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Common Compliance Violations: Political Activities

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  • Political activities compliance is a separate entity from the larger sphere of corporate compliance as a whole.

  • Individuals may make some glaring mistakes when filing disclosure reports.

  • Retaining or hiring a political activities compliance professional is crucial in an industry where laws vary so widely from municipal to state to federal levels.

  • Laws are in place to prevent individuals or companies from contribution funds in order to secure votes or contracts with government entities (“pay-to-play”).

  • Violating any of the political activities compliance rules and regulations may be punishable by up to $250,000 in fines or years in prison.

There is not much glam or glitz when it comes to political activities compliance work. Some company compliance functions may not be necessarily focused on political activities, but if government officials are engaged on policy matters, there may be requirements to be mindful of. So, what exactly is political activities compliance? Generally, the category covers political contributions, meals, and entertainment given to government officials as well as legislative and procurement lobbying. Numerous federal and state regulations govern these activities, which anyone could inadvertently violate. A list of typical political activities compliance violations is below. Whether inadvertent or not, non-compliance is breaking the law. These offenses may be punishable by anythingfrom a small fine to multiple years in prison, depending on the jurisdiction and the type of infraction.

>> Failing to register as a lobbyist

The most basic form of noncompliance. Every US citizen has the right to walk into his/her elected official’s office and lobby the official on any particular issue. The question is whether that individual received compensation for the lobbying activity. If the answer is yes, the individual may be required to register as a lobbyist and file a disclosure report with the applicable jurisdiction.

Whether inadvertent or not, non-compliance is breaking the law. These offenses may be punishable by anything from a small fine to multiple years in prison, depending on the jurisdiction and the type of infraction.

>> Neglecting to file Federal LD-2s

The Federal Lobbying Disclosure Act of 19951 requires that every federally registered lobbyist file quarterly disclosures including the amount of time and money expended and the issues on which they lobbied.

>> Neglecting to file Federal LD-203s

In addition to restrictions, these regulations are in place to prevent the exchange of money for political support. If you or your company is submitting a request for proposal to a reporting lobbying activity, federally registered lobbyists must disclose certain personal contributions semi-annually.

>> Violating gift laws

The laws and government entity, make sure you know the state’s pay-to-play restrictions before making any contributions (personally or via your company) to a political campaign.


In certain instances, there are limitations or prohibitions on contributions by the lobbyists, certain other regulations governing gifts and entertainment involving elected, appointed, or covered officials in any level of government are tedious (read: mind-numbing). For example, the limit for federal government employees is dependent upon which branch (i.e., Legislative, Executive, or Judicial), which chamber of Congress, whether a legislative branch employee is a Member or a staffer, or whether an executive branch employee is a political appointee or career staff.

>> Violating procurement lobbying disclosure requirements

Combined government spending for goods and services in the U.S. is between $1.3 and $1.6 trillion annually.2 A “procurement lobbyist” is generally anyone who interacts with people responsible for awarding government contracts. Some states require registration and disclosure of the activities undertaken by people and/or companies seeking to do business with state and/or municipal governments.

Most recently, former Gov. Bob McDonnell (R-VA) was found guilty on 11 counts of corrupt behavior; his wife was found guilty on eight counts.

>> Failing to adhere to pay-to-play restrictions or prohibitions on political contributions

Similar to procurement lobbying restrictions, these regulations are in place to prevent the exchange of money for political support. If you or your company is submitting a request for proposal to a government entity, make sure you know the state’s pay-to-play restrictions before making any contributions (personally or via your company) to a political campaign. In certain instances, there are limitations or prohibitions on contributions by the lobbyists, certain other employees, and sometimes certain family members.

>> Engaging in any activity that could be considered fraudulent, or attempting to bribe an elected or appointed official

While this may seem straight-forward and obvious, there are many cases of non-compliance with fraud and bribery laws. Most recently, former Gov. Bob McDonnell (R-VA) was found guilty on 11 counts of corrupt behavior; his wife was found guilty on eight counts. The pair “could now face decades in federal prison,” according to The New York Daily News.3

It is important to understand the limitations placed upon political activities to mitigate potential legal and reputational risks. ✵

  1. U.S. House of Representatives, Office of the Clerk: Lobbying Disclosure Act Guidance. February 15, 2013. Available at http://bit.ly/lobbying-dislosure
  2. Khi V. Thai: “Public Procurement Re-examined.” Journal of Public Procurement, 2001; vol 1, issue 1. Available at http://bit.ly/unpcdc
  3. Adam Edelman: “Former Virginia Gov. Bob McDonnell, wife found guilty on federal corruption charges.” New York Daily News, September 4, 2014. Available at http://bit.ly/bob-mcdonnell