include independent contractors who furnish assistance to a contractor in support of the preparation or submission of a bid or proposal.
Since many consultants who "seek to influence the award of a contract" also
"provide assistance to the contractor in support of the submission of the proposal."
and are "hired to solicit or obtain the contract", much of the lobbying that is disclosed under the Byrd Amendment should also be disclosed under the so-called contingent fees provision and the consultants registration requirements. Again, a completely different set of disclosure requirements apply, with a different set of forms
and exceptions.
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At our earlier hearings, several lobbyists testified that legislative and executive
branch lobbying are "two sides of the same coin". The same can be said for the two
seta of disclosure laws. The executive branch lobbying provisions, like the laws requiring the disclosure of legislative branch lobbying, are "phantom laws" which
result in no meaningful disclosure of lobbying activities.
What we have is a series of "rifle-shot" laws that miss theirtargets.These laws
don't serve the public's interests because they don't result in any meaningful disclosure. They don't serve the lobbyists' interests because they are confusing and overlapping, and create a misleading picture of lobbying activities. They need a totally
fresh look.
I look forward to hearing the views of our witnesses on these problems and how
they may best be addressed.
.LOBBYING COSTS REPORTED BY.
SIX TOP DEFENSE CONTRACTORS
Pursuant t o Contract Requirements'
1989:
$7,988,000
1990;
$5,711,000"
Under the Lobbying Regulation Act
1990 Receipts:
$388,727
1990 Expenditures:
$135,346
Under the Byrd Amendment^
1990 Expenditures:
$3,547
McDonnell Douglas, General Dynamics, General E l e c t r i c ,
• n i t e d Technologies, Hartin Marietta, Lockheed
2
Reported t o tha Department of Defense as unallowable
coats pursuant t o the contract cost principles i n the Federal
A c q u i s i t i o n Regulation.
3
1990 figures ore not complete, as several contractors
have not y e t reported t h e i r lobbying costs.
^Reported t o the Secretary of the Senate by registered
l o b b y i s t s f o r the identified contractors.
5
Di8Closed to the Department of Defense and submitted t o
the Secretory of tho Senate pursuant to the Bvrd Amendment.
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Senator LEVIN. We have two panels of witnesses today who are
going to help us decide how we can address this problem. The first
panel is made up of Derek Vander Schaaf, who is the Deputy Inspector General at the Department of Defense, and Bernard Ungar,
who is the Director for Federal Human Resource Management
Issues of the General Government Division of the General Accounting Office.
Mr. Vander Schaaf and Mr. Ungar, we welcome you both, and I
understand Mr. Draver is accompanying Mr. Ungar.
Mr. Vander Schaaf is a frequent visitor here, and we welcome
you again. Do you want to start off?
TESTIMONY OF DEREK J. VANDER SCHAAF,' DEPUTY INSPECTOR
GENERAL, U.S. DEPARTMENT OF DEFENSE
Mr. VANDER SCHAAF. Thank you, Senator Levin. Yes, I'll be
happy to start and will try to keep my remarks to 10 minutes or so.
I'm sure we'll go into a lot of detail when my statement is concluded.
Senator LEVIN. Thank you.
Mr. VANDER SCHAAF. I certainly appreciate the opportunity to
appear here this morning and discuss compliance with the Byrd
Amendment.
The Byrd Amendment prohibits recipients of Federal contracts,
grants, loans and cooperative agreements from using appropriated
funds for lobbying activities and requires the filing of disclosure
forms if funds other than funds appropriated are used for lobbying
activities subject to the Amendment. It also requires persons or
companies that request or receive a contract, grant, loan or cooperative agreement to certify that no prohibited payments were or
will be made. Full-time employees of contractors or grantees that
lobby are exempted from filing a disclosure form. The DOD is required to report to Congress every 6 months on the number of lobbying activity disclosure forms received.
The intent of the amendment is to prevent the use of appropriated Federal dollars for lobbying and ensure full disclosure of lobbying activities that influence the awarding of contracts, grants,
loans and cooperative agreements.
OMB issued internal Government-wide guidance to implement
this statute on four occasions—^December 20 of 1989, February 26 of
1990; some clarifying guidance on March 23rd of 1990, and finally,
further clarifying guidance on June 12th of 1990. Of course the appropriate guidance has been put in the Federal Acquisition Regulation through Federal Acquisition Circulars.
Obviously there was a great deal of difficulty in writing the rules
under which this act would be implemented. As a matter of fact,
when I saw the June 12, 1990finalrevision, I clearly and distinctly
remember saying to our staff, "I think we just had the effect of repealing a law via regulation." I remember that clearly, and obviously, we are here today to discuss if in fact the law is effective.
Actually, we conducted a review of the effectiveness of the
impact of this law during the last 3 or 4 months. We did this at the
1
The prepared statement of Mr. Vander Schaaf appears, on page 390.
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request of the Executive Associate Director of the Office of Management and Budget, Mr. Frank Hodsoll. Mr. Hodsoll was concerned that there were very few disclosure reports being filed. I
think he and I both understood that there probably were no certifications of use of appropriated funds for the purpose of lobbying.
But we thought there ought to be far more disclosure statements,
as common sense would seem to dictate. He asked us to go and look
at why there were fewer disclosure statements and look at the
impact and the effect of this particular law—the Byrd Amendment.
I want to emphasize to you, Senator, that we were not requested
to, and did not evaluate, the policy implications of this law. We
looked at its impact, its effect, and whether the executive branch
was in fact carrying this law out and whether there was compliance with it. In fact, on page 5 of my statement, I identify the
scope of our review and the steps we took in order to reach the conclusions that have in the review. I think this review has been provided to you and the Committee for your use.
We obviously looked at the history and implementing guidance.
We went out and reviewed 13 defense contractors and 2 universities that received contracts, grants or cooperative agreements from
DOD and looked at what actions they took to comply with both the
law and OMB guidance. We identified 144 consultant agreements.
And my statement is slightly in error—it indicates we identified
144 consultants. In some cases, those same consultants worked for
more than one of the contractors or one of the universities, so
there are 144 separate agreements that we tracked.
We also looked at 133 contract actions and grants and one cooperative agreement in the Department of Defense to determine if
they had the proper clause in these agreements. Just as importantly, we looked at the Defense Contract Audit Agency's review of the
implementation of this Act.
Now, none of the 13 contractors or the two universities we selected for review had filed disclosure forms under the Byrd Amendment according to reports made by the Department of Defense to
Congress. Because of the limited time available in our review, we
did not interview consultants engaged by the contractors. We also
did not interview senior DOD officials that were identified by these
consultants as having been contacted with respect to their activity.
So the next step would have been to look at the 144 agreements,
the consultants, and then go interview the consultants and interview the people that the consultants claimed to have contacted. We
did not do this.
Nor could we confirm that the 13 contractors in our sample had
fully complied with the Byrd Amendment. The Amendment relies
on self-reporting by recipients, and unreported lobbying activities
cannot be readily identified from reviewing contractor records.
Each contractor, however, was familiar with the Byrd Amendment
and established policies and procedures in attempting to comply
with its regulations.
Contractors' policies and procedures attempted to distinguish
permitted from nonpermitted lobbying activities and provided the
information in training modules to key corporate personnel. Corporate contracting officials administered contract flow-down clauses
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on the Byrd Amendment to subcontractors and processed Byrd
Amendment clarifications on contracts.
Each of the companies had modified or reissued agreements with
consultants to incorporate the provisions of the Byrd Amendment.
The agreements either required the consultant to report to the
company any influencing activities that were contract related, or
stated that the consultant would not engage in any activities subject to disclosure by the Byrd Amendment unless specifically directed to by the company.
My statement on pages 8 and 9 contains two examples of these
agreements as they were amended following enactment of the Byrd
Amendment. You can see the emphasis tends to be onfindinga
way for not reporting, i.e., making sure you don't lobby on a specific—and I want to emphasize that word because that's going to
become very important in the implementation of this legislation—a
specific contract or grant. And also, in both of those agreements
that I have examples of, they in a sense attempt to separate the
corporation, if you will, from the consultant hired in terms of using
that consultant for influence purposes.
Activity reports which consultanto were generally required to
submit each month with their invoices varied in thie level of detail
provided. The reports ranged from one-line statements that appeared on each invoice to detailed reports on who was contacted, a
short description of each contact, and the date of the contact.
On page 10 of my statement there is an example of the kinds of
statements we generally ran into—you can see they are very, very
short—on the billings that the consultants presented to the contractors. "Talked with Senator 'X' about the need for program
such-and-such." That was about the extent of the justification for
the costs incurred.
We found that the activity reports, in other words, did not disclose the details of the contacts such as what was discussed, what
agreements were reached, or who initiated the contact. So we
couldn't tell from looking at the reports of the consultants whether
lobbying activity as defined in the Byrd Amendment had taken
place or not.
All of the contractors that were reviewed hadfiledcertifications
in association with DOD contracts that they had not used or would
not use appropriated funds to lobby for specific contracts—and I
emphasize that word, "specific". None had filed disclosure statements, as I indicated before.
The contractors stated that their lobbying activities ceased or
would cease once a request for proposal for a contract was issued.
The OMB implementing guidance, specifically the clarifying
guidance issued on June 12, 1990, states the actual release of a
formal solicitation or formal announcement in the Commerce Business Daily by an agency triggers the operation of the Byrd Amendment for "independent sales representatives". Now, that term was
introduced for the first time on June 12th. That term does not
appear in the legislation, and it did not appear in any of the previous OMB guidance. The term has become another reason the consultant concludes that he is an "independent sales represen'.ative"
combined with the "specific contract" requirement, the two pro-
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vide, in my words, a very large loophole for not having to report
under the Byrd Amendment.
I cover the two universities on page 12; I don't think I want to
pursue that any further.
I want to say that we believe that there is a need for additional
OMB guidance with respect to this statute. We believe the guidance that applies to existing FAR cost principles relating to executive and legislative lobbying and selling costs would help clarify
the matter. Also, guidance is needed on the differences between ongoing progiems and specific contract lobbying activities. These
clarificatiomi would provide a basis for a contractor to determine
when a disclosure form is needed. The guidance should be clarified
to state that cost? properly classified and made unallowable under
these various FAR provisions—the legislative lobbying provisions,
the executive lobbying provisions—that when they are incurred on
behalf of a prospective contractor, they represent activities that require the filing of a lobbying disclosure form.
We made this recommendation to OMB. OMB has indicated back
to us concurrence. You may wint to pursue this a little later in the
questions. What we are looking at is when a contractor incurs
these costs, and ' hey are classified under these categories, many
(times these cost ^re not allocable or allowable under defense contracts. So they are not put in the pool, if you will, under which we
are going to reimburse.
In that case, when the cost is incurred by a consultant—not a
full-time employee of the corporation—that would trigger the
mechanism to file a report under the Byrd Amendment. We think
that with such guidance we could implement this Amendment in a
way where you would get significant compliance.
As far as. Department of Defense compliance with respect to the
Byrd Amendment, we contacted 33 contracting offices to determine
whether they had inserted the proper clauses in the contracts. We
looked at 134 contracts, grants and cooperative agreements, and we
found that in 110 of the 133 contracts and the one cooperative
agreement, either the clause was properly inserted in the contract,
or the contract had been awarded before the amendment was
passed.
We also think there is a need for the Department to establish
some internal controls with respect to the disclosure statements
that are in fact issued. When we were out in the field doing this
work, we identified 11 additional disclosures that had not been
properly forwarded in Department of Defense channels so those
disclosures ultimately did not reach the official in the Department
of Defense who was responsible for putting the package together
and sending it on to Congress. So there is a need for an internal
control there.
There is one other aspect in the Department where we think
some corrective action would be effective and useful. We found that
the contracting community itself was well aware of the Byrd
Amendment, its implications, and had full knowledge of it. However, we found that senior managers, officers, commanders, the
people who are most likely to be lobbied in the Department of Defense, are not all that aware of the Byrd Amendment. The consultants, who are often former high-ranking military officials or De-
�121
partment of Defense civilian officials, do not typically deal with
contracting personnel, but with senior managers in the department
who are not as aware of the Byrd Amendment requirements as is
the contracting community.
In our audit report, we suggested one method to remedy this
problem, and that is to require individuals who have contacts of
this nature—by individuals, I mean officials in the Department of
Defense—to report the names of persons lobbying them and any
suspected violations of the Byrd Amendment. That is kind of a
system of double-entry bookkeeping, if I can use that term. The
contacts would be reported on one side and contractors' disclosures
on the other side. Of course, the disadvantage of this is more paperwork and more intrusion into people's private lives and so forth.
The policy issues, we didn't look at but that is one way that one
could in fact check to make sure there is a significant degree of
compliance.
We made four recommendations to the Director of Defense Procurement. None of these recommendations have been agreed to,
and we may have to elevate those recommendations to higher management within the Department of Defense. As I said, the most significant of those recommendations is to develop statements or
forms for use by senior officials within DOD to report persons lobbying them and any suspected violations of the Byrd Amendment.
The other recommendations we made to DOD deal with training
and education with respect to the Byrd Amendment.
The last thing I want to emphasize to you today is the role of the
Defense Contract Audit Agency in this process. Ultimately, if this
legislation or revised legislation is to remain around, the Defense
Contract Audit Agency has to be the policeman in the process.
Most, if not all, of the lobbying costs which are described as
either Legislative, Executive, or selling costs are built into what we
call "indirect expense accounts." They are overheads. DCAA is generally several years behind in reviewing overheads, and that is one
of the reasons why the 1990 number is smaller than the 19S9
number. So the DCAA didn't have ranch experience in terms of auditing compliance with the Byrd Amendment. And second, they
need to establish procedures to be used by their auditors to review
contractor lobbying and liaison costs In determining whether these
lobbying activities are subject to the Byrd Amendment.
But while they concurred with our recommendation, they made
it quite clear that it is essential for OMB to issue additional clarifying guidance that addresses the exart nature of lobbying activity
that is unallowable and subject to disclosure. And here we get back
to this cost allowability question as our remedy for the situation.
It is also important that specific recordkeeping requirements be
prescribed for contractors to allow auditors to perform compliance,
and it is also going to require access to all costs incurred by contractors. Much of the lobbying costs that are incurred are not eventually allocable to defense contracts, and they are not necessarily
shown to the Defense Contract Audit Agency. So it would require
access to all of those costs.
The DCAA believes that such recordkeeping requirements could
be incorporated into the contract claases that deal with certification and disclosure regarding payments to influence certain Feder-
�122
al transactions and another clause dealing with limitations on payments to influence Federal transactions.
We in the Inspector General's office are prepared to actively participate in ensuring that the Byrd Amendment provisions are properly enforced. We will test the adequacy of enforcement during our
annual reviews for compliance within the Department of Defense.
That concludes my statement. Senator. I thank you for hearing
me out on this.
Senator LEVIN. Thank you, Mr. Vander Schaaf.
Mr. Ungar?
1
TESTIMONY OF BERNARD L. UNGAR, DIRECTOR FOR FEDERAL
HUMAN RESOURCE MANAGEMENT ISSUES, GENERAL GOVERNMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY TERRY DRAVER, SENIOR EVALUATOR
Mr. UNGAR. Good morning, Mr. Chairman.
We are pleased to be here today to testify on the results of our
review of the Byrd Amendment, and we would like to go ahead and
summarize our statement if that's OK.
Senator LEVIN. Please do, and both the statements will be made
a part of the record in their totality.
Mr. UNGAR. Thank you, sir.
Enacted in October 1989, the Byrd Amendment prohibits the use
of Federal funds for lobbying agency employees or members or employees of Congress in connection with the awarding of contracts,
making of grants and loans, and entering cooperative agreements.
Persons requesting or receiving these kinds of awards, as well as
certain others, over specified dollar values must make certifications
and disclosures regarding the use of Federal and private funds for
lobbying.
Even more of a surprise, Mr. Chairman, than I think you had
identified there, we found that some agencies hadn't implemented
the Byrd Amendment at all. We surveyed in April and May of 1991
31 inspectors general or comparable officials to see whether they
had reported on the Byrd Amendment as required and found that
three agencies had not implemented the act. These three were the
Federal Deposit Insurance Corporation, the Resolution Trust Corporation, and the Export-Import Bank.
FDIC has now implemented the law effective in July; the RTC
plans to implement it soon, and we are not quite sure about the
Export-Import Bank. They were in the process of implementing it,
and we are not sure what the status is there.
In addition to that, we found that the Office of Thrift Supervision (OTS) and the Department of the Treasury had not yet implemented the act because of a question over whether the law applied
to it. OTS since that time has gone ahead and implemented it because there has been a general agreement that the law does apply
to that organization.
The law requires Inspectors General or comparable officials to
report annual y on their agencies' compliance with and effectiveness of the act. Twenty-eight of the 31 inspectors general that we
1
The prepared statement of Mr. Ungar appears on page 410.
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surveyed did report on their evaluations for calendar year 1990;
three did not. Two of those were because their agencies hadn't implemented the law—RTC and FDIC—and the Labor IG had not yet
done a complete evaluation and didn't submit a full report.
As you indicated, Mr. Chairman, the Byrd Amendment has not
been as effective as intended. We and many of the IGs that we
have surveyed identified problems with the act's implementation
and effectiveness. Required certifications and disclosure forms were
not always made, and disclosure forms that were filed were often
incomplete, lacking such required information as payments to lobbyists, the names of persons lobbied, and the dates of service.
In addition, whether or not the law's intent to preclude the use
of Federal funds for lobbying has been met is basically unknown. It
would be a mammoth undertaking to find that out without detailed
audits of the nature that the DCAA would do.
Turning to the disclosure forms themselves, as Appendix III of
our statement shows, for the three reporting periods since the implementation of the amendment, 18 agencies sent to the Secretary
of the Senate 257 disclosure forms. We ranked the agencies by the
number of disclosure forms filed. GSA had the most filed, with 60
forms, including 32 for contracts, in contrast with the Department
of Defense, which reported 10 forms, 5 for contracts. This was
somewhat of a surprise, to say the least, especially when for only a
6-month period, April through September of 1990, Defense had reported nearly 14,000 initial contract awards, amounting to almost
$19 billion. These figures can be found in Appendix IV of our full
statement.
HUD meanwhile reported a total of 15 disclosure forms, which
included 6 contracts. For the same 6-month period, April through
September 1990, it reported 10 initial contract awards, valued at
$2.6 million.
We found that of the 257 forms filed by 180 individuals or organizations that 151 forms identified a lobbyist. Of these, we further
identified 67 different lobbyists listed on these forms showed up
only once. We further found that only 24 of the 79 disclosure forms
for contracts reported a lobbyist. Of those reporting grants, 107 of
the 119 forms for grants reported a lobbyist.
There are a number of reasons for the lack of reporting under
the law. They include the newness of the statute, the voluntary
nature of compliance, ambiguity in the definition of "lobbying", exclusions of certain types of program advocacy from the act, and
ambiguity ih the law and Office of Management and Budget's guidance to agencies on the act's implementation as well as some of the
other - items that were mentioned in your statement and Mr.
Vander Schaaf s.
Refinements to the law and OMB's guidance can help reduce
some of these problems. For example, OMB should specifically require a statement that filers did or did not use nonappropriated
funds for lobbying and require Federal agencies to ensure disclosure forms are complete. Further, Congress should clarify when
disclosure forms are due—at the time of application or receipt.
Right now, the person who is to file has a choice, and it is not clear
at what point they are supposed to do that. We have had a couple
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of bid protests at GAO which raised the issue of a non-certification
statement as a defect.
None of the disclosure forms filed with the Secretary of the
Senate to date related to contracts awarded by the Federal Aviation Administration; yet high-level officials we contacted at FAA
said they had frequent contacts with contractors or their representatives relating to contract awards. This raises questions about compliance at FAA which need to be further investigated.
This afternoon, Mr. Chairman, we intend to make formal recommendations to the Director of OMB and to the Department of
Transportation Inspector General, as we have indicated here in our
testimony.
I would also like to close by saying that we are certainly in
agreement with your observation that it is time to take a fresh
look at the number and variety of the lobbying statutes that are on
the books and how best to structure those to make sense out of a
maze that currently exists.
With that, we'd be available for questions.
Senator LEVIN. Before I begin my questions, we would welcome
the recommendations of both of your agencies on that matter, because we are taking a fresh look. We are not just going to try to
figure out how we can increase enforcement from 4 percent to 5
percent. With 95 percent of lobbying activities undisclosed, it would
be a waste of energy it seems to me to spend a tremendous amount
of time on questions like "why isn't this thing working a little bit
better in one agency?" and "what interpretation is the other
agency using, which is too narrow?" Even though that may be
useful activity as long as the law is on the books, there is something wrong here, something is amiss, and Mr. Vander Schaaf, let
me start with you.
When you look at that chart, first of all I think you said in your
testimony it is very possible that some of the lobbying costs were
not even disclosed to the DCAA, which means that $8 million on
our chart may actually even be understated; is that possible?
Mr. VANDER SCHAAF. That is possible. I can't comment on those
numbers. I would have to surmise that it is very likely because
some of those costs are not allowable under defense contracts.
Those costs may not even be shown to the auditor as having been
incurred because they are not built into the overhead rates.
Senator LEVIN. In your prepared statement, Mr. yander Schaaf,
you indicate that all of the contractors that you reviewed engaged
in "agency and legislative lobbying and liaison activities" and most
stated that they "tried to influence the authorization and appropriation of funds for their programs". Your staff has told us that
almost all of- these contractors hired outside consultants to assist
them in this lobbying, and that you were able to identify about 100
such consultants; yet not one of those contractors filed a single disclosure statement under the Byrd Amendment. Is that a fair summary?
Mr. VANDER SCHAAF. That's a fair statement.
Senator L E V I N . NOW, what is the reason for that? Is that because
of the way the Byrd Amendment is written or the way it has been
interpreted, Dr is it a lack of compliance on the part of the contractor?
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Mr. VANDER SCHAAF. I don't think it's a lack of compliance. Due
to interpretations that have been given to the law, or maybe the
flaw in the law—I don't want to specify which it is because I don't
know for sure—but I can tell you that contractors don't file because we have "programs" in the Department of Defense, and they
lobby on programs, not contracts. They lobby for the V-22 or the
B-2 or the SSN-21 or whatever the case may be, they are lobbying
the program,' they are not lobbying "contract number so-and-so
with an RFP out on the street. Under OMB guidance contractors
say they are working a general program, not a specific contract,
and therefore they are not required to file.
Senator LEVIN. Just so we understand what you have said, you in
your testimony have set forth some of the activities which have not
been disclosed on the ground that they are not covered by the definition in the law. Here are some of them—I am quoting your testimony here now—one lobbyist met with Senator "X" on May 18 to
impress upon him the need for continuing a certain program. Another one met with Senator "X" regarding an add-on of $65 million
for a certain prototype. Another one met to continue confirmation
of congressional commitment to a particular retrofit plan and support for the concept of adding funding for attrition aircraft. Another one talked to Senator "X" about the need for full funding for
a certain program. Another one visited a research and development office to discuss a particular program. Another one contacted
key Senators and staff members to ensure that they had complete
and accurate information regarding a particular item. Another one
talked with Dr. "X" at the Pentagon on opportunities for new business development. Another one met with the contracting officer
and an admiral at the Pentagon to change the attitude on solesource procurement for a particular item. Another one talked with
Admiral "X" on honoring the fiscal year 1991 funding in the full
amount for a particular item.
Those are examples you give which under any common sense definition would be considered lobbying.
Mr. VANDER SCHAAF. Yes, I would consider they are trying to influence the executive branch's action with respect to a rather specific matter—but not a specific contract.
Senator LEVIN. I understand. I'm not saying that they had to be
disclosed under the particular law. The point here is that those
under any common sense definition of lobbying would be included.
Mr. VANDER SCHAAF. I don't disagree with you. Senator.
Senator L E V I N . OK. But yet they weren't disclosed—putting aside
whether they had to be disclosed or should have to be disclosed is a
different issue.
Mr. VANDER SCHAAF. That's right.
Senator LEVIN.-There are two points I'd like to see if you agree
with me on. Number one, under any common sense definition of
lobbying, they would be included, those activities.
Mr. VANDER SCHAAF. That is lobbying by my understanding of
the word.
Senator LEVIN. And second, they are not being disclosed under
current law—they weren't disclosed under current law.
Mr. VANDER SCHAAF. That is correct; they were not disclosed
under current law. There were no disclosures. We have, as I said,
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literally hundreds of these individual invoices that were in fact
submitted back to the companies.
Senator LEVIN. And the way you phrase it in your written testimony is that none of the contractors filed the standard form which
is used to disclose lobbying activities subject to the Byrd Amendment——
Mr. VANDER SCHAAF, That's right.
Senator LEVIN. —and this is ^ very important line to me—all of
the contractors acknowledged th^t they engaged in agency and legislative lobbying and liaison activities, and most stated that they
tried to influence the authorization and appropriation of funds for
their programs.
Mr. VANDER SCHAAF. Exactly—but not a specific contract.
Senator LEVIN. Right, I understand that. The reason why they
probably did not file—there are a lot of loopholes, and you have
just identified one of many—but the reason why they did not probably was that they would say, "I didn't lobby for the contract for
that weapon system; I lobbied to make sure that there would be a
weapon system authorized. That is a program, not a contract;
therefore, I am not covered by the Byrd Amendment."
Mr. VANDER SCHAAF. Again you are right on target, Senator.
Senator LEVIN. NOW, to keep on target a little longer, that is only
one of a number of loopholes in the law which result in activities
which are commonly understood to be lobbying activities not being
disclosed under the law.
Mr. VANDER SCHAAF. That is one, but I think in the case of the
Department cf Defense, where much of our business is contracts,
that is by far the biggest.
Senator LEVIN. NOW, Mr. Vander Schaaf, several Department of
Defense officials have taken the position that the reason for the
lack of disclosures under the Byrd Amendment is that contractors
have stopped hiring outside consultants to do their lobbying for
them. The Byrd Amendment doesn't apply to in-house employees
but only to outside consultants. Now, they view this—"they" being
those several Department of Defense officials—as a positive effect
of the Byrd Amendment.
Based on your review, is there any reason to believe that contractors have stopped hiring outside lobbyists?
Mr. VANDER SCHAAF. Well, they have not stopped hiring, them.
That's clear. Whether they are hiring more or less, I don't know;
we did not attempt to measure that. We did not look at one year's
agreements and the next year's agreements with consultants or
outside contractors.
Senator LEVIN. The kinds of activities that I have quoted from
your testimony may or may not be required technically under the
Byrd Amendment, but it is my opinion, at least, that they are the
types of activities which the Byrd Amendment was directed at.
Mr. VANDER SCHAAF. Yes, again. Senator, that was my understanding. That's why I said to our staff when the June 12th final
guidance came out, "Wow—I'm not sure we have anything here
that means anything at this point in time," I doubted there would
be any action as a result of the Amendment.
Senator L E V I N . The way it is being interpreted.
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.
1
j
•
;
;
Mr. VANDER SCHAAF. Well, yes, the way it is being interpreted.
This often happens with this type of legislation, dealing with ethics
and behavior. I have watched this process for years. When the Congress is busy implementing this legislation, people seem to want to
jump out of windows, if you will—"my gosh, I'm not going to be
able to be employed, I'm going to have all this paperwork burden,
this is going to be a horrendous problem." Then when you actually
pass it and implement it, and you look at it downstream, you really
see very little activity that seems to fall within the purview of the
law as it is written. Everybody goes to work at the legislation and
picks away at it until such time as they find a way to redefine and
"work" the problem. As a result, you don't get the reporting that I
think people thought they were going to get when they passed the
law in the first place.
Senator LEVIN. I think what is unusual about these disclosure
laws is that by the time they are done being picked at, there is
almost nothing left. Do you agree with that?
Mr. VANDER SCHAAF. Well, we had 10 reports filed, and we found
an additional 11, so we have 21. Yet we have thousands of contract
actions.
Senator LEVIN. Nineteen thousand, possibly?
Mr. VANDER SCHAAF. OK, possibly. And obviously, when you've
got 19,000 contractual actions there will be various interests involved. As a matter of fact, when I was asked to do this work I said
to the audit staff why don't we just take a look at the add-ons in
the defense authorization and defense appropriations bill i.e., those
items that the President did not request, which were added on. I
know full well from my experience that every one of those add-ons
has somebody behind it. Often it's got a lot of "somebodys" behind
it, who have "worked" the process, have "worked" the Department
of Defense, Capitol Hill, the Office of Management and Budget and
wherever else they had to go to get that item, if you will, authorized and appropriated above and beyond the President's budget.
Well, if they hired an outside consultant to do it, to me it should
imped lately trigger the Byrd Amendment. And I know that happened maybe 50 to 100 times in specific line items within these appropriations and authorization bills. You don't find very many of
those reported.
Senator L E V I N . The bottom lirie is we've got a bucket of lobbying
going on, but only a few drops in the bucket are being disclosed.
Mr. VANDER SCHAAF. Well, I
Senator L E V I N . That's my formula.
Mr. VANDER SCHAAF. OK, that's your formula.
Senator L E V I N . It sounds to me like it's not too far from your formula.
Mr. VANDER SCHAAF: Yes, sit, it's close to mine. From what I
thought the Byrd Amendment was going to do when I first read
about the Byrd Amendment, I said "Wow, this is going to be
tough." It seemed very direct and to the point. It was going to be
very hard to build loopholes in the Amendment. I was wrong again.
The loopholes are obviously there now. I'm not saying, however
that this is necessarily good public policy. I think it is good public
policy that our Government business ought to be done in the open
to the maximum extent possible. That's what democracy is all
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about. And it has been longstanding public policy that we don't use
appropriated funds which are provided for services or to buy things
and then use those very same funds to lobby for more funds. That's
what the Byrd Amendment, in my opinion, is trying to get at, and
it has not been successful to date.
Senator LEVIN. I am one who believes that the Byrd Amendment
was a well-intended and an important amendment, but it just has
not yet succeeded in achieving what was intended. That's my own
belief, so that we are clear on it. In terms of the policy, I know you
are not taking a position on the policy side of it, but that's my own
view, that it was both well-intended and important but that if we
look at the result, it hasn't achieved its result, and the question
now is how, in a sensible way, can we try to achieve the result.
I don't think anyone is served by the current system, by the way,
as I said before. You may or may not want to comment on that.
Mr. Ungar, let me move to you. You also identified significant
undisclosed lobbying activities, and here is a summary of some of
the things you found, and you have touched on them.
Top officials at the FAA have extensive industry contacts and
meetings with contractor representatives at practically every step
of an acquisition. One official specifically stated that she had been
approached by contractors and grantees and their representatives,
seeking to influence the award of specific contracts and grants; and
yet not one contractor or grantee filed a disclosure statement
under the Byrd Amendment indicating that they had lobbied the
FAA.
Top officials at the Department of Energy are regularly contacted by contractors, grantees or their representatives to either advocate a particular Federal program or express concern about a
budget matter affecting a Federal program; yet only three DOE
contractors filed disclosures in the first 16 months that the Byrd
Amendment was in effect.
Now, it seems to me those are the kinds of activities, again, that
the amendment was intended to address but they are not being disclosed. What in your opinion is the reason? Is it that the law does
not cover those activities or that it does, but that the contractors
are ignoring the law—or some other explanation?
Mr. UNGAR. Mr. Chairman, it is probably a combination of reasons. We don't know all the details in those cases. If we take DOE,
for example, the argument probably would be from the persons
doing the lobbying that they are basically doing program lobbying,
I guess in our view we might have a slightly different view from
OMB as to whether or not that is covered under the act.
Let me give you some examples, at least hypothetical. If you
have a situation in which there is a new program, and the field is
wide open where people can come in and bid or apply, and people
lobby for the program, I think we would agree in general that
that's not really addressed under the Byrd Amendment in sort of a
broad sense.
On the other hand, if you have a situation where you have a
sole-source procurement that currently exists, and the person who
holds that is the only one who can provide the service, and that
organization or individual retains somebody to lobby for that program, we think there is a pretty strong link in connection with a
�129
specific award in a practical sense. So it would appear to us that
that type of situation would be covered.
It becomes a little more cloudy when you have a situation where
a person might hold a grant or contract—one of many, currently-rand lobby for the extension of the program, because obviously they
would like to have the contract or the grant extended. In that case
the law does cover modifications and extensions to current awards.
But there is a bit of cloudiness there.
So I guess on the one hand it is a question of how people label
what they do versus really what is covered. There may be other
cases where they may be applying OMB's guidance that if activity
takes place before solicitation, for example, it may not be considered—perhaps inappropriately—not to be a covered activity.
Senator L E V I N . The bottom line is that you found that there
were more than 19,000 Federal contract actions subject to the Byrd
Amendment in the first 16 months that the statute was in effect,
and yet only 24 contractors filed disclosures in which they acknowledged hiring consultants to engage in lobbying activities.
Is that correct?
Mr. UNGAR. Yes.
Mr. DRAVER. There
is one change. The initial contract actions for
Defense, Mr. Chairman, were just for a 6-month period, and it is
really more than that. It was from April through September of
1990. That wasn't for the entire 15 months.
Senator L E V I N . Well, then, let me just add
Mr. DRAVER. SO we are really understating it.
Senator L E V I N . The question is this. I said more than 19,000.
Mr. DRAVER. Oh, I'm sorry. OK.
Senator L E V I N . I inadvertently stated it correctly.
Mr. DRAVER. YOU did.
Senator L E V I N . I'd better amend it, though, just so we can get a
clear answer for the record.
You found that there were at least 19,000 and probably significantly more Federal contract actions subject to the Byrd Amendment in the first 16 months that the statute was in effect, and yet
only 24 contractors filed disclosures in which they acknowledged
hiring consultants to engage in lobbying activities.
Is that now an accurate statement, or have I still missed your
correction?
Mr. DRAVER. Actually, the 19,000 represent just the Department
of Defense. More accurate would be there are five contracts filed
with Department of Defense representing the 19,000 contracts—not
24. The 24 contracts who reported lobbyists were for the entire universe, Government-wide.
Senator L E V I N . OK, let me try it again.
Mr. DRAVER. OK. Sorry.
Senator L E V I N . That's all right. I want it to be accurate.
You found that there were at least 19,000 Department of Defense
contract actions subject to the Byrd Amendment in the first 16
months that the statute was in effect, yet only five contractors filed
disclosures in which they acknowledged hiring consultants to
engage in lobbying activities.
Mr. DRAVER. That's correct.
Senator L E V I N . OK.
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Mr. VANDER SCHAAF. Senator, you've got to be careful. I don't
like the use of the words "subject to the Byrd Amendment". Many
of those contracts may not have had a consultant involved. They
may have had no contact with the Department prior to the award
period by their own employees. That wouldn't be covered, nor
would it if they used ful time employees—so you've got to be a
little bit careful when you use the word "covered" by the Byrd
Amendment.
Senator L E V I N . I didn't say "covered". I said "subject to".
Mr. VANDER SCHAAF. "Subject to".
Senator L E V I N . Where somebody would have to determine whether or not the Byrd Amendment applied.
Mr. VANDER SCHAAF. Exactly, or more than $100,000 in that
sense.
Senator L E V I N . All right. That's what I mean by "subject",
broadly. I won't try to redefine that again, though.
Do they have to file a certification under the Byrd Amendment?
Mr. VANDER SCHAAF. Yes.
.
Senator L E V I N . Then in that case, my words "subject to" are
indeed very accurate.
Mr. VANDER SCHAAF, Yes.
Senator L E V I N . OK.
Mr. VANDER SCHAAF. Let
me comment on that. I think sometimes the irritant among the contractors, et cetera, is all these certifications. I'm not sure that having a separate certifying document
here is really necessary so long as
Senator L E V I N . I don't want to get into that, either. The point is
that there were—and I am going to repeat it because I think we
ought to get a clear statement on this in the record, and I'll make
it as accurate as I can to get agreement on it—you found that
there were at least 19,000 Department of Defense contract actions
subject to the Byrd Amendment in the sense that a certification at
a minimum had to be filed under the Byrd Amendment during the
first 16 months that the statute was in effect, and yet only five contractors acknowledged in their disclosures that they were hiring
consultants to engage in lobbying activities.
Mr. VANDER SCHAAF. If GAO can certify to the 19,000 number, I
can certify to the rest of your statement.
Senator L E V I N . All right.
Mr. DRAVER. I am in error, Mr. Chairman. One more time.
Senator L E V I N . I don't think so. I think we'd better correct it—go
on and try it.
Mr. DRAVER. There were 19,000 altogether, Government-wide,
but there were 14,000 for the Department of Defense.
Senator L E V I N . OK. Subject to that correction, do we now have
agreement op the phraseology?
.
Mr. UNGAR. I hope so. We'll have to call a third party in to arbitrate here.
Senator L E V I N . Mr. Vander Schaaf, subject to that now?
Mr. VANDER SCHAAF. Yes.
Senator L E V I N . OK. And if there is any correction of that, let us
know for the record because that is a very significant summary,
folks, as to what is not being disclosed—five of 14,000 certifications
disclosed the hiring of consultants to engage in lobbying activities.
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Mr. VANDER SCHAAF. NO, you have to separate the certifications
from the disclosures.
Senator LEVIN. I understand that. OK. But there are at least
14,000 cases where they certified under the Byrd Amendment, and
what I'm saying is there are only 5 disclosures under the Byrd
Amendment.
Mr. VANDER SCHAAF. YOU have that right.
Senator LEVIN. NOW, that's still a drop in a bucket of lobbying,
however you do it. Maybe it's two drops in a bucket. And we can
spend another 5 minutes arguing as to whether it is one drop or
two drops, but it is a drop in a bucket of lobbying.
Now, here's the reason why—I think. We start with a universe—
whether it is 14,000, 19,000, whether it is DOD, Government-wide,
it is a heck of a big universe. Let's take the 14,000 DOD.
First, the law says it only covers grants, contracts and loans, so
it doesn't cover regulations, policies, lobbying relative to those
kinds of things. So the universe is here—that's the 14,000 DOD—
you cut it dramatically in the law by saying we're not going to include regulations, lobbying for regulations, lobbying relative to
policies. Then the law also says that only outside consultants are
covered. So you've cut it from here to here for your first cut, and
now in your second cut, because you eliminate in-house people, you
cut it again dramatically. So now you are down to that.
Then the OMB regulation comes along and says—this is by regulation, now—that when you lobby on a program you are not covered. That cuts your increment again dramatically. And then
comes some OMB guidance that says that the Byrd Amendment
only applies after a solicitation is issued and not before a solicitation is issued. You've got that little remnant left, and I'm sure
there are more slices you can cut off of that beyond.
But there are four major cuts just to start with, which gets you
down to a very small percentage of that universe that we're talking
about, which most people would consider to be lobbying activities.
Would you say that's a fair summary as to why we have got so
little disclosure—even putting aside the question of whether there
is compliance. We haven't gotten to the compliance part yet. That's
the part you talked about, Mr. Ungar. We haven't gotten to that,
because everything I've talked about is where folks don't have to
disclose. OK. Is that a fair summary, would you say, Mr. Ungar?
Mr. UNGAR. Well, Mr. Chairman, partly. I guess in practice what
is actually happening, I think I would say yes. But in terms of literally what is required and what is supposed to happen, I think obviously more activity is supposed to be reported under the statute.
So again, as to what is happening on a day-to-day basis, I think you
are right on target. It's not necessarily what is supposed to happen.
Senator LEVIN. Right. In other words, it is possible that some of
that should have been covered
Mr. UNGAR. That's correct.
Senator LEVIN. —but in the real world of disclosure, my dcocription is an accurate description.
Mr. UNGAR. I think so, yes.
Senator LEVIN. OK.
Mr. VANDER SCHAAF. AS a matter of fact. Senator, many of the
disclosures that were made—and there weren't very many made in
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the Defense Department, as we just went over—but even some of
those said on the disclosure; "Look, I don't think I really have to
make this disclosure, but in the interest of complying with the law,
I am making and filing the report."
Senator LEVIN. If my memory is correct, of the relatively tiny
percentage of disclosures that we have relative to the number of
activities, in something like half of those they were saying they
didn't even have to disclose.
Mr. VANDER SCHAAF. That's about right. I was asking the staff
that worked on this review to check that number. There were 21
that we identified. Let me go back into the Record and see how
many of the 21 disclosures that we've looked at actually even indicate that they didn't think they had to make the disclosure, but
we're doing it because there was some doubt. We'll put that in the
Record for you.
Senator LEVIN. TO try to sum up—I think there is a little difference in approach between the two of you. Mr. Ungar, I think you
would basically say that the Byrd Amendment's lack of coverage in
your view is due to two things. One is that it is fairly narrow in its
coverage to begin with, that it has been interpreted even more narrowly, and that it has not been complied with by many agencies.
Mr. UNGAR. Correct.
Senator LEVIN. OK. And Mr. Vander Schaaf, I think you would
agree with the first two pieces of that
Mr. VANDER SCHAAF. I think it has been complied with. If you
look at the OMB interpretations
Senator LEVIN. SO you would agree, then, that the reason that its
coverage is so narrow is that it was drafted or written narrowly
and, by regulation or guidance, interpreted narrowly.
Mr. VANDER SCHAAF. It was further narrowed, yes.
Senator LEVIN. SO that it was a narrowing in terms of its writing
and interpretation which has resulted in such a few drops in that
lobbying bucket being covered; whereas Mr. Ungar would say that
it is a combination of the narrow interpretation and implementation being inadequate.
Mr. VANDER SCHAAF. We found implementation in the DOD to be
good. The contractors that we visited had full knowledge of it and
took actions in response to it.
Senator to save from having to put a piece of paper in your
record, 7 of the 21 disclosure forms we examined were submitted
only because the contractor or grantee was uncertain whether its
activities were covered by the Byrd Amendment.
Senator LEVIN. I see. But some of them actually say that "We
believe we're not covered," don't they?
Mr. VANDER SCHAAF. I think one or two of those seven said that;
that's correct.
Senator LEVIN. So that they are either uncertain or they are
filing it despite the fact that they don't have to. I'm going to correct your statement now. Tit for tat here this morning. [Laughter.]
Senator LEVIN. Mr. Ungar?
Mr. UNGAR. Mr. Chairman, I can add to the confusion——
Senator LEVIN. I was just going to thank the panel for its testimony and get on to the next one. I'm not so sure I want you to add
to the confusion. But if it is significant, go ahead.
�Mr. UNGAR. Just one sentence. We found of about 257 forms that
werefiled,106 basically did not report a lobbyist. So if you take it
on face value, 106 out of 257 didn't even need to report.
Senator LEVIN. That didn't add to the confusion. That clarified it.
Thank you. We appreciate all of you coming by.
Senator LEVIN. Our second panel includes Dr. Allan V. Burman,
Administrator of the Office of Federal Procurement Policy of OMB;
Ms. Shelley Longmuir, the Deputy General Counsel in the Office of
General Counsel of the Department of Housing and Urban Development; and Mr. Pete Bryan, who is Director, Contract Policy and
Administration, Office of the Secretary of Defense.
We welcome you all. Thank you for coming by. As always, I don't
know what the reason is for this order of witnesses, but we will
follow it.
Dr. Burman, you are downfirst,so we'll call on you.
4
1
TESTIMONY OF ALLAN V. BURMAN, ADMINISTRATOR, OFFICE
OF FEDERAL PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET
Dr. BURMAN. Thank you, Mr. Chairman. I am pleased to be here
this morning to testify before the Committee on Section 319 of
Public Law 101-121, the Byrd Amendment. If I may, I'd like to
briefly summarize my statement and submit it for the record.
Senator LEVIN. Thank you.
Dr. BURMAN. You asked that the Office of Management and
Budget comment on the importance and effectiveness of the law
which places restrictions on lobbying for contracts andfinancialassistance awards. What I would like to do is briefly describe its
main features and then address the specific questions you asked us
in your letter.
As has been mentioned, the Byrd Amendment does the following.
It prohibits the use of appropriated funds to try to influence the
award of a contract pr any other type of Federal award; it requires
that a consultant's influencing activities be disclosed; it requires a
written declaration of compliance be filed with bids, proposals or
applications, and it subjects violators of the law to civil penalties
ranging from $10,000 to $100,000. Agencies have to submit disclosure reports to Congress twice a year, and inspectors general are
asked to report annually on enforcement and compliance.
The law specifically exempts from coverage certain types of activities. These include reasonable compensation to afirm'sown employees for either agency and legislative liaison or professional and
technical services rendered directly in the preparation, submission,
or negotiation of a bid or proposal.. These latter activities are also
exempted for non-regular employees or what we would generally
call consultants.
In my prepared testimony I describe some of the issues that we
dealt with or that we encountered in developing the guidance, such
as how we should define "profits" or "fees" since these are not subject to the law's prohibition.
1
The prepared statement of Dr. Burman appears on page 432.
�134
Another issue that I discuss centers on selling activities engaged
in by independent sales and marketing representatives, an issue
that you discussed with the first panel. At first look, it appeared to
use that the term "agency and legislative liaison" could include the
concept of selling and in fact was meant to include that notion. The
problem was that while the Byrd Amendment exempts a firm's
own employees from this coverage, i t makes no mention of a similar exemption foi non-employees who are retained by a firm to sell
or market products to Federal agencies.
Under this interpretation, then, they couldn't be paid by appropriated funds, and their contacts regarding routine selling activities became potentially reportable. We and the Congress received
numerous complaints from these sales representatives, saying that
they were effectively being shut down. Many of them were small
businesses. We finally concluded it was not Congress' intent to put
these people out of business, and in June 1990 we clarified our
guidance on this issue. We basically said that the Byrd coverage
did not apply to this group as long as their activities were technical
and marketing activities and took place prior to an agency solicitation.
I should add that we tried to be very confining in that guidance,
identifying both the types of activities that were to be included as
well as the nature of the group that this applied to. It did not apply
to K Street lawyers; it applied to a very precise set of individuals.
In assessing the law's effectiveness as you asked, we believe that
the Byrd Amendment has had a definite effect on agency contracting and grant-making operations. A question that has come up—it
is a question we had as well—is why the number of disclosure reports filed are so low. That is a hard question to answer.
One reason may be that it is having something approaching its
intended effect—that is, firms may be using fewer consultants to
influence agency contracting and grant-making actions. Since the
disclosure requirement only applies to non-employees, I have heard
a number of reports that lobbying activity previously given to consultants may have been brought in-house. In other words, the firm
decides it is going to use its own employees for that specific purpose, while fcr general program lobbying, the kinds of discussions
that yuu had previously, they would continue to hire these consultants; so in effect they are moving them to a different type of activityIn June, we asked the Department of Defense, Mr. Vander
Schaaf, to look at this issue because we were concerned with the
low number of disclosures. In their report, the Defense IG found
that all contracts examined included the certifications required by
the Byrd Amendment. They also said they couldn't find any indication that contractors hadn t filed disclosure reports when required,
nor had any allegations of improper or undisclosed lobbying been
reported to the Defense Inspector General's hotline.
We recognize that there has been criticism levelled at the Byrd
Amendment coverage, some saying it covers too much. We had a
lot of complaints when our regulations went out on that side of the
coin, others saying too little. However—and I think this is a point
that you have made before, Mr. Chairman, and it is one that I
think we do need to stress—it wasn't the intent of the Byrd
�135
Amendment to cover situations which didn't involve communications rega-ding particular contract or grant awards. Even if you
look at the specific legislative language associated with the law, it
makes it very clear that these kinds of program activities were not
meant to be included nor were petitions for redress of grievances to
the Congress.
In other words, communications by consultants on what might be
described as public policy issues, as for example appropriations at
the account level, program continuances, and so on, wouldn't fall
within the scope of the amendment because for these, no communications "in connection with" a Federal award would have taken
place.
On the other hand, after reviewing that, and after looking at the
disclosures, we may well want a firm to disclose its influencing activity in this regard, particularly where i t has a direct economic interest in the outcome of the issue under consideration.
For example, this might be the case where a consultant is interested in a particular Federal program because of the contracts or
grants that its client might get from the program, and this might
especially apply when the program issue under consideration results in a possible sole-source contract or grant being awarded to
the consultant's client. That is something that was suggested to us
in the Defense IG report; it is something that we have been considering, and I think it is something that we would plan to take some
further action on.
That concludes my prepared remarks, Mr. Chairman. Of course,
I would be happy to take any questions from you.
Senator LEVIN. Thank you very much, Dr. Burman.
Ms. Longmuir?
1
TESTIMONY OF SHELLEY A. LONGMUIR, DEPUTY GENERAL
COUNSEL. OFFICE OF GENERAL COUNSEL, DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
Ms. LONGMUIR. Thank you, Mr. Chairman.
The Department of Housing and Urban Development appreciations this opportunity today to discuss the lobbying provisions of
section 112 of the HUD Reform Act and the Byrd Amendment.
I would like to submit my full testimony for the record and provide a summary now at this point.
Senator L E V I N . Thank you.
Ms. LONGMUIR. Shortly after Secretary Jack Kemp assumed
office, it became clear that he had inherited a legacy of abuse and
mismanagement, fraud and favoritism in certain HUD programs.
Secretary Kemp immediately commissioned a thorough review of
HUD's legislative authorities to determine the legislative and regulatory steps necessary to end these abuses and prevent their recurrence.
Some of the most egregious abuses involved the use of improper
influence in the way. the department awards and administers financial assistance. There was e v i n c e that housing grants had
been awarded to developers who pa:d--huge fees to politically-con1
The prepared statement of Ms. Lor.^muir appt-ar? jn pai;e 4^:
�136
nected consultants and lobbyists who did little more than open
doors and place phone calls. In addition, politically-connected consultants were reported to have received as much as $1,500 per unit
to arrange housing assistance awards in advance of public notice.
The Secretary's review resulted in the transmission of the administration's HUD Reform Act of 1989 to Congress. The bill proposed a wide range of reforms that Secretary Kemp considered
vital to addressing each major area of waste, fraud and abuse of
HUD programs and restoring integrity and public confidence in the
department.
One of the principal ethics-related provisions of HUD reform
dealt with lobbying reform. This provision, ultimately enacted as
section 112 of the Reform Act, was published as a proposed rule on
June 1, 1990. The rule was the subject of considerable public interest, attracting comments on 108 separate issues. Thefinalrule was
published on May 17, 1991.
Section 112 reflects Secretary Kemp's belief that the best approach to protecting the award and administration of HUD's financial assistance from improper influence peddling is to apply liberal
doses of sunshine—certainly something that has been a theme in
the discussions so far this morning. The rule cast its sunshine on
the two actors typically involved in the lobbying efforts—those who
pay for lobbying services and those who are paid to provide the
services.
Specifically, those who make expenditures to influence a HUD
employee in the award of financial assistance or the taking of a
management action by the Department must keep records on the
expenditures and report them to HUD on an annual basis. Those
who are retained to influence a HUD employee in the award of financial assistance or the taking of a management action must register with HUD within 14 days of being retained and report annually to HUD on their lobbying activities.
The statute contained several exceptions to its reporting and registration requirements. Exemption from all the rule's requirements
is provided for communications that involve compliance with
HUD's requirements and procedures. Exemption from the rule's reporting but not registration requirements are provided for the payment of reasonable compensation to a regularly employed officer or
employee of the assistance recipient only, and also where the sum
of all amounts expended or received in the calendar year for lobbying HUD is less than $10,000.
Secretary Kemp realized that the overall effectiveness of section
112 depends on imposing burdens on the public only where strictly
necessary to carry out the provision's purposes. Accordingly, the
Secretary agreed to carve out three regulatory exceptions in response to concerns raised by the public during the notice and comment period of the regulation's formulation.
The first provided an exemption from all the rule's requirements
for State and local elected officials and their immediate staff as
well as those serving in policy-level appointed positions.
The second excepted all communications regarding persons engaged in litigation with the Department.
The third area provided a special provision where an entity, such
as a law firm or a consulting firm, is retained to provide lobbying
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services. In this situation, the final rule requires only the entity
itself to file a registration with HUD. The registration must indicate the officers or employees who will actually contact the Department. This replaced far more onerous language in the proposed
rule which required the entity as well as its officers and employees
to register and the entity to report its compensation to those officers and employees.
In each of these cases, the Secretary determined that section 112
could be effectively enforced without imposing the added compliance on the individuals involved.
The rule has not been in effect long enough to determine with
any certainty how well it is working. It took effect on June 17th,
1991, about 3 months ago, but it contained a grace period for the
imposition of sanctions until August 24th, 1991. Thus, from a practical standpoint, the rule has been in effect a little bit more than a
month.
In addition, reports required by the rule are filed on an annual
basis, at the beginning of the calendar year. Thus, we are waiting
until the period from January 1 to January 10th to receive the first
round of reports for this 3-month period.
The early signs, however, are encouraging. It is clear that the
word on section 112 has gotten out. The proposed rule drew comments from 17 law firms, 11 national associations, 6 consulting
firms, and 5 State and municipal associations. These commenters
represent the core of those persons subject to the rule.
Most significant, however, is the fact that as of September 16th,
1991, we have received 380 registrations. HUD's Office of Ethics reviews each registration submitted and accepts only those that on
their face are appropriate for filing. Since the rule has been in
effect for only one month, this record is most encouraging. It provides further strong evidence that the public is not only aware of
section 112 but also is taking it seriously.
A high level of registration is particularly important since it is
the initial step in the section 112 process. Registration puts the Department on notice that covered lobbying is taking place. Registrations also contain the name of the person paying for the lobbying.
It should be noted that officers and employees who qualify for the
regularly-employed exception from reporting must nonetheless register. Registration information permits the Department to do the
cross-checking between the payor and payee that is at the heart of
the Department's enforcement of the new law.
The Secretary has made awareness of section 112 a high priority
both within and outside the Department. Since section 112 depends
heavily on voluntary compliance by the public, public education
and information is critical to the new law's success.
An ethics letter has been sent to all top field and headquarters
staff on the new provision. This letter describes section 112's requirements and makes clear the responsibilities of all HUD employees. Conference calls were held to personally brief regional administrators and regional counsel on the new law's provisions.
Mr. Chairman, section 112 training is in the current ethics training module and will be in the next cycle that is conducted in the
course of this coming year. In addition, information on section 112
has been issued to all HUD employees.
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For outreach purposes, the Department is currently developing a
list of organizations with frequent contacts with the Department.
Examples include organizations representing realtors, homebuilders, and mortgage bankers. Each organization will then subsequently be sent material explaining the rule, inviting questions on
it, and specifying contacts should they have questions. In addition,
information on section 112 has been added to the documents reaching the public, such as the HUD notice of funding availability.
Therefore, although the jury must necessarily remain out on the
overall effectiveness of section 112, the preliminary evidence suggest? that the public is both aware of and complying with its requirements. It is certainly Secretary Kemp's firm resolve to do
whatever is necessary to make section 112 a model public disclosure statute.
The Byrd Amendment signed by the President about 2 months
before the HUD Reform Act is lobbying legislation that also had its
origins in the past problems of the Department. Public response to
the Byrd Amendment has gone slowly. From the statute's December 23, 1989 effective date to September 30th, 1990, the Department
received two properly-filed disclosures. Thus far this reporting
year, four properly-filed disclosures have been subsequently submitted.
The Secretary is concerned about the Byrd Amendment's slow
showing to date. We are especially surprised at the showing since
we would have expected a higher correlation between Byrd disclosures and the registrations we have received so far under section
112. This showing has come despite the fact that we have gone the
extra mile to make Byrd work at HUD. Less than 2 months after
the issuance of the Byrd interim final rule, we sent senior HUD
management detailed implementing instructions on the new law.
Senior management was in turn instructed to issue program-specific implementing instructions in each program area. In January
1991, the Office of Ethics trained all 10 regional counsel, field contracting officers, and headquarters program offices on Byrd so that
they could bring the full benefit of their training to members of
their organizations.
The Office of Ethics has conducted Byrd compliance reviews in 9
of the 10 HUD regions over the last year, and has made a number
of recommendations to improve Byrd compliance. The office has
also issued information on the Byrd Amendment to all HUD employees. We will continue to review performance under Byrd and to
train appropriate HUD field personnel. We will continue to take a
proactive approach to the implementation of this congressional
mandate.
Mr. Chairman, thank you for this opportunity to testify. The Department looks forward to working with you to ensure that the
provisions of section 112 and the Byrd Amendment are implemented to the fullest extent possible.
Senator LEVIN. Thank you, Ms. Longmuir.
Mr. Bryan?
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1
TESTIMONY OF PETE A. BRYAN, DIRECTOR, CONTRACT POLICY
AND ADMINISTRATION, OFFICE OF THE SECRETARY OF DEFENSE
Mr. BRYAN. Thank you, Mr. Chairman.
I appreciate the opportunity to appear before you today on the
disclosure of lobbying for contracts, grants and loans under the socalled Byrd Amendment.
Prior to the bill being enacted, we pointed out to several Congressmen and staffers several concerns that needed to be addressed. One of these concerns was the need for such a law, given
existing laws and regulations.
Subsequent to passage of the law, the Byrd Amendment was implemented in FAR Subpart 3.8. The FAR provisions conform completely with the Government-wide OMB guidance.
The Inspector General performed an audit to determine if there
was compliance by DOD contractors with respect to the requirements of the Byrd Amendment, and no evidence was fouiid that
contractors were not in compliance with the Byrd Amendment.
Concerning the effectiveness of the law, since there have been
very few disclosures, a case could be made that the law is effective.
On the other hand, we are not sure of the extent of lobbying that is
covered by the Byrd Amendment that was taking place prior to the
act.
We estimate in DOD that there are approximately 35,000 contract actions a year that would be covered by the Byrd Amendment.
Mr. Chairman, this concludes my statement, and I will be happy
to answer any questions that you may have.
Senator LEVIN. Thank you, Mr. Bryan.
We have heard testimony this morning from the GAO and the
DOD Inspector General about what is being disclosed under the
Byrd Amendment, and according to the GAO more than 19,000
Federal contracts in excess of $100,000 were awarded in thefirst16
months that the statute was in effect, and yet there are only 24
contractors, if my memory is correct, that disclosed using a lobbyist
in connection with such awards.
Dr. Burman, first asking you, would you agree that the existing
statutes have not resulted in a great deal of disclorure of lobbying
activity?
Dr. BURMAN. I think that is a factual question I can give a factual answer to. I would agree.
Senator LEVIN. And why do you think we haven't gotten more
disclosure?
Dr. BURMAN. I think there are two questions that you are raising. One is a question of the effectiveness of all of these lobbying
laws and whether they do what they are purported to do. Another
is the question of whether the Byrd Amendment itself fulfills its
purpose. I think those are two different issues.
I think as you went through, before, the list of what things were
covered, there are a lot of things that were not covered, are not
covered, were not meant to be covered by Byrd, and there was also
' The prepared statement of Mr. Bryan appears on pa«e 450.
�140
a recognition when this was being put together that there are certain kinds of selling activities, professional or technical activities,
where expertise is involved that is legitimate that also shouldn't be
covered. So when you eliminate afirm'sown employees from coverage, and then you also allow certain other kinds of activities, then
you do narrow the universe considerably under the law.
If I might just add, we worked very closely with the Congress
when this law was being put into effect, and I think that our institution probably as much as any in Government would like to see
this law work and be effective. That is clearly our point of view.
There is no effort whatsoever in any of the guidance that we put
out to try to undercut the purposes of the law. And we asked the
Defense IG to do this review for the same reasons that you are
raising questions—why aren't there more disclosures.
Senator LEVIN. Is it pretty clear to you as it is to me, that the
common sense intention of the law, putting aside the specific interpretations and language construction and all the rest, but that the
common sense purpose of the law would be to have more than 24
disclosures out of 19,000 Federal contracts; wouldn't you agree with
that?
Dr. BURMAN. I would agree. I think the law was meant to make
things unallowable as well, to make sure that we didn't spend
money on things, and that affected the firms' own employees, too.
But it also did have clearly a disclosure or a sunshine requirement
that went along with it.
Senator LEVIN. And without trying to figure out whether it intended to get to half of it or a third of it or two-thirds of those Federal contracts in excess of $100,000, that at a minimum it would
have made sense only—let me start over again—that clearly the
law was intended tc cover more than what has been disclosed.
Dr. BURMAN. The law was meant to identify activities that
shouldn't be paid for with Government funds, and it was also to
say when you are doing these activities, paying for them by yourself, we'd like to know what you are doing because the public interest demands that; the integrity of the process demands that we
have that information available to us. So I think that is clearly the
case.
Senator LEVIN. I want you to speculate a little bit here. Think
about Senator Byrd now—if he were told when he was working
hard on this law that there would only be 24 disclosures out of
19,000 contracts, do you think he would have written it differently?
Dr. BURMAN. He may have. On the other hand, if the evidence is,
as people are saying, that for the kinds of activities they are talking about, trying to get a contract and using some improper methods to get that contract, if that activity is not bein^ done, then we
are achieving something through the law. And that s the issue that
I think is difficult to get a final conclusion on at this stage. If
people are in fact deciding they are not going to use outside folks,
the influence peddlers, that sort of thing, the people who can make
a phone call and win hundreds of thousands of dollars from it, if
they are not going to do that, then the law is achieving something.
Senator LEVIN. Do you have any basis to conclude that in fact
there has been that kind of reduction in lobbying activity by consultants?
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Dr. BURMAN. Well, you see, I'm not sure that there is a reduction
in lobbying activity across the board. I think the question is whether they are using consultants for precisely this purpose. And I have
heard from many firms
Senator LEVIN. Putting aside the purpose just for a minute, let's
just talk about the use of consultants for any purpose. You in your
statement said that the Byrd Amendment is having something approaching its intended effect, which is that the use of consultants
to influence agency contracting and grant-making actions has been
diminished, and you base that conclusion on a number of unsubstantiated reports that lobbying activity which previously was
given to consultants may have now been brought in-house.
On the other hand, contrasting with the unsubstantiated reports
that you base that conclusion on, we hear testimony this morning
from the DOD IG and from the GAO that is very different. The
DOD IG has identified more than 100 defense contractor consultants who have contacted top legislative and executive branch officials about DOD to ensure continued funding for weapon systems.
So we have that analysis, contrasted to your unsubstantiated reports.
Dr. BURMAN. But that analysis deals with the question of program lobbying versus the question of. lobbying on a contract. Moreover.
Senator L E V I N . But I am only talking about the use of outside
consultants versus in-house people. On that point, do you have any
analysis to
Dr. BURMAN. NO. But I also did review the prior testimony of the
General Accounting Office in one of your previous hearings where
they did this review of Washington representatives, and if you look
at the kinds of activities that these lobbyists were performing, the
numbers that they spoke to—there were about 16 reports, as I
recall—there were very few of them that reported lobbying on contracts or grants. They were doing legislative lobbying, program lobbying, trying to influence appropriation bills and that sort of thing.
So I think there are some questions, even from the data supplied
from the GAO, on exactly what these lobbyists are doing.
Senator L E V I N . I think in your comment, you used the word "improper" lobbying, and I don't think that you really intended that.
Dr. BURMAN. No. I think we are all talking about influence peddling. The law for Byrd basically talks about influencing the award
of a contract or grant.
Senator L E V I N . But "improper", when you use the word you suggest that it is illegal in some way. Byrd doesn't try
Dr. BURMAN. Byrd doesn't do that.
Senator L E V I N . But we are trying to get disclosure of what happens here.
Dr. BURMAN. Right.
Senator L E V I N . So I was a little bit bothered here by the use of
your
Dr. BURMAN. Byrd does say you can't use Government funds to
perform that function, and that certainly would be improper if
they were using Government funds to do it. That's why we have
separate categories to identify 'ihese costs.
�142
Senator LEVIN. Of course, but the disclosure under Byrd is supposed to be what is proper lobbying as well.
Dr. BURMAN. PredJsely, yes. I agree.
Senator LEVIN. YOU indicate in your prepared testimony that lobbying on public policy issues such as appropriations at the account
level and program continuances are not covered by the Byrd
Amendment because they are not made in connection with a Federal contract award.
Do you think that as a policy matter that distinction makes good
sense?
Dr. BURMAN. Well, as I mentioned to you, one of the things we
are considering in our review of this is where there is a clear nexus
between a direct economic interest for the firm or the person or
the client lobbying for that firm and some legislative outcome, that
perhaps that sort of activity should be covered, and we are looking
clearly at this point to see if that might in fact make the law more
effective in its application.
Senator LEVIN. Will you let us know what the outcome of that
review is?
Dr. BURMAN. We certainly will.
Senator LEVIN. There is a lot of difference now, Ms. Longmuir—
asking you a few questions—between the Byrd Amendment and
the HUD law, section 112, was it
Ms. LONGMUIR. Yes.
Senator LEVIN. But both statutes cover the same basic activities.
Ms. LONGMUIR. Well, not precisely, Mr. Chairman.
Senator LEVIN. Not exact y—there is some overlap, is there not?
Ms. LONGMUIR. There is some, but the thrust of section 112 is
really to coverfinancialassistance and awards of grants and, for
instance, subsidies such as the mod rehab program, and influencing
management decisions.
I think the major difference with Byrd is that Byrd also covers
procurement contracts, which section 112 does not.
Senator LEVIN. Well, getting to the question I was going to ask
you, the HUD law has resulted in a great deal more disclosure
than the Byrd Amendment has.
Ms. LONGMUIR. Yes, it certainly has.
Senator LEVIN. Can you tell us why it is you think that that is
true?
Ms. LONGMUIR. Well, we are a little surprised at the vast difference in the number of filings that we have had for Byrd—four to
date this year—and the 380-piUs registrations that we have received to date on section 112.
While I admit that we are perplexed at the distinction, we do
recognize that there is a difference between an individual's registration, which is what that 380-plus number represents, and the
number of ultimate reports that we may receive between January
1st and the 10th of next year.
There is a dollar threshold limit which may not be reached by
some of those registrants, so that we anticipate that there may be
fewer reports than registrants.
In addition, we have planned and are instituting a cross-checking
system come the beginning of the year to make a comparison by
computer of what those registrations represent, what the reports
�143
represent, and how that compares to any Byrd filings. But we certainly do share your concern and surprise at the difference in the
numbers of reports versus registrations.
Senator LEVIN. Could part of the reason be that the HUD law
requires registration by lobbyists, many of whom are in Washington, whereas the Byrd Amendment focuses more on the clients,
many of whom are obviously outside of the beltway?
Ms. LONGMUIR. There has been a great sensitization of the industry, both those individuals that would be subject to Byrd and those
entities that are covered by section 112.
We have done a tremendous amount of training both of HUD
employees and senior management persons on both laws, so I am
not quite certain that that would hold up.
Senator LEVIN. Would you analyze this further as a little more
time passes and let this Committee know why it is, in your opinion,
that you are getting much greater disclosure under the HUD law
than under the Byrd Amendment?
Ms. LONGMUIR. Absolutely, Mr. Chairman; it would be our pleasure.
Senator LEVIN. Dr. Burman. back you for a minute. The Byrd
Amendment contains an exemption for "routine agency and legislative liaison activities"—those are the words of the amendment—
"which are conducted by regular employees of a contractor". The
OMB has interpreted the exemption to exempt not only lobbying
by regular employees, but also lobbying by independent sales representatives and other consultants and to exempt virtually all lobbying that takes place prior to the issuance of a solicitation.
Can you give us the statutory basis for that interpretation?
Dr. BURMAN. We looked at the issue in connection with an award
and tried to determine whether an independent sales or marketing
person, an independent sales representative, would fall within that
purview, someone who is showing his products to people in various
military installations, for example, defining the qualities, qualifications of thefirmsthat the individual is working for, and fe t that it
was clearly not the intent of Congress to cover these types of
people. That is a legitimate activity, has been a longstanding activity, and we narrowly defined that
Senator LEVIN. Let me just stop you right there when you say it
is a "kgitimate" activity. A lot of the activities we're talking about
are legitimate. That's not a reason for nondisclosure.
Dr. BURMAN. This would have made the funding for these efforts
unallowable. They would not be able tp be paid by a firm to do
normal selling activities. We did not believe that that was the
intent of the Congress.
We were asked, as a matter of fact, by the Congress specifically
to address that issue because of the concerns that were being
raised, that we were too broadly defining the coverage of the law.
Senator LEVIN. I just want to get to the use of that term "legitimate", though, because again that creeps in as though we are covering here illegitimate activities. For instance, the use of a consultant is not an illegitimate activity.
Dr. BURMAN. Certainly, but it is an unallowable cost, and that is
the issue. And if someone is paying these people out of appropri-
�144
ated funds, then they would be breaking the law. In that sense it is
improper.
Senator LEVIN. But nonappropriated funds.
Dr. BURMAN. Absolutely allowable.
Senator LEVIN. And I don't think you intend tp imply that it is
not a legitimate activity if paid for by nonappropriated funds.
Dr. BURMAN. NO; I would agree with that.
Senator LEVIN. But to get to my question, then, you are relying
in those exemptions on statutory language or on legislative history,
or both?
Dr. BURMAN. A combination.
Senator LEVIN. And the statutory language, again, is
Dr. BURMAN. Deals with in connection with an award and whether that activity is in connection with an award.
Senator LEVIN. And the legislative history
Dr. BURMAN. Is all of the points about why we don't want folks
out there making phone calls and getting hundreds of thousands of
dollars for an effort that we would consider to be not something
that ought to be funded by the Government and ought to be disclosed.
Senator, LEVIN. But in terms of the independent sales representative exemption, for instance, is there legislative history that you
are pointing to for exempting them other than the actual words in
the egislation—"in connection with an award"?
Dr. BURMAN. There is not any additional legislative history other
than the points that I made and our discussions with the Congress
on intent when the law was being passed.
Senator LEVIN. HOW does the point about not wanting appropriated funds to be used to hire an outside consultant help you interpret the law to exempt independent sales representatives?
Dr. BURMAN. I was looking at the context of who this law was
meant to be going after. That was the issue.
Senator LEVIN. And by implication you are saying that there is
no explicit coverage of that in the legislative history, and the
words, "in connection with an award", in OMB's opinion, do not
cover the lobbying by independent sales representatives. Is that a
fair summary?
Dr. BURMAN. Yes. There is no specific language in the legislative
history that deals with independent sales representatives, that's
correct.
Senator LEVIN. Mr. Bryan, in your prepared statement you indicate that the Department of Defense had a number of concerns
about the Byrd Amendment whon it was enacted, including the
need for such a law—"given existing laws and regulations"—those
are the words of your statement. Were there any existing laws and
regulations in existence at the time the Byrd Amendment was
passed which required the public disclosure of lobbying by defense
contractors?
Mr. BRYAN. Well, Senator, it was our understanding that one of
the primary purposes of the Byrd Amendment was to make unallowable legislative lobbying costs, and we just pointed out that
there was already a law, 10 USC 2324, that made those types of
costs unallowable. We just wanted people to be aware that that law
was on the books.
�145
Senator LEVIN. In terms of public disclosure, though, which is required by the Byrd Amendment, was there any statute or regulation in existence which required the public disclosure of lobbying?
Mr. BRYAN. I am not aware of any.
Senator LEVIN. And is the Department of Defense opposed to
public disclosure requirements for lobbying by defense contractors?
Mr. BRYAN. No, sir.
Senator LEVIN. Does the administration have a view on that, Mr.
Burman?
Dr. BURMAN. We absolutely support the notion of having that
disclosure. As I said, we were strongly supportive of the law when
it was passed.
Senator LEVIN. Under the Byrd Amendment, a contractor may
have to dirclose its activities under several different provisions if it
hires somebody to help it get a defense contract, but it doesn't have
to disclose anything at all if it engages in lobbying activities to
keep the contract from being terminated or to avoid suspension
from Government contracting. A private company may have to disclose its activities under two statutes if it hires a consultant to help
it obtain a HUD grant, but it doesn't have to disclose anything if it
lobbies the executive branch on environmental regulations or tax
policy.
First let me ask you, Dr. Burman, do you think it is appropriate
to single out a few specific types of action for disclosure and to
ignore other actions which could have equal or greater financial
consequences?
Dr. BURMAN. I guess there would have to be a judgment as to
what those activities are, and are they in fact equal in effect. I presume that you went up with these kinds of proposals because of
abuses that people see and want to take care of. That's generally
how the system seems to work in all of these areas.
Senator LEVIN. But assuming that other actions have equal or
greater financial consequences, would you then think they should
be treated the same way?
Dr. BURMAN. It would seem to me that that would be a logical
conclusion.
Senator LEVIN. And getting to you, Ms. Longmuir, under the
HUD or the Byrd Amendment, my understanding is that there is
no requirement of disclosure of the lobbying activity to keep a contract from being terminated or to avoid suspension from Government contracting. Is that accurate?
Ms. LONGMUIR. Well, with respect to section 112, Mr. Chairman,
if that involvement of the individual lobbyist would alter a management decision then that would be captured by section 112, and
the lobbyist would be covered by section 112 and have to register
and report.
Senator LEVIN. Well, the two specific activities that I've given
you, do they fall under altering management decision—the two specific activities are—let me just try one of them, for instance—.
avoiding suspension from Government contracting.
Ms. LONGMUIR. I would say yes, that would be covered.
Senator LEVIN. And how about activity to keep a contract from
being terminated?
�146
Ms. LONGMUIR. Again, yes, that would, because that would be an
attempt to influence a management decision.
Senator LEVIN. And are those activities covered by the Byrd
Amendment?
Ms. LONGMUIR. TO my knowledge, no.
. Senator LEVIN. Does that make a lot of sense in terms of a general approach, Dr. Burman, that we have one agency that covers it
and another agency that doesn't?
Dr. BURMAN. The Byrd Amendment does have provisions that
say for modifications, if you are going to try to get more money for
a contract and what-have-you, but again it doesn't deal with general legislative or executive branch
Senator LEVIN. But are those two specific instances covered by
the Byrd Amendment?
Dr. BURMAN. I don't think they would be covered. Maybe I can
just check—no.
. .
Senator LEVIN. Does it make sense, just in terms of an overall
way to operate these disclosure laws, that they be covered for HUD
but no other agency?
Dr. BURMAN. NO; I think that in general we would prefer to have
laws, i f there is an abuse, to apply across-the-board i f it is Government-wide kind of abuse.
Senator LEVIN. In other words, if we are going to have a law that
it apply across-the-board.
Dr. BURMAN. That's right.
Senator LEVIN. Are you willing to work with us to try to develop
a disclosure approach which would simplify existing law and make
it coherent, at the same time treating all types of lobbyists on an
equal basis? Is that a goal you can work with us to achieve?
Dr. BURMAN. We would certainly be happy to work with the
Committee on looking at all of these laws and seeing i f there are
some ways to improve them. Clearly, we would like to see the Byrd
Amendment achieve its purposes as well.
Senator LEVIN. We have some overlap, and you have indicated,
Ms. Longmuir, that there are some differences between the HUD
language and the Byrd language, but there is also some overlap.
They both cover lobbying for ontracts, grants and loans, so that
anybody who is seeking Fedc al assistance from HUD or Farmers
Home Administration is required to disclose lobbying activities on
two separate forms, under two separate statutes, each with its own
reporting dates, disclosure requirements and exceptions.
I am wondering whether it makes sense to have two separate
and overlapping disclosure systems.
Ms. LONGMUIR. Mr. Chairman, I certainly think to the degree
there is duplication and overlap that it would be helpful to have
the laws harmonized. I would like to point out, however, that the
information solicited under Byrd and under section 112 are so similar that the individual having to file under either of those two statutes would not have to go out and gather completely separate or
novel information to satisfy both of those laws.
Senator LEVIN. But still, two separate forms, each with its own
reporting dates, disclosure requirements and exceptions, even
though the material that is needed to fill out the forms in many
�147
cases is the same material—in some cases it is not—and you've got
two forms with different dates and different exceptions.
Ms. LONGMUIR. That's correct, Senator.
Senator LEVIN. And Dr. Burman, would you agree that we ought
to try to eliminate that kind of duplication and lack of harmony
and confusion? It is a complicated area, and we are going to need a
lot of cooperation from the executive branch i f we are going to
come up with something which makes sense to the public and
makes sense to the community in which we live. We are not trying
to stop lobbying. It is a very important function and is constitutionally protected. We are trying to protect the public right to know as
to who is being hired to lobby who for what issue, without creating
a mass of duplicative or confusing or ambiguous regulations and
paperwork which doesn't serve anybody. And we are going to
really need the cooperation of the executive branch if we are going
to achieve this.
Are you on that wavelength with us, is what it amounts to.
Dr. BURMAN. Yes, I am certainly on that wavelength. I thought
when we went through the procurement integrity business and the
revolving door and all of those ethics statutes, in many respects we
have similar kinds of concerns, it seems to me, and I think we have
been trying to work together to see if we can rationalize that process and come up with something that is a little more understandable for folks.
We would be, obviously, happy to work with the Congress on
these issues.
Senator LEVIN. Ms. Longmuir, the HUD Act requires a detailed
accounting of all receipts and expenditures of a lobbyist, including
information as to whom the money was paid and for what purposes. And apparently those requirements were drawn from the
Congressional Lobbying Regulation Act which contains similar provisions.
We have learned in our previous hearings that lobbyists who
comply fully with the requirements of the lobbying act disclose specific expenditures for items such as overhead, cab fares, xeroxing
and messenger fees; they try to pro rate money going to messenger
companies and landlords.
Does that same language in the HUD Reform Act require similar
types of disclosure—cab fares, xeroxing, messenger fees? Does your
language similar to the legislative branch law, the Lobbying Regulation Act, end up requiring the disclosure of that kind of minutiae?
Ms. LONGMUIR. I am not certain that it does, Mr. Chairman. I
can certainly look into that and supplement the record with that
precise information.
I think our goal in attempting to get at related expenditures is to
capture whatever funds are expended so that we can aggregate
those figures to reach that $10,000 threshold so that then an
annual report is required.
Senator LEVIN. All right. Would you take a look at some of those
forms and tell us whether or not we have seen that result in those
HUD disclosures?
Ms. LONGMUIR. Yes.
�148
Senator LEVIN. Dr. Burman, I think you are familiar with some
of that testimony even though you weren't here for it. Does that
requirement not seem needlessly burdensome to you?
Dr. BURMAN. It did seem like there were a lot of provisions that
probably were put into effect a long time ago and not really looked
at very carefully since.
Senator LEVIN. And do you see any common sense reason to require xeroxing costs to be disclosed, that kind of thing?
Dr. BURMAN. Given the cost of xeroxing these days perhaps there
might be—I don't know—but probably not. That may be a level of
detail a little beyond what is necessary.
Senator LEVIN. Messenger expenditures. Does that make sense to
you, to require disclosure?
Dr. BURMAN. It strikes me as an amount of detail that is beyond
what we would normally ask for from contractors.
Senator LEVIN. One of the things we are trying to do here is to
just basically start from scratch to come up with some laws which
achieve the purpose which I have just outlined, which is to disclose
to the public what the public really wants to know, which is who is
paid how much to lobby who for what issue, but without imposing
these absolutely useless, burdensome requirements on people, to
pro rate their rent, so they tell us—I mean, we had disclosures
here of $1.93 for rent that can be allocated to this contact with this
congressional office. That's just driving people n. s for no reason;
it doesn't tell us anything.
So we want to do two things. We want to come up with a system
which makes sense and achieves its purpose, and we want to avoid
a system which is needlessly burdensome, confusing, redundant,
duplicative, and all the other negatives that have come out during
these hearings.
So we have two goals, and it is not just the administration whose
help we are going to need on this; frankly, we are going to need the
help of the lobbying community on this because they are not
served either by the current system.
Let me just ask a few more questions and then we'll wind up.
The Byrd Amendment requires the disclosure of—and I'm quoting
here—"the activity for which the lobbyist was paid". The disclosure form, though, takes this a step further, and it requires a specific and detailed description of the services that the lobbyist has
performed, including the identity of all Federal officials, employees
contacted or the officers, employees or members of Congress that
were contacted.
Could each of you tell us, is that listing of all contacts with Federal officials practical—that's number one. And number two, is it
fair to single out the recipients of contracts, grants or loans, or
people seeking those, for that kind of disclosure?
Two questions here: Is it practical to require all contacts to be
listed, and number two, assuming that it is practical, is it fair that
we just ask the people seeking contracts, grants and loans :o disclose that.
Let's go down the line and start with you, Dr. Burman.
Dr. BURMAN. I do think it is one of the intents of the law to try
to define who was being influenced and for what purpose, so it
seems to me that it would be difficult to come up with some ap-
�149
proach that allows people not to be included. I don't quite know
how you would do that. So I would say whether it is practical or
not, that was one of the issues we ran into with these independent
sales representatives, who talked to 18 different people during the
day, 5 minutes each, saying, "Here is our compressor" or something that they were selling'for someone. When you are dealing
with that kind of an issue, I think that becomes a real prob'em for
the selling process.
But I do think it is appropriate to name them, and I do think it
is reasonable, when you are talking about significant sums of
money, for individuals to know who they are asking to help them
get those moneys from the Federal Government.
So I would be supportive on both counts.
Senator LEVIN. Ms. Longmuir.
Ms. LONGMUIR. With respect to HUD's activities, while perhaps
burdensome, I would agree with Dr. Burman that who is being contacted to influence an award of financial assistance or of a contract
or loan would be important to know. The recent history of HUD
would certainly bear that out.
V,'ith respect to your second point—targeting the law to those
contracts, grants or loans, the business of HUD is such that those
activities, the award of Federal assistance, would be covered by
that definition. So from our perspective that would be an appropriate universe.
Senator LEVIN. Mr. Bryan.
Mr. BRYAN. I would agree that we should have them report all
contracts. If we left the door open co only report only a portion of
them, they may leave out just the ones that we would like to have
seen reported.
On the other issue, on the contracts, loans or grants, are you
talking about whether it i-.hould be just limited to that or to the
broader issue of policy, influencing
Senator LEVIN. Yes.
Mr. BRYAN. —and you mentioned the case a while ago of termination discussions.
Senator LEVIN. Should it be limited to contracts, loans and
grants.
Mr. BRYAN. Well, I don't think we are prepared to give you a
firm answer on that this morning, but I think in some of the areas
such as terminations, for example, there have been one or two terminations that have received a lot of attention. But we have probably hundreds or thousands of contracts terminated each year in
the Department of Defense. Before we would terminate a contract,
we would write a letter to the contractor and notify him that he
was not performing in accordance with the contract and ask him to
come back and tell us what he intended to do to get back on schedule or improve performance.
Now, if that's considered lobbying, then I'm not sure that that
type, on the day-to-day contracts, would be beneficial to anybody.
Concerning influencing regulations, we are required by law to
publish any proposed regulations for comment. Each time we publish a proposed change to the FAR, we get some comments from
the public. On some regulations, we get lets of comments. Again.
�150
I'm not sure that that type of influencing would serve any purpose
to be reported.
Senator LEVIN. Before I kind of sum up where we are, let me just
quickly say that relative to the executive branch disclosure requirements in the Byrd Amendment—and I particularly address this to
you, Dr. Burman—the implementation of these requirements is a
very difficult task, and it has not been made easier by the lack of a
Committee report, for instance. You haven't had that guidance.
You have had to kind of divine legislative intent based on very
little material. So I don't want anything I've said to suggest that
your task in interpreting this and giving guidance on it or passing
regulations has been an easy one. It has not. Congressional offices
have urged you to do various things, and you haven't had a lot of
congressional guidance at the time it was passed to help you figure
out what to do. So we are all in a situation where we have to
decide whether we want to revamp this whole system or tinker
with it. And I am not just here talking about executive branch, but
overall, in my summary comments because we are now at the end
of the third hearing on our lobbying laws. This is the last of the
hearings. We are going to try to pull it all together and come up
with some proposed legislation.
Let me just briefly outline my conclusions foi .you. Basically, the
laws don't do what they are advertised to do, and that is to disclose
what lobbying is going on. We do not know—basically, the public
does not know—from the current actual disclosures the actual
practices, who is being paid to lobby for whom on what issues.
There are ;ust too many gaps, too many holes. As I said at one
hearing, there are more holes than there is chejs-s in these disclosure laws.
So the public interest in that is a legitimate interest. Lobbying
itself is legitimate, and so is the public right to know at least that
particular aspect of it—how much is being paid to whom to lobby
for what.
Sofirst,the bulk of lobbying is not being disclosed. That's conclusion number one. Today we have seen, with just six defense contractors, the tremendous discrepancy between what is being reported to the Department of Defense for auditing purposes and what is
being reported to the public relative to lobbying Congress.
We have seen today that the Byrd Amendment, that lobbying activity was disclosed on only 24 of over 19,000 contracts Government-wide—and that is just contracts; there are probably similar
figures for grants and loans.
We have seen with the Foreign Agents Registration Act—this
was an earlier hearing—that virtually no disclosure of lobbying is
taking place in matters of great" importance to foreign companies
and on which lobbying was extensive.
So first, there isn't much disclosure compared to the amount of
lobbying that is occurring. Second, what is being disclosed is confusing and misleading. There are just major discrepancies in the
amounts of money that are being disclosed under these laws. There
are disclosure requirements that few people understand and for
which there are many different interpretations, such as the terms,
contributions, expenditures and receipts, in the Lobbying Registration Act, also discussed at an earlier hearing.
�151
Third, there is duplication and excessive paperwork. We require
disclosure in some cases of how much a lobbyist spent on a taxi or
on a fax or on a cup of coffee. We have two and sometimes three
different lobbying disclosure laws with different requirements covering the exact same activity, requiring different forms and different types of information.
Fourth, there is a lack of clarity. The Justice Department has a
very different interpretation of the exemption for attorney fees
under the Foreign Agents Registration Act than attorneys have
under that act.
Another example is that the House clerk advises lobbyists to register if they are lobbying staff, yet a Supreme Court decision suggests that disclosure is required only if a lobbyist is contacting
members.
Andfinally—theGAO earlier today testified to this, but so have
others—there is weak enforcement. We learned in one hearing that
there has only been one case that has been pursued under the Foreign Agents Registration Act in the last 10 years, and we don't
know of any sanctions that have been brought under the Lobbying
Regulation Act since it was passed in 1946.
The Justice Department's resources are spent primarily on examining the records of those who do file disclosures to be sure that
they are correct, but little or no resources are being spent to determine who is not registering and should be registering.
So we will now be working on legislation to revamp the whole
system. That's our goal. It is a very ambitious one. We are not
going to try to tinker with existing laws. They are untinkerable.
But we are going to try to accomplish a number of goals in our
revamp, and we need your help, folks, or else it's not going to
happen, and the status quo is going to continue, and the status quo
serves nobody.
The revamp of the whole system is going to be aimed at establishing meaningful requirements, covering the appropriate people,
leading to meaningful enforcement, eliminating duplication and
unnecessary burdens. If we can achieve all that in this Congress, I
think we will all be able to say that we have done something which
has both assisted the public in their legitimate and understandable
desire to know who is lobbying whom for what causes or what entities are being paid for that purpose, how much money, but at the
same time avoiding some of the onerous minutiae which has been
imposed on those lobbyists who have chosen to comply.
We want to be fair to the lobbying community as well as serving
the public's right to know here. The lobbying community has a
right to be dealt with fairly so that people who are performing the
same services are dealt with in the same way and that some people
aren't keeping records of cab fares while other people are saying
we're not going to do anything like that. We have to be fair to both
the public and the people who are involved in this constitutionally
protected process, and we intend to do that, and with your help we
will succeed.
We thank this panel and all the other panels, and we'll stand adjourned.
[Whereupon, at 11:40 a.m., the Subcommittee was adjourned.]
�June 7, 1995
MEMORANDUM TO MICHAEL WALDMAN
FROM:
DAN COLLINS
RE:
FARA
Michael:
A quick and dirty "everything you wanted to know about FARA, but were afraid to
ask". The Act does not prohibit representation of foreign interests in the US.
FARA just requires certain foreign interests register with the AG. FARA was
originally intended to uncover subversive Nazi and Communist activity in the
IQSO's aBfi.iOte'to preventforeigninterests from misleading the US; government
and puBBc. I t was later expanded to monitor foreign activity aimed-at influencing
US eeoawnic policy.
1
2
3
To artswesc your questions:
What "triggers" the Act?
- Within ten days of becoming an agent of a foreign
principal, the person must file a registration statement with the US Attorney
General. (22 U S C sec. 612(a))
- The Act defines an "agent of a foreign principal":
- 1) as any person who acts as an
agent, representative, employee, or servant, or any person who acts in any other
capacity at the order, request, or direction or control of, a foreign principal, or any
person whose activities are directly or indirectly supervised, financed, controlled or
subsidized in whole or in major part by a foreign principal,
- and who directly or through any
other person — engages in, among other things, political activity within the US in
the interest of the foreign principal or acts as a foreign relations counsel, publicity
agent, political consultant, etc.. in the interests of the foreign principal or
represents the interests of the foreign principal before any agency or official of the
US government.
1
"Recently Proposed Reforms t o t h e Foreign Agents
R e g i s t r a t i o n Act", 23 C o r n e l l I n t ' l L.J. 133 (1990)
2
Id.
3
Id.
�- 2) any person who agrees, consents,
assumes or purports to act as, or who is or holds himself out to be, whether or not
pursuant to contractual relationship, an agent of a foreign principal as defined
above.
Who has to register?
- any person who becomes an agent of a foreign
principal.(22 USC sec. 612(a)) The Act defines a "person" to includes individuals,
partnerships, associations, corporations, organizations, or any other combination of
individuals.
There are lots of definitions and exemptions in the Act that affect the answers
given above (my disclaimer). The first ten pages of the Cornell Law Journal article
provides a good summary of the structure of the Act.
�ACTS OF CONGRESS
1137
Food Stamp Act of 1977—Continued
Pub.L. 103-36, Title XIII, Chapter 3, Subchapter A, §§ 13911 to 13917, Subchapter B,
§§ 13921 to 13925, Subchapter C, §§ 13931, 13932, Subchapter D, §§ 13941 to 13944,
Subchapter E, § 13951, Subchapter F, § 13961, Aug. 10, 1993, 107 Stat. 673 to 680 (7
§§ 2012, 2014, 2015, 2017, 2020 to 2023, 2025, 2026, 2028)
PubX. 103-225, Title I , §§ 101(a), 101(b)(1), (2), 102, 103, 104(b). Title II, §§ 201 to 204,
Mar. 25,1994,108 Stat. 106 to 109 (7 §§ 2012,2014, 2015, 2016, 2018,2020 note, 2026)
Pub.L. 103-296, Title I , § 108(f), Aiig. 15, 1994, 108 Stat. 1487 (7 §§ 2015, 2017, 2020, 2025)
Pub.L. 103-354, Title III, § 303(a), Oct. 13, 1994, 108 Stat. 3239 (7 § 2012)
Food Stamp Act Amendments of 1980
Pub. L. 96-249, May 26, 1980, 94 Stat. 357 (7 §§ 2011 note, 2012, 2014, 2015, 2019, 2020,
2024, 2025, 2026, 2027; 26 §§ 6103, 7213; 42 §§ 503, 504)
Pub. L. 96-611, § 11(a)(1), Dec. 28, 1980, 94 Stat. 3573 (26 § 6103)
Food Stamp Act Amendments of 1982
Pub. L. 97-253, Title I , §§ 140-193, Sept. 8, 1982, 96 Stat. 772 to 789 (7 §§ 1624 note, 2011
note, 2012, 2014 to 2018, 2020 to 2023, 2025 to 2029)
Food Stamp and Commodity Distribution Amendments of 1981
Pub. L 97-98, Title XIII, Dec. 22, 1981, 95 Stat. 1282 (7 §§ 612c note, 2011 note, 2012, 2014
to 2016, 2018 to 2020, 2023 to 2027, 2029, 2270)
Food Stamp Program improvements Act of 1994
PubX. 103-225, Mar. 25, 1994, 108 Stat. 106 (7 §§ 2011 note, 2012, 2012 note, 2014, 2015,
2015 note, 2016, 2018, 2020 note, 2026)
Food Survey Act
See Food Conservation Acts
Foot-and-Mouth Disease Act (Mexico)
Feb. 28, 1947, ch. 8, 61 Stat. 7 (21 §§ 114b, 114c)
July 27, 1966, Pub. L 89-521, 80 Stat. 330 (21 §§ 114b, 114d-l)
Foraker Act (Puerto Rico)
See Puerto Rico Civil Code
Force Act
May 31, 1870, ch. 114, 16 Stat. 140
Force Act (Suits against Revenue Officers)
Mar. 2, 1833, ch. 57, § 3, 4 Stat. 633
Fordney-McCumber Act (Tariff)
5, 257, 258, 261, 1333; 46
Sept. 21, 1922, ch. 356, 42 Stat. 858 (19
Foreign Accounts Bank Act
See Federal Reserve Act
Foreign Agents Registration Act of 1938
June 8, 1938, ch. 327, 52 Stat. 631 (22 §§ 611 to 617)
Apr. 29, 1942, ch. 263, § 1, 56 Stat. 248 (22 §§ 611, 611 note, 612 to 621)
Oct. 4, 1961, Pub. L. 87-366, 75 Stat 784 (22 §§ 611, 613)
July 4, 1966, Pub. L. 89-486, §§ 1 to 7, 80 Stat 244-248 (22 §§ 611 to 616, 618)
Aug. 12, 1970, Pub. L. 91-375, § 6(k), 84 Stat 782 (22 § 611)
Nov. 8, 1984, Pubi. 98-620, Title IV, § 402(26), 98 Stat. 3359 (22 § 618)
0
Fo^Aiiratt^s^^'^^^' -
«* ^
Dec. 17, 1947, ch. 520, 61 Stat. 934
Foreign Aid and Related Agencies Appropriation Act, 1963
Pub. L. 87-«72, Oct. 23, 1962, 76 Stat. 1163 (22 §§ 2151 note, 2370 note)
Foreign Aid and Related Agencies Appropriation Act, 1964
Pub. L. 88-258, Jan. 6, 1964, 77 Stat. 857 (2 §§ 46a, 46c; 22 §§ 2151 note, 2370 note)
Foreign Aid Appropriation Acts
Oct. 6, 1949, ch. 621, 63 Stat. 709
Sept 6, 1950, ch. 896, ch. XI, 64 Stat 757
Foreign Assistance Act of 1948
Apr. 3, 1948, ch. 169, 62 Stat. 137 (7 § 612c note; 22 § 286b)
�CHAPTER 11—FOREIGN AGENTS AND PROPAGANDA
SUBCHAPTER I—GENERALLY
Sec
601. Repealed.
SUBCHAPTER H—REGISTRATION OF FOREIGN PROPAGANDISTS
611. Definitions.
612. Registration statement,
(a) Filing; contents.
(b) Supplements; filing period.
(c) Execution of statement under oath.
(d) Filing of statement not deemed full compliance nor as preclusion from prosecution.
(e) Incorporation of previous statement by reference.
(f) Exemption by Attorney General.
613. Exemptions,
(a) Diplomatic or consular officers.
(b) Officials of foreign government.
(c) Staff members of diplomatic or consular officers.
(d) Private and nonpolitical activities; solicitation of funds.
(e) Religious, scholastic, or scientific pursuits.
(f) Defense of foreign government vital to United States defense.
_
(g) Persons qualified to practice law.
614. Filing and labeling of political propaganda.
(a) Copies to Attorney General; statement as to places, times, and
extent of transmission.
(b) Identification statement
(c) Public inspection.
(d) Library of Congress.
(e) Information furnished to agency or official of United States
Government.
(0 Appearances before Congressional committees.
615. Books and records.
616. Public examination of official records; transmittal of records and
information.
(a) Permanent copy of statement; inspection; withdrawal.
(b) Secretary of State.
(c) Executive departments and agencies; Congressional committees.
617. Liability of officers.
618. Enforcement and penalties.
(a) Violations; false statements and willful omissions.
(b) Proof of identity of foreign principal.
(c) Deportation.
(d) Nonmailable matter.
(e) Continuing offense.
C Injunctive remedy; jurisdiction of district court.
O
(g) Deficient registration statement.
(h) Contingent fee arrangement.
619. Territorial applicability of subchapter.
620. Rules and regulations.
621. Reports to Congress.
611
�FOREIGN RELATIONS
Ch. 11
WESTLAW COMPUTER ASSISTED LEGAL RESEARCH
WESTLAW supplements your legal research in many ways. WESTLAW
allows you to
• update your research with the most current information
• expand your library with additional resources
• retrieve direct history, precedential history and parallel citations with
the Insta-Cite service
For more information on using WESTLAW to supplement your research,
see the WESTLAW Electronic Research Guide, which follows the Explanation.
SUBCHAPTER I—GENERALLY
§ 601.
Repealed. June 25, 1948, c. 645, § 21, 62 Stat. 862, eft.
Sept. 1, 1948
HISTORICAL AND STATUTORY NOTES
Section, Acts June 15, 1917, c. 30, Title
VIII. § 3, 40 Stat 226; Mar. 28, 1940, c.
72, § 6, 54 Stat. 80, related to acting as a
foreign agent without notice to Secretary
of State, and is now covered by section
951 of Title 18, Crimes and Criminal
Procedure,
SUBCHAPTER II—REGISTRATION OF
FOREIGN PROPAGANDISTS
EXECUTIVE ORDERS
EXECUTIVE ORDER NO. 9176
May 29, 1942, 7 F.R. 4127
TRANSFER OF REGISTRATION FUNCTIONS FROM THE SECRETARY OF
STATE TO THE ATTORNEY GENERAL
By virtue of the authority vested in me 1244) [this subchapter], requiring the
by Title I of the First War Powers Act, registration of agents of foreign princi1941, approved December 18, 1941 (Pub- pals, are hereby transferred to and vestlic Law No. 354, 77th Congress [section ed in the Attorney General.
601 et seq. of the Appendix to Title 50,
2. All property, books and records
War and National Defense]), and as heretofore maintained by the Secretary
President of the United States, it is here- of State with respect to his administraby ordered as follows:
tion of said act of June 8, 1938, as
1. All functions, powers and duties of amended, are hereby transferred to and
the Secretary of State under the act of vested in the Attorney General.
June 8, 1938 (52 Stat. 631), as amended
3. The Attorney General shall furnish
by the act of August 7, 1939 (53 Stat. to the Secretary of State for such com-
612
�Ch. 1 FOREIGN AGENTS AND PROPAGANDA
1
ment, if any, as the Secretary of State
may desire to make from the point of
view of the foreign relations of the United States, one copy of each registration
statement that is hereafter filed with the
Attorney General in accordance with the
provisions of this Executive order.
4. All rules, regulations and forms
which have been issued by the Secretary
§ 611.
22 § 6 1 1
of State pursuant to the provisions of
said act of June 8, 1938, as amended,
and which are in effect shall continue in
effect until modified, superseded, revoked or repealed by the Attorney General.
5. This order shall become effective
as of June 1, 1942.
Definitions
As used in and for the purposes of this subchapter—
(a) The term "person" includes an individual, partnership,
association, corporation, organization, or any other combination of individuals;
(b) The term "foreign principal" includes—
(1) a government of a foreign country and a foreign
political party;
(2) a person outside of the United States, unless it is
established that such person is an individual and a citizen
of and domiciled within the United States, or that such
person is not an individual and is organized under or
created by the laws of the United States or of any State or
other place subject to the jurisdiction of the United States
and has its principal place of business within the United
States; and
(3) a partnership, association, corporation, organization,
or other combination of persons organized under the laws
of or having its principal place of business in a foreign
country.
(c) Expect as provided in subsection (d) of this section, the
term "agent of a foreign principal" means—
(1) any person who acts as an agent, representative,
employee, or servant, or any person who acts in any other
capacity at the order, request, or under the direction or
control, of a foreign principal or of a person any of whose
activities are directly or indirectly supervised, directed,
controlled, financed, or subsidized in whole or in major
part by a foreign principal, and who direcdy or through
any other person—
(1) engages within the United States in political activities for or.in the interests of such foreign principal;
(U) acts within the United States as a public relations
counsel, publicity agent, information-service employee
613
1
�22 § 6 1 1
FOREIGN RELATIONS
Ch. 11
or political consultant for or in the interests of such
foreign principal;
(Ul) within the United States solicits, collects, disburses, or dispenses contributions, loans, money, or
other things of value for or in the interest of such
foreign principal; or
(iv) within the United States represents the interests
of such foreign principal before any agency or official
of the Government of the United States; and
(2) any person who agrees, consents, assumes or purports to act as, or who is or holds himself out to be,
whether or not pursuant to contractual relationship, an
agent of a foreign principal as defined in clause (1) of this
subsection.
(d) The term "agent of a foreign principal" does not include
any news or press service or association organized under the
laws of the United States or of any State or other place subject
to the jurisdiction of the United States, or any newspaper,
magazine, periodical, or other publication for which there is on
file with the United States Postal Service information in compliance with section 3611 of Title 39, published in the United
States, solely by virtue of any bona fide news or journalistic
activities, including the solicitation or acceptance of advertisements, subscriptions, or other compensation therefor, so long
' as it is at least 80 per centum beneficially owned by, and its
officers and directors, if any, are citizens of the United States,
and such news or press service or association, newspaper,
magazine, periodical, or other publication, is not owned, directed, supervised, controlled, subsidized, or financed, and none of
its policies are determined by any foreign principal defined in
subsection (b) of this sertion, or by any agent of a foreign
principal required to register under this subchapter;
(e) The term "government of a foreign country" includes any
person or group of persons exercising sovereign de facto or de
jure political jurisdiction over any country, other than the
United States, or over any part of such country, and includes
any subdivision of any such group and any group or agency to
which such sovereign de facto or de jure authority or functions
are directly or indirectly delegated. Such term shall include
any faction or body of insurgents within a country assuming to
exercise governmental authority whether such faction or body
of insurgents has or has not been recognized by the United
States;
614
2
�Ch. 11
FOREIGN AGENTS AND PROPAGANDA
22 §611
(f) The term "foreign political party" includes any organization or any other combination of individuals in a country other
than the United States, or any unit or branch thereof, having
for an aim or purpose, or which is engaged in any activity
devoted in whole or in part to, the establishment, administration, control, or acquisition of administration or control, of a
government of a foreign country or a subdivision thereof, or
the furtherance or influencing of the political or public interests, policies, or relations of a government of a foreign country
or a subdivision thereof;
(g) The term "public-relations counsel" includes any person
who engages directly or indirectly in informing, advising, or in
any way representing a principal in any public relations matter
pertaining to political or public interests, policies, or relations
of such principal;
(h) The term "publicity agent" includes any person who engages directly or indirectly in the publication or dissemination
of oral, visual, graphic, written, or pictorial information or
matter of any kind, including publication by means of advertising, books, periodicals, newspapers, lectures, broadcasts, motion pictures, or otherwise;
(1) The term "information-service employee" includes any
person who is engaged in furnishing, disseminating, or publishing accounts, descriptions, information, or data with respect to
the political, industrial, employment, economic, social, cultural,
or other benefits, advantages, facts, or conditions of any country other than the United States or of any government of a
foreign country or of a foreign political party or of a partnership, association, corporation, organization, or other combination of individuals organized under the laws of, or having its
principal place of business in, a foreign country;
(J) The term "political propaganda" includes any oral, visual,
graphic, written, pictorial, or other communication or expression by any person (1) which is reasonably adapted to, or which
the person disseminating the same believes will, or which he
Intends to, prevail upon, indoctrinate, convert, Induce, or In
any other way influence a recipient or any section of the public
within the United States with reference to the political or public
interests, policies, or relations of a government of a foreign
country or a foreign political party or with reference to the
foreign policies of the United States or promote in the United
States racial, religious, or social dissensions, or (2) which
advocates, advises, instigates, or promotes any racial, social,
political, or religious disorder, civil riot, or other conflict involving the use of force or violence in any other American
615
�22 § 6 1 1
FOREIGN RELATIONS
Ch. 11
republic or the overthrow of any government or political subdivision of any other American republic by any means involving
the use of force or violence. As used in this subsection the
term "disseminating" includes transmitting or causing to be
transmitted in the United States mails or by any means or
instrumentality of interstate or foreign commerce or offering
or causing to be offered in the United States mails;
(k) The term "registration statement" means the registration
statement required to be filed with the Attorney General under
section 612(a) of this title, and any supplements thereto required to be filed under section 612(b) of this title, and includes
all documents and papers required to be filed therewith or
amendatory thereof or supplemental thereto, whether attached
thereto or incorporated therein by reference;
(/) The term "American republic" includes any of the states
which were signatory to the Final Act of the Second Meeting of
the Ministers of Foreign Affairs of the American Republics at
Habana, Cuba, July 30, 1940;
(m) The term "United States", when used in a geographical
sense, includes the several States, the District of Columbia, the
Territories, the Canal Zone, the insular possessions, and all
other places now or hereafter subject to the civil or military
jurisdiction of the United States;
(n) The term "prints" means newspapers and periodicals,
books, pamphlets, sheet music, visiting cards, address cards,
printing proofs, engravings, photographs, pictures, drawings,
plans, maps, patterns to be cut out, catalogs, prospectuses,
advertisements, and printed, engraved, lithographed, or autographed notices of various kinds, and, in general, all impressions or reproductions obtained on paper or other material
assimilable to paper, on parchment or on cardboard, by means
of printing, engraving, lithography, autography, or any other
easily recognizable mechanical process, with the exception of
the copying press, stamps with movable or immovable type,
and the typewriter;
(o) The term "political activities" means the dissemination of
political propaganda and any other activity which the person
engaging therein believes will, or which he intends to, prevail
upon, indoctrinate, convert, induce, persuade, or in any other
way influence any agency or official of the Government of the
United States or any section of the public within the United
States with reference to formulating, adopting, or changing the
domestic or foreign policies of the United States or with reference to the political or public interests, policies, or relations of
a government of a foreign country or a foreign political party;
616
�Ch. 11
FOREIGN AGENTS AND PROPAGANDA
(p) The term "political consultant" means any person who
engages in informing or advising any other person with reference to the domestic or foreign policies of the United States or
the political or public interest, policies, or relations of a foreign
country or of a foreign political party;
(q) For the purpose of section 613(d) of this title, activities in
furtherance of the bona fide commercial, industrial or financial
interests of a domestic person engaged in substantial commercial, industrial or financial operations in the United States shall
not be deemed to serve predominantly a foreign interest because such activities also benefit the interests of a foreign
person engaged in bona fide trade or commerce which is
owned or controlled by, or which owns or controls, such
domestic person: Provided, That (i) such foreign person is not,
and such activities are not directly or indirectly supervised,
directed, controlled, financed or subsidized in whole or in
substantial part by, a government of a foreign country or a
foreign political party, (ii) the identity of such foreign person is
disclosed to the agency or official of the United States with
whom such activities are conducted, and (iii) whenever such
foreign person owns or controls such domestic person, such
activities are substantially in furtherance of the bona fide
commercial, industrial or financial interests of such domestic
person.
(June 8, 1938, c. 327, § 1, 52 Stat. 631; Aug. 7, 1939, c. 521, § 1, 53 Stat.
1244; Apr. 29, 1942, c. 263, § 1, 56 Stat. 249; Proc. No. 2695, July 4, 1946,
1 F.R. 7517, 60 Stat. 1352; Sept. 23, 1950, c. 1024, Title I, § 20(a), 64 Stat.
1
1005; Aug. 1, 1956, c. 849, § 1, 70 Stat. 899; Oct. 4, 1961, Pub. L. 87-366, § 1,
75 Stat. 784; July 4, 1966, Pub. L. 89^t86, § 1, 80 Stat. 244; Aug. 12, 1970,
Pub. L. 91-375, §6(k), 84 Stat. 782.)
1
2
So in original. Probably should be "Except".
So in original. Probably should be "section 3685".
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1950 Act House Report No. 2980 and
Conference Report No. 3112, see 1950
U.S.Code Cong. Service, p. 3886.
1956 Act. Senate Report No. 2719, see
1956 U.S.Code Cong, and Adm
.News, p.
4056.
1961 Act. Senate Report No. 1061, see
1961 U.S.Code Cong, and Adm.
.News, p.
3218.
1966 Act House Report No. 1470 and
Conference Report No. 1632, see 1966
U.S.Code Cong, and Adm.News, p. 2397.
1970 Act House Report No. 91-1104
and Conference Report No. 91-1363, see
1970 UACode Cong, and Adm.News p.
3649.
References In Text
For definition of Canal Zone, referred
to in subsec. (m), see section 3602(b) of
this title.
Codifications
Words. "including the Philippine Islands," were deleted from the definition
of the "United States" in subsection (m)
pursuant to Proc. No. 2695, which granted independence to the Philippines un-
617
�22 §611
FOREIGN RELATIONS
der the authority of section 1394 of this
title, under which section Proc. No. 2695
is set out as a note.
Amendments
1970 Amendment
Subsec. (d).
PubX. 91-375 substituted "file with the
United States Postal Service information
in compliance with section 3611 of Title
39" for "file with the Postmaster General
a sworn statement in compliance with
section 2 of the Act of August 24, 1912
(37 Stat. 553), as amended".
1966 Amendment
Subsec. (b).
Pub.L. 89-486, § 1(1), redesignated former pars. (3) and (4) as (2) and (3),
substituted in such par. (3) "combination
of persons" for "combination of individuals" and eliminated from the definition
of "foreign principal" former pars. (2),
(5), and (6) which included "(2) an individual affiliated or associated with, or
supervised, directed, controlled, financed, or subsidized, in whole or in
part, by any foreign principal defined in
clause (1) of this subsection"; "(5) a domestic partnership, association, corporation, organization, or other combination
of individuals, subsidized directly or indirectly, in whole or in part, by any
foreign principal defined in clause (1),
(3), or (4) of this subsection"; and "(6) a
domestic partnership, association, corporation, or other combination of individuals; supervised, directed, controlled, or
financed, in whole or in substantial part,
by any foreign government or foreign
political party."
Ch. 11
ernmental officials contained in former
par. (4).
Subsec. (d), Pub.L. 89-486, § 1(3),
struck out "clause (1), (2), or (4) of
preceding "subsection (b)".
Subsec. (g). Pub-L. 89-486, § 1(4),
inserted "public relations" preceding
"matter pertaining to" and "of such principal" fol lowing "or relations".
Subsecs. (o) to (q). Pub.L. 89-486,
§ 1(5), added subsecs. (o) to (q).
1961 Amendment Subsec. (b)(6).
Pub.L. 87^-366 added par. (6).
1956 Amendment Subsec. (c)(5).
Act Aug. 1, 1956 repealed par. (5), which
included within the definition of "agent
of a foreign principal" any person
trained in foreign espionage systems
with certain exceptions, and is now covered by sections 851 and 852 of Title 50,
War and National Defense.
1950 Amendment Subsec. (c)(5).
Act Sept. 23, 1950 added par. (5).
1942 Amendment Act Apr. 29, 1942
amended section generally to redefine
terms used in this subchapter.
1939 Amendment Act Aug. 7, 1939
amended section generally to redefine
terms used in this subchapter.
Effective Dates
1970 Act Amendment by Pub.L.
91-375 effective within 1 year after Aug.
12, 1970, on date established therefor by
the Board of Governors of the United
States Postal Service and published by it
Subsec. (c). Pub.L. 89-486, § 1(2), in the Federal Register, see § 15(a) of
amended provisions generally to rede- Pub.L. 91-375, set out as a note precedfine "agent of a foreign principal" by ing section 101 of Title 39, Postal Serspecifying four categories of activities vice.
creating the agency relationship where
1966 Act Section 9 of Pub.L. 89-486
person acts as agent, employee, representative, or servant or at the order of, provided that: "This Act [which enacted
or under the control of, a foreign princi- sections 219 and 613 of Title 18, Crimes
pal, by requiring a showing not only of and Criminal Procedure, and amended
foreign connections but alio of certain sections 611 to 616 and 618 of this title]
activities performed by the agent for for- shall take effect ninety days after the
elan intereits, by making change as it date of its enactment [July 4, 1966]."
relates to problem of indirect control
1942 Act Section 3 of Act Apr. 29,
exerted by foreign principals over their 1942 provided that: "This Act [this subagents, by including political activities chapter] shall take effect on the sixtieth
and actions as political consultant, by day after the date of Its approval, except
excluding attorneys from the relation- that prior to such sixtieth day the Attorship, by Incorporating provisions of for- ney General may make, prescribe,
mer par. (3) in par. (2) where a person amend, and rescind such rules, regulaassumes or purports to act as an agent of tions, and forms as may be necessary to
a foreign principal, and by eliminating carry out the provisions of this Act [this
the separate category for military or gov- subchapter]."
618
�Ch. 11
FOREIGN AGENTS AND PROPAGANDA
1938 Act. Section 7 of Act June 8,
1938 provided that this subchapter shall
take effect on the ninetieth day after
June 8, 1938.
Transfer of Functions
Section 2 of Act Apr. 29, 1942 provided
that: "Upon the effective date of this Act
[see Effective Date of 1942 Amendment
note set out under this section], all powers, duties, and functions of the Secretary of State under the Act of June 8,
1938 (52 Stat. 631), as amended [this
subchapter], shall be transferred to and
become vested in the Attorney General,
together with all property, books,
records, and unexpended balances of appropriations used by or available to the
Secretary of State for carrying out the
functions devolving on him under the
above-cited Act [this subchapter]. All
rules, regulations, and forms which have
been issued by the Secretary of State
pursuant to the provisions of said Act
[this subchapter], and which are in effect, shall continue in effect until mod•'fied, superseded, revoked, or repealed."
22 §611
the Act [this subchapter], and the application of such provisions to other persons or circumstances, shall not be affected thereby.
"Sec 13. This Act [enacting this subchapter] is in addition to and not in
substitution for any other existing statute."
Short Title
1938 Act. Section 14 of Act June 8,
1938, as added by Act Apr. 29, 1942, § 1,
provided that: "This Act [enacting this
subchapter] may be cited as the Toreign
Agents Registration Act of 1938, as
amended'."
Policy and Purpose of Subchapter
Act Apr. 29, 1942, amending generally
Act June 8, 1938, added an opening paragraph preceding § 1 of the latter Act and
reading as follows: "It is hereby declared to be the policy and purpose of
this Act [enacting this subchapter] to
protect the national defense, internal security, and foreign relations of the United States by requiring public disclosure
by persons engaging in propaganda acSeparability of Provtolons; Effect on tivities and other activities for or on
Existing Law
behalf of foreign governments, foreign
Sections 12 and 13 of Act June 8, 1938, political parties, and other foreign prinas added by Act Apr. 29, 1942, § 1, pro- cipals so that the Government and the
vided that:
people of the United States may be in"Sec. 12. If any provision of this Act formed of the identity of such persons
[enacting this subchapter], or the appli- and may appraise their statements and
cation thereof to any person or circum- actions in the light of their associations
stances, is held invalid, the remainder of and activities."
CROSS R E F E R E N C E S
Deportable aliens, see 8 USCA § 1251.
Foreign principal for purposes of contributions by foreign nationals to federal
elections, see 2 USCA § 441e.
LIBRARY R E F E R E N C E S
American Digest System
Foreign agents and propagandists, see International Law «=>10.24.
Encyclopedias
Foreign agents and propagandists, see CLS. International Law § 42.
Law Reviews
Foreign Agents Registration Act: How open should the marketplace of ideas be?
Note, 53 Mo.L.Rev. 795 (1988).
Unconstitutional inhibitions: "Political propaganda" and the Foreign Agents
Registration Act. Note, 33 N.Y.L^ch.L-Rev. 345 (1988).
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
619
�22 §611
FOREIGN RELATIONS
Ch. 11
NOTES OF DECISIONS
Agency 4
Constitutionality 1
Domestic organization 5
Intermediary for foreign principal 6
Partnership 7
Person acting at request of foreign
principal 8
Political propaganda 9
Power of Congress 3
Purpose 2
1. Constitutionality
Use of phrase "political propaganda"
in Foreign Agents Registration Act, to
describe materials subject to Act, does
not violate First Amendment rights of
citizen desiring to show films so described, though description may be perceived as pejorative by public, where Act
poses no obstacle to citizen's access to
materials he wishes to exhibit. Act's definition of "political propaganda" is evenhanded and neutral, and there is no evidence insufficient to show that public's
perceptions about word "propaganda"
have actually had any adverse impact on
distribution of foreign advocacy materials subject to statutory scheme. Meese
v. Keene, Cal.1987, 107 S.CL 1862, 481
U.S. 465, 95 L.Ed.2d 415.
This subchapter as applied to unincorporated association, did not violate U.S.
CA Const. Amend. 1, notwithstanding
association's allegations that it was unlawfully singled out for prosecution under this subchapter because of hostility
to its beliefs and in an attempt to impede
and deter it from freely exercising its
rights under U.S.C.A. Const. Amend. 1.
Attorney General of U.S. v. Irish Northem Aid Committee, D.C.N.Y.1981, 530
F^upp. 241, affirmed 668 F.2d 159.
This subchapter is sufficiently definite
to establish and formulate an ascertainable standard of guilt and is not unconstitutional as denying due process of
law. U.S. v. Peace Information Center,
D.C.D.C.1951, 97 F^upp. 255.
2. Purpose
The purpose of this subchapter is to
identify agents of foreign principals who
might engage in subversive acts or in
spreading foreign propaganda, and to require them to make public record of the
nature of their employment. Viereck v.
VS., 1943, 63 S.Ct. 561, 318 U.S. 236, 87
L.Ed. 734.
General purpose of this subchapter is
to protect security and foreign relations
of United States by requiring agents of
foreign principals to identify themselves
and disclose their activities. Attorney
General of U.S. v. Irish Northern Aid
Committee, D.C.N.Y.1981, 530 RSupp.
241, affirmed 668 F.2d 159.
Purpose of this subchapter is to protect interests of the United States by requiring complete public disclosure by
persons acting for or in interests of foreign principals where their activities are
political in nature. Attorney General v.
Irish Northern Aid Committee, D.C.N.Y.
1972, 346 F^upp. 1384, affirmed 465
F.2d 1405, certiorari denied 93 S.Ct. 679,
409 U.S. 1080, 34 L.Ed.2d 669.
The purpose of this subchapter is to
require all persons who are in the United States for political propaganda purposes to register and supply specified
information concerning their activities,
employers and contracts in order to publicize the nature of subversive or other
similar activities of such foreign propagandists. U.S. v. Peace Information Center, D.C.D.C.1951, 97 F^upp. 255.
This subchapter was designed to bring
about disclosure of authorship and
source of that appearing in publications
and other media of dissemination at instance of foreign governments or foreign
factions or parties, as well as to prevent
writings of a character seeking to establish a foreign system of government in
the United States, or to secure group
action of a nature foreign to United
States institutions of government. VS.
v. Kelly. D.C.D.C.1943, 51 F^upp. 362.
Congress in enacting this subchapter,
requiring the agent of foreign principal
who undertakes to disseminate foreign
political propaganda in United States to
register with the Secretary of State, did
not intend to deprive citizens of United
States of political information, even if
such information should be propaganda
of foreign government or foreign principal, but Congress did intend to bring
activities of persons engaged in disseminating foreign poUtical propaganda out
into the open and to make known the
identity of any person engaged in such
activities, the source of the propaganda
620
�Ch. 11 FOREIGN AGENTS AND PROPAGANDA
22 §611
Note 9
and who is'bearing the expense of its
dissemination in the United States. U.S.
v. Auhagen, D.C.D.C.1941, 39 F^upp.
590.
establish such organization. U.S. v. Kelly, D.C.D.C.1943, 51 F^upp. 362.
6. Intermediary for foreign principal
Fact that registered agent of foreign
principal was compelled to register be3. Power of Congress
This subchapter founded on indisputa- cause registered agent was found to have
ble power of government to conduct its acted at request of foreign principal,
foreign relations and to provide for na- alone, was not sufficient to establish that
tional defense and so falls within inher- registered agent was an "intermediary"
ent regulatory power of Congress. At- for foreign principal so as to require
torney General v. Irish Northern Aid registration of registered agent's agent as
Committee, D.C.N.Y.1972, 346 F.Supp. agent of foreign principal. Attorney
1384, affirmed 465 F.2d 1405, certiorari General of U.S. v. Irish People, Inc.,
denied 93 S.CL 679, 409 U.S. 1080, 34 1986, 796 F.2d 520, 254 U.S.App.D.C.
229.
L.Ed.2d 669.
7. Partnership
Section 618 of this title which proscribes payment of fees contingent on
success of political lobbying did not render illegal and unenforceable agreements between Italian commercial fishermen and American corporation, which
had been designated managing general
>artner of general partnership estab4. Agency
ished by parties as joint venture, where
Agency relationship sufficient to re- fishermen held only 25% share in partquire registration as agent of foreign nership and thus did not exercise control
principal need not meet standard of fi- of partnership as compared with 75%
duciary relation which results from share held by American corporation,
manifestation of consent by one person and where American corporation's posito another that other shall act on his tion as managing partner kept fishermen
behalf and subject to his control, and from exercising de facto control; this
consent by other to so act; concern is result was not changed by provisions of
not whether agent can impose liability agreement requiring fishermen to make
upon his principal but whether relation- capital contributions to partnership.
ship warrants registration by agent to Michele Amoruso Figli v. Fisheries Decarry out informative practices of this velopment Corp., D.C.N.Y.1980, 499
subchapter. Attorney General of U.S. v. RSupp. 1074.
Irish Northern Aid Committee, C.AN.Y.
8. Person acting at request of foreign
1982, 668 F.2d 159.
principal
The requirement for registration unUnder this subchapter, surrounding
der § 612 of this title is not limited to circumstances will normally provide sufagencies created by an express contract, ficient indication as to whether "request"
but true test is whether agency in fact by foreign principal requires recipient to
exists. VS. v. German-American Voca- register as agent Attorney General of
tional League, CA.NJ.1946, 153 F.2d U.S. v. Irish Northern Aid Committee,
860, certiorari denied 66 S.Ct 976, 977, C.A.N.Y.1982, 668 F.2d 159.
978, 328 U.S. 833, 834, 90 L.Ed. 1608,
9. Political propaganda
1609, 1610.
There is no First Amendment violation
5. Domestic organization
in government's branding as "poUtical
Where there is concert of action propaganda" environmental films disamong individuals for furthering inter- tributod by one required to register unest of a foreign government, they consti- der Foreign Agents Registration Act, on
tute a "domestic organization" within theory that the statutory term "propameaning of this subchapter notwith- ganda" goes beyond mere identification
standing that they are organized by an of the films as product of a foreign
agent of such government sent here to government's efforts to disseminate its
The subject matter of this subchapter
affecting agents of foreign principals
who carry on specified activities in the
United States is within the power of Congress under U.S.C.A.Const. Art.' 1, § 8, to
legislate concerning the "national defense". U.S. v. Peace Information Center, D.C.D.C.1951, 97 F.Supp. 255.
22 U.S.CA. K 1 I O 1620—22
621
�22 §611
FOREIGN RELATIONS
Ch. 11
Note 0
political views and amounts to a constitutionally prohibited governmental pronouncement that the films contain misstatements, half-truths and attempts to
mislead; even if the classification constitute an expression of official government disapproval of the ideas in question, neither precedent nor reason justify
finding such an expression in itself un-
lawful; disagreeing with Keene v. Smith,
569 RSupp. 1513 (E.D. Cal.), and Keene
v. Meese, 619 F.Supp. 1111 (E.D.Cal.).
Block v. Meese, 1986, 793 F.2d 1303, 253
U.S.App.D.C. 317, certiorari denied 106
S.Ct. 3335, 478 U.S. 1021, 92 L.Ed.2d 740,
rehearing denied 107 S.Ct. 1989, 481 U.S.
1043, 95 L.Ed.2d 828.
§ 612. Registration statement
(a) Filing; contents
No person shall act as an agent of a foreign principal unless he
has filed with the Attorney General a true and complete registration
statement and supplements thereto as required by subsections (a)
and (b) of this section or unless he is exempt from registration
under the provisions of this subchapter. Except as hereinafter
provided, every person who becomes an agent of a foreign principal
shall, within ten days thereafter, file with the Attorney General, in
duplicate, a registration statement, under oath on a form prescribed
by the Attorney General. The obligation of an agent of a foreign
principal to file a registration statement shall, after the tenth day of
his becoming such agent, continue from day to day, and termination of such status shall not relieve such agent from his obligation to file a registration statement for the period during which
he was an agent of a foreign principal. The registration statement
shall include the following, which shall be regarded as material for
the purposes of this subchapter:
(1) Registrant's name, principal business address, and all
other business addresses in the United States or elsewhere, and
all residence addresses, if any;
(2) Status of the registrant; if an individual, nationality; if a
partnership, name, residence addresses, and nationality of each
partner and a true and complete copy of its articles of copartnership; if an association, corporation, organization, or any
other combination of individuals, the name, residence addresses, and nationality of each director and officer and of each
person performing the functions of a director or officer and a
true and complete copy of its charter, articles of incorporation,
association, constitution, and bylaws, and amendments thereto;
a copy of every other instrument or document and a statement
of the terms and conditions of every oral agreement relating to
its organization, powers, and purposes; and a statement of its
ownership and control;
(3) A comprehensive statement of the nature of registrant's
business; a complete list of registrant's employees and a state622
�Ch. 11 FOREIGN AGENTS AND PROPAGANDA
22 § 612
ment of the nature of the work of each; the name and address
of every foreign principal for whom the registrant is acting,
assuming or purporting to act or has agreed to act; the character of the business or other activities of every such foreign
principal, and, if any such foreign principal be other than a
natural person, a statement of the ownership and control of
each; and the extent, if any, to which each such foreign principal is supervised, directed, owned, controlled, financed, or
subsidized, in whole or in part, by any government of a foreign
country or foreign political party, or by any other foreign
principal;
(4) Copies of each written agreement and the terms and
conditions of each oral agreement, including all modifications
of such agreements, or, where no contract exists, a full statement of all the circumstances, by reason of which the registrant
is an agent of a foreign principal; a comprehensive statement
of the nature and method of performance of each such contract, and of the existing and proposed activity or activities
engaged in or to be engaged in by the registrant as agent of a
foreign principal for each such foreign principal, including a
detailed statement of any such activity which is a political
activity;
(5) The nature and amount of contributions, income, money,
or thing of value, if any, that the registrant has received within
the preceding sixty days from each such foreign principal,
either as compensation or for disbursement or otherwise, and
the form and time of each such payment and from whom
received;
(6) A detailed statement of every activity which the registrant
is performing or is assuming or purporting or has agreed to
perform for himself or any other person other than a foreign
principal and which requires his registration hereunder, including a detailed statement of any such activity which is a political
activity;
(7) The name, business, and residence addresses, and if an
individual, the nationality, of any person other than a foreign
principal for whom the registrant is acting, assuming or purporting to act or has agreed to act under such circumstances as
require his registration hereunder; the extent to which each
such person is supervised, directed, owned, controlled, financed, or subsidized, in whole or in part, by any government
of a foreign country or foreign political party or by any other
foreign principal; and the nature and amount of contributions,
income, money, or thing of value, if any, that the registrant has
received during the preceding sixty days from each such person
623
�22 § 612
FOREIGN RELATIONS
Ch. 11
in connection with any of the activities referred to in clause (6)
of this subsection, either as compensation or for disbursement
or otherwise, and the form and time of each such payment and
from whom received;
(8) A detailed statement of the money and other things of
value spent or disposed of by the registrant during the preceding sixty days in furtherance of or in connection with activities
which require his registration hereunder and which have been
undertaken by him either as an agent of a foreign principal or
for himself or any other person or in conection with any
activities relating to his becoming an agent of such principal,
and a detailed statement of any contributions of money or
other things of value made by him during the preceding sixty
days (other than contributions the making of which is prohibited under the terms of section 613 of Title 18) in connection
with an election to any political office or in connection with
any primary election, convention, or caucus held to select
candidates for any political office;
(9) Copies of each written agreement and the terms and
cpnditions of each oral agreement, including all modifications
of such agreements, or, where no contract exists, a full statement of all the circumstances, by reason of which the registrant
is performing or assuming or purporting or has agreed to
perform for himself or for a foreign principal or for any person
other than a foreign principal any activities which require his
registration hereunder;
(10) Such other statements, information, or documents pertinent to the purposes of this subchapter as the Attorney General,
having due regard for the national security and the public
interest, may from time to time require;
(11) Such further statements and such further copies of documents as are necessary to make the statements made in the
registration statement and supplements thereto, and the copies
of documents furnished therewith, not misleading.
1
(b) Supplements; filing period
Every agent of a foreign principal who has filed a registration
statement required by subsection (a) of this section shall, within
thirty days after the expiration of each period of six months succeeding such filing, file with the Attorney General a supplement
thereto under oath, on a form prescribed by the Attorney General,
which shall set forth with respect to such preceding six months'
period such facts as the Attorney General, having due regard for the
national security and the public interest, may deem necessary to
make the information required under this section accurate, com624
�Ch. 11 FOREIGN AGENTS AND PROPAGANDA
22 §612
plete, and current with respect to such period. In connection with
the information furnished under clauses (3), (4), (6), and (9) of
subsection (a) of this section, the registrant shall give notice to the
Attorney General of any changes therein within ten days after such
changes occur. If the Attorney General, having due regard for the
national security and the public interest, determines that it is
necessary to carry out the purposes of this subchapter, he may, in
any particular case, require supplements to the registration statement to be filed at more frequent intervals in respect to all or
particular items of information to be furnished.
(c) Execution of statement under oath
The registration statement and supplements thereto shall be executed under oath as follows: If the registrant is an individual, by
him; if the registrant is a partnership, by the majority of the
members thereof; if the registrant is a person other than an
individual or a partnership, by a majority of the officers thereof or
persons performing the functions of officers or by a majority of the
board of directors thereof or persons performing the functions of
directors, if any.
(d) Filing of statement not deemed full compliance nor as preclusion from
prosecution
The fact that a registration statement or supplement thereto has
been filed shall not necessarily be deemed a full compliance with
this subchapter and the regulations thereunder on the part of the
registrant; nor shall it indicate that the Attorney General has in any
way passed upon the merits of such registration statement or
supplement thereto; nor shall it preclude prosecution, as provided
for in this subchapter, for willful failure to file a registration
statement or supplement thereto when due or for a willful false
statement of a material fact therein or the willful omission of a
material fact required to be stated therein or the willful omission of
a material fact or copy of a material document necessary to make
the statements made in a registration statement and supplements
thereto, and the copies of documents furnished therewith, not
misleading.
(e) Incorporation of previous statement by reference
If any agent of a foreign principal, required to register under the
provisions of this subchapter, has previously thereto registered with
the Attorney General under the provisions of section 2386 of Title
18, the Attorney General, in order to eliminate inappropriate duplication, may permit the incorporation by reference in the registration statement or supplements thereto filed hereunder of any infor625
�22 § 612
FOREIGN RELATIONS
Ch. 11
mation or documents previously filed by such agent of a foreign
principal under the provisions of said section.
(f) Exemption by Attorney General
The Attorney General may, by regulation, provide for the exemption—
(1) from registration, or from the requirement of furnishing
any of the information required by this section, of any person
who is listed as a partner, officer, director, or employee in the
registration statement filed by an agent of a foreign principal
under this subchapter, and
(2) from the requirement of furnishing any of the information required by this section of any agent of a foreign principal,
where by reason of the nature of the functions or activities of such
person the Attorney General, having due regard for the national
security and the public interest, determines that such registration,
or the furnishing of such information, as the case may be, is not
necessary to carry out the purposes of this subchapter.
(June 8, 1938, c. 327, § 2, 52 Stat. 632; Apr. 29, 1942, c. 263, § 1, 56 Stat.
251; Aug. 3, 1950, c. 524, § 1, 64 Stat. 399; July 4, 1966, Pub. L. 89-486, § 2,
80 Stat. 245.)
•So in original. Probably should be "connection".
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1950 Act Senate Report No. 1900, see
1950 U.S.Code Cong. Service, p. 2886.
1966 Act House Report No. 1470 and
Conference Report No. 1632, see 1966
U.S.Code Cong, and Adm.News, p. 2397.
References in Text
Section 613 of Title 18, referred to in
subsec. (a)(8), was repealed by Pub.L.
94-283, Title U, § 201(a), May 11, 1976,
90 Stat. 496.
Codifications
In subsec. (e), in the original, "section
2386 of Title 18" read "the Act of October
17.1940 (54 Stat. 1201)", which had been
classified to §§ 14 to 17 of Title 18.
"Section 2386 of Title 18" was substituted for "sections 14 to 17 of Title 18" on
authority of Act June 25,1948, c. 645, 62
Stat. 863, § 1 of which enacted Title 18,
Crimes and Criminal Procedure.
Amendments
1966 Amendment
Subsec. (a).
Pub.L. 89-486, § 2(1), deleted requirement for transmittal of registration
statements by the Attorney General to
the Secretary of State and provision declaring a failure of transmission not to
be a bar to prosecutions, now covered in
section 616(b) of this title.
Subsec. (a)(3). Pub.L. 89-486, § 2(2),
struck out ", unless, and to the extent,
this requirement is waived in writing by
the Attorney General" following "statement of the nature of the work of each"
and provided for a statement of the extent to which a foreign principal is supervised, directed, etc., by any other foreign principal.
Subsec. (a)(4). Pub.L. 89-486, § 2(3),
inserted ", including a detailed statement
of any such activity which is a political
activity".
Subsec. (a)(6). Pub.L. 89-486, § 2(4),
inserted ", including a detailed statement
of any such activity which is a political
activity".
Subsec. (a)(7). Pub.L. 89-486, § 2(5),
required certain information pertaining
to control and financial arrangements
with respect to those persons, not them-
626
�Ch. 11
FOREIGN AGENTS AND PROPAGANDA
22 § 612
Note 3
Effective Dates
1966 Act. Amendment by § 2 of
Pub.L 89-486 effective ninety days after
July 4, 1966, see § 9 of Pub.L. 89-486,
set out as a note under section 611 of
this title.
Subsec. (a)(8). Pub.L. 89-486, § 2(6),
1942 Act Amendment by Act Apr.
added requirement that agent report the 1942 effective the sixtieth day after 29,
money or other things of value spent or date of its approval, except that priorthe
to
disposed of in connection with his be- such sixtieth day the Attorney General
coming the agent of his foreign principal may make, prescribe, amend, and reand all political contributions made dur- scind such
ing the preceding sixty days, other than as may be rules, regulations, and forms
necessary to carry
contributions made on behalf of their provisions of this subchapter, seeout the
principals, such contributions being pro- Act Apr. 29, 1942, set out as a note § 3 of
under
hibited under § 613 of Title 18.
section 611 of this title.
1938 Act Section effective the ninetiSubsec. (f). PubL. 89-486, § 2(7),
eth day after June 8, 1938, see § 7 of Act
added subsec. (f).
June 8, 1938.
1950 Amendment Subsec. (a). Act
Aug. 3, 1950 made failure to register a Prior Provisions
Provisions on this subject were concontinuing offense.
tained in §§ 612 and 613 of this title
1942 Amendment Act Apr. 29, 1942 prior to general amendment of Act June
amended section generally.
8, 1938, by Act Apr. 29, 1942.
selves foreign principals, who are so related to a foreign principal that their
agents when engaged in political activities in the interests of the principal are
required to register.
CROSS R E F E R E N C E S
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY R E F E R E N C E S
American Digest System
Foreign agents and propagandists, see International Law «=10.24.
Encyclopedias
Foreign agents and propagandists, see CJ.S. International Law § 42.
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
NOTES O F DECISIONS
Constitutionality 1
2. Construction with other laws
Construction with other laws 2
There is no inconsistency between
Contents of statement 5
§ 951 of Title 18 making it criminal offense for one to act as agent of foreign
Persons required to register 4
government without prior notification of
Purpose 3
Secretary of State and this section. U.S.
Time for registration 6
v. Melekh, D.C.I1U961, 193 F.Supp. 586.
3. Purpose
1. Constitutionality
Congress in enacting this section did
This section does not regulate expres- not intend to deprive citizens of United
sion of ideas and does not limit or inter- States of political information, even if
fere with freedom of speech or impose a such information should be propaganda
burden on the exercise of Ihe right of of foreign government or foreign princifreedom of speech in violation of U.S.C. pal, but Congress did intend to bring
A.Const. Amend. 1. U.S. v. Peace Infor- activities of persons engaged in dissemimation Center, D.C.D.C.1951, 97 F.Supp. nating foreign political propaganda out
into the open and to make known the
255.
627
I
�22 § 6 1 2
Note 3
identity of any person engaged in such
activities, the source of the propaganda
and who is bearing the expense of its
dissemination in the United States. U.S.
v. Auhagen, D.C.D.C.1941, 39 F.Supp.
590.
4. Persons required to register
Attorneys who engaged in general law
practice and who had been retained by
Republic of Cuba to represent Cuba and
its governmental agencies in legal matters including litigation in United States
were obligated to register under this subchapter. Rabinowitz v. Kennedy, Dist.
Col.1964, 84 S.Ct. 919, 376 U.S. 605, 11
I_Ed.2d 940.
The requirement for registration under this section is not limited to agencies
created by an express contract, but true
test is whether agency in fact exists.
U.S. v. German-American Vocational
League, CJ\.NJ.1946, 153 F.2d 860, certiorari denied 66 S.Ct. 976, 977, 978, 328
U.S. 833, 834, 90 L.Ed. 1608, 1609, 1610.
5. Contents of statement
Issue whether attorneys retained by
Republic of Cuba would, in registering
under this subchapter, be required by
registration forms to make public disclosure of private, personal and business
affairs unconnected with representation
of Cuba was not ripe for adjudication,
where attorneys had made no attempt to
FOREIGN RELATIONS
Ch. 11
determine which questions had to be answered and how much information had
to be disclosed. Rabinowitz v. Kennedy,
Dist.Col.1964, 84 S.Ct. 919, 376 U.S. 605,
11 L.Ed.2d 940.
This subchapter, before its amendment in 1942, required, and authorized
the Secretary of State to require by regulations, a statement of only those activities of registrants which were carried
out in behalf of foreign principals. Viereck v. U.S., 1943, 63 S.Ct. 561, 318 U.S.
236, 87 L.Ed. 734.
Under this subchapter, the Secretary
of State has authority to require answers, under penal sanctions, to an item
in the registration statement calling for a
comprehensive statement of the nature
of the registrant's business, at least as
regards the registrant's activities as agent
of a foreign principal. Viereck v. U.S.,
1944, 139 F.2d 847, 78 U^.App.D.C. 279,
certiorari denied 64 S.Ct. 787, 321 U.S.
794, 88 L.Ed. 1083.
6. Time for registration
This section requiring agent of foreign
principal to register with 10 days after
becoming such agent, means not later
than 10 days after becoming such agent
and imposes no prohibition against earlier registration. U.S. v. Melekh, D.C.I11.
1961, 193 RSupp. 586.
§ 6 1 3 . Exemptions
The requirements of section 612(a) of this title shall not apply to
the following agents of foreign principals:
(a) Diplomatic or consular officers
A duly accredited diplomatic or consular officer of a foreign
government who is so recognized by the Department of State, while
said officer is engaged exclusively in activities which are recognized
by the Department of State as being within the scope of the
functions of such officer;
(b) Officials of foreign government
Any official of a foreign government, if such government is
recognized by the United States, who is not a public-relations
counsel, publicity agent, information-service employee, or a citizen
of the United States, whose name and status and the character of
whose duties as such official are of public record in the Department
of State, while said official is engaged exclusively in activities which
628
�Ch. 1 FOREIGN AGENTS AND PROPAGANDA
1
22 § 613
are recognized by the Department of State as being within the scope
of the functions of such official;
(c) Staff members of diplomatic or consular officers
Any member of the staff of, or any person employed by, a duly
accredited diplomatic or consular officer of a foreign government
who is so recognized by the Department of State, other than a
public-relations counsel, publicity agent, or information-service employee, whose name and status and the character of whose duties as
such member or employee are of public record in the Department
of State, while said member or employee is engaged exclusively in
the performance of activities which are recognized by the Department of State as being within the scope of the functions of such
member or employee;
(d) Private and nonpolitical activities; solicitation of funds
Any person engaging or agreeing to engage only (1) in private and
nonpolitical activities in furtherance of the bona fide trade or
commerce of such foreign principal; or (2) in other activities not
serving predominantly a foreign interest; or (3) in the soliciting or
collecting of funds and contributions within the United States to be
used only for medical aid and assistance, or for food and clothing
to relieve human suffering, if such solicitation or collection of
funds and contributions is in accordance with and subject to the
provisions of subchapter II of chapter 9 of this title, and such rules
and regulations as may be prescribed thereunder;
(e) Religious, scholastic, or scientific pursuits
Any person engaging or agreeing to engage only in activities in
furtherance of bona fide religious, scholastic, academic, or scientific pursuits or of the fine arts;
(f) Defense of foreign government vital to United States defense
Any person, or employee of such person, whose foreign principal
is a government of a foreign country the defense of which the
President deems vital to the defense of the United States while, (1)
such person or employee engages only in activities which are in
furtherance of the policies, public interest, or national defense both
of such government and of the Government of the United States,
and are not intended to conflict with any of the domestic or foreign
policies of the Government of the United States, (2) each communication or expression by such person or employee which he intends
to, or has reason to believe will, be published, disseminated, or
circulated among any section of the public, or portion thereof,
within the United States, is a part of such activities and is believed
by such person to be truthful and accurate and the identity of such
629
�22 § 613
FOREIGN RELATIONS
Ch. 11
person as an agent of such foreign principal is disclosed therein,
and (3) such government of a foreign country furnishes to the
Secretary of State for transmittal to, and retention for the duration
of this subchapter by, the Attorney General such information as to
the identity and activities of such person or employee at such times
as the Attorney General may require. Upon notice to the Government of which such person is an agent or to such person or
employee, the Attorney General, having due regard for the public
interest and national defense, may, with the approval of the Secretary of State, and shall, at the request of the Secretary of State,
terminate in whole or in part the exemption herein of any such
person or employee;
(g) Persons qualified to practice law
Any person qualified to practice law, insofar as he engages or
agrees to engage in the legal representation of a disclosed foreign
principal before any court of law or any agency of the Government
of the United States: Provided, That for the purposes of this subsection legal representation does not include attempts to influence or
persuade agency personnel or officials other than in the course of
established agency proceedings, whether formal or informal.
(June 8, 1938, c. 327, § 3 , 52 Stat. 632; Aug. 7, 1939, c. 521, § 2 , 53 Stat.
1245; Apr. 29, 1942, c. 263, § 3, 56 Stat. 254; Oct. 4, 1961, Pub. L. 87-366,
§2, 75 Stat. 784; July 4, 1966, Pub. L. 89-486, § 3 , 80 Stat. 246.)
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1942 Amendment Act Apr. 29, 1942
1961 Act. Senate Report No. 1061, see amended section generally.
1961 U^.Code Cong, and Adm.News, p.
1939 Amendment Act Aug. 7, 1939
3218.
amended section "generally.
1966 Act House Report No. 1470 and
Conference Report No. 1632, see 1966 Effective Dates
U^.Code Cong, and Adm.News, p. 2397.
1966 Act Amendment by § 3 of
Pub.L 89-486 effective ninety days after
Amendments
1966 Amendment
Subsec. (d). July 4, 1966, see § 9 of Pub.L. 89-486,
set
Pub.L. 89-486, § 3(a), designated exist- this out as a note under section 611 of
title.
ing provisions as els. (1) and (3), deleted
"financial or mercantile" preceding "ac1942 Act Amendment by Act Apr. 29,
tivities" in cl. (1) and inserted the cl. (2) 1942 effective the sixtieth day after the
exemption of any person engaging or date of its approval, except that prior to
agreeing to engage in other activities not such sixtieth day the Attorney General
serving predominantly a foreign interest. may make, prescribe, amend, and reSubsec (g). PubX. 89-486, § 3(b), scind such rules, regulations, and forms
as may be necessary to carry out the
added subsec. (g).
provisions of this subchapter, see § 3 of
1961 Amendment
Subsec (d). Act Apr. 29,1942, set out as a note under
Pub.L. 87-366 substituted "private and section 611 of this title.
nonpolitical financial or mercantile ac1938 Act. Section effective the ninetitivities in furtherance" for "private, nonpolitical, financial, mercantile, or other eth day after June 8, 1938, see § 7 of Act
June 8. 1938.
activities in furtherance".
630
�Ch. 1 FOREIGN AGENTS AND PROPAGANDA
1
22 §613
Note 4
statements after each six months period.
Provisions on that subject were Incorporated In § 612 of this title by 1942
amendment.
Prior Proviiloni
Prior to general amendment of Act
June 8, 1938, by Act Apr, 29, 1942, sec
tion related to additional registration
CROSS R E F E R E N C E S
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY R E F E R E N C E S
American Digest System
Foreign agents and propagandists, see International Law «=*10.24.
Encyclopedias
Foreign agents and propagandists, see CJ.S. International Law § 42.
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
NOTES OF DECISIONS
Financial or mercantile activities 1
Legal activities 3
Private and nonpolitical activities 2
Relief organization 4
3. Legal activities
If attorney engages in any activities in
behalf of foreign principal which are not
exempt from record keeping and disclosure requirements of this subchapter he
must include in his registration statement Under this subchapter a description of these otherwise exempt legal activities as well. Attorney General of U.S.
v. Covington and Burling, D.C.D.C.1976,
411 F.Supp. 371. injunction denied 430
F.Supp. 1117.
1. Financial or mercantile activities
Lawyer's work in litigating for a foreign government could not be characterized as only "financial or mercantile"
activity, even though it could be regarded as "private and nonpolitical" activity,
within this section exempting from regisIt is doubtful that one who is engaged
tration anyone engaging in "private, and
nonpolitical, financial, or mercantile" in the legal representation of disclosed
activities in furtherance of trade or com- foreign agent before any court is remerce of foreign principal. Rabinowitz quired to register under this subchapter.
v. Kennedy, Dist.Col.1964, 84 S.Ct. 919. Schonbrun v. Dreiband, D.C.N.Y.1967,
268 F^upp. 332.
376 U.S. 605, 11 L.Ed.2d 940.
2. Private and nonpolitical activities
Attorney representing foreign government could not qualify for exemption
under this section providing exemption
for person engaged in private and nonpolitical financial or mercantile activities in furtherance of foreign principal's
trade or commerce if any one of characteristics referred to in this section was
missing. Rabinowitz v. Kennedy, Dist.
Col.1964, 84 S.Ct. 919, 3?6 U.S. 605, 11
LEd.2d 940.
4. Relief organization
Unincorporated association failed to
sustain its burden of proving that it was
a "relief organization" and thus exempt
from the requirements of this subchapter, in view of uncontroverted evidence
that association was an agent of the Irish
Republican Army and provided money
and services for other than relief purposes. Attorney General of U.S. v. Irish
Northern Aid Committee. D.C.N.Y.1981,
530 F^upp. 241, affirmed 668 F.2d 159.
631
�22 § 614
FOREIGN RELATIONS
Ch. 11
§ 614. Filing and labeling of political propaganda
(a) Copies to Attorney General; statement as to places, times, and extent
of transmission
Every person within the United States who is an agent of a
foreign principal and required to register under the provisions of
this subchapter and who transmits or causes to be transmitted in
the United States mails or by any means or instrumentality of
interstate or foreign commerce any political propaganda for or in
the interests of such foreign principal (i) in the form of prints, or
(ii) in any other form which is reasonably adapted to being, or
which he believes will be, or which he intends to be, disseminated
or circulated among two or more persons shall, not later than
forty-eight hours after the beginning of the transmittal thereof, file
with the Attorney General two copies thereof and a statement, duly
signed by or on behalf of such agent, setting forth full information
as to the places, times, and extent of such transmittal.
(b) Identification statement
It shall be unlawful for any person within the United States who
is an agent of a foreign principal and required to register under the
provisions of this subchapter to transmit or cause to be transmitted
in the United States mails or by any means or instrumentality of
interstate or foreign commerce any political propaganda for or in
the interests of such foreign principal (i) in the form of prints, or
(ii) in any other form which is reasonably adapted to being, or
which he believes will be, or which he intends to be, disseminated
or circulated among two or more persons, unless such political
propaganda is conspicuously marked at its beginning with, or
prefaced or accompanied by, a true and accurate statement, in the
language or languages used in such political propaganda, setting
forth the relationship or connection between the person transmitting the political propaganda or causing it to be transmitted and
such propaganda; that the person transmitting such political propaganda or causing it to be transmitted is registered under this
subchapter with the Department of Justice, Washington, District of
Columbia, as an agent of a foreign principal, together with the
name and address of such agent of a foreign principal and of such
foreign principal; that, as required by this subchapter, his registration statement is available for inspection at and copies of such
political propaganda are being filed with the Department of Justice;
and that registration of agents of foreign principals required by the
subchapter does not indicate approval by the United States Government of the contents of their political propaganda. The Attorney
632
�Ch. II
FOREIGN AGENTS AND PROPAGANDA
22 § 614
General, having due regard for the national security and the public
interest, may by regulation prescribe the language or languages and
the manner and form in which such statement shall be made and
require the inclusion of such other information contained in the
registration statement identifying such agent of a foreign principal
and such political propaganda and its sources as may be appropriate.
(c) Public Inspection
The copies of political propaganda required by this subchapter to
be filed with the Attorney General shall be available for public
inspection under such regulations as he may prescribe.
(d) Library of Congress
For purposes of the Library of Congress, other than for public
distribution, the Secretary of the Treasury and the Postmaster
General are authorized, upon the request of the Librarian of Congress, to forward to the Library of Congressfiftycopies, or as many
fewer thereof as are available, of all foreign prints determined to be
prohibited entry under the provisions of section 1305 of Title 19
and of all foreign prints excluded from the mails under authority of
section 1717 of Title 18.
Notwithstanding the provisions of section 1305 of Title 19 and of
section 1717 of Title 18, the Secretary of the Treasury is authorized
to permit the entry and the Postmaster General is authorized to
permit the transmittal in the mails of foreign prints imported for
governmental purposes by authority or for the use of the United
States or for the use of the Library of Congress.
(e) Information furnished to agency or official of United States Government
It shall be unlawful for any person within the United States who
is an agent of a foreign principal required to register under the
provisions of this subchapter to transmit, convey, or otherwise
furnish to any agency or official of the Government (including a
Member or committee of either House of Congress) for or in the
interests of such foreign principal any political propaganda or to
request from any such agency or official for or in the interests of
such foreign principal any information or advice with respect to
any matter pertaining to the political or public interests, policies or
relations of a foreign country or of a political party or pertaining to
the foreign or domestic policies of the United States unless the
propaganda or the request is prefaced or accompanied by a true
and accurate statement to the effect that such person is registered
as an agent of such foreign principal under this subchapter.
633
�22 § 614
FOREIGN RELATIONS
Ch. 11
(f) Appearances before Congressional committees
Whenever any agent of a foreign principal required to register
under this subchapter appears before any committee of Congress to
testify for or in the interests of such foreign principal, he shall, at
the time of such appearance, furnish the committee with a copy of
his most recent registration statement filed with the Department of
Justice as an agent of such foreign principal for inclusion in the
records of the committee as part of his testimony.
(June 8, 1938, c. 327, § 4, 52 Stat. 632; Aug. 7, 1939, c. 521, § 3, 53 Stat.
1246; Apr. 29, 1942, c. 263, § 1, 56 Stat. 255; July 4, 1966, Pub.L. 89-486,
§ 4, 80 Stat. 246; Aug. 12, 1970, Pub.L. 91-375, § 4(a), 84 Stat. 773.)
HISTORICAL AND STATUTORY NOTES
Revialon Note* end Legislative Reports
1966 Act House Report No. 1470 and
Conference Report No. 1632, see 1966
U.S.Code Cong, and Adm.News, p. 2397.
Codifications
In subsec. (d), in the original, "section
1717 of Title 18" read "section 1 of Title
XII of the Act of June 15, 1917 (40 Stat.
230)" which had been translated as
§ 343 of Tide 18. "Section 1717 of Title
18" was substituted for "section 343 of
Title 18" on authority of Act June 25,
1948, c. 645, 62 Stat. 683, § 1 of which
enacted Title 18, Crimes and Criminal
Procedure.
Amendments
1966 Amendment
Subsec. (a).
PubX. 89-486, § 4(1), inserted "for or in
the interests of such foreign principal"
following "political propaganda" and
substituted "file with the Attorney General two copies thereof for "send to the
Librarian of Congress two copies thereof
and file with the Attorney General one
copy thereof."
Subsec. (b). PubX. 89-486, § 4(2), inserted "for or in the interests of such
foreign principal" following "political
propaganda", where first appearing, and
"the relationship or connection between
the person transmitting the political
propaganda or causing it to be transmitted and such propaganda;" following
"setting forth" and substituted "such foreign principal" for "each of his foreign
principals".
Subsec. (c). PubX. 89-486, § 4(3),
substituted "filed with the Attorney General" for "sent to the Librarian of Congress".
Subsecs. (e), (f). Pub.L. 89-486,
§ 4(4), added subsecs. (e) and (f).
1942 Amendment. Act Apr. 29, 1942
amended section generally.
1939 Amendment Act Aug. 7, 1939
amended section generally.
Effective Dates
1966 Act. Amendment by § 4 of
Pub.L. 89-486 effective ninety days after
July 4, 1966, see section § 9 of Pub.L.
89-486, set out as a note under section
611 of this title.
1942 Act Amendment by Act Apr. 29,
1942 effective the sixtieth day after the
date of its approval, except that prior to
such sixtieth day the Attorney General
may make, prescribe, amend, and rescind such rules, regulations, and forms
as may be necessary to carry out the
provisions of this subchapter, see § 3 of
Act Apr. 29,1942, set out as a note under
section 611 of this title.
1938 Act Section effective the ninetieth day after June 8, 1938, see § 7 of Act
June 8, 1938.
Transfer of Functions
In subsec. (d), "United States Postal
Service" was substituted for 'Tostmaster
General" in two instances pursuant to
PubX. 91-375, § 4(a), Aug. 12, 1970, 84
Stat. 773, set out as a note under section
201 of Title 39, Postal Service, which
abolished the office of Postmaster General of the Post Office Department and
transferred its functions to the United
States Postal Service.
Prior Provisions
Prior to general amendment of Act
June 8, 1938, by Act Apr. 29, 1942, sec-
634
�Ch. 11
FOREIGN AGENTS AND PROPAGANDA
tion related to retention of statements as
public records. Provisions on that sub-
22 § 615
ject were incorporated in section 616 of
this title by 1942 amendment.
CROSS REFERENCES
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY REFERENCES
American Digest System
Foreign agents and propagandists, see International Law «=> 10.24.
Encyclopedias
Foreign agents and propagandists, see CJ.S. International Law § 42.
Law Reviews
Unconstitutional inhibitions: "Political propoganda" and the Foreign Agents
Registration Act. Note, 33 N.Y.L.Sch.LRev. 345 (1988).
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
§ 6 1 5 . Books and records
Every agent of a foreign principal registered under this subchapter shall keep and preserve while he is an agent of a foreign
principal such books of account and other records with respect to
all his activities, the disclosure of which is required under the
provisions of this subchapter, in accordance with such business and
accounting practices, as the Attorney General, having due regard
for the national security and the public interest, may by regulation
prescribe as necessary or appropriate for the enforcement of the
provisions of this subchapter and shall preserve the same for a
period of three years following the termination of such status.
Until regulations are in effect under this section every agent of a
foreign principal shall keep books of account and shall preserve all
written records with respect to his activities. Such books and
records shall be open at all reasonable times to the inspection of
any official charged with the enforcement of this subchapter. It
shall be unlawful for any person willfully to conceal, destroy,
obliterate, mutilate, or falsify, or to attempt to conceal, destroy,
obliterate, mutilate, or falsify, or to cause to be concealed, destroyed, obliterated, mutilated, or falsified, any books or records
required to be kept under the provisions of this section.
(June 8, 1938, c. 327, § 5, 52 Stat. 633; Apr. 29, 1942, c. 263, § 1, 56 Stat.
256; July 4, 1966, Pub. L. 89^86, § 5, 80 Stat. 247.)
635
�22 § 615
FOREIGN RELATIONS
Ch. 11
HISTORICAL AND STATUTORY NOTES
1942 Act. Amendment by Act Apr. 29,
Revision Notes and Legislative Reports
1966 Act. House Report No. 1470 and 1942 effective the sixtieth day after the
Conference Report No. 1632, see 1966 date of its approval, except that prior to
U.S.Code Cong, and Adm.News, p. 2397. such sixtieth day the Attorney General
may make, prescribe, amend, and reAmendments
scind such rules, regulations, and forms
1966 Amendment. Pub.L. 89-486 in- as may be necessary to cany out the
serted "in accordance with such business provisions of this subchapter, see § 3 of
and accounting practices," following Act Apr. 29, 1942, set out as a note under
"under the provisions of this subchap- section 611 of this title.
ter,".
1938 Act. Section effective the nineti1942 Amendment. Act Apr. 29, 1942 eth day after June 8, 1938, see § 7 of Act
amended section generally.
June 8, 1938.
Effective Dates
1966 Act. Amendment by § 5 of
Pub.L. 89-}86 effective ninety days after
July 4, 1966, see § 9 of Pub.L. 89^86,
set out as a note under section 11 of this
title.
Prior Provisions
Prior to general amendment of Act
June 8, 1938, by Act Apr. 29, 1942, section related to penalties. Provisions on
that subject were incorporated in section
618 of this title by 1942 amendment.
CROSS R E F E R E N C E S
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY R E F E R E N C E S
American Digest System
Foreign agents and propagandists, see International Law «='10.24.
Encyclopedias
Foreign agents and propagandists, see C.J.S. International Law § 42.
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
NOTES OF DECISIONS and Burling, D.C.D.C.1977,
v. Covington
Attorney-client privilege 1
430 F^upp. 1117.
Confidential communications 2
Inspection as abridgment of rights
2. Confidential communications
Scope of inspection 4
Phrase "books of account and other
records", as used in this section includes
records which would tend to reveal con1. Attorney-client privilege
fidential communications between forWith respect to communications other eign principal and its agent-attorney conthan those from client, a foreign coun- cerning legal matters. Attorney General
try, to its attorney or attorney's agents, of U.S. v. Covington and Burling, D.C.D.
for which registration unit of Justice De- C.1976, 411 F-Supp. 371, injunction department sought disclosure under this nied 430 F^upp. 1117.
subchapter in its investigation of defendant law firm, where it was clear from 3. Inspection as abridgment of rights
examining document that disclosure of
Inspection requested by government
it would not tend to reveal confidence of of books and records of defendant, an
client specifically, or where defendant admitted agent of a foreign principal,
law firm failed to allege the contrary, did not abridge rights under U.S.C.A.
claim of attorney-client privilege would Const. Amend. 1 of defendant's members
not be upheld. Attorney General of U.S. and contributors, notwithstanding claim
636
�Ch. 1 FOREIGN AGENTS AND PROPAGANDA
1
22 § 616
that disclosure of books and records
would result in reprisals against such
members and contributors, where disclosure of defendant's activities bore a
substantial relation to a legitimate interest which was asserted by government to
justify disclosure, and such interest
could fairly be said to outweigh any possible infringement of rights of defendant's members and contributors. Attorney General v. Irish Northern Aid
Committee, D.C.N.Y.1972, 346 RSupp.
1384, affirmed 465 F.2d 1405, certiorari
denied 93 S.Ct. 679, 409 U.S. 1080, 34
L.Ed.2d 669.
v. Peace Information Center, D.C.D.C.
1951, 97 RSupp. 255.
4. Scope of Inspection
Scope of inspection requested by
government of books and records of defendant, an admitted agent of a foreign
principal, was not too broad, notwithstanding claim that government had no
right to inspect personal correspondence
contained in defendant's files, where
government made perfectly clear at argument that it was seeking inspection
only of those books and records which
were relevant to defendant's registration
under this subchapter and was not askThis subchapter does not violate the ing for personal correspondence of depersonal privilege against self-incrimina- fendant's officials, nor books and
tion guaranteed by U.S.C.A.Const. records concerning other activities, if
Amend. 5, since it requires disclosure of any, conducted by defendant. Attorney
information only on a voluntary basis as General v. Irish Northern Aid Commita condition of carrying on specified oc- tee, D.C.N.Y.1972, 346 RSupp. 1384, afcupations or activities in the United firmed 465 F.2d 1405, certiorari denied
States and the information called for by 93 S.Ct. 679, 409 VS. 1080, 34 L.Ed.2d
it is not incriminating on its face. U.S. 669.
, ^ 616.
Public examination of official records; transmittal of
records and Information
(a) Permanent copy of statement; Inspection; withdrawal
The Attorney General shall retain in permanent form one copy of
all registration statements and all statements concerning the distribution of political propaganda furnished under this subchapter, and
the same shall be public records and open to public examination
and inspection at such reasonable hours, under such regulations, as
the Attorney General may prescribe, and copies of the same shall be
furnished to every applicant at such reasonable fee as the Attorney
General may prescribe. The Attorney General may withdraw from
public examination the registration statement and other statements
of any agent of a foreign principal whose activities have ceased to
be of a character which requires registration under the provisions
of this subchapter.
(b) Secretary of State
The Attorney General shall, promptly upon receipt, transmit one
copy of every registration statement filed hereunder and one copy
of every amendment or supplement thereto, and one copy of every
item of political propaganda filed hereunder, to the Secretary of
State for such comment and use as the Secretary of State may
determine to be appropriate from the point of view of the foreign
relations of the United States. Failure of the Attorney General so to
637
�22 § 616
FOREIGN RELATIONS
Ch. 11
transmit such copy shall not be a bar to prosecution under this
subchapter.
(c) Executive departments and agencies; Congressional committees
The Attorney General is authorized to furnish to departments and
agencies in the executive branch and committees of the Congress
such information obtained by him in the administration of this
subchapter, including the names of registrants under this subchapter, copies of registration statements, or parts thereof, copies of
political propaganda, or other documents or information filed under this subchapter, as may be appropriate in the light of the
purposes of this subchapter.
(June 8, 1938, c. 327, §6. 52 Stat 633; Apr. 29, 1942, c. 263, § 1, 56 Stat.
256; July 4, 1966, Pub. L. 89-486, § 6, 80 Stat. 247.)
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports
1966 Act House Report No. 1470 and
Conference Report No. 1632, see 1966
U.S.Code Cong, and Adm.News, p. 2397.
Amendments
1966 Amendment Pub.L. 89-486 designated existing provisions as subsec. (a)
and added subsecs. (b) and (c).
1942 Amendment Act Apr. 29, .1942
amended section generally.
Effective Dates
1966 Act Amendment by § 6 of
Pub.L. 89-486 effective ninety days after
July 4, 1966, see § 9 of Pub.L. 89-486,
set out as a note under section 611 of
this tide.
1942 Act. Amendment by Act Apr. 29,
1942 effective the sixtieth day after the
date of its approval, except that prior to
such sixtieth day the Attorney General
may make, prescribe, amend, and rescind such rules, regulations, and forms
as may be necessary to carry out the
provisions of this subchapter, see § 3 of
Act Apr. 29, 1942, set out as a note under
section 611 of this title.
1938 Act Section effective the ninetieth day after June 8, 1938, see § 7 of Act
June 8, 1938.
Prior Provisions
Prior to general amendment of Act
June 8, 1938, by Act Apr. 29, 1942, section related to rules and regulations.
Provisions on that subject were incorporated in section 620 of this title by 1942
amendment.
Provisions on this subject were contained in section 614 of this title prior to
general amendment of Act June 8, 1938,
by Act Apr. 29, 1942.
CROSS R E F E R E N C E S
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
Public officials acting as agents of foreign principals, see 18 USCA § 219.
LIBRARY R E F E R E N C E S
American Digest System
Foreign agents and propagandists, see International Law 9=10.24.
Public access to pubhc records, see Records «=30 to 67.
Encyclopedias
Availability to public of records of filings by foreign agents, see CJ.S. International Law § 42.
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
638
�Ch. 1 FOREIGN AGENTS AND PROPAGANDA
1
22 §617
Records cases: 326k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
NOTES OF DECISIONS
1. Constitutionality
attendants, was not of such magnitude
Impairment of First Amendment right as to require invalidating the disclosure
to receive ideas in privacy and impair- provision, in face of government interest
ment, if at ail, of First Amendment inter- in disclosing to the public the nature and
est in dissemination of Ideas by com- extent of an agents' dissemination of forpelled public disclosure of information eign advocacy. Block v. Meese, 1986,
required to be furnished under Foreign 793 F.2d 1303, 253 U.S.App.D.C. 317. cerAgents Registration Act, including in the tiorari denied 106 S.Ct. 3335, 478 U.S.
case of a film, the name of each station, 1021, 92 L.Ed.2d 740, rehearing denied
organization or theater using the film, 107 S.Ct. 1989, 481 U.S. 1043, 95 L.Ed.2d
the date of showing and the estimated 828.
§ 617.
Liability of officers
Each officer, or person performing the functions of an officer,
and each director, or person performing the functions of a director,
of an agent of a foreign principal which is not an individual shall be
under obligation to cause such agent to execute and file a registration statement and supplements thereto as and when such filing is
required under subsections (a) and (b) of section 612 of this title
and shall also be under obligation to cause such agent to comply
with all the requirements of sections 614(a) and (b) and 615 of this
title and all other requirements of this subchapter. Dissolution of
any organization acting as an agent of a foreign principal shall not
relieve any officer, or person performing the functions of an officer, or any director, or person performing the functions of a
director, from complying with the provisions of this section. In
case of failure of any such agent of a foreign principal to comply
with any of the requirements of this subchapter, each of its officers,
or persons performing the functions of officers, and each of its
directors, or persons performing the functions of directors, shall be
subject to prosecution therefor.
(June 8, 1938, c. 327, § 7, 52 Stat. 633; Apr. 29, 1942, c. 263, § 1, 56 Stat.
256; Aug. 3, 1950, c. 524, § 2, 64 Stat. 400.)
HISTORICAL AND STATUTORY NOTES
Revision Notes and Legislative Reports 1942 Amendment Act Apr. 29, 1942
19S0 Act. Senate Report No. 1900, see amended section generally.
1950 U.S.Code Cong. Service, p. 2886.
Effective Dates
1942 Act Amendment by Act Apr. 29,
Amendments
19S0 Amendment Act Aug. 3, 1950 1942 effective the sixtieth day after the
continued the obligation of officers, di- date of its approval, except that prior to
rectors, and persons acting as such to such sixtieth day the Attorney General
comply with this subchapter despite the may make, prescribe, amend, and rescind such rules, regulations, and forms
dissolution of a foreign agent.
639
U
l
�22 § 617
FOREIGN RELATIONS
Ch. 11
as may be necessary to carry out the Prior Provisions
provisions of this subchapter, see § 3 of
Section 7 of Act June 8, 1938, prior to
Act Apr. 29, 1942, set out as a note under the general amendment of that Act by
section 611 of this title.
Act Apr. 29, 1942, provided for the effec1938 Act Section effective the nineti- tive date of the 1938 Act. See Effective
eth day after June 8, 1938, see § 7 of Act Date note set out under section 611 of
this title.
June 8, 1938.
CROSS REFERENCES
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY REFERENCES
American Digest System
Foreign agents and propagandists, see International Law *»10.24.
Encyclopedias
Foreign agents and propagandists, see CJS. International Law § 42.
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
§ 618. Enforcement and penalties
(a) Violations; false statements and willful omissions
Any person who—
(1) willfully violates any provision of this subchapter or any
regulation thereunder, or
(2) in any registration statement or supplement thereto or in
• any statement under section 614(a) of this title concerning the
distribution of political propaganda or in any other document
filed with or furnished to the Attorney General under the
provisions of this subchapter willfully makes a false statement
of a material fact or willfully omits any material fact required
to be stated therein or willfully omits a material fact or a copy
of a material document necessary to make the statements
therein and the copies of documents furnished therewith not
misleading, shall, upon conviction thereof, be punished by a
fine of not more than $10,000 or by imprisonment for not more
than five years, or both, except that in the case of a violation of
subsection (b), (e), or (f) of section 614 of this title or of
subsection (g) or (h) of this section the punishment shall be a
fine of not more than $5,000 or imprisonment for not more
than six months, or both.
(b) Proof of identity of foreign principal
In any proceeding under this subchapter in wliich it is charged
that a person is an agent of a foreign principal with respect to a
foreign principal outside of the United States, proof of the specific
640
�Ch. 11 FOREIGN AGENTS AND PROPAGANDA
22 § 618
identity of the foreign principal shall be permissible but not necessary.
(c) Deportation
Any alien who shall be convicted of a violation of, or a conspiracy
to violate, any provision of this subchapter or any regulation
thereunder shall be subject to deportation in the manner provided
by sections 1251 to 1253 of Title 8.
v
(d) Nonmailable matter
The United States Postal Service may declare to be nonmailable
any communication or expression falling within clause (2) of section 6110) of this title in the form of prints or in any other form
reasonably adapted to, or reasonably appearing to be intended for,
dissemination or circulation among two or more persons, which is
offered or caused to be offered for transmittal in the United States
mails to any person or persons in any other American republic by
any agent of a foreign principal, if the United States Postal Service
is informed in writing by the Secretary of State that the duly
-•ccredited diplomatic representative of such American republic has
_nade written representation to the Department of State that the
admission or circulation of such communication or expression in
such American republic is prohibited by the laws thereof and has
requested in writing that its transmittal thereto be stopped.
(e) Continuing offense
Failure to file any such registration statement or supplements
thereto as is required by either section 612(a) or section 612(b) of
this title shall be considered a continuing offense for as long as
such failure exists, notwithstanding any statute of limitation or
other statute to the contrary.
(f) Injunctive remedy; jurisdiction of district court
Whenever in the judgment of the Attorney General any person is
engaged in or about to engage in any acts which constitute or will
constitute a violation of any provision of this subchapter, or regulations issued thereunder, or whenever any agent of a foreign principal fails to comply with any of the provisions of this subchapter or
the regulations issued thereunder, or otherwise is in violation of the
subchapter, the Attorney General may make application to the
appropriate United States district court for an order enjoining such
acts or enjoining such person from continuing to act as an agent of
such foreign principal, or for an order requiring compliance with
any appropriate provision of the subchapter or regulation thereunder. The district court shall have jurisdiction and authority to issue
641
�22 § 6 1 8
FOREIGN RELATIONS
Ch. 1
a temporary or permanent injunction, restraining order or sue?
other order which it may deem proper.
(Q) Deficient registration statement
If the Attorney General determines that a registration statemeni
does not comply with the requirements of this subchapter or the
regulations issued thereunder, he shall so notify the registrant ir.
writing, specifying in what respects the statement is deficient. Ii
shall be unlawful for any person to act as an agent of a foreign
principal at any time ten days or more after receipt of such
notification without filing an amended registration statement in full
compliance with the requirements of this subchapter and the regulations issued thereunder.
(h) Contingent fee arrangement
It shall be unlawful for any agent of a foreign principal required
to register under this subchapter to be a party to any contract,
agreement, or understanding, either express or implied, with such
foreign principal pursuant to which the amount or payment of the
compensation, fee, or other remuneration of such agent is contingent in whole or in part upon the success of any political activities
carried on by such agent.
(June 8, 1938, c. 327, § 8, as added Apr. 29, 1942, c. 263, § 1, 56 Stat. 257,
and amended Sept. 23, 1950, c. 1024, Title I, § 20, 64 Stat. 1005; June 27,
. 1952, c. 477, Title IV, § 402(d). 66 Stat. 276; Aug. 1, 1956, c. 849, § 1, 70
Stat. 899; July 4, 1966, Pub.L. 89-486, § 7, 80 Stat. 248; Aug. 12, 1970,
Pub.L. 91-375, § 4(a), 84 Stat. 773; Nov. 8, 1984, Pub.L. 98-620, Title IV.
§ 402(26), 98 Stat. 3359.)
HISTORICAL AND STATUTORY NOTES
RevUlon Notes and Legislative Reports the proceedings had to be made a pre1950 Act House Report No. 2980 and ferred cause and expedited in every way.
Conference Report No. 3112, see 1950
1966 Amendment Subsec. (a)(2).
U.S.Code Cong. Service, p. 3886.
Pub.L. 89-486, § 7(1), added the excep1952 Act House Report No. 1365 and tion provision.
Subsecs. (f) to (h). Pub.L. 89-486,
Conference Report No. 2096, see 1952
U.S.Code Cong, and Adm.News, p. 1653. § 7(2), added subsecs. (f) to (h).
1956 Act Senate Report No. 2719, see 1956 Amendment Act Aug. 1, 1956
1956 U.S.Code Cong, and Adm.News, p. amended credit to section by redesignating § 20(b) of Act Sept. 23, 1950, as
4056.
§20.
1966 Act House Report No. 1470 and 1952 Amendment Subsec. (c). Act
Conference Report No. 1632, see 1966 June 27, 1952 substituted "sections 1251
U.S.Code Cong, and Adm.News, p. 2397. to 1253 of Title 8 for "sections 155 and
"
1984 Act. House Report No. 98-1062, 156 of Title 8".
see 1984 U.S.Code Cong, and Adm.News, 1950 Amendment Subsec. (e). Act
p. 5708.
Sept. 23, 1950 added subsec. (e).
Amendments
Effective Date*
1984 Amendment Subsec. (f).
1984 Act. Amendment by Pub.L.
PubX. 98-620 struck out provision that 98-620 not to apply to cases pending on
642
�Ch. 1 FOREIGN AGENTS AND PROPAGANDA
1
22 §618
Note 2
Transfer of Functions
In subsec. (d), "United States Postal
Service" was substituted for 'Tostmaster
General" in two instances pursuant to
PubX. 91-375, § 4(a), Aug. 12, 1970, 84
Stat. 773, set out as a note under section
201 of Title 39, Postal Service, which
abolished the office of Postmaster General of the Post Office Department and
transferred its functions to the United
States Postal Service.
Nov. 8, 1984, see section 403 of Pub.L.
98-620, set out as a note under section
1657 of Title 28, Judiciary and Judicial
Procedure.
1966 Act. Amendment by § 7 of
Pubi. 89-486 effective ninety days after
July 4, 1966, see § 9 of Pub.L. 89-486,
set out as a note under section 611 of
this title.
1942 Act. Section effective the sixtieth day after the date of its approval,
except that prior to such sixtieth day the
Attorney General may make, prescribe,
amend, and rescind such rules, regulations, and forms as may be necessary to
carry out the provisions of this subchapter, see § 3 of Act Apr. 29, 1942, set out
as a note under section 611 of this title.
Prior Provisions
Provisions on this subject were contained in § 615 of this title prior to general amendment of Act June 8, 1938, by
Act Apr. 29, 1942.
CROSS REFERENCES
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY REFERENCES
American Digest System
Prosecutions, foreign agents, see International Law «=»10.25.
Encyclopedias
Prosecutions, foreign agents, see CJ.S. International Law § 42.
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
NOTES OF DECISIONS
be dismissed as an unconsented suit
against United States. Kennedy v. Rabinowitz, 1963, 318 F.2d 181, 115 U.S.App.
D.C. 210, affirmed 84 S.Ct. 919, 376 U.S.
605, 11 L.Ed.2d 940.
Admissibility of evidence
Discovery and Inspection
Dismissal 12
Indictment 4
Injunction 11
Inspection 5
Letters rogatory 6
Period of limitations 10
Persons liable 3
Private right of action 2
Production of documents
Self-incrimination 9
Sovereign Immunity 1
1. Sovereign Immunity
Suit which, in effect, was one to restrain Attorney General from prosecuting plaintiffs under this section- providing criminal penalties for anyone who
represents a foreign government in this
country and fails to register, not challenging constitutionality of this subchapter on its face or as applied, or authority
of Attorney General to enforce it would
2. Private right of action
Purpose of this subchapter is to provide centralized reporting system to
track activities of agents acting on behalf
of foreign countries, subchapter provides general benefit to public rather
than any special category of persons,
and no language in statute or its legislative history suggests that Congress intended to estabUsh cause of action in
any entity other than federal government; therefore, implied private cause
of action is not consistent with legislative scheme as it would only serve to
create in private parties some of authority explicitly assigned only to federal
government. Committee for a Free Namibia v. South West Africa People's Or-
643
�22 § 618
FOREIGN RELATIONS
Note 2
ganization, D.C.D.C.1982. 554 F.Supp.
722.
3. Persons liable
A person outside the United States
who uses the mails to commit here an
act forbidden by this subchapter is liable
to the penalties thereof. 1940, 39 Op.
Atty.Gen. 535.
4. Indictment
Indictment, alleging that named unincorporated association had been an
agent of named foreign principal, stating
in what manner it had acted as such
agent and charging that association had
wilfully failed to file a registration statement as agent of such foreign principal
and that individual defendants as officers and directors of association had
failed to cause association to register,
was sufficient to charge an offense under this section. U.S. v. Peace Information Center, D.C.D.C.1951, 97 F.Supp.
255.
5. Discovery and inspection
A motion for an order directing the
government to produce list of witnesses
and certain material evidence addressed
itself to the discretionary power of the
court in prosecution for violation of this
subchapter, since the defendant was not
charged with "treason or other capital
offense". U.S. v. Frank, D.C.D.C. 1959,
23 F.R.D. 145.
Ch. 11
prived of the benefit of any evidence
which the documents might contain. Attorney General of U.S. v. Irish People,
Inc., 1982, 684 F.2d 928, 221 U.S.App.
D.C. 406, certiorari denied 103 S.Ct. 817,
459 VS. 1172, 74 L.Ed.2d 1015, rehearing denied 103 S.Ct. 1509, 460 U.S. 1056,
75 L.Ed.2d 937.
8. Admissibility of evidence
Even if defendant, charged with willfully failing to register as agent of foreign government and willfully acting as
agent without registering, had lied to
Federal Bureau of Investigation agent in
response to questions about aviator and
exile from foreign nation, when he stated that he had met aviator only on one
occasion, probative value of evidence
about disappearance of aviator and exile
was too slight and its prejudicial tendency too great to justify its introduction in
prosecution, and prosecutor's attempt to
connect defendant in jury's mind with
such affair deprived defendant of a fair
trial. Frank v. U.S., 1958, 262 F.2d 695,
104 U.S.App.D.C. 384.
In a prosecution under this subchapter, the admission, without a showing of
unavailability of the letters themselves,
of secondary evidence of the contents of
letters which concerned defendant's demands for increased compensation, and
which passed between the German Consul General in New York and the German Charge d'Affaires in Washington,
was not error of the trial judge who,
over objection under the best evidence
rule, took judicial notice of the inviolability of diplomatic correspondence and
the existence of a state of war with Germany. Viereck v. U.S., 1944, 139 F.2d
847, 78 U.S.App.D.C. 279, certiorari denied 64 S.Ct 787, 321 U.S. 794, 88 L.Ed.
1083.
6. Letters rogatory
Where defendant was charged with violating this subchapter requiring agent
of foreign principal who undertakes to
disseminate foreign political propaganda
in the United States to register with the
Secretary of State, defendant's motion,
seeking issuance of letters rogatory addressed to appropriate judicial authority
in Germany for purpose of taking on
behalf of defendant, the deposition of 9. Self-incrimination
In a prosecution under this subchapGerman national who was alleged to be
defendant's principal was denied by the ter, where defendant voluntarily took
district court in exercise of its discretion. the stand and sought to convey to the
U.S. v. Auhagen, D.C.D.C.1941, 39 jury that there was nothing that he needF^upp. 590.
ed or wished to conceal, his privilege
against self-incrimination was not violat7. Production of documents
ed by permitting the government on
Due process would not require that cross-examination to show that defendefendant in suit to compel registration dant had invoked such privilege and reunder this subchapter gain actual physi- fused to testify before the grand jury
cal possession of documents claimed to prior to a former indictment against
be relevant to selective prosecution de- him, and again when subpoenaed to tesfense, so long as defendant was not de- tify in the trial of a third person for
644
�Ch. 11 FOREIGN AGENTS AND PROPAGANDA
22 § 619
perjury. Viereck v. U.S., 1944, 139 F.2d
Preliminary injunction would issue di847, 78 U.S.App.D.C. 279, certiorari de- recting defendant, an admitted agent of
nied 64 S.Ct. 787, 321 U.S. 794, 88 L.Ed. a foreign principal, to produce its books
and records for inspection by govern1083.
ment officials charged with enforcement
of provisions of this subchapter. Attor10. Period of limitations
Statute of limitations for offense of ney General v. Irish Northern Aid Committee, D.C.N.Y.1972, 346 F.Supp. 1384,
failing to register as required by Foreign affirmed 465 F.2d 1405, certiorari deAgents Registration Act began to run on nied 93 S.Ct. 679, 409 U.S. 1080, 34
last day that defendant allegedly acted as L.Ed.2d 669.
a foreign agent. VS. v. McGoff, 1987,
12. Dismissal
831 F.2d 1071, 265 U.S.App.D.C. 312.
Even if there was colorable showing of
11. Injunction
selective prosecution in suit to compel
Attorney General was entitled to per- registration under this subchapter, dismanent injunction prohibiting defendant missal might be inappropriate remedy
unincorporated association from violat- for government's inability to produce
ing this subchapter in view of uncontro- documents which constituted state severted evidence establishing that associa- crets; court should weigh other factors
tion had violated this subchapter by fail- such as likelihood that documents would
ing to disclose that it was an agent of serve to exculpate defendant, their neforeign principal failing to properly cessity for defense, what defendant
identify officers and affiliates, failing to stood to lose in case, government's intersufficiently describe its activities on be- est in maintaining secrecy and bringing
half of foreign principal, failing to sup- action, availability of alternatives, parply adequate financial statements, and ties' respective behavior, and distinction
and criminal
failing to comply with section 614 of this between civilof U.S. v. Irishcases. Attorney General
People, Inc.,
title governing filing and labelling of po- 1982, 684 F.2d 928, 221 U^.App.D.C.
litical propaganda. Attorney General of 406, certiorari denied 103 S.Ct. 817, 459
U.S. v. Irish Northern Aid Committee, U.S. 1172, 74 L.Ed.2d 1015, rehearing
D.C.N.Y.1981, 530 RSupp. 241, affirmed denied 103 S.Ct. 1509, 460 US. 1056, 75
668 F.2d 159.
L.Ed.2d 937.
§ 6 1 9 . Territorial applicability of subchapter
This subchapter shall be applicable in the several States, the
District of Columbia, the Territories, the Canal Zone, the insular
possessions, and all other places now or hereafter subject to the
civil or military jurisdiction of the United States,
(June 8, 1938, c. 327, § 9, as added Apr. 29. 1942, c. 263, § 1, 56 Stat. 257,
and amended Proc. No. 2695, July 4, 1946, 11 F.R. 7517, 60 Stat. 1352.)
HISTORICAL AND STATUTORY NOTES
References In Text
For definition of Canal Zone, referred
to in text, see section 3602(b) of this title.
CodlficaUons
Words "including the Philippine Islands," were deleted from section pursuant to Proc. No. 2695, which granted
independence to the Philippine Islands
under the authority of § 1394 of this
title, under which section Proc. No. 2695
is set out as a note.
EffecUve Dates
1942 Act Section effective the sixtieth day after the date of its approval,
except that prior to such sixtieth day the
Attorney General may make, prescribe,
amend, and rescind such rules, regulations, and forms as may be necessary to
carry out the provisions of this subchapter, see § 3 of Act Apr. 29, 1942, set out
as a note under section 611 of this title.
645
�22 § 619
FOREIGN RELATIONS
Ch. 11
CROSS REFERENCES
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY REFERENCES
American Digest System
Foreign agents and propagandists, see International Law «= 10.24.
Encyclopedias
Foreign agents and propagandists, see CJ.S. International Law § 42.
WESTLAW ELECTRONIC RESEARCH
International law cases: 221k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
§ 6 2 0 . Rules and regulations
The Attorney General may at any time make, prescribe, amend,
and rescind such rules, regulations, and forms as he may deem
necessary to carry out the provisions of this subchapter.
(June 8, 1938, c. 327, § 10, as added Apr. 29, 1942, c. 263, § 1, 56 Stat.
257.)
HISTORICAL AND STATUTORY NOTES
Effective Dates
ter, see § 3 of Act Apr. 29, 1942, set out
1942 Act Section effective the sixti- as a note under section 611 of this title.
eth day after the date of its approval,
except that prior to such sixtieth day the Prior Provisions
Provisions on this subject were conAttorney General may make, prescribe,
amend, and rescind such rules, regula- tained in § 616 of this title prior to gentions, and forms as may be necessary to eral amendment of Act June 8, 1938, by
carry out the provisions of this subchap- Act Apr. 29, 1942.
CROSS REFERENCES
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY REFERENCES
Administrative Law
Administration and enforcement, see 28 C.F.R. § 5.1 et seq.
Notification of foreign official status, see 22 C.F.R. § 4.1 et seq.
American Digest System
Powers and duties of Attorney General, see Attorney General «=»6.
Encyclopedias
Powers and duties of Attorney General, see CJJS. Attorney General § 8.
WESTLAW ELECTRONIC RESEARCH
Attorney General cases: 46k [add key number].
See, also, WESTLAW guide following the Explanation pages of this volume.
§ 6 2 1 . Reports to Congress
The Attorney General shall, from time to time, make a report to
the Congress concerning the administration of this subchapter,
646
�Ch. 1 FOREIGN AGENTS AND PROPAGANDA
1
22 §621
including the nature, sources, and content of political propaganda
disseminated or distributed.
(June 8, 1938, c. 327, § 11, as added Apr. 29, 1942, c. 263. § 1, 56 Stat. 258.)
HISTORICAL AND STATUTORY NOTES
Effective Dates
amend, and rescind such rules, regula1942 Act Section effective the sixti- tions, and forms as may be necessary to
eth day after the date of its approval, carry out the provisions of this subchape x c e j K p r i o r to such sixtieth day the ter, see § 3 of Act Apr. 29 194 . £ .out
Attorney General may make, prescribe, as a note under section 611 of this title.
CROSS REFERENCES
Authority to deport aliens for violations of provisions, see 8 USCA § 1251.
LIBRARY REFERENCES
American Digest System
.
Powers and duties of Attorney General, see Attorney General «=6.
^ ^ o w e r f a n d duties of Attorney General, see CJ.S. Attorney General § 8.
WESTLAW ELECTRONIC RESEARCH
Attorney General cases: 46k [add key number].
„„i„
See, also, WESTLAW guide following the Explanation pages of this volume.
mff
647
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Michael Waldman
Description
An account of the resource
<p>Michael Waldman was Assistant to the President and Director of Speechwriting from 1995-1999. His responsibilities were writing and editing nearly 2,000 speeches, which included four State of the Union speeches and two Inaugural Addresses. From 1993 -1995 he served as Special Assistant to the President for Policy Coordination.</p>
<p>The collection generally consists of copies of speeches and speech drafts, talking points, memoranda, background material, correspondence, reports, handwritten notes, articles, clippings, and presidential schedules. A large volume of this collection was for the State of the Union speeches. Many of the speech drafts are heavily annotated with additions or deletions. There are a lot of articles and clippings in this collection.</p>
<p>Due to the size of this collection it has been divided into two segments. Use links below for access to the individual segments:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+1">Segment One</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0469-F+Segment+2">Segment Two</a></p>
Creator
An entity primarily responsible for making the resource
Michael Waldman
Office of Speechwriting
Date
A point or period of time associated with an event in the lifecycle of the resource
1993-1999
Identifier
An unambiguous reference to the resource within a given context
2006-0469-F
Extent
The size or duration of the resource.
Segment One contains 1071 folders in 72 boxes.
Segment Two contains 868 folders in 66 boxes.
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
CFR [Campaign Finance Reform] - FARA [Foreign Agents Registration Act] [1]
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
Michael Waldman
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 54
<a href="http://clinton.presidentiallibraries.us/items/show/36404"> Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763296">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2006-0469-F Segment 2
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Preservation-Reproduction-Reference
Date Created
Date of creation of the resource.
6/3/2015
Source
A related resource from which the described resource is derived
7763296
42-t-7763296-20060469F-Seg2-054-003-2015