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Legacy Content / RULES OF THE GAME

Now The Hard Part

Can Obama Keep His Promises On Ethics And Transparency?

November 17, 2008

Having pledged that lobbyists and moneyed interests would take a back seat in his administration, President-elect Barack Obama is already discovering how tough such promises are to keep.

At least a half-dozen of Obama's new transition team leaders were among the top fundraisers who "bundled" cash for him on the campaign trail. Four of them pulled in $500,000 or more as Obama bundlers -- Don Beyer, a former Virginia lieutenant governor who owns five automobile dealerships; Julius Genachowski, co-founder and managing director of Rock Creek Ventures; Donald Gips, vice president at the technology firm Level 3 Communications; and Thomas J. Perrelli, managing partner of Jenner & Block's Washington office.

The $700 billion bailout opens dangerous opportunities for lobbying and ethics abuses, particularly given the absence so far of any real oversight.


"Any time you see these people who brought in half a million dollars to the campaign being appointed to government service, it's a red flag," said Craig Holman, legislative representative at Public Citizen, which is tracking Obama appointments on its new Web site. One of every four of President Bush's bundlers ended up in a government post, Holman said, a performance he hopes Obama will not repeat.

To be sure, Obama's earned high marks from government watchdogs for his transition's strict new ethics rules, which bar any lobbyist from working on the transition in any issue area they've lobbied during the past year. Outgoing transition team members who return to the private sector may not lobby the administration on a matter they've worked on in the past year. Also, lobbyists may not donate to the nonprofit organization set up to help finance Obama's transition, and donors to that fund will be disclosed monthly.

"The initial steps have been excellent, and have shown that president-elect Obama is very serious about what he said during the campaign," said Fred Wertheimer, president of campaign finance watchdog Democracy 21.

Still, rules aimed at excluding lobbyists are invariably squishy, as Obama's ban on political donations from lobbyists illustrated during the campaign. Such limits exclude former lobbyists, and non-lobbyist executives with influential firms and interest groups. Transition team leaders who previously lobbied include Sally Katzen, a former lobbyist for Amgen; David J. Hayes, an ex-lobbyist for Latham & Watkins; and Tom Wheeler, formerly head of the wireless industry lobby group CTIA.

Obama is setting up his administration, moreover, in the midst of a government economic bailout that's unleashed a feeding frenzy among Washington lobbyists, particularly those with Democratic ties. The $700 billion bailout opens dangerous opportunities for lobbying and ethics abuses, particularly given the absence so far of any real oversight. Though an inspector general has finally been named to ensure that the money is doled out ethically and efficiently, it remains unclear how rigorously conflict-of-interest rules will be enforced.

"The bailout legislation said there's supposed to be transparency, but there's no mechanism for the transparency to occur," said Gary D. Bass, executive director of OMB Watch, which recently joined with more than 200 individuals and organizations to call on the incoming president to take steps to improve government transparency.

Among other changes, Bass and his allies called on Obama to create a searchable online database that discloses who is getting federal funding in the form of grants, contracts, loans, insurance, federal subsidies and tax breaks. The groups also called for disclosure of who is lobbying for federal funding, including those contractors not currently covered by the Lobbying Disclosure Act.

Obama promised to do all that and more on the campaign trail. As a senator, he helped usher through legislation that created, which reports basic information about who receives federal awards, including names, amounts and location. He also helped enact lobbying and ethics changes with the Honest Leadership and Open Government Act.

As a candidate, he pledged to end no-bid contracts for all contract orders of $25,000 or more; impose strict pre- and post-employment limits on lobbyists who work for his administration; and ban gifts to executive branch employees in any amount from lobbyists or their firms. He also pledged to create a centralized database of lobbying reports, congressional ethics records and campaign finance filings.

Obama is expected to announce in the coming weeks a policy that bans anyone who's lobbied in a given subject area in the last two years from working on it in his administration. On the campaign trail, he pledged that no political appointee who leaves for the private sector would be permitted to lobby the executive branch for the remainder of the administration.

Obama should go further and push for an executive branch ethics overhaul that strengthens and centralizes ethics oversight, say some good government advocates. The executive branch Office of Government Ethics has no authority to pass or enforce conflict-of-interest regulations, noted Holman; they are left in the hands of more than 6,000 ethics officers scattered throughout various agencies.

Holman and other reform advocates have also urged Obama to limit donations to his inaugural committee, traditionally a magnet for unregulated money. It remains to be seen whether in this, as in other areas, Obama's actions can match his rhetoric. "I am really expecting to see a difference," said Holman. "Let's see if he carries through on his pledge for change."

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