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.

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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.