Obama lobbying rules having unintended effects

The dome of the U.S. Capitol in Washington, August 26, 2009.

WASHINGTON (Reuters) - President Barack Obama's new special interest rules are having unexpected consequences with some lobbyists giving up their formal registrations and finding other ways to influence policy as they try to maintain access to key agencies or hope for future government jobs.

Congressional aides, industry executives and watchdog groups say the rules have also slowed Obama's ability to fill key government jobs, eliminated some highly qualified candidates and kept away some others who worry tougher "revolving door" rules could tie their hands in the future.

"The president's executive order isn't working the way they planned," said one top Washington industry lobbyist, who asked not to be identified, given the sensitivity of the subject.

He said he personally knew of several companies and non-profit groups who had filed papers with Congress terminating the lobbyist status of people on their payrolls after realizing that they were being shut out.

Reading the rules narrowly, even he could deregister and leave the actual "lobbying" to others on his staff, said the lobbyist, but quickly added he had no intention to do that.

Obama's January 21 executive order on ethics bans lobbyists from working in an agency they previously lobbied for two years, and bans any lobbying of high-level government officials for the rest of the administration if an appointee leaves.

The administration in May tightened rules that banned lobbyists from speaking with administration officials about specific economic stimulus projects, to include oral communication by anyone, not just lobbyists.

The White House maintains it has filled more jobs faster than any other administration in recent history and says that its efforts to pry loose the influence of special interests in Washington are starting to show results.

Norm Eisen, special council to the president for ethics and government reform, says the administration will continue to review lobbying rules and remains convinced that there is always more than one qualified candidate for any job.

"We're going to keep working on those loopholes," he said, although he declined to give any details about further plans.

REFORM TOUGH TO DO

The rules meant experts like John Douglass, former head of the Aerospace Industries Association and Margaret Seminario, occupational health and safety director of the labor giant AFL-CIO, could not be considered for top government jobs.

Douglass, a retired Air Force general and former Navy arms buyer, was a key adviser to Obama before he entered the White House but bears no grudges: "I do support what the president is trying to do in terms of getting the special interests in Washington under control, but it is an extremely difficult thing to do and sometimes has unintended consequences."

The White House has granted a few waivers, including one for Deputy Defense Secretary William Lynn, a former lobbyist with Raytheon Co.

Pierre Sprey, a former Pentagon official, and Winslow Wheeler, a former long-time congressional aide, called Lynn "the defense industry's secret weapon" in a recent article in Mother Jones magazine, and said he had sought to soften a defense acquisition reform law signed by Obama in May.

The controversy over Lynn has made officials even more careful about nominations going forward.

STEALTH LOBBYING?

Meanwhile, OMBWatch and other nonpartisan groups have urged the White House to exempt public interest lobbyists from the job restrictions. Several groups, including the Open Society Policy Center, have deregistered lobbyists after concluding they never met the criteria for official registration.

"It's severely restricted the talent pool that government can draw from," said Lee Mason, director of nonprofit speech rights for OMBWatch.

Under federal law, individuals must register as lobbyists if they make two or more contacts with covered officials and spend more than 20 percent of their time trying to influence legislation. Those reports are due every six months.

Mason said moves by some lobbyists to cancel their registrations could undermine Obama's intent, and underscored his longstanding concerns about existing lobbying rules.

"If lobbyists are deregistering for fear of being affected by the president's order, it means less transparency about the policies that are being created," Mason said.

In the past companies and groups registered anyone who could possibly be seen as a lobbyist, but the opposite was now true, said one former lobbyist.

As of June, there were 12,553 federal lobbyists registered, down from 14,800 at the end of 2008, and below a record 15,137 in 2007, according to the Center for Responsive Politics.

Lobbyist termination data are elusive since the government does not keep a running count in its registration database.

The Center's Dave Levinthal said registrations could rise before year-end and several factors could be contributing to the decline, including the sour economy, increasing deregistrations, and a shift into non-covered activities such as advertising and grassroots work, he said.

"There's a great deal of stealth lobbying that takes place," he said, noting that current law did not capture many activities that could be seen as lobbying, including efforts to influence federal policy by state and municipal authorities.

(Reporting by Andrea Shalal-Esa; Editing by Diane Craft)