2. 1 Restrictions on the Use of Federal Assistance Funds for Lobbying Federal Assistance Law Division U.S. Department of Commerce JAOM FMC May 2007

3. 2 What statutes, regulations, and guidelines govern lobbying activities by Federal assistance recipients?

4. 3 Lobbying Statutes, Regulations, and Guidelines Many appropriation acts restrict the use of funds for “publicity or propaganda” Many appropriation acts restrict the use of funds for “publicity or propaganda” –Commerce Department, FY 2006: Public Law 109-108, Title VI, Sec. 601 18 U.S.C. § 1913 18 U.S.C. § 1913 31 U.S.C. § 1352 (Byrd Amendment) Common Rule, 15 CFR § 28 31 U.S.C. § 1352 (Byrd Amendment) Common Rule, 15 CFR § 28 Lobbying Disclosure Act (LDA) of 1995 Lobbying Disclosure Act (LDA) of 1995 –2 U.S.C. §§1601-1607 Cost principles: OMB Circulars A-21, A-87, A- 122, Part 31 of the Federal Acquisition Regulation Cost principles: OMB Circulars A-21, A-87, A- 122, Part 31 of the Federal Acquisition Regulation Other requirements may arise in specific statutes Other requirements may arise in specific statutes

5. 4 Publicity or Propaganda Prohibition Appropriation Acts often restrict use of funds for “publicity or propaganda” Appropriation Acts often restrict use of funds for “publicity or propaganda” Department of Commerce version: Department of Commerce version: “PL 109-108, TITLE VI--GENERAL PROVISIONS, SEC. 601. No part of any appropriation contained in this Act shall be used for publicity or propaganda purposes not authorized by the Congress.”

6. 5 Publicity or Propaganda Prohibition What is “publicity or propaganda”? Defined by administrative interpretation. Scores of Government Accountability Office cases on topic regard definition What is “publicity or propaganda”? Defined by administrative interpretation. Scores of Government Accountability Office cases on topic regard definition Recent examples: agencies issued video news releases and/or contracts with media figures that resulted in promotion of agency programs without attributing the government as the source of the information Recent examples: agencies issued video news releases and/or contracts with media figures that resulted in promotion of agency programs without attributing the government as the source of the information –Examples: “No Child Left Behind” (television’s Armstrong Williams was a prominent subcontractor), the Medicare prescription drug program, and the “Healthy Marriage Initiative” Contrast GAO opinions with Department of Justice Office of Legal Counsel opinions of Jan. 19, 2001 and July 30, 2004: http://www.usdoj.gov/olc/. Executive agencies follow Department of Justicehttp://www.usdoj.gov/olc/

7. 6 Publicity or Propaganda Prohibition For many years, applicability to Federal grantees unclear For many years, applicability to Federal grantees unclear In 1981, Comptroller General opined that restriction applies to grant recipients: B-202975, Nov. 3, 1981 In 1981, Comptroller General opined that restriction applies to grant recipients: B-202975, Nov. 3, 1981 Restriction limited to lobbying the United States Congress; does not apply to lobbying at the state level: B-214455 (Nov. 24, 1984; B-206466 (Sept. 13, 1982) Restriction limited to lobbying the United States Congress; does not apply to lobbying at the state level: B-214455 (Nov. 24, 1984; B-206466 (Sept. 13, 1982)

8. 7 18 U.S.C. § 1913 General prohibition against using appropriated funds to lobby Congress on legislation General prohibition against using appropriated funds to lobby Congress on legislation Does not prohibit “communicating” with Congress if requested, or requesting “through proper official channels” legislation or funding the Agency deems necessary for the efficient conduct of the public business Does not prohibit “communicating” with Congress if requested, or requesting “through proper official channels” legislation or funding the Agency deems necessary for the efficient conduct of the public business Statute is broad; violation is criminal offense Statute is broad; violation is criminal offense

9. 8 18 U.S.C. § 1913 Does this restriction flow down to Federal assistance recipients? Does this restriction flow down to Federal assistance recipients? –Appropriations restrictions often flow down, and some officials have indicated an interest in flowing down this requirement. At least two Federal court cases so far, however, suggest this law is limited to Federal agencies and employees but this includes FMC members and staff — –See Grassley v. Legal Services Corp., 535 F.Supp. 818 (S.D. Iowa, 1982); American Federation of Government Employees v. District of Columbia, not reported in F.Supp.2d, 2005 WL 1017877 (D.D.C., May 2, 2005). See also 1981 WL 23148 (Comp. Gen.), B- 202975, Matter of: Bobbi Fielder, House of Rep. (Nov. 3, 1981)

10. 9 31 U.S.C. §1352 Byrd Amendment Common Rule, 15 CFR Part 28 31 U.S.C. §1352 Byrd Amendment Common Rule, 15 CFR Part 28 Enacted in 1989, prohibits use of Federally-appropriated funds to influence Congress in awarding of contracts, grants, loans and cooperative agreements Enacted in 1989, prohibits use of Federally-appropriated funds to influence Congress in awarding of contracts, grants, loans and cooperative agreements Requires certification from organizations requesting or receiving Federally- appropriated funds that they have not and will not use Federally-appropriated funds to lobby for a Federal contract, grant, loan, or cooperative agreement Requires certification from organizations requesting or receiving Federally- appropriated funds that they have not and will not use Federally-appropriated funds to lobby for a Federal contract, grant, loan, or cooperative agreement See also OMB Guidance and Clarification Notices: 54 FR 52306 (12/20/89), 61 FR 1412 (1/19/96), 55 FR 24540 (6/15/90), and 57 FR 1772 (1/15/92) See also OMB Guidance and Clarification Notices: 54 FR 52306 (12/20/89), 61 FR 1412 (1/19/96), 55 FR 24540 (6/15/90), and 57 FR 1772 (1/15/92)

11. 10 31 U.S.C. § 1352 Byrd Amendment Common Rule, 15 CFR Part 28 Requires disclosure of names of registered lobbyist if organizations receiving funds over $100,000 have used non-appropriated funds to make contacts regarding Federal awards Requires disclosure of names of registered lobbyist if organizations receiving funds over $100,000 have used non-appropriated funds to make contacts regarding Federal awards Implementing regulations contain: Implementing regulations contain: –Appendix A - standard language for certification of compliance with this law (in the Commerce Department, CD 511) –Appendix B - Standard Form LLL, to disclose covered lobbying from non- appropriated funds if the recipient received a grant or cooperative agreement in excess of $100,000

12. 11

13. 12 What agencies do with SF LLL Disclosures Then, on May 31 and November 30 each year, agency heads must collect and compile the forms and submit a report to the House and Senate: 15 C.F.R. § 28.600 First, file them

14. 13 Lobbying Disclosure Act (LDA) of 1995 2 U.S.C. §§ 1601-1607 LDA expanded definition of “lobbying” under Byrd Amendment to almost any contact with “covered officials” on almost any Federal action LDA expanded definition of “lobbying” under Byrd Amendment to almost any contact with “covered officials” on almost any Federal action Also, organizations no longer need disclose amount of money spent on lobbying or describe specific lobbying activities Also, organizations no longer need disclose amount of money spent on lobbying or describe specific lobbying activities

15. 14 Lobbying Disclosure Act (LDA) of 1995 2 U.S.C. §§ 1601-1607 For grants and cooperative agreements, lobbying expenditures must be disclosed once they reach $100,000 For grants and cooperative agreements, lobbying expenditures must be disclosed once they reach $100,000 $100,000 civil penalty if an organization makes a prohibited expenditure or fails to file the required certification and disclosure $100,000 civil penalty if an organization makes a prohibited expenditure or fails to file the required certification and disclosure

16. 15 Federal Cost Principles Cost principles differ, but generally prohibit use of funds to influence Federal, state, local elections and Federal and state legislation by direct contact or by publicity or propaganda (including “grassroots” lobbying) Cost principles differ, but generally prohibit use of funds to influence Federal, state, local elections and Federal and state legislation by direct contact or by publicity or propaganda (including “grassroots” lobbying) See 2 C.F.R. Subtitle B (OMB Circulars A-21, Sections 28, 33; Circular A-87, Sections 24, 28; and Circular A-122, Section 25, 30) See 2 C.F.R. Subtitle B (OMB Circulars A-21, Sections 28, 33; Circular A-87, Sections 24, 28; and Circular A-122, Section 25, 30)

17. 16 Cost Principles: Membership Fees Membership fees can be an allowable cost, but if an organization the grantee joins lobbies, that may violate cost principles Membership fees can be an allowable cost, but if an organization the grantee joins lobbies, that may violate cost principles Publicity and propaganda restriction can also apply Publicity and propaganda restriction can also apply See 2 C.F.R., Subtitle B (OMB Circulars A-21, Sec. 33; A-87, Sec. 28; A-122, Sec. 30) See 2 C.F.R., Subtitle B (OMB Circulars A-21, Sec. 33; A-87, Sec. 28; A-122, Sec. 30)

18. 17 Social and Civic Organizations Under 501(c)(4) Under 1996 revisions to the LDA, 2 U.S.C. § 1611, tax-exempt organizations formed under Section 501(c)(4) of the Internal Revenue Code are INELIGIBLE for Federal financial assistance if they engage in lobbying as defined in the LDA Under 1996 revisions to the LDA, 2 U.S.C. § 1611, tax-exempt organizations formed under Section 501(c)(4) of the Internal Revenue Code are INELIGIBLE for Federal financial assistance if they engage in lobbying as defined in the LDA These groups are often referred to as “social organizations” or “civic organizations” These groups are often referred to as “social organizations” or “civic organizations” ALL lobbying is prohibited, not just lobbying with Federal funds ALL lobbying is prohibited, not just lobbying with Federal funds

19. 18 Summary Propaganda restriction flows to grantees, but determined on a case-by-case basis Propaganda restriction flows to grantees, but determined on a case-by-case basis Grantees cannot use Federal funds to influence a Federal agency official, or a Member of Congress or staff, in connection with the awarding of any Federal contract, grant, or other financial assistance Grantees cannot use Federal funds to influence a Federal agency official, or a Member of Congress or staff, in connection with the awarding of any Federal contract, grant, or other financial assistance Grantees required to disclose certain lobbying contacts Grantees required to disclose certain lobbying contacts Cost principles implement lobbying and membership limits Cost principles implement lobbying and membership limits –Grantees must adhere to principles with care as many costs are unallowable as either a direct cost or through indirect cost rate