President Donald Trump on Aug. 28, 2025, signed a presidential memorandum directing U.S. Attorney General (AG) Pam Bondi to investigate whether federal grant funds are being used for lobbying and political activities in violation of federal laws. In view of this memorandum, federal grantees may need to prepare themselves for heightened scrutiny and should consider whether they have adequate policies and procedures in place to demonstrate compliance with relevant restrictions.
Companies, charities and social welfare organizations that accept federal grant and contract funds are subject to a range of restrictions on the use of such funds for lobbying and political activities. The Aug. 28 memorandum specifically highlights compliance with the Byrd Amendment, a federal law that prohibits the use of funds appropriated by Congress to lobby for any type of federal award, including a federal contract, grant, loan or cooperative agreement. The Byrd Amendment also requires a person who receives a covered federal award to make a certification regarding compliance with the law and make certain lobbying-related disclosures as part of the process of receiving federal funds. Representations regarding Byrd Amendment compliance and associated disclosures are commonly incorporated into the federal contracting and grantmaking process, but many federal contractors and grantees have only a limited familiarity with the law's requirements.
The Byrd Amendment is only one of a set of restrictions on lobbying and political activities that apply to entities that accept federal funds. Many of these restrictions – including the Simpson Amendment, which flatly prohibits lobbying on the part of certain social welfare organizations that receive federal funds – are relatively obscure. Others are better known but have not previously been the subject of coordinated enforcement efforts such as those contemplated under the Aug. 28 memorandum. These include the registration and reporting requirements of the Lobbying Disclosure Act and Foreign Agents Registration Act, as well as restrictions on lobbying and political activities on nonprofit organizations imposed under the Internal Revenue Code.
The Aug. 28 memorandum directs the AG to investigate the use of federal grant funds in coordination with the heads of executive departments and agencies and provide the president a progress report within 180 days. Given the nature of federal grants, contracts and loans, the Trump Administration may be in a position to leverage a broad range of public disclosures, Byrd Amendment certifications, and provisions of federal contracts and grant agreements to further this investigation.
Organizations that have received federal funds may wish to review their compliance with the restrictions on lobbying and political activities discussed above and ensure that they have adequate policies and procedures in place to demonstrate compliance in the event of a federal inquiry. Holland & Knight will closely monitor developments regarding the Aug. 28 memorandum and AG's investigation.
