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Mr. Chairman, Members of the Committee, I am pleased to be here this morning to testify on legislation I have been working on for almost five years. When I first started the drive to enact a lobbying reform bill, I was cautioned by those who were somewhat older and undoubtedly wiser that this was a thankless undertaking and an impossible task, because despite numerous attempts, the loophole-ridden 1946 Lobbying Regulation Act has never been amended. That's almost 50 years of effort after effort.
Well, I'm happy to report that a month ago the Senate passed S. 1060, the Levin-Cohen Lobbying Reform Act of 1995, on a unanimous, bipartisan vote of 98-0. This hearing today hopefully means that the House will soon follow suit and finally put this issue behind us.
Mr. Chairman, the flaws in the lobbying disclosure laws have been recognized for decades. We are here today because Congress did not heed President Truman's call in 1948 to reform the lobbying laws. We are here today because in the 1950's, Senator McClellan's reform efforts reached a dead- end. We are here today because the lobbying reform bill that passed the Senate in the 1960's was never taken up in the House, even though it had been endorsed by President Johnson. We are here today because the lobbying reform bills that were approved by both Houses of Congress in 1976 could not be reconciled in conference. We are here today because the lobbying reform bill approved by the House in 1978 was never reported out of Committee in the Senate. And we are here today because the conference report on last year's lobbying reform bill died in an end-of-session filibuster in the Senate.
Decade after decade, Congress has tried to close the loopholes in the lobbying registration laws, and decade after decade, those efforts have failed. This Congress has a chance to be different.
The right to petition government is a constitutionally protected right. Lobbying is every bit as much a part of our government process today as on-the-record rulemakings or public hearings. But the public has a right to know, and the public should know, who is being paid how much by whom to lobby on what issues. We cannot expect the public to have confidence in our actions unless we conduct our business more in the sunshine.
Lobbying disclosure will enhance public confidence in government by ensuring that the public is aware of the efforts that are made by paid lobbyists to influence public policy. In some cases, such disclosure will perhaps encourage lobbyists and their clients to be sensitive to even the appearance of improper influence. In other cases, it is likely to alert other interested parties of the need to provide their own views in the decision-making process.
The lobbying disclosure laws that are on the books today are not serving these objectives. In the 102nd Congress, the Senate Subcommittee on Oversight of Government Management, which I then chaired, held a series of hearings on the lobbying disclosure laws. We learned that these laws are plagued by loopholes, confusing provisions, and an almost total absence of guidance on how to comply with them.
For example, the Federal Regulation of Lobbying Act -- the basic lobbying registration law now on the books -- covers only lobbying of the Congress on matters of legislation, not lobbying of the executive branch. That law has been interpreted to cover only those who spend a majority of their time in personal meetings with Members of Congress (not congressional staff).
As a result of these loopholes, the GAO found that fewer than 4,000 of the 13,500 individuals and organizations listed in the book Washington Representatives were registered under the Act, despite the fact that three- quarters of the unregistered representatives interviewed by the GAO said that they contact Members of Congress and their staffs, deal with federal legislation, and seek to influence actions of either Congress or the executive branch.
The failure of these individuals and organizations to register does not mean that they are violating the law, as it is written today. What it does mean is that the definition of "lobbying" in the law is so full of loopholes that few people are actually required to register. There are more holes than cheese.
Moreover, most lobbyists who do register don't disclose much. A few lobbyists go to the trouble and expense of telling us that they have incurred expenditures such as $45 phone bills, $10 cab fares, and $16 messenger fees. It is not at all clear what public purpose is served by these disclosures.
At the same time, the law falls short of requiring disclosure of the most basic types of information about lobbying -- how much is spent and for what purpose. Many lobbyists provide lists of specific bills that they are lobbying on, but these often appear to be xeroxed from quarter to quarter without regard to the actual issues that came up. Other lobbyists simply state that they lobbied on "issues that affect business operations of the client", "general legislative matters", or "all legislation affecting the insurance industry." This language is so general that it reveals nothing.
Worse-still, only a small fraction of the amount of money spent on lobbying ever gets disclosed. For example -
- In 1989, the Legal Times estimated the gross lobbying revenue of ten of the biggest and best known Washington lobbying firms at more than $60 million. However, a review of the lobbying reports filed by these firms reveals that they reported combined lobbying receipts (from all clients) of less than $2 million and total lobbying expenditures of less than $35,000. One of these firms -- a major Washington law firm -- reported no lobbying expenditures at all for any client in 1989.
- Six top defense contractors reported to the Department of Defense that they spent a combined total of almost $8 million lobbying Congress in 1989. By comparison, public reports filed by lobbyists for the same six companies under the Lobbying Regulation Act listed a total of $388,727 in lobbying income and $135,346 in lobbying expenses.
- The GAO reviewed more than a thousand lobbying reports filed in 1989 and found that almost 90% reported no expenditures for wages, salaries, fees or commissions; more than 95% reported no expenditures for public relations and advertising services; and more than 60 percent reported no expenditures at all in the period covered.
Our existing lobbying disclosure laws have been characterized by the Department of Justice as "ineffective . . . and unenforceable"; they breed disrespect for the law because they are so widely ignored; they have been a sham and a shambles since they were first enacted almost 50 years ago. At a time when the American public is increasingly skeptical that their government really belongs to them, our lobbying registration laws have become a joke, leaving more professional lobbyists unregistered than registered.
S. 1060 -- the Lobbying Disclosure Act of 1995 -- would change all of that and ensure that we finally know who is paying how much to whom, to lobby what federal agencies and Houses of Congress on what issues. This bill would close the loopholes in existing lobbying registration laws. It would cover all professional lobbyists, whether they are lawyers or non-lawyers, in-house or independent, whether they lobby Congress or the executive branch, and whether their clients are for-profit or non-profit.
S. 1060 would not create any significant new paperwork burdens on the private sector. On the contrary, the bill would significantly streamline lobbying disclosure requirements by consolidating filing in a single form and a single location ("one-stop shopping"), instead of the multiple filings required by current,law. It would replace quarterly reports with semi-annual reports and it would authorize the development of computer-filing systems and simplified forms. It would require a single registration by each organization whose employees lobby, instead of separate registrations by each employee-lobbyist (as are required by current law). The names of the individual lobbyists (and any high-ranking government position in which they served in the previous 2 years) would simply be listed in the employer's registration forms.
In addition, this bill would simplify reporting of receipts and expenditures by substituting estimates of total, bottom-line lobbying income (by category of dollar value) for the current requirement to provide 29 separate lines of financial information with supporting data, most of it meaningless. To further ensure that the statute will not impose new burdens on the private sector, the bill includes specific provisions allowing entities that are already required to account for lobbying expenditures under the Internal Revenue Code to use data collected for the IRS for disclosure purposes as well.
This bill also includes de minimis rules, to ensure that small organizations and other entities located outside Washington will be exempt from registration, even if their employees make occasional contacts. S. 1060, as passed by the Senate, would exempt from registration any individual who spends less than 2O% of his or her time on lobbying activities and any organization whose lobbying expenditures do not exceed $20,000 in a semiannual period. We have scrupulously avoided imposing any burden at all on citizens who are not professional lobbyists, but merely contact the federal government to express their own personal views.
Mr. Chairman, the so-called "grass roots" lobbying provisions, to which some objected in last year's conference report, are not in S. 1060 at all. Every reference to grass roots lobbying -- and even to paid efforts to stimulate artificial grass roots lobbying -- has been deleted from the bill.
The enforcement provisions, which some thought could create a new bureaucracy or place too much power in an executive branch agency, have been removed from the bill. S. 1060, unlike last year's bill, would be administered by the Clerk of the House of Representatives and the Secretary of the Senate. Violators would be subject to civil monetary penalties, to be assessed in the federal courts.
I am personally disappointed that we were unable to do anything to address the issue of a form of grass-roots lobbying referred to as "astroturf" lobbying, in which lobbyists hire professional experts to run phone banks and generate mail in support of-their efforts. In my view, these paid, professional astroturf campaigns bear nothing in common with the genuine grassroots activities about which so much concern was expressed last year.
Here is how an April 11, 1993, article in the Cleveland Plain Dealer described this type of "rent-a-firestorm" lobbying campaign:
"The Washington lobbying landscape is dotted with big and small firms promising to deliver the support that will make a critical difference in federal, state and local lobbying fights. For hefty fees, sometimes running more than $1 million per project, these firms use phone banks to drum up constituent support in key congressional districts or find a small group of community leaders who can put the arm on a member of Congress . . . .
"Rather than generating letters and phone calls from ordinary Joe Sixpacks, [some lobbying firms] promise to round up local business an civic leaders who have clout with members of Congress. [One firm] boasts that it has databases enabling it to pinpoint such leaders in every congressional district, based on a variety of demographic and psychographic characteristics'.
"[Another firm] charges $350 - $500 for each letter or call generated by a community leader. [The firm] also offers to set up meetings between community leaders and members for fees ranging from $5,000 to $9,000."
Similar articles have appeared in recent years in numerous other newspapers. I ask that copies of these articles be placed in the record.
Mr. Chairman, while I am disappointed that we were not able to do anything about even disclosing the money spent on "astroturf" lobbying and hope that the House will reconsider the disclosure of such lobbying, the bill passed by the Senate is a very good bill that will go a long way to fix our lobbying disclosure laws.
The Levin-Cohen bill addresses one of the most intractable issues faced by Congress over the last 50 years -- the reform of our loophole-plagued lobbying disclosure laws. We need a bill that will ensure that the public knows who is paying how much to whom to lobby on what issues, without imposing unnecessary burdens on the private sector. S. 1060, as passed by the Senate, meets this test and I hope that the House will act quickly on this issue.