Friday, March 27, 2009, 12:27 PM

Political GPS: LOBBYIST TRANSPARENCY OR GAG ORDER: OUR THOUGHTS

Late last week, President Obama took another step that attempts to marginalize the role of lobbyists in government decision-making. In a memorandum to agency heads, the President banned lobbyists from participating in meetings and telephone calls with executive branch officials about projects funded under the American Recovery and Reinvestment Act (Recovery Act). Any comments by lobbyists on such matters must be submitted to agency officials in writing.

The most striking aspect of the directive is that it prohibits an entire segment of the policy-making community from speaking with government officials about the disbursement of federal funds, while allowing numerous others who are unregistered –including most lawyers and company officials – to participate freely in those discussions.

The only instance where a lobbyist can talk to an executive branch official about Recovery Act spending is when the conversation is limited to “policy issues” that do not “touch upon” particular projects. But as soon as the discussion turns to specific funding applications, oral communications are supposed to come to an end.

And that’s not the only way that lobbyists are singled out. Meetings with lobbyists about “policy issues” must be summarized by the officials and posted on the agency’s “Recovery website.” Lobbyists’ written comments must also be posted. But communications between executive officials and anyone who is not a lobbyist are not required to be part of the public record. That’s an odd result for a directive that’s intended to promote transparency.

Meanwhile, the directive raises other, more practical issues.

One question is whether non-lobbyist employees of organizations registered under the Lobbying Disclosure Act (LDA) may participate in meetings with government officials about Recovery Act projects. The President has directed agency officials to inquire, upon scheduling and again at the outset of any oral communication, whether “any of the individuals or parties appearing or communicating” about particular recovery projects are “registered under the Lobbying Disclosure Act of 1995.” If so, the lobbyist may not attend or participate.

What, then, is the rule for non-lobbyist employees of companies or associations that are LDA registrants? These employees would be meeting with officials on behalf of a “party” registered under the LDA. Because the directive says that such parties may not communicate orally with agency officials about particular Recovery Act projects, does this mean that such non-lobbyist employees should be treated the same way as their lobbyist colleagues? It’s doubtful that this result is intended. But the language of the President’s directive can certainly be read that way.

If our assumption is right that non-lobbyist employees of LDA registrants may meet with executive branch officials, then what exactly is gained? An in-house lobbyist could analyze the issues and discuss them with her employer. The company can then handpick a non-lobbyist to participate in a meeting with executive branch officials. And the non-lobbyist may even hand-deliver the lobbyist’s written comments during the meeting. The lobbyist’s participation will be obvious and her influence felt - whether she is in the room or not.

At the same time, there is little doubt that the law will empower those who operate outside the LDA scheme at the expense of those who register and report. This would seem to reward those who decline to register because they decide that the burdens of entering the LDA reporting scheme outweigh the risk of getting caught. The rule will also benefit those who spend less than 20% of their time in a three-month period engaged in lobbying-related work, and therefore do not trigger one of the registration thresholds.

Finally, it must be noted that the President’s directive stands in contrast to other efforts to address perceived lobbying abuses. HLOGA’s restrictions on gifts from lobbyists to public officials were tied to documented abuses - even if they involved only a relative few. This new directive, however, limits speech with government officials – speech that is at the core of the First Amendment right to petition the government for the redress of grievances.

The Director of OMB is required to issue guidance on the memorandum to agency heads and within 60 days make recommendations to the President for modifications and revisions. We expect that some of these issues will be raised with OMB and addressed through this procedure.

ROUNDUP OF STATE DEVELOPMENTS

Florida High Court Upholds Gift Ban, Disclosure Rules for Lobbyists

The Florida Supreme Court last week upheld a 2005 law that bans lobbyists from giving gifts to legislators and requires that lobbyists file quarterly reports disclosing their compensation. The court rejected arguments that the legislature gave itself powers reserved to the other branches of government, such as issuing advisory opinions, investigating violations, and recommending punishment. The court also brushed aside arguments that lobbying is part of the general practice of law and therefore discipline can only be handed out by the Florida Supreme Court.

Like many other states, Florida has tightened its gift rules and expanded disclosure for lobbyists. The state’s gift law, referred to as a “no cup of coffee rule,” bars registered lobbyists from buying legislators meals or tickets, paying for their travel, or providing a host of other amenities.

Then There Were Five: New Mexico May Quit the “No Contribution Limits” Club

A bill has passed the New Mexico legislature that for the first time sets limits on campaign contributions to state elected officials and lawmakers. Governor Richardson is expected to sign the bill, with the new limits taking effect for the 2010 election cycle. The new law does not prohibit donations from corporations, as many states do.

The measure would limit individual contributions to $5,000 per election for statewide candidates, and $2300 for candidates running for non-statewide offices. Political committees would be subject to a $5,000 limit per election for all candidates.

Only five other states presently have no limits on campaign contributions: Illinois, Missouri, Oregon, Utah, and Virginia.

New York City Touts Results From Pay-to-Play Reform

The New York City Campaign Finance Board boasted recently that its pay-to-play law has given City voters “greater confidence that their candidates are free from the influence of ‘big money’ interests.” City officials examined campaign reports covering a six-month period and found that out of 14,782 contributions, only 60 violated the reduced contribution limits that apply to City vendors. The reduced limits also apply to a vendor’s owners, principal officers, and senior managers.

Wisconsin Court Rejects Broad Regulation of Ballot Measure Groups

A Wisconsin federal judge held that a state law unconstitutionally burdened the First Amendment rights of a citizen who planned to spend $500 on postcards and yard signs to influence a state ballot initiative. The Wisconsin law requires every group or individual that spends $26 or more on influencing a referendum to register with the state, open a dedicated bank account, keep records for three years, and file reports that disclose donors.

The court rejected a request to strike down the law altogether or increase the threshold for triggering disclosure from $25 to $1,000. U.S. District Judge J.P. Stadtmueller wrote: “Because of the relatively unsettled and evolving nature of First Amendment jurisprudence in the area of campaign finance laws, and because it appears that the Wisconsin Supreme Court has not addressed the scope of these statutory provisions, the court declines to reach the issue of whether [the law is] unconstitutional on [its] face.” The Wisconsin legislature has yet to indicate whether it will try to amend the law to raise the thresholds for disclosure.

FEC BUNDLING REPORT FORM: IT’S TWO, TWO, TWO REPORTS IN ONE!

Candidate committees, leadership PACs, and party committees that receive bundled contributions exceeding $16,000 in a semiannual period must now report those contributions to the FEC. The Commission’s recently-adopted rules require these committees to disclose reportable bundled contributions according to their normal reporting schedules – i.e., monthly, quarterly or semiannually. But, the new rules say that monthly and quarterly filers must also file a semiannual report of bundled contributions.

This rule has caused some confusion as to whether a committee reporting bundled contributions might have to file two separate reports containing potentially identical information in July and again in January. Fortunately, the FEC’s just-released Form 3L, allows monthly or quarterly filers to consolidate those reports and the semiannual report on one form. The form also requires the filers to report separate totals of bundled contributions when, for example, bundled contributions in a quarter differ from the total amount of bundled contributions for the semiannual period.

And yes, . . . we are old enough to remember the Doublemint twins.

If you have any questions, comments or would like to schedule a consultation, please feel free to contact Larry (LNorton@wcsr.com, (202) 857-4429), or
Jim (JKahl@wcsr.com, (202) 857-4417).
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