Disclosure Priorities

June 12, 2013
posted by Bob Bauer

DOJ is taking an exceptional action in suing for large fines against an “habitual” violator of the federal lobbying disclosure laws. United States of America v. Biassi Business Services, Inc., No. 13-0853 (D.D.C., filed June 7, 2013). The delinquencies alleged in the Complaint, for late or unfiled reports, are sobering: 28 quarterly reports and 98 semi-annual reports since 2009. Even the remedial actions taken, the Complaint alleges, lagged behind the statutory requirement, indifferent to the 60 day deadlines for correcting problems once the filer is officially notified of them. The U.S. Attorney’s arrival on the scene to issue additional warnings apparently had little effect: the defendant “ignored or failed to respond to numerous letters sent by the U.S. Attorney’s Office…” Id at 11.

Assuming the facts as alleged, this first enforcement action hardly qualifies as an overreaction or a trial run of an innovative enforcement theory. And yet it is a “first.” So it is an occasion for considering the relative weights assigned as a matter of federal law and policy to the two disclosure regimes of campaign finance and lobbying.

Campaign finance law is populated with various requirements for detailed, periodic disclosure. The Federal Election Commission operates a Reports Analysis Division “to ensure that campaigns and political committees file timely and accurate reports that fully disclose their financial activities.” Reports Analysis Division Mission Statement at http://www.fec.gov/rad/index.shtml. The agency also administers a system of administrative remedies for late and non-filing—routinizing the enforcement of the law and seeking to allocate resources as efficiently as possible to cover both large and small cases. 11 CFR § 111.30 et seq. (Subpart B: Administrative Fines). The FEC has reported to Congress that since 2000, the Commission has resolved 2,399 cases and assessed $4.27 million in fines through this system. Federal Election Commission, Performance and Accountability Report (2012) at 23.

Few argue that disclosure issues are all resolved. See e.g. Center for Individual Freedom v. Van Hollen, 694 F. 3d 108 (2012) (challenge to Commission rules establishing the scope of rules mandating disclosure of funds donated to support independent expenditures). Most recently, the fights over 501(c)(4) electioneering disclosure have become prominent in the reform debate: activity on this issue is taking place on both the federal and state levelsSee 13 NYCRR § 91.6 ( New York State regulation prescribing “annual disclosure of electioneering activities by non-501(c)(3) registrants”); Letter of Campaign Legal Center and Democracy 21 to Chair and Ranking Members of the House Ways and Means Committee (June 3, 2012) (calling for enforcement against political abuse of 501(c)(4) social welfare organizations). The baseline for discussion, however, is a fairly developed disclosure regime for federal campaign finance activity. And it is telling that there are fights about what is missing.

Lobbying disclosure laws, in substance and enforcement, have a long way to travel to catch up. Meaningful disclosure requirements were only enacted in 1995, 20 years after the federal campaign disclosure was reformed. Another expansion of those requirements followed twelve years later in the Honest Leadership and Open Government Act, but even with these changes, a comparison of federal campaign finance and lobbying law disclosure requirements—and of the mechanisms for enforcement—leave no doubt about the difference in the dominant policy priority.

This is the sum of it: the law demands more disclosure of what individuals or groups pay to say to voters than it does of what lobbyists are paid to say to the government. Government is more active in creating and enforcing transparency demands on political communications than in establishing comparable requirements for lobbying communications. The conclusions drawn about this difference and its significance vary. Certainly some may want strict disclosure in both cases and others would prefer barely any in either.

But the choice made here in the design of these disclosure regimes is worth much more attention than it usually gets, and it seems to get little attention because many who follow money in politics, with notable exceptions, watch more closely the money spent on messages that are publicly distributed and audible to voters, than the money spent on messages delivered quietly to government officials behind closed doors.

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