TARP and Stimulus Lobbying by Members of Congress

           Yesterday the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) released a report regarding efforts to prevent “undue external influence” over the TARP program.  On page 13, the report discusses the yet-to-be-issued Treasury rules regarding lobbying on TARP matters: 

At the time of our study, Treasury was still in the process of finalizing its draft policy limiting external communications regarding TARP. A Treasury official stated that the Treasury approval (and subsequent submission to the White House) of this draft policy is awaiting White House approval on similar lobbyist guidelines submitted for American Recovery and Reinvestment Act (“ARRA”) funds. A Treasury official stated that Treasury’s draft policy for TARP funds is similar to the ARRA policy. The TARP policy will state that Treasury employees cannot talk to lobbyists or members of the Congress, with one exception—instances of overarching policy discussions. (emphasis added) 

This paragraph is peculiar for two reasons.  First, although the Obama Administration’s initial policy on stimulus (ie, “ARRA”) lobbying prohibited contacts with registered lobbyists regarding specific projects, it subsequently revised this approach so that registered lobbyists are no longer treated differently than other interested parties.  Instead, under updated guidelines issued on July 24, 2009 , the original guidance to agency officials was “clarified” as follows: 

During the period of time commencing with the submission of a formal application of a formal application by an individual or entity for a competitive grant or other competitive form of Federal financial assistance under the Recovery Act, and ending with the award of the competitive funds, you may not participate in oral communications initiated by any person or entity concerning a pending application for a Recovery Act competitive grant or other competitive form of Federal financial assistance, whether or not the initiating party is a federally registered lobbyist. 

Second, although the updated guidelines generally ban oral communications with “any person or entity” during the blackout period, they contain an exception for communications with “another Federal Government employee.”  Thus, unlike the proposed TARP policy, the stimulus guidelines do not discriminate against lobbyists, and they do not apply to Members of Congress at all, unless one interprets the term “Federal Government employee” not to include Members of Congress. 

Dan Schuman of the Sunlight Foundation, reviewing the updated stimulus guidelines, suggested that the term “federal government employee” might not, at least literally, cover Members of Congress.    However, he argued that this was probably an unintended consequence of the guidelines and, upon further reflection, concluded that the term was probably best interpreted as covering all federal officials in any branch of the government. 

I agree with Schuman that the stimulus guidelines are ambiguous, but I wonder whether this resulted from simple inadvertence.  Given the fact that the guidelines explicitly address the question of when communications with state legislators are permitted (ie, only when they are from “the Presiding Officer or Majority Leader” in each chamber), it seems surprising that the guidelines do not expressly mention communications with federal legislators.  The SIGTARP report suggests the possibility that there may have been an intent, at least at one point, to ban communications with Members of Congress (which, I have previously argued, could otherwise undermine the effectiveness of the attempt to limit outside influence).  It may be that the revised guidelines were left deliberately ambiguous on this point, or that they were written so as to avoid making it obvious that Members of Congress are permitted to intervene in the competitive award process. 

In any event, it would seem odd if the guidelines for TARP lobbying forbade communications with Members of Congress, while those for stimulus lobbying did not.  I guess we will have to await further “clarification” from the administration to find out which it is.