Bennet looks to ban lobbyist bundlers, close the 20 percent loophole and more

Sen. Michael Bennet’s new bill looks to shine a light on so-called “shadow lobbying.” (Photo credit: Office of Michael Bennet/Wikimedia Commons)

This week, Sen. Michael Bennet, D-Colo., introduced the Lobbying and Campaign Finance Reform Act. The bill aims to shine light on a growing number of shadow lobbyists and end one of the long-running practices that allows them to secretly manipulate Washington.

The bill, which Bennet first introduced in the 113th Congress, has three prongs:

  1. It closes the 20 percent loophole (see below for more information on this);
  2. it prevents registered lobbyists from bundling campaign contributions; and
  3. it prevents members of Congress from asking for campaign donations from lobbyists while Congress is in session.

We are happy to join with a number of other groups, including Democracy 21 and Common Cause, in strong support of this bill.

What’s the 20 percent loophole and why does it need to be closed?

If you work in politics and you spend more than 20 percent of your time on traditional lobbying activities like meeting with members of Congress and their staff to push for specific positions, you’re supposed to register as a lobbyist.

Requiring lobbyists to register and disclose their activities is nothing new, but it has recently become clear that more and more influencers are taking advantage of the 20 percent loophole to avoid registering as lobbyists, claiming that covered activities take up a smaller percentage of their time.

This includes some high profile former members of Congress, like Anthony Weiner and Newt Gingrich, but it has also resulted in a broader decline in the number of registered lobbyists and a corresponding rise in “stealth lobbyists.”

As has been noted on our blog before, “Lobbying contracts don’t disappear, they just go unreported.” Lobbyists are deregistering because it appears less risky than registering and screwing up the paperwork, but they’re still working on their clients’ interests.

In that post Tim LaPira, an assistant professor of political science at James Madison University, noted that lobbyists had actually come out in favor of closing the loophole.

Closing the 20 percent loophole would force lobbyists out of the shadows, but it would also simplify the decision-making process for those influencers: If you lobby at all, you register. As the Government Accountability Office found last year, most registered lobbyists manage to figure out the paperwork and properly disclose their lobbying. The only real reason for influencers to remain in the shadows is to skirt the rules and hide their power.

A brief history of bundling

“Bundling” is a common campaign finance practice where one individual will gather donations for a candidate from a number of other people and present them all in a neat package (or unmarked envelope). It is also a common way for lobbyists to remind candidates just how much they’re worth when it comes time to vote on their priorities.

There is some disclosure around lobbyist bundling, but it is nowhere near adequate. Candidates for federal offices are supposed to report to the Federal Election Commission when they receive bundled contributions from a registered lobbyist, but, unfortunately, the data is buried in hard to parse PDF files and lacks some of the most interesting context; for instance, with some digging, you can identify the lobbyist that bundled contributions, but not who wrote the individual checks.

Even more concerning, many of the biggest bundlers fall into the “stealth lobbyist” category detailed above. They wield their influence around Washington, D.C., but the only disclosure around their activities comes thanks to the digging of investigative journalists — with little publicly disclosed information available to help them out.

Bennet’s bill would ban lobbyist bundling outright, an idea that President Obama has supported in the past. By closing the 20 percent loophole, it would also identify and restrict “stealth lobbyists” from continuing their big bundling ways.

We are happy to see these vital reforms getting attention, and hope that other members of Congress will sign on in support of this legislation as the 2016 elections approach.