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The Sunlight Foundation Blog
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Is Obama’s Revolving Door Rule Bad Policy?
Jacob Weisberg has a good article up on Slate (also, Newsweek) on whether the revolving door policy instituted by President Obama is constructive. Weisberg’s contention is that the policy, by being overly broad, places both profiteering, private interest lobbyists in the same barrel as public interest, non-profit lobbyists, preventing would be public servants from serving simply due to an arbitrary designation. Is this correct… or just slightly overblown?The revolving door policy, as established by the President under an Executive Order, states that no one who was a registered lobbyist in the past two years may take a position at an agency if they lobbied that agency or if the agency handles issues that they were hired to lobby on. This policy comes with a possibility of a waiver, which has been applied to a few appointees.
These appointees pretty fairly split between what most would consider the more objectionable private interest lobbyists–William Lynn, Raytheon lobbyist turned deputy Secretary of Defense and Mark Patterson, Goldman Sachs lobbyist turned chief of staff to Treasury Secretary Timothy Geithner– and public interest lobbyists–William Corr, anti-tobacco lobbyist turned deputy Secretary of Health and Humans Services, Jocelyn Frye, National Partnership for Women and Families gerneral counsel turned Director of Policy and Projects in the Office of the First Lady, and Cecilia Muñoz, Senior Vice President for the National Council of La Raza turned Director of Intergovernmental Affairs. While the administration is nowhere close to filling all of the key jobs, reports show that Obama is ahead of recent presidents in appointing his team. It doesn’t seem that this policy is necessarily hampering his ability to fill these important jobs.
The key case, and most glaring one, that Weisbarg points to–previously reported by Laura Rozen at Foreign Policy–is that Tom Malinowski, the director of the Washington office of Humans Rights Watch, a pro-human rights organization, was forced to withdraw his name from consideration to head the State Department’s Democracy, Human Rights, and Labor Bureau after the administration came under attack for granting the first lobbyist waiver to Raytheon lobbyist William Lynn.
This is where the problem becomes acute and where Weiberg gets it right. As the administration set up a high legal barrier to employing lobbyists, helped by a whole bunch of anti-lobbyist rhetoric during the 2008 campaign, it became difficult for them to bend those rules by granting waivers. Had the administration simply chosen to self-select which lobbyists would be appropriate to hire, as they seem to be doing under the waiver rule, without implementing an Executive Order, they wouldn’t face the political peril of constantly being called out for issuing waivers to circumvent their own rule, thus driving away public servants like Malinowski. Weisberg calls these rules “counterproductive,” when the same effect could have been made through “explanation and symbolism.”
Of course, the counter argument would be that anything less than a legally binding rule would not have the power to constrain the ever-spinning revolving door. We’ve seen numerous instances, on ethics and transparency issues, where legally binding language is required in the absence, or even existence, of good intentions. If the Obama team was sincere on keeping lobbyists out of government, did they need to issue this order? And is there a way out of lumping public interest lobbyists with those working for the private interest?
To the latter question, I’d say no. Not only is the administration not going back on their Executive Order to the type of policy Weisberg supports, but creating a distinction between for-profit and non-profit lobbyists would cause its own set of problems. There are quite a few non-profits that are fronts for, or act in support of, a particular industry. These non-profit lobbyists are absolutely different from public interest lobbyists. This could require yet another distinction, signalling that the whole process of unlumping registered lobbyists would create even further arbitrary and counterproductive decisions. Even worse, some lobbyists may simply choose to deregister to not face the future stigma. As Weisberg writes, “Allowing a few arbitrary exceptions to this kind of bad policy only makes the unfairness worse.”
It turns out that Washington lobbyists are not quite the uniform bunch of scoundrels that campaign rhetoric might have us believe. Crafting a revolving door policy brings these differences out for all to see. Is the current policy acceptable or should it be altered? And what would an ideal revolving door policy look like?
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The Revolving Door Spins in CEO Pay Protector
In the back-and-forth regarding who inserted the retroactive bonus immunity provision into the stimulus bill, we were repeatedly treated to on-air dodgeball acrobatics as both Sen. Chris Dodd and Treasury Secretary refused to name the Treasury staffers who could have pressed for this provision. While Geithner has owned up to his role and his support for the bonus immunity provision–on the grounds that a legal challenge could invalidate the entire stimulus bill–it would be worth our time to take a look at one member of Geithner’s staff: his chief of staff. Mark Patterson is a former lobbyist for Goldman Sachs who has lobbied for pretty much every position that the administration is now openly opposing.
David Corn, in Mother Jones, dives into this revolving door drama:
On Wednesday afternoon, as President Barack Obama was leaving the White House for a town hall meeting in California, he spoke for 15 minutes to reporters about the AIG controversy. Responding to the rising rage over the $165 million or so in bonuses paid to executives at the bailed-out insurance firm, Obama noted that he was quickly developing policies to prevent future AIG-like catastrophes. And he slammed Wall Street’s culture of “excess greed, excess compensation, excess risk taking.” To demonstrate that he’s committed to battling such greed, the president cited his work in the Senate to rein in executive compensation. Noting that he and Rep. Barney Frank (D-Mass.) had each introduced legislation on this front in 2007, Obama declared that “there were some people who attacked us, saying government has no business doing that.”
One of Obama’s opponents at that time was Mark Patterson, a lobbyist then for Goldman Sachs, the investment banking firm, which opposed the Frank-Obama initiative. Yet Patterson is now chief of staff to Treasury Secretary Timothy Geithner, the embattled point man in the Obama administration’s endeavor to undo the notorious AIG bonuses. That is, 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.
Corn notes at the end of his post that, according to Treasury spokesmen, Patterson has recused himself from discussion regarding Goldman Sachs and issues he was previously paid to lobby. This still creates a serious conflict for Geithner, as Treasury is being partly managed by a former Goldman lobbyist. Geithner is also placed in a tough position considering that his chief of staff is limited in the areas in which he can work (supposedly).
For those who ask, didn’t Obama plan on not allowing the influence of lobbyists into his administration, here’s a handy chart showing the 30 individuals in his administration who were registered as lobbyists at some point during the past five years. Now not all of these persons are objectionable for their lobbying (lobbying on public interest issues is rather different than private interest), but it clearly flies in the face of a lot of remarks we heard during the campaign trail. National Journal’s Julie Kosterlitz has a good article on this today as well.
Looking at the Dodd-Geithner-AIG-Stimulus secret provision quadrangle, the real problem may be who the decision makers listen to. If their top advisors are former Goldman Sachs lobbyists previously hired to lobby against tame executive compensation bills, then we can begin to assume where their positions come from.
