Regulatory: President Obama's Policies on Lobbyists

As President Barack Obama approaches the end of his first two years in office, commentators, political allies and opponents will tally the successes and failures of his administration thus far. This analysis will focus--and appropriately so--on the major issues of the day: the economy, wars in Iraq and Afghanistan, and health care reform, among other topics.

At the same time, lobbyists, lawyers and other government affairs professionals will also reflect on how the president's campaign against lobbyists has affected their particular industry. And while this priority of the Obama Administration has not generated front-page headlines, there can be no doubt that it has had a significant impact on those who engage in government advocacy and on those who must ensure that advocates comply with the ever-shifting laws and rules.

Lobbyists have long been an easy target for political candidates. Running against the influence of "special interests" has proven to be a successful strategy for aspiring politicians. But those who dismissively tar lobbyists ignore their history and protected place in our political system.

Advocacy through lobbying has been a central part of the governmental ebb and flow both in the nation's capital and in state capitals since the early days of the republic. The First Amendment to the Constitution affirms the "right of the people to petition the government for a redress of grievances." Lobbying, the process of bringing the views of individuals and groups to the attention of elected officials, allows those officials to forge policy out of the views of more than 310 million citizens.

In the course of his run for the presidency, then-Senator Obama refused to accept campaign contributions from federal lobbyists. Once elected, he limited the role of lobbyists in his transition.

On his very first day in office in 2009, President Obama signed an executive order that applied tougher ethics rules to officials joining his administration, taking aim in particular at lobbyists. Over the next year, the administration rolled out a series of policies and proposals designed to "challenge the culture that has dominated Washington for far too long" by curtailing the role of lobbyists.

Inside counsel with responsibility for government affairs activities and compliance should be familiar with the complex array of federal lobbyist restrictions. The Obama policies affect lobbyists and their employers in a number of ways:

  • Ban on gifts from lobbyists. Those executive branch officials subject to the Obama Administration's ethics pledge (chiefly political appointees) may not accept a gift from lobbyists or their employers. A gift (including a meal, attendance at an event or anything of value offered to a covered official) must fall within a recognized exception. Note that the ban restricts gifts not just from lobbyists. Even if a company employs just one federal lobbyist, any gift paid for by the company would be subject to the ban, even if offered by a non-lobbyist employee.
  • Restrictions on hiring former lobbyists. Under the Obama policies, an individual hired by the government may not work for an agency which he or she has lobbied during the prior two years. The executive order further prohibits an official from participating in any particular matter involving parties directly related to his or her former employer, regardless of whether the work involved lobbying.
  • Post-employment lobbying ban. After leaving the government, certain senior officials face a two-year ban on trying to influence the government on any matter before the agency or department where the former employee worked. In addition, the pledge requires those leaving government service to agree not to lobby certain senior executive branch officials for the duration of the Obama Administration.
  • Rules for lobbying on stimulus and TARP projects. In 2009, the Obama Administration proposed special restrictions on lobbying regarding funding available through two key economic recovery programs: the American Recovery and Reinvestment Act (also known as the Stimulus Act) and the Emergency Economic Stabilization Act (which includes the Troubled Asset Relief Program, or TARP). Initially, the president sought to prohibit lobbyists from participating in meetings or engaging in conversations with officials concerning particular projects or applicants. Amid strong criticism and questions about their constitutionality, the policies were revised to merely require additional disclosure of communications by lobbyists.
  • Ban on lobbyists on agency boards and commissions. Finally, President Obama earlier this year directed the heads of executive departments and agencies not to appoint or reappoint any registered federal lobbyists to advisory committees or other boards or commissions. There are approximately 1,000 such panels with more than 60,000 members who are experts in particular topics, called upon to provide advice to government officials.

President Obama's policies toward lobbyists have a number of implications for government affairs professionals and corporate counsel.

First, the policies have had a noticeable "chilling effect" on administration officials. While the White House backed away from plans to prohibit certain meetings with lobbyists and maintains that an unofficial ban was not their intent, anecdotal reports suggest some government officials simply avoid meeting or speaking with lobbyists. This has prompted some companies to turn to employees who are not lobbyists to engage in government advocacy--raising the possibility that they themselves could be required to register as lobbyists.

Second, the Obama policies added a variety of new restrictions and prohibitions to an already complicated area of the law. The gift restrictions, for example, do not match up precisely with either existing executive branch rules or the comparable congressional rules. The result is that an organization sponsoring a meeting or other event and hoping to invite federal officials to attend may need to analyze it under four different gift regimes--those of the House, Senate, executive branch and Obama ethics pledge--or even more if state officials are to be invited.

Third, the rules heighten the need for careful adherence to lobbying disclosure rules and the importance of effective corporate compliance policies and procedures. Until 2008, there were few distinct disadvantages to registering as a federal lobbyist, and many government affairs professionals registered, even if not explicitly required to do so. But in the last few years, the Obama policies as well as revisions to the lobbying statute and the congressional gift rules have all created disincentives to registering unless absolutely necessary.

As a result, many in-house lobbyists have re-examined their lobbying activities and decided, where possible, to terminate their registrations. (Some argue the Obama policies have therefore undermined transparency, rather than enhanced it.) Those wishing to de-register can take advantage of new guidance that brought some clarity to the previously uncertain question of when a federal lobbyist may properly terminate. And because of the implications and enhanced scrutiny in this area, including random audits, terminations should be done only if the conclusion can be well-documented with accurate records of lobbying contacts and time spent on lobbying activities.

[This is the fourth in a series of articles on the intersection of corporate compliance, lobbying and political activities.]

Read William Minor's previous column. Read William Minor's next column.

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