Q: I am a lobbyist with a question about the new restrictions on
lobbying for TARP funding. As I understand it, we are now prohibited from
talking to government officials regarding any pending funding applications.
While this seems a bit onerous, I suppose it is OK so long as everyone is
playing by the same rules. However, some of my peers in the field have said that
they plan to continue discussing specific projects with government officials by
utilizing what they say is a loophole in the new rules. According to them, there
is an exception allowing discussions regarding pending applications so long as
those discussions take place at a widely attended gathering. I’m not sure about
this. I don’t want to break the rules, but I also don’t want to lose out to
lobbyists who plan to take advantage of this exception. What do the rules say?
A: In January, Treasury Secretary Timothy Geithner announced that
there would be new restrictions governing lobbying for funds provided through
the Troubled Asset Relief Program. In a memorandum published last month, the
Treasury Department issued those new restrictions. Note that these restrictions
are different from the rules governing lobbying for stimulus funding that the
Office of Management and Budget issued in April and then revised in July.
In any event, the purposes of the new restrictions on TARP lobbying are to
“limit the influence of lobbyists and special interests” and to ensure that TARP
decisions are “guided by objective assessments in the best interest of the
health and stability of the financial system.” Regardless of whether the
restrictions will have that effect, they will certainly change the way that
people lobby for TARP funding.
One of the most significant restrictions is the one you mention. It prohibits
any oral communications with Treasury officials regarding pending applications
for TARP funds. This prohibition applies during the period beginning with the
submission of a formal application for TARP funds and ending with the
preliminary approval of such funds. During that time, substantive communications
with Treasury officials regarding the application must be written, and even
those must then be made public by the Treasury. Note that this bar on oral
communications applies not only to lobbyists but to just about everyone. The
only people to whom it does not apply are Treasury employees and officials of
other executive agencies, presumably because it would be virtually impossible
for them to do their jobs without discussing pending applications for TARP
There are a handful of exceptions. The one you mention covers oral
communications at “widely attended gatherings.” According to the recent Treasury
memorandum, the reason for this exception is that the new restrictions are aimed
at increasing transparency of oral communications regarding TARP funding.
Because oral communications at widely attended gatherings are already
transparent, the new rules impose “no further restrictions on such oral
For purposes of this exception, a gathering qualifies as “widely attended” if
it is attended by a large number of people from throughout an industry or
profession and if they represent a wide range of interests. In the past, the
Office of Government Ethics has issued guidance interpreting the term “widely
attended gathering” in other contexts. It says a key aspect of a widely attended
gathering is that there is an “interchange of ideas with a variety of
individuals.” Thus, under the OGE guidance, a small dinner party is not a widely
attended gathering, and neither is an event primarily attended by employees of a
particular company. Moreover, the presence of a “token” representative of a
divergent interest group will not cure an otherwise nondiverse gathering.
Some of your peers appear to believe that this exception allows them to have
private discussions regarding pending TARP applications with Treasury officials
so long as those discussions happen to take place at a widely attended
gathering. I’m not so sure that’s right.
In fact, the recent Treasury memorandum specifically closes off this
potential loophole. The memorandum states that “private conversations at a
widely attended gathering are not covered” under the exception. Thus, the bar on
conversations regarding pending applications does apply to private oral
communications that “may happen to occur at, in connection with, or immediately
before or after, a widely attended gathering.”
In sum, while some of your peers may hope to evade the new restrictions by
pulling aside officials at widely attended gatherings, I would caution against
you doing the same. You can do as these peers do or you can play by the new
rules. But you can’t do both.
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