Although it tried on several occasions, it wasn't until 1946 that Congress finally passed the first law regulating lobbying activity — the Federal Regulation of Lobbying Act.
The primary purpose of the act was to provide public disclosure of lobbying activities. It required lobbyists (defined as any person or organization that was paid to influence Congress) to register with the clerk of the House of Representatives or the secretary of the Senate, state their purpose for lobbying, and provide quarterly updates on their clients and fees.
The law quickly proved to be ineffective, however, as lobbyists exploited several loopholes to avoid compliance. It was further weakened by a 1954 Supreme Court decision that held that the act only applied to paid lobbyists, groups, or organizations whose principal purpose was influencing Congress, and lobbyists who contacted members of Congress directly. Individuals who lobbied Congressional staff, were unpaid, or who performed other services in addition to lobbying did not have to register with Congress. As a consequence, fewer than 7,000 individuals and organizations registered as lobbyists.
On June 11, 1995, at a public event in Manchester, New Hampshire, President Clinton and House Speaker Newt Gingrich shook hands on a promise to pass campaign finance and lobbying reform. While the former pledge was forgotten, the latter was acted upon, as the two parties came together to pass the Lobbying Disclosure Act of 1995. The law overhauled the 1946 act with six new provisions:
It defined a lobbyist as anyone who spent more than 20 percent of his or her time lobbying members of Congress, their staff, or executive branch officials.
It banned for life former U.S. trade representatives and their staffs from lobbying for foreign interests.
It banned nonprofit groups that lobby Congress from receiving federal grants.
It required lobbyists to file semiannual reports disclosing the specific issues and bills worked on, the amount of money spent, and the branches of government contacted.
It required lawyers who represent foreign entities or U.S–owned divisions of foreign-owned companies to register with Congress.
It exempted grassroots lobbying efforts and lobbyists who are paid less than $5,000 semiannually.
The law had an immediate impact, as the number of registered lobbyists doubled almost immediately. It also revealed the size and scope of the lobbying activities of foreign governments in Washington, and helped bring about two separate Congressional investigations of the Chinese government's attempts to influence the Clinton administration.