Four years later, City Council finally poised to extend lobbyist requirements to nonprofits

Chicago is finally getting around to broadening the definition of registered lobbyists to include nonprofits, but only after softening the blow to avoid tying their hands with costly red tape.

Four years ago, then-Mayor Lori Lightfoot convinced the City Council to approve the latest in a seemingly endless string of ethics reforms in response to the corruption scandal at the center of the ongoing trial of former Ald. Edward M. Burke (14th).

In addition to forcing Burke to sever his ties to his private law firm specializing in property tax appeals, the ordinance broadened the definition of lobbyists to include nonprofits.

Although Lightfoot agreed at the time to delay the effective date and waive nonprofit registration fees, that portion of the ordinance never took effect.

Nonprofit organizations that do important social service work in Chicago neighborhoods complained they could not afford to jump through regulatory hoops or pay hefty fines in the event of an honest mistake.

On Monday, the Committee on Ethics and Government Oversight passed a revised ordinance aimed at easing those concerns.

It calls for Chicago to join New York, Los Angeles, San Francisco and Philadelphia in requiring nonprofit lobbyists to register and file regular reports with the Chicago Board of Ethics.

To minimize the burden, the new requirements would:

• Postpone the effective date until July 1, 2024 to give the Board of Ethics ample time to conduct a “robust public education campaign.”
• Exempt nonprofits with an operating budget, net assets or a fund balance below $5 million.
• Cap all lobbying fines at $20,000 per violation.
• Establish a monetary and hourly threshold for requiring lobbyists to register.
• Clarify “which actions constitute administrative action or legislative action” to make it easier for both for-profit and nonprofit organizations to “understand when their conversations with city officials” constitute lobbying.
• Add a “self-defense communication” that would be “an exemption from lobbying for nonprofits.
• Make it clear that “background work in which lobbyists speak with their employers or clients do not count toward the hourly threshold.”
• Exempt those individuals who communicate with city governmental personnel “solely through participation in temporary youth employment programs.”
• Make clear that public comment, participation on a city advisory committee, or requesting regular city services do not constitute lobbying. Such actions rise to the level of lobbying only when a group advocates for “new resources or programs for their own nonprofits.”

Ethics Committee Chair Matt Martin (47th) said the substitute ordinance approved Monday is the product of “years of work.”

“It clarifies the definition of lobbying to make it easier for both for-profit and nonprofit organizations alike to understand when their conversations with city officials are lobbying,” Martin told his colleagues.

“It relieves the burden of reporting for small nonprofit organizations which are often on the front lines of providing essential services to underserved communities and don’t have additional staff and money to navigate complex red tape.”

Martin said he’s grateful to the “dozens of nonprofits” across the city that “gave their time to provide thoughtful feedback.”

Steve Berlin, longtime executive director of the Chicago Board of Ethics, said 122 individuals “from the not-for-profit community” are already registered as lobbyists.

“I’ve been with the board since September of 1993 and have seen numerous changes and widely different approaches to the city’s regulation of lobbying, specifically lobbying by and on behalf of Chicago’s not-for-profit community,” Berlin said. “Literally, on no other topic on which I’ve worked have I seen such passion.”