1. 1 Compliance with New Federal Lobbying Laws and Congressional Gift Rules Presented by: Caplin & Drysdale Trevor PotterKristy Tsadick 202.862.5092202.862.8851 tp@capdale.comkbt@capdale.com

2. 2 Topics LDA Registration and Reporting Requirements New rules effective January 1, 2008 New rules effective January 1, 2008 Congressional Gift and Travel Rules New rules in effect now New rules in effect now Internal Compliance Procedures/Best Practices

3. 3 LDA Guidance New LDA guidance issued December 10, 2007 New forms not yet available, but closely resemble previous forms New forms not yet available, but closely resemble previous forms New rules and forms effective January 1, 2008 LD-1 Registration LD-1 Registration LD-2 Quarterly Lobbying Report LD-2 Quarterly Lobbying Report LD-203 Semiannual Contributions Report and Certification LD-203 Semiannual Contributions Report and Certification Mandatory electronic filing New filing procedure No ACES Digital Signature required No ACES Digital Signature required Simultaneous filing with House and Senate using Senate password Simultaneous filing with House and Senate using Senate password

4. 4 LDA Registration (Form LD-1) Lobbying firms (and self-employed lobbyists) must register if they earn income totaling $2,500 or more during a calendar quarter Organizations employing in-house lobbyists must register if they incur expenses for lobbying activities totaling $10,000 or more during a calendar quarter Registrations are due within 45 days of a firm being retained to lobby or an organization employee qualifying as a lobbyist Individuals qualify as federal lobbyists if they: Make 2 or more “lobbying contacts” with legislative or executive branch “covered officials”; and Make 2 or more “lobbying contacts” with legislative or executive branch “covered officials”; and Spend 20% or more of their time on “lobbying activities” during a three month period Spend 20% or more of their time on “lobbying activities” during a three month period

5. 5 Federal Lobbying Contacts and Activities “Lobbying contacts” - oral or written communications with covered officials regarding: Federal legislation; Federal legislation; A federal rule, regulation, executive order, or any other program, policy, or position of the federal government; A federal rule, regulation, executive order, or any other program, policy, or position of the federal government; A federal program or policy (including the negotiation, award, or administration of a federal contract, grant, loan, permit, or license); or A federal program or policy (including the negotiation, award, or administration of a federal contract, grant, loan, permit, or license); or The nomination or confirmation of a person subject to confirmation by the U.S. Senate The nomination or confirmation of a person subject to confirmation by the U.S. Senate “Lobbying activities” - all federal lobbying contacts and any other activities in support of lobbying contacts Includes preparation and planning activities, drafting of position papers, research, and background work, which is intended, at the time performed, for use in connection with federal lobbying contacts Includes preparation and planning activities, drafting of position papers, research, and background work, which is intended, at the time performed, for use in connection with federal lobbying contacts

6. 6 Lobbying Contacts - exceptions Administrative communications Public testimony Speeches, articles, publications, or other materials distributed publicly or through mass communication Information provided in writing in response to an oral or written request Communications disclosed under FARA Communications responding to a notice soliciting comments from the public and directed to the designated agency official Communications related to participation in an advisory committee Communications compelled by statute, regulation, contract, loan, permit, license, or other action of the Congress or an agency Communications with agency officials regarding judicial proceedings, law enforcement inquiries, investigations, or proceedings Confidential communications, filings, or proceedings Communications made in compliance with an adjudication

7. 7 LDA “Covered Officials” Covered legislative branch officials Members of Congress Elected congressional officers Congressional or legislative branch employees Covered executive branch officials President Vice President Officers and employees of the Executive Office of the President Members of the uniformed services serving at grade 0-7 or above (brigadier general, rear admiral, and above) Officials serving in an Executive Level I-V position “Schedule C” employees – employees with policy-making, policy-determining, or policy-advocating positions

8. 8 Form LD-1 Requirements Registrant information Client information (for organizations, client is “self”) Lobbyist information Lobbyists names Lobbyists names Any covered positions held by the lobbyists in the 20 years before they first acted as a lobbyist for the client Any covered positions held by the lobbyists in the 20 years before they first acted as a lobbyist for the client Lobbying issues General lobbying issue areas General lobbying issue areas Specific lobbying issues Specific lobbying issues Affiliated organization information Foreign entity information

9. 9 Affiliated Organizations “Affiliated organizations” – organizations contributing $5,000 or more toward the registrant’s lobbying activities and actively participating in the planning, supervision, or control of the lobbying activities “Actively participating” – engaging directly; participating in decisions about selecting or retaining lobbyists; formulating priorities among legislative issues; designing lobbying strategies; performing a leadership role in forming an ad hoc coalition; or engaging in substantive planning or managerial roles “Actively participating” – engaging directly; participating in decisions about selecting or retaining lobbyists; formulating priorities among legislative issues; designing lobbying strategies; performing a leadership role in forming an ad hoc coalition; or engaging in substantive planning or managerial roles Organizations listed on the registrant’s public website as contributors or members that do not plan, supervise, or control the organization’s lobbying activities in whole or major part need not be listed if the website’s Internet address is provided “In whole or major part” – in substantial part; 20% or more control or supervision “In whole or major part” – in substantial part; 20% or more control or supervision

10. 10 Foreign Entities “Foreign entities” – Hold at least 20% equitable ownership in the registrant or any affiliated organization; or Hold at least 20% equitable ownership in the registrant or any affiliated organization; or Directly or indirectly, in whole or major part, plan, supervise, control, direct, finance or subsidize activities of the registrant or any affiliated organization; or Directly or indirectly, in whole or major part, plan, supervise, control, direct, finance or subsidize activities of the registrant or any affiliated organization; or Is an affiliate of either the registrant or an affiliated organization and has direct interest in the outcome of the lobbying activity Is an affiliate of either the registrant or an affiliated organization and has direct interest in the outcome of the lobbying activity

11. 11 Changes to LD-1 Lobbyists Revised LD-1, Line 10 requires a listing of lobbyists and any covered positions they held in the 20 years before they first acted as a lobbyist for the client Revised LD-1, Line 10 requires a listing of lobbyists and any covered positions they held in the 20 years before they first acted as a lobbyist for the client

12. 12 Affiliated organizations Revised LD-1, Line 13 allows 60 total listings of affiliated organizations and includes an Internet address reporting field Revised LD-1, Line 13 allows 60 total listings of affiliated organizations and includes an Internet address reporting field Affiliates that in whole or major part participate in a registrant’s lobbying activities must be listed first, followed by the active participants Affiliates that in whole or major part participate in a registrant’s lobbying activities must be listed first, followed by the active participants Organizations with more than 60 affiliates should list the affiliates on its public website and disclose the Internet address or file an amendment disclosing the additional affiliates Organizations with more than 60 affiliates should list the affiliates on its public website and disclose the Internet address or file an amendment disclosing the additional affiliates

13. 13 LDA Quarterly Lobbying Reports (Form LD-2) Quarterly lobbying report due dates: April 20 th - 1Q April 20 th - 1Q July 20 th - 2Q July 20 th - 2Q October 20 th - 3Q October 20 th - 3Q January 20 th - 4Q January 20 th - 4Q If the due date falls on a weekend day or holiday, the report is due the next business day. For example, the first report for 2008 is due April 21 st. Each report covers the preceding calendar quarter

14. 14 Form LD-2 Requirements Registrant and client information For organizations, client is “self” For organizations, client is “self” Report type Income or Expenses – “good faith estimate” Income earned by lobbying firms for lobbying activities Income earned by lobbying firms for lobbying activities Expenses incurred by organizations for lobbying activities Expenses incurred by organizations for lobbying activities Salary, overhead, and out-of-pocket costs for lobbying activities by in-house personnel (lobbyist and non-lobbyist employees) Payments made to contract lobbyists, consultants, and vendors Portion of dues payments to trade associations or other organizations attributable to lobbying activities Travel and gift expenses related to lobbying Does not include grassroots lobbying expenses Amounts in excess of $5,000 must be rounded to the nearest $10,000 Amounts in excess of $5,000 must be rounded to the nearest $10,000 Organization reporting method – LDA or IRC Organization reporting method – LDA or IRC

15. 15 Form LD-2 Requirements Lobbying Activity General issue area code General issue area code Specific lobbying issues Specific lobbying issues Bill name and general description Houses of Congress and Federal agencies contacted by registered lobbyists Houses of Congress and Federal agencies contacted by registered lobbyists Lobbyist information Lobbyist information Lobbyists names Covered positions held by the lobbyists in the 20 years before they first acted as a lobbyist for the client Whether lobbyists are “new” to the general issue area Foreign entities with an interest in the specific lobbying issues Foreign entities with an interest in the specific lobbying issues

16. 16 Form LD-2 Requirements Information update – complete only if changes apply Client information Client information Lobbyist information Lobbyist information Add new lobbyists or terminate lobbyist registrations General lobbying issues General lobbying issues Affiliated organization information Affiliated organization information Add new affiliates or terminate affiliations Foreign entity information Foreign entity information Add new foreign entities or terminate affiliation with foreign entities

17. 17 Changes to LD-2 Clients Revised LD-2, Line 7 includes a checkbox to indicate the client is a state or local government or instrumentality Revised LD-2, Line 7 includes a checkbox to indicate the client is a state or local government or instrumentality

18. 18 Changes to LD-2 Type of report Revised LD-2, Line 8 includes checkboxes for quarterly reports Revised LD-2, Line 8 includes checkboxes for quarterly reports 1Q (January 1 – March 31) 2Q (April 1 – June 30) 3Q (July 1 – September 30) 4Q (October 1 – December 31)

19. 19 Changes to LD-2 Income or expenses Revised LD-2, Lines 12 and 13 have lower reporting thresholds – “less than $5,000” and “$5,000 or more.” Amounts over $5,000 must be rounded to the nearest $10,000 Revised LD-2, Lines 12 and 13 have lower reporting thresholds – “less than $5,000” and “$5,000 or more.” Amounts over $5,000 must be rounded to the nearest $10,000

20. 20 Changes to LD-2 Lobbyists Revised LD-2, Line 18 requires a listing of lobbyists who worked on the lobbying issue and any covered positions they held in the 20 years before they first acted as a lobbyist for the client Revised LD-2, Line 18 requires a listing of lobbyists who worked on the lobbying issue and any covered positions they held in the 20 years before they first acted as a lobbyist for the client

21. 21 Affiliated organizations Revised LD-2, Line 25 allows 40 total listings of affiliated organizations and includes an Internet address reporting field Revised LD-2, Line 25 allows 40 total listings of affiliated organizations and includes an Internet address reporting field Affiliates that in whole or major part participate in a registrant’s lobbying activities must be listed first, followed by active participants Affiliates that in whole or major part participate in a registrant’s lobbying activities must be listed first, followed by active participants Organizations with more than 40 affiliates should list the affiliates on its public website and disclose the Internet address or file an amendment disclosing the additional affiliates Organizations with more than 40 affiliates should list the affiliates on its public website and disclose the Internet address or file an amendment disclosing the additional affiliates

22. 22 LDA Semiannual Contributions Report and Certification (Form LD-203) LDA registrants and individual registered lobbyists must electronically file semiannual contributions reports and certifications Each lobbyist must obtain an identification number and password (www.disclosure.senate.gov) Each lobbyist must obtain an identification number and password (www.disclosure.senate.gov) Reports must be filed even if no reportable contributions or payments are made Reports must be filed even if no reportable contributions or payments are made Semiannual contributions report due dates: July 30 th July 30 th January 30 th January 30 th If the due date falls on a weekend day or holiday, the report is due the next business day. Reports cover the preceding semiannual period

23. 23 Form LD-203 Requirements Filer information Name and employer (if applicable) of registrant or lobbyist Name and employer (if applicable) of registrant or lobbyist Political committees established or controlled by the registrant or lobbyist Political committees established or controlled by the registrant or lobbyist Contribution information Date, recipient, and amount of funds ($200 or more) contributed to federal officeholders, candidates, leadership PACs, or political party committees Date, recipient, and amount of funds ($200 or more) contributed to federal officeholders, candidates, leadership PACs, or political party committees Date, name of honoree, and amount of funds ($200 or more) paid to Presidential library foundations or Presidential inaugural committees Date, name of honoree, and amount of funds ($200 or more) paid to Presidential library foundations or Presidential inaugural committees (continued on next page)

24. 24 Date, name of honoree(s), and amount of funds paid to or for: Date, name of honoree(s), and amount of funds paid to or for: Events to honor or recognize a covered legislative or executive branch official Entities named for a covered legislative branch official or designated by such official Meetings, retreats, conferences, or other similar events held by, or in the name of, covered legislative or executive branch officials Persons or entities in recognition of a covered legislative branch official Entities designated, established, financed, maintained, or controlled by covered legislative or executive branch officials These payments, if reported to the FEC by the recipient, need not be disclosed by the filer.

25. 25 Form LD-203 Requirements Checkbox to certify (under penalty of false statements) that the registrant or lobbyist: Has read and is familiar with the congressional gift rules; and Has read and is familiar with the congressional gift rules; and Has not given a gift or provided travel that the registrant or lobbyist knew to be improper under those rules Has not given a gift or provided travel that the registrant or lobbyist knew to be improper under those rules

26. 26 Gifts to Congressional Officials (in effect) Lobbyists and organizations that retain or employ lobbyists may not give anything of value to legislative branch officials and employees unless the gift qualifies for an exception

27. 27 Congressional Gift Rule Exceptions (Lobbyists and Non-lobbyists) Anything paid for by the Member, officer, or employee Political contributions Gifts from relatives or personal friends Widely-attended events Charity fundraising events Informational materials Awards and prizes in public contests or events Honorary degrees Home state products Inheritance Anything granted a waiver by the Ethics Committee Items of little intrinsic value Food and beverages other than part of a meal Certain benefits and opportunities related to outside or former employment, available the public, or available to a specific group Training in the interest of Congress Commemorative items Anything paid for by federal, state, or local government Items received in accordance with foreign gift statutes

28. 28 Congressional Gift Rules Lobbyists are prohibited from making contributions to: Entities maintained or controlled by congressional Members, officers, or employees Entities maintained or controlled by congressional Members, officers, or employees Charitable organizations on the basis of a designation, recommendation, or other specification of a congressional Member, officer, or employee (with limited exception) Charitable organizations on the basis of a designation, recommendation, or other specification of a congressional Member, officer, or employee (with limited exception) Conferences, meetings, or events sponsored by or affiliated with an official congressional organization Conferences, meetings, or events sponsored by or affiliated with an official congressional organization Legal expense funds for congressional Members, officers, or employees Legal expense funds for congressional Members, officers, or employees

29. 29 Convention Events Members may not attend private events held in their honor during the national convention if directly paid for by a lobbyist or an organization that employs or retains lobbyists Rule applies even if event qualifies for gift exception Rule applies even if event qualifies for gift exception Exception for Members appearing in capacity as presidential or vice-presidential nominees Exception for Members appearing in capacity as presidential or vice-presidential nominees

30. 30 Congressional Travel All officially-connected, privately sponsored travel requires pre-approval from the Ethics Committees and post-travel disclosure Trip sponsors must complete a travel certification form and submit the form to invitees Trip sponsors must complete a travel certification form and submit the form to invitees Invitees must complete additional forms and submit all travel documents to the appropriate Ethics Committee for pre-approval at least 30 days prior to the trip Invitees must complete additional forms and submit all travel documents to the appropriate Ethics Committee for pre-approval at least 30 days prior to the trip To be approved, trips must be connected to official duties and may not include excessive unscheduled or recreational time To be approved, trips must be connected to official duties and may not include excessive unscheduled or recreational time

31. 31 Congressional Travel Sponsored by Lobbyist Employers General rule: Lobbyists and organizations that employ or retain lobbyists may not sponsor congressional travel Exceptions: One-day trips sponsored by organizations that employ or retain lobbyists (includes one overnight stay; possibility of second night for long-distance or difficult travel) One-day trips sponsored by organizations that employ or retain lobbyists (includes one overnight stay; possibility of second night for long-distance or difficult travel) Lobbyists may have de minimis involvement in the arrangement of the trip Lobbyists may not accompany House travelers while traveling to or from the event Lobbyists may not accompany Senate travelers while traveling travel to or from the event in other than a de minimis way

32. 32 Congressional Travel Sponsored by Lobbyist Employers Exceptions: House - travel sponsored by institutions of higher learning House - travel sponsored by institutions of higher learning Lobbyists may arrange travel and accompany traveler Senate - travel sponsored by 501c3 organizations Senate - travel sponsored by 501c3 organizations Lobbyists may not arrange the trip or accompany the traveler at any point throughout the trip in other than a de minimis way

33. 33 Internal Compliance Procedures/Best Practices Compliance Policy Draft and implement policy addressing interactions with government officials and registration and reporting requirements Draft and implement policy addressing interactions with government officials and registration and reporting requirements Gift and contribution pre-approval Compliance procedures and training schedule Training Training for employees who engage in lobbying activities (at least once per year) Training for employees who engage in lobbying activities (at least once per year) Training for other employees Training for other employees Training attendance records and certifications Training attendance records and certifications New employee training New employee training

34. 34 Internal Compliance Procedures Lobbyist registrations Decide which employees should be registered Decide which employees should be registered Determine whether lobbyists held “covered positions” during previous 20 years Determine whether lobbyists held “covered positions” during previous 20 years Financial information Develop and implement method for tracking lobbying expenses Develop and implement method for tracking lobbying expenses Reasonable system to establish a good faith estimate Information from contract lobbyists and trade associations Develop and implement method for tracking political contributions and payments benefiting covered officials Develop and implement method for tracking political contributions and payments benefiting covered officials Determine whether registered lobbyists will track payments and file reports independently

35. 35 Internal Compliance Procedures Gifts and travel for government officials Require gift and travel pre-approval Require gift and travel pre-approval Decide which non-lobbyist employee will organize congressional travel Decide which non-lobbyist employee will organize congressional travel Develop and implement method for tracking gifts and travel Develop and implement method for tracking gifts and travel Include check-off box on expense reimbursement forms certifying pre-approval was received and expenditure complies with congressional gift rules Include check-off box on expense reimbursement forms certifying pre-approval was received and expenditure complies with congressional gift rules Issues lobbied Develop and implement method for tracking list of issues lobbied and Houses of Congress or agencies contacted by registered lobbyists Develop and implement method for tracking list of issues lobbied and Houses of Congress or agencies contacted by registered lobbyists

36. 36 Internal Compliance Procedures Registration and report preparation and approval Prepare reporting calendar/reminders Prepare reporting calendar/reminders Develop and implement procedures for preparing and approving LDA filings Develop and implement procedures for preparing and approving LDA filings Only 20 days to prepare quarterly lobbying reports and 30 days to prepare semiannual contributions reports Choose the appropriate signatory Choose the appropriate signatory Signatory responsible for the accuracy of information disclosed on the report

37. 37 Internal Compliance Procedures Recordkeeping Keep copies of all registrations and reports and proof of filing Keep copies of all registrations and reports and proof of filing Maintain back-up documentation supporting information disclosed on registrations and reports Maintain back-up documentation supporting information disclosed on registrations and reports Keep records for at least 6 years Keep records for at least 6 years Internal compliance audits Outside counsel assistance Limits legal exposure Limits legal exposure Ensures updated information Ensures updated information

38. 38 2008 LDA Report Due Dates February 14, 2008 – 2007 end-year LD-2 April 21, 2008 –1Q LD-2 July 21, 2008 – 2Q LD-2 July 30, 2008 – semiannual contributions report LD-203 covering January through June 2008 (organization and all registered lobbyists) October 20, 2008 – 3Q LD-2