Lobbying and Ethics Reform Takes Center Stage at the White House

On Jan. 21, President Barack Obama signed an executive order on Ethics Commitments by Executive Branch Personnel. The order details new restrictions for political appointees that work in the Obama administration. It limits the role lobbyists can play in the executive branch and attempts to reduce the influence of powerful special interests by addressing the revolving door — when government officials move to and from private sector jobs.

The Obama order says that a person cannot be hired by an agency if he or she lobbied that agency within the last two years. There is also a two-year ban on appointees — even those who are not lobbyists — from working on any issue they used to cover when in the private sector. Additionally, there is a ban, which runs for the entirety of the administration's time in office, on lobbying any other executive branch official or senior appointee should an appointee leave government service. The order requires appointees to sign a pledge stating they will abide by the new rules.

Executive branch employees are also barred from accepting gifts from lobbyists, and hiring at all agencies must be based upon qualifications and experience, not political connections.

In making lobbying and ethics reform one of his first items of business, Obama was acting on campaign and transition promises of significant change in the way the federal government does business. Obama's campaign website stated the intention to close the revolving door on former and future employers. The campaign site also pledged to "create a centralized Internet database of lobbying reports, ethics records, and campaign finance filings." The order does not address the searchable website. In addition, Obama planned to create an independent watchdog agency to oversee congressional investigations into ethics violations.

The executive order provides for a waiver from the new ethics rules. The director of the Office of Management and Budget (OMB), in consultation with the president's Counsel, can grant the waiver for one of two reasons: "(i) that the literal application of the restriction is inconsistent with the purposes of the restriction, or (ii) that it is in the public interest to grant the waiver."

The order represents an attempt to deal with industry representatives coming into government and regulating the very industry the person used to represent, or being in a position to dole out federal funding to a particular company or industry.

Obama's order is an attempt to reverse this trend by requiring all appointees seeking employment in the administration to pledge not to "participate in any particular matter involving specific parties that is directly and substantially related to my former employer or former clients, including regulations and contracts."

Despite the best intentions toward a more open and honest government, these rules have already faced some tough realities. Two exceptions to the rules have already been made for administration nominees. William Lynn was appointed Deputy Secretary of Defense but had been a registered lobbyist for defense contractor Raytheon until July 2008; Raytheon received $11.7 billion in federal funding in Fiscal Year 2007, not including money through partnerships with other companies. And William Corr was nominated as Deputy Secretary at the Department of Health and Human Services; in the past, he has lobbied on behalf of the Campaign for Tobacco-Free Kids.

The White House issued a waiver to Lynn because of his unique qualifications. In response, the Project On Government Oversight (POGO) issued a statement of disapproval and called on Obama to remove Lynn's name from consideration. "The Obama Administration should not allow its ethics standards to begin with a series of waivers and loopholes which immediately undermine its good intentions."

According to Congressional Quarterly, Senate Armed Services Committee Chairman Carl Levin (D-MI) endorsed the waiver, "which the panel had sought before voting on the nomination. But Levin said that under congressional ethics rules, Lynn would still have to recuse himself for one year from matters related to Raytheon."

On Jan. 23, POGO, Citizens for Responsibility and Ethics in Washington (CREW), the Government Accountability Project (GAP), and Public Citizen signed a letter to Levin and Ranking Member John McCain (R-AZ). The letter states that the groups do not doubt that Lynn is qualified for the position, and that before the new rules, "there would have been little ground for questioning the proposed nomination of Mr. Lynn." But the letter notes that Lynn's background clearly violates Obama's executive order and that the nomination does not "meet the spirit of these standards for a waiver."

The Hill recently reported that the same groups opposed to Lynn's nomination do not find Corr's nomination problematic. "I don't think they're the same. I think there's this problem of tarring all lobbyists with the same brush," said Melanie Sloan, the executive director of CREW.

"For these groups, their chief objection to Lynn moving from Raytheon, a major defense contractor, to the Pentagon is the potential for financial conflicts of interest," noted The Hill. "Because the Campaign for Tobacco-Free Kids does not earn money from HHS programs, Corr would not be in the same position, the watchdogs argued. 'His former group is not going to profit from him being at HHS,' said Mandy Smithberger, a national security investigator at the Project on Government Oversight."

Overall, the standards for issuing a waiver are unclear. More so, the problem is not the lobbying industry itself but the role money plays in politics. Some argue that without an overhaul of the campaign finance system, specifically the public financing system, other attempts to improve government ethics will continue to be undermined.

The definitions outlined in the order may also allow some ways around these new rules. For example, those who leave the administration are free to lobby Congress or engage in lobbying activities that do not meet the threshold for someone to be required to register as a lobbyist.

Obama bolstered existing limits on gifts from lobbyists or lobbying organizations. However, many are concerned that an exception that allows for speaking engagements or attending "widely attended events" is not included in the new executive order. According to BNA Money and Politics (subscription required), "Without this exception, the strictly applied gift ban would appear to bar officials from accepting an invitation offered by a company or other entity that employs lobbyists to have a meal or other hospitality at any Washington event. [. . .] The order also retains a provision allowing an administration official to accept the cost of travel to and participation in an event outside of Washington, as long as the trip is related to the official's duties." This may mean that appointees can attend events across the country, but not accept an invitation in Washington, D.C.

Because some unplanned consequences of the order have clearly already appeared, it may have to be modified in the future. Importantly, the order leaves open the possibility for improvement and the consideration for further disclosure requirements. For example, the director of the Office of Government Ethics has been charged with reporting on "steps the executive branch can take to expand to the fullest extent practicable disclosure of such executive branch procurement lobbying."