DOJ Secures $200,000 Lobbying Disclosure Act Penalty

  • A default judgment secured in U.S. v. Biassi Business Services Inc., D.D.C. may be indicative of a more aggressive Lobbying Disclosure Act (LDA) enforcement policy, and the U.S. Attorney's Office is considering pursuing criminal penalties for LDA violations.
  • LDA registrants should always respond in a timely manner when contacted by the Secretary of the Senate, Clerk of the House or the U.S. Attorney's Office about an LDA matter.

The U.S. Attorney's Office for the District of Columbia recently secured a default judgment of $200,000 against a consulting firm for violations of the Lobbying Disclosure Act of 1995 (LDA), as amended. It appears that the LDA registrant in this case ignored numerous communications from the Secretary of the Senate, the Clerk of the House and the U.S. Attorney's Office. (U.S. v. Biassi Business Services Inc., D.D.C., No. 13-853, judgment 12/2/12).

This action may signal a more aggressive LDA enforcement policy, as all previous LDA cases involved negotiated settlements. From 1995 to 2007, the U.S. Attorney's Office settled three LDA enforcement cases for undisclosed amounts. In 2007, the Honest Leadership and Open Government Act (HLOGA) increased civil penalties and provided criminal sanctions for LDA violations. Since 2007, the U.S. Attorney's Office has entered into negotiated settlements three times — once in 2011 for $45,000 and twice in 2012 for $50,000 and $30,000. This latest case marks the first LDA enforcement case to result in a judgment.

Future LDA Enforcement

In addition, according to a Government Accountability Office (GAO) LDA report issued in April 2013, the U.S. Attorney's Office is considering pursuing criminal penalties for LDA violations for the first time. Although all LDA enforcement cases to date have involved LDA registrants, it is possible that future enforcement cases may involve entities or individuals not registered under the LDA that engage in lobbying — sometimes referred to as "stealth-lobbyists." It is unclear how many LDA enforcement actions are currently underway, but the Secretary of the Senate has referred a total of 12,229 potential LDA violations to the U.S. Attorney’s Office since 1995 and the GAO has audited over a thousand LDA filings since 2007.  

What Do I Need to Know?

LDA registrants should always respond in a timely manner when contacted by the Secretary of the Senate, Clerk of the House or the U.S. Attorney's Office about an LDA matter. Entities and individuals subject to the LDA should also take this opportunity to review their current procedures to ensure that they are in compliance with the LDA. All LDA registrants should have an updated LDA compliance program in place and should be prepared to respond to a GAO audit or Department of Justice (DOJ) investigation.

About the LDA

The LDA is a federal lobbying statute that applies to contacts with the legislative and executive branch. It is administered by Congress and LDA reports are audited by the GAO. The LDA does not apply to state or local lobbying. It requires registering and disclosing certain lobbying activities, including the issues lobbied, identification of individual lobbyists and lobbying costs. The LDA is enforced by the U.S. Attorney’s Office for the District of Columbia and violations are subject to fines of up to $200,000 and up to five years in prison for certain violations.

Topics:  DOJ, Enforcement, Enforcement Actions, Lobbying, Lobbying Disclosure Act, Lobbyists, Penalties

Published In: Criminal Law Updates, Elections & Politics Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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