By Constance Campanella, President and CEO
Hello? Yes…this is Connie, what can I do for you?
Oh, I’m sorry to hear that….but, you are not alone. Quite a few state government relations managers discover that they have “secret lobbyists” in their company.
Secret Lobbyists ? What’s that about?
Well to begin, they are not completely secret.
Somebody hired them and presumably someone is paying for them to lobby or consult. The problem is that the person IN CHARGE of interactions with state and local government did not know about them until well after the fact.
How is that possible?
Many companies are comprised of divisions or units. Often, there is also a marketing unit that supports the entire company. In many companies, lobbyists hired to support public sector sales are not defined or compensated as such. They are called consultants or advisors and not registered as lobbyists. And, their activities are not coordinated with the state government relations (SGR) department – despite the fact that these individuals are often communicating with state legislators, governors, executive branch officials and other officials.
One newly hired executive recently discovered that while an inherited lobbyist was not a secret, the fee for the consultant who brokered the arrangement with the lobbyist was buried in another area of the budget. In some states, that fee would also be reportable as a lobbying expense.
I could list a dozen reasons why such lack of communication and coordination is bad for business, but I’ll confine this blog post to just one aspect: legal liability.
With more states requiring “consolidated” reporting of lobbying expenses, not being aware of expenditures that have to be reported is dangerous. And, while the forms typically include the phrase, “To the best of my knowledge” above the signature line, no SGR manager wants to answer for their company’s inability to track lobbyists.
If you are worried about “secret lobbyists” here are a couple of suggestions:
- Look up your own company on state lobbyist registration rosters. All are available online and a complete list with web addresses is available from Stateside Associates. That will not help you with unregistered consultants, but it is a start.
- If you are responsible for lobbyist reporting, make the case to your General Counsel (or higher) that anyone hired to represent your company before state and local government has to be cleared by your department or at least reported to you. Edicts like this need to come from high up.