Nonprofits and Obama's Lobbying Rules

On Jan. 21, President Barack Obama issued an executive order to stop the influence special interests have had in government and to close the revolving door between government service and financial rewards in the private sector. One aspect of the Obama order puts limits on lobbyists serving in government. These limits appear to be having unintended consequences for employees of nonprofit organizations, specifically those registered as lobbyists and working in the public interest. 

For those who register to lobby under the Lobbying Disclosure Act (LDA) within two years of working for the administration, the order prohibits the individual from participating in any matter on which the person lobbied within the previous two years or from working for an agency that the person lobbied within the last two years. The order also includes a provision to allow waivers from these requirements if, for example, the lobbying was in the public interest or if there has been minimal executive branch lobbying.

There are at least three problems that nonprofit organizations have identified. First, there has been no guidance on the definition of executive branch lobbying. Accordingly, it has been rumored that senior nonprofit leadership interested in possibly working for the Obama administration have avoided policy meetings with Obama officials for fear that such meetings might be construed as executive branch lobbying and trigger the two-year waiting period. This deprives the Obama administration of important insight.

Second, many employees within nonprofit organizations have been registered under the LDA even if they are below the required reporting thresholds. Since the LDA is simply a disclosure law, most nonprofit organizations felt it wise to err on the side of full disclosure, especially since they disclose lobbying information on annual tax forms.

A consequence of the order is that many groups, including nonprofits, are either deregistering or restricting their lobbying activities so that they are eligible to serve in the Obama administration. According to The Washington Post, "More than 700 lobbyists or lobbying groups have filed 'de-registration' papers with the House and Senate since Obama took office, including scores of charities and other nonprofits. [. . .] Many of the groups and their representatives feel particularly stung because they registered as lobbyists even when it was not required, either as a demonstration of their influence or to err on the side of caution in complying with transparency rules." Stephen Rickard, Washington director of the Open Society Institute, said, "They were not trying to say that if you were lobbying to stop the genocide in Darfur, you're not going to be able to work for us. . . . If you're in nonprofit advocacy, there is a very good chance you want to work for Barack Obama."

The third problem with the rules is that the Obama administration seems to be using the waiver authority sparingly. In fact, the widespread perception is that the Obama administration does not want to grant waivers in the aftermath of former Sen. Tom Daschle's nomination and withdrawal to run the Department of Health and Human Services.

The Washington Post reported that the administration said three waivers have been issued so far: William Lynn, deputy Defense secretary; Jocelyn Frye, Michelle Obama's director of policy and projects; and Cecilia Muñoz, White House director of intergovernmental affairs. Upon announcing two waivers, Norm Eisen, the president's chief ethics counsel, said in a White House blog posting on March 10 that waivers will be granted because "it is important to have reasonable exceptions in case of exigency or when the public interest so demands."

Even as the administration has identified only three waivers, the National Journal (subscription required) found that of 267 Obama nominees and appointees, at least 30 have been registered lobbyists at some point during the past five years.

The focus on registered lobbyists has caused controversy for the Obama administration. For example, consider the numerous registered lobbyists that, according to disclosure reports, do very little direct lobbying. The Center for Responsive Politics (CRP) recently issued a report on such "stealth" lobbying. CRP found "nearly 19,000 reports totaling at least $565 million in payments to firms for their lobbying activities that was almost entirely unaccounted for. Last year, more than one in 10 filings were the equivalent of a single page – no issues listed, no lobbyists named, no government agencies contacted."

This raises an additional problem: a lack of disclosure about the waivers or executive branch lobbying. If waivers were used more and disclosed, the public would know whether the objective of the Obama order – stopping the influence of special interests – is being achieved. Disclosure can also play an important role in addressing executive branch lobbying. A small step to such a requirement came the week of March 16 when Obama announced, "Any lobbyist who wants to talk with a member of my administration about a particular Recovery Act project will have to submit their thoughts in writing, and we will post it on the Internet for all to see. If any member of my administration does meet with a lobbyist about a Recovery Act project, every American will be able to go online and see what that meeting was about."

It is disappointing that nonprofits may be scaling back their lobbying activities in hopes of working with the administration. The voice of public interest advocates is invaluable in the public policy arena in contrast to the boisterous, well-heeled corporate lobbyists. Possibly, with such disclosure by all parties, guidance on what executive branch lobbying includes, and clarity on when waivers can be employed, the government and the public would be able to tell the difference between public interest lobbyists and those of large corporations.

back to Blog