[Senate Report 117-150]
[From the U.S. Government Publishing Office]


                                                      Calendar No. 491
117th Congress      }                                    {      Report
                                 SENATE
 2d Session         }                                    {     117-150
_______________________________________________________________________

                                     



                    DISCLOSING FOREIGN INFLUENCE IN

                              LOBBYING ACT

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 4254

            TO AMEND THE LOBBYING DISCLOSURE ACT OF 1995 TO
CLARIFY A PROVISION RELATING TO CERTAIN CONTENTS OF REGISTRATIONS UNDER 
                                THE ACT






[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]







               September 20, 2022.--Ordered to be printed 
               
                             _________
                              
                 U.S. GOVERNMENT PUBLISHING OFFICE
                 
29-010                   WASHINGTON : 2022
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
               
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   GARY C. PETERS, Michigan, Chairman
THOMAS R. CARPER, Delaware           ROB PORTMAN, Ohio
MAGGIE HASSAN, New Hampshire         RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona              RAND PAUL, Kentucky
JACKY ROSEN, Nevada                  JAMES LANKFORD, Oklahoma
ALEX PADILLA, California             MITT ROMNEY, Utah
JON OSSOFF, Georgia                  RICK SCOTT, Florida
                                     JOSH HAWLEY, Missouri

                   David M. Weinberg, Staff Director
                    Zachary I. Schram, Chief Counsel
            Lena C. Chang, Director of Governmental Affairs
               Emily I. Manna, Professional Staff Member
                Pamela Thiessen, Minority Staff Director
            Sam J. Mulopulos, Minority Deputy Staff Director
       Cara G. Mumford, Minority Director of Governmental Affairs
                    Allen L. Huang, Minority Counsel
                     Laura W. Kilbride, Chief Clerk














                                                      Calendar No. 491
117th Congress      }                                    {      Report
                                 SENATE
 2d Session         }                                    {     117-150

======================================================================



 
              DISCLOSING FOREIGN INFLUENCE IN LOBBYING ACT

                                _______
                                

               September 20, 2022.--Ordered to be printed

                                _______
                                

 Mr. Peters, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 4254]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 4254) to amend the 
Lobbying Disclosure Act of 1995 to clarify a provision relating 
to certain contents of registrations under that Act, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                     Page
  I. Purpose and Summary..............................................  1
 II. Background and Need for the Legislation..........................  1
III. Legislative History..............................................  2
 IV. Section-by-Section Analysis......................................  2
  V. Evaluation of Regulatory Impact..................................  3
 VI. Congressional Budget Office Cost Estimate........................  3
VII. Changes in Existing Law Made by the Bill, as Reported............  4

                         I. Purpose and Summary

    S. 4254, the Disclosing Foreign Influence in Lobbying Act, 
requires disclosure of foreign governments and political 
parties that exert control or influence over lobbying 
activities, regardless of whether they are funding the lobbying 
activities.

              II. Background and the Need for Legislation

    The Lobbying Disclosure Act of 1995 (LDA) imposes 
comprehensive disclosure and registration requirements on 
lobbyists who contact covered legislative and executive branch 
officials. Under Section 4(b)(3) of the LDA (2 U.S.C. 
Sec. 1603(b)(3)), a registrant must disclose any organization, 
other than the client, that ``actively participates'' in 
lobbying and contributes over $5,000 to the registrant or the 
client. Section 4(b)(4) of the LDA (2 U.S.C. Sec. 1603(b)(4)), 
imposes alternative tests for disclosure for any ``foreign 
entity'' that owns 20% of a client or an organization 
contributing to lobbying activities, in whole or in major part 
directs or finances a client or organization contributing to 
lobbying activities, or is an affiliate of a client or 
organization and has a direct interest in the outcome of the 
lobbying activities.
    However, experts have identified instances in which, due to 
political climate, government structure, or other factors, some 
foreign governments and political parties are able to exert 
significant control over lobbying organizations without having 
a direct financial stake in lobbying activities. According to a 
January 2021 report from the Center for Strategic and 
International Studies, since 2012, the Chinese Communist Party 
(CCP) in particular is promoting a new form of corporate 
governance that calls for inserting provisions directly into 
corporate charters that give the company's internal CCP 
organization a voice in management decisions.\1\ Reports by law 
enforcement organizations to Congress establish that the CCP is 
able to use its role in private companies to advocate for CCP 
interests and that other foreign governments or political 
parties would be able to engage similarly.\2\
---------------------------------------------------------------------------
    \1\Center for Strategic and International Studies, The New 
Challenge of Communist Corporate Governance (Jan. 2021) (https://csis-
website-prod.s3.amazonaws.com/s3fs-public/publication/
210114_Livingston_New_Challenge.pdf).
    \2\Federal Bureau of Investigation, Briefing with Senate Judiciary 
Committee Staff (Feb. 4, 2022).
---------------------------------------------------------------------------
    The ``Disclosing Foreign Influence in Lobbying Act'' closes 
the LDA loophole that allows such foreign governments and 
political parties to escape disclosure by establishing a new 
test requiring disclosure of any participation by a foreign 
government or political party in the direction, planning, 
supervision, or control of lobbying activities, regardless of 
financial contribution, ownership of the client, or other 
financial incentive.

                        III. Legislative History

    Senator Chuck Grassley (R-IA) introduced S. 4254, 
Disclosing Foreign Influence in Lobbying Act, on May 18, 2022, 
with Chairman Gary Peters (D-MI), Senator Ben Sasse (R-NE), 
Senator Richard Durbin (D-IL), Senator John Cornyn (R-TX), 
Senator Margaret Wood Hassan (D-NH), and Senator Kyrsten Sinema 
(D-AZ). The bill was referred to the Committee on Homeland 
Security and Governmental Affairs.
    The Committee considered S. 4254 at a business meeting on 
May 25, 2022. The bill was ordered reported favorably by voice 
en bloc. Senators Peters, Hassan, Sinema, Rosen, Padilla, 
Ossoff, Portman, Lankford, Romney, Scott, and Hawley were 
present.

        IV. Section-by-Section Analysis of the Bill, as Reported


Section 1. Short title

    This section establishes the short title of the bill as the 
``Disclosing Foreign Influence in Lobbying Act.''

Section 2. Clarification of contents of registration

    This section adds a provision to the Lobbying Disclosure 
Act of 1995 requiring registrants to disclose foreign 
governments and political parties that exert control or 
influence over lobbying activities, regardless of whether they 
are funding the lobbying activities.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 23, 2022.
Hon. Gary Peters,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 4254, the Disclosing 
Foreign Influence in Lobbying Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                         Phillip L. Swagel,
                                                          Director.
    Enclosure.

    
    

    S. 4254 would amend the Lobbying Disclosure Act of 1995 to 
require lobbyists to identify any connection with a foreign 
government or political party that plans, supervises, directs, 
or controls any effort of that lobbyist, regardless of those 
entities' financial contributions to the lobbying effort. CBO 
estimates that implementing the bill would not significantly 
increase the administrative costs of the House of 
Representatives or the Senate over the 2022-2027 period. Any 
spending would be subject to the availability of appropriated 
funds.
    Failure to disclose the newly required information could 
increase collections of civil fines, which are recorded in the 
budget as revenues. CBO estimates that those collections would 
not be significant in any year or over the 2022-2032 period 
because of the relatively small number of cases likely to be 
affected.
    S. 4254 would impose a private-sector mandate as defined in 
the Unfunded Mandates Reform Act (UMRA) by requiring lobbyists 
to disclose information on foreign governments and foreign 
political parties that participate in or supervise their 
lobbying activities. CBO estimates that the cost of the mandate 
would not exceed the annual private-sector threshold 
established in UMRA ($184 million in 2022, adjusted annually 
for inflation).
    S. 4254 contains no intergovernmental mandates as defined 
in UMRA.
    The CBO staff contacts for this estimate are Matthew 
Pickford (for federal costs) and Andrew Laughlin (for 
mandates). The estimate was reviewed by H. Samuel Papenfuss, 
Deputy Director of Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows: (existing law 
proposed to be omitted is enclosed in brackets, new matter is 
printed in italic, and existing law in which no change is 
proposed is shown in roman):

UNITED STATES CODE

           *       *       *       *       *       *       *


TITLE 2--ORGANIZATION OF CONGRESS

           *       *       *       *       *       *       *


CHAPTER 26--DISCLOSURE OF LOBBYING ACTIVITIES

           *       *       *       *       *       *       *



SEC. 1603. REGISTRATION OF LOBBYISTS

    (a) * * *
    (b) * * *
          (1) * * *

           *       *       *       *       *       *       *

          (6) the name of each employee of the registrant who 
        has acted or whom the registrant expects to act as a 
        lobbyist on behalf of the client and, if any such 
        employee has served as a covered executive branch 
        official or a covered legislative branch official in 
        the 20 years before the date on which the employee 
        first acted as a lobbyist on behalf of the client, the 
        position in which such employee served; [and]
          (7) for any listed lobbyist who was convicted in a 
        Federal or State court of an offense involving bribery, 
        extortion, embezzlement, an illegal kickback, tax 
        evasion, fraud, a conflict of interest, making a false 
        statement, perjury, or money laundering, the date of 
        the conviction and a description of the offense [.]; 
        and
          (8) notwithstanding paragraph (4), the name and 
        address of each government of a foreign country 
        (including any agency or subdivision of a foreign 
        government, such as a regional or municipal unit of 
        government) and foreign political party, other than the 
        client, that participates in the direction, planning, 
        supervision, or control of any lobbying activities of 
        the registrant.

           *       *       *       *       *       *       *


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