Last week, Citizens for Responsibility and Ethics in Washington (CREW) filed a complaint with the United States Attorney’s Office for the District of Columbia, alleging that several key associates of a notorious dark money group may have violated federal laws by making false statements to the government, obstructing an investigation and pocketing more than $1 million originally meant for broadcasting television ads. In the course of investigating their possible illegal acts, CREW discovered other instances in which one of the individuals involved appears to have disregarded the law.
Scott Reed, a key figure in CREW’s complaint, is an experienced and well-known political operative in Washington, DC. The former campaign manager for Bob Dole’s 1996 presidential bid, Reed is now the senior political strategist for the U.S. Chamber of Commerce, which plans to spend as much as $100 million on the 2016 elections. As the founder and chairman of the consulting firm Chesapeake Enterprises, he has also been a registered lobbyist since at least 1998.
Lobbying firms like Reed’s are required by law to file quarterly reports disclosing their lobbying activities. Though they only capture a portion of the money spent by special interests, these disclosure reports are an essential tool for the American public to track who is paying to influence federal policy. When they stop lobbying for a client, lobbyists must file a “termination” report.
In 2014, Reed lobbied the House, the Senate, and federal agencies on behalf of several clients, and the Office of the Clerk of the House currently lists Chesapeake Enterprises as representing seven clients. Yet Reed hasn’t filed a single lobbying disclosure report with the Senate or the House in all of 2015. He didn’t file termination reports for the seven clients either. As a result, it is impossible to know exactly how much lobbying Reed and his associates did for these and other clients, or even if Reed is still lobbying for them.
This isn’t the first time Reed has neglected to file his required reports. In 2014, Reed didn’t file any lobbying disclosure reports until December 26, when Chesapeake filed 23 reports covering nine clients over the previous three quarters. His clients included Bridgestone Tires, Motorola, US Airways, and 1st Alliance Lending, Inc. The reports, which totaled $390,398 in payments to Reed’s firm, included two termination reports for clients Reed stopped representing in the first quarter of 2014. Reed and Chesapeake have been silent since then, not even filing reports covering the fourth quarter of 2014.
Lobbyists are also required to file reports disclosing certain political contributions semiannually, including contributions to federal candidates, leadership PACs, and party committees registered with the Federal Election Commission. Reed and Chesapeake Enterprises haven’t filed one since January 2014, which covered the second half of 2013. Between January 2014 and July 2015, Reed contributed at least $21,400 to federal candidates and their PACs, all of which should have been disclosed on lobbying contribution reports. Even if he hadn’t contributed to any candidates, he should have filed the reports certifying that he is familiar with the relevant rules, such as this one filed on behalf of his firm in July 2013.
It’s unclear why Reed would neglect to follow the law and report his lobbying activities, but the fact that he has multiple years of missing reports suggests it may not be a simple clerical error. And his disclosure failure could cost him.
The U.S. Attorney’s Office for the District of Columbia can pursue both civil and criminal action against noncompliant lobbyists, although actual penalties are rare. In 2015, however, two lobbying firms have already agreed to pay civil penalties stemming from Lobbying Disclosure Act (LDA) violations. In an August 2015 press release announcing a $125,000 settlement with one of the scofflaw lobbying firms, Acting U.S. Attorney Vincent H. Cohen, Jr explained why lobbying disclosure is important. “The American public has a right to know about the efforts of paid lobbyists to influence legislative and executive decision-making,” he said. “Lobbyists who fail to report their activities thwart the purpose of the Lobbying Disclosure Act and remove transparency from the legislative process.”
Cohen also said that his office is determined “to seek significant penalties from repeat offenders who fail to meet their reporting obligations.” That could be bad news for Reed.