Federal Lobbying: Differences in Lobbying Definitions and Their Impact
(Letter Report, 04/15/99, GAO/GGD-99-38).

Pursuant to a legislative requirement, GAO reviewed the reporting of
lobbying activities by organizations that have employees who lobby on
the organizations' behalf and have the option to report their lobbying
expenses under the Lobbying Disclosure Act (LDA) of 1995 or applicable
Internal Revenue Code (IRC) provisions that they use for tax purposes,
focusing on: (1) the differences between the LDA and IRC section 4911
and 162(e) definitions of lobbying; (2) the impact that differences in
the definitions may have on registration and reporting under LDA,
including information on the number of organizations using each
definition and the expenses they have reported; and (3) identifying and
analyzing options, including harmonizing the three definitions, that may
better ensure that the public disclosure purposes of LDA are realized.

GAO noted that: (1) the LDA definition covers only contacts with federal
officials; (2) the IRC definitions cover contacts with federal, state,
and local officials as well as attempts to influence the public through
grassroots lobbying; (3) the definitions differ in their coverage of
contacts with federal officials, depending on whether the contact
concerns a legislative or nonlegislative matter; (4) the differences in
the lobbying definitions can affect whether organizations register under
LDA; (5) an organization that engages or expects to engage in certain
lobbying activities during a 6-month period, including incurring at
least $20,500 in lobbying expenses, is required to register under LDA;
(6) the definition an organization uses in calculating its lobbying
expenses determines the expenses it counts toward the $20,500 threshold;
(7) when using the LDA definition would result in expenses of more than
$20,500, an organization may be able to use the applicable IRC
definition to keep its lobbying expenses below $20,500 or vice versa;
(8) the lobbying definition an organization uses affects the information
it must disclose on its semiannual lobbying report; (9) when using an
IRC definition, an organization must report its total lobbying expenses
for all activities covered by that definition; (10) however, all of
these expenses are reported in one total amount, so the lobbying reports
do not indicate the amount related to different levels of government and
types of lobbying activities; (11) when organizations report information
other than expenses, they are required to report only information
related to federal government lobbying, regardless of whether they use
the LDA definition or one of the IRC definitions to calculate expenses;
(12) because of the differences in definitions, information disclosed on
lobbying reports filed by organizations using the IRC definitions is not
comparable to information on reports filed by organizations using the
LDA definition; (13) under the IRC definitions, organizations can
disclose less information than under the LDA definition; (14) of the
organizations that lobbied on their own behalf and had the option of
using an IRC definition for reporting expenses under LDA, most used the
LDA definition; (15) the organizations that reported using the IRC
section 162(e) definition had the highest mean and median expenses; and
(16) because the differences among the three lobbying definitions can
significantly affect who registers and what they report under LDA, the
use of the IRC definitions can conflict with LDA's public disclosure
purpose.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-99-38
     TITLE:  Federal Lobbying: Differences in Lobbying Definitions and 
             Their Impact
      DATE:  04/15/99
   SUBJECT:  Lobbying activities
             Political activities
             Tax law
             Reporting requirements
             Comparative analysis

             
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Microsoft Word - 17gj01!.PBF FEDERAL LOBBYING Differences in
Lobbying Definitions and Their Impact

United States General Accounting Office

GAO Report to Congressional Committees


April 1999 

GAO/GGD-99-38

April 1999   GAO/GGD-99-38

United States General Accounting Office Washington, D. C. 20548

General Government Division

B-276377

Page 1 GAO/GGD-99-38 Federal Lobbying Definitions

GAO April 15, 1999 The Honorable Fred Thompson, Chairman The
Honorable Joseph I. Lieberman, Ranking Minority Member Committee
on Governmental Affairs United States Senate

The Honorable Henry J. Hyde, Chairman The Honorable John Conyers,
Jr., Ranking Minority Member Committee on the Judiciary House of
Representatives

The Honorable Charles T. Canady, Chairman The Honorable Melvin L.
Watt, Ranking Minority Member Subcommittee on the Constitution
Committee on the Judiciary House of Representatives

To increase public disclosure of the identity and extent of the
efforts of lobbyists who are paid to influence decisionmaking by
federal legislative and executive branch officials, Congress
enacted the Lobbying Disclosure Act of 1995 (LDA). 1 LDA, as
amended, 2 requires paid lobbyists to register with Congress and
semiannually report on their lobbying activities. LDA also
requires us to review the reporting of lobbying activities by
organizations that have employees who lobby on the organizations'
behalf and have the option to report their lobbying expenses under
LDA using the definitions of lobbying in either (1) LDA or (2) the
applicable Internal Revenue Code (IRC) provision IRC sections 4911
or 162( e) that they use for tax purposes. 3 Section 4911 imposes
taxes on lobbying expenditures over certain limits incurred by
certain IRC section 501( c)( 3) tax- exempt nonprofit
organizations, commonly known as public charities. 4 IRC section
162( e) generally concerns the denial of income tax deductions by
businesses for lobbying.

1 Pub. L 104- 65. 2 Lobbying Disclosure Technical Amendments Act
of 1998, Pub. L 105- 166. 3 We are not required to review the
reporting of lobbying activities by lobbying firms that are hired
to represent clients. 4 Public charities include entities
organized and operated exclusively for religious, charitable,
scientific, public- safety testing, literary, or educational
purposes; for the prevention of cruelty to children or animals; or
to foster amateur sports. Churches and their integrated
auxiliaries cannot use IRC section 4911.

B-276377 Page 2 GAO/GGD-99-38 Federal Lobbying Definitions

As agreed with your offices, our objectives for this report were
to

 describe the differences between the LDA and IRC section 4911 and
162( e) definitions of lobbying;

 determine the impact that differences in the definitions may have
on registration and reporting under LDA, including information on
the number of organizations using each definition and the expenses
they have reported; and

 identify and analyze options, including harmonizing the three
definitions, that may better ensure that the public disclosure
purposes of LDA are realized.

The LDA definition of lobbying differs significantly from the
definitions of lobbying under IRC sections 4911 and 162( e). Most
significantly, the LDA definition covers only contacts with
federal officials. The IRC definitions cover contacts with
federal, state, and local officials as well as attempts to
influence the public through grassroots lobbying, such as
television commercials on a bill under debate in Congress or a
state legislature. Also, the definitions differ in their coverage
of contacts with federal officials, depending on whether the
contact concerns a legislative or nonlegislative matter. For
example, for contacts with federal executive branch officials
about nonlegislative matters, LDA covers about 4,600 officials, or
10 times the number of such officials that IRC section 162( e)
covers; IRC section 4911 does not cover contacts with officials in
such circumstances.

The differences in the lobbying definitions can affect whether
organizations register under LDA. An organization that engages or
expects to engage in certain lobbying activities during a 6- month
period, including incurring at least $20,500 in lobbying expenses,
is required to register under LDA. The definition an organization
uses in calculating its lobbying expenses determines the expenses
it counts toward the $20,500 threshold. When using the LDA
definition would result in expenses of more than $20,500, an
organization may be able to use the applicable IRC definition to
keep its lobbying expenses below $20,500 or vice versa. However,
no data exist to determine (1) the number of organizations that
met the threshold under LDA's definition but are not registered as
a result of using an IRC definition or (2) whether any registered
organizations that may have met the threshold under an IRC
definition did not do so under the LDA definition.

In addition to affecting whether an organization is required to
register under LDA, the lobbying definition an organization uses
affects the information it must disclose on its semiannual
lobbying report. An Results in Brief

B-276377 Page 3 GAO/GGD-99-38 Federal Lobbying Definitions

organization can switch between the LDA definition and the
applicable IRC definition from one year to another, and it can
choose the definition that enables it to disclose the least
information.

When using an IRC definition, an organization must report its
total lobbying expenses for all activities covered by that
definition, including grassroots lobbying and federal, state, and
local government lobbying. However, all of these expenses are
reported in one total amount, so the lobbying reports do not
indicate the amount related to different levels of government and
types of lobbying activities. Also, when organizations report
information other than expenses, such as the issues on which they
lobbied, they are required to report only information related to
federal government lobbying, regardless of whether they use the
LDA definition or one of the IRC definitions to calculate
expenses. Thus, when using an IRC definition, organizations can
report expenses that do not relate to other information disclosed
on their lobbying reports.

Because of the differences in definitions, information disclosed
on lobbying reports filed by organizations using the IRC
definitions is not comparable to information on reports filed by
organizations using the LDA definition. Further, the information
that is reported under the IRC definitions, particularly expense
data, can be unrelated to LDA's purpose of disclosing efforts to
influence federal decisionmaking e. g., when the information
includes expenditures for state and local lobbying. Under the IRC
definitions, organizations can also disclose less information than
under the LDA definition, such as for contacts with officials in
the executive branch about nonlegislative matters. On the other
hand, if organizations contact lower level executive branch
officials about legislation, then using an IRC definition could
result in more information being disclosed than under the LDA
definition

Of the organizations that lobbied on their own behalf and had the
option of using an IRC definition for reporting expenses under
LDA, most used the LDA definition. Less than a third elected to
use the IRC definitions. Specifically, for the July through
December 1997 reporting period, 1,306 used the LDA definition; 157
and 361 used the IRC section 4911 and 162( e) definitions,
respectively. The organizations that reported using the IRC
section 162( e) definition had the highest mean and median
expenses. 5

5 The mean is the sum of all the expenses of organizations using a
particular lobbying definition divided by the total number of
organizations using the definition. The median is the midpoint of
all expenses reported by organizations using a particular lobbying
definition, when those expenses are arranged in order from lowest
to highest.

B-276377 Page 4 GAO/GGD-99-38 Federal Lobbying Definitions

Because the differences among the three lobbying definitions can
significantly affect who registers and what they report under LDA,
the use of the IRC definitions can conflict with LDA's public
disclosure purpose. Options exist for reducing or eliminating
these potential conflicts with LDA's purpose. These options
include (1) harmonizing the definitions, (2) eliminating the
authorization to use the IRC definitions for LDA purposes, or (3)
requiring those organizations that choose an IRC definition to
include only expenses related to federal lobbying under that IRC
definition when they register and report under LDA. The options,
in varying degrees, could improve the comparability of reports
filed by lobbyists and the alignment of registrations and
reporting with LDA's purpose of increasing public disclosure of
efforts to lobby federal officials in order to influence their
decisionmaking. However, each option includes trade- offs between
better ensuring LDA's purpose and other public policy objectives
and could result in additional reporting burden in some cases.

Congress passed LDA and IRC sections 4911 and 162( e) at different
times and for different purposes. LDA, which was enacted in 1995
and became effective on January 1, 1996, requires organizations
that lobby certain federal officials in the legislative and
executive branches to register with the Secretary of the Senate
and the Clerk of the House of Representatives. It also requires
lobbying organizations that register to semiannually report
expenditures and certain other information related to their
lobbying efforts. Congress intended LDA's registration and
reporting requirements to provide greater public disclosure of
attempts by paid lobbyists to influence decisions made by various
federal legislative and executive branch officials.

Unlike LDA, neither IRC section 162( e) nor section 4911 was
intended to facilitate the public disclosure of lobbying. 6 IRC
section 4911, which was enacted in 1976, provides for a limit on
the amount of lobbying by 501( c)( 3) organizations 7 and thereby
helps clarify the extent to which these public charities can lobby
without jeopardizing their tax- exempt status. Section 162( e), as
amended in 1993, denies the federal income tax

6 When tax- exempt organizations use IRC section 4911 to calculate
their lobbying expenses for tax purposes, they report those
expenses on their Form 990 federal tax returns. Because these tax
returns are available to the public on request, IRC section 4911
also facilitates some public disclosure of lobbying, albeit not in
the same manner or to the same extent that Congress requires under
LDA.

7 IRC section 4911 applies to 501( c)( 3) organizations that elect
to report their lobbying expenses under the provisions of IRC
section 501( h), which provides for specific dollar limits on
lobbying expenses. IRC section 501( h) is a safe harbor for 501(
c)( 3) organizations that lobby. Those 501( c)( 3) organizations
that do not elect to report under 501( h) must limit their
lobbying activities to an insubstantial portion of their total
activities, but the test for determining if amounts are
insubstantial is less precise than the test used under IRC section
501( h). Background

B-276377 Page 5 GAO/GGD-99-38 Federal Lobbying Definitions

deductibility of certain lobbying expenses for businesses. It does
not otherwise place restrictions on lobbying activities.

LDA requires lobbying organizations, such as lobbying firms, to
register with the Secretary of the Senate and the Clerk of the
House of Representatives no later than 45 days after they first
make a lobbying contact on behalf of a client. Also, organizations
that have employees who lobby on behalf of the organizations the
organizations on which this report focuses must register under
LDA. 8 The lobbying registration includes such information as the
registering organization's name and address; the client's name and
address; the names of all individuals acting as lobbyists for the
client; the general and specific issues to be addressed by
lobbying; and organizations substantially affiliated with the
client, including foreign organizations. An organization that has
employees who lobby on the organization's behalf must identify
itself as both the registering organization and the client,
because the organization's own employees represent the
organization.

LDA includes minimum dollar thresholds in its registration
requirements. Specifically, an organization with employees who
lobby on the organization's behalf does not have to register under
LDA unless its total lobbying expenses exceed or are expected to
exceed $20,500 9 during the 6 month reporting period (i. e.,
January through June and July through December of each year). 10
LDA also includes minimum thresholds for determining which
employees must be listed as lobbyists in the lobbying
registration. Under LDA, to be listed as a lobbyist, an individual
must make more than one lobbying contact and must spend at least
20 percent of his or her time engaged in lobbying activities on
behalf of the client or employing organization during the 6 month
reporting period. An organization must have both $20,500 in
lobbying expenses and an employee who makes more than one lobbying
contact and spends at least 20 percent of his or her time lobbying
before it is required to register under LDA.

8 Individual lobbyists register only if they are self- employed,
in which case, the self- employed lobbyist is considered to be a
lobbying firm. 9 LDA provides that the minimum dollar thresholds
for registration will be adjusted every 4 years based on the
Consumer Price Index, which measures the changes in the prices of
goods and services. 10 A lobbying firm receives and reports income
and must use the LDA definition. Such a firm also does not have to
register on behalf of a client unless the firm's total income for
lobbying on behalf of the client exceeds or is expected to exceed
$5, 000 during the 6 month reporting period. Registration

B-276377 Page 6 GAO/GGD-99-38 Federal Lobbying Definitions

All organizations that register under LDA must file lobbying
reports with the Secretary of the Senate and Clerk of the House of
Representatives for every 6 month reporting period. The lobbying
reports filed under LDA by organizations that lobby on their own
behalf must include the following disclosures:

 total estimated expenses relating to lobbying activities (total
expenses are reported either by checking a box to indicate that
expenses were less than $10,000 or by including an amount, rounded
to the nearest $20,000, for expenses of $10,000 or more); 11

 a three- digit code for each general issue area (such as AGR for
Agriculture and TOB for Tobacco) addressed during lobbyists'
contacts with federal government officials;

 specific issues, such as bill numbers and references to specific
executive branch actions that are addressed during lobbyists'
contacts with federal government officials;

 the House of Congress and federal agencies contacted;

 the name of each individual who acted as a lobbyist; and

 the interest of the reporting organization's foreign owners or
affiliates in each specific lobbying issue.

Unless it terminates its registration, once a lobbying
organization registers, it must file reports semiannually,
regardless of whether it has lobbied during the period.

Under LDA, lobbying firms that are hired to represent clients are
required to use the LDA lobbying definition. However, LDA gives
organizations that lobby on their own behalf and that already use
an IRC lobbying definition for tax purposes the option of using
the applicable IRC lobbying definition (IRC sections 4911 or 162(
e)), instead of the LDA lobbying definition, for

 determining whether the LDA registration threshold of $20,500 in
semiannual lobbying expenses is met and

 calculating the lobbying expenses to meet the LDA reporting
requirement. 11 Organizations are to include those expenses
associated with their efforts to lobby as well as payments to
third parties, such as lobbying firms. When discussing lobbying
expenses, this report focuses on expenses directly incurred by
organizations lobbying on their own behalf. Organizations lobbying
on their own behalf are to include payments made to lobbying firms
in their report to Congress, and lobbying firms are to report
their income from such payments in their separate reports to
Congress. As a result, some overlap exists between the reporting
of organizations lobbying on their own behalf and lobbying firms
they may have hired. Reporting

Option of Using IRC Lobbying Definitions

B-276377 Page 7 GAO/GGD-99-38 Federal Lobbying Definitions

For all other purposes of the act, including reporting issues
addressed during contacts with federal government officials and
the House of Congress and federal agencies contacted, LDA provides
that organizations using an IRC definition must (1) use the IRC
definition for executive branch lobbying and (2) use the LDA
definition for legislative branch lobbying.

By allowing certain organizations to use an IRC definition to
calculate lobbying expenses, LDA helps those organizations avoid
having to calculate their lobbying expenses under two different
lobbying definitions the LDA definition for reporting under LDA
and the applicable IRC definition for calculating those expenses
for tax purposes. An organization that chooses to use the
applicable IRC definition, instead of the LDA definition to
calculate its lobbying expenses, must use the IRC definition for
both lobbying reports filed during a calendar year. However, from
one year to the next, the organization can switch between using
the LDA definition and using the applicable IRC definition.

Under LDA, we are required to report to Congress on (1) the
differences among the definitions of certain lobbying- related
terms found in LDA and the IRC, (2) the impact that any
differences among these definitions may have on filing and
reporting under the act, and (3) any changes to LDA or to the
appropriate sections of the IRC that the Comptroller General may
recommend to harmonize the definitions.

As agreed with your offices, our objectives for this report were
to

 describe the differences between the LDA and IRC section 4911 and
162( e) definitions of lobbying;

 determine the impact that differences in the definitions may have
on registration and reporting under LDA, including information on
the number of organizations using each definition and the expenses
they have reported; and

 identify and analyze options, including harmonizing the three
definitions, that may better ensure that the public disclosure
purposes of LDA are realized.

To identify the differences among the LDA and IRC lobbying
definitions, we reviewed the relevant statutory provisions. We
also reviewed related regulations and guidance, including guidance
issued by the Secretary of the Senate and the Clerk of the House
of Representatives. We also reviewed journal articles and an
analysis of the definitions of lobbying and met with registered
lobbyists, representatives of nonprofit and business Objectives,
Scope and

Methodology

B-276377 Page 8 GAO/GGD-99-38 Federal Lobbying Definitions

organizations, and other parties who were knowledgeable about the
different statutory definitions and their effect on lobbying
registrations.

To determine the differences among the LDA and IRC lobbying
definitions regarding the number of federal executive branch
officials covered for contacts dealing with nonlegislative
matters, we reviewed the LDA and IRC statutory definitions of
covered executive branch officials that apply for lobbying
contacts on nonlegislative matters. To determine the number of
officials covered by these definitions, we counted the number of
Executive Schedule Levels I through V positions listed in sections
5312 through 5316 of Title 5 of the United States Code. In several
cases, these sections of Title 5 list federal boards and
commissions as having Executive Schedule positions but do not
specify the number of such positions. In these cases, we did not
attempt to determine the number of positions and counted only one
position for each such listed board or commission. Thus, our
estimate of the number of Executive Schedule Levels I through V
positions is understated. Further, to determine the number of
officials covered, we obtained data from

 The United States Government Manual 1998/ 1999 on cabinet- level
officials and the number of offices in the Executive Office of the
President;

 the Department of Defense (DOD) on military personnel ranked 0- 7
and above as of September 30, 1997;

 the U. S. Coast Guard, the Public Health Service, and the
National Oceanic and Atmospheric Administration (NOAA) on the
number of commissioned corps ranked 0- 7 and above as of February
1999;

 the Office of Personnel Management's (OPM) Central Personnel Data
File on the number of Schedule C officials as of September 30,
1997; and

 Budget of the United States Government, Appendix, Fiscal Year
1999 on the actual full- time- equivalent employment for fiscal
year 1997 in each office of the Executive Office of the President.

To determine the impact that differences in the definitions may
have on registration and reporting under LDA, we first had to
define how we would measure impact. We defined impact as (1) the
way differences among the definitions can affect who must register
with the Secretary of the Senate and the Clerk of the House of
Representatives and what lobbying expenses and related information
must be included in those reports; (2) the number of organizations
that reported using the LDA and IRC section 4911 and 162( e)
definitions when reporting lobbying expenses and related
information for July through December 1997; and (3) the lobbying
expenses reported under each of the three definitions for this
period.

B-276377 Page 9 GAO/GGD-99-38 Federal Lobbying Definitions

To determine the way differences among the definitions can affect
who must register and what they must report, we reviewed,
analyzed, and categorized the general effects of the differences
that we found among the definitions under our first objective. We
also looked for possible effects during our reviews of statutes,
regulations, guidance, and journal articles. Finally, we discussed
the possible effects of the differences among the definitions with
registered lobbyists, representatives of nonprofit and business
organizations, and other knowledgeable parties.

To identify the number of organizations that reported using the
definitions of lobbying in LDA or IRC to calculate their lobbying
expenses for July through December 1997 and to determine the
lobbying expenses reported under LDA that were calculated using
one of the three definitions, we obtained data on all lobbying
reports filed with the Secretary of the Senate during this period
from the new lobbying database of the Senate Office of Public
Records. Only the lobbying reports for one semiannual period July
through December 1997 were available from the new database when we
began our analysis in October 1998. Using the database, we
identified the number of organizations that lobbied on their own
behalf and filed reports for the period July through December
1997. We also analyzed the reported expenses of these
organizations and determined the mean and median expenses reported
under each of the three definitions. Because lobbyists did not
round their lobbying expenses to the nearest $20,000 in some
cases, as required by LDA, we rounded all reported expenses to the
nearest $20,000 before conducting our analysis.

Officials from the Senate Office of Public Records said that they
had not verified the data in the database, and we did not perform
a reliability assessment of the data contained in this database.
However, we reviewed the lobbying reports of all organizations
whose lobbying expenses were recorded in the database as being
less than $10, 000, which is the minimum amount required to be
recorded on the lobbying form, but had erroneous Senate Office of
Public Records codes. We corrected any errors we found before
conducting our analysis.

To identify and analyze options that may better ensure that the
public disclosure purposes of LDA are realized, we relied on (1)
information we collected from our review of the relevant
literature on lobbying, including statutory provisions,
regulations, and guidance; and (2) our findings for our first two
objectives.

We did our work during two periods. From November 1996 through
April 1997, we reviewed the differences in the LDA and IRC
definitions of

B-276377 Page 10 GAO/GGD-99-38 Federal Lobbying Definitions

lobbying- related terms. As agreed by the Senate Committee on
Governmental Affairs and the House Subcommittee on the
Constitution, Committee on the Judiciary, we postponed completing
our review until data on lobbying expenses became available. The
second period of our review was from October 1998 through January
1999, after we obtained data on lobbying expenses from the new
lobbying database of the Senate Office of Public Records. We did
our work in Washington, D. C., and in accordance with generally
accepted government auditing standards. We obtained technical
comments on a draft of this report from the Internal Revenue
Service and incorporated changes in the report as appropriate. The
Clerk of the House of Representatives, the Secretary of the
Senate, and the Department of the Treasury had no comments on the
report.

The contacts, activities, and expenses that are considered to be
lobbying under the LDA lobbying definition differ in many ways
from those covered by the IRC definitions. Most significantly, LDA
covers contacts only with federal officials; the IRC definitions
cover contacts with officials in other levels of government as
well as attempts to influence the public through grassroots
lobbying. Also, the definitions differ in their coverage of
contacts with federal officials depending on whether the contact
was on a legislative or nonlegislative matter.

Table 1 and the following sections present some of the key
differences in coverage under the different definitions. Appendix
I discusses these differences in more detail; and appendix II
provides a detailed table of the differences among the definitions
concerning coverage of the federal, state, and local levels of
government. Significant Differences

Exist Among LDA and IRC Definitions

B-276377 Page 11 GAO/GGD-99-38 Federal Lobbying Definitions

Covered under Contacts, activities, and expenses LDA IRC section
4911 IRC section 162( e)

Contacts with state government officials No Yes Yes Contacts with
local government officials No Yes Yes a Grassroots lobbying
attempts to influence the public on legislative subjects

No Yes Yes Contacts with federal government officials

In the legislative branch Regarding legislative subjects Yes Yes
Yes Regarding nonlegislative subjects Yes No No In the executive
branch Regarding legislative subjects Yes Yes Yes Regarding
nonlegislative subjects Yes No Yes a Note: Yes and no indicate
whether an activity or expense is counted in any manner under each
definition. However, if an activity or expense is covered by two
or more definitions, substantial differences may exist in the
specifics of what is covered in each definition. See appendices I
and II for more detailed explanations of these differences. a
Although IRC section 162( e) covers these types of contacts in
some circumstances, the coverage is

limited, as discussed in the following sections. Source: GAO
analysis of LDA and IRC sections 4911 and 162( e).

LDA covers only the lobbying of federal government officials, so
organizations using the LDA definition would not include any
information in their lobbying reports about lobbying state and
local officials. But both IRC lobbying definitions cover contacts
with state government officials to influence state legislation. In
addition, both IRC definitions cover contacts with local
government officials to influence local government legislation,
but IRC section 162( e) provides an exception for contacts with
local legislative officials regarding legislation of direct
interest to the organization.

The LDA lobbying definition covers only lobbying of federal
government officials, so organizations using the LDA definition
would not include in their lobbying reports any information
related to attempts to influence legislation by affecting the
opinions of the public that is, grassroots lobbying. Both IRC
lobbying definitions cover grassroots lobbying, such as television
commercials; newspaper advertisements; and direct mail

Table 1: Key Differences in Coverage of Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Lobbying State and Local Officials

Grassroots Lobbying

B-276377 Page 12 GAO/GGD-99-38 Federal Lobbying Definitions

campaigns to influence federal, state, and local legislation,
including referenda and ballot initiatives.

To determine if a lobbyist's contact with a federal government
official is covered by one of the three lobbying definitions, one
must (1) have certain information about the government official,
such as whether the official is in the legislative or executive
branch; and (2) know whether a legislative or nonlegislative
subject was addressed during the contact. The three definitions
differ in many ways regarding the officials and subjects they
cover.

The LDA definition does not distinguish between covered
legislative and executive branch officials on the basis of whether
the subject of the lobbyist's contact is legislative or
nonlegislative in nature. The IRC definitions define covered
officials differently, depending on whether the subject of the
lobbying contact was legislative or nonlegislative in nature. When
the subject of a lobbyist's contact concerns a nonlegislative
matter, such as a regulation, grant, or contract, LDA covers more
officials than the IRC definitions cover. When the subject of a
lobbyist's contact is a legislative matter, both IRC definitions
potentially cover more levels of executive branch officials than
the LDA definition does.

Under LDA, lobbying organizations' contacts with all Members of
Congress and employees of Congress and approximately 4,600
executive branch officials are covered for either legislative or
nonlegislative subjects. In contrast, under IRC section 4911,
contacts with legislative or executive branch officials, including
Members of Congress and the President, about any nonlegislative
subject do not count as lobbying. Also, under IRC section 162( e),
contacts with Members of Congress and other legislative branch
officials do not count as lobbying if they deal with a
nonlegislative subject; and very few executive branch officials
are covered if contacts are about nonlegislative matters. As table
2 shows, LDA covers 10 times the number of executive branch
officials that IRC section 162( e) covers for nonlegislative
matters; it also contrasts with IRC section 4911, which does not
cover federal officials for nonlegislative contacts. Lobbying
Federal

Government Officials

B-276377 Page 13 GAO/GGD-99-38 Federal Lobbying Definitions

Approximate number covered under

Levels of officials and/ or offices LDA IRC section 4911 IRC
section

162( e)

President, Vice President; Executive Schedule level I, cabinet-
level officials, and their immediate deputies

50 0 50 Executive Schedule levels II through V (excluding cabinet-
level officials and their immediate deputies)

610 0 0 Uniformed Services at or above O- 7 960 0 0 Officials
serving in a confidential, policymaking, or advocating position
(Schedule C appointees) a

1,420 0 0 Entire office of the Executive Office of the President
(excluding the White House Office) 1,180 0 20 White House Office
of the Executive Office of the President 380 0 380

Total 4,600 0 450

Note: Numbers in the table are a mixture of (1) authorized
positions, which may or may not be filled at any given time; (2)
filled positions; and (3) full- time- equivalent employment, which
represents one fulltime employee or one or more part- time
employees who collectively complete 2, 080 work hours in a given
year. All numbers are rounded and approximate. The estimate of the
number of authorized positions at Executive Schedule levels II
through V is understated because it does not include estimates of
the number of members of federal boards and commissions when 5 U.
S. C. 5313- 5316 does not specify the number of such members. a
Schedule C appointees are political appointees (graded GS/ GM- 15
and below) in positions that

involve determining policy or require a close confidential
relationship with the agency head or other key officials of the
agency.

Source: 5 U. S. C. 5312- 5316; U. S. Government Manual; OPM; DOD;
U. S. Coast Guard; Public Health Service; NOAA; Budget of the
United States Government, Fiscal Year 1999 Appendix.

For contacts on legislation, LDA covers contacts with Members of
Congress, employees of Congress and the approximately 4,600
executive branch officials shown in table 2. In contrast, for
contacts on legislation, the IRC definitions cover Members of
Congress, employees of Congress, and any executive branch
officials who may participate in the formulation of the
legislation. Therefore, for contacts addressing legislation, the
IRC definitions potentially cover more levels of executive branch
officials than the LDA definition does.

LDA contains 19 exceptions to the definition of lobbying; however,
for the most part, these exceptions make technical clarifications
in the law and do not provide special exceptions for particular
groups. The IRC section 162( e) definition has one exception in
the statute, which is for contacts with local government
legislative branch officials on legislation of direct interest to
the organization. In addition, IRC section 162( e) has seven

Table 2: Approximate Number of Executive Branch Officials With
Whom Contacts About Nonlegislative Matters Could Be Counted as
Lobbying Under the Three Lobbying Definitions

Exceptions to the Lobbying Definitions

B-276377 Page 14 GAO/GGD-99-38 Federal Lobbying Definitions

exceptions, which are provided for by Treasury Regulations and
which are technical clarifications of the statutory provisions.

IRC section 4911 has five exceptions, and two of these could allow
a significant amount of lobbying expenses to be excluded from IRC
section 4911 coverage. The first is an exception for making
available the results of nonpartisan analysis, study, or research.
Due to this exception, IRC section 4911 does not cover 501( c)( 3)
organizations' advocacy on legislation as long as the organization
provides a full and fair exposition of the pertinent facts that
would enable the public or an individual to form an independent
opinion or conclusion. The second significant exception under IRC
section 4911 is referred to as the self- defense exception. This
exception excludes from coverage lobbying expenses related to
appearances before, or communications to, any legislative body
with respect to a possible decision of such body that might affect
the existence of the organization, its powers and duties, tax-
exempt status, or the deduction of contributions to the
organization.

According to IRS officials, this exception provides that a 501(
c)( 3) nonprofit tax- exempt organization can lobby legislative
branch officials on matters that might affect its tax- exempt
status or the activities it can engage in without losing its tax-
exempt status, and such lobbying will not be counted under the IRC
section 4911 definition. According to IRS officials, this
exception does not cover lobbying on state or federal funding.

For those organizations that lobby on their own behalf, the choice
of using either the LDA definition or the applicable IRC
definition can significantly affect whether they must register
with the Secretary of the Senate and the Clerk of the House of
Representatives. In addition, the lobbying definition an
organization uses can materially affect the information, such as
federallevel lobbying, it must disclose on its semiannual lobbying
report. Allowing organizations to use an IRC definition for LDA
reporting can result in organizations disclosing information that
may not be comparable, is unrelated to LDA's purpose, or that
falls short of what LDA envisions. However, of the 1,824
organizations that lobbied on their own behalf and filed reports
under LDA from July through December 1997, most reported using the
LDA definition. Those organizations that used the IRC section 162(
e) definition had the highest mean and median expenses reported.
Differences in

Definitions Can Significantly Affect Registration and Reporting
Under LDA

B-276377 Page 15 GAO/GGD-99-38 Federal Lobbying Definitions

The lobbying definition an organization uses, which governs how it
calculates lobbying expenses, can affect whether the organization
is required to register under LDA. If (1) the actual or expected
expenses of an organization lobbying on its own behalf exceed or
are expected to exceed the $20,500 LDA threshold for a 6- month
period, and (2) the organization has an employee that makes more
than one lobbying contact and spends at least 20 percent of his or
her time lobbying during the same 6- month period, then the
organization must register. Lobbying activities and contacts that
count toward the $20,500 and 20 percent thresholds depend on which
lobbying definition LDA, IRC section 4911, or IRC section 162( e)
an organization uses. If an activity is not covered under a
particular definition, then the expenses related to that activity
do not count toward the lobbying expenses of an organization using
that definition.

In some cases, allowing organizations to use an IRC definition
instead of the LDA definition could result in the organization
having covered lobbying expenses below the $20,500 threshold and
no employees who spend 20 percent of their time lobbying; however,
if the organization used the LDA definition, its lobbying expenses
and activities could be above the LDA registration thresholds. For
example, for an organization that primarily focuses its lobbying
efforts on lobbying federal officials about nonlegislative
matters, using an IRC definition is likely to result in lower
covered lobbying expenses than using the LDA definition and,
therefore, could result in an organization not meeting the $20,500
registration threshold. This could occur because any contacts with
legislative branch officials about nonlegislative matters are not
covered under either IRC sections 4911 or 162( e). Also, for
contacts on nonlegislative matters, IRC section 4911 does not
cover executive branch officials, and IRC section 162( e) covers
only about one- tenth of the executive branch officials that LDA
covers. Thus, an organization could spend over $20, 500 lobbying
federal officials who are covered by LDA for nonlegislative
matters, with the possibility that none of these expenses would
count toward the registration requirement if the organization used
an IRC definition.

It is also possible that an organization could have over $20,500
in lobbying expenses and one or more employees spending 20 percent
of their time lobbying by using an IRC definition, when using an
LDA definition would put its covered expenses below $20,500 and
put its lobbying employees under the 20- percent threshold. For
example, the IRC definitions potentially cover contacts with more
executive branch officials than LDA covers when those contacts are
about legislation. So, if an organization lobbies executive branch
officials not covered under LDA in order to Differences in
Definitions

Can Affect Who Must Register

B-276377 Page 16 GAO/GGD-99-38 Federal Lobbying Definitions

influence legislation, those contacts would count as lobbying
under the IRC definitions but not under the LDA definition. This
could result in the organization's covered lobbying expenses being
above the $20,500 threshold and in an employee's time spent on
lobbying being above the 20 percent threshold.

However, no data exist to determine the number of organizations
(1) that are not registered under LDA as a result of using an IRC
definition or (2) that met the thresholds under an IRC definition
but not under the LDA definition.

Similarly, the individuals who must be listed as lobbyists on an
organization's lobbying registration can be affected by the choice
of definition. Individuals must be listed as lobbyists on the
registration if they make more than one lobbying contact and spend
at least 20 percent of their time engaged in lobbying activities
for their employers during the 6 month reporting period. Using an
IRC definition instead of the LDA definition could result in an
individual not being listed as a lobbyist on his or her
organization's registration or subsequent semiannual report. For
example, this could occur if a lobbyist spends most of his or her
time lobbying high- level officials at independent federal
agencies about regulations, contracts, or other nonlegislative
matters, because the IRC definitions do not consider such contacts
as lobbying.

Just as the choice of definition affects whether an organization
must register under LDA with the Secretary of the Senate and the
Clerk of the House of Representatives, the choice of definition
also can materially affect the information that is reported
semiannually. Because an organization can switch from using the
LDA definition one year to using the applicable IRC definition
another year and vice versa, organizations can use the definitions
that enable them to minimize what they must disclose on their
lobbying reports.

The three definitions were written at different times for
different purposes, so what they cover differs in many ways, both
subtle and substantial. These differences result in organizations
that use one definition reporting expenses and related information
that organizations using another definition would not report. The
reported expenses and other information may provide less
disclosure and may be unrelated to what is needed to fulfill LDA's
purpose of publicly disclosing the efforts of lobbyists to
influence federal officials' decisionmaking. Differences in
Definitions

Can Affect What Must Be Reported

B-276377 Page 17 GAO/GGD-99-38 Federal Lobbying Definitions

Whether an organization uses the LDA definition or the applicable
IRC definition, it is required to disclose on its lobbying report
its total estimated expenses for all activities covered by the
definition. Thus, organizations using the LDA definition must
report all expenses for lobbying covered federal government
officials about subject matters covered by LDA. Similarly,
organizations using an IRC definition must disclose on their
lobbying reports all expenses for activities that are covered by
the applicable IRC definition, including federal, state, and local
government lobbying and grassroots lobbying.

However, organizations report only their total expenses, so the
lobbying reports do not reveal how much of the reported expenses
were for individual activities and for what level of government.
Thus, even if an organization using the LDA definition reported
the same total lobbying expenses as an organization using an IRC
definition, it would be impossible to tell from the lobbying
reports how similar the two organizations' federal lobbying
efforts may have been. In addition, an organization reporting
under an IRC definition would be, in all likelihood, including
expenses that are not related to LDA's focus on federal lobbying
because the IRC definitions go beyond lobbying at the federal
level. An organization reporting under an IRC definition could
also be reporting less information on federal level lobbying than
would be provided under the LDA definition, which Congress wrote
to carry out the public disclosure purpose of LDA. For example,
the IRC definitions include far fewer federal officials in their
definitions for lobbying on nonlegislative matters.

Also, an organization using the IRC section 4911 definition could
exclude considerable lobbying expenses from its lobbying report,
if its lobbying fell under the IRC section 4911 exception for
nonpartisan analysis or the selfdefense exception. For example, in
1995, a 501( c)( 3) tax- exempt nonprofit organization lobbied
against legislation that would have sharply curtailed certain
activities of charities. On its 1995 tax return, the organization,
which used the IRC section 4911 definition to calculate its
lobbying expenses for tax purposes, reported about $106, 000 in
lobbying expenses. However, in a letter to a congressional
committee, the organization stated that its 1995 lobbying expenses
totaled over $700,000; it cited the selfdefense exception as a
reason for excluding about $594,000 in lobbying expenses from its
tax return. 12

12 This example occurred before LDA took effect on January 1,
1996, but it illustrates how using the IRC section 4911 definition
can result in an organization not reporting lobbying expenses. In
this case, an unknown part of the $700,000 was for grassroots
lobbying, which would not be reportable under the LDA definition.

B-276377 Page 18 GAO/GGD-99-38 Federal Lobbying Definitions

In contrast to reporting expenses, when reporting information
other than expenses on the LDA lobbying reports, organizations are
required to report only information related to federal lobbying.
This information includes issues addressed during lobbying
contacts with federal government officials and the House of
Congress and federal agencies contacted. Therefore, if an
organization uses an IRC definition and includes expenses for
state lobbying and grassroots lobbying in its total lobbying
expenses, it is not required to report any issues or other
information related to those nonfederal expenses.

Further, LDA provides that for reporting information other than
expenses for contacts with federal executive branch officials,
organizations using an IRC definition to calculate their expenses
must use the IRC definition for reporting other information. But
for contacts with federal legislative branch officials,
organizations using an IRC definition to calculate their lobbying
expenses must use the LDA definition in determining what other
information, such as the issues addressed during lobbyists'
contacts and the House of Congress contacted, must be disclosed on
their reports. Because of this latter provision, organizations
that use an IRC definition and lobby legislative branch officials
about nonlegislative matters are required to disclose the issues
addressed and the House of Congress contacted, even though they
are not required to report the expenses related to this lobbying.

For the July through December 1997 reporting period, lobbying
firms that had to use the LDA definition to calculate lobbying
income filed reports for 9,008 clients. In addition, for this
reporting period, 1, 824 organizations that lobbied on their own
behalf and were able to elect which definition to use in
calculating their lobbying expenses filed lobbying reports. Of the
1, 824 organizations, 1,306 (71 percent) used the LDA definition
to calculate their lobbying expenses. Another 157 organizations (9
percent) elected to use the IRC 4911 definition. Finally, 361
organizations (20 percent) used the IRC 162( e) definition to
calculate their lobbying expenses. (See table 3.) Most
Organizations

Reported Using the LDA Definition

B-276377 Page 19 GAO/GGD-99-38 Federal Lobbying Definitions

Number of organizations that used definition Lobbying expenses
reported LDA IRC

section 4911 IRC section 162( e)

Less than $10,000 13 433 15 20 $10,000 or more 873 142 341

Total 1,306 157 361

Source: GAO analysis of the Secretary of the Senate lobbying
database.

Data do not exist that would enable us to estimate the number of
organizations that may not be registered because they used an IRC
definition but would have had to register had they used the LDA
definition. Because computerized registration data were available
only for one 6month period when we did our analysis, we did not
analyze changes in registrations over time. Thus, we do not know
whether, or to what extent, organizations switch between
definitions from year to year as allowed by LDA.

Organizations that lobbied on their own behalf and reported using
the IRC section 162( e) definition had the highest mean and median
expenses reported. These organizations had 87 percent higher mean
lobbying expenses than organizations that reported using the LDA
definition and 58 percent higher mean lobbying expenses than those
using the IRC section 4911 definition. Organizations that reported
using the IRC section 162( e) definition had $180,000 in median
expenses; organizations that reported using the LDA definition and
those that reported using the IRC section 4911 definition each had
median expenses of $80, 000.

It is possible that some of the differences among the mean and
median expenses of organizations using the different definitions
could reflect more extensive and expensive lobbying efforts by
those organizations that used the IRC section 162( e) definition.
However, it is not possible to determine how much of the
differences are due to what is covered by each definition or the
extent of the lobbying efforts by the organizations using the
different definitions. The main reason for this, as discussed
earlier, is that although the lobbying reports filed under LDA
show total lobbying expenses, they do not show the amount spent on
different lobbying

13 Organizations that lobby on their own behalf do not have to
register if their lobbying expenses for the 6 month reporting
period are below $20, 500. However, until a registered
organization terminates its registration, it must file lobbying
reports, even if its lobbying expenses are below the $20, 500
registration threshold.

Table 3: Number of Organizations That Used One of the Three
Lobbying Definitions to Calculate the Lobbying Expenses Reported
Under LDA From July to December 1997

Reported Expenses Were Highest Under IRC Section 162( e)
Definition

B-276377 Page 20 GAO/GGD-99-38 Federal Lobbying Definitions

activities. Therefore, data do not exist that would help explain
the reasons for the differences.

Table 4 shows the total, mean, and median expenses for
organizations using each of the three lobbying definitions that
reported having $10,000 or more in lobbying expenses from July to
December 1997.

Calculated under Lobbying expenses LDA IRC

section 4911 IRC section 162( e)

Total $258,060,000 $49,700,000 $188,520,000 Mean $295,601 $350,000
$552,845 Median $80,000 $80,000 $180,000 Source: GAO analysis of
the Secretary of the Senate data.

Table 4 includes only data on organizations reporting lobbying
expenses of $10,000 or more, because organizations with less than
$10,000 in expenses check a box on the LDA reporting form and do
not include an amount for their expenses. Because, as shown in
table 3, many more of these organizations used the LDA definition
than used either of the IRC definitions, it follows that the
largest total amount of all expenses reported was under the LDA
definition.

Because the differences among the three lobbying definitions can
significantly affect who registers and what they report under LDA,
the current statutory provisions do not always complement LDA's
purpose. As discussed earlier, allowing organizations to use an
IRC definition for LDA purposes can result in organizations (1)
not registering under LDA, (2) disclosing information that may not
be comparable, and (3) disclosing information that is unrelated to
LDA's purpose or that falls short of what LDA envisions. Options
for revising the statutory framework exist; LDA requires us to
consider one option, harmonizing the definitions; and we
identified two other options on the basis of our analysis. Those
options are

 eliminating the current authorization for businesses and tax-
exempt organizations to use the IRC lobbying definitions for LDA
reporting and

 requiring organizations that use an IRC lobbying definition to
include only expenses related to federal lobbying covered by that
IRC definition when the organizations register and report under
LDA.

The options address, in varying degrees, the effects of the
differences on registration and reporting, but all have
countervailing effects that must be balanced in determining what,
if any, change should be made.

Table 4: Total, Mean, and Median Lobbying Expenses for
Organizations That Reported Having $10,000 or More in Lobbying
Expenses From July to December 1997

Options That May Better Ensure That the Public Disclosure Purposes
of LDA Are Realized

B-276377 Page 21 GAO/GGD-99-38 Federal Lobbying Definitions

In addition to charging us with analyzing the differences among
the three lobbying definitions and the impact of those differences
on organizations' registration and reporting of their lobbying
efforts, LDA charges us with reporting any changes that we may
recommend to harmonize those definitions. Harmonization implies
the adoption of a common definition that would be used for LDA's
registration and reporting purposes and for the tax reporting
purposes currently served by the IRC definitions. Harmonizing the
three lobbying definitions would ensure that organizations would
not have the burden of keeping track of their lobbying expenses
and activities under two different definitions one for tax
purposes and another for LDA registration and reporting purposes.
Requiring the use of a common definition would also mean that no
alternative definitions could be used to possibly avoid LDA's
registration requirement and that all data reported under the
common definition would be comparable.

However, developing a lobbying definition that could be used for
the purposes of LDA, IRC section 4911, and IRC section 162( e)
would require Congress to revisit fundamental decisions it made
when it enacted each definition. For example, if a common
definition included state lobbying expenses that are included
under the current IRC definitions, then the current objective of
LDA to shed light on efforts to influence federal decisionmaking
would essentially be rewritten and expanded. On the other hand, if
a common definition did not include state lobbying expenses,
fundamental decisions that were made when the statutes containing
the IRC definitions were written would be similarly modified.
Adopting a harmonized definition of lobbying could result in
organizations disclosing less information on lobbying reports, if
the new definition covered less than what is covered by the
current LDA definition. In addition, a new definition would not be
used only by organizations lobbying on their own behalf, which
currently have the option of using an IRC definition for LDA
reporting, but also by lobbying firms, which currently must use
the LDA definition for their clients' lobbying reports.

Eliminating the current authorization for using the IRC lobbying
definitions for LDA purposes would mean that consistent
registration and reporting requirements would exist for all
lobbyists, and the requirements would be those developed by
Congress specifically for LDA. This would result in all
organizations following the LDA definition for LDA purposes; thus,
only the data that Congress determined were related to LDA's
purposes would be reported. However, this option could increase
the reporting burden of the relatively small number of
organizations currently using the IRC definitions under LDA,
because it would require them to Harmonizing the Definitions

Eliminating the Current Authorization for Using an IRC Lobbying
Definition for LDA Purposes

B-276377 Page 22 GAO/GGD-99-38 Federal Lobbying Definitions

track their lobbying activities as defined by LDA while also
tracking the activities covered under the applicable IRC lobbying
definition.

The last option we identified would require organizations that
elected to use an IRC definition for LDA to use only expenses
related to federal lobbying efforts as defined under the IRC
definitions when they determine whether they should register and
what they should report under LDA. This would improve the
alignment of registrations and the comparability of lobbying
information that organizations reported, because organizations
that elected to use the IRC definitions would no longer be
reporting to Congress on their state, local, or grassroots
lobbying. The reporting of expenses under this option would be
similar to the reporting of all other information required under
LDA, such as issues addressed and agencies contacted, which are
based on contacts with federal officials.

However, this option would only partially improve the
comparability of data being reported by organizations using
different definitions. Differences in the reported data would
remain because the LDA and IRC definitions do not define lobbying
of federal officials identically. LDA requires tracking contacts
with a much broader set of federal officials than do the IRC
definitions when lobbying contacts are made about nonlegislative
matters.

In addition, because differences would remain between the LDA and
IRC definitions of lobbying at the federal level under this
option, organizations might still avoid registering under LDA and
might still report information that would differ from that
reported by organizations using the LDA definition. For example,
because the IRC lobbying definitions include fewer federal
executive branch officials when a contact is about a
nonlegislative matter, organizations using an IRC definition might
still have expenses under the $20,500 threshold for lobbying;
whereas, under the LDA definition they might exceed the threshold.
Finally, this option could impose some additional reporting burden
for the relatively small number of organizations currently using
IRC definitions for LDA purposes. Reporting only federal lobbying
when they use an IRC definition could result in some increased
recordkeeping burden if these organizations do not currently
segregate such data in their recordkeeping systems.

The three lobbying definitions we reviewed were adopted at
different times to achieve different purposes. What they cover
differs in many subtle and substantial ways. LDA was enacted to
help shed light on the identity of, and extent of effort by,
lobbyists who are paid to influence decisionmaking in the federal
government. IRC section 4911 was enacted Requiring Organizations

Using IRC Definitions to Use Only Expenses for Federal Lobbying
for LDA Registration and Expense Reporting

Conclusions

B-276377 Page 23 GAO/GGD-99-38 Federal Lobbying Definitions

to help clarify the extent to which 501( c)( 3) organizations
could lobby without jeopardizing their tax- exempt status, and IRC
section 162( e) was enacted to prevent businesses from deducting
lobbying expenses from their federal income tax. Because the IRC
definitions were not enacted to enhance public disclosure
concerning federal lobbying, as was the LDA definition, allowing
organizations to use the IRC definitions for reporting under LDA
may not be consistent with achieving the level and type of public
disclosure that LDA was enacted to provide.

Allowing organizations to use an IRC definition instead of the LDA
definition for calculating lobbying expenses under LDA can result
in some organizations not filing lobbying registrations, because
the use of the IRC definition could keep their federal lobbying
below the LDA registration thresholds. On the other hand, under
certain circumstances, organizations could meet the thresholds
when using the IRC definition but would not do so if they used the
LDA definition. We do not know how many, if any, organizations are
not registered under LDA that would have met the registration
thresholds under LDA but not under the applicable IRC definition.

Giving organizations a choice of definitions to use each year can
undermine LDA's purpose of disclosing the extent of lobbying
activity that is intended to influence federal decisionmaking,
because organizations may disclose very different information on
lobbying reports, depending on which definition they use. When an
organization can choose which definition to use each year, it can
choose the definition that discloses the least lobbying activity.
Further, if an organization uses an IRC definition for its
lobbying report, the report can include expenses for state, local,
and grassroots lobbying that are unrelated to the other
information on the report that only relates to federal lobbying.
Also, if an organization uses an IRC definition, its lobbying
report can exclude expenses and/ or other information about
lobbying that is not covered under the selected IRC definition (e.
g., contacts about nonlegislative matters) but that nevertheless
constitutes an effort to influence federal decisionmaking. In this
situation, less information would be disclosed than LDA intended.

Because the differences among the LDA and IRC lobbying definitions
can significantly affect who registers and what they report under
LDA, the use of the IRC definitions can conflict with LDA's
purpose of disclosing paid lobbyists' efforts to influence federal
decisionmaking. Options for reducing or eliminating these
conflicts exist. These options include (1) harmonizing the
definitions, (2) eliminating organizations' authorization to use
an IRC definition for LDA purposes, or (3) requiring those that
use an IRC

B-276377 Page 24 GAO/GGD-99-38 Federal Lobbying Definitions

definition to include only expenses related to federal lobbying
under the IRC definition when they register and report under LDA.
The options, to varying degrees, could improve the alignment of
registrations and the comparability of reporting with Congress'
purpose of increasing public disclosure of federal lobbying
efforts. However, each option includes trade- offs between better
ensuring LDA's purposes and other public policy objectives and
could result in additional reporting burden in some cases.

In our opinion, the trade- offs involved in the option of
harmonizing the definitions are disproportionate to the problem of
LDA registrations and reporting not being aligned with LDA's
purpose. Harmonizing the definitions would best align
registrations and reporting with LDA's purposes if LDA's
definition is imposed for tax purposes as well, which would
significantly alter previous congressional decisions about how
best to define lobbying for tax purposes. Adopting a common
lobbying definition that includes activities, such as state
lobbying, that are covered under the current IRC definitions would
require a rewrite and expansion of LDA's objective of shedding
light on efforts to influence federal decisionmaking. Such major
changes in established federal policies that would be required to
harmonize the definitions appear to be unwarranted when only a
small portion of those reporting under LDA use the IRC
definitions.

The trade- offs for the other two options are less severe.
Eliminating organizations' authorization to use a tax definition
for LDA purposes would ensure that all lobbyists register and
report under the definition that Congress wrote to carry out LDA's
purpose. However, eliminating the authorization likely would
impose some additional burden on the relatively small number of
organizations currently using IRC definitions for LDA. Requiring
that only expenses related to federal- level lobbying under the
IRC definitions be used for LDA purposes would not align reporting
with LDA's purposes as thoroughly as eliminating the authorization
to use an IRC definition for LDA would. Under this option
organizations could still avoid registering under LDA when the use
of an IRC definition results in total expenses falling below the
LDA registration threshold. The option also could impose some
additional recordkeeping burden for the relatively small number of
organizations currently using the IRC definitions.

B-276377 Page 25 GAO/GGD-99-38 Federal Lobbying Definitions

If Congress believes that the inclusion of nonfederal lobbying
expenses and the underreporting of lobbying efforts at the federal
level due to the optional use of the IRC lobbying definitions
seriously detract from LDA's purpose of public disclosure, then it
should consider adopting one of two options. Congress could remove
the authorization for organizations to use an IRC definition for
reporting purposes. In this case, data reported to the Senate and
House would adhere to the LDA definition, which Congress enacted
specifically to achieve LDA's public reporting purpose.
Alternatively, Congress could allow organizations to continue
using the IRC definitions but require that they use only the
expenses related to federal- level lobbying that those definitions
yield when they register and report under LDA. The data reported
would be more closely aligned with LDA's purpose of disclosing
federal level lobbying efforts, but some differences would remain
between the data so reported and the data that would result from
applying only the LDA definition. If either of these options were
considered, Congress would need to weigh the benefit of reporting
that would be more closely aligned with LDA's public disclosure
purpose against the additional reporting burden that some
organizations would likely bear.

On February 11, 1999, we sent a draft of this report for review
and comment to the Clerk of the House of Representatives, the
Secretary of the Senate, the Secretary of the Treasury, and the
Commissioner of the Internal Revenue Service. Representatives of
the Clerk of the House of Representatives, the Secretary of the
Senate, and the Secretary of the Treasury told us that no comments
would be forthcoming. On February 17, 1999, we met with officials
from the Internal Revenue Service, and they provided technical
comments on a draft of this report. On the basis of their
comments, we made changes to the report as appropriate. In a
letter dated March 5, 1999, the Chief Operations Officer of the
Internal Revenue Service stated that IRS had reached general
consensus with us on the technical matters in the report. Matters
for

Congressional Consideration

Agency Comments and Our Evaluation

B-276377 Page 26 GAO/GGD-99-38 Federal Lobbying Definitions

We are sending copies of this report to Senator Carl Levin;
Senator Ted Stevens; Senator William V. Roth, Jr., Chairman, and
Senator Daniel P. Moynihan, Ranking Minority Member, Senate
Committee on Finance; Representative Bill Archer, Chairman, and
Representative Charles B. Rangel, Ranking Minority member, House
Committee on Ways and Means; the Honorable Gary Sisco, Secretary
of the Senate; the Honorable Jeff Trandahl, Clerk of the House of
Representatives; the Honorable Robert E. Rubin, Secretary of the
Treasury; and the Honorable Charles O. Rossotti, Commissioner of
Internal Revenue. Copies will also be made available to others
upon request.

The major contributors to this report are listed in appendix IV.
Please call me on (202) 512- 8676 if you have any questions.

Michael Brostek Associate Director, Federal Management and
Workforce Issues

Page 27 GAO/GGD-99-38 Federal Lobbying Definitions

Page 28 GAO/GGD-99-38 Federal Lobbying Definitions

Contents 1 Letter 30 Comparison of LDA and IRC Definitions 30
Grassroots Lobbying 30 Lobbying State and Local Officials 31
Differences Based on the Federal Officials Contacted 31
Differences Based on Subjects Addressed During

Lobbying Contacts 35

Exceptions to the Lobbying Definitions 36 Appendix I

Comparisons of LDA and IRC Definitions

39 Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

46 Exceptions to the LDA Lobbying Definition 46 Exceptions to the
IRC Section 4911 Lobbying Definition 48 Exceptions to the IRC
Section 162( e) Lobbying Definition 49 Appendix III

Exceptions to the LDA and IRC Lobbying Definitions

50 Appendix IV Major Contributors to This Report

Table 1: Key Differences in Coverage of Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

11 Tables Table 2: Approximate Number of Executive Branch

Officials With Whom Contacts About Nonlegislative Matters Could Be
Counted as Lobbying Under the Three Lobbying Definitions

13

Contents Page 29 GAO/GGD-99-38 Federal Lobbying Definitions

Table 3: Number of Organizations That Used One of the Three
Lobbying Definitions to Calculate the Lobbying Expenses Reported
Under LDA From July to December 1997

19 Table 4: Total, Mean, and Median Lobbying Expenses for

Organizations That Reported Having $10,000 or More in Lobbying
Expenses From July to December 1997

20 Table I. 1: Approximate Number of Executive Branch

Officials With Whom Contacts About Nonlegislative Matters Could Be
Counted as Lobbying Under the Three Lobbying Definitions

32 Table II. 1: Coverage of Federal Lobbying 39 Table II. 2:
Coverage of State Lobbying 44 Table II. 3: Coverage of Local
Lobbying 45

Abbreviations

DOD Department of Defense IRC Internal Revenue Code LDA Lobbying
Disclosure Act of 1995 NOAA National Oceanic and Atmospheric
Administration OPM Office of Personnel Management U. S. C. United
States Code

Appendix I Comparisons of LDA and IRC Definitions

Page 30 GAO/GGD-99-38 Federal Lobbying Definitions

The types of activities and contacts that are covered by the
Lobbying Disclosure Act of 1995 (LDA) lobbying definition are
significantly different from those covered under the Internal
Revenue Code (IRC) definitions. First, LDA does not cover
grassroots lobbying. The IRC lobbying definitions cover grassroots
lobbying, such as television advertisements and direct mail
campaigns, that are intended to influence legislation at the
federal, state, or local levels. Second, LDA covers lobbying only
at the federal level. However, both IRC definitions cover lobbying
of federal officials, as well as state and local government
officials.

The IRC definitions potentially cover contacts with more levels of
executive branch officials than LDA covers when those contacts are
about legislation. However, when contacts are about nonlegislative
subject matters, such as regulations or policies, LDA covers
contacts with a broader range of federal officials than the IRC
definitions. Further, LDA's definition of lobbying includes
legislative matters and an extensive list of nonlegislative
matters. IRC section 4911 only covers lobbying contacts that
address specific legislative proposals. IRC section 162( e) covers
lobbying contacts on legislative and nonlegislative subjects, but
its coverage of legislative subjects is somewhat more limited than
LDA's coverage, and its coverage of nonlegislative subjects is not
clearly defined.

Grassroots lobbying efforts to influence legislation by
influencing the public's view of that legislation is covered under
the IRC definitions but not under the LDA definition. Grassroots
lobbying campaigns can use such means as direct mailings and
television, radio, and newspaper advertisements and can be very
expensive. Both IRC section 4911 and IRC section 162( e) cover
grassroots lobbying at the federal, state, and local levels.
However, IRC section 4911 has a narrower definition of grassroots
lobbying than IRC section 162( e) does.

Under IRC section 4911, grassroots lobbying is defined as any
attempt to influence legislation through an attempt to affect the
opinions of the general public or any segment thereof. To be
considered grassroots lobbying under IRC section 4911, a
communication with the public must

 refer to a specific legislative proposal,

 reflect a view on such legislative proposal, and

 encourage the recipient of the communication to take action with
respect to such legislative proposal.

IRC section 162( e) does not have the same stringent tests that
IRC section 4911 has for determining if a communication with the
public is grassroots Comparison of LDA

and IRC Definitions Grassroots Lobbying

Appendix I Comparisons of LDA and IRC Definitions

Page 31 GAO/GGD-99-38 Federal Lobbying Definitions

lobbying. Under IRC section 162( e), communications with the
public that attempt to develop a grassroots point of view by
influencing the general public to propose, support, or oppose
legislation are considered to be grassroots lobbying. To be
considered as grassroots lobbying under IRC section 162( e), a
communication with the public does not have to encourage the
public to take action with respect to a specific legislative
proposal. Therefore, the IRC section 162( e) grassroots lobbying
provision is likely to encompass more lobbying campaigns than IRC
section 4911 does.

The LDA lobbying definition covers only contacts with federal
government officials and does not require lobbyists to report any
expenses for contacts with state and local government officials.
This is consistent with LDA's overall purpose of increasing public
disclosure of the efforts of lobbyists paid to influence federal
decisionmaking. The IRC lobbying definitions also cover contacts
with federal government officials. However, in contrast to LDA,
the IRC lobbying definitions require that expenses for contacts
with state officials to influence state legislation be included in
lobbying expenses. Further, both IRC lobbying definitions cover
contacts with local government officials to influence local
government legislation; but coverage of local government contacts
is limited under IRC section 162( e), because that section has an
exception for contacts with local councils on legislation of
direct interest to the organization. (Contacts with state and
local government officials to influence something other than
legislation, such as a state or local policy or regulation, are
not covered by either of the IRC definitions.)

The amounts spent lobbying state governments can be significant.
For example, in 1997, under state lobbying disclosure laws,
reported spending on lobbying state government officials was $144
million in California, $23 million in Washington, and $23 million
in Wisconsin.

Whether a lobbyist's contact with a federal government official
counts as lobbying under any of the three lobbying definitions
depends, in part, on whether the contact is with a covered
official. Covered officials are defined by several factors, such
as their branch of government, the office they work in, and their
rank. All three definitions include as lobbying lobbyists'
contacts with legislative branch officials Members and employees
of Congress to influence legislation. However, for contacts with
executive branch officials to influence legislation and contacts
with either legislative branch or executive branch officials on
legislative matters, such as regulations and contracts, the
definitions of what is counted as lobbying differ significantly.
Lobbying State and

Local Officials Differences Based on the Federal Officials
Contacted

Appendix I Comparisons of LDA and IRC Definitions

Page 32 GAO/GGD-99-38 Federal Lobbying Definitions

Under LDA, contacts with any covered government officials about
any legislative or nonlegislative matters covered by LDA are
considered lobbying contacts, and their associated expenses must
be reported. However, under the IRC definitions, whether the
contact is on legislative or nonlegislative matters determines
which officials are covered. For contacts to influence
legislation, any executive branch officials who may participate in
the formulation of legislation are covered under both IRC
definitions. But, for nonlegislative matters, IRC section 4911
covers no executive branch officials, and IRC section 162( e)
covers very few executive branch officials.

Many of the executive branch officials covered by LDA for contacts
on any lobbying subject are not covered by IRC section 162( e)
when contacts are intended to influence nonlegislative matters.
Also, none of the executive branch officials covered by LDA are
covered by IRC section 4911 for contacts on nonlegislative
matters, because IRC section 4911 covers only contacts to
influence legislation.

For contacts to influence the official actions or positions of an
executive branch official on nonlegislative matters, IRC section
162( e) provides a list of covered executive branch officials.
LDA's list of covered executive branch officials includes all the
officials on the IRC section 162( e) list, plus several more
categories of officials. LDA's list applies to contacts on any
matter covered by LDA legislative or nonlegislative. Table I. 1
shows that LDA covers about 10 times the number of officials that
IRC section 162( e) covers for nonlegislative matters.

Approximate number covered under

Levels of officials and/ or offices LDA IRC section 4911 IRC
section

162( e)

President, Vice President; Executive Schedule level I, cabinet-
level officials, and their immediate deputies

50 0 50 Executive Schedule levels II through V (excluding cabinet
level officials and their immediate deputies)

610 0 0 Uniformed Services at or above O- 7 960 0 0 Officials
serving in a confidential, policymaking, or advocating position
(Schedule C appointees) a 1,420 0 0 Entire office of the Executive
Office of the President (excluding the White House Office) 1,180 0
20 White House Office of the Executive Office of the President 380
0 380

Total 4,600 0 450

Covered Executive Branch Officials for Contacts on Nonlegislative
Matters

Table I. 1: Approximate Number of Executive Branch Officials With
Whom Contacts About Nonlegislative Matters Could Be Counted as
Lobbying Under the Three Lobbying Definitions

Appendix I Comparisons of LDA and IRC Definitions

Page 33 GAO/GGD-99-38 Federal Lobbying Definitions

Note: Numbers in the table are a mixture of (1) authorized
positions, which may or may not be filled at any given time; (2)
filled positions; and (3) full- time- equivalent employment, which
represents one fulltime employee or one or more part- time
employees who collectively complete 2, 080 work hours in a given
year. All numbers are rounded and approximate. The estimate of the
number of authorized positions at Executive Schedule levels II
through V is understated because it does not include estimates of
the number of members of federal boards and commissions when 5 U.
S. C. 5313- 5316 does not specify the number of such members. a
Schedule C appointees are political appointees (graded GS/ GM- 15
and below) in positions that

involve determining policy or require a close confidential
relationship with the agency head or other key officials of the
agency.

Source: 5 U. S. C. 5312- 5316; U. S. Government Manual; OPM; DOD;
U. S. Coast Guard; Public Health Service; NOAA; Budget of the
United States Government, Fiscal Year 1999 Appendix.

As shown in table I. 1, LDA and IRC section 162( e) include
contacts with the President and Vice President and Cabinet Members
and similar highranking officials and their immediate deputies. In
the Executive Office of the President, LDA includes all contacts
with all offices; IRC section 162( e) includes only all officials
in the White House Office and the two most senior level officers
in the other agencies of the Executive Office of the President.
Further, LDA includes contacts with officials in levels II through
V of the Executive Schedule, which includes agency heads and
deputy and assistant secretaries; IRC section 162( e) does not.
Also, LDA includes contacts with officials at levels O- 7 and
above, such as Generals and Admirals, in the uniformed services.
Finally, LDA includes contacts with all Schedule C appointees, who
are political appointees (graded GS/ GM- 15 and below) in
positions that involve determining policy or require a close,
confidential relationship with the agency head or other key
officials of the agency.

The narrow scope of IRC section 162( e) 's list of covered
executive branch officials can result in organizations not
including on their lobbying reports expenses or other information,
such as issues addressed, relating to contacts with very high-
ranking officials. For example, if an organization made contacts
to influence an official action or position with the top official
at most independent agencies, including the National Aeronautics
and Space Administration, the General Services Administration, the
Export- Import Bank, and the Federal Communications Commission,
these contacts would not be considered as contacts with covered
executive branch officials and therefore would not be covered by
the IRC section 162( e) definition. Similarly, contacts on
nonlegislative matters with the heads of agencies within cabinet
departments, such as the heads of the Internal Revenue Service,
the Occupational Safety and Health Administration, the Bureau of
Export Administration, and the Food and Drug Administration, would
not be considered as contacts with officials at a high enough
level for the list of covered executive branch officials under the
IRC section 162( e) definition. However, contacts with all of
these officials would be covered under the LDA definition of
lobbying.

Appendix I Comparisons of LDA and IRC Definitions

Page 34 GAO/GGD-99-38 Federal Lobbying Definitions

The two IRC definitions generally provide the same coverage of
contacts with executive branch officials for influencing
legislation. The two definitions provide that a contact with any
government official or employee who may participate in the
formulation of legislation made to influence legislation must be
counted as a lobbying expense. 1 Thus, these definitions
potentially cover many more levels of executive branch officials
than are included on LDA's list of covered executive branch
officials. LDA's list of covered officials is shown in table I. 1
and applies to both legislative and nonlegislative matters.
Therefore, contacts with officials in the Senior Executive Service
or in grades GS/ GM- 15 or below who are not Schedule C appointees
would generally count as lobbying contacts under the IRC
definitions if such contacts were for the purpose of influencing
legislation and those officials participated in the formulation of
legislation. But such contacts would not count as lobbying
contacts under the LDA definition, because LDA does not include
these officials as covered executive branch officials.

Neither IRC section 162( e) nor IRC section 4911 covers contacts
with legislative branch officials on nonlegislative matters. The
two IRC definitions cover only legislative branch officials in
regard to contacts to influence legislation. However, LDA counts
as lobbying any contacts with Members of Congress and
congressional employees on any subject matter covered by LDA.
Therefore, a lobbyist who contacts Members of Congress to
influence a proposed federal regulation would be required to count
these contacts in lobbying expenses calculated under the LDA
definition and to disclose the issues addressed and the House of
Congress contacted.

LDA and the two IRC definitions cover the same federal legislative
branch officials for contacts made to influence legislation. LDA
covers contacts with any Member or employee of Congress for
contacts on any legislative or nonlegislative subject matter
covered by the act. Both IRC definitions cover contacts with any
Member or employee of Congress for contacts made to influence
legislation.

1 IRC section 4911 differs somewhat from IRC section 162( e)
concerning contacts with executive branch officials for
influencing legislation. Specifically, according to the Treasury
Regulations for IRC section 4911, contacts with executive branch
officials to influence legislation only count as lobbying if the
principal purpose of the contact is to influence legislation.
However, under IRC section 162( e), the principal purpose of a
contact does not have to be for influencing legislation for a
contact with an executive branch official to be counted under that
section's provisions regarding contacts to influence legislation.
Covered Executive Branch

Officials for Contacts on Legislation

Covered Legislative Branch Officials for Contacts on
Nonlegislative Matters

Covered Legislative Branch Officials for Contacts on Legislation

Appendix I Comparisons of LDA and IRC Definitions

Page 35 GAO/GGD-99-38 Federal Lobbying Definitions

The subject matters for which contacts with officials count as
lobbying are different under the three lobbying definitions. LDA
provides a comprehensive list of subjects about which contacts
with a covered official are considered to be lobbying. For
example, for nonlegislative matters, the list includes, in part,
the formulation, modification, or adoption of a federal rule,
regulation, Executive order, or any other program, policy, or
position of the United States Government. Under IRC section 4911,
the only subject covered by lobbying contacts is influencing
legislation. Under IRC section 162( e), the subjects covered are
influencing legislation and influencing official actions or
positions of executive branch officials. The phrase official
actions or positions applies to contacts on nonlegislative
matters.

Further, more specific information about what was covered in a
lobbyist's contact is needed under IRC sections 4911 and 162( e)
than is needed under LDA to determine if the contact should count
as lobbying.

For legislative matters, LDA covers the formulation, modification,
or adoption of Federal legislation (including legislative
proposals). In contrast, for legislative matters, the IRC lobbying
definitions list only influencing legislation, which, according to
the Treasury Regulations, refers to contacts that address either
specific legislation that has been introduced or a specific
legislative proposal that the organization supports or opposes. 2

Under both IRC definitions, a contact to influence legislation is
a contact that refers to specific legislation and reflects a view
on that legislation. Therefore, a lobbyist's contact with a
legislative branch official in which the lobbyist provides
information or a general suggestion for improving a situation but
in which the lobbyist does not reflect a view on specific
legislation would not be considered to be a lobbying contact under
the IRC definitions. For example, the Treasury regulations for IRC
section 162( e) provide an example of a lobbying contact in which
a lobbyist tells a legislator to take action to improve the
availability of new capital. In this example, the lobbyist is not
referring to a specific legislative proposal, so the contact does
not count as lobbying. However, according to the Treasury
Regulations, a lobbyist's contact with a Member of Congress in
which the lobbyist urges a reduction in the capital gains tax rate
to increase the availability of new capital does count as
lobbying, because the

2 According to IRS officials, contacts to influence the nomination
and confirmation of officials subject to Senate confirmation are
considered to be contacts to influence legislation under the IRC
lobbying definitions. For the purposes of this report, the LDA
provision relating to nominations and confirmations is treated as
a nonlegislative matter. Differences Based on

Subjects Addressed During Lobbying Contacts

Coverage of Legislative Matters

Appendix I Comparisons of LDA and IRC Definitions

Page 36 GAO/GGD-99-38 Federal Lobbying Definitions

contact refers to a specific legislative proposal. In contrast,
because LDA covers legislation from its formulation to adoption,
the fact that a specific legislative proposal was not addressed
during a lobbyist's contact with a government official does not
prevent the contact from being counted as a lobbying contact.

LDA's list of nonlegislative matters under its definition of
lobbying contact seems to include most activities of the federal
government. The list includes

 the formulation, modification, or adoption of a federal rule,
regulation, executive order, or any other program, policy, or
position of the United States Government;

 the administration or execution of a federal program or policy
(including the negotiation, award, or administration of a federal
contract, grant, loan, or permit, or license); and

 the nomination or confirmation of a person for a position subject
to confirmation by the Senate.

IRC section 4911 does not include any nonlegislative matters in
its lobbying definition.

The only nonlegislative matter included under the IRC section 162(
e) lobbying definition is any direct communication with a covered
executive branch official in an attempt to influence the official
actions or positions of such official. However, neither IRC
section 162( e) nor its regulations define what is meant by
official actions or positions, thus leaving the interpretation of
what activities to count up to the lobbyist. Some lobbyists might
consider an official action to be almost anything a federal
official does while at work, while others might consider that
official actions must be more formal actions, such as those
requiring the signing of official documents.

LDA contains 19 exceptions to the definition of lobbying and IRC
sections 4911 and 162( e) contain 5 and 7 exceptions,
respectively. These exceptions are listed in appendix III.

Although LDA includes an extensive list of exceptions, for the
most part these exceptions make technical clarifications in the
law and do not provide special exceptions for particular groups.
Many of the LDA exceptions are for contacts made during the
participation in routine government business, and some of these
are for contacts that would be part of the public record. For
example, these include (1) contacts made in Coverage of
Nonlegislative

Matters Exceptions to the Lobbying Definitions

Appendix I Comparisons of LDA and IRC Definitions

Page 37 GAO/GGD-99-38 Federal Lobbying Definitions

response to a notice in the Federal Register soliciting
communications from the public and (2) a petition for agency
action made in writing and required to be a matter of public
record pursuant to established agency procedures. Other exceptions
are for contacts dealing with confidential information, such as
contacts not possible to report without disclosing information,
the unauthorized disclosure of which is prohibited by law.

LDA includes four exceptions for particular groups, including an
exception for contacts made by public officials acting in an
official capacity; an exception for representatives of the media
making contacts for news purposes; an exception for any contacts
made by certain tax- exempt religious organizations; and an
exception for contacts made with an individual's elected Member of
Congress or the Member's staff regarding the individual's
benefits, employment, or other personal matters.

Of the five exceptions to the IRC section 4911 lobbying
definition, two could allow a significant amount of lobbying
expenses to be excluded from IRC section 4911 coverage. The first
is an exception for making available the results of nonpartisan
analysis, study, or research. Due to this exception, IRC section
4911 does not cover 501( c)( 3) organizations' advocacy on
legislation as long as the organization provides a full and fair
exposition of the pertinent facts that would enable the public or
an individual to form an independent opinion or conclusion.

The second significant exception under IRC section 4911 is
referred to as the self- defense exception. This exception
excludes from coverage lobbying expenses related to appearances
before, or communications to, any legislative body with respect to
a possible decision of such body that might affect the existence
of the organization, its powers and duties, taxexempt status, or
the deduction of contributions to the organization. According to
IRS officials, this exception provides that a 501( c)( 3)
nonprofit tax- exempt organization can lobby legislative branch
officials on matters that might affect its tax- exempt status or
the activities it can engage in without losing its tax exempt
status, and such lobbying will not be counted under the IRC
section 4911 definition. According to IRS officials, this
exception does not cover lobbying on state or federal funding.

The IRC section 162( e) definition has one exception in the
statute, which is for contacts with local government legislative
branch officials on legislation of direct interest to the
organization. In addition, IRC section 162( e) has seven
exceptions, which are provided for by Treasury Regulations. These
seven exceptions provide technical clarifications to the

Appendix I Comparisons of LDA and IRC Definitions

Page 38 GAO/GGD-99-38 Federal Lobbying Definitions

statutory provisions and do not appear to exclude a significant
amount of expenses that would be counted as lobbying expenses
under the other lobbying definitions. For example, the IRC section
162( e) exceptions include (1) any communication compelled by
subpoena, or otherwise compelled by federal or state law; and (2)
performing an activity for purposes of complying with the
requirements of any law.

Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Page 39 GAO/GGD-99-38 Federal Lobbying Definitions

This appendix contains detailed information about which contacts,
activities, and expenses are covered under the definitions of
lobbying for LDA, IRC section 4911, and IRC section 162( e). Table
II. 1 shows the coverage of federal lobbying. Table II. 2 shows
the coverage of state lobbying, and table II. 3 shows the coverage
of local lobbying.

Contacts, activities, and expenses Covered under LDA IRC section
4911 IRC section 162( e) Efforts in support of lobbying contacts,
including preparation and planning activities, research, and other
background work

Yes 2 U. S. C. 1602 (7) Yes

Treas. Reg.  56.4911- 3( a)

Yes 26 U. S. C. 162( e)( 5)( C)

Contacts to influence legislation

Contacts with legislative branch officials Members of Congress Yes

2 U. S. C. 1602( 8)( A)( i) & (4)( A)

Yes 26 U. S. C. 4911( d)( 1)( B)

Yes 26 U. S. C. 162( e)( 1)( A) & (4)( A)

Employees of Congress Yes 2 U. S. C. 1602( 8)( A)( i) & (4)( C) &
(D)

Yes 26 U. S. C. 4911( d)( 1)( B)

Yes 26 U. S. C. 162( e)( 1)( A) & (4)( A) Contacts with executive
branch officials

President, Vice President; Executive Schedule level I, cabinet-
level officials, and their immediate deputies

Yes 2 U. S. C. 1602( 8) (A)( i) & (3)( A), (B) & (D)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A) & (4)( A) Executive Schedule
levels II, III, IV, and V (excluding cabinet- level officials and
their immediate deputies)

Yes 2 U. S. C. 1602( 8) (A)( i) & (3)( D)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A) & (4)( A) Uniformed services at
or above O- 7 Yes

2 U. S. C. 1602( 8)( A)( i) & (3)( E)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A) & (4)( A) Officials serving in a
confidential, policymaking, or advocating position (Schedule C
appointees)

Yes 2 U. S. C. 1602( 8)( A)( i) & (3)( F)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A) & (4)( A) Entire office of the
Executive Office of the President Yes

2 U. S. C. 1602( 8)( A)( i) & (3)( C)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A) & (4)( A) White House Office of
the Executive Office of the President Yes

2 U. S. C. 1602( 8)( A)( i) & (3)( C)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A) & (4)( A) The two most senior
officers of each agency in the Executive Office of the President
Yes

2 U. S. C. 1602( 8)( A)( i) & (3)( C)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A) & (4)( A)

Table II. 1: Coverage of Federal Lobbying

Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Page 40 GAO/GGD-99-38 Federal Lobbying Definitions

Contacts, activities, and expenses Covered under LDA IRC section
4911 IRC section 162( e)

Contacts with any executive branch officials who may participate
in the formulation of legislation

Maybe b Yes 26 U. S. C. 4911( d)( 1)( B)

Yes 26 U. S. C. 162( e)( 1)( A) & (4)( A)

Contacts to influence rules, regulations, or executive orders

Contacts with legislative branch officials Members of Congress Yes

2 U. S. C. 1602( 8)( A)( ii) & (4)( A)

No No Employees of Congress Yes

2 U. S. C. 1602( 8)( A)( ii) & (4)( C) & (D)

No No Contacts with executive branch officials

President, Vice President; Executive Schedule level I, cabinet-
level officials, and their immediate deputies

Yes 2 U. S. C. 1602( 8)( A)( ii) & (3)( A), (B) & (D)

No Maybe c 26 U. S. C. 162( e)( 1)( D) & (6)( A),( B) & (D)
Executive Schedule levels II, III, IV, and V (excluding cabinet-
level officials and their immediate deputies)

Yes 2 U. S. C. 1602( 8)( A)( ii) & (3)( D)

No No Uniformed services at or above O- 7 Yes

2 U. S. C. 1602( 8)( A)( ii) & (3)( E)

No No Officials serving in a confidential, policymaking, or
advocating position (Schedule C appointees)

Yes 2 U. S. C. 1602( 8)( A)( ii) & (3)( F)

No No Entire office of the Executive Office of the President Yes

2 U. S. C. 1602( 8)( A)( ii) & (3)( C)

No No White House Office of the Executive Office of the President
Yes

2 U. S. C. 1602( 8)( A)( ii) & (3)( C)

No Maybe c 26 U. S. C. 162( e)( 1)( D) & (6)( C) The two most
senior officers of each agency in the Executive Office of the
President Yes

2 U. S. C. 1602( 8)( A)( ii) & (3)( C)

No Maybe c 26 U. S. C. 162( e)( 1)( D) & (6)( C)

Contacts regarding the administration of a program or policy

Contacts with legislative branch officials Members of Congress Yes

2 U. S. C. 1602( 8)( A)( iii) & 4( A)

No No

Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Page 41 GAO/GGD-99-38 Federal Lobbying Definitions

Contacts, activities, and expenses Covered under LDA IRC section
4911 IRC section 162( e)

Employees of Congress Yes 2 U. S. C. 1602( 8)( A)( iii) & (4)( C)
& (D)

No No Contacts with executive branch officials

President, Vice President; Executive Schedule level I, cabinet-
level officials, and their immediate deputies

Yes 2 U. S. C. 1602( 8)( A)( iii) & (3)( A), (B) & (D)

No Maybe c 26 U. S. C. 162( e)( 1)( D) & (6)( A), (B), & (D)
Executive Schedule levels II, III, IV, and V (excluding cabinet-
level officials and their immediate deputies)

Yes 2 U. S. C. 1602( 8)( A)( iii) & (3)( D)

No No Uniformed services at or above O- 7 Yes

2 U. S. C. 1602( 8)( A)( iii) & (3)( E)

No No Officials serving in a confidential, policymaking, or
advocating position (Schedule C appointees)

Yes 2 U. S. C. 1602( 8)( A)( iii) & (3)( F)

No No Entire office of the Executive Office of the President Yes

2 U. S. C. 1602( 8)( A)( iii) & (3)( C)

No No White House Office of the Executive Office of the President
Yes

2 U. S. C. 1602( 8)( A)( iii) & (3)( C)

No Maybe c 26 U. S. C. 162( e)( 1)( D) & (6)( C) The two most
senior officers of each agency in the Executive Office of the
President Yes

2 U. S. C. 1602( 8)( A)( iii) & (3)( C)

No Maybe c 26 U. S. C. 162( e)( 1)( D) & (6)( C)

Contacts with executive branch officials to influence official
actions or positions of the officials

President, Vice President; Executive Schedule level I, cabinet-
level officials, and their immediate deputies

Yes d 2 U. S. C. 1602( 8)( A) & (3)( A), (B) & (D)

No Yes 26 U. S. C. 162( e)( 1)( D) & (6)( A), (B), & (D) Executive
Schedule levels II, III, IV, and V (excluding cabinet- level
officials and their immediate deputies)

Yes d 2 U. S. C. 1602( 8)( A) & (3)( D)

No No Uniformed services at or above O- 7 Yes d

2 U. S. C. 1602( 8)( A) & (3)( E)

No No Officials serving in a confidential, policymaking, or
advocating position (Schedule C appointees)

Yes d 2 U. S. C. 1602( 8)( A) & (3)( F)

No No

Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Page 42 GAO/GGD-99-38 Federal Lobbying Definitions

Contacts, activities, and expenses Covered under LDA IRC section
4911 IRC section 162( e)

Entire office of the Executive Office of the President Yes d

2 U. S. C. 1602( 8)( A) & (3)( C)

No No White House Office of the Executive Office of the President
Yes d

2 U. S. C. 1602( 8)( A) & (3)( C)

No Yes 26 U. S. C. 162( e)( 1)( D) & (6)( C) The two most senior
officers of each agency in the Executive Office of the President
Yes d

2 U. S. C. 1602( 8)( A) & (3)( C)

No Yes 26 U. S. C. 162( e)( 1)( D) & (6)( C)

Contacts to influence the nomination or confirmation of official
subject to confirmation by the Senate e

Contacts with legislative branch officials Members of Congress Yes

2 U. S. C. 1602( 8)( A)( iv) & (4)( A)

Yes 26 U. S. C. 4911( d)( 1)( B)

Yes 26 U. S. C. 162( e)( 1)( A)& (4)( A) Employees of Congress Yes

2 U. S. C. 1602( 8)( A)( iv) &( 4)( C) & (D)

Yes 26 U. S. C. 4911( d)( 1)( B)

Yes 26 U. S. C. 162( e)( 1)( A)& (4)( A) Contacts with executive
branch officials

President, Vice President; Executive Schedule level I, cabinet-
level officials, and their immediate deputies

Yes 2 U. S. C. 1602( 8)( A)( iv) & (3)( A), (B) & (D)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A)& (4)( A) Executive Schedule
levels II, III, IV, and V (excluding cabinet- level officials and
their immediate deputies)

Yes 2 U. S. C. 1602( 8)( A)( iv) & (3)( D)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A)& (4)( A) Uniformed services at
or above O- 7 Yes

2 U. S. C. 1602( 8)( A)( iv) & (3)( E)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A)& (4)( A) Officials serving in a
confidential, policymaking, or advocating position (Schedule C
appointees)

Yes 2 U. S. C. 1602( 8)( A)( iv) & (3)( F)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A)& (4)( A) Entire office of the
Executive Office of the President Yes

2 U. S. C. 1602( 8)( A)( iv) & (3)( C)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A)& (4)( A) White House Office of
the Executive Office of the President Yes

2 U. S. C. 1602( 8)( A)( iv) & (3)( C)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A)& (4)( A) The two most senior
officers of each agency in the Executive Office of the President
Yes

2 U. S. C. 1602( 8)( A)( iv) & (3)( C)

Yes a 26 U. S. C. 4911( d)( 1)( B)

Yes a 26 U. S. C. 162( e)( 1)( A)& (4)( A)

Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Page 43 GAO/GGD-99-38 Federal Lobbying Definitions

Contacts, activities, and expenses Covered under LDA IRC section
4911 IRC section 162( e) Attempts to influence the general public
regarding legislation, referenda, ballot initiatives,
constitutional amendments, and treaties

No Yes 26 U. S. C. 4911( d)( 1)( A) & (e)( 2)

Yes 26 U. S. C. 162( e)( 1)( C) & (4)( B)

26 U. S. C. 4911( e)( 2) a IRC sections 4911 and 162( e) do not
specify which executive branch officials are covered when

contacts are made to influence legislation. However, under IRC
sections 4911( d)( 1)( B) and 162( e)( 4)( A), if contacts are
made to influence legislation with any government official or
employee who may participate in the formulation of legislation,
then those contacts fall under the IRC definitions of lobbying. b
Contacts with executive branch officials are covered under LDA if
the officials are on LDA's list of

covered executive branch officials. LDA has no requirement that
executive branch officials must participate in the formulation of
legislation for contacts with them to be covered. c IRC section
162( e) includes as lobbying any direct communication with a
covered executive branch

official in an attempt to influence the official actions or
positions of such official. However, unlike LDA, this IRC section
does not specifically name nonlegislative matters about which
contacts with covered officials will be considered as lobbying.
Further, it does not define what official actions or positions
are. d LDA specifically names several nonlegislative matters, such
as federal rules, regulations, executive

orders, and the administration or execution of a federal program
or policy, about which contacts with covered executive branch or
legislative branch officials will be considered as lobbying. The
provision that defines as lobbying any direct communication with a
covered executive branch official in an attempt to influence the
official actions or positions of such official is from IRC section
162( e). e According to IRS officials, contacts to influence the
nomination or confirmation of an official subject to

confirmation by the Senate are considered to be contacts to
influence legislation under IRC sections 4911 and 162( e). See
Treasury Regulations 1. 162- 20( b)( ii)( 3) and 56.4911- 2( b)(
4)( ii)( B) example 6.

Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Page 44 GAO/GGD-99-38 Federal Lobbying Definitions

Contacts, activities, and expenses Covered under LDA IRC section
4911 IRC section 162( e) Efforts in support of lobbying contacts,
including preparation and planning activities, research, and other
background work

No Yes Treas. Reg.  56.4911- 3( a)

Yes 26 U. S. C. 162( e)( 5)( C)

Contacts to influence legislation

Contacts with legislative branch officials Members of state
legislature No Yes

26 U. S. C. 4911( d)( 1)( B) & (e)( 2)

Yes 26 U. S. C. 162( e)( 1)( A) & (4)( A) Employees of state
legislature No Yes

26 U. S. C. 4911( d)( 1)( B) & (e)( 2)

Yes 26 U. S. C. 162( e)( 1)( A) & (4)( A) Contacts with executive
branch officials who may participate in the formulation of
legislation No Yes

26 U. S. C. 4911( d)( 1)( B) & (e)( 2)

Yes 26 U. S. C. 162( e)( 1)( A) & (4)( A)

Contacts to influence rules, regulations, or executive orders No
No No

Contacts regarding the administration of a program or policy No No
No

Contacts with executive branch official to influence official
actions or positions of the official

No No No Attempts to influence the general public regarding
legislation, referenda, ballot initiatives, and constitutional
amendments

No Yes 26 U. S. C. 4911( d)( 1)( A) & (e)( 2)

Yes 26 U. S. C. 162( e)( 1)( C ) & (4)( B)

26 U. S. C. 4911( e)( 2)

Table II. 2: Coverage of State Lobbying

Appendix II Coverage of Different Contacts, Activities, and
Expenses Under the Three Definitions of Lobbying

Page 45 GAO/GGD-99-38 Federal Lobbying Definitions

Contacts, activities, and expenses Covered under LDA IRC section
4911 IRC section 162( e) Efforts in support of lobbying contacts,
including preparation and planning activities, research and other
background work

No Yes Treas. Reg.  56.4911- 3( a)

Yes 26 U. S. C. 162( e)( 5)( C)

Contacts to influence legislation

Contacts with legislative branch officials No Yes 26 U. S. C.
4911( d)( 1)( B) & (e)( 2)

Maybe a 26 U. S. C. 162( e)( 1)( A) & (e)( 4)( A) & (e)( 2)
Members of local council No Yes

26 U. S. C. 4911( d)( 1)( B) & (e)( 2)

Maybe a 26 U. S. C. 162( e)( 1)( A) & (e)( 4)( A) & (e)( 2)
Employees of local council No Yes

26 U. S. C. 4911( d)( 1)( B) & (e)( 2)

Maybe a 26 U. S. C. 162( e)( 1)( A) & (e)( 4)( A) & (e)( 2)
Contacts with executive branch officials who may participate in
the formulation of legislation No Yes

26 U. S. C. 4911( d)( 1)( B)

Yes 26 U. S. C. 162( e)( 1)( A) & (e)( 4)( A)

Contacts to influence rules, regulations, or executive orders No
No No

Contacts regarding the administration of a program or policy No No
No

Contacts with executive branch official to influence official
actions or positions of the official

No No No

Attempts to influence the general public regarding legislation,
referenda, ballot initiatives, and constitutional amendments

No Yes 26 U. S. C. 4911( d)( 1)( A) & (e)( 2)

Yes 26 U. S. C. 162( e)( 1)( C)& (e)( 4)( B)

26 U. S. C. 4911 (e)( 2) a IRC section 162( e)( 2) includes an
exception for lobbying local government legislative branch
officials

concerning legislation that is of direct interest to the taxpayer.
Therefore, only contacts with local government legislative branch
officials about legislation that is not of direct interest to the
taxpayer are covered by the IRC section 162( e) lobbying
definition.

Table II. 3: Coverage of Local Lobbying

Appendix III Exceptions to the LDA and IRC Lobbying Definitions

Page 46 GAO/GGD-99-38 Federal Lobbying Definitions

Title 2 of the United States Code 1 contains 19 exceptions to
LDA's lobbying definition. Under Title 2, the term lobbying
contact does not include a communication that is:

1. made by a public official acting in the public official's
official capacity; 2. made by a representative of a media
organization if the purpose of the communication is gathering and
disseminating news and information to the public;

3. made in a speech, article, publication, or other material that
is distributed and made available to the public, or through radio,
television, cable television, or other medium of mass
communication;

4. made on behalf of a government of a foreign country or a
foreign political party and disclosed under the Foreign Agents
Registration Act of 1938; 2

5. a request for a meeting, a request for the status of an action,
or any other similar administrative request, if the request does
not include an attempt to influence a covered executive branch
official or a covered legislative branch official;

6. made in the course of participation in an advisory committee
subject to the Federal Advisory Committee Act;

7. testimony given before a committee, subcommittee, or task force
of Congress, or submitted for inclusion in the public record of a
hearing conducted by such committee, subcommittee, or task force;

8. information provided in writing in response to an oral or
written request by a covered executive branch official or a
covered legislative branch official for specific information;

9. required by subpoena, civil investigative demand, or otherwise
compelled by statute, regulation, or other action of Congress or
an agency, including any communication compelled by a federal
contract, grant, loan, permit, or license;

1 2 U. S. C. 1602( 8)( B). 2 22 U. S. C. 611 et seq. Exceptions to
the LDA

Lobbying Definition

Appendix III Exceptions to the LDA and IRC Lobbying Definitions

Page 47 GAO/GGD-99-38 Federal Lobbying Definitions

10. made in response to a notice in the Federal Register, Commerce
Business Daily, or other similar publication soliciting
communications from the public and directed to the agency official
specifically designated in the notice to receive such
communications;

11. not possible to report without disclosing information, the
unauthorized disclosure of which is prohibited by law;

12. made to an official in an agency with regard to( 1) a judicial
proceeding or a criminal or civil law enforcement inquiry,
investigation, or proceeding; or (2) a filing or proceeding that
the government is specifically required by statute or regulation
to maintain or conduct on a confidential basis if that agency is
charged with responsibility for such proceeding, inquiry,
investigation, or filing;

13. made in compliance with written agency procedures regarding an
adjudication conducted by the agency under section 554 of Title 5
or substantially similar provisions;

14. a written comment filed in the course of a public proceeding
or any other communication that is made on the record in a public
proceeding;

15. a petition for agency action made in writing and required to
be a matter of public record pursuant to established agency
procedures;

16. made on behalf of an individual with regard to that
individual's benefits, employment, or other personal matters
involving only that individual, except that this clause does not
apply to any communication with( 1) a covered executive branch
official, or (2) a covered legislative branch official (other than
the individual's elected Members of Congress or employees who work
under such Member's direct supervision) with respect to the
formulation, modification, or adoption of private legislation for
the relief of that individual;

17. a disclosure by an individual that is protected under the
amendments made by the Whistleblower Protection Act of 1989 3
under the Inspector General Act of 1978 4 or under another
provision of law;

3 5 U. S. C. A. sec. 1211 et seq. 4 5 U. S. C. A. App. 3.

Appendix III Exceptions to the LDA and IRC Lobbying Definitions

Page 48 GAO/GGD-99-38 Federal Lobbying Definitions

18. made by (1) a church, its integrated auxiliary, or a
convention or association of churches that is exempt from filing a
federal income tax return under paragraph (2)( A)( i) of such
section 6033( a) of Title 26, or (2) a religious order that is
exempt from filing a federal income tax return under paragraph
(2)( A)( iii) of such section 6033( a); and

19. between (1) officials of a self- regulatory organization (as
defined in section 3( a)( 26) of the Securities Exchange Act) that
is registered with or established by the Securities and Exchange
Commission as required by that act or a similar organization that
is designated by or registered with the Commodities Future Trading
Commission as provided under the Commodity Exchange Act; and (2)
the Securities and Exchange Commission or the Commodities Future
Trading Commission, respectively, relating to the regulatory
responsibilities of such organization under the act.

Title 26 of the United States Code 5 contains five exceptions to
the lobbying definition in IRC section 4911. Under IRC section
4911, the term influencing legislation, with respect to an
organization, does not include:

1. making available the results of nonpartisan analysis, study, or
research; 2. providing technical advice or assistance (where such
advice would otherwise constitute influencing of legislation) to a
governmental body or to a committee or other subdivision thereof
in response to a written request by such body or subdivision, as
the case may be;

3. appearances before, or communications to, any legislative body
with respect to a possible decision of such body that might affect
the existence of the organization, its powers and duties, tax-
exempt status, or the deduction of contributions to the
organization;

4. communications between the organization and its bona fide
members with respect to legislation or proposed legislation of
direct interest to the organization and such members, other than
communications that directly encourage the members to take action
to influence legislation;

5. any communication with a government official or employee, other
than (1) a communication with a member or employee of a
legislative body (where such communication would otherwise
constitute the influencing of

5 26 U. S. C. 4911( d)( 2) Exceptions to the IRC

Section 4911 Lobbying Definition

Appendix III Exceptions to the LDA and IRC Lobbying Definitions

Page 49 GAO/GGD-99-38 Federal Lobbying Definitions

legislation), or (2) a communication the principal purpose of
which is to influence legislation.

Title 26 of the United States Code 6 contains a single exception
to the lobbying definition in IRC section 162( e):

1. appearances before, submission of statements to, or sending
communications to the committees, or individual members, of local
councils or similar governing bodies with respect to legislation
or proposed legislation of direct interest to the taxpayer.

In addition, the Treasury Regulations contain eight exceptions: 2.
any communication compelled by subpoena, or otherwise compelled by
federal or state law; 7

3. expenditures for institutional or good will advertising which
keeps the taxpayer's name before the public or which presents
views on economic, financial, social, or other subjects of a
general nature but which do not attempt to influence the public
with respect to legislative matters; 8

4. before evidencing a purpose to influence any specific
legislation determining the existence or procedural status of
specific legislation, or the time, place, and subject of any
hearing to be held by a legislative body with respect to specific
legislation; 9

5. before evidencing a purpose to influence any specific
legislation preparing routine, brief summaries of the provisions
of specific legislation;

6. performing an activity for purposes of complying with the
requirements of any law;

7. reading any publications available to the general public or
viewing or listening to other mass media communications; and

8. merely attending a widely attended speech. 6 26 U. S. C. 162(
e)( 2)( B)( i). 7 Treasury Regulation section 1.162- 29( b)( 3). 8
Treasury Regulation Section 1.162- 20( a)( 2). 9 This exception
and the following four exceptions are from Treasury Regulation
Section 1. 16229( c)( 3). Exceptions to the IRC

Section 162( e) Lobbying Definition

Appendix IV Major Contributors to This Report

Page 50 GAO/GGD-99-38 Federal Lobbying Definitions

Richard W. Caradine, Assistant Director, Federal Management and
Workforce Issues Terry L. Draver, Assignment Manager Kathleen M.
Peyman, Evaluator- in- Charge Mary F. Ernsberger, Evaluator Kiki
Theodoropoulos, Evaluator

Alan N. Belkin, Assistant General Counsel Rachel DeMarcus,
Assistant General Counsel Jessica A. Botsford, Senior Attorney
General Government

Division, Washington, D. C.

Office of the General Counsel

Page 51 GAO/GGD-99-38 Federal Lobbying Definitions

Page 52 GAO/GGD-99-38 Federal Lobbying Definitions

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