LOBBYING CONTINGENCY FEES IN THE U.S.A.

In the United States "Contingency fees" are often paid to lawyers. If a lawyer and client agree to do business on a contingency basis, the client pays no fees until the case is won, and at that time the lawyer gets a cut of the damages won. If the case is lost, the attorney receives no payment.

However when it comes to U.S. federal and state lobbying the standard is different.  In the case of  lobbyists, a contingency fee is defined as any commission, percentage, brokerage, or other fee that is contingent upon a favorable legislative result. Federal regulations governing contractors who lobby for government contracts specifically prohibit contingency fees on the grounds that they may induce lobbyists to exert "improper influence" on public officials, in other words, inducing someone to act on any basis other than the merits of the matter.

On the state level, 43 states prohibit the practice.

Alabama: No principal or lobbyist shall accept compensation for, or enter into a contract to provide lobbying services which is contingent upon the passage or defeat of any legislative action. Each principal must also sign a statement for each registered lobbying confirming that no contingency fees will be paid.

Alaska: A lobbyist may not ...accept or agree to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action.

Arizona: No person shall retain or employ another person to promote or oppose legislation for compensation contingent in whole or in part on the passage or defeat of any legislation, or the approval or veto of any legislation by the governor, and no person shall accept employment or render service for compensation on a contingent basis.

Arkansas: No person engaging in lobbying shall contract to receive or accept compensation that is dependent in any manner upon: (A) The success or failure of a legislative or administrative action; or (B) The outcome of any executive, legislative, or administrative action relating to the solicitation or securing of a procurement contract.

California: No lobbyist or lobbying firm shall accept or agree to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action.

Colorado: No person may make any agreement under which any consideration is to be given, transferred, or paid to any person contingent upon the passage or defeat of any legislation; the making or defeat of any rule, standard, or rate by any state agency, or the approval or veto of any legislation by the governor of this state.

Connecticut: No person shall be employed as a lobbyist for compensation which is contingent upon the outcome of any administrative or legislative action.

Delaware: No person shall employ a lobbyist nor shall any person be employed as a lobbyist pursuant employed as a lobbyist pursuant to any compensation agreement that permits more than half of the compensation to be paid to such a lobbyist to be dependent upon the outcome of any legislative or administrative action.

District of Columbia: Not addressed in statute.

Florida: No person may, in whole or in part, pay, give, or receive, or agree to pay, give, or receive, a contingency fee.

Georgia: No person, firm, corporation, or association shall retain or employ a lobbyist for compensation contingent, in whole or in part, upon the passage or defeat of any legislative measure, upon the adoption or decision not to adopt any state agency rule or regulation, or upon the granting or awarding of any state contract. No lobbyist shall be employed for compensation contingent, in whole or in part, upon the passage or defeat of any legislation, upon the adoption or decision not to adopt any state agency rule or regulation, or upon the granting or awarding of any state contract.

Hawaii: No lobbyist shall accept or agree to accept any payment in any way contingent upon the defeat, enactment, or outcome of any proposed legislative or administrative action

Idaho: A person required to register as a lobbyist shall not accept any employment as a lobbyist for a compensation dependent in any manner upon the passage or defeat of any proposed or pending legislation or upon any other contingency connected with the action of the legislature or of either branch thereof or of any committee thereof.

Illinois: No person shall retain or employ another to lobby with respect to any legislative, executive, or administrative action for compensation contingent in whole or in part upon the outcome of the action and no person shall accept any such employment or render any such service for compensation contingent upon the outcome of the legislative, executive, or administrative action. No person or entity shall retain a person or entity required to register under the Lobbyist Registration Act to attempt to influence the outcome of a procurement decision made under this Code for compensation contingent in whole or in part upon the decision or procurement. Any person who violates this subsection is guilty of a business offense and shall be fined not more than $10,000.

Indiana: It is unlawful for any person to be a lobbyist for a compensation dependent upon the success of his lobbying efforts, or upon any contingency connected with the administrative action or legislative action.

Iowa: A fee or bonus shall not be paid to any lobbyist with reference to any legislative action that is conditioned wholly or in part upon the results attained by the lobbyist. Executive branch lobbyists shall not accept or agree to accept any payment in any way contingent upon the defeat, enactment or outcome of any proposed administrative rule or any executive order by an executive branch state agency or a statewide elected official.

Kansas: (a) No person shall pay or accept or agree to pay or accept or arrange for a third party to pay or agree to pay present, future, promised or contingent compensation, or any part thereof, for lobbying which is contingent upon the result achieved or attained. (b) No person shall pay or accept or agree to pay or accept present, agree to pay or accept present, future, promised or contingent compensation, or any part thereof, for the referral of a person or persons to a lobbyist for lobbying services.

Kentucky: No Person Shall engage any person to lobby in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation. No person shall accept any engagement to lobby in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation. Violation of this provision is a Class D felony.

Louisiana : Not addressed in statute

Maine : No person may accept employment as a lobbyist on a basis which makes that person's compensation contingent in any manner upon the outcome of any legislative action.

Maryland: A regulated lobbyist may not: be engaged for lobbying purposes for compensation that is dependent in any manner on the enactment or defeat of legislation… any other contingency related to executive action or legislative action...

Massachusetts: No person shall make any agreement whereby any compensation or thing of value is to be paid to any person contingent upon a decision as described in the definition of ""executive agent'', or the passage or defeat of any legislation or the approval or veto of any legislation by the governor. No person shall agree to undertake to influence such a decision, or to communicate to influence such a decision or to promote, oppose or influence legislation or to communicate with members of the legislature, or to advocate approval or veto by the governor for consideration to be paid upon the contingency of the outcome of such a decision or that any legislation is passed or defeated.

Michigan: A person shall not be employed as a lobbyist agent for compensation contingent in any manner upon the outcome of an administrative or legislative action. A person who knowingly violates this subsection is guilty of a felony and if the person is an individual shall be punished by a fine of not more than $10,000.00, or imprisoned for not more than 3 years, or both, and if the person is other than an individual shall be punished by a fine of not more than $25,000.00.

Minnesota: No person may act as or employ a lobbyist for compensation that is dependent upon the result or outcome of any legislative or administrative action, or of the official action of a metropolitan governmental unit. A person who violates this section is guilty of a gross misdemeanor.

Mississippi: A lobbyist shall not contract to receive or accept compensation dependent upon the success or failure of a legislative or executive action.

Missouri: Not addressed in statute

Montana: A principal may not make payments to influence official action by any public official unless that principal files the reports required under this chapter.

Nebraska: No person shall be employed as a lobbyist for compensation contingent in any manner upon the outcome of an administrative or legislative action.

Nevada: A person who employs or uses a lobbyist shall not make that lobbyist's compensation or reimbursement contingent in any manner upon the outcome of any legislative action.

New Hamsphire: Not addressed in statute

New Jersey: A governmental affairs agent shall not enter into any agreement, arrangement, or understanding under which the governmental affairs agent's compensation, or any portion thereof, is made contingent upon the success of any attempt to influence legislation, regulation or governmental process.

New Mexico: No person shall accept employment as a lobbyist and no lobbyist's employer shall employ a lobbyist for compensation contingent in whole or in part upon the outcome of the lobbying activities before the legislative branchy of state government or the approval or veto of any legislation by the governor.

New York: No client shall retain or employ any lobbyist for compensation, the rate or amount of which compensation in whole or part is contingent or dependent upon: the passage or defeat of any legislative bill or the approval or veto of any legislation by the governor, the terms, issuance, modification or rescission of a gubernatorial executive order, the terms, approval or disapproval, or the implementation and administration
of tribal-state compacts, memoranda of understanding, or any other tribal-state agreements and any state actions related to gaming or the adoption or rejection of any code, rule or regulation having the force and effect of law or the outcome of any rate making proceeding by a state agency; the passage or defeat of any local law, ordinance, regulation or resolution by any municipality or subdivision thereof, the terms, issuance, modification or rescission of an executive order issued by the chief executive officer of a municipality, or the adoption, rejection or implementation of any rule, resolution or regulation having the force and effect of a local law, ordinance or regulation or any rate making proceeding by any municipality or subdivision thereof; any determination by a state agency, either house of the state legislature, the unified court.

North Carolina: No individual shall act as a lobbyist for payment for services that is dependent upon the result or outcome of any legislative or executive action.

North Dakota: It is unlawful for any lobbyist or for any other person: 1. To directly or indirectly give or agree to give any money, property or valuable thing, or any security therefore, to any person for that person's service or the service of any other person in procuring the passage or defeat of any measure before the legislative assembly or either house thereof, or before any committee thereof, upon the contingency or condition that any measure will be passed or defeated. 2. To directly or indirectly receive or agree to receive any such money, property, thing of value, or security for such service, upon any such contingency or condition as set forth in the preceding subsection.

Ohio: No person shall engage any person to actively advocate in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation. No person shall accept any engagement to actively advocate in exchange for compensation that is contingent in any way upon the passage, modification, or defeat of any legislation

Oklahoma: No person may retain or employ a lobbyist ... for compensation contingent in whole or in part on the passage or defeat of any official action or the approval or veto of any legislation, issuance of an executive order or approval or denial of a pardon or parole by the Governor. No lobbyist may accept any employment or render any service for compensation contingent on the passage or defeat of any legislation or the approval or veto of any service for compensation contingent on the passage or defeat of any legislation or the approval or veto of any legislation by the Governor. Any person convicted of violating the provisions of this section shall be guilty of a felony punishable by a fine of not more than One Thousand Dollars or by imprisonment in the State Penitentiary not exceeding two years or by both such fine and imprisonment.

Oregon: A person may not lobby or offer to lobby for consideration any part of which is contingent upon the success of any lobbying activity.

Pennsylvania: (1) A person may not compensate or incur an obligation to compensate a person to engage in lobbying for compensation contingent in whole or in part upon any of the following: (i) Occurrence, nonoccurrence or amendment of legislative action. (ii) Occurrence, nonoccurrence or amendment of an administrative action other than procurement described in paragraph (1)(iv) of the definition of "administrative action"  (2) A person may not engage in or agree to engage in lobbying for compensation contingent in whole or in part upon any: (i) Occurrence, nonoccurrence or amendment of legislative action. (ii) Occurrence, nonoccurrence or amendment of an administrative action other than procurement described in paragraph (1)(iv) of the definition of "administrative action"

Rhode Island: No person shall be employed as a lobbyist for compensation dependent in any manner upon the passage or defeat of any proposed legislation or upon any other contingency connected with the action of the general assembly or of either branch or of any committee of the general assembly, or of the governor.

South Carolina: A lobbyist may not solicit or accept compensation dependent in any manner upon the passage or defeat of any pending or proposed legislation, covered agency actions, or covered gubernatorial actions. A lobbyist's principal may not employ, appoint, or retain a lobbyist for compensation dependent in any manner upon the passage or defeat of any pending or proposed legislation, covered agency actions, or covered gubernatorial actions

South Dakota: Contingent compensation employment prohibited. No person may be employed as a lobbyist for a compensation dependent in any manner upon the passage or defeat of any proposed legislation or upon any other contingency connected with the action of the Legislature, or of either house thereof, or of any committee thereof.

Tennessee: No employer of a lobbyist shall offer or pay and no lobbyist shall solicit or accept any fee, compensation or bonus for lobbying wherein the amount of the fee, compensation or bonus is contingent upon achievement of an outcome deemed to be successful for the employer.

Texas: a) A person may not retain or employ another person to influence legislation or administrative action for compensation that is totally or partially contingent on the passage or defeat of any legislation, the governor's approval or veto of any legislation, or the outcome of any administrative action. (b) A person may not accept any employment or render any service to influence legislation or administrative action for compensation contingent on the passage or defeat of any legislation, the governor's approval or veto of any legislation, or the outcome of any administrative action.

Utah: A person may not employ or solicit another to serve as a lobbyist for compensation contingent in whole or part upon the passage, defeat, or amendment of legislative action or the approval, modification, or denial of a certain executive

Vermont: It shall be prohibited conduct: (1) to employ a lobbyist, or accept employment as a lobbyist or a lobbying firm for compensation that is dependent on a contingency...

Virginia: It shall be unlawful for any individual to lobby for compensation which is dependent in any manner upon the outcome of any legislative or executive action

Washington: A lobbyist shall not enter into any agreement, arrangement, or understanding according to which his or her compensation, or any portion thereof, is or will be contingent upon the success of any attempt to influence legislation.

West Virginia: Not addressed in statute

Wisconsin: No lobbyist may: ... (d) Contract to receive or receive compensation dependent in any manner upon the success or failure of any legislative or administrative action.

Wyoming: Not addressed in the statutes