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Project on Government Oversight

POGO Supports Effort to Stregthen Disclosure of Lobbying Contacts Within the Executive Branch

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August 19, 2010 | By: Scott H. Amey, J.D.

Ms. Marguerite Pridgen
Office of Federal Financial ManagementO
ffice of Management and Budget72
5 17th Street, NW
Washington, DC 20503 

RE: Comments on SF–LLL Renewal on behalf of OMB Watch, Project On Government Oversight, Sunlight Foundation, and Thomas M. Susman

Dear Ms. Pridgen:

We appreciate the opportunity to comment on the SF-LLL, Disclosure of Lobbying Activities, as announced in the June 22, 2010 Federal Register.  As organizations and individuals dedicated to government accountability and civic participation, we believe that the current form needs substantial change to strengthen disclosure of lobbying contacts within the executive branch.  Acting under authority granted by the Byrd Amendment (as amended by the Lobbying Disclosure Act), combined with general government operations authority, and consistent with the intent of the executive order on Ethics Commitments By Executive Branch Personnel (E.O. 13490), we believe that SF-LLL should be amended to capture all contacts that involve attempts to seek contracts, grants, cooperative agreements, loans, insurance awards, tax expenditures, or any other financial arrangements. 

We propose that the Office of Management and Budget (OMB) modify SF-LLL to expand executive branch lobbying disclosure to shed sunlight on the wielding of unseen influence by all entities and those representing entities that are seeking to request, win, or influence any federal award or spending on any individual federal program above $250,000.  This proposal not only covers disclosure by those registered under the Lobbying Disclosure Act (LDA), but also executives, board members, employees, consultants, and other agents who seek to influence executive branch spending matters, but are not required to register under the LDA.  We propose the new SF-LLL be filed online and that the content should be made available through a searchable website.  Penalties for noncompliance need to be stringently enforced.

Expanding Who Reports

Any oral or written communication, including email or other electronic forms, between an entity attempting to seek a federal award and an executive branch employee would trigger the requirement to complete an SF-LLL.

For these purposes, an “entity” would include any company, partnership, association, industry, or sector, an employee thereof, or any person representing such entity, that either already has a federal award, seeks to obtain any federal award, or attempts to influence funding worth more than $250,000 for any federal program, project, or activity.[1]

The term “federal award” includes contracts, grants, cooperative agreements, loans, leases, insurance awards, or any other financial arrangement, including tax expenditures and non-monetary transfers, as well as any subsequent awards (e.g. subcontracts, subgrants, etc.) made through these vehicles.

“Communications” would include policy, program, legal, technical or background communications knowingly prepared to seek a federal award or influence federal spending.  This would not include general questions about the logistics of federal awards or other administrative requests; communications initiated by the executive branch during the period in which a grant or contract proposal that has been submitted to the government is being reviewed by the executive branch; or public comments to a government solicitation that are normally posted to regulations.gov or some other publically available site.

Revising SF-LLL

A key change we propose is to require all respondents to complete SF-LLL online through a website launched by OMB.  For any meetings, including in-person, telephonic and video communications, between an entity attempting to seek a federal award and an executive branch employee, the entity would be required to electronically file SF-LLL within 72 hours of the communication.  All meetings will be assigned an identifier that is organized with a department and agency code followed by the meeting number.  This number should be shared with the entity.

The information that would be submitted would be expanded from the current SF-LLL to include:

  • Date and time of the meeting, and a meeting number that should be assigned at the time of the meeting.
  • Name, office address and employer (One report per entity is sufficient, regardless of the number of representatives of that entity, as long as each individual is listed on the form).
  • Form of contact (telephonic, in-person or through video conferencing).
  • Whether filer is a registered lobbyist under LDA.
  • Whether the filer is a former employee of the agency contacted and when last employed.
  • Whether the filer is an employee of the entity being represented and, if not, name of entity being represented
  • The full name, address and DUNS number of the entity being represented (and the parent company).  Plus, the congressional district of the entity, which should also automatically fill in based on the information entered into the address line.
  • Whether the entity expects to be a prime recipient or sub-recipient of the federal award.
  • If expected to be a sub-recipient, the name, address and DUNS number of the prime recipient.
  • The type of government action (contract, grant, etc.) being sought.  This would have two parts:
  • Are you currently (or are you representing an entity or industry) receiving federal awards?  [This would be a box to allow the entity to check all the appropriate boxes: contract, grant, cooperative agreement, loan, loan guarantee, loan insurance, lease, tax expenditure, non-cash transfer (specify).]
  • Are you seeking to influence the outcome of one or more federal awards?  [This would be a box to allow the entity to check all the appropriate boxes: contract, grant, cooperative agreement, loan, loan guarantee, loan insurance, lease, tax expenditure, non-cash transfer (specify).]
  • Is the meeting related to an existing federal award?
  • If yes, was this about: a no cost extension of the award; an extension that will cost the government additional money or lost revenue; an expansion that will cost the government additional money or lost revenue?
  • The name of the federal agency making the award and the name or description of the federal program, and all identifying codes (like RFP numbers, contract number, CDFA, etc.).
  • Summary of the nature of the contact; the specific action or actions requested of the executive branch official during the contact.  Respondents would also be required to attach any written materials that were provided at the meeting.
  • Have there been previous meetings on this subject?
  • If yes, identify meeting codes for other related meetings.

Additionally, any written communication, including email or other electronic forms, between an entity attempting to seek a federal award and an executive branch employee would be disclosed.  The agency receiving the communication would be responsible for posting the written communication to the website launched by OMB within 3 days of receiving it.

Adding Government Employee Form

The government employee participating in a meeting with an entity attempting to influence a federal award would be required to complete a “short form” (e.g., SF-LLLShort), which would be an online form summarizing the nature of the meeting.  The government employee would be required to file the short form within 24 hours of the meeting.  The government employee would also be required to post any materials distributed during the meeting on a centralized, public, searchable website within 7 days of the meeting.  If any information required to be posted under this provision constitutes trade secrets or confidential commercial information, it should be summarized for the public posting or the material posted should be appropriately redacted.

The posting of the short form would trigger an automatic email reminder to the entity to complete the SF-LLL and would provide the meeting identifier that was assigned.

The content of the short form would be limited to date and time of meeting, meeting identifier number, name of the government employee(s), federal agency, job title, contact information, names of meeting participants, client name, employer name, brief description of the meeting, and materials submitted during the meeting.

Disclosing Lobbying Information

OMB would ensure that the content from the electronic submission of the SF-LLL is posted on a centralized, public, searchable website within 3 days of receiving it.  OMB would also establish the means for the agency to post the short-form (e.g., SF-LLLShort) on the same centralized, public, searchable website within 48 hours of the meeting.  The short- and long-forms would be connected through the unique meeting identifier number described above.

At a minimum, the website should include searchable fields (e.g., name of entity, federal agency, amount of money); downloadable data in aggregate and by search in multiple formats; source feeds via RESTful web service discovery, via Atom or RSS; other ethics information with a minimum being lobbying expenditures under the Lobbying Disclosure Act and campaign contributions as reported to the FEC; and other performance information, such as data from the recently-created Federal Awardee Performance and Integrity Information System (FAPIIS), which will act as an aggregation of various contractor performance data sources.

It may be useful to link this website to the USAspending.gov website in several ways.  For example, the data described above might be a tab under USAspending.gov.  Additionally, as a user searches for information about a recipient of a federal award, the user might be asked if they would want information about the entity’s lobbying records.  If the user responds affirmatively, the lobbying data would be displayed.

Enforcement

A system that does not enforce this policy, including failing to report or reporting inaccurate information, will hinder compliance.  Because the executive branch employee or those entities attending the meeting could fail to follow these reporting rules, enforcement strategies should be applied to both parties and rigorously applied.  There are several options, both proactive and reactive and of which none is exclusive of the other, which could be exercised to encourage compliance.

Lobbying Entities

  • Contractor Responsibility.  Procurement officers should consider completion of SF-LLLs as part of contractor responsibility.
  •  Certification.  Require contractors to certify pursuant to amended FAR 52.209-5 that they or entities representing them have filled out all the relevant disclosure forms when placing an offer or bid for a federal government contract.
  • Compliance notification in contractor databases.  If the meeting attendee ultimately wins an award of federal funds and fails to comply with meeting reporting requirements, such failure would be noted in any federal contractor responsibility or performance database and may be used in future contract award responsibility determinations. 
  • Remedies.  In addition to other remedies available to the government, an entity's failure to comply with the disclosure requirements may result in:
  • Fines.  Incorporate penalties from the Byrd amendment.  These fines could be tiered to more strictly penalize frequent or substantial abuses.
  • Suspension or Debarment.  Entities that fail to properly fill out disclosure forms either on a timely basis or with complete and accurate information may be considered for suspension or debarment.

Executive Branch Agencies and Employees

  • Employee Assessments.  Failure to properly document communications with an entity would result in negative employee performance reviews.
  • Automatic Reminders.  Completion of the short form (e.g., SF-LLLShort) should automatically generate electronic reminders, in the form of timely emails, to both the government employee to post any materials distributed at the meeting, and the entity to fill out the long-form.
  • Public Report.  Each agency should submit a public report to the Office of Government Ethics reviewing their employees' timeliness and completeness in filling out disclosure short-forms.  These reports would be part of an electronic dashboard that assesses agency performance.  This dashboard should be accessible through the OMB launched website (see above).

Consistency with Executive Order 13490

President Obama’s Ethics Executive Order calls on the Office of Government Ethics, in consultation with OMB, to identify ways of expanding executive branch procurement lobbying disclosure and, where possible, to implement such actions.  (See Section (c)(4).)  The plan proposed in these comments on SF-LLL provides a blueprint on strengthening procurement lobbying disclosure.

Legal Justification

We believe the president has the authority to implement this proposal.  As evidence of that authority, on Jan. 27, 2009 Treasury Secretary Timothy Geithner announced new rules designed to limit the influence of lobbyists and special interests in the Emergency Economic Stabilization Act (EESA) to ensure that investment decisions are guided by objective assessments in the best interest of the health and stability of the financial system.  EESA had no specific statutory requirement to implement these rules regarding lobbying communications; instead the administration relied on its general powers.[2]  The rules have never been challenged.

The Treasury regulations ban oral communications with any person or entity concerning a pending application for aid under the $700 billion program, whether or not they are federally registered lobbyists.  But the rules allow government officials to communicate with outside parties regarding general inquiries about deadlines and logistics under the EESA. The policy allows communication that “does not involve advocacy about EESA policy or a specific application for funding under the EESA.”  Our recommendations in these comments do not go as far as banning any communications; instead, they rely on disclosure.

Based on actions taken by Treasury, it is clear the president needs no statutory authority to pursue the recommendations in this letter.  Nonetheless, the Byrd amendment (31 USC 1352) provides a useful statutory framework to build upon.

The Byrd amendment covers any “person” who “requests or receives” a federal award (31 USC 1352(b)(1)).  Under 31 USC 1352(b) each “person” is to report its lobbying activities.  A “person” mirrors the definition we propose in these comments (31 USC 1352(g)(3)(A)).  The Byrd amendment requires the entity who is requesting or receiving an award to disclose the name of any LDA registrant hired by the entity (31 USC 1352(b)(2)-(3)).  However, with limited exception, there is no statutory or regulatory restriction on OMB requiring information be provided by non-LDA registrants.

OMB may need to modify the Byrd amendment common rule to note that any entity “requesting” or initiating agency consideration of an award would need to disclose.  Currently, OMB’s disclosure process begins when the entity wins an award, not when the requesting process begins.  OMB may need to define “requests” to ensure that it covers policy, program, legal, technical or background communications knowingly prepared to seek a federal award. The Byrd amendment also calls on entities that are requesting federal awards to report each time the entity “initiates agency consideration” of a federal award.  Again, OMB can use its authority to be clear that reporting is required for each communication.  Nothing in the law would restrict such application.

In 1992, OMB modified the interim final rule on the Byrd amendment to expand the definition of lobbying (57 Fed. Reg. 1772 (Jan. 15, 1992)).  In the modification of the rule, OMB included “activities to influence the earmarking of funds for a particular program, project or activity…” While this change was targeted to an “appropriation, authorization or other bill or in report language”, OMB has the authority to extend this to actions undertaken to influence executive branch actions.

Conclusion

We believe that the recommendations presented here could significantly advance efforts to curb the influence of special interests when it comes to federal financial awards.  The changes proposed here are not expensive and are well within the legal authority of the president and OMB to implement.  We hope that you will give our recommendations to modify SF-LLL serious consideration.  We remain available to discuss these recommendations further or to assist with implementation.

Yours truly,

Gary D. Bass
OMB Watch
202-234-8494

Scott Amey
Project On Government Oversight
202-347-1122

Lisa Rosenberg
Sunlight Foundation
202-360-7895

Thomas M. Susman
202-662-1000



1. While we propose a trigger of $250,000 for application of these requirements because that number is two and one-half times the threshold used under the Byrd amendment, we believe that the much higher number of covered lobbying communications implicated by our proposal may militate toward a higher threshold (perhaps $500,000 or even higher).  Our objective is to capture influences of powerful special interests, without burdening small businesses.  This proposal does not address required disclosure and certification under the Byrd amendment that no federal funds were used to lobby for additional funding.

2. Sec. 108 of EESA instructs the Treasury Secretary to “issue regulations or guidelines necessary to address and manage or to prohibit conflicts of interest."  It is important to note that this provision does not specifically authorize rules on the influence of lobbyists, but rather mandates regulations dealing with conflicts of interest.

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