CEOs Beware: New Anti-Lobbying Law Takes Effect Today

Last Updated Apr 21, 2008 5:19 PM EDT

Starting today (April 21), CEOs had better start paying more attention to how they conduct and report their lobbying efforts. Big-time failure to do so could result in fines up to $200,000 and five years in prison.

Taking effect is the grandly-titled Honest Leadership and Open Government Act of 2007. The law requires corporations to report every employee who takes part in lobbying and reports must now be made quarterly instead of twice yearly. Trade associations must note any worker who paid more than $5,000 for lobbying. "Informal" groups involved in advocacy must be reported, too

The law gets down to the nitty gritty of check-grabbing at coffee shops or swank restaurants. The deal seems to be that a lobbyist or corporate official cannot take a politician, regulator or Capitol Hill staffer out and pay for a filet mignon or even a double skinny latte. But the lobbyist is allowed to make a campaign contribution to the politician and then ask the sentor or congressman to pay for a meal so they can have an intimate chat. More details are available on newlobbylaw.com or query the Center for Congressional and Presidential Studies at American University.
Corporate executives have lobbyist Jack Abramoff to thank for the new law. Noted for his black fedora and trench coat, Abramoff was the toast of Washington until he was sent to prison for fraud. The scandal forced a re-assessment of Hill lobbying, Another factor was the demise of the "K Street Project," a cabal of Republicans lead by former House Majority Leader Thomas DeLay that funnelled lobbying to approved GOP groups.

It's silly to simply poo-poo lobbying, however. Microsoft did exactly that in the 1990s when the West Coast IT giant simply thought itself above federal politics. Microsoft seemed surprised when the U.S. Department of Justice took Microsoft to court 1998 for creating a monopoly by bundling its Internet Explorer program that it sold with its Windows operating systems. The feds had been making noises about such a move since 1991 but since Bill Gates didn't like lobbyists, he didn't notice the warning signs.

Done properly, lobbying can be an effective way to mold legislation and policies in ways that C-Suites need. Advocates can serve as an important intelligence service. If the rules are followed, lobbying can be honest and honorable.