03/18/2010 05:12 am ET Updated May 25, 2011

Potential Lobbying Disclosure Violations Surged In 2009

Since 1996, the Secretary of the Senate has referred 8,281 potential violations of lobbying disclosure rules to the Justice Department. About 4,400 of those referrals happened in 2009 alone.

And yet in all this time there have been only three law enforcement actions -- and none since 2005. What's going on?

Part of the explanation for the surge in potential violations could be that Obama's transparency initiatives are backfiring. As lobbyists become more reviled, and as the administration enacts more and more restrictions on lobbyists in the executive branch, more lobbyists want to ditch the title -- and they're flaking on the paperwork in the process.

"By basically demonizing lobbyists, the executive branch is definitely motivating people to lose the title 'lobbyist,'" said Ken Gross, a veteran ethics lawyer with Skadden Arps. "They're looking at the definitions more closely, and if they don't fit, they're de-registering."

Indeed, two lobbyists named Larry Mitchell and Brien Bonneville de-registered at the end of 2009 and founded a new "non-lobbying entity" called K Street Research. They figure they can do the same work as before without the "Scarlet L."

In the second quarter of 2009, 1,418 lobbyists de-registered. Usually, only a few hundred de-register in a quarter.

However, while it may be true that "perception is reality" in government, there is also a more boring explanation.

Some of the referrals to the Justice Department are prompted by outside complaints of wrongdoing, but the vast majority of the potential violations have to do with failures to file quarterly and semi-annual reports. The number of reports lobbyists and lobbying firms are required to file has more than doubled since George W. Bush signed the Honest Leadership and Open Government Act in 2007.

The law (referred to as "Helloga" by lobbying wonks) requires firms to file reports on expenses and contacts four times instead of twice a year, and it introduced a new requirement that firms and individual lobbyists file semiannual reports on political contributions. So, there's a lot more paperwork to screw up.

If a lobbyist or lobbying firm fails to file one of its reports, the Secretary of the Senate sends a nagging letter. If the report still hasn't been filed after 60 days, then the Secretary notifies the D.C. U.S. Attorney's Office, which follows through with another letter. Then, if there's still no response, prosecutors have to figure out if there's serious malfeasance afoot or if the firm or lobbyist in question simply quit lobbying and failed to file a "termination" report.

There seems to be a lot of that, Gross said. A lobbyist might see to it that his firm puts his name on the "no longer lobbying" part of a form when he wants to quit, but then fails to follow through with the additional step of terminating his active status. It's a violation, but not much of a prosecutorial priority.

"The U.S. Attorney's Office is the sole enforcer of this law and it has got a lot of things on its plate, like drug dealers, thieves, and murderers, and not somebody who failed to fill out line 13 on their LD-2 form," said Gross. "These referrals that come over by the carload are about as welcome as ants at a picnic."

Which is not to say the Justice Department is incapable of squishing a few ants from time to time. In 2005, three firms settled with the federal government to the tune of $47,000 in fines for failing to file semi-annual reports. Gross said it was "breathtaking" that lobbyists who had received notice of missing paperwork would tempt prosecutors by doing nothing.

"I wouldn't play that game. They may be looking for a scalp and it may just be bad luck you get picked out of the barrel," Gross said. "They're going to need to find a few scalps."