By Dan Eggen
Washington Post Staff Writer
Wednesday, April 1, 2009
President Obama's war with K Street is escalating, this time over stringent new rules on lobbyists attempting to land federal stimulus money for their clients.
An unlikely alliance of groups -- including one co-founded by Obama's chief ethics adviser -- argue that the restrictions will penalize those who play by the rules while doing nothing to curb the influence of large corporations and campaign donors.
Leaders of the groups, which include Citizens for Responsibility and Ethics in Washington and the American League of Lobbyists, also said yesterday that they are preparing to challenge the guidelines on First Amendment grounds if the administration does not agree to revise them.
"President Obama has managed to unconstitutionally ban American citizens from one of our most sacred rights, and it's flat-out wrong," said Dave Wenhold, president of the lobbying league, which has joined CREW and the American Civil Liberties Union in demanding a repeal of the gag rules. "This is not how a democracy works; this is how a totalitarian regime works."
The restrictions come as lobbying firms report a boom in business from local governments, clean-energy companies and others hoping to cash in on the $787 billion in stimulus money contained in the American Recovery and Reinvestment Act of 2009. Many cities and smaller companies rely on private lobbyists to navigate Washington, and they fear that they will be hampered in securing stimulus funding because of the new rules.
Obama, who campaigned on promises to reduce the influence of special interests in Washington, has issued a series of sharp lobbying restrictions that have angered Washington's mammoth influence industry, including hiring limits that effectively prevent many sympathetic liberal lobbyists from working in the administration.
The latest complaints focus on a March 20 memo from Obama laying out restrictions on contacts between registered lobbyists and government officials in connection with stimulus spending, including a ban on phone calls and meetings about specific projects. Lobbyists are free to communicate about such projects in writing, but the documents will be posted on the government-run Web site focused on the stimulus plan, Recovery.gov. Lobbyists may also speak with government officials about general policy issues, the rules say.
"We must not allow Recovery Act funds to be distributed on the basis of factors other than the merits of proposed projects or in response to improper influence or pressure," Obama wrote.
The new restrictions prompted a letter yesterday to White House Counsel Gregory B. Craig from three unusual allies: the lobbyists' league, the ACLU and CREW, a watchdog group often critical of the influence of lobbyists on the federal government. CREW was co-founded by Norm Eisen, who is Obama's chief ethics counsel and who helped formulate the latest lobbying restrictions.
"I'm surprised that he would have created proposals that I think are poorly thought out," CREW Executive Director Melanie Sloan said in a conference call yesterday, referring to Eisen.
Sloan and other opponents argue that the ban on telephone calls and meetings unfairly demonizes one group of people and ignores the role played by lawmakers, corporate executives and other non-lobbyists in securing federal funding for favored projects. Those officials will be free to talk to government officials by telephone or in person about specific stimulus projects without being subjected to any disclosure requirements, the critics say.
"They are not actually increasing transparency for the people that may have the biggest financial interests at stake," said Caroline Fredrickson, the ACLU's Washington director, who is also a registered lobbyist.
Sloan, Wenhold and others also complain that Obama has issued the restrictions without consulting lobbying and public interest groups about the guidelines' potential impact.
But administration officials say that the rules are a good-faith effort to limit the risk of paying for unworthy projects and that the impact of the guidelines will be assessed after 60 days. Spokesman Ben LaBolt said the "goal is full transparency," which is "entirely consistent with the First Amendment."
"Lobbyists can communicate about specific projects in writing and about policy issues orally," LaBolt said "That fully respects freedom of speech while at the same time ending closed-door lobbyist deal-making in favor of sunlight."
Elizabeth Vella Moeller, a partner at Pillsbury Winthrop Shaw Pittman, said the rules will help companies or localities that have a "foot in the door" at federal agencies while making it harder for "new entrants" to compete.
Christopher L. Rissetto, co-chairman of the public policy and infrastructure practice group at Reed Smith, also argued that the rules could slow the pace of spending because lobbyists often help clients avoid paperwork errors and other mistakes that can bog down funding applications.
"If the government wants to get grants issued and awarded as fast as possible, it seems to me they should want everyone's hands on deck to help out," Rissetto said. "When they start closing doors like this, that will slow things down."
J. Thomas Cochran, executive director of the United States Conference of Mayors, said the restrictions are "somewhat extreme." He said many mayors are particularly worried that the rules will penalize midsize and smaller cities that often use lobbyists to champion their causes in Washington.
"We're supposed to come together at a time like this," Cochran said. "But if a city or a mayor can't talk to the federal government or the president, then everybody gets upset about it."