Friday, May 29, 2009, 11:30 AM

Executive Branch Lobbying Restrictions: A Chance For Common Ground?

The next chapter in the dispute over the President's March 20 memorandum restricting lobbyists' communications with executive branch officials is likely to begin soon when OMB Director Orszag reports to the President after a 60-day study period. The memorandum has received much criticism, and threats of legal action, from both the private sector and public-interest lobbying communities. (See Political GPS, March 27 and April 16, 2009). But, as we discuss below, a frontal assault on the memorandum should not be the lobbyists' only strategy.

It's difficult to argue with the directive's stated goals of making Recovery Act spending more transparent and reducing improper influence. It's just that the directive doesn't accomplish either. Rather than requiring disclosure of all communications with executive branch officials, the memorandum requires only that agencies post on their websites written communications received from registered lobbyists about particular Recovery Act projects and summaries of oral communications with registered lobbyists that relate to Recovery Act policy. The result, so far, has been little agency disclosure at all.

Oral communications between agency officials and registered lobbyists, if they concern particular Recovery Act projects, are simply banned. Curiously, OMB's April 7 interim guidance acknowledges that lobbyists "bring to bear helpful information" that facilitates agencies' evaluation of projects on the merits. That's hardly the best case for a gag order.

As we've noted before, the memorandum is also replete with loopholes that permit non-lobbyists (e.g., a company CEO who has bundled thousands in campaign contributions) and even state-registered lobbyists to have conversations with agency officials about Recovery Act projects. And because only certain communications must be posted on agency websites, many conversations will never see the light of day.

So what should lobbyists do next? The President’s ethics advisor Norm Eisen has already called the memo "right" as a legal and a policy matter. So don't expect a reversal from the White House. Also, a protracted legal battle may not be of much help to lobbyists since the restriction is aimed at short-term stimulus funding.

An alternative approach might be found in the President’s recent suggestion to a college graduation class, where he said that antagonists in another controversy should use "fair-minded words" and "join hands in common effort." In fact, the roadmap for lobbyists might just be found in the Honest Leadership and Open Government Act of 2007, a law that President Obama championed in the Senate. In section 214 of HLOGA, Congress urged lobbying organizations to develop professional standards, provide training, create third-party certification programs, and promote professionalism and disclosure. Other professions under intense scrutiny have found a rigorous self-regulatory system, developed by those who best understand the industry, to be preferable to overly restrictive and often poorly crafted government regulation.

Proceeding down the path of expanded self-regulation would surely be a recognition by the lobbying community, unavoidable we think, that the rules of the road have changed. But such a step forward by the lobbying community might just permit the White House to step back from the restrictive approach of the executive memorandum or at least exercise a gentler touch going forward.

FLORIDA COURT STRIKES DOWN DISCLOSURE REQUIREMENTS FOR ISSUE GROUPS

A federal judge last week struck down a Florida law that requires 501(c) groups to register and file reports in the same manner as political committees if they fund communications that refer to or depict a clearly identified candidate for office, or clearly refer to an issue to be voted on at an election. The suit was filed by the National Taxpayers Union and the National Taxpayers Union Foundation, the Broward Coalition, and the University of Florida College Libertarians.

U.S. District Judge Stephan P. Mickle concluded that the Florida law regulates "issue advocacy speech, pure political speech," and as such, failed the Supreme Court's test for regulating political speech in FEC v. Wisc. Right to Life (WRTL II). Judge Mickle held that the electioneering communications provision of the McCain-Feingold law is "the outer bounds of permissible regulation." That law bars corporate funding, and compels disclosure, for broadcast, cable, or satellite communications that refer to a clearly identified federal candidate in the 30 days before a primary and 60 days before a general election. In contrast, the Florida law regulates communications in all media, including the Internet, and, applies to speech that, according to the Florida court, may reasonably be viewed as communicating something other than an appeal to vote or against a candidate.

The Florida ruling is one of a string of recent cases, going back to Wisconsin Right to Life, in which courts have rejected restrictions on issue advocacy groups, even if a group's advertising refers to candidates for public office. We recently wrote in Political GPS about a Wisconsin ruling that struck down a state law that required registration and disclosure by groups attempting to influence ballot initiatives. As we have also discussed, recent FEC rulings have loosened the rules that the Commission applied just a few years ago in obtaining large fines from 527s and other non-profit groups.

A LATE-SESSION PUSH FOR ETHICS REFORM IN NEW YORK STATE

New York Governor David A. Paterson announced a sweeping ethics proposal that would replace the 13-person Public Integrity Commission with a five-member Government Ethics Commission. Appointments to the Commission would be made by a new 10-member Government Ethics Designating Commission, whose members would be appointed by the Governor, the four Legislative Leaders, the Attorney General, and the Comptroller.

The new Ethics Commission would take over enforcement of the state's campaign finance laws, currently the province of the State Board of Elections, and would oversee the Legislative branch, in addition to the Executive Branch and lobbyists. Since the Governor's proposal requires pension fund "placement agents" to register as lobbyists, they too would be subject to regulation by the new Commission.

The current Public Integrity Commission has been stung by charges from the State IG that the panel had improperly disclosed confidential information about investigations into the Spitzer administration. Nonetheless, the Governor's proposal is likely to meet resistance in the state legislature.

FEDS NAB VIRGINIA MAN IN CONDUIT SCHEME

A Virginia man pled guilty this week to federal charges that he made $17,000 in "conduit" contributions in 2003 to a candidate seeking federal office. Jerry Pierce-Santos, a former Bush (41) official and a major Republican fundraiser, engaged in a scheme in which he reimbursed political contributions made by ten individuals to the federal candidate. Seven persons were reimbursed for $2000 contributions and three others were reimbursed for $1000 contributions. At sentencing, Mr. Pierce-Santos faces up to two years in prison, three years supervised release, and a statutorily mandated $50,000 fine.

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