Based on reports from around town here in D.C., the Government Accountability Office (“GAO”) has begun a new wave of audits of firms that are registered under the federal Lobbying Disclosure Act (“LDA”).  These periodic audits are required under legislation enacted in 2007, the Honest Leadership and Open Government Act (“HLOGA”).  HLOGA requires that registrants be selected for audit on a “random” basis.  GAO issues a report each March or April aggregating and summarizing its findings, but generally does not single out particular firms in those reports.  (An exception to that rule is that GAO has in the past identified by name firms that have refused to cooperate with GAO by submitting to an audit.)

Audits are conducted not only for lobbying firms but also for corporations and associations that are registered under the LDA.  After several years of these random audits, we have a pretty good sense of the approach that GAO takes, and the best practices for firms that are audited.  If your firm is contacted by GAO for an audit, you should conduct, or have counsel conduct, a pre-audit, in which you review the report or reports that GAO has indicated that it will audit.  If issues are identified in the pre-audit, it generally makes sense to prepare an amended report, advise GAO of your own findings, and then file the amendment.  The optimal approach will depend on the facts and circumstances, and you should consult counsel.  In the case of an audit of a Form LD-203 (the twice yearly form on which federal lobbyists and LDA-registered firms disclose political contributions and certify to gift rule compliance), it makes sense to compare your filed LD-203 to the FEC’s contribution database in order to identify any discrepancies.

Most GAO audits are brief and efficient.  The auditors will expect to see orderly records that provide factual support for the information contained in your LDA filings.  You should have a system in place to create and maintain appropriate backup for your LDA reports, and you should maintain the backup materials so that they can be accessed and shared with GAO auditors as needed.

Tags: audit, GAO, HLOGA, LD-203, LDA, lobbying
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Photo of Robert Kelner Robert Kelner

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads …

Robert Kelner is the chair of Covington’s nationally recognized Election and Political Law Practice Group.  He counsels clients on the full range of political law compliance matters, and defends clients in civil and criminal law enforcement investigations concerning political activity. He also leads the firm’s prominent congressional investigations practice.

Rob’s political law compliance practice covers federal and state campaign finance, lobbying disclosure, pay to play, and government ethics laws. 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 and marketing activities by registered investment advisers and municipal securities dealers.

Rob’s political law clients include numerous multinational corporations, many of which are household names.  He counsels major banks, hedge funds, private equity funds, trade associations, PACs, political party committees, candidates, lobbying firms, and politically active high-net-worth individuals. He has represented the Republican National Committee, National Republican Congressional Committee, and National Republican Senatorial Committee.  He also advises Presidential political appointees on the complex vetting and confirmation process.

As a partner in the firm’s White Collar Defense & Investigations practice group, Rob regularly defends clients in congressional investigations before virtually every major congressional investigation committee.  He also defends corporations and others in investigations by the Federal Election Commission, the Public Integrity Section of the U.S. Department of Justice, federal Offices of Inspector General, and the House & Senate Ethics Committees.  He has prepared many CEOs and corporate executives for testimony before congressional investigation panels. He regularly leads the Practicing Law Institute’s training program on congressional investigations for in-house lawyers.  In addition, he is frequently retained to lead internal investigations and compliance reviews for major corporate clients concerning lobbying and campaign finance law issues.

Rob 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, Associated Press, Legal Times, Roll Call, The Hill, Politico, USA Today, Financial Times, and other publications.

Rob is Chairman of Covington’s Professional Responsibility Committee and a General Counsel of the firm.  He also currently serves as Chairman of the District of Columbia Bar’s Legislative Practice Committee, and he previously was appointed by the President of the American Bar Association to serve on the ABA’s Standing Committee on Election Law.

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