President Obama Severely Restricts Lobbyists’ Participation In Recovery Act Funding

On March 20, 2009, President Obama issued a Memorandum to the Heads of Executive Departments and Agencies prescribing rules intended to assure that applications for funding under the Recovery Act will be determined on their merits.  After setting forth the general goals for Recovery Act projects, the Memorandum issues orders, including prohibition of oral communications between lobbyists and federal officials concerning particular Stimulus projects and posting of all lobbyists’ communications on Recovery.gov.

The Memorandum is scheduled for publication in the Federal Register tomorrow.

Summary

Encapsulating the more detailed memorandum of the Office of Management and Budget issued in mid-February, the Memorandum lists four goals of merit-based determinations for Stimulus funding.  The project must:

• Deliver programmatic results.
• Optimize economic activity and jobs in relation to the amount of funding.
• Achieve long term benefits in technology, science, health, infrastructure, environmental protection, and economic activity.
• Satisfy the Act’s transparency and accountability objectives.

To meet and protect these goals, the Memorandum issues the following orders:

1. Each department and agency must develop merit-based selection criteria for Recovery Act funding.  No communication may “supersede or supplant” any Recovery Act consideration by the department or agency.
2. Departments and agencies shall not approve projects for, or in relation to the prohibited objects listed in section 1604A of the Act, specifically: any casino or gambling establishment, aquarium, zoo, golf course or swimming pool.
3. Lobbyists registered under the Lobbying Disclosure Act:
   1. May not participate in any oral communication with a department or agency official concerning any particular project or application;
   2. May, however, communicate in writing concerning a project or application;
   3. May participate in oral communications with department or agency officials concerning general Recovery Act policy issues.
4. Any department or agency official orally discussing general Recovery Act issues with a lobbyist must document the conversation and post the report on the internet within 3 business days.
5. All lobbyists’ written communications shall be posted on the internet within 3 business days.
6. The Memorandum does not apply to the tax-related provisions of the Act.
7. OMB shall report to the President in 60 days any recommendations to modify or revise the Memorandum.

The term “department or agency official” is not defined.  It may apply only to federal personnel who are authorized to make material decisions on an application or project, thus leaving unrestricted lobbyist participation in discussions with staff on project, application, reporting, procedural and administrative requirements.  Clarity on this may be provided by OMB announcements.  Whether the severe restriction on lobbyists in the Memorandum will be moderated by OMB or a subsequent Presidential Memorandum is difficult to predict.

The sanctions for violating the lobbyist restrictions are not identified at this time.

The Memorandum does not purport to restrict participation in oral communications with officials by individuals not registered as lobbyists.

If you have any questions concerning this matter or are interested in receiving a copy of the Memorandum, please contact a member of the team listed above.