Stimulus Lobbying Rules, Take Two

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The White House’s Office of Management and Budget released the administration’s new stimulus lobbying rules on Friday, as John mentioned earlier. In summary, the new rules generally expand who is covered by the ban on agency staff having oral communications regarding Recovery Act grants, although it shrinks the circumstances as to when the ban applies and what it covers. It also closes a loophole pertaining to written communications by lobbyists on policy matters.

The 787 billion dollar question is how does the OMB’s July 24th guidance on stimulus recovery lobbying differ from its April 7th memo? (For a short video explaining the old rules, see this.) Here’s how the rules have changed.

Who Is Covered?

The rule against agency officials engaging in oral communications with persons applying for federal financial assistance under the Recovery Act has been expanded to nearly everyone, instead of only encompassing lobbyists, as it did before.

However, the ban specifically exempts certain groups of people. It doesn’t reach federal government employees. It doesn’t cover the elected chief executive of a state, local, or tribal government (e.g., governors and mayors). And the ban doesn’t apply to the Presiding Officer or Majority Leader in each chamber of a state legislature.

In addition, the ban does not apply if the subject of the communication to an agency official regards a purely logistical question, or was made at a widely attended gathering. Nor does it cover people responding to communications initiated by agency staff – that is, to answer agency staff questions.

Interestingly enough, it is not clear whether the new rules pertain to Congressional staff or Members of Congress. It seems reasonable to conclude that Congressional staff can communicate with agency officials under the “federal government employee” exemption. However, Members of Congress are not specifically exempted from these rules, although elected officials at the state and local level are specifically mentioned as exempted. (It would be a stretch to fit Members of Congress under the “federal government employee” exemption.)

The omission of Members of Congress probably is an oversight. If followed, banning communications by Members of Congress would likely be unconstitutional, as Congress has oversight responsibilities over agency activities.

When Does The Ban Take Effect?

The ban on oral communications set forth in the April 7th memo prohibits communications “regarding Recovery Act matters” that pertain to “particular projects, applications, or applicants for funding.” Under the old rule, oral communications are prohibited upon the first expression of interest by a party, or even earlier than that, if there’s enough indication that the party is interested in a specific project or application.

The new memo changes this considerably. Now, persons interested in receiving Recovery Act money may communicate with agency officials up until the point they file a “formal application.” This is much later on in the process. Conceivably, persons interested in Recovery Act funds may hold off on filing an application for a grant while they lobby administration officials, and then submit the formal paperwork once they’ve laid the groundwork.

What Does The Ban Cover?

Under the new rule, the ban covers only oral communications concerning pending applications for a competitive grant or other competitive form of federal financial assistance under the Recovery Act. The previous rule covered oral communications regarding all grants, regardless of whether they were competitive or issued based upon a formula. The new OMB memo explains that only competitive grants are covered because “in formula-driven grant contexts, grantees . . . are designated by statute and do not have to compete with others to receive their awards from Federal agencies.”

Final Thoughts

The OMB memo says that the administration will soon release a “web tool” to “facilitate disclosure of lobbyist contacts concerning the Recovery Act.” This will go a long way towards making this a more transparent process. Hopefully, the form will look something like this.

Last Friday’s memo also partially closed a loophole identified in an earlier post. Agencies are now required to publish online written communications from lobbyists concerning Recovery Act policies. This alleviates the concern about lobbyists can ask for the creation of specific grants that would benefit their clients without having to disclose their request. It leaves open, however, the ability of lobbyists to ask for the creation of formula-driven grants that would ultimately be distributed to their clients.

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  • I did not discuss this in the post, but there are two additional questions worth raising. The first has to do with who is a “federal agency official.” the second concerns the breadth of the term “federal government employee.”

    1.

    The ban on oral communications and general disclosure requirements restricts “federal agency officials” from speaking with nearly anyone who has filed a formal application to be eligible for a competitive grant.

    What is a “federal agency official?” The term is not defined anywhere in the July 24, 2009 memo. Does it mean all agency staff who play a role in deciding to award competitive grants? All agency staff? Contractors?

    Depending on how the term “federal agency official” is defined, people who have applied for grants could continue to meet with contractors who work at an agency, and those contractors could simply pass along information from the lobbying meeting to “federal agency officials,” thus doing an end-run around the prohibition.

    2.

    I discussed above whether Members of Congress are exempted from the ban on oral communications. Let me spell this out a little more.

    “Federal government employees” are specifically exempted from the ban on oral communications with “federal agency officials.” The term “federal government employee” is not defined anywhere.

    One way to interpret the term “federal government employee” is to say that it includes all persons who work for the federal government. When I initially thought about it, that definition seemed a bit broad.

    Logically, it doesn’t make sense to exempt persons who work for the judicial branch from this ban. It probably doesn’t make sense to exempt most people working for legislative support agencies from the ban. Neither group, in their official roles, will likely lobby regarding the expenditure of these funds, although it is conceivable that they could do so.

    So what I concluded, trying to guess the intent of the author, is that what was meant was that the term “federal government employee” was intended to mean executive branch employees, which likely including those who work for independent executive agencies as well. This doesn’t mean that legislative staff are excluded, but perhaps that they were not considered in the initial formulation.

    In addition, the term “employee” generally indicates a subordinate status. That contrasts with the term “agency official,” which to my mind indicates some kind of superior or decision-making status. However, the term “federal employee” could just as easily encompass everyone who works for the government, while “agency official” could be a subset of federal employees.

    And thus Members of Congress, not being members of the executive branch, not part of the federal employee GS or SES scales, and not being in subordinate roles, may logically not be covered by the term “federal employee.”

    Anyway, that was the chain of reasoning. Looking at this more closely, the interpretation that “federal government employee” does not encompass Members of Congress is a plausible, but weaker interpretation of the rule. It is more likely that what was meant is “federal government employee” encompasses all federal government employees. (As I mentioned above, it is unclear whether this reaches contractors as well. It is also unclear whether this encompasses part-time employees, although it seems reasonable that it should.)

    However, I may not be the only person confused by this. The sample guidance for executive branch departments, included in the July 24th memo, should include an additional Q&A item to explain that members of all three branches are encompassed by the term “federal government employee,” specifically including Members of Congress and their staff. The memo should also mention that the “federal government employee” must be acting in the course of his/her government jobs. Someone who is lobbying on the side shouldn’t be exempted simply because they also work for the federal government on unrelated matters.