The Congressional Research Service just released a report entitled "Lobbying and the Executive Branch: Current Practices and Options for Change." It reaches an unsupported conclusion about the effect of the administration's lobbying disclosure rules, and also contains several factual and analytical errors. Ultimately, the Administration needs to do more to disclose lobbying contacts online, in real time, in one place, and in machine readable formats.

Changing the "relationship"?

The big story is CRS's conclusion that the "[c]reation of restrictions on federally registered lobbyists' access to executive branch departments and agencies has already changed the relationship between lobbyists and covered executive officials." (emphais added) However, the report does not explain the sense in which the term "relationship" is used, or whether these rules have changed the effectiveness of lobbying efforts and opened up the policy-making process to the public.

Unsurprisingly, Obama Ethics Advisor Norm Eisen hailed the report's findings on the White House blog, writing:

We’re pleased that CRS recognized a fact that is apparent everyday to those of us who work in government: The president’s historic restrictions on lobbying are having a significant impact in making sure that the government serves the public interest and not special interests.

Mr. Eisen and CRS may be right that these new rules have rebalanced the role that lobbyists play in Washington. Indeed, the administration notes its efforts with regard to disclosing and limiting lobbying on the Main street and Wall street bailouts, its request that lobbyists not serve on advisory boards, and imposing new ethical requirements. However, we don't have enough information to reach the conclusion that these rules have had a significant impact. There's a lot more that should be done.

Errors in the CRS Report

The report erroneously states (p. 4) that the EESA (a.k.a. TARP or the Wall Street bailout) lobbying rules came into effect in January, when the rules were not issued until September. Although the Treasury Department issued a press release on January 27, 2009, stating that it would issue these rules, an August Investigator General report criticized Treasury for not promulgated the rules, which were published online in September. (Indeed, Mr. Eisen's blogpost says September 10th is the date). Thus far, only four lobbying contacts have been disclosed, with the earliest reported contact being in September. Treasury deserves little credit for its late and lackadaisical approach to disclosing TARP lobbying contacts.

The CRS report also erroneously states (p. 5) that the TARP lobbying rules and the updated stimulus lobbying rules "mirror" one another, and gives the TARP rules only cursory attention. They are, in fact, very different. For example:

• The stimulus lobbying rules prohibit communications with all persons (with only a few exceptions) during the decisional period, but the TARP lobbying rules apply only to registered lobbyists.

• The stimulus lobbying rules allow Members of Congress to lobby executive branch officials for funds for specific projects during the decisional period, but the TARP lobbying rules prohibit such communications.

Much more about the TARP and stimulus lobbying rules is available here.

Centralized Database of Recovery Act Lobbying Contacts

The CRS report accurately notes (p. 13, fn 65) that "a central database of registered-lobbyist contacts with executive branch officials does not currently exist." Over the past months, many people have called upon the administration to implement an online searchable lobbying database of all disclosures required under the rules, which is updated in real-time. The public database should be searchable by date, communicant, subject matter of the conversation, and so on. The burden of collecting that data could be reduced by allowing staff to submit reports online. Here's  one way it could look.

CRS Reports Generally

This CRS report has been widely reported in the news and has been acclaimed as providing support for the administration's policies, and yet it was not released by CRS. Indeed, CRS never publicly releases its reports, although most of them eventually find their way to the free archive OpenCRS or are available from fee-based services. (Mr. Eisen's blogpost links to the CRS report on OpenCRS). The Sunlight Foundation has repeatedly called for CRS Reports to be made publicly available, and legislation is pending in the House and Senate to do just that. This is just another illustration of why CRS reports should be publicly available.

(H/T to Electionlawblog for noting the report in the first place.)

Full disclosure: in a previous life, I was a legislative attorney with CRS.

Yesterday, I called the Treasury Department in one last ditch effort to find their TARP Lobbyist Contact Disclosure Forms. I did so as final due diligence before publishing this blogpost, earlier today, in which I evaluated the TARP lobbying disclosure rules. In it, I noted that the required disclosure forms were eerily absent from Treasury's website.

This afternoon -- voila! -- 2 disclosure forms appeared. One form is dated 10/9/2009, and the other is dated 9/22/2009. Now, Treasury is required to publish these forms within 3 days of the lobbying contact, so we know that both of these forms were published outside of the 3 day window required by Treasury's own rules. (At a minimum, they weren't published here.)

What is also interesting is that there are only two lobbying contacts reported. This leads to a couple of possible implications: (1) Treasury has more forms to publish, perhaps some of which are late; or (2) Treasury has no more forms to publish right now. For the latter to be true, either no one has talked to Treasury about spending TARP funds over the last month, or the lobbying disclosure rules don't have a lot of bite and missed capturing lobbying communications.

It will be interesting to see what appears on their website in the upcoming days and weeks. I am still waiting for that phone call back from Treasury about my question: where are the rest of the lobbying contact disclosure forms?

In September, the Treasury Department released its TARP lobbying disclosure rules, nearly eight months after a press release heralding their creation, and a month after an Inspector General report bluntly urged Treasury to promulgate the rules. The rules require that the Treasury Department document communications through which companies lobby for TARP funds. Commonsense rules that increase transparency regarding lobbying communications can have the beneficial effect of reducing the likelihood and appearance of corruption, fostering better dialog, and enhancing the public's faith in the political process.

The rules promulgated by the Treasury Department attempt to meet the great challenge of improved transparency, but fall short of their potential. They are hard to understand, difficult to apply, and full of contradictions and omissions that undermine stated policy objectives. The rules should be clarified, rewritten, simplified, and broadened.

My initial review of the rules identified some key differences between the TARP lobbying rules and the stimulus lobbying rules, which were issued over the summer and document lobbying over recovery dollars. In the following sections, I analyze the TARP lobbying rules in considerable detail. Before doing so, here are two measures the Treasury Department should consider.

First, Treasury should implement an online searchable lobbying database of all disclosures required under the rules, which is updated in real-time. The public database should be searchable by date, communicant, subject matter of the conversation, and so on. The burden of collecting that data could be reduced by allowing staff to submit reports online.

Regardless of whether this database is built, all of the documents that the lobbying rules require be disclosed should be available in an easy-to-find place online. So far, I have been unable to find the lobbying communication reports on Treasury's website. The rules require that those reports be made available online within 3 days of a disclosable communication taking place. A phone call to Treasury seeking assistance with finding the disclosures has not yet been returned.

Second, Treasury (and the administration generally) should reconsider the format it uses to promulgate rules. Short, terse, lawyerly language, such as that contained in the TARP lobbying rules memo, is difficult for most people to follow. Treasury should use straightforward language, and define all key terms. Moreover, linguistic sign posts, such as improved headings and sub-headings, would provide a welcome roadmap. Furthermore, adding charts and decision trees to help explain the rules would provide a welcome complement to dense prose.

Overview of TARP Lobbying Rules

TARP, the Troubled Asset Relief Program, was created by the Emergency Economic Stabilization Act of 2008 to stabilize the financial markets via a Wall Street bailout. The TARP lobbying disclosure rules seek to “limit the influence of lobbyists and special interest[s]” regarding how the $700+ billion in TARP money is awarded, and “ensure that [government] investment decisions are guided by objective assessments” in promoting the “health and stability of the financial system.”

The lobbying rules apply only to communications with Treasury officials regarding TARP funds. In doing so, they break down communications into two categories, oral and written, and impose different transparency requirements on each.

Presumably, oral and written communications are regulated differently because of the varying ease and comprehensiveness with which federal employees can report the contents of communications. As to oral communications, it is impractical (and probably unwise) for federal employees to transcribe or tape record conversations and place them online. Thus, the rules require that certain oral communications be reduced into written form, with a summary of the communication placed online. This reductive process raises the spectre of improper communications uncaptured by a written report, and likely led to the administration's ban on certain oral communications. By contrast, written communications (i.e., documents) submitted for consideration by Treasury officials can be readily published online in their entirety. As a result, there is less concern about incompletely recorded communications, as all of the information is available for public inspection.

The TARP lobbying disclosure rules can have one of three effects on lobbying communications. They can permit a communication to occur without restriction, prohibit a communication, or allow a communication to occur but impose public reporting requirements.

Unrestricted TARP-related Communications

Any person may ask a Treasury official a logistical question regarding TARP funding or implementation without hindrance. Oral and written communications are allowed, and do not trigger rules requiring Treasury employees to report the communication. Logistical questions include inquires concerning (1) the application process for TARP funding, (2) deadlines for making funding requests, (3) to whom an application should be submitted, and (4) Treasury practices or program requirements.

In addition, the lobbying rules do not impose limitations on oral communications with Treasury officials at “widely attended gatherings,” which is precisely defined in the Code of Federal Regulations. The reasoning behind this rule, presumably, is that airing the communication in public gives those persons holding contrary points of view the opportunity to respond, and also reduces the likelihood of improper influence exerted through the communication.

Bans on TARP-related Communication

At the opposite end of the spectrum, the TARP lobbying disclosure rules ban oral communications regarding specific applications for funds in certain circumstances. It is likely they do so because it is difficult to fully capture and report the contents of oral communications. Specifically, the absence of transparency raises questions about the integrity of agency deliberations.

The rules break down the process of awarding TARP funds into three time periods, summarized in the timeline below. First is the period of time leading up to submission of a “formal application for financial assistance.” Second is the period of time from the submission of a formal application for funds until their “preliminary approval.” Third is the time after granting approval of preliminary funding. It seems to me that there should be a fourth time period demarcated by when the Treasury Department grants “final approval” to the expenditure of funds.

The lobbying rules ban all oral communications between Treasury employees and anyone else (with exceptions discussed shortly) regarding applications for TARP funds during the period between a “formal application” for funds and “preliminary approval” of funding.

What exactly is a “formal application” for assistance, or the granting of “preliminary approval?” The rules don't define those terms. It is also unclear why the ban on oral communications is limited only to the time period between formal application and preliminary approval.

Presumably, an applicant could draft an application for funds with the assistance of a Treasury official, only after which, once the application is “formally” handed in, would the applicant be prohibited from speaking with that official. Moreover, the communications ban would be lifted once the application is preliminarily approved. After preliminary approval, the same applicant could then speak with Treasury officials to advocate for additional funds. Perhaps the ban ends early because an agency may wish to speak with an applicant regarding refining an application. Even if so, as discussed later, there is an exception to the ban that specifically permits conversations initiated by Treasury officials, thus weakening that argument.

Of course, Treasury may have wished to make the oral communications ban as narrow as possible in light of the burdensome nature of such a rule. If so, then requirements to disclose the contents of oral communications, which are discussed in the section on reporting requirements, logically should apply to all other oral communications along these lines. They do not.

Exceptions to the Ban

Before examining the rules regarding reporting communications, we should identify the exceptions to the oral communications ban. As mentioned before, both logistical communications and communications made at widely attended gatherings are not subject to the ban. The TARP lobbying rules carve out two additional exceptions: communications initiated by Treasury officials, and communications between a federal executive agency official and a Treasury employee.

The first exception to the ban, which permits communications between Treasury officials and any person, so long as the communication is initiated by a Treasury official, is relatively straightforward. The FAQ accompanying the lobbying rules provides some context. It explains that Treasury officials may initiate communications to obtain information about pending applications for the purpose of evaluating the applications, among other (unidentified) reasons. It clarifies that agency officials “should not receive, be willing to receive[,] or respond to communications concerning pending applications unless the official affirmatively seeks or requires information about the application.”

The second exception, for communications between a federal executive agency official and a Treasury employee, is also relatively straightforward. The FAQ provides minimal additional insight into the rule, explaining merely that oral communications are permissible at any time. Presumably, the purpose underlying this rule is that members of the executive branch need to be able to speak about pending applications, and their need to do so outweighs any risk of improper influence or inadequate disclosure.

Notable here is that this second exception is narrower than that which exists in the stimulus lobbying rules, which allows communications by federal agency officials. The addition of the word “executive,” as Mike Stern ably explains, cuts Congress out from being able to lobby decisions-makers regarding the awarding of these funds. The White House is not similarly limited.

Overview: Reporting Requirements for TARP-Related Communications

The TARP lobbying rules impose reporting requirements on certain communications. Those rules depend upon whether a communication is oral or written. As a general rule, communications must be reported on the Treasury Department's website within three days. Presumably, those reports will appear at http://financialstability.gov/latest/reportsanddocs.html, although I have not been able to find them to date.

Reporting Requirements for TARP-Related Oral Communications

Although, in the vast majority of instances, oral communications are permitted with Treasury officials regarding TARP funds, those communications will often trigger public reporting requirements. Those requirements vary based upon whether the communication is with a registered federal lobbyist or someone else. This creates a large reporting gap.

Communications with federally registered lobbyists, regardless of whether the communication concerns general policy matters or a specific application for funding, must be summarized and publicly posted on the Treasury Department's website within 3 days. (Note that communications regarding logistical information or that take place at widely attended gatherings need not be summarized and reported.) That summary must include the date of the contact, identify the parties to the conversation, the names of the lobbyist's clients, and a “general, one-sentence description of the subject of the conversation.” In addition, any written materials submitted in connection with the meeting must also be posted online.

By contrast, Treasury officials do not need to report oral communications if the person they are speaking with is not currently a federally registered lobbyist.

Registered lobbyists comprise only a portion of the people who lobby on specific matters. To have to register as a lobbyist, a person must spent at least 20% of his or her total time on “lobbying activities” over a six-month period, and make at least one “lobbying contact.” (See this CRS Report for more details as to who must register as a lobbyist.) Consequently, many persons these rules would seemingly intend to cover, such as corporate CEOs and communications directors, who have substantial but not frequent communications with government officials, are not covered. Smart lobbyists will be able to easily navigate around this disclosure requirement via their colleagues.

Reporting Requirements for TARP-Related Written Communications

Certain written communications must be posted on the Treasury Department's website within 3 business days of the communication. This publication requirement is riddled with qualifications and exceptions that make it hard to understand and fail to capture relevant communications.

The rules recognize three broad categories of communications: general communications, communications regarding policy matters, and communications regarding specific applications for funds. General communications include communications on logistical matters, and are never required to be publicly disclosed. Communications on policy matters and specific applications for money must be disclosed in some circumstances.

Communications on Policy Matters

Only some written communications regarding policy matters must be disclosed. The key factor in determining whether disclosure is required is identifying whether the person making the communication is a lobbyist. When the person is a lobbyist, the communication must be disclosed; otherwise, the communication need not be disclosed.

It is unclear why the rule requires Treasury officials to disclose policy communications with lobbyists, but not the people these lobbyists represent. An easy work-around for those who wish to avoid the disclosure rules would be for the lobbyists to draft communications, but have a CEO, or other person who is not required to register as a lobbyist, send the letter.

Communications Regarding Specific Applications for Funds

Communications regarding specific applications for funds is slightly more tricky to understand, mostly because it creates a third class of people to whom the rules apply. The three groups of people are: federal lobbyists, TARP applicants or their representatives, and all other people.

All written communications by federally registered lobbyists regarding specific applicants for TARP funds must be publicly disclosed. There's a qualifying requirement, namely that the lobbyist must be writing on “behalf” of a client or employer. The word “behalf” is ambiguous, as it be defined “as a representative of or a proxy for” or “in the interest or aid of (someone).” Using the former definition, a lobbyist could be directed to ask for funds for someone other than his employer, and thus the Treasury employee would not be required to report that communication. However, that strikes me as an unreasonable interpretation, as one main purpose of the rules is to limit the (undue) influence of lobbyists and special interests through public disclosure.

It is worth emphasizing that the TARP lobbying disclosure rules have created a new class of people, TARP applicants or their representatives, for the purpose of disclosing certain types of written communications. Some, but not all, written communications from TARP applicants or their representatives regarding specific applications for funds must be disclosed. This category of people is significantly broader than federal lobbyists, and would likely cover the corporate CEOs, communications directors, and many others who have a vested interest in directing how TARP funds are used. It is unclear why this category of communicant was not used to help refine the ban on oral communications or rules requiring disclosure of oral communications. Doing so would have contributed significantly towards closing many of the loopholes identified above.

Regardless, Treasury employees must publicly disclose written communications from TARP applicants or their representatives, but only in limited circumstances. Specifically, written communications must be disclosed only when an application for funds is pending. This likely mirrors the ban on oral communications, which prevents some oral communications while an application is pending. As a result, it seems likely that written communications prior to a “formal application” for funding need not be disclosed. In addition, it is unclear whether applications are still considered “pending” after the agency gives preliminary approval to a funding request, or whether an application ceases being pending once an agency gives it final approval. The text provides no hint as to when the “pending” period ends. The disclosure rule would be more logical were it to apply all the way through final approval, although either interpretation is valid.

Even so, this discussion of “lobbyists” and TARP “applicants or their representatives” leaves out additional people who have an interest in swaying Treasury administrators to disburse funds (or change policy). These financial regulations omit business that are partners with companies that stand to receive government funds, or that are partially controlled by likely beneficiaries, and other persons with financial interests. Moreover, agents of foreign governments, who often lobby on behalf of companies based in their countries and who are registered under the Foreign Agents Registration Act, are ignored entirely. It is unclear why the rules would skip business partners and others that have pecuniary or political motivations with regard to influencing whether specific applications for funds are granted, or general policy matters that will affect future funding.

What's Next?

After the administration promulgated the stimulus lobbying rules, it reconsidered whether the rules worked as intended. During that rethinking process, the administration met with public interest organizations and others, and ultimately revised the rules. The Treasury Department should engage in a similar public process and reconsider whether its lobbying disclosure rules fully meet the transparency standards articulated by President Obama.

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.

Not sure what I think about this, but former TARP czar Neil Kashkari, appointed under President Bush, told the TARP Inspector General that he thought that the lobbying rules announced earlier this year for TARP recipients were political in nature. The lobbying rules have yet to be fully written and implemented, but are expected to closely track those imposed on lobbyists seeking stimulus funding. It appears that this is simply Kashkari's opinion on the rules and not any admittance of fact.

The Washington Times reports the statement by Kashkari in a way that makes it seem that he is revealing something more than his own opinion. (This makes me think of this great post by Michael Scherer at the Time Magazine blog on the media's obsession with simulacrum.) That being said, Kashkari's opinion on the rules does raise questions considering the Treasury Department has yet to announce a full set of rules for lobbyists and has yet to implement them nearly eight months after announcing them.

Considering that the administration also announced rules for the stimulus spending that were met with intense opposition from lobbyist groups, the likelihood that these rules were announced solely for political purposes seems doubtful. What I'm really wondering is: why has the Treasury Department slow-walked the implementation of lobbying rules and who is behind that?

Earlier this month, the Inspector General responsible for overseeing the government's bailout of the financial sector released an audit of the Treasury Department and federal banking agencies that raised the specter of “external parties” – such as financial institutions – having “undue influence” over the bailout process. In short, the IG concluded that because the Treasury Department and other banking agencies insufficiently document oral communications between external parties and the federal government, it was “impossible” to determine whether bailout decisions were improperly influenced.

When explaining how to fix this disclosure gap, the Inspector General pointed to rules governing lobbying on the $787 billion economic stimulus funds as a good model for the financial bailout. The IG also noted that the Treasury Department announced on January 27, 2009 that it “would develop new rules to increase transparency and curtail potential lobbyist influence” over the financial industry bailout. And yet, the Treasury Department is still “finalizing” its draft policy 7 months after the press release. (More background available from WSJ and the Washington Times.)

It seems, however, that both the IG and the Treasury Department may not have realized that the model they are using for the financial bailout lobbying rules has itself been updated. They also seem to have forgotten about public disclosure of written communications.

Did Treasury Misunderstand the Lobbying Disclosure Rules?

Mike Stern, former senior counsel for the U.S. House of Representatives, wrote about two peculiarities in the Treasury Department's understanding of the stimulus lobbying rules, as recounted by the IG.

Stern highlights this paragraph from the IG report:

"A Treasury official stated that Treasury’s draft policy for TARP [financial industry bailout] funds is similar to the ARRA [stimulus lobbying] policy. The TARP policy will state that Treasury employees cannot talk to lobbyists or members of the Congress, with one exception—instances of overarching policy discussions.” (emphasis added by Stern)

First, Stern explains that Obama's revised stimulus lobbying rules treat lobbyists and other interested parties similarly with respect to prohibiting certain communications. Yet, the Treasury official's statement on the draft financial bailout lobbying rules does not mention other parties as being included in the ban. Second, the revised stimulus lobbying ban likely does not apply to Members of Congress, and yet the Treasury official's statement states that Treasury employees cannot speak with members of Congress regarding specific projects. (This is probably unconstitutional.)

Even with these problems, the Inspector General embraces the stimulus lobbying guidelines as a model for the financial bailout guidelines. And yet, nowhere does the report mention that the administration has updated and significantly revised its stimulus lobbying guidelines. I wrote about the major revisions earlier.

Based upon Stern's analysis, there are two instances where the IG report failed to note that the Treasury official's statement concerning stimulus lobbying guidelines was no longer operative. Moreover, although the IG report summarized the Treasury Department's interim stimulus lobbying guidelines (which mirror the April 7th stimulus lobbying guidelines promulgated by the OMB), nowhere does the report mention that the stimulus lobbying rules were updated by OMB on July 24th.

Has the Treasury Department failed to update its stimulus lobbying guidelines in accordance with OMB rules? Why weren't OMB's updated stimulus lobbying guidelines summarized in the IG report, even if they haven't yet been adopted by Treasury? Should Treasury use the old or the revised stimulus lobbying guidelines as a model for its financial bailout lobbying guidelines?

What Happened to Disclosing Written Communications About Policy Matters?

There is another problem as well. The original stimulus lobbying rules had a loophole that was closed when they was updated. If Treasury uses the interim Treasury stimulus lobbying disclosure guidelines as a model for its financial bailout disclosure guidelines, and not the revised version promulgated by OMB, it leaves open a tremendous loophole: the absence of public disclosure requirements for written communications by lobbyists (or anyone with financial interests).

The interim OMB rules regarding lobbyists writing to federal employees on policy matters had no public disclosure requirements. The revised OMB rules, however, impose a public disclosure requirement on the writings themselves as well as public disclosure that the communication has taken place.

Specifically, the revised OMB memo tells government employees: "If you receive a written communication from a federally registered lobbyist on behalf of a client or employer concerning Recovery Act policy or projects for funding (including, but not limited to, any written communication from a federally registered lobbyist about a pending application), then please submit that written communication to your designated agency official for posting on the agency’s website within 3 business days of the communication. . . . " (emphasis added)

The IG report, however, explains that "although Treasury and the banking agencies have processes for documenting and responding to written external inquiries, not all have procedures to document oral communications with external parties when discussing TARP funds." (emphasis added) In saying this, the report omits any mention of whether the documents that are received by Treasury should be made public. Implicitly, it implies that this is not required.

And if you look further, the IG report's explanation of the stimulus lobbying guidelines parallels the interim (outdated) OMB guidelines in distinguishing between discrete projects and policy matters. The IG report says that "treasury employees are . . . required to forward written communications from federally registered lobbyists regarding specific projects, applications, or applicants." The interim stimulus guidelines contrast "specific projects, applications, or applicants" with policy matters. The IG report does not mention general policy matters, and implicitly adopts that dichotomy as well. Indeed, it fails to adopt the language of the revised OMB memo requiring publication on a website of policy communications.

As a result, it is unclear whether the IG is recommending that the Treasury Department publicly disclose the written communications on policy matters submitted from lobbyists to federal employees. Further muddying the waters is the statement by the Treasury official, quoted in the IG report, that seems to exempt “instances of overarching policy discussions” from the financial lobbying ban on Treasury employees speaking with “lobbyists or members of the Congress.” The focus of that section of the report is on oral communications, but it could be interpreted to include written communications as well.

In a private email (that I have permission to quote), Stern writes that "As a practical matter, if a lobbyist wants to communicate in writing with Treasury regarding a TARP/ARRA policy matter and for some reason does not want the communication to be disclosed publicly, he or she could just have the letter signed by a non-lobbyist representative (eg, the client’s CEO).” He is right. This is another issue that Treasury should address.

It is a good thing that the IG is pressing the Treasury Department and other banking agencies to be more transparent, particularly as to lobbying that could place taxpayers on the line for billions of dollars. However, there are many additional questions that must be answered by Treasury and the IG -- and soon.

You can't see under it.

While we might be a bit concerned about Recovery.gov's reporting practice for a bunch of ham, the problems with the TARP bailout program are so much worse. Witness the testimony that Neil Barofsky, Special Inspector General for TARP, plans to give on the overall lack of transparency in the program:

In particular, SIGTARP highlights four specific areas in which recommendations for making the financial industry bailout more accountable and open, have gone unheeded. Treasury has not committed itself to providing taxpayers with updated information on the financial performance of its TARP investments, according to Barofsky's prepared statement. It has not acted on a recommendation that [Term Asset-Backed Securities Loan Facility] borrowers who fail to repay their loans be identified. It has not required the disclosure of "all trading activity, holdings, and valuations of assets of the PPIF" on a timely basis. And perhaps most significantly, Treasury has declined to require all TARP recipients to report on the actual use of TARP funds -- notwithstanding a few agreements with Citigroup, Bank of America and AIG.

"Treasury has declined to adopt this recommendation, calling any such reporting "meaningless" in light of the inherent fungibility of money," Barofsky will testify. "SIGTARP continues to believe that banks can provide meaningful information about what they are doing with TARP funds."

"In rejecting SIGTARP's basic transparency recommendations, TARP has become a program in which taxpayers (i) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested," Barofksy adds. "In SIGTARP's view, the very credibility of TARP (and thus in large measure its chance of success) depends on whether Treasury will commit, indeed as in word, to operate TARP with the highest degree of transparency possible."

The TARP program has been in effect since last October and over two administrations and we have seen hardly any progress towards more transparency in the program. Pretty lame. Maybe they'll actually listen to Barofsky's suggestions for once.