On Friday, the New York Times reported that four agencies responsible for implementing the financial reform bill are announcing new transparency policies:

After passage of the law overhauling the nation’s financial regulations, the federal agencies responsible for writing the rules are striving for transparency to avoid the appearance of improper coziness with lobbyists, bankers and executives in the financial services industry.

After closely tracking similar policies put in place by the Treasury to oversee the stimulus and TARP programs, we've started looking into just what these policies will entail.

Unfortunately, details are still scant, but we're collecting what we can about the new policies apparently being put in place by the Fed, the FDIC, the SEC, and the CFTC. They're strongly reminiscent of the previous policies around the stimulus and TARP, where new disclosure policies were self-imposed by the Executive over particularly vulnerable or sensitive decision making processes, ostensibly to protect merit-based decision making from undue special interest influence.

In plain English, they're posting who they meet with, so that they make honest decisions as they reform our finance system.

These policies should be a very important development, protecting important decisions, and giving us a view into who is trying to influence the reworking of our financial regulatory system.

We'll be looking in more detail at how these policies work, and whether they're effective as they're developed and implemented. In the meantime, there are a few guidelines that should cover what they're doing.

First, the reporting needs to be timely. Disclosure needs to move at the pace of influence, and reading about last quarter's meetings enables history, not oversight.

Second, the reporting needs to be online. They should follow guidelines for openness, and encourage reuse and analysis. (To see the sort of view into lobbying that we've envisioned, see this mockup of a lobbying disclosure site.)

Third, the disclosures need to be substantive. They should include information like the date, names of people attending the meetings, substance of the conversation, the clients represented, and copies of materials submitted. If disclosing the meetings protects decisions, adding substance to what gets disclosed should enhance that effect.

Finally, careful thought needs to be given to what gets reported. Agencies should consider carefully whether the rules will apply to different classes of meetings, and offer clear guidance about what constitutes a reportable meeting. They should also recognize that relying on the Lobbying Disclosure Act definition of lobbyist isn't particularly meaningful, since influence can easily find its way around the twenty percent rule.

We'll be following this closely, since it can be another test case in how online transparency can affect a situation where concentrated interests are swarming a few very important decisions.

If you have any further suggestions for how these policies should work, please add them in the comments, or suggest any further resources to add to our research.

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.

NextGov reports on positive side-effects of the stimulus' disclosure and transparency provisions:

Technology that states have deployed to report how they spent federal stimulus funds is likely to permanently change information exchange across the public and private sector, despite controversy over figures on the number of jobs created and saved, said New York officials, academics and federal leaders.

I think that, even in the face of criticism over data problems in stimulus reporting, almost everyone agrees that the creation of Recovery.gov has been a huge transparency victory. The disclosure requirements look even better after seeing the transparency success trickle down to the states.

Recovery.gov is supposed to be a transparency clearing house for information on the federal stimulus spending appropriated in the $787 billion American Recovery and Reinvestment Act passed earlier this year. Unfortunately, the reports on spending and jobs saved or created are showing errors across the board.

Clay Johnson at Sunlight Labs looked at the "dirty secret" that is FederalReporting.gov, the site where agencies and stimulus fund recipients file their reports before that data is pulled by Recovery.gov:

Looking into FederalReporting.gov is a lot tougher than Recovery.gov. Not a lot of light has shone upon this website. In terms of costs-- the only thing I can find on usaspending.gov is that the EPA has set up a $4,000,000 helpdesk for the operation. It looks like right now there are three ways to send data into FederalReporting-- via an Excel Spreadsheet, a Web Form, and via an XML API. The question on my mind is-- what kind of validation is being done on the data before it goes into federalreporting.gov? For instance, how is data getting being accepted by FederalReporting.gov saying that jobs are being created in Arizona's 15th District when Arizona's 15th district doesn't exist? Shouldn't FederalReporting.gov be validating that? It seems from the documentation that all three methods of submission have a validation process. Is the validation so lax that obviously wrong data can get through?

My initial reaction upon seeing the Arizona 15th District story was that this could have been a state-level agency or contractor reporting that jobs were created in the 15th District of the Arizona Legislature (Arizona elects one state senator and two state representatives from each of their 30 legislative districts). That was until I saw that jobs and spending were being reported from the 86th District and other states were seeing reporting coming from the 99th District and other non-existent legislative boundaries. This problem, which is huge for a project that is relying on transparency for legitimacy, stems from a patchwork reporting structure that, as Clay reported, is not being overseen properly. It looks like some of the state and local agencies and private contractors and subcontractors are simply putting a number into a box where they decided not to figure out the correct answer. Subsequently, the reporting site that they submit to is apparently not checking for errors.

In response to a letter sent by House Oversight and Government Reform Committee ranking member Darrell Issa, Recovery Accountability and Transparency Board chairman Earl Devaney answered questions about the accuracy of Recovery.gov reporting by stating, "Your letter specifically asks if I am able to certify that the number of jobs reported as created/saved on Recovery.gov is accurate and auditable. No, I am not able to make this certification." The accurate part is obvious from the many examples pointed out by ABC, Sunlight Labs and others, but the auditable seems a bit shocking. Why isn't the data able to be audited? Is it really that bad? Or is the Recovery board's staff that over-stretched. While Devaney promises “increasingly higher levels of accuracy in the future," this problem of accuracy and auditability should have been tackled before issuing press releases claiming the positive effects of stimulus spending.

Earlier today, I gave a presentation on the executive branch's lobbying disclosure rules to the American Bar Association's Section of Administrative Law and Regulatory Practice at their 2009 Administrative Law Conference.

My slides from the conference are available below.

Michael Paese used to be the chief of staff to Finance Committee Chair Barney Frank until he took a job as a chief lobbyist for Goldman Sachs last September. Congressional ethics laws forbid former staffers from contacting the office or committee of their previous employment for one year. Paese's year was about to be up, just in time for him to lobby his former employer and coworkers as they took up work on an extensive financial regulation package. Frank, however, took the rare step of prohibiting Paese from communicating with any staff of the committee for an undetermined amount of time to avoid any appearance of a conflict of interest.

This continues a trend in Washington where decision makers understand where the the lines of a conflict of interest could be crossed. The White House has instituted new lobbying policies for both the TARP and stimulus funding (with many loopholes, as Daniel Schuman has pointed out). A former lobbyist turned chief of staff to Rep. Jim Matheson turned down an invitation to a lobbyist thrown party. And now, Frank has refused to allow his staff to talk to one of Goldman Sachs' prime hires.

This could point towards a moment where Congress could enact further lobbying reforms to strengthen those passed in the 2007 ethics bill. More transparency should be shed on the meetings between lawmakers, staff and lobbyists. Simple disclosure of names and clients simply serves to provide a listing for lawmakers to know who they are talking to and does little to provide real information to the public.

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?

Lobbyists are in midst of a bonanza in Washington. With the Obama administration pursuing so many goals at once, the influence industry is booming. One area that has lobbyists salivating like cats surrounding a mouse is the $787 billion stimulus package (only about $400 billion of this was actually spending-related) signed into law earlier this year by President Obama. That was the reason that the administration crafted rules for stimulus lobbyists designed to limit their ability to influence spending decisions and make transparent their actions. The rules, smartly summarized by my colleague Daniel Schuman here, included a requirement for agency officials to disclose all contacts made by lobbyists in regards to the stimulus. The Associated Press looked at these disclosures and found little disclosure occurring with wide discrepancies in the format of disclosure among those few reports filed:

President Obama ordered federal officials to disclose their contacts with lobbyists trying to influence how the government doles out money to jump-start the economy. Yet few such communications have been reported even though lobbyists say they are busier than ever with the multibillion-dollar stimulus. Since the $787 billion American Recovery and Reinvestment Act passed in February, federal agencies have reported 197 contacts with lobbyists about stimulus grants. In August, the entire government reported only eight such lobbying contacts. The Pentagon, which controls about $7.4 billion in stimulus spending, reported just one lobbying contact so far this year. The Homeland Security Department, with at least $3 billion to spend, reported none.

Forgive me for not believing that the Pentagon has only been contacted by ONE lobbyist and the Homeland Security Department has had ZERO contact with lobbyists over stimulus spending. Other agencies are no better. Of particular concern is the lack of a standardized format for disclosure. According to the AP, "The Education Department described 19 encounters, including Secretary Arne Duncan's meetings with the NAACP and other groups, some with detailed descriptions of the discussions. Energy Department reports include barely legible scrawls as well as 159 pages of public comments on a transmission infrastructure program."

If the administration is going to undertake a serious effort to reduce influence around and bring transparency to stimulus spending they are going to need to reconsider how they are requiring these disclosures. In the recent OMB memo on stimulus lobbying rules, the administration stated its intent on creating a web tool to “facilitate disclosure of lobbyist contacts concerning the Recovery Act.” The development of this tool should also coincide with the creation of standardized disclosure. Beyond that, they need to empower some official at each agency to enforce the disclosure rule.

For right now, this is both not-too-surprising and very disappointing. Maybe we just need a law requiring lobbyists to disclose their contacts. Perhaps the administration, which campaigned on transparency and curtailing the power of lobbyists, could consider putting their weight behind a legislative effort to increase transparency in the influence industry.

The Project on Government Oversight (POGO) reviewed all 50 state formulas for disclosing stimulus contracts and found that New Hampshire gets it right. "A POGO review of the procurement websites from all 50 states (plus DC) found that one state—New Hampshire—has been posting original scanned Recovery Act contracts. This provides taxpayers with unprecedented access to important details regarding government spending."

Michael Scherer at the Time blog Swampland writes about Howard Dean's public disclosures about his non-lobbyist consulting work when he appears on television in contrast to the non-disclosure by Tom Daschle, who appears on Sunday shows to discuss health care without revealing that he holds UnitedHealth Corp. in his portfolio at the law firm Alston & Bird.

Sunlight's Bill Allison uses the newly minted FARA database to explore lobbying by the Cayman Islands to keep their tax safe haven safe.

At Open Congress, Donny Shaw notes a comment left on the bill page for H.R. 1207 , the audit the Federal Reserve bill, that suggests the recommended GAO audit be released to the public. The bill only requires the GAO to release the audit to members of Congress.