On Friday, June 7, the U.S. Attorney’s Office for the District of Columbia filed what appears to be the first ever complaint in a Lobbying Disclosure Act (“LDA”) enforcement action that was not the product of a negotiated settlement.  While there have been a small handful of settled enforcement actions over the last few years, in this case, according to the complaint, the defendant, Biassi Business Services, Inc., allegedly ignored multiple warnings and failed to resolve the matter prior to enforcement.

As in the prior settled cases, this one is a civil action brought by the U.S. Attorney’s Office because an LDA-registered entity allegedly failed on numerous occasions to file LD-2 and LD-203 reports with the Secretary of the Senate and Clerk of the House.  The complaint alleges that the defendant failed to file 128 reports due since 2009.  The complaint also notes ominously that under the Honest Leadership and Open Government Act of 2007 (“HLOGA”), each late report could lead to a penalty of up to $200,000.  That means the maximum fine could run into the millions of dollars.

There are a few things worth noting about this new case.  First, there still has yet to be any criminal enforcement of the LDA, even after HLOGA amended the LDA to provide for criminal penalties.  Second, the D.C. U.S. Attorney’s Office (which has rare exclusive jurisdiction to enforce the LDA) continues to focus its enforcement efforts on firms that register but then repeatedly fail to file disclosure reports even after numerous warnings.  There has yet to be any public report of a U.S. Attorney’s Office investigation or enforcement action against an unregistered lobbyist or corporation.  It seems likely that if a criminal LDA enforcement action is ever brought, it will be against a firm or individual that fails to register altogether, or one that registers but intentionally mis-reports its activities.

Finally, an interesting feature of the complaint is its claim that the defendant corporation is liable for the failure of its employee lobbyists to file their own personal LD-203 semiannual political contribution disclosure forms.  Corporate registrants are required to file an LD-203, and employees listed as lobbyists must also file personal LD-203s.  It is far from clear, however, that a corporation can be held liable for the failure of an individual lobbyist to file his own personal reports.  That’s an issue that may be litigated in this case, if it doesn’t settle quickly, as we suspect it might.

We’ll keep our eyes on this one.

Tags: enforcement, LD-2, LD-203, LDA, lobbying
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Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s Election and Political Law Practice Group. Mr. Kelner provides political law compliance advice to a wide range of corporate and political clients.  His compliance practice focuses on federal and state campaign finance, lobbying disclosure, pay to…

Robert Kelner is the chair of Covington’s Election and Political Law Practice Group. Mr. Kelner provides political law compliance advice to a wide range of corporate and political clients.  His compliance practice focuses on federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws, as well as legal ethics rules.  His expertise includes the Federal Election Campaign Act, Lobbying Disclosure Act, Ethics in Government Act, Foreign Agents Registration Act, and Foreign Corrupt Practices Act.  He is also a leading authority on the arcane rules governing political contributions by municipal securities dealers, investment advisers, hedge funds, and private equity funds.  Mr. Kelner advises Presidential political appointees on the complex process of being vetted and confirmed for such appointments.

In addition, he regularly advises corporations and corporate executives on instituting political law compliance programs.  He conducts compliance training for senior corporate executives and lobbyists.  He has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance, as well as other corporate compliance matters.  Mr. Kelner regularly defends clients in investigations by the Federal Election Commission, the U.S. Department of Justice, the U.S. House & Senate Ethics Committees, the House Oversight & Government Reform Committee, the House & Senate Judiciary Committees, the House Energy & Commerce Committee and its Subcommittee on Oversight & Investigations, the Senate Finance Committee, the Senate Special Committee on Aging, the Senate Permanent Subcommittee on Investigations, the Senate Health, Education, Labor, and Pensions Committee, and other congressional committees.  He has prepared numerous CEOs and corporate executives for testimony before congressional investigation panels, and he regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  He also defends clients in Lobbying Disclosure Act audits by the GAO and enforcement actions and audits by state election and lobbying enforcement agencies.

Mr. Kelner has appeared as a commentator on political law matters on The PBS News Hour, CNBC, Fox News, and NPR, and he has been quoted in the New York Times, Washington Post, Wall Street Journal, Legal Times, Washington Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

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