K Street Exploits Stimulus Lobbying Loophole

After the Obama administration levied strict new rules on stimulus-related lobbying late last month, K Streeters didn’t just get mad, they got creative. Under the March 20 directive, federal agencies must disclose lobbying contacts on stimulus issues and post them online. And, if lobbyists wish to influence government officials on particular stimulus projects, they have to put these requests in writing—communications that are also to be made public by the relevant government agencies.

Naturally, lobbyists bristled at this attempt to foist transparency on their opaque world. But it didn’t take long for the influence industry to devise a very simple workaround: use non-lobbyists to lobby on the $787 billion stimulus. The Wall Street Journal reports that “the rule has brought in a slew of work for nonregistered lawyers, who can call or meet with officials without submitting requests in writing.” (That is, so long as they don’t spend more than 20 percent of their time peddling influence, in which case they would be legally required to register as a lobbyist.) “Where there’s any issue, it’s just easier to hand it off to somebody who’s not registered,” one lobbyist told the Journal. “Certainly people are helping out who normally wouldn’t be engaged in this.”

The “recovery” Web sites of federal agencies overseeing billions in stimulus funds would appear to bear this out. Of those that do include sections detailing lobbyist contacts and communications, most have few if any entries. The Department of Transportation’s  site, for instance, features a lone piece of correspondence [PDF] from Ferguson Group lobbyist Matt Ward, who’s representing the city of Stamford, Connecticut. The letter requests a meeting to discuss obtaining stimulus funds for a handful of “mega-infrastructure projects.” Likewise, NASA, the Small Business Administration, and the Interior Department are each reporting a single lobbyist contact. The Web sites of the General Services Administration and the Commerce Department disclose two apiece. And the Department of Energy has made public three “communications with interested parties.” According to the Sunlight Foundation, a host of federal agencies controlling stimulus funds—including the departments of Homeland Security, Education, and Housing and Urban Development—have yet to post lobbyist communications.

Surely, with nearly billions in economic recovery funds to be doled out, lobbyists and their clients aren’t simply crossing their fingers and hoping for a piece of the action. They’ve simply found a way to game the system. It’s not as if the Obama administration wasn’t warned that something like this would happen. After the directive was released, Citizens for Responsibility and Ethics in Washington (CREW), the ACLU, and American League of Lobbyists sent a letter [PDF] to the White House asking Obama to rescind the rules, which the groups called “an ill-advised restriction on speech and not narrowly tailored to achieve the intended purpose.” The groups warned: “Instead of increasing the transparency and accountability, this action will encourage participation by people who are not required to register and abide by the rules set forth in the stringent regulations that govern lobbyists. To be clear, this action will decrease transparency and accountability. Moreover, it will also discourage accurate reporting under the Lobbying Disclosure Act—especially for those who are on the cusp for meeting the definitional  requirement of a ‘registered lobbyist.’”

In a strange turn of events, it was actually CREW’s cofounder, Norm Eisen, who helped to devise the administration’s tough stimulus lobbying rules. Last Friday, Eisen, now Obama’s special counsel for ethics and government reform, and other White House officials met with the aggrieved groups to hear their complaints. But it appears the administration is so far standing firm on the restrictions, whether or not they are having the desired effect. According to Eisen, “We told them we believed the restrictions were tough but fair to make sure that lobbyist communications are as transparent as possible, and that stimulus decisions are based on the merits.”


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