On March 20, 2009, a Presidential Memorandum was issued to provide additional guidance to federal agencies on ensuring responsible spending of funding authorized by the American Recovery and Reinvestment Act (Recovery Act). The Memorandum directs changes in three key areas in how the Government distributes grants and funds under the Recovery Act.

First, executive departments and agencies are directed to develop transparent, merit-based selection criteria to guide the use of Recovery Act funds, to further the goals of job creation, economic recovery, and other purposes of the Recovery Act. According to the memorandum, the criteria should be designed to support projects that have a demonstrated or potential ability to:

  • 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," for example, by investing in technological advances, transportation, environmental protection, energy independence, educational quality and other infrastructure; and
  • satisfy the Recovery Act's transparency and accountability objectives.

Second, executive departments and agencies are instructed to avoid any project that is "imprudent or that does not further the job creation, economic recovery, and other purposes of the [Recovery] Act." Certain presumably "imprudent" projects, such as casinos, are identified in the memorandum.

Finally, the Presidential Memorandum imposes new restrictions on lobbying activities in connection with Recovery Act projects. Under these restrictions, agencies are instructed that any communication by a registered lobbyist regarding a particular project, program, application or applicant must be submitted in writing, and must be posted on the applicable agency recovery website within three business days. Agencies are permitted to engage in oral communications with registered lobbyists regarding "general Recovery Act policy issues," so long as those communications do not "extend to or touch on particular projects, programs, applications or applicants . . . ." Finally, agencies must post on their recovery websites a summary of any oral communications with any registered lobbyist, regarding "general Recovery Act policy issues," to include the names and dates of those attending as well as a "short description of the substance of the communication."

The memorandum directs OMB to issue implementing guidance to the heads of executive departments and agencies, and to make recommendations for any modifications or revisions to the memorandum within the next 60 days. Wiley Rein is following these developments closely, and will issue additional alerts as additional guidance is issued.