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The Sunlight Foundation Blog
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A Closer Look at CRS’s Recent Report “Lobbying and the Executive Branch”
The Congressional Research Service just released a report entitled “Lobbying and the Executive Branch: Current Practices and Options for Change.” It reaches an unsupported conclusion about the effect of the administration’s lobbying disclosure rules, and also contains several factual and analytical errors. Ultimately, the Administration needs to do more to disclose lobbying contacts online, in real time, in one place, and in machine readable formats.
Changing the “relationship”?
The big story is CRS’s conclusion that the “[c]reation of restrictions on federally registered lobbyists’ access to executive branch departments and agencies has already changed the relationship between lobbyists and covered executive officials.” (emphais added) However, the report does not explain the sense in which the term “relationship” is used, or whether these rules have changed the effectiveness of lobbying efforts and opened up the policy-making process to the public.
Unsurprisingly, Obama Ethics Advisor Norm Eisen hailed the report’s findings on the White House blog, writing:
We’re pleased that CRS recognized a fact that is apparent everyday to those of us who work in government: 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.
Mr. Eisen and CRS may be right that these new rules have rebalanced the role that lobbyists play in Washington. Indeed, the administration notes its efforts with regard to disclosing and limiting lobbying on the Main street and Wall street bailouts, its request that lobbyists not serve on advisory boards, and imposing new ethical requirements. However, we don’t have enough information to reach the conclusion that these rules have had a significant impact. There’s a lot more that should be done.
Errors in the CRS Report
The report erroneously states (p. 4) that the EESA (a.k.a. TARP or the Wall Street bailout) lobbying rules came into effect in January, when the rules were not issued until September. Although the Treasury Department issued a press release on January 27, 2009, stating that it would issue these rules, an August Investigator General report criticized Treasury for not promulgated the rules, which were published online in September. (Indeed, Mr. Eisen’s blogpost says September 10th is the date). Thus far, only four lobbying contacts have been disclosed, with the earliest reported contact being in September. Treasury deserves little credit for its late and lackadaisical approach to disclosing TARP lobbying contacts. (Continue reading…)
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TARP Lobbying Disclosure: What a Difference a Day Makes
Yesterday, I called the Treasury Department in one last ditch effort to find their TARP Lobbyist Contact Disclosure Forms. I did so as final due diligence before publishing this blogpost, earlier today, in which I evaluated the TARP lobbying disclosure rules. In it, I noted that the required disclosure forms were eerily absent from Treasury’s website.
This afternoon — voila! — 2 disclosure forms appeared. One form is dated 10/9/2009, and the other is dated 9/22/2009. Now, Treasury is required to publish these forms within 3 days of the lobbying contact, so we know that both of these forms were published outside of the 3 day window required by Treasury’s own rules. (At a minimum, they weren’t published here.)
What is also interesting is that there are only two lobbying contacts reported. This leads to a couple of possible implications: (1) Treasury has more forms to publish, perhaps some of which are late; or (2) Treasury has no more forms to publish right now. For the latter to be true, either no one has talked to Treasury about spending TARP funds over the last month, or the lobbying disclosure rules don’t have a lot of bite and missed capturing lobbying communications.
It will be interesting to see what appears on their website in the upcoming days and weeks. I am still waiting for that phone call back from Treasury about my question: where are the rest of the lobbying contact disclosure forms?
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The TARP Lobbying Rules: What They Say And What They Mean For Transparency
In September, the Treasury Department released its TARP lobbying disclosure rules, nearly eight months after a press release heralding their creation, and a month after an Inspector General report bluntly urged Treasury to promulgate the rules. The rules require that the Treasury Department document communications through which companies lobby for TARP funds. Commonsense rules that increase transparency regarding lobbying communications can have the beneficial effect of reducing the likelihood and appearance of corruption, fostering better dialog, and enhancing the public’s faith in the political process.
The rules promulgated by the Treasury Department attempt to meet the great challenge of improved transparency, but fall short of their potential. They are hard to understand, difficult to apply, and full of contradictions and omissions that undermine stated policy objectives. The rules should be clarified, rewritten, simplified, and broadened.
My initial review of the rules identified some key differences between the TARP lobbying rules and the stimulus lobbying rules, which were issued over the summer and document lobbying over recovery dollars. In the following sections, I analyze the TARP lobbying rules in considerable detail. Before doing so, here are two measures the Treasury Department should consider.
First, Treasury should implement an online searchable lobbying database of all disclosures required under the rules, which is updated in real-time. The public database should be searchable by date, communicant, subject matter of the conversation, and so on. The burden of collecting that data could be reduced by allowing staff to submit reports online.
Regardless of whether this database is built, all of the documents that the lobbying rules require be disclosed should be available in an easy-to-find place online. So far, I have been unable to find the lobbying communication reports on Treasury’s website. The rules require that those reports be made available online within 3 days of a disclosable communication taking place. A phone call to Treasury seeking assistance with finding the disclosures has not yet been returned.
Second, Treasury (and the administration generally) should reconsider the format it uses to promulgate rules. Short, terse, lawyerly language, such as that contained in the TARP lobbying rules memo, is difficult for most people to follow. Treasury should use straightforward language, and define all key terms. Moreover, linguistic sign posts, such as improved headings and sub-headings, would provide a welcome roadmap. Furthermore, adding charts and decision trees to help explain the rules would provide a welcome complement to dense prose.
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Treasury Releases TARP Lobbying Rules
According to the Hill, yesterday the Treasury Department released its rules regarding “Communications With Registered Lobbyists And Other Persons About Emergency Economic Stabalization Act Funds.” The rules are available on Treasury’s web site, but there’s no press release and no obvious hyperlink as of the time I am writing this blogpost, nearly a day later.
In late August, I wrote about the Special Inspector General’s report that dinged Treasury for taking so long to release its rules for TARP (financial bailout) lobbying. It took Treasury 226 days to release these rules, since January 27th when the agency issued a self-laudatory press release announcing its plan to “develop new rules to increase transparency and curtail potential lobbyist influence.”
Having now (quickly) read the TARP lobbying rules, they pretty much follow the Recovery Act lobbying rules initially promulgated on April 7 and revised on July 24.
Here are a few differences between the TARP lobbying rules and the final stimulus lobbying rules that I’ve noticed so far:
- The TARP lobbying rules permit communications regarding a specific project once it has received preliminary approval, whereas the stimulus lobbying rules don’t allow those communications until the project has been awarded. Thus, the TARP rules leave open a window of opportunity for lobbying between “preliminary” and “final” approval. I don’t have a sense of how long that window is open or the “final” approval process.
- The TARP lobbying rules are a bit unclear (at C(iii)), but seem to permit oral communications with Treasury employees regarding applications for financial assistance that, instead of encompassing all federal employees, encompass only federal executive agency officials. The stimulus lobbying rules are much broader, and permit communications with more federal and some state officials. Treasury’s closing these exceptions may have the effect of reducing the amount of outside pressure placed upon the agency to spend money. These rules have also cut Members of Congress out of the lobbying picture — reducing the ability of lobbyists/financial interests to get Members of Congress to lobby for them. It is unclear (but unlikely) that doing so raises Constitutional questions regarding Congress’ oversight powers.
- Both sets of rules allow oral communications regarding particular projects right up until a formal application is filed, as contrasted with the interim version of the recovery act lobbying rules that stopped oral communications when the government official thought that a proposal would be filed. As a result, both the final stimulus lobbying rules and the TARP lobbying rules allow lobbying right up until the last moment. This may allow more give and take between the government and those engaged in lobbying, but may also increase the possibility of undue influence.
Considering the nearly-identical nature of the TARP lobbying rules with the stimulus lobbying rules, it is curious why it has taken so long for Treasury to promulgate these rules, and why it seems to have done so in such a quiet manner.
The similarities also cause me to wonder whether this iterative process of producing lobbying rules may lend itself to creating regulations that could ultimately have much broader applicability.
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Former Treasury Official Thought TARP Lobbyist Rules Were Political
Not sure what I think about this, but former TARP czar Neil Kashkari, appointed under President Bush, told the TARP Inspector General that he thought that the lobbying rules announced earlier this year for TARP recipients were political in nature. The lobbying rules have yet to be fully written and implemented, but are expected to closely track those imposed on lobbyists seeking stimulus funding. It appears that this is simply Kashkari’s opinion on the rules and not any admittance of fact.The Washington Times reports the statement by Kashkari in a way that makes it seem that he is revealing something more than his own opinion. (This makes me think of this great post by Michael Scherer at the Time Magazine blog on the media’s obsession with simulacrum.) That being said, Kashkari’s opinion on the rules does raise questions considering the Treasury Department has yet to announce a full set of rules for lobbyists and has yet to implement them nearly eight months after announcing them.
Considering that the administration also announced rules for the stimulus spending that were met with intense opposition from lobbyist groups, the likelihood that these rules were announced solely for political purposes seems doubtful. What I’m really wondering is: why has the Treasury Department slow-walked the implementation of lobbying rules and who is behind that?
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Are the Inspector General’s Financial Bailout Recommendations Out of Date?
Earlier this month, the Inspector General responsible for overseeing the government’s bailout of the financial sector released an audit of the Treasury Department and federal banking agencies that raised the specter of “external parties” – such as financial institutions – having “undue influence” over the bailout process. In short, the IG concluded that because the Treasury Department and other banking agencies insufficiently document oral communications between external parties and the federal government, it was “impossible” to determine whether bailout decisions were improperly influenced.
When explaining how to fix this disclosure gap, the Inspector General pointed to rules governing lobbying on the $787 billion economic stimulus funds as a good model for the financial bailout. The IG also noted that the Treasury Department announced on January 27, 2009 that it “would develop new rules to increase transparency and curtail potential lobbyist influence” over the financial industry bailout. And yet, the Treasury Department is still “finalizing” its draft policy 7 months after the press release. (More background available from WSJ and the Washington Times.)
It seems, however, that both the IG and the Treasury Department may not have realized that the model they are using for the financial bailout lobbying rules has itself been updated. They also seem to have forgotten about public disclosure of written communications. (Continue reading…)
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They Don’t Call It TARP For Nothing
You can’t see under it.
While we might be a bit concerned about Recovery.gov’s reporting practice for a bunch of ham, the problems with the TARP bailout program are so much worse. Witness the testimony that Neil Barofsky, Special Inspector General for TARP, plans to give on the overall lack of transparency in the program:
In particular, SIGTARP highlights four specific areas in which recommendations for making the financial industry bailout more accountable and open, have gone unheeded. Treasury has not committed itself to providing taxpayers with updated information on the financial performance of its TARP investments, according to Barofsky’s prepared statement. It has not acted on a recommendation that [Term Asset-Backed Securities Loan Facility] borrowers who fail to repay their loans be identified. It has not required the disclosure of “all trading activity, holdings, and valuations of assets of the PPIF” on a timely basis. And perhaps most significantly, Treasury has declined to require all TARP recipients to report on the actual use of TARP funds — notwithstanding a few agreements with Citigroup, Bank of America and AIG.
“Treasury has declined to adopt this recommendation, calling any such reporting “meaningless” in light of the inherent fungibility of money,” Barofsky will testify. “SIGTARP continues to believe that banks can provide meaningful information about what they are doing with TARP funds.”
“In rejecting SIGTARP’s basic transparency recommendations, TARP has become a program in which taxpayers (i) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested,” Barofksy adds. “In SIGTARP’s view, the very credibility of TARP (and thus in large measure its chance of success) depends on whether Treasury will commit, indeed as in word, to operate TARP with the highest degree of transparency possible.”
The TARP program has been in effect since last October and over two administrations and we have seen hardly any progress towards more transparency in the program. Pretty lame. Maybe they’ll actually listen to Barofsky’s suggestions for once.
