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Recent changes in lobbying and ethics rules have caused companies to face an important fact: Managing the political and legal risks that accompany interaction with public officials now has as high a priority as other business risks. With the enactment of the Honest Leadership and Open Government Act of 2007 (and new House ethics rules shortly before that), the stakes have been raised. For the first time, the private sector is subject to legal liability under the federal lobbying law for violations of internal congressional ethics rules. Moreover, the rules themselves have been tightened, for example, to effectively prohibit any registered lobbyist and foreign agent, and the businesses that employ or retain them (“lobbyist employers”), from taking a member of Congress or staffer to lunch or dinner or giving them tickets to a sporting or cultural event. The 2007 act also heavily restricts congressional travel when paid for by a lobbyist employer or involving lobbyists. Fund-raising by lobbyists, which used to fly under the legal radar because of a narrow definition of so-called “bundling,” will now be disclosed to the public by the recipient candidates or committees if the fund-raising exceeds $15,000 in a six-month period. This will become effective once the Federal Election Commission issues regulations. Most significantly, registered lobbyists and lobbyist employers now will be required to certify that they have not knowingly violated the congressional gift and travel rules. The law also sets steep new penalties of up to $200,000 and up to five years in jail for violations of the federal law. In addition, despite the failure of the act to delegate traditional regulatory powers to an existing or new entity, the act nevertheless grants amorphously defined audit powers to the comptroller general. Among such authorities is the ability to request documents from registrants that are relevant to the act’s purposes of improving compliance and strengthening enforcement. While it is clear that the comptroller general itself has no power to prosecute violations of the lobbying law, it is unclear whether and how this power could serve as a conduit for referrals to the agency with such authority — the Justice Department. A RULES ROAD MAP While we wait for more guidance on the details of the act, businesses need to demonstrate to enforcement officials that they have a reliable and documented compliance system. Here are some suggested guidelines.

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