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Treasury Releases TARP Lobbying Rules

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According to the Hill, yesterday the Treasury Department released its rules regarding "Communications With Registered Lobbyists And Other Persons About Emergency Economic Stabalization Act Funds." The rules are available on Treasury's web site, but there's no press release and no obvious hyperlink as of the time I am writing this blogpost, nearly a day later.

In late August, I wrote about the Special Inspector General's report that dinged Treasury for taking so long to release its rules for TARP (financial bailout) lobbying. It took Treasury 226 days to release these rules, since January 27th when the agency issued a self-laudatory press release announcing its plan to "develop new rules to increase transparency and curtail potential lobbyist influence."

Having now (quickly) read the TARP lobbying rules, they pretty much follow the Recovery Act lobbying rules initially promulgated on April 7 and revised on July 24.

Here are a few differences between the TARP lobbying rules and the final stimulus lobbying rules that I've noticed so far:

  • The TARP lobbying rules permit communications regarding a specific project once it has received preliminary approval, whereas  the stimulus lobbying rules don't allow those communications until the project has been awarded. Thus, the TARP rules leave open a window of opportunity for lobbying between "preliminary" and "final" approval. I don't have a sense of how long that window is open or the "final" approval process.
  • The TARP lobbying rules are a bit unclear (at C(iii)), but seem to permit oral communications with Treasury employees regarding applications for financial assistance that, instead of encompassing all federal employees, encompass only federal executive agency officials. The stimulus lobbying rules are much broader, and permit communications with more federal and some state officials. Treasury's closing these exceptions may have the effect of reducing the amount of outside pressure placed upon the agency to spend money. These rules have also cut Members of Congress out of the lobbying picture -- reducing the ability of lobbyists/financial interests to get Members of Congress to lobby for them. It is unclear (but unlikely) that doing so raises Constitutional questions regarding Congress' oversight powers.
  • Both sets of rules allow oral communications regarding particular projects right up until a formal application is filed, as contrasted with the interim version of the recovery act lobbying rules that stopped oral communications when the government official thought that a proposal would be filed. As a result, both the final stimulus lobbying rules and the TARP lobbying rules allow lobbying right up until the last moment. This may allow more give and take between the government and those engaged in lobbying, but may also increase the possibility of undue influence.
Considering the nearly-identical nature of the TARP lobbying rules with the stimulus lobbying rules, it is curious why it has taken so long for Treasury to promulgate these rules, and why it seems to have done so in such a quiet manner.

The similarities also cause me to wonder whether this iterative process of producing lobbying rules may lend itself to creating regulations that could ultimately have much broader applicability.