Why it Doesn’t Matter Whether Celia Roady is a “Lobbyist”

Celia Roady, the Morgan Lewis tax partner who posed the now-infamous planted question regarding IRS targeting of conservative groups at an ABA conference, “focuses her practice on tax and governance issues affecting tax-exempt organizations, including charities, foundations, colleges and universities, museums, and other nonprofit organizations,” according to the Morgan Lewis website.

Roady has also been described by news reports as a “lobbyist,” but that is not quite right. She was registered in 2005 and 2006 to lobby for two clients, the Schwab Fund for Charitable Giving and the Vanguard Charitable Endowment Program. In both cases the subject of the lobbying was “tax treatment of donor-advised funds of charitable organizations” and in both cases the lobbying registration was terminated on January 19, 2007. Thereafter Roady was not registered to lobby for any client, and thus no longer a “lobbyist.” Or at least a “registered lobbyist.”

Roady’s lobbying reports reflect contacts only with the Senate Finance Committee and Joint Committee on Taxation. One might therefore assume that she had no discussions with executive branch agencies regarding the subject of her lobbying effort. The Lobbying Disclosure Act requires a report of “the Houses of Congress and the Federal agencies contacted by lobbyists employed by the registrant on behalf of the client.” As pointed out by the ABA Lobbying Manual (4th ed.), at p. 136, this language might be read to require disclosure if conversations take place with any federal agency, but it has been interpreted by the Clerk of the House and Secretary of the Senate to apply only if there has been a “lobbying contact” with the agency. This means, for example, that Roady would only have to list the IRS if she had discussions with someone who qualified as a “covered executive branch official” and those discussions did not fall within one of 19 exceptions to covered communications.

Roady clearly has a close relationship with various people at the IRS, including Lois Lerner, the director of the IRS’s exempt organization division, who called Roady before the ABA conference to request that she ask a question regarding the Inspector General’s investigation of improper targeting of conservative organizations. One would expect that Roady has communicated frequently with Lerner and other IRS officials regarding matters of importance to her own clients so one might wonder why those conversations never triggered a disclosure obligation under the LDA. Certainly Lerner is senior enough to qualify as a “covered executive branch official.” [Ok, maybe not so certainly- see comment from Dave Mason below]

One way that Roady might have been able to avoid triggering a disclosure obligation would be to communicate in ways that fell within one of the exceptions to the Lobbying Disclosure Act. For example, with respect to her lobbying on “tax treatment of donor-advised funds of charitable organizations,” Roady would have had to disclose if she had had a conversation with Lerner (or another high-ranking IRS official) on behalf of one of her clients. But suppose Roady’s involvement in this issue was not limited to her advocacy on behalf of private clients? At around the same time of her lobbying effort, she served on a working group of the “Panel on the Nonprofit Sector,” a project of Independent Sector, which describes itself as the “leadership network for nonprofits, foundations, and corporate giving programs committed to advancing the common good in America and around the world.” This project resulted in a report which, among other things, made a series of recommendations regarding donor-advised funds (see p. 39). So if Roady discussed these issues with Lerner or others at the IRS, who is to say if she was doing so on behalf of her paying clients or Independent Sector?

Speaking of Independent Sector, another way that Roady might communicate with high-ranking IRS officials without engaging in “lobbying contacts” is to appear with them on panels or at professional conferences (like the ABA conference itself). As public events, these probably fall outside the definition of “lobbying contacts.” Roady (like many other Washington tax lawyers) frequently participates in such events. For example, if you had been at the Ritz Carlton on April 24, 2013, you could have attended a program jointly sponsored by Independent Sector and Georgetown Law School, and featuring tax and legal experts such as Roady and . . . wait for it . . . Lois Lerner.

(This event was titled, ironically, “Nonprofit Governance: Advancing Your Mission Through Lobbying.” You see, the tax law generally restricts nonprofits from engaging in lobbying, but it is a tad vague on what exactly constitutes lobbying or how much is allowed. This “leaves public charities in quandary- they are permitted to engage in some lobbying but too much may jeopardize their tax exemption, and there is no bright-line test for determining how much lobbying is too much.” If this problem sounds to you  a lot like the issue of how much political activity can be engaged in by tax exempt groups, we think alike.)

Even more ironically, Roady may have avoided “lobbying contacts” in part because of her appointment by the IRS to be a member of its Advisory Committee on Tax-Exempt and Government Entities. This appointment would not have been possible if Roady had still been a registered lobbyist because President Obama has barred lobbyists from serving on such committees. However, the LDA also exempts communications “made in the course of participation in an advisory committee” from the definition of “lobbying contacts.” Thus, having been appointed to the committee due to her cozy relationship with the IRS, Roady’s service on the committee provided her with a basis for communicating with senior IRS officials without triggering a registration obligation.

Of course, given the many vagaries of the LDA, someone who really does not want to register can often find a colorable basis for failing to do so. Lack of enforcement makes it unlikely that a non-registrant will even have to explain his or her failure to register. While these problems may militate in favor of tightening the requirements of the LDA, they also make it foolish and counterproductive to punish those who do register.

Thus, while the policy of banning lobbyists from serving on advisory committees may or may not prove to be unconstitutional (as currently being argued before the D.C. Circuit), the Roady case illustrates why it certainly will not fulfill Obama’s stated goal of changing the “culture of special interest access.” All it does is incentivize non-compliance with the LDA, and reward those who can find a way not to register.

House Rules on Employment Negotiations and Recusal: the Case of Representative Cardoza

Representative Cardoza of California announced earlier this week that he would be resigning from Congress and joining the law firm of Manatt Phelps. Manatt apparently jumped the gun a bit and listed Cardoza yesterday on its website as a managing director in its public policy practice, even though Cardoza had not actually resigned yet, according to this Politico article. (Manatt subsequently removed the listing). Politico says that Cardoza was going to submit a letter of resignation effective midnight yesterday, although the Clerk still has him as a Member of the House as of this afternoon.

So that’s a little gauche, but were any laws or rules violated? There is no prohibition on former Members of Congress going to work for lobbying firms, although the post-employment law forbids them from lobbying the legislative branch for a period of one year after they leave office. Nevertheless, there are many things that they can do even during this one-year “cooling off period.” As explained in this House Ethics Committee memorandum, a former Member may immediately “aid or advise clients (other than foreign governments or foreign political parties) concerning how to lobby Congress, provided the former Member makes no appearance before or communications to Members or employees of Congress.” The former Member can also lobby the executive branch and state governments during this period.

We have previously discussed whether it is appropriate for Members of Congress to resign for personal convenience and concluded that while perhaps there should be a norm/rule against this, it is not currently prohibited.

So that leaves the question of whether Cardoza properly complied with House Rules regarding employment negotiations and recusal. As explained in the Ethics Committee memorandum, “Members must notify the Committee within three (3) business days after they commence any negotiation or agreement for future employment or compensation with a private entity.” The definition of what constitutes a negotiation is somewhat vague, but this doesn’t matter much for our purposes, since we don’t know what communications Cardoza had with Manatt or when they occurred.

What we do know is that Cardoza filed a Notification of Negotiations or Agreement for Future Employment Form with the Committee on July 30. The form indicates that the negotiations began that same day, July 30, which I suppose is possible. I would note, however, that Cardoza’s last vote in the House appears to have been on July 25 (Roll Call Vote 518). He did not vote in any of 38 roll call votes that the House took on July 26, July 31, August 1 or August 2.

Of course, we don’t know why Cardoza missed these votes, but it seems like a reasonable surmise that participating in some or all of these votes would have raised ethical questions. The Committee advises that “Members are strongly encouraged to abstain from voting on legislation that provides a benefit targeted to any entity with which the Member is negotiating or from which the Member has accepted future employment.” Presumably, the Committee would look askance at a Member voting with respect to legislation on which his prospective future employer was lobbying. Given the breadth of Manatt’s lobbying practice, it might have been difficult for Cardoza to determine which legislation he shouldn’t vote on, and he may have decided that the prudent thing to do was to stop voting on everything.

If this was the case, Cardoza was required to notify the Ethics Committee of his recusal, and also to provide the Clerk with a copy of his prior Notification of Negotiations form so that the Clerk can make that document public. It does not appear that Cardoza did this because the Clerk never made the notification form public. Thus, there may have been technical non-compliance with this requirement.

All in all, however, if it is true that Cardoza did not begin his negotiations with Manatt until July 30 or shortly before, it seems to me that he complied with the spirit, if not the letter, of the House rules on employment negotiations and recusal.




ABA Proposal for Lobbying Reform

The American Bar Association has approved a resolution calling for changes to federal lobbying regulation. (see this story in Politico). Interestingly, Politico quotes the head of the American League of Lobbyists as generally supportive of the resolution, except for the proposal to restrict campaign fundraising by lobbyists.

The ABA resolution stems from the report of the ABA Task Force on Lobbying Regulation, on which I served. The report of the Task Force, which was co-chaired by Trevor Potter, Charles Fried, Rebecca Gordon and Joe Sandler, can be read here.

Here is the actual resolution (h/t Rick Hasen, who also served on the Task Force).


Lobbyist Fundraising and the Second Circuit

Perhaps the most significant aspect of the Second Circuit’s decision in Green Party of Connecticut v. Garfield, discussed in my last post, involves Connecticut’s ban on soliciting of campaign contributions by contractors and lobbyists.  In contrast to the ban on direct contributions, which the court found to be a peripheral First Amendment activity subject to the more lenient “closely drawn” level of scrutiny, the Second Circuit stated “a limit on the solicitation of otherwise permissible contributions prohibits exactly the kind of expressive activity that lies at the First Amendment’s ‘core.’”  Accordingly, it held that the ban on solicitations was subject to strict scrutiny, i.e., the restriction could only be upheld if it was “narrowly tailored” to further a “compelling interest.”  

            The district court had found that the government had a compelling interest in combating the threat posed by “bundling” of campaign contributions by contractors or lobbyists, particularly with respect to contributions from their employees or clients.  The danger is that “contractors and lobbyists will promise to deliver large number of coordinated contributions to a state official in exchange for political favors.”


            The court of appeals expressed some skepticism as to whether there was a compelling interest in stopping bundling.  The court seemed to feel that it was unlikely that bundling would lead to “quid pro quo” corruption (in other words, an actual agreement to exchange political favors for bundled contributions).  Instead, the court apparently viewed bundling as more analogous to independent expenditures, where the indirect benefit received by the candidate is viewed as insufficient to justify curtailment of First Amendment rights. 

            Even assuming the threat of bundling implicated a compelling interest, however, the Second Circuit concluded that the solicitation ban was not “narrowly tailored” to address that interest.  Without holding that any of these methods would necessarily survive strict scrutiny, the court identified several less restrictive alternatives to “address the perceived bundling threat.”  These included: (1) a direct ban on bundling itself; (2) a ban on large-scale efforts to raise funds, such as “a ban on state contractors organizing fundraising events of a certain size;” and (3) a ban on soliciting money only from certain individuals, such as banning contractors from soliciting money from employees and lobbyists from soliciting money from clients. 

            Accordingly, the court held that the solicitation ban violated the First Amendment with respect to both contractors and lobbyists.  It should be noted that this ruling, if it is followed by other circuits, would mean that federal laws to ban lobbyist fundraising face a high constitutional hurdle.  

The Second Circuit, Lobbying Regulation, and the “Appearance of Corruption”

In Green Party of Connecticut v. Garfield, decided last month, the Second Circuit considered a First Amendment challenge to Connecticut’s Campaign Finance Reform Act, a law that prohibited campaign contributions and fundraising solicitations by (1) state contractors and prospective contractors and (2) lobbyists.  The law also covered certain individuals, such as family members, associated with contractors and lobbyists. There are two aspects of this decision that I find of interest.  The first, which I will discuss today, involves the court’s application of the “appearance of corruption” standard to the ban on campaign contributions.  The court begins its analysis by finding that limitations on campaign contributions are not subject to the most exacting standard of review, strict scrutiny, but only the more relaxed “closely drawn” standard (under which a law will be upheld if it is closely drawn to match a sufficiently important governmental interest).  This is based on the theory that campaign contributions, while they implicate a First Amendment interest, are “closer to the edges than to the core of political expression.” Finding that CFRA was passed in response to several corruption scandals in Connecticut involving bribes paid to public officials by contractors and prospective contractors, the court had little difficulty in finding a sufficiently important public interest in limiting contractor campaign contributions.  The court had more trouble, however, justifying Connecticut’s total ban on such contributions.  The panel noted that a complete ban was a “drastic measure” and expressed skepticism that allowing small contributions by contractors would lead to actual corruption. Nevertheless, it concluded that the state had a strong interest in preventing even the appearance of corruption.  Noting that “Connecticut’s recent corruption scandals were widely publicized, and corruption involving contractors became a political issue,” it found the ban on contractor contributions “an appropriate response to a specific series of incidents that have created a strong appearance of corruption with respect to all contractor contributions.” Moreover, the Second Circuit upheld the contribution ban as applied to contactor “principals,” defined to include a wide range of officers, directors, shareholders and managerial employees, and family members, despite the absence of evidence that such individuals had been involved in the corruption scandals.  Although the court expressed reservations as to whether the bans on these individuals were in fact “closely drawn,” it decided that it should give the legislature leeway to define broadly the category of individuals who might be used as a conduit or means of circumventing the ban on contractor contributions.  It justified this decision on the grounds that “the recent corruption scandals in Connecticuthave shown that contractors are willing to resort to varied forms of misconduct to secure contracts with the state.” Turning to the ban on lobbyist contributions, the court observed that this prohibition was “markedly different” because “the recent corruption scandals in Connecticut in no way involved lobbyists.”  It therefore concluded that “there is insufficient evidence to infer that allcontributions made by state lobbyists give rise to an appearance of corruption.” It acknowledged that the public may distrust the lobbyists because of the perception that they wield undue influence over public officials.  However, the court rejected the proposition that such influence amounts to corruption: Influence and access, moreover, are not sinister in nature.  Some influence, such as wise counsel from a trusted advisor—even if that advisor is a lobbyist—can enhance the effectiveness of our representative government. Accordingly, the court held that the ban on lobbyist contributions was not “closely drawn” and therefore violated the First Amendment. The court’s differing treatment of contractors and lobbyists illustrates the vagaries of an “appearance of corruption standard.”  The court allows the public to jump to the erroneous conclusion that small contributions by contractors or prospective contractors are corrupting because some such entities have actually corrupted state officials in the past (albeit not through small contributions).  The court will also allow the public to jump to the erroneous conclusion that small contributions by principals or family members of contractors are indirect means of corruption, even though there is little or no evidence of such indirect means being used in the past.  But the court will not allow the public to jump to the erroneous conclusion that small contributions by lobbyists (or lobbyists’ families) are corrupting because, unbeknownst to the public, what it perceives as corruption is merely influence-peddling. It is worth noting that the Second Circuit’s ruling with respect to lobbyist contributions is in considerable tension with the Fourth Circuit’s 1999 opinion in North Carolina Right to Life v. Bartlett,  where the court upheld a North Carolina statute prohibiting lobbyists from contributing to state legislators while the legislature was in session.  Although the cases are distinguishable on the grounds that the North Carolina ban was much narrower than the one in Connecticut, the Fourth Circuit recognized a compelling state interest in preventing corruption and the appearance of corruption in restricting lobbyist contributions.  In doing so it explicitly rejected the notion that it needed to wait for a specific North Carolinascandal: While lobbyists do much to inform the legislative process, and their participation is in the main both constructive and honest, there remain powerful hydraulic pressures at play which can cause both legislators and lobbyists to cross the line. State governments need not await the onset of scandal before taking action. Thus, the court rejected the First Amendment challenge to North Carolina’s (more limited) ban on lobbyist contributions.

Toyota and Lobbying Disclosure

There has been a good deal of buzz regarding this Toyota internal document, which purports to show the various “wins” of the company’s Public Policy and Governmental/Regulatory Affairs office in Washington, D.C.   In particular, the media has focused the document’s claim that Toyota saved $100 million by negotiating a limited recall with respect to the sudden acceleration problem in the Toyota Camry. A different aspect of the document caught my attention, however.  Many of Toyota’s “wins,” including the recall issue and various rulemakings cited in the internal document, involve dealings with the National Highway Traffic Safety Administration (NHTSA), yet Toyota’s lobbying disclosure filings do not show any lobbying of NHTSA. This might be because Toyota’s communications with NHTSA did not involve “covered executive branch officials” under the Lobbying Disclosure Act.  Only a small number of officials at NHTSA, such as the Administrator, Deputy Administrator and other high-ranking officials, would qualify as “covered executive branch officials” under the LDA.  Communications with other NHTSA officials do not qualify as “lobbying contacts” and therefore may not trigger a reporting requirement.  To make matters more confusing, in some cases it may not be clear whether a particular official is covered or not. Even if Toyota communicated with a covered official, moreover, the communication still may not qualify as a lobbying contact.  The LDA exempts certain types of communications related to administrative proceedings from the definition of lobbying contact.  For example, communications in formal administrative hearings are exempted if they are made in accordance with written agency procedures.  In addition, written communications in public rulemaking proceedings are exempted (on the theory that these communications are available to the public anyway).  In many cases the applicability of these exceptions to particular communications may be less than clear, leaving it up to the judgment of the filer as to whether they need to be reported. Regardless of why Toyota’s filings fail to disclose its communications with NHTSA, this is another example of the disconnect between what the LDA identifies as “lobbying” and what the general public may perceive that term to mean.

Mark Patterson’s Executive Decision

It’s worth taking a closer look at the “issue areas” that Mark Patterson, the former Goldman Sachs lobbyist now serving as the chief of staff to Treasury Secretary Geithner, is restricted from participating in, and asking how these prohibitions might be interpreted and enforced. Today let’s look at the issue of executive compensation.

Under the terms of Treasury’s February 4, 2009 recusal memorandum, Patterson is prohibited from involvement in “shareholder votes on executive compensation.” This prohibition evidently stems from Patterson’s 2007 lobbying against H.R. 1257, a bill supported by then-Senator Obama, which would have authorized shareholders to vote on executive compensation packages. As this article notes, Goldman Sachs CEO Lloyd Blankfein, who received compensation of about $70 million in 2007 (though a mere $9 million for 2009), was not a fan of this proposal, and Patterson was one of the lobbyists who (successfully) tried to kill it. Thus, “a Washington influence-peddler who worked against Obama’s effort to limit excessive corporate pay is now a key member of the Obama administration team that is supposed to contain excessive compensation in the AIG case and in general.”

The authors were told by Treasury that Patterson “recused himself from discussions on this and all other issues he worked on during his time in the private sector.” They then ask “Does this mean that Geithner’s chief of staff cannot be involved in conversations and decisions regarding corporate compensation issues, including the AIG bonuses? If so, wouldn’t that place Geithner at a disadvantage as he tries to handle such matters?”

But Patterson’s recusal memorandum doesn’t prohibit him from involvement in all corporate compensation issues, only “shareholder votes on corporate compensation.” Does Treasury interpret this to allow Patterson to be involved in all executive compensation issues so long as shareholder voting isn’t involved? And if shareholder voting is involved, is Patterson excluded from the entire issue, or can he simply decline to “participate” (leave the meeting, cover his ears?) when shareholder voting comes up?

Judging by Treasury’s response to my FOIA request, there is no documentation as to how the recusal memorandum has been implemented, nor any documentation of Patterson actually being recused from any particular meeting, appointment or matter. It would appear, therefore, that the Treasury General Counsel is not making case-by-case rulings on the memorandum, or at least not issuing formal instructions to Treasury officials with respect to its requirements. Instead, it would seem that it is up to Patterson, consulting the GC’s office as he deems fit, to interpret and apply the memorandum’s prohibitions.

It is hard to say for sure how Patterson has handled the executive compensation issue. His calendars, however, suggest that he has participated in matters relating to executive compensation. For example, Patterson was intimately involved in preparing Treasury Secretary Geithner for meetings, testimony, speeches and press interviews in March 2009, when the issue of AIG bonus payments was the hot topic of every event. It seems virtually certain that Patterson participated in the AIG bonus issue, and indeed a March 28, 2009 calendar entry shows he participated in a conference call “follow up on AIG discussion.”

Did the recusal memorandum have any practical effect on Patterson’s ability to participate in executive compensation issues or to influence executive compensation decisions in a manner that might benefit Goldman Sachs? Did the interpretation and application of this memorandum fall entirely on Patterson, operating on the honor system? These might be interesting questions for some congressional investigation.

Treasury’s Lobbying Loopholes

About a year ago I noted that it was difficult to see how Mark Patterson, the former Goldman Sachs lobbyist who now serves as chief of staff to Treasury Secretary Tim Geithner, could join the administration without a waiver of the Obama Executive Order regarding former lobbyists.  It subsequently appeared that Patterson would be appointed without a waiver, and that his recusal would not be based on Goldman Sachs’s public lobbying filings, but on a secret list of issues that Patterson and the Treasury General Counsel had developed. 

This February 4, 2009 memorandum from the Treasury General Counsel’s office, which I obtained through a FOIA request, confirms that this is indeed how Patterson was appointed.  The Treasury Department is not prohibiting Patterson from participating in many of the specific issue areas listed in Goldman’s 2008 and 2007 lobbying reports.  Instead, the General Counsel’s office came up with a smaller and narrower (although still substantial) list of issues from which Patterson must be recused. 

            It is not clear exactly how Treasury came up with this list, but here are a few possibilities.  First, some of the issues on the Goldman report are so general (e.g., “general economic conditions” and “investment banking issues”) that they may not be thought to qualify as “specific issues” at all, although this term is not defined either in the LDA or the E.O.  Second, the Treasury memorandum emphasizes that the issue must involve a “particular matter,” which means the matter must be focused “on the interests of specific persons, or a discrete and identifiable class of persons.”  Thus, one might suspect that Treasury excluded some issues on the grounds that they did not involve a particular matter at all.  This, however, seems less likely when one considers that all of the issues listed by Treasury involve general public policy questions, and it is difficult to see how these issues would be any more focused on Goldman Sach’s interests than most of the issues it chose not to list.  

            Third, Treasury may have determined that Patterson did not in fact lobby or work on some of the issues that are listed in the Goldman reports.  Since the reports only identify the lobbyists who engaged in lobbying activities with respect to each general issue area, it is possible that Patterson did not work on some of the specific issue areas listed in the reports.  Moreover, the Treasury General Counsel’s office apparently decided that Patterson did not need to recuse himself from “auction rate securities” matters because he merely “facilitated” briefings of congressional staff by his Goldman Sachs colleagues.  In the (debatable) judgment of the G.C.’s office, this activity did not constitute “lobbying” within the meaning of the Executive Order.   

Finally, Treasury may have decided to more narrowly define some of the issues that Goldman listed on its report.  For example, Goldman listed “over-the-counter derivatives” as one of the specific issues on which it had lobbied.  Treasury, however, precludes Patterson from participating only in “energy derivatives.”  

            I have previously suggested some of the deficiencies in Treasury’s approach to this issue: 

What are the problems with this approach?  First, it seems inconsistent with the E.O.’s purpose in basing its restrictions on the LDA.  Presumably, the reason for using the LDA is that it provides an objective and publicly available record of who is a lobbyist, who was lobbied and what subjects were lobbied on.  Allowing individual appointees and their agencies to deviate from the public record based on arbitrary and undisclosed criteria hardly seems designed to enhance public confidence in the process.  

Second, there are bound to be questions raised with regard to discrepancies between LDA forms and the recusal decisions of particular agencies.  How does the administration know that Goldman’s LDA form does not accurately identify the issues Patterson worked on?  Is it making its determinations solely on Patterson’s current recollection?  Has it looked at the records underlying the LDA filing? 


Some of these deficiencies are illustrated by the follow-up Treasury memo of March 19, 2009, which expands the restricted issue list to include “alternative energy investment tax credits,” based on the fact that Patterson “recently recalled” working on this issue during his employment at Goldman.

Perhaps an even more serious question is raised with respect to Treasury’s approach to section 3(c) of the E.O., which bars a former lobbyist from appointment “with any executive agency that [he or she] lobbied within the [prior two years].” Goldman’s reports indicate that Patterson lobbied the Treasury Department with respect to financial issues in 2007, which would have barred him from his current position. The Treasury General Counsel, however, “determined after careful consideration that the informational briefing that you provided at the request of a Treasury official in July 2007 did not constitute lobbying.”

This determination, which is not further explained in the memorandum, seems very questionable. Even if the briefing was given at the request of a Treasury official, this would not exempt it from the definition of “lobbying contact” under the LDA (see Section 3(8)(B)(viii) of the LDA). Moreover, even if the briefing were not a “lobbying contact” (if, for example, no covered executive officials were present), it still seems very likely that it would constitute “lobbying activity” (ie, activity in support of lobbying contacts) under the LDA.

Whether or not Treasury’s determination is defensible under the literal terms of the E.O., one should step back and consider the situation in terms of the administration’s supposed aversion to employing lobbyists. Patterson’s calendars for the first half of 2009 reveal, as one would expect, that he has been involved in the major issues facing the department, including matters such as the auto bailout, TALF/TARP, the stimulus, housing, regulatory reform, stress tests, “munis” (perhaps referring to issues concerns the safety of municipal bonds), and the Public Private Investment Program for buying up toxic assets.

Many of these issues clearly have a major impact on Patterson’s former employer. Goldman Sachs, for example, was a TARP recipient which announced in early 2009 that it wished to exit the TARP program as soon as possible, which it did in June 2009. Patterson participated in various meetings regarding TARP, including a June 4, 2009 meeting regarding “TARP repayment.” If one believes (as the Obama administration presumably does) that lobbyists are predisposed to favor the interests of their former employers, why wouldn’t one be just as concerned about Patterson’s involvement in these issues as in the issues listed in Treasury’s memorandum? And if, on the other hand, one believes that Patterson can be trusted to put the public interest over that of Goldman Sachs, what is the point of requiring Treasury to find loopholes in the E.O. in order to hire him?

Andy Stern and the Unbearable Lightness of Being (a Lobbyist)

           Andrew Stern (no relation), president of the Service Employees International Union (SEIU), was a registered lobbyist for SEIU until February 20, 2007, when SEIU de-listed him and 15 others in a Lobbying Disclosure Report.  Prior to that time, SEIU had listed Stern as a lobbyist on several issues, including health care, immigration and labor matters.    

            Stern’s de-listing has been challenged by two limited government advocacy groups, who point to publicly available information that Stern continues to engage in extensive lobbying activities.  In a letter to the Clerk of the House, Secretary of the Senate, and Acting U.S. Attorney, they point to the fact that White House logs show that Stern visited covered executive branch officials on 11 occasions in the first quarter of 2009, and on 10 occasions in the second quarter.  In addition, they provide evidence suggesting that Stern regularly met with Members of Congress and other covered legislative branch officials during this period. 

            There can be little doubt that Stern had sufficient “lobbying contacts” (defined by the LDA as communications with covered officials regarding virtually any policy matter) to qualify him as a “lobbyist” under the law.  However, to qualify Stern must also have spent at least 20% of his time on “lobbying activities,” which are defined to include both lobbying contacts and efforts in support of such contacts, including preparation, research, planning and coordinating with the lobbying activities of others. 

            If Stern is assumed to work a 40 hour week, he would have 520 work hours in a quarter.  Thus, he would have to spend 104 hours on “lobbying activities.”  It seems unlikely that Stern, or almost anyone else, would spend that much time on lobbying contacts alone.  If Stern spent an average of two hours on each White House visit and spent a like amount in direct communications with the Hill, this would still be less than half the amount of time required to qualify as a lobbyist.   

            Thus, even if one could identify all of Stern’s lobbying contacts and determine exactly how much time he spent on them, it is unlikely that it would add up to 104 hours.  Therefore, one would have to come up with some way of determining how much time Stern spent on other activities in support of lobbying contacts.  No doubt Stern spends some amount of time on direct preparation for lobbying contacts.  But it is likely that he spends a good deal more time on activities, such as learning about and discussing the public policy issues at the core of SEIU’s lobbying, that cannot be unambiguously categorized as lobbying or non-lobbying. 

            In order to determine whether Stern qualifies as a lobbyist, one would first have to have some source of information to determine the number and duration of his lobbying contacts, then to identify and quantify the time spent on direct lobbying support, then to identify and allocate the time spent on ambiguous activities and finally to compare the resulting number to an estimate of Stern’s total work hours (which are probably much higher than 40 hours a week).  This might be doable for some people who are full-time lobbyists and/or bill by the hour, but it would be very difficult for Stern and many others. 

            In short, while there seems little doubt that Andy Stern spends a good deal of time lobbying the highest levels of government (indeed just today he was scheduled to meet with the President to discuss a proposed tax on high-cost insurance plans), the determination of whether he qualifies as a “lobbyist” within the meaning of the LDA will likely come down to his own guesstimate.  The simple fact is that the LDA was designed to provide a broad overview of the amount and type of lobbying performed by various interest groups; but the vagueness of its definitions, the lack of recordkeeping requirements and the minimal enforcement make it a very unreliable instrument for determining who is a “lobbyist.”

Spin City

           There was a minor flap last week when the White House claimed that this Congressional Research Service report (entitled “Lobbying the Executive Branch: Current Practices and Options for Change”) vindicated the administration’s lobbying policies.  The White House claim was reported rather uncritically by the media, including Kenneth Vogel of Politico.  In an article entitled “President Obama’s lobbying reforms praised by Congressional Research Service,” Vogel wrote that “congressional researchers concluded that the administration’s crackdown has ‘already changed the relationship between lobbyists and covered executive branch officials’ and suggested that Congress might consider enacting similar restrictions on itself.”  On the White House blog, meanwhile, Norm Eisen wrote “[w]e’re pleased that CRS recognized . . . the President’s historic restrictions on lobbying are having a significant impact in making sure that the government serves the public interest and not special interests.” 

            Anyone who has read a lot of CRS reports would understand that how unlikely it is that CRS would make an unqualified judgment about anything, much less express an amorphous and subjective opinion such as that implied by Politico and the White House.  In fact, if one reads the CRS report, it is apparent that CRS makes no judgments about the wisdom, efficacy or significance of the Obama administration’s lobbying policies.  It simply identifies the various policies that have been adopted, summarizes critiques of those policies, and notes several potential options for additional regulation.  The interpretation adopted by the White House and Politico is based solely on part of the first sentence of the following paragraph, which appears at the top of page 13 in the report: 

Creation of restrictions on federally registered lobbyists’ access to executive branch departments and agencies has already changed the relationship between lobbyists and covered executive branch officials. If desired, there are additional options which might further clarify lobbyists’ relationships with executive branch officials. These options each have advantages and disadvantages for the future relationships between lobbyists and governmental decision-makers.  CRS takes no position on any of the options identified in this report. 

            It seems clear that the phrase “changed the relationship” is part of an awkwardly worded transitional sentence and signifies nothing more than the undisputed fact that the administration has imposed certain new restrictions and requirements on lobbyists and lobbying communications with the executive branch.  Nowhere in the report is there any attempt by CRS to evaluate the real world impact of these changes or to draw any conclusions regarding their effectiveness.  In other words, CRS is observing that reforms have been made, not “praising” them.  

            One can perhaps understand Norm Eisen’s attempt to spin the CRS report in the most favorable light to the administration.  But what’s Kenneth Vogel’s excuse?