Financial Services Task Force Update
Federal Government Issues Restrictions on Lobbyist Communications
Ensuring Responsible Spending of Recovery Act Funds, 74 Fed. Reg. 12,531 (Mar. 25, 2009) - Printable PDF
The federal government’s response to the economic crisis has provided President Obama with the perfect opportunity to make good on his campaign promise to bring transparency to the decision making that takes place within his administration. A number of the president’s transparency initiatives have been specifically tailored to limit the influence that lobbyists have on government decisions.
President Obama Restricts Federal Lobbyist Communications with Agencies
The most recent of these measures was the president’s memorandum to the heads of all federal executive departments and agencies, entitled “Ensuring Responsible Spending of Recovery Act Funds,” 74 Fed. Reg. 12,531 (Mar. 25, 2009). The president made clear in this directive that the federal funds to be distributed must be “expended for projects that further the job creation, economic recovery and other purposes of the Recovery Act,” not to “fund projects for special interests” or those that are “imprudent.”
To achieve these ends, the president laid out three broad requirements for executive departments and agencies in dealing with those seeking Recovery Act funds. Federal agencies must:
- Make merit-based decisions in allocating grants and other forms of federal financial assistance;
- Avoid funding of imprudent projects or projects that do not promote job creation and economic recovery; and
- Ensure transparency of communications with registered lobbyists.
The third of these requirements — the so-called “lobbyist gag order” — has two main components. First, it prohibits executive agency officials and employees from discussing the merits of a particular Recovery Act project with a federally registered lobbyist either in person or on the phone, thereby limiting substantive communications between lobbyists and agencies to written correspondence only. Second, it requires an agency that receives written communications from a registered federal lobbyist to post that communication on the agency’s recovery Web site within three business days. An example of such an agency recovery Web site is the U.S. Department of Transportation’s site. Lobbyist-written communications with the agency are posted at the link entitled “ARRA Lobbying and Other Contacts.”
OMB Guidance Leaves Lobbyist Gag Order Intact
The director of the White House Office of Management and Budget has issued additional guidance to clarify the president’s directive with respect to the lobbyist gag order. The key points of the OMB memo include the following:
- The prohibition against lobbyist oral communications with agencies about the substance of specific projects remains intact.
- Lobbyists may continue to have unlimited communications with agencies about any project or matter, provided such communication is in writing.
- Lobbyists may continue to have oral communications with agency employees about general policy issues or logistical matters pertaining to a specific project; however, such communication must be documented in detail by the agency and posted to the agency’s recovery Web site within three business days.
- Lobbyists may continue to engage in oral communications with agency officials and employees in the context of a “widely attended event,” as that term is used in Congressional ethics rules. This allows for communication in a truly public forum, therefore mitigating the concern over private influence by lobbyists.
- The restrictions apply only to individuals who are federally registered lobbyists, not to (1) organizations that retain lobbyists or to their non-registered employees, (2) formerly registered federal lobbyists or (3) state-level lobbyists.
Not surprisingly, these measures have not been well received by the federal lobbying community; indeed, there are efforts currently underway within the affected community to seek a loosening of these rules. And whether these measures serve to achieve the aims of the Recovery Act remains to be seen. Indeed, as the OMB recognizes, lobbyists play an important role in federal decision making by “bring(ing) to bear helpful information that facilitates agencies’ evaluation of policies and projects on the merits.”
Organizations involved in outreach with federal government officials in connection with Recovery Act funding and related federal programs will need to be mindful of these new limitations on lobbyists in developing their outreach strategy. Further, organizations should be aware that ethics, lobbying and related rules exist and apply to all branches of government and at each level of government (federal, state and local).
Attorneys in Quarles & Brady’s Government Affairs Compliance Practice Group are available to assist with the compliance issues arising in connection with public outreach efforts. If you would like additional information regarding how these new lobbyist restrictions may affect your organization or information regarding public outreach strategies generally, please contact Jim Friedman at 414-277-5735 /
, Steve Burk at 414-277-3045 /
, Jeff Peelen at 414-277-5773 /
or your Quarles & Brady LLP attorney.