Two papers of record on ethics reform, the Washington Post and the New York Times, declare the House to have passed its first "test" when it approved a provision requiring bundling reporting by lobbyists.  Other tests lie ahead, including the one they now care most about, an independent office for ethics enforcement.  In the meantime, with assistance from Republicans who successfully moved a change in the reported bill, the House has earned for this fleeting moment a passing grade, and we can look at the final language to see what was, in fact done.

      1. Which contributions can be "bundled" for reporting purposes?  The reporting requirements apply to contributions, when "bundled" (see below), in amounts of $200 or greater, received by any multi-candidate, party, or candidate committee, including Leadership PACs. 

      A floor amendment provided for the inclusion of multi-candidate committees more generally.  The bill was originally focused on candidate-controlled (or influenced) committees—parties, personal campaign committees and leadership PACs—because its objective was to limit the influence of lobbyists on current or prospective elected decision-makers.  Amended to reach farther, to all multi-candidate committees, lobbyists would now disclose contributions bundled for independent committees. 

     This may have been, for the Republican sponsors, an act of revenge, distorting the logic of a provision designed to expose what David Kilpatrick this morning in the Times refers to as a "hidden practice" of "candidates….turning to well-connected lobbyists to bundle stacks of checks to make up the millions they need to run their campaigns."  As passed, the candidate need not be in the picture at all.  A lobbyist—perhaps a public interest lobbyist who raises money for an independent committee supporting candidates with acceptable records on particular issues—would also have to report any contributions "bundled," as defined under this bill.  In the discussion, the reference is typically to candidates and the committees they control, but the range of "covered recipients" under the bill is broader.

      2.  How does a contribution become "bundled"?  It is either received by the lobbyist for transmittal to the "covered" or ultimate recipient, or it

Will be or has been credited or attributed to the registered lobbyist through records, designations, recognitions, or other means of tracking by the covered recipient to whom the contribution is made.

     In other words, a contribution is "bundled" when a lobbyist has collected it and passed it on, or has raised it for the candidate.  Contributions raised and not collected become bundled contributions when the candidate has "tracked" them, keeping the information by which the lobbyist could be credited or recognized for her efforts in bringing in the loot.

     A point of importance is that the "bundling" of the contribution, when it has been raised, depends on how the candidate tracks it and not how the lobbyist brought it in.  The bill pays no attention to the lobbyist’s methods.  If the candidate can trace the contributions received to the efforts or urging of the lobbyist, then the contribution is a bundled one—regardless of whether the lobbyist merely and periodically urged like-minded friends or colleagues to contribute, or more systematically developed and worked a list to meet an overall fundraising goal.

     Also omitted from this definition is any requirement that the candidate and the lobbyist have agreed or understood that the lobbyist would help in this way.  Bundling reporting is triggered by two acts, not always or necessarily interdependent:  the lobbyist’s action in calling on others to contribute, and the candidate’s action in tracking or recognizing the assistance that the lobbyist has rendered with the bundled contributions. 

     3.  Who can be a bundler?  The press and debate on bundling pays attention primarily to the individual lobbyist, but the employer—the "registrant" under the law that hires and compensates the individual lobbyists—can also be a bundler with disclosure requirements under the House measure. 

     How this provision would work on the organizational level is not entirely clear.  It could apply, for example, when a corporation finances, as the law allows, "partisan communications" to its executives, urging them to contribute to specific candidates—whether or not the occasion is a particular event held by a candidate.  The contributions subsequently made—which by law cannot pass through the corporation but only by the hand, directly, of the individual executive donor—could meet the definition of "bundled" contributions and require the corporation, if it reports under the federal lobbying law, to file a quarterly report of bundled contributions.

     4.  What triggers reporting of contributions that are bundled?  In any quarter, the reporting requirement applies where the lobbyist has:

 —bundled two or more contributions;

 —in an aggregate amount exceeding $5,000. 

      5. What does the reporting lobbyist report in the quarterly disclosure?

     The lobbyist discloses her name and that of her employer, and also:

The name of the covered recipient to whom the contribution was made, and to the extent known the aggregate amount of such contributions  or a good faith estimate thereof) within the quarter of the covered recipient.

     The uncertainty—"to the extent known"—attaches to the aggregate amount of contributions "bundled," and the reporting lobbyist can provide a "good faith estimate" instead of a hard number.  She is expected to know the candidate for whom she tried to raise the money; she would probably report only if she was reasonably certain that some of the individuals asked to give responded affirmatively.  But the bill assumes that the lobbyist might be unsure of the extent, to the last dollar, of her fundraising success.  (Obviously, she would have a far better handle on the numbers if she bundles by collecting and forwarding the money, rather than by calling on others to give but expecting them to take charge of delivery to the candidate.)

     So she estimates, which means that she and the candidate might have different measures of her effectiveness, and the bill accounts for that, by providing that she and the candidate should have the chance, prior to the filed report, to compare notes.  Thus:

     6. How do the lobbyist and the candidate assure that their understandings of which contributions were "bundled" match?

     To protect, if at all possible, against confusion, the lobbyist would be required to provide the candidate with written notice [by certified mail] of what the lobbyist intends to report as "bundled" to that candidate.  The notice is required no later than 25 days after the close of the quarterly period for which the report is due.  It is to include a statement of each contribution bundled, identified by source. 

     The lobbyist would include in this message "a notification that the [candidate or other "covered recipient"] has "the right to respond to the statement to challenge and correct any information included before the registered lobbyist files the report…."  It seems that the recipient’s word is final:  his right—defined as a "right"—is to "challenge and correct" the information included in the report.  What the candidate or other recipient says, goes. 

     This exchange—the statement provided to the candidate and any challenge and correction with which the candidate responds—is not a matter of public record.  It is foreseeable that the candidates in particular, but perhaps other recipients as well, will be asked for them, by the press (and in some cases, where politically irresistible, by the opposition) for each of the reports eventually filed by the lobbyist disclosing bundled contributions.

     7.  What is the reporting schedule?  Not later than the 45th day after the end of each calendar quarter, 

     8.  Who would receive the report?  The Clerk of the House and the Secretary of the Senate.

Bob Bauer