Saturday, October 25th, 2014

The Obameter

Tougher rules against revolving door for lobbyists and former officials

"No political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years. And no political appointee will be able to lobby the executive branch after leaving government service during the remainder of the administration."

Updates

Grassley demands waivers and recusals on former lobbyists in the Obama administration

It's been about three months since we gave a Promise Broken to Barack Obama's pledge to restrict former lobbyists from serving in his administration. We found that the administration has granted waivers to several former lobbyists, allowing them to serve. The administration also allows recusals, where former lobbyists simply recuse themselves from discussions concerning whatever interest it is for which they used to lobby. The recusals have not been made public, and we don't know how many have been issued. (You can read more details on our ruling by scrolling down to our update of March 17, 2009.)

We haven't seen anything to make us change our ruling. But there's been a new development: Republican Sen. Charles Grassley of Iowa recently sent a letter asking for accountability about the recusals and waivers. (Grassley is one of four senators who voted against the nomination of William Lynn as a deputy secretary for defense; Lynn was a lobbyist for the defense contractor Raytheon.)  

Grassley has asked Robert Cusick, director of the U.S. Office of Government Ethics, to require the Obama administration to release all waivers and recusals as they are issued and post the documentation to the Internet. Grassley said Cusick has that authority under the Ethics in Government Act.

"The American people deserve a full accounting of all waivers and recusals to better understand who is running the government and whether the administration is adhering to its promise to be open, transparent, and accountable," Grassley wrote. "I urge you to take immediate action to make any waivers and recusals public and ask for your response to my requests no later than June 19, 2009." (You can read Grassley's letter in its entirety here.)

We'll be watching for a full accounting of waivers and recusals in the Obama administration. Meanwhile, we're sticking to our ruling: Promise Broken.

Sources:

Letter from Sen. Charles Grassley to Office of Government Ethics Director Robert Cusick , June 10, 2009

Former lobbyist in the White House? It's okay if they say it's okay.

Of the 513 promises we're tracking, this one has become the most controversial. It is the cornerstone of President Obama's campaign theme about limiting the influence of special interests.

During the campaign, Obama said many times that lobbyists would not run his White House, and the campaign delighted in tweaking rival John McCain for the former lobbyists who worked on McCain's campaign.

Obama's ethics proposals specifically spelled out that former lobbyists would not be allowed to "work on regulations or contracts directly and substantially related to their prior employer for two years." On his first full day in office, Obama signed an executive order to that effect.

But the order has a loophole — a "waiver" clause that allows former lobbyists to serve. That waiver clause has been used at least three times, and in some cases, the administration allows former lobbyists to serve without a waiver.

After examining the administration's actions for the past two months, we have concluded that Obama has broken this promise.

The waiver process in the executive order is certainly official-looking. But the waivers are granted by the Obama administration itself, and are little more than the administration saying a former lobbyist is okay. For a candidate who pledged to conduct business out in the open, there is little transparency about when a waiver is required. Even good-government advocates we spoke with who praised Obama's overall policy found the waiver process to be unclear.

By itself, the nomination of former Raytheon lobbyist William J. Lynn to be deputy defense secretary provides sufficient evidence for us to rate this a broken promise. Lynn's waiver requires that he not participate "personally and substantially" in any matter in which Raytheon is a party for one year, which directly contradicts Obama's campaign pledge and executive order to make ex-lobbyists wait two years.

But there's more than just Lynn. The administration's handling of other former lobbyists provides further evidence that the promise has been broken:

* In some cases, the White House apparently has decided that former lobbyists don't need waivers at all. If the former lobbyists simply recuse themselves from discussions concerning whatever interest it is for which they used to lobby, then that suffices.

* Recusals appear to have even less documentation than waivers. We have yet to see a recusal "order," despite having asked the White House for them. We know there are at least two recusals; there may be more. We're not sure how recusals specifically differ from waivers because the White House has said little about the policy.

* The White House is not prompt about releasing the waivers. For two nominees who didn't require Senate approval, waivers were released weeks after they were signed and after the people took their positions. These two waivers were also substantially less detailed than the waiver issued for Lynn.

The waiver for William Lynn

What we know about Lynn's waiver we've learned not from a transparent White House, but rather thanks to the Senate confirmation process he had to undergo.

Sen. Charles Grassley, R-Iowa, raised questions about Lynn's nomination in a letter to Peter Orszag, director of the White House's Office of Management and Budget. Grassley questioned whether the nomination undermined the goal of closing the "revolving door" for lobbyists working in government.

Lynn was a Raytheon lobbyist for six years, lobbying extensively on a broad range of defense-related issues, Grassley argued. If confirmed, Lynn would be the top operations manager at the Pentagon, with final authority on a number of contract, program and budget decisions.

"I simply cannot comprehend how this particular lobbyist could be nominated to fill such a key position at DOD overseeing procurement matters, much less be granted a waiver from the ethical limitations listed in the Executive Order," Grassley wrote in a letter to the White House. (Read Grassley's full letter .)

In response, Orszag said Obama's executive order included "some of the strictest rules ever imposed on executive branch personnel" and was "roundly praised by commentators and good-government advocates as the toughest ever of its kind." Orszag said Lynn was well-qualified because he'd been undersecretary of defense (as comptroller) under President Clinton, assistant to the secretary of defense for budget, a legislative counsel for defense and arms control to Sen. Edward Kennedy and a senior fellow at the National Defense University.

Orszag also provided details about Lynn's waiver. He said Lynn will not seek permission to participate in any of six programs for which he personally lobbied. Those programs include "the DDG-1000 surface combatant, the AMRAAM air-to-air missile, the F-15 airborne radar, the Patriot Pure Fleet program, the Future Imagery Architecture, and the Multiple Kill Vehicle." (Read Orszag's full letter .)

Grassley ultimately voted against Lynn's nomination, joined by two other Republicans and Democrat Claire McCaskill, who is normally a strong Obama ally. McCaskill said during Lynn's confirmation hearing that she was concerned about the revolving door between defense contractors and the government.

Two more waivers for former lobbyists

Lynn's position required confirmation by the Senate, which appears to have given Grassley the ability to extract more details from the White House. For two other former lobbyists who are now serving in the administration — without the need for Senate approval — there is significantly less information.

On March 10, the White House released brief details on two former lobbyists who were granted waivers to serve in the executive branch. The release begins with quotations from good-government groups praising Obama's executive order and goes on to describe at length the progressive causes for which the former lobbyists worked. ( Read the release in full here .)

One of the lobbyists is Jocelyn Frye, who is now director of policy and projects in the Office of the First Lady. She previously lobbied for National Partnership for Women and Families from 2001 to 2008. The organization advocates for fairness in the workplace, access to health care and "policies that help women and men meet the dual demands of work and family." Many of the laws for which Frye lobbied are things Obama has supported. In 2008, for example, she was listed as lobbyist working for the Lilly Ledbetter Fair Pay Act , the first law Obama signed into law after becoming president.

The other lobbyist is Cecilia Muñoz, now director of intergovernmental affairs in the Executive Office of the President, managing the White House"s relationships with state and local governments. She has also been designated the administration's a principal liaison to the Hispanic community. Muñoz formerly lobbied for National Council of La Raza, a Hispanic civil rights and advocacy organization, between 1998 and 2008. Records show she lobbied on issues like the State Children's Health Insurance Program (SCHIP), improving Head Start and youth intervention programs.

The waivers for Frye and Muñoz make for fast reading. Here's Muñoz's waiver in full; Frye's is substantially similar:

"After consultation with the Counsel to the President, I hereby waive the requirements of paragraph 2 and paragraph 3 of the Ethics Pledge of Ms. Cecilia Muñoz. I have determined that it is in the public interest to grant the waiver because Ms. Muñoz's knowledge and expertise are vital to the functioning of the Office of Intergovernmental Affairs. I understand that Ms. Muñoz will otherwise comply with the remainder of the pledge and with all pre-existing government ethics rules."

The order is signed by Norman Eisen, one of the White House's attorneys and its designated ethics officer, and dated Feb. 20. Yet it took two weeks after that for the waivers to be posted to the White House blog as an "ethics update." The Lynn waiver has never been posted in full as far as we could find.

The Obama administration told us that the three waivers for Lynn, Frye and Munoz are the only waivers given out of approximately 800 appointees.

Waivers vs. recusals for former lobbyists

But it turns out that not all former lobbyists need to get a waiver to work in the Obama administration. Some apparently just need "recusals," where the former lobbyist agrees to simply recuse himself or herself from discussions related to former lobbying interests. How many former lobbyists are operating under recusals? We don't know.

Information about waivers and recusals comes out piecemeal, in response to media reports from places like Politico , Jake Tapper of ABC News , The National Journal , The Hill , the Los Angeles Times and The New York Times , among others.

Here at PolitiFact, we've repeatedly asked about the recusal for Mark Patterson, the chief of staff to Treasury Secretary Tim Geithner. Public records show Patterson worked as a lobbyist for Goldman Sachs in 2008. We're not certain what steps the recusal calls for, because the White House did not provide us with a copy, though we've been assured Patterson has not received a waiver, only a recusal.

Given Goldman Sach's central role in the finance industry, we find it difficult to see how the chief of the staff to the treasury secretary could recuse himself from all discussions that affect Goldman Sachs and still perform his job.

For example, the Treasury Department has used tens of billions of taxpayer dollars to rescue insurance giant AIG. And Goldman Sachs is one of the firms that benefited from AIG's credit default swaps, which were a key factor in last fall's economic collapse. And this is just one example of how Goldman Sachs has benefited from Treasury actions to shore up the financial system.

Simon Johnson, former chief economist of the International Monetary Fund and an economics professor at MIT, told Congress recently that the influence of financial lobbyists on economic policy is particularly troubling. Johnson testified March 12 that he believes that global economic growth requires a rebalancing away from the financial sector and toward other industries such as manufacturing, retail and health care.

"But this change in the allocation of resources is greatly complicated by the increased political power of the financial lobby," Johnson said. "During the boom years, large banks and their fellow travelers accumulated ever-greater political power. This power is now being used to channel government subsidies into the now outmoded (and actually dangerous) financial structure, and in essence to prevent resources from moving out of finance into technology and manufacturing across the industrialized world."

Obama's campaign rhetoric

Some ethics experts say a policy on lobbyists needs to be flexible. They say lobbyists bring valuable expertise from outside government that can help Obama get his agenda through Congress.

"Washington is not a nice place to walk in with just a lot of bright ideas. You have to be able to get things done," said David Vance, the communication and research director of the Campaign Legal Center, a nonpartisan organization that tracks government ethics. "The mistake of the administration was to use too broad a brush in vilifying lobbyists. The school lunch lobbyist is lumped in with the Halliburton lobbyist."

The Obama administration has set a higher standard for ethics that deserves praise, said Bill Allison, senior fellow with the open government group the Sunlight Foundation. But he said the way the administration is using waivers and recusals without releasing details publicly has muddied the issue of whether the administration is keeping its pledge.

"By trying to do this, they have made it more difficult on themselves," Allison said. "That information should really be public and publicly available."

Obama's promise about lobbyists was a regular part of his stump speech. He said it on the campaign trail again and again. He used it to sharply contrast himself with John McCain, who had former lobbyists on his campaign staff. Obama's comments against lobbyists were some of the biggest applause lines of his rallies, especially as the economy was roiled in September and October 2008.

"Make no mistake: We need to end an era in Washington where accountability has been absent, oversight has been overlooked, your tax dollars have been turned over to wealthy CEOs and the well-connected corporations," Obama said at an Oct. 1 campaign stop in Wisconsin. "You need leadership you can trust to work for you, not for the special interests who have had their thumb on the scale. And together, we will tell Washington, and their lobbyists, that their days of setting the agenda are over. They have not funded my campaign. You have. They will not run my White House. You'll help me run my White House."

We previously rated this promise a Compromise while we waited to see whether Lynn was confirmed and how the Obama White House handled its waiver process. Some have said that Lynn alone caused the promise to be broken, but we felt that a transparent, timely and objective waiver process might merit a ruling of Compromise. But the concerns about waivers and recusals outlined above have convinced us that this promise is not being kept in letter or in spirit, and a Compromise rating is no longer appropriate.

Obama was very clear with his promise. He said no lobbyists would "work on regulations or contracts directly and substantially related to their prior employer for two years." No means none. Promise Broken.

Sources:

White House Web site, "Ethics Update" blog post , March 10, 2009

U.S. Office of Government Ethics, Memo on ethics waivers , Feb. 23, 2009

U.S. Office of Government Ethics, Memo on ethics pledge , Feb. 10, 2009

U.S. Senate, Confirmation William J. Lynn, III, of Virginia, to the Deputy Secretary of Defense , Feb. 11, 2009

CQ Transcripts, Senate Armed Services Committee Holds Hearing, Jan. 15, 2009

Wall Street Journal, Nominee is questioned about Pentagon's revolving door , Jan. 15, 2009

U.S. Department of the Treasury, U.S. Treasury and Federal Reserve Board Announce Participation in AIG Restructuring Plan , March 2, 2009

Peterson Institute for International Economics, U.S. Foreign Economic Policy in the Global Crisis , March 12, 2008

Center for Responsive Politics, Securities & Investment: Long-Term Contribution Trends , 1990 - 2008

Center for Responsive Politics, Top Industries Giving to Members of Congress , 2008 Cycle

U.S. House of Representatives Committee on Foreign Affairs, Subcommittee on Terrorism, Nonproliferation and Trade, Hearing on U.S. Foreign Economic Policy in the Global Crisis , March 12, 2009

Point of Order (legal blog), It depends on the meaning of the word 'specific' , Feb. 6, 2009

Los Angeles Times, Likely Justice Department nominee faces ethics hurdle , Feb. 5, 2009

The Hill, Lobbyists slipping into Obama administration , March 5, 2009

The New York Times, Friendship Born at Harvard Goes on to White House , March 9, 2009

Politico, Lobbyists ban limits Obama's options , March 13, 2009

Washington Post, White House ethics? 'Mr. No' Knows , March 13, 2009

Center for Responsive Politics, National Partnership for Women and Families lobbying report , Jocelyn Frye, 2001 - 2008

Center for Responsive Politics, National Council of La Raza , Cecelia Munoz, 1998 - 2008

Huffington Post, Obama's Anti-Lobbyist Policy Causing Unintended Harm , March 5, 2009

ABC News, Another Lobbyist Headed into Obama Administration , Jan. 27, 2009

Center for Responsive Politics, Goldman Sachs lobbying filings , 2005-2008

Center for Responsive Politics, Raytheon lobbying filings , 2002-2008

White House Press Briefing , Jan. 22, 2009

Letter from Sen. Charles Grassley to OMB Director Peter Orszag , Jan. 29, 2009

Letter from OMB Director Peter Orszag to Sen. Charles Grassley , Feb. 3, 2009

Defense, Treasury appointees have conflicts

One of the first things President Obama did after he took office was sign an executive order setting rules on lobbying and serving in his administration. It included a general ban on appointments for people who had lobbied on related issues during the prior two years. We rated it Promise Kept.

But there was also a waiver clause, and when it became apparent that the administration would use waivers to employ former lobbyists in positions where they would have broad authority, we moved the meter to Compromise.

Since then, we've gotten many e-mail from readers on this issue, and we've been monitoring the developments to see if former lobbyists have received jobs in the administration.

Some appointments appear to follow his promise.This includes former lobbyists who haven't actively lobbied in two years, such as Attorney General Eric Holder . It includes people who lobbied on issues different from what they now do, such as Agriculture Secretary Tom Vilsack , who lobbied for the National Education Association.

But there are two appointments that appear to contradict Obama's promise. Mark Patterson, it has been widely reported, has been named chief of staff for the Treasury Department. Patterson is a former vice president for the financial giant Goldman Sachs , and was registered to lobby there from 2005 to 2008. (See public filings compiled by the nonpartisan Center for Responsive Politics.) And Goldman Sachs received $10 billion in money from the TARP program and is considered a key player in the financial industry.

According to the terms of Obama's executive order, we can only surmise that Patterson is receiving a waiver of some sort. We asked the White House press office and the Treasury Department what kind of waiver Patterson received and what its terms were. We received no response. Treasury Secretary Tim Geithner appoints the chief of staff and the position is not subject to Senate approval.

We've also learned new details about nominee William J. Lynn, who has been nominated to be an undersecretary at the Defense Department, even though he used to lobby for the defense contractor Raytheon . That position requires confirmation by the Senate.

Sen. Charles Grassley, R-Iowa, raised questions about Lynn's nomination in a letter to Peter Orszag, director of the White House's Office of Management and Budget. Under the terms of the executive order Obama signed, it's Orszag's office that dispenses waivers for former lobbyists.

In a four-page letter, Grassley wrote that the Lynn nomination undermined Obama's stated goal of closing the "revolving door" for lobbyists working in government:

"Mr. Lynn was a registered Raytheon lobbyist for six years. His lobbying reports clearly indicate that he lobbied extensively on a very broad range of DOD programs and issues in both the House and Senate and at the Department of Defense. If confirmed, Mr. Lynn would become the top operations manager in the Pentagon. He would be the final approval authority on most — if not all — contract, program and budget decisions. Surely, a number of Raytheon issues would come across his desk. ... Based upon President Obama's statements made during the presidential campaign and leading up to and following the signing of the Executive Order, I simply cannot comprehend how this particular lobbyist could be nominated to fill such a key position at DOD overseeing procurement matters, much less be granted a waiver from the ethical limitations listed in the Executive Order."

Grassley concluded that more waiver information needs to be made public: "Please bring transparency and accountability to Mr. Lynn's waiver and all future waivers of the Executive Order by providing details about why waivers have been granted and the criteria used to determine them."  (Read Grassley's full letter .)

We asked the White House press office whether more information on the waivers would be made public, and if we could anticipate waiver information to be included in the online database of ethics and lobbying information that Obama promised during the campaign. Again, we received no response.

Orszag did respond to Grassley's questions, however. His letter of response began by hailing Obama's executive orders as "some of the strictest rules ever imposed on executive branch personnel ... roundly praised by commentators and good government advocates as the toughest ever of its kind."

He then reviewed Lynn's particular qualifications: undersecretary of defense (comptroller) under President Clinton; assistant to the secretary of defense for budget; legislative counsel for defense and arms control to Sen. Edward Kennedy; senior fellow at the National Defense University.

Finally, Orszag enumerated details about Lynn's waiver. It requires Lynn to divest his Raytheon stock within 90 days of his appointment and outlines additional detail on particular stock programs. The waiver also requires that he not participate "personally and substantially" in any matter in which Raytheon is a party for one year, unless he receives prior authorization. It says Lynn will not seek permission to participate in any of six programs for which he personally lobbied. Those programs include "the DDG-1000 surface combatant, the AMRAAM air-to-air missile, the F-15 airborne radar, the Patriot Pure Fleet program, the Future Imagery Architecture, and the Multiple Kill Vehicle."

In conclusion, Orszag wrote, "We do not believe the ethics compliance process described above will hinder Mr. Lynn from doing his job. The process strikes a reasonable balance under the circumstances." (Read Orszag's full letter .)

As of this writing, the Senate has not yet voted on Lynn's confirmation.

When asked about Lynn on Jan. 22, White House spokesman Robert Gibbs said a waiver process is necessary and that Lynn is "somebody who obviously is superbly qualified."

We understand that the examples we've examined here are just two positions out of thousands that the president has to appoint. However, they don't seem consistent with Obama's promise. Indeed, we can't find any mention of waivers prior to Election Day.

We've received numerous e-mails from readers making reasonable arguments that we should rate this a Promise Broken, but we want to wait and see what happens with the nominees. We are leaving this one as a Compromise and will keep a close eye on what happens.

Sources:

ABC News, Another Lobbyist Headed into Obama Administration , Jan. 27, 2009

Center for Responsive Politics, Goldman Sachs lobbying filings , 2005-2008

Center for Responsive Politics, Raytheon lobbying filings , 2002-2008

White House Press Briefing , Jan. 22, 2009

Letter from Sen. Charles Grassley to OMB Director Peter Orszag , Jan. 29, 2009

Letter from OMB Director Peter Orszag to Sen. Charles Grassley , Feb. 3, 2009

 

Waiver for former defense lobbyist moves the needle

On his first day, President Obama signed an executive order placing restrictions on lobbyists working in the White House, as he promised to do during the campaign. We rated it Promise Kept.

But we've since learned new information that is prompting us to keep a closer eye on Promise No. 240 and move the needle to Compromise.

The executive order Obama signed includes a waiver clause. The executive order says a waiver may be granted if "the literal application of the restriction is inconsistent with the purposes of the restriction" or "it is in the public interest. ... The public interest shall include, but not be limited to, exigent circumstances relating to national security or to the economy."

And a waiver seems to be in the works already — for William J. Lynn III, the appointee  to be deputy secretary of defense. Lynn was formerly a lobbyist for the giant defense contractor Raytheon.

Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee, said the committee needs more information before confirming Lynn.

The committee wants to know "whether a waiver will be forthcoming and what the scope of the waiver will be," said Levin in a statement on Jan. 22, 2009.

White House spokesman Robert Gibbs, when asked about Lynn on Jan. 22, said the waiver process is necessary to allow uniquely qualified people to serve. "In the case of Mr. Lynn, he's somebody who obviously is superbly qualified," Gibbs said.  "His experience going back to his Pentagon jobs during the Clinton administration make him uniquely qualified to do this."

Defense Secretary Robert Gates said he asked for an exception for Lynn because "he came with the highest recommendations of a number of people that I respect a lot." Gates spoke at a Defense Department news briefing on Jan. 22, 2009.

Another former lobbyist, William Corr, was tapped to be deputy secretary at the Department of Health and Human Services. He previously lobbied for the nonprofit Campaign for Tobacco-Free Kids. Corr has not yet been confirmed, but ABC News' Jake Tapper quoted a White House official saying that Corr intends to recuse himself from tobacco policy.

Perhaps a lobbyist who worked to keep kids from smoking could work at HHS without a conflict. But the nomination of a defense industry lobbyist to work at the Defense Department? Obama said that "no political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years." Lynn's appointment contradicts that.

The waiver clause states that an exception to the rule should serve the public interest, and it has to be signed by the Director of the Office of Management and Budget. That might sound like an independent party, but OMB is part of the Obama White House, so it essentially means the administration would decide on its own who merits a waiver.

Since there"s only talk of one or two waivers now, we"re going to drop the Obameter rating a notch to Compromise. But we"ll be keeping a close eye to see if Obama seeks many waivers, and we might have to revisit our rating.

Sources:

Sen. Carl Levin Web site, Levin Statement on the Nomination of William Lynn to be Deputy Secretary of Defense , Jan. 22, 2009

Center for Responsive Politics, William J. Lynn profile , accessed Jan. 23, 2009

CQ Transcripts, Defense Department news briefing, Jan. 22, 2009

Center for Responsive Politics, William Corr profile , accessed Jan. 23, 2009

ABC News' Jake Tapper, Another Obama Nominee Seems to Run Afoul of Anti-Lobbyist Campaign Rhetoric , Jan. 13, 2009

Obama signs executive order on lobbyists

In one of his first acts as president, Barack Obama kept a campaign promise to toughen ethics rules, signing an executive order on Jan. 21, 2009.

"If you are a lobbyist entering my administration, you will not be able to work on matters you lobbied on, or in the agencies you lobbied during the previous two years," Obama said at the signing ceremony. "When you leave government, you will not be able to lobby my administration for as long as I am president. And there will be a ban on gifts by lobbyists to anyone serving in the administration as well."

The title of the order is "Executive Order on Ethics Commitments by Executive Branch Personnel." (See the full text below.)

We rate his promise to institute tougher ethics rules as Promise Kept.

Sources:

CNN, " Vowing transparency, Obama OKs ethics guidelines ," Jan. 21, 2009

The White House, Executive Order -- Ethics Commitments by Executive Branch Personnel , Jan. 21, 2009