Proposed Ethics Rule Change Seen as Isolating Government Officials from Industry

The American League of Lobbyists and CEA, in particular (CD Nov 16 p17) , have mounted campaigns against the rule. Law firm Wiley Rein put out a bulletin explaining the proposed rule in more depth (http://xrl.us/bmjcs7). The only exception would be for executive branch employees assigned by their agencies to speak at an industry event, who would be allowed to attend for free but only on the day of their presentation. The rule applies to employees of independent agencies like the FCC, said a lawyer closely tracking the rule change.

In seeking comments on the proposed ban, OGE said it hopes to eliminate advantages lobbyists have over the public (http://xrl.us/bmjpyv). “Probably an invitation to a gala ball will not directly influence an official to take action benefitting the giver,” OGE said. “But it is increasingly recognized that the more realistic problem is not the brazen quid pro quo, but rather the cultivation of familiarity and access that a lobbyist may use in the future to obtain a more sympathetic hearing for clients."

"The ethics rules are in danger of hermetically sealing off all federal decision makers from the real world,” an FCC official said. “It’s difficult to make informed decisions without venturing beyond the Beltway to study the practical implication of regulations. So I would hope OGE would not extend these rules as proposed."

American League of Lobbyists President Howard Marlow told us the rule likely will take effect. “Bottom line, they may make modifications, though I don’t know what those modifications will be,” he said. “But the likelihood is they will issue a final rule because it is the right year. It’s coming up on an election year. It’s part of their anti-lobbying foray.” The cumulative effect of the proposed rule and other rules on contact between government employees and lobbyists is having a “chilling effect” on communications between industry and the government, Marlow said. “The government workers that I have contact with in the areas of my expertise are learning from me just like I'm learning from them,” he said. “It’s important to have that give and take. ... These conferences are important.”

Government officials learn a lot by going to trade shows, walking the show floor and talking to the people affected by regulation, said telecom lawyer John Nakahata of Wiltshire Grannis, a former FCC chief of staff. “This proposed rule puts form over common sense,” he said. “If you put government officials in a cocoon, you guarantee that they will be out of touch with the latest developments in technology and the marketplace. And it is much better for government officials to see the broad spectrum of industry at a trade show than only to hear from those that can fly to Washington."

National Emergency Number Association President Brian Fontes, also an ex-FCC chief of staff, agreed that attendance at trade shows is helpful to regulators. “I think it will further isolate federal employees from the industries they regulate and reduce the dialogue between industry and government,” he said of OGE’s proposed rule. “I understand the ... intention of such restrictions, but I think it is important to have a dialogue and often times at industry conferences the best minds come together for debate and discussion.”

Rural Cellular Association President Steve Berry also panned the proposal. It “demonstrates little understanding of the need for government employees to interact with real business people in the field,” he said. “It will hamper government’s ability to gather valuable information and learn of the practical challenges businesses face everyday.” Berry said the rule could be especially negative for the small carriers RCA represents. “How can you encourage cooperative relationships and informed decisions without personal interaction?” he asked. “As a practical matter it will make it even more difficult for the smaller carriers or businesses to interact with policy makers -- government agencies will have to pay for attendance at shows ... and therefore go to fewer shows."

Public-interest groups and smaller players could be the first to suffer if the rules are adopted as proposed, Public Knowledge Legal Director Harold Feld said. “Certainly the FCC will spend money to send staff to the NAB annual conference, but will they also send staff to the National Conference on Media Reform?” he asked. “I think it is important to balance the real concerns about lavish gifts with the need to have real dialogue between stakeholders ... and regulators outside of D.C.,” he said. “In theory, Congress should appropriate more money to allow agency staff to attend these conferences. But the reality is, Congress won’t."

"The proposed OGE changes, however well-intentioned in theory, would have the likely effect, especially at a time when agency budgets are going to be increasingly constrained, of curtailing useful exchanges between the private sector and government officials with pertinent regulatory responsibilities,” said Randolph May, president of the Free State Foundation. “It is one thing to recognize there ought to be some reasonable restraints on the benefits that private sector parties may bestow on government officials. But it is wrong to assume the decisions of government officials are going to be unduly influenced by complimentary attendance at trade shows that are open to the public and which are conducted in a way that leads to an educational exchange of views.” May, whose group often opposes regulation, used to be an FCC associate general counsel.

Media Access Project Senior Vice President Andrew Schwartzman said the problem with the current system is that it’s subject to abuse. “There have been instances in which particular staff members have become too close to particular industries,” he said. “The socializing which takes place at trade shows gives access which is unavailable to ordinary members of the public. At the very least, we need more effective and enforceable limits on the wining and dining, meaningful compliance with the ex parte rules and greater transparency."

The trend has already been for FCC and other officials to spend less time at trade shows than in the past, a longtime communications lawyer and former FCC official noted. “This could have some negative impact, but there has already been a steady decrease in government participation over the years,” the attorney said. “Industries will have trade shows, but companies may send fewer regulatory staff to these shows."

CEA urged OGE to drop the rulemaking entirely, in comments it filed with the agency. “The proposed rules will essentially criminalize and segregate government from business,” the association said. “The rules suggest that business and jobs creators are enemies rather than partners who each play a crucial role in growing the economy. No other country has such draconian segregation of government and business.”