Obama Administration Restricts Lobbying on Stimulus Spending

Political Law Alert

The Obama Administration issued a memorandum on March 20, 2009 to Executive Branch department and agency heads that imposes rules on government spending and financial assistance in connection with the American Recovery and Reinvestment Act of 2009, which has been commonly referred to as the stimulus package. The stated objective of the lobbying provisions in these rules is to limit the influence of outside interests on departments and agencies with authority to commit or distribute stimulus funds. In fact, one controversial provision included in the memorandum, described below in number 1, significantly restricts the ability of registered federal lobbyists to communicate with government officials regarding particular grants or projects funded through the stimulus package.

Specifically, pursuant to the memorandum:

    1. Executive Branch department and agency officials are prohibited from considering the views of registered federal lobbyists regarding distribution of stimulus funds for "particular" projects, applications, or applicants unless the lobbyists' views are expressed in writing. All written lobbyist communications must be publicly disclosed within three business days.

    3. Executive Branch departments and agencies must adopt transparent, merit-based selection criteria for determining recipients of stimulus grants and financial assistance and take measures to avoid the undue influence of outside persons and entities on spending decisions.

    5. Stimulus funds may not be used for "imprudent projects" that fail to support the job creation and economic recovery goals of the Recovery Act such as casinos, aquariums, zoos, golf courses, or swimming pools. Executive Branch departments and agencies should use their discretion to decline approval for imprudent projects.

The constitutionality of the lobbyist communications ban described in 1 above is unclear, at best, but as written it means that lobbyists may not have verbal communications with Executive Branch officials about the expenditure of stimulus funds for specific projects or the receipt of stimulus funds by a particular entity. Lobbyists may have general conversations with Executive Branch officials about government funding or policies, but the memo instructs Executive Branch officials participating in general conversations with lobbyists to document those communications and disclose them publicly within three business days.

If you have any questions about these provisions or their application to your activities, please feel free to contact a member of our Political Activity Law Practice Group.

Trevor Potter: 202-862-5092 or tp@capdale.com
Matthew T. Sanderson: 202-862-5046 or mts@capdale.com

Caplin & Drysdale
Washington, D.C. Office: One Thomas Circle N.W., Suite 1100
Washington, D.C., USA 20005
PH: +1 202-862-5000 FX: +1 202-429-3301

New York Office: 375 Park Avenue, 35th Floor
New York, New York, USA 10152
PH: +1 212-319-7125 FX: +1 212-644-6755

© 2009 Caplin & Drysdale, Chartered
All Rights Reserved.

About Caplin & Drysdale
A leading law firm, Caplin & Drysdale provides political activity law counseling and a full range of tax and legal services to companies, organizations, and individuals throughout the United States and around the world. The firm also provides employee benefits counseling, corporate law counseling, exempt organization counseling, white collar defense, and complex civil litigation services.

This alert is intended as a summary of legal issues for your general information. It does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose.


Related Practices/Industries

Jump to Page

We use cookies to make your experience of our website better. By continuing to browse this site you consent to the use of cookies. Please visit our Privacy Policy for more information.