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Obama Aiming To Lock Turnstile For Lobbyists

President Obama wants Washington lobbyists to check their professional identities on the way into his administration.

STATE OF LOBBYINGObama's LobbyistsNational Journal checked the names of 267 individuals appointed or nominated to various senior positions in the Obama administration against the Senate Office of Public Records database of registered lobbyists. The database has records dating back to 1999. This chart lists the names of 30 individuals, or about 11 percent of the total, who were registered to lobby at some point within the past five years. [more...]

Ever since Barack Obama began issuing his broadsides on the presidential campaign trail against lobbyists and the "culture of Washington," Washington has debated whether he was being cynical or merely naive.

Lobbyists "think they own this government, but we're here today to take it back," Obama announced at the outset of his campaign in 2007. He later boasted that he didn't "take a dime of [lobbyists'] money, and when I am president, they won't find a job in my White House."


Although he had already softened his stance a bit before the election -- saying only that lobbyists wouldn't rule his White House -- the pundits and K Street pronounced Obama's boast a nonstarter. Sooner or later, most experienced Washington hands gravitate to lobbying, went the logic, and Obama simply would not be able to run a government without veterans who had some connection to K Street or the wider influence sector.

They were partly right: Obama has not blacklisted lobbyists from his administration the way that his campaign rhetoric suggested he would.

Indeed, a National Journal look at 267 Obama nominees and appointees found that at least 30 -- or about 11 percent -- have been registered lobbyists at some point during the past five years.


Among them are some top officials: Attorney General Eric Holder was registered as a lobbyist at Covington & Burling as recently as 2004; Tom Vilsack, the former Iowa governor who is Obama's Agriculture secretary, was a registered lobbyist for the National Education Association in 2007; Ron Klain, chief of staff to Vice President Biden, was a lobbyist at O'Melveny & Myers until 2004; and David Hayes, deputy secretary of the Interior, was a lobbyist at Latham & Watkins through 2006.

But Obama is attempting to make good on his promise to keep lobbyists out of government employ in another way. His executive order on ethics, which he signed with unmistakable symbolism on his first full day in office, requires lobbyists who want to work for him to essentially check their professions at the door. Those who were registered to lobby within two years before joining the administration can't seek or take jobs at any agency they lobbied during those two years; can't participate in any matter on which they lobbied during that time; and must steer clear of the issue areas in which they were involved.

Obama is also in no hurry to let executive branch officials resume or take up lobbying when they leave their government jobs. Current law prohibits certain high-level appointees who leave for the private sector from lobbying or communicating with their former department or agency for two years after their departure. The president would essentially ban these folks from ever lobbying his entire administration -- even if he wins a second term.

"We've tried to make sure that lobbyists stay totally away from the areas they lobbied so that there's not a revolving door, as has happened in the past," says Norm Eisen, special counsel to the president for ethics and government reform. (For more from Eisen's interview with National Journal, click here.)


Eisen doesn't have to spell out the potential for mischief in such situations: President Bush provided a high-profile example with his choice of mining and oil lobbyist J. Steven Griles to the No. 2 slot at the Interior Department in 2001. Griles was allowed to receive more than $1 million in payments from his former lobbying firm while he was on the government payroll, but then violated his promise to steer clear of former clients and their issues. He left Interior in 2004 and later served a short prison term for lying about his contacts with notoriously corrupt lobbyist Jack Abramoff.

Registered lobbyists aren't the only target of Obama's new order. A less heralded provision requires high-level employees to sign an ethics pledge to stay out of matters that are "directly and substantially related to my former employer or former clients, including regulations and contracts" for two years.

This recusal requirement is a first for the executive branch, says Craig Holman, a lobbyist for the watchdog group Public Citizen, who advised the administration on its ethics rules. Previous executive branch conflict-of-interest requirements required only that top officials divest from, or put into a blind trust, any financial investments that might pose a potential conflict.

Double Standard?

If the new executive order is something less than the total shutout that Obama once threatened, lobbyists aren't exactly treating it as a win for the team.

"Quite frankly, I think the executive order is not only a mistake but an example of flawed logic," says David Wenhold, president of the American League of Lobbyists. "They say, 'You can work in my administration, but not in the areas of your expertise.' That's not how you would run a business. We need the best experts on an issue whether they are a CEO, the president of a university, or a lobbyist."

The administration has given critics fodder by almost immediately seeking exceptions to its own rules. Within days of issuing the executive order, the White House invoked a clause allowing the Office of Management and Budget director to waive restrictions to allow former Raytheon lobbyist William Lynn to become deputy Defense secretary. And in February, the administration issued two more waivers: one allowing Jocelyn Frye, former general counsel at the National Partnership for Women & Families, to serve as first lady Michelle Obama's director of policy and projects; and one clearing the way for Cecilia Muñoz, the former senior vice president for the National Council of La Raza, to become White House director of intergovernmental affairs.

William Corr, executive director of the nonprofit Campaign for Tobacco-Free Kids and a registered lobbyist until September 2008, is Obama's choice for deputy Health and Human Services secretary; his situation didn't require a waiver, officials said, because he has promised to recuse himself from tobacco-related matters that come before HHS. Former Goldman Sachs lobbyist Mark Patterson, Treasury Secretary Timothy Geithner's choice for chief of staff, likewise reportedly signed an ethics pledge promising to recuse himself from matters "directly and substantially related" to his former employer.

In announcing the Frye and Muñoz waivers on the White House blog -- some three weeks after the fact -- Eisen felt compelled to defend the practice. "Because the rules are so stringent, it is important to have reasonable exceptions in case of exigency or when the public interest so demands," he wrote, citing endorsements of the policy from outside experts.

The focus on registered lobbyists has also subjected Obama, perhaps paradoxically, to charges that his administration is simultaneously overreaching and setting a meaningless double standard.

Those who register to lobby are a pretty diverse bunch, as witnessed by the administration's lobbyist-appointees themselves. Obama's law school classmate Cassandra Butts, now deputy White House counsel for domestic policy and ethics, as well as Neera Tanden, counselor at the Health and Human Services Department, registered to lobby for the left-leaning Center for American Progress Action Fund. But both reportedly did little or no actual lobbying. Robert Sussman, senior policy counselor to Environmental Protection Agency Administrator Lisa Jackson, by contrast, spent nearly two decades at Latham & Watkins, much of it lobbying for corporate clients.

At the same time, there are many ways to wield influence on behalf of paying clients in Washington without actually registering to lobby.

Former Senate Majority Leader Tom Daschle, D-S.D. -- an Obama mentor and the president's original choice to run the White House health care reform effort and HHS -- showed how it's done. After losing re-election in 2004, Daschle earned $2.1 million as a "strategic adviser" at the law and lobbying firm Alston & Bird, but he wasn't required to register as a lobbyist because he apparently didn't spend at least 20 percent of his billable hours on "lobbying activities" such as face-to-face meetings with elected officials. Still, Daschle's "adviser" role raised questions about the wisdom of his nomination, even before controversy over his tax payments caused him to withdraw from consideration.

Some "non-lobbyists" fared better. Obama tapped Democrat George Mitchell, another former Senate majority leader, to be special envoy for the Middle East. Mitchell was not a registered lobbyist even though he had served as chairman of, and was a well-known rainmaker for the international law and lobbying firm DLA Piper until the end of 2008, when he was named chairman emeritus of the global board of the firm, which boasts a fast-growing Middle East practice.

Although he was never a registered lobbyist, former Senate Majority Leader Tom Daschle earned more than $2 million as a "strategic adviser" at the law and lobbying firm Alston & Bird.

Leon Panetta, President Clinton's chief of staff who was Obama's pick to head the Central Intelligence Agency, earned more than $1 million in 2008 as a corporate consultant and guest speaker, including as an adviser to global PR giant Fleishman-Hillard.

Besides being a registered lobbyist for the National Education Association, Agriculture Secretary Vilsack was a partner in the Des Moines offices of Dorsey & Whitney, an international law and lobbying firm, where he made $300,000 doing what the firm said was "strategic counseling and advising clients in the fields of energy conservation, renewable energy, and agribusiness development," according to The Washington Times. He also earned $100,000 in consulting fees from MidAmerican Energy, the largest utility in his home state of Iowa.

Thomas Donilon, Obama's deputy national security adviser, was a registered lobbyist when he oversaw Fannie Mae's aggressive lobbying operation as a vice president for the firm for several years, but not when he subsequently headed the Strategic Counseling Practice at O'Melveny and Myers. The law and lobbying firm said that Donilon's job was to "advise companies and their boards on a range of sensitive governance, policy, legal, and regulatory matters."

These Washington éminences grises are far from the only players in the influence industry who aren't registered lobbyists. Denise Wilson, chosen as a member of the White House congressional-affairs team, doesn't show up in the database of registered lobbyists, even though her White House biography says she did a stint at Motorola as manager of Washington government relations. Likewise, Obama's choice to head the National Telecommunications and Information Administration on an acting basis is former Sprint Nextel government-affairs executive Anna Gomez, who isn't a registered lobbyist but advocated on the company's behalf.

Moreover, although Obama has spoken out against Washington's revolving-door ways, several of his lobbyist-appointees, have indulged in the practice.

Hayes, for example, sandwiched in a lobbying career at Latham & Watkins between stints as deputy Interior secretary during the Clinton administration and his new post with Obama. Sussman, now senior policy counselor to EPA Administrator Jackson, interrupted a career spanning two decades at Latham & Watkins with a job as deputy EPA administrator in Clinton's first term.

Hayes was one of three people at his firm registered to lobby the Interior Department on behalf of a gas and electric company client through 2006, just short of the two-year window that could have potentially barred his return to Interior. Sussman, whose clients included the Business Roundtable; a diesel truck manufacturer; electric utilities; and a pharmaceutical company -- and whose lobbying often included EPA -- was registered to lobby through 2007, according to his former firm.

Some of Obama's other nominees have also appeared to benefit from a prior tour of duty in the government -- without necessarily joining the influence industry.

Michele Flournoy, the Defense Department's new undersecretary for policy, had a high-level job at the department during the Clinton administration and spent the intervening years at think tanks. But she also got $60,000 in consulting fees from a firm she ran with her husband, whose clients included major defense contractors Lockheed Martin, and BAE Systems of North America, according to an Associated Press review of her financial disclosure forms.

Nancy-Ann DeParle, Obama's director of the White House Office of Health Care Reform, according to a review of corporate records by The American Spectator, made at least $2.4 million in 2006-07 from serving on the corporate boards of health care companies whose businesses she could be in a position to affect in her new position. DeParle sat on 10 boards while also serving as a managing director at private equity firm CCMP Capital and a senior adviser at JP Morgan Partners.

DeParle's appointment, the conservative publication suggested, smacked of hypocrisy: "Her journey from the public sector to the private sector and back again would seem to represent the type of revolving-door relationship between Washington and corporate America that President Obama pledged to put an end to during the campaign and in an executive order."

The Washington Times made a similar case about Vilsack's ties to MidAmerican Energy. As governor, the paper reported, Vilsack aided the company's leap into wind power generation; when he left office in 2006 he became a MidAmerican consultant and he received political donations from company executives during his presidential bid in 2008.

"It's brand new and very jarring -- particularly to the lobbying community."
-- Fred Wertheimer

In most of these cases, administration officials have said that the appointees intend to sever links that pose conflicts of interest and that they would be bound by the order's recusal provisions. Their stories suggest, however, the breadth and depth of the network that relays power and influence from government to the private sector and back again.

To American University professor James Thurber, who views the influence industry as an inextricable strand in the fabric of politics, this nexus suggests the insincerity of "Obama's attack on lobbyists and changing Washington." Speaking of the president's stance, Thurber says, "Maybe it's because of naïveté or maybe it's because he knows that lobbyists and lobbying are not very popular in the minds of Americans."

Ethics watchdog Fred Wertheimer, who heads the nonprofit group Democracy 21, says that having different rules for corporate executives and advisers than for lobbyists reflects a search for balance. "The goal of these kinds of provisions is not, and should not be, to keep anyone with a given experience in the private sector out of government," he says.

The executive order is clearly a work in progress, according to Wertheimer. "We're going to need to have an experience with this for a couple of years to see how it works and look for potential places for refinement and improvement." But most of the objections, he says, "are being raised as a way to try to undermine the credibility of the executive order, not to improve it, and thereby trying to get out from under it."

Public Citizen's Holman finds irony in all of the attention given to the potential conflicts of appointees without lobbying backgrounds. "Obama set up this very high standard and as a result there's been closer scrutiny." Recusal, Holman says, "has never been a consideration before, so no one would have questioned any of these situations before."

If nothing else, Obama's executive order has forced Washington professionals to think hard about what it means to be an agent of influence. The American Bar Association's director of government affairs, Tom Susman, says that Obama's emphasis on registered lobbyists is "both over-inclusive and underinclusive." That narrow focus can sweep in low-paid advocates for environmental and consumer protection who are "hardly the influence-peddlers of public rhetoric," he notes, but fail to flag the influential advisers who make "the classic phone call from the corner office of a law or PR firm."

Still, the president had to draw a line somewhere, says Susman, a former Hill aide who spent much of his career as a lobbyist. Having helped to advise Congress on a tougher definition of "lobbyist" in its 2007 reform law, Susman says he is "personally comfortable with the idea of using the list of registered lobbyists as a surrogate for those actively involved in lobbying for a substantial amount of their time."

The administration's decision to leave itself wiggle room by allowing waivers for appointees who were recently lobbyists suggests how difficult it is to codify intrinsically subjective hiring decisions. The White House issues waivers, for example, when doing so is deemed to be in the "public interest," although what constitutes the public interest is, of course, in the eye of the beholder and can reflect ideology as much as ethics.

Eisen told National Journal that the Office of Government Ethics is writing more-precise regulations, and he has also said that the administration will issue waivers very sparingly. Ethics advocates note that the waivers do not, in any event, apply to the broader conflict-of-interest rules for all top appointees, which require recusal from matters involving former employers or clients.

By sparking a serious discussion about ethics, Obama's rules have arguably already achieved a measure of success. But while excoriating those who make multiple turns through the revolving door, Obama has nevertheless rewarded some prime practitioners with another half turn. Even if he holds to his vow to replace the revolving door with a locking turnstile, it won't make much difference for the longest offenders, coming as it does near the end of their careers.

For younger appointees, current and future, Obama's rule could make a real difference. Will they chuck their Rolodexes on their way out of government and get "real jobs"? Will they find new ways to put their government contacts and experience to work for outside interests?

"This process that President Obama has unleashed is creating a different dynamic here that people are trying to work their way through," Wertheimer says. "It's brand new and very jarring -- particularly to the lobbying community."

And that, Wertheimer adds, is a good sign.

Reporting Intern Eliza Krigman provided research for this story.

This article appears in the March 21, 2009 edition of National Journal Magazine.

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