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Reproduced with permission from Money & Politics Report, (Mar. 30, 2009). Copyright 2009 http://www.bna.com/moneyandpolitics/ by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

Lobbying: Lobbyists Stew Over New Obama Memo Barring Input on Stimulus Funding Actions

Lobbyists are frustrated and confused about the latest directive from the Obama administration designed to limit their influence—a memorandum telling administration officials that they may not have "any oral communication" with a lobbyist trying to secure funding under the massive $787 billion economic stimulus bill enacted in February.

According to Dave Wenhold, president of the American League of Lobbyists, the new memo means that many lobbyists cannot do their normal work making phone calls or scheduling meetings on behalf clients that seek federal money for highways, railroads, water projects, or billions of dollars worth of other items to be funded under the stimulus bill. The measure is known formally as the American Recovery and Reinvestment Act (ARRA).

"We have heard from many concerned members who are outraged about this latest exclusion and feel that the rhetoric and demonization of the [lobbying] profession has simply gone too far," Wenhold said in a recent e-mail to colleagues. "There is an emerging pattern of industry segregation, discrimination, and actions that skirt the boundaries of our Constitutional right to simply do our jobs. Enough is enough!"

President Obama announced the memo March 20. It contains new guidelines, which he said were designed to minimize waste and fraud as states and municipalities began to spend funds under the new recovery legislation. The guidelines require executive branch agencies and departments to ensure stimulus-funded projects are "merit based," focusing on projects that promote economic stimulus, jobs, and "long lasting benefits" to science and health, transportation, environmental protection, or infrastructure.

As part of the effort to limit improper influence, the memo prohibited officials from considering the views of any registered lobbyist covered by the federal Lobbying Disclosure Act in decisions to fund specific stimulus projects. The guidelines required agencies and departments to post on the Internet all written requests by lobbyists to meet with administration officials on "general policy issues" regarding stimulus spending.

Ways Around Restrictions?

Already, many organizations with interests in the measure are looking for ways around the new restrictions—chiefly by trying to arrange meetings that include people other than a lobbyist listed on an LDA registration form, according to sources in the lobbying community.

But, such efforts can also raise complications, ethics attorneys advising the lobbying and association community have pointed out.

Wenhold, meanwhile, has been trying to drum up support to oppose the new Obama memo head on. He has asked for a meeting with White House officials—though he has received no response—and has promised to consider “all options,” including litigation, to oppose the new policy limiting lobbyist contacts.

Others noted that the Office of Management and Budget is required under the new memo to issue further guidance to agency heads and within 60 days make recommendations for any modifications and revisions. Some of the issues raised by a growing chorus of critics could be addressed OMB through this process.

Part of lobbyists' frustration is the interruption of their traditional input into the decisionmaking process—which Wenhold likened to serving as "translators" between bureaucrats and those seeking funding for specific activities. Meanwhile, others continue to be free to try to influence the decision-making process. For example, a key source of heavy clout not limited by the new memo is members of Congress, who often weigh in to influence the executive branch on funding decisions, Wenhold noted.

Law Firm Advisories

The new Obama memo also has produced a flurry of alerts and advisories from Washington law firms that provide guidance on how to navigate ethics rules. Much of this advice has focused on whether lobbying organizations that have employees not listed as LDA-registered lobbyists might be able to have these non-lobbyists help plead the case of a client or association member seeking stimulus money.

But this option also raises new questions, the legal analyses indicate. Some attorneys noted that the LDA requires registration of lobbying organizations—not just individual lobbyists—raising a question about whether anyone speaking for such an organization might be covered by the new restrictions.

One attorney, Jeff Altman of McKenna Long & Aldridge, also raised a question about whether any non-lobbyist working for a client on the stimulus bill might therefore become a lobbyist. He noted that the LDA requires registration of anyone who spends more than 20 percent of his or her work time for a particular organization on lobbying efforts and makes more than one direct lobbying contact.

The memo amounts to an "only one contact and you can't work too hard on the issue" rule, Altman said in an e-mail to BNA. He added that, if there are "a few bad apples that use improper influence, there are other ways to deal with that situation rather than cutting off legitimate and constructive communications with individuals who abide by the law and are perfectly willing for their activities to be publicly disclosed."

Similar sentiments were echoed in a blog posting by attorneys Lawrence Norton and James Kahl, the former FEC general counsel and deputy general counsel, respectively, now in private practice with the firm Womble Carlyle Sandridge & Rice.

Gain for Those Outside Disclosure System?

"If our assumption is right that non-lobbyist employees of LDA registrants may meet with executive branch officials, then what exactly is gained?" Norton and Kahl wrote "An in-house lobbyist could analyze the issues and discuss them with her employer. The company can then handpick a non-lobbyist to participate in a meeting with executive branch officials. And the non-lobbyist may even hand-deliver the lobbyist's written comments during the meeting. The lobbyist's participation will be obvious and her influence felt—whether she is in the room or not."

They added that the new Obama memo would "empower those who operate outside the LDA scheme at the expense of those who register and report. This would seem to reward those who decline to register because they decide that the burdens of entering the LDA reporting scheme outweigh the risk of getting caught."

Norton and Kahl concluded that the president's new directive "stands in contrast to other efforts to address perceived lobbying abuses," such as the 2007 Honest Leadership and Open Government Act. They said HLOGA's restrictions on gifts from lobbyists to public officials were tied to documented abuses—even if they involved only a relative few. In contrast, the new Obama memo limits speech with government officials that is "at the core of the First Amendment right to petition the government for the redress of grievances."

By Kenneth P. Doyle