In recent weeks, the Obama Administration has moved to implement a series of new guidance documents that clarify requirements for potential Administration appointees, as well as guidance that imposes substantial new restrictions on contacts with the Administration by registered lobbyists.
The American Recovery and Reinvestment Act
On March 20, 2009, President Obama released guidance related to outside communications with federal agencies related to funding and programs under the American Recovery and Reinvestment Act (“ARRA” or “the Act”). The guidance memorandum clarifies the permissible use of funds under the Act and provides criteria by which departments and agencies shall evaluate projects and applicants. The memorandum also implements restrictions and reporting requirements on lobbyist communication with the Administration regarding implementation of ARRA programs and funding. The memorandum applies only to Division A of the Act and specifically excludes the tax-related provisions in Division B.
Direction of Funds
The guidance memorandum explicitly states that funds under the ARRA shall not be used to support any projects described in §1604 of the Act, which states, “None of the funds appropriated or otherwise made available in this Act may be used by any State or local government, or any private entity, for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool.” Further, the memorandum outlines four criteria by which to evaluate ARRA projects, applications and applicants for funding, stating that executive departments and agencies shall not support or approve any project that does not further job creation, economic recovery, and other purposes of the Act. To ensure merit-based decision making for grants and other forms of financial assistance, projects must demonstrate the potential ability to meet the following criteria:
- Deliver programmatic results;
- Achieve economic stimulus by optimizing economic activity and the number of jobs created or saved in relation to the Federal dollars obligated;
- Achieve long-term public benefits by, for example, investing in technological advances in science and health to increase economic efficiency and improve quality of life;
- investing in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits;
- fostering energy independence or improving educational quality; and
- Satisfy the Act’s transparency and accountability objectives.
Where executive departments or agencies lack discretion under the ARRA to refuse funding for projects not able to meet the funding criteria, the department or agency shall immediately consult with the White House Office of Management and Budget (OMB) about the project and its funding requirements. Where legally permissible, the department or agency shall: (i) delay funding of the project for 30 days, or the longest period permitted by law if less than 30 days, in order to ensure adequate opportunity for public scrutiny of the project prior to commitment of funds; and (ii) publish a description of the proposed project and its funding requirements on the agency’s recovery website as soon as practicable before or after commitment, obligation, or expenditures of funds for the project. Executive departments and agencies are directed to monitor contractors, grantees, and other recipients of federal financial assistance to ensure continued compliance.
Communication with the Administration
The guidance memorandum places restrictions and reporting requirements on all communications between lobbyists registered under the Lobbying Disclosure Act (LDA) and any executive department or agency official regarding the ARRA. Officials in the Administration must ask upon the scheduling of an oral communication (in-person or telephone call) whether any of the communicating parties are registered lobbyists. No lobbyist may attend or participate in any oral communication concerning particular projects, applications, or applicants for funding under the Act. However, a lobbyist may submit a communication in writing. All written communications from a registered lobbyist concerning the commitment, obligation, or expenditure of funds under the Act for particular projects, applications, or applicants shall be posted publicly by the receiving agency or governmental entity on its recovery website within three business days after receipt of such communication.
Lobbyists may orally communicate with Administration officials only on general ARRA issues, provided that the Administration official document in writing: (i) the date and time of the contact on policy issues; (ii) the names of the registered lobbyists and the officials) between whom the contact took place; and (iii) a short description of the substance of the communication. The writing must be posted publicly by the executive department or agency within three business days of the communication. Examples of such permissible communications include discussions concerning rules governing the implementation of the health information technology provisions, or the Treasury Grant Program allowing taxpayers to receive grants in lieu of tax credits for certain renewable energy properties. The task of inquiring at the outset of communication, as well as the recording and reporting of any communication between an official and a lobbyist, falls on the executive department or agency. The burden does not lie with the lobbyist, though lobbyists must abide by the restrictions.
An employee (officer or executive) of a company is permitted to communicate with an Administration official, even though that company’s lobbyist is prohibited from doing so. Simply talking to an official about a specific project does not constitute lobbying. Registration as a lobbyist under the LDA is required only when specific activity thresholds are met with respect to the number of contacts with officials and the amount spent engaged in “lobbying activity” under the LDA.
The guidance memorandum orders the Director of OMB to administer the responsibilities outlined in the memorandum, and calls for a review of the implementation of the memorandum within 60 days, with any recommendations to be directed toward the President.
The memorandum and guidance issued by the Administration has already been subjected to significant criticism from a number of outside groups. In a letter to the White House, Citizens for Responsibility and Ethics in Washington (CREW), the American Civil Liberties Union (ACLU), and the American League of Lobbyists (ALL) urged President Obama to rescind the communications ban on lobbyists. These groups assert that the guidance memorandum violates the First Amendment as a restriction on speech, and that the restrictions are too narrow - applying only to registered lobbyists. The White House responded by asserting the legality of the directive, a move which may result in the groups filing a lawsuit to challenge the rules.
OGE Guidance: “Who Must Sign the Ethics Pledge?”
On March 16, 2009, the U.S. Office of Government Ethics (OGE) released guidance regarding which executive agency employees must sign the Ethics Pledge laid out in the President’s January 21, 2009 Executive Order (EO 13490). OGE also provided further details on who in the executive branch must adhere to the lobbyist gift ban contained in the pledge. According to the OGE guidance to agency ethics officials, the Ethics Pledge provision of EO 13490 was intended to apply to full-time political appointees of all types.
The following employees must sign the Ethics Pledge:
- Senior Foreign Service members who are considered non-career or political appointees (e.g., political Ambassador appointees);
- Career Senior Executive Service (SES) members who are appointed to positions requiring Senate confirmation or to other Presidentially-appointed positions that ordinarily are viewed as non-career; and
- Non-career term appointees who are full-time and were appointed or reappointed on or after January 20, 2009.
The Ethics Pledge does not apply to the following employees:
- Special government employees (SGEs);
- Career Senior Foreign Service members (e.g., career Ambassadors);
- Career staff appointed to serve as temporary confidential assistants to agency leaders;
- Certain Schedule C employees who have no policymaking role (e.g., secretaries);
- Career officials acting temporarily in the absence of an appointee to a non-career position;
- Career appointees temporarily detailed to a position normally occupied by non-career appointees; and
- Term appointees appointed prior to January 20, 2009.
The Ethics Pledge does not apply to individuals appointed prior to January 20, 2009, and the Administration will provide a 100 day grace period for holdover appointees. However, the OGE guidance notes that the Administration is considering requiring holdover appointees to sign the Ethics Pledge at some point beyond the 100 day grace period. In situations where holdover appointees are asked to remain on as President Obama’s choice for that position, those appointees will be asked to sign the Ethics Pledge.