CHAPTER 12 LOBBYING GOVERNMENT OFFICIALS - LEGAL, ETHICAL, AND PRACTICAL CONSIDERATIONS

• Jurisdiction: United States

Federal and Indian Oil and Gas Royalty Valuation and Management
(Feb 2007)
CHAPTER 12
LOBBYING GOVERNMENT OFFICIALS - LEGAL, ETHICAL, AND PRACTICAL CONSIDERATIONS
Robert L. Theriot ^*
Attorney, Liskow & Lewis
Houston, Texas

ROBERT L. THERIOT

Robert L. Theriot is a shareholder with the firm of Liskow & Lewis in their Houston office.

He holds degrees from the University of Southwestern Louisiana and Tulane Law School, where he graduated summa cum laude and served as Editor-in-Chief of the Tulane Law Review.

He served as law clerk to the Honorable John Minor Wisdom on the U.S. Court of Appeals for the Fifth Circuit, then began his career in private practice with Liskow & Lewis in 1987. Mr. Theriot's practice includes many aspects of oil and gas advice and litigation, including royalty, regulatory, marketing, lease, property damage, and joint operating issues.

I. OVERVIEW

This paper presents an overview of the various lobbying laws and rules that may affect those who work in the oil and gas industry. The author has drawn upon materials that he has previously presented to various groups in the industry. For purposes of this Special Institute, however, particular emphasis is given to the laws and rules that may come into play for those involved in federal oil and gas royalty management. For those whose work crosses both federal and state jurisdictions, information on the lobbying laws and rules of several producing states is also included in the final section.

Anyone who regularly deals with the government as part of his or her job responsibilities should be aware of the various laws and rules that regulate the lobbying of government officials. One may be inclined to think of "lobbying" as those activities done by a few high-paid influence peddlers who stalk the halls of Congress, and therefore think this topic is irrelevant to her own day-to-day work. She may be surprised, therefore, to realized that "lobbying" in its simplest and broadest definition simply means any attempt to influence a governmental official. Thus, anyone who communicates with government officials - even the individual who writes his Congressman complaining of high taxes and poor schools - is engaged in lobbying in a sense. Certainly, an employee whose job responsibility includes representing his company and advancing its interests before governmental agencies is arguably lobbying and potentially subject to the various laws and rules that regulate lobbying.

Of course, there is nothing inherently wrong, illegal, or unethical in lobbying. The right to petition the government for a redress of grievances is a fundamental constitutional right, guaranteed by the First Amendment to the Constitution. All courts that have considered the constitutionality of lobbying laws have clearly noted that lobbying is a protected constitutional right. Nevertheless, courts have also repeatedly held that the government can regulate lobbying in certain aspects. Specifically, courts have upheld restrictions that (1) impose registration and reporting upon those who engage in a certain level of commercial lobbying activities and (2) limit gifts and other benefits that may be extended to government officials by those seeking their favor.

Consequently, in most jurisdictions, lobbying is regulated by two different sets of laws and rules:

1. Lobbying laws: Lobbying laws generally impose registration and reporting requirements for persons engaged in a certain minimum threshold of commercial lobbying. Those individuals (or the companies that employ them) must register as "lobbyists" if they meet certain time, spending, or compensation thresholds in connection with

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lobbying. Registered lobbyist must submit periodic reports on their lobbying activities to the governmental agency that administers the lobbying law.

2. Governmental ethics laws: Most jurisdictions also have statutes and administrative rules limiting gifts, gratuities, and other benefits that may be given to or received by government officials in their dealings with the public. These restrictions may limit what one may do or provide while lobbying a government official. In some jurisdictions, the limitations differ depending on whether one is a registered lobbyist or not.

Other laws, as well, regulate some potential aspects of lobbying activities. Of course, all jurisdictions have bribery and public corruption statutes that prohibit improper solicitation or coercion of government actions. Also, when dealing with elected officials, one must be mindful of campaign finance laws because certain activities might be regulated differently under campaign finance laws than under the lobbying or general governmental ethics laws.

II. THE BASIC MECHANICS OF LOBBYING LAWS

The federal government and all 50 states have some form of "lobbying" law. Unfortunately, there is no "model" lobby law and thus laws across the various jurisdictions differ, often significantly. These differences make it difficult to summarize lobbying "law." Nevertheless, the various statutory schemes tend to follow a similar framework in how they approach and regulate lobbying.

The chief aim of most lobbying laws is to require registration and reporting by lobbyists who engage in a certain threshold of commercial lobbying. Most lobbying statutes seek to achieve this aim by adopting the following scheme:

• Defining "lobbying" (usually broadly), but then limiting the reach of the statute by some combination of (1) limiting definitions, (2) exclusions of certain types of contacts, or (3) exclusion of contacts with lower-level officials;

• Defining "lobbyists" as one who lobbies and exceeds some sort of threshold of activity, usually some combination of (1) time spent, (2) compensation received, or (3) money spent on lobbying.

• Requiring registration and periodic reporting of lobbying activities by those who meet the threshold test for lobbying or lobbyist.

• Empowering some particular agency or department ( e.g. the Secretary of State or a state ethics agency) to collect lobbying information and enforce the lobbying laws.

The different jurisdictions have widely divergent definitions of "lobbying." Some states, such as Colorado and New Mexico define lobbying narrowly, for example, limiting it to efforts to influence legislation or official rulemaking proceedings. Others, such as Louisiana and Texas, extend the definition to a broad range of contacts with state officials and employees on most government matters. Some states or jurisdictions, such as the federal government, also limit the definition to contacts only with certain "high-level" officials. These various definitions are subject to numerous "exceptions." The thrust of these exceptions is to exclude those contacts and communications that do not tend to create the dangers

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to which the lobbying law is directed. Common exceptions include (1) routine contacts (seeking information or advice, but not seeking to influence), (2) compelled or required communications, (3) public communications, and (4) legal advocacy-type contacts.

The different jurisdictions also have widely divergent threshold tests for determining who is deemed a "lobbyist" and must register. Most jurisdictions use some combination of compensated time and expense tests. These two separate thresholds can either be alternative tests (i.e., registration is required if you meet either test) or conjunctive tests (i.e., registration is required only if you meet both tests). Under the compensated time threshold, you will be deemed a lobbyist only if lobbying activities exceed a certain threshold of your total compensated time - this can mean the majority of your time in certain states; in Texas, by contrast, this means as little of 5% of your time during the qualifying period. Under the expense threshold, persons who spend above a certain limit on lobbying expenditures or activities, will also be deemed lobbyists, or at least required to report such expenditures. The various states also have numerous exceptions - some implicit in the definitional language, others explicit in the statutes or enabling rules - for certain types of activities, contacts, and expenditures that are excluded when determining whether the thresholds are met. Common exceptions include contacts or expenses that are motivated by reasons other than a person's official status (such as family or other personal relationship), bona fide private transactions, de minimus tokens of gratitude, food and beverage, travel and lodging related to official functions, and other like exceptions.

Accordingly, it is often difficult to determine whether one's activities rise to the level of requiring registration and reporting as a lobbyists. The definitions of "lobbying," "lobbyists," lobbying "expenses", the time, compensation, and/or expense thresholds, and the various exceptions thereto must all be read in conjunction to determine what combination of activities and conduct might combine to trigger the registration requirements. Additionally, the various elements of the statutory provisions do not always parallel each other; for example, a lunch with a lower-level state official might not constitute "lobbying," but could otherwise be counted as an expenditure that triggers the reporting threshold. Likewise, certain activities or expenses might not count towards the expenditure threshold, but are nevertheless required to be reported if the person otherwise meets the definitional thresholds.

As noted, meeting the definition of lobbyists (or, in some states, simply meeting the expenditure threshold) will require registration and/or periodic reporting. Each jurisdiction has promulgated forms and procedures for reporting, some of which are quite detailed, and the specifics of those requirements are beyond the scope of this paper. One should also note that the various jurisdictions differ as to whether the registration and...