Law on the rocks

Ever since the enactment of the Honest Leadership and Open Government Act last year, many on the Hill and K Street have been chafing at some of the new gift and lobbying restrictions. Even before passing the law, the Senate quietly scaled back additional earmark disclosure requirements. Then, members tried to preserve or restore their erstwhile privileges on charter and commercial flights.

The members’ nibbling at HLOGA was eclipsed last week when the National Association of Manufacturers took a huge bite by filing suit. On its face, NAM’s challenge centers narrowly on the new associational disclosure requirements for lobbying registration and reporting. But NAM’s lawsuit identifies other vulnerabilities in HLOGA that could swallow almost the entire law.

Among other things, HLOGA requires any entity or individual registering under the Lobbying Disclosure Act to report on a quarterly basis the identity of any other entity that contributes more than $5,000 to the registrant’s lobbying efforts, and “actively participates in the planning, supervision, or control of such lobbying activities.” This is much broader than the prior obligation, which required such reporting only if an organization “supervises” or “controls” the registrant’s lobbying.

NAM, which is required to register, argues that the amended requirement would harm its First Amendment right to advocate on hot-button public policy issues, such as global warming, asbestos litigation reform, nuclear power and globalization. As NAM points out, these issues often have prompted violent protests, boycotts, litigation and other forms of harassment. According to the lawsuit, entities that contribute to NAM’s lobbying on these issues also have a right to remain anonymous. If NAM must identify publicly its contributors, those contributors would cut back their support.

Alternatively, NAM would have to curtail its lobbying on controversial issues.

NAM’s First Amendment claim has some legal precedent. During the civil rights era, the Supreme Court ruled that states could not force the NAACP to disclose its membership list, where doing so would have subjected members to intimidation and harassment. Similarly, during the McCarthy era, the Court invalidated an Arkansas law requiring its schoolteachers to disclose every organization to which they belonged or contributed.

However meritorious NAM’s argument about associational freedom, what is more significant are several specific shortcomings that NAM has identified in HLOGA. These shortcomings may undermine the enforceability of not only HLOGA’s gift and travel restrictions, but also the entire lobbying registration and disclosure regime under the Lobbying Disclosure Act, as amended.

One of HLOGA’s novelties is that it incorporates into statute the congressional gift and travel rules, which previously did not have the full force of law. Effective this year, registered lobbyists must sign semiannual certifications that they have not violated those rules. Sponsoring improper gifts or trips may subject registrants to prosecution under federal false statement laws, as well as civil penalties of up to $200,000 and imprisonment of up to five years.

As NAM points out, however, another problematic HLOGA quirk is that it directs various congressional committees and offices to issue guidance to clarify the gift, travel, registration, and reporting rules. All the while, such guidance is not legally binding, and the Department of Justice may enforce those rules according to its own interpretations. Thus, lobbyists may follow the congressional guidance in good faith but still face the prospect of severe civil and criminal punishment.

Yet another aspect of NAM’s challenge is that the definition of “lobbying activities” is unconstitutionally vague, especially in light of the heightened penalties. As amended, the Lobbying Disclosure Act requires registration if, during a quarterly period, a lobbyist makes more than one lobbying contact, spends more than 20 percent of his or her time on “lobbying activities” for a client, and earns more than $2,500 from the client. The definition of a “lobbying activity” is subjective, and requires an intent that such activity was done to support a lobbying contact. NAM credibly argues that the Supreme Court has forbidden such subjective standards to determine disclosure obligations for political speech. If NAM’s point is accepted, the entire LDA registration and reporting regime is suspect.

One last curiosity that NAM does not address is HLOGA’s attempt to regulate personal friendships. This past holiday season, many Hill and K Street employees faced a dilemma that is endemic to the Beltway region: lobbyists and legislative officials and staff who are neighbors or acquaintances. Could a lobbyist invite his neighbor, a Hill staffer, to a holiday party at his house? What about inviting a member of Congress, with whom the lobbyist is good friends, but not the best of friends? Under HLOGA, the answer was generally no, unless some gift rule exception applied.

While the Supreme Court has never addressed at length the “freedom of association” as to friends, it has suggested that such a right is implicit under the Court’s “substantive due process” and “personal privacy” jurisprudence. Thus, HLOGA is also susceptible to legal challenge for purporting to regulate a right so basic that it is hardly worthy of discussion — the right to friendship.

NAM’s challenge against HLOGA is quite serious. If successful, it will lay the grounds for additional lawsuits that could unravel the law in its entirety. Congress can address some of the law’s constitutional shortcomings by rewriting a few provisions. Whether members have the will is another question.

Wang is an attorney at Blank Rome LLP.