President’s Nominee for Trade Rep, a Lobbyist in 2008, to Take Advantage of Loophole in Anti-Lobbyist Regs

By MichaelJames

Feb 21, 2009 5:55pm

On first blush, Ron Kirk, the former mayor of Dallas and President Obama’s nominee for U.S. Trade Representative, could seem as though he has an enormous impediment standing in his way to the Cabinet: President Obama’s high standards against lobbyists in his Cabinet.

As recently as last year, Kirk was a lobbyist for investment bank Merrill Lynch & Co., Inc., and President Obama has said no one can work in his administration on issues they lobbied on in the previous two years.

Given the vast array of issues the trade representative deals with, and the vast array of Merrill Lynch holdings, such a scenario seems potentially quite problematic.

But here’s the quirk for Kirk: He was a lobbyist in Austin, Texas. Not in Washington, D.C.

And that allows Kirk to easily avoid the requirements of President Obama’s'anti-lobbyist ethics rules, which apply only to federal lobbyists.

To be sure, President Obama’s ethics and anti-lobbyist rules go farther than any of his predecessors’. Indeed, some agencies and departments have had trouble getting fully staffed because of the rules and regulations. A vast majority of Obama administration officials have never lobbied for anything or anyone, and good government groups largely give the president good marks for the steps he has taken.

But though the president at his most precise has railed against former "federally registered lobbyists" running his administration, at other times he has not been so precise, and his language on the matter at times may have given many Americans the impression that state and local lobbyists — who in many instances bring the same baggage as federal lobbyists — would be kept from working in his administration as well.

Last year, Merrill Lynch paid Kirk up to $49.999.99 for lobbying (Texas Ethics Commission laws only require reporting on an income range) while the law and lobbying firm Vinson & Elkins LLP paid Kirk between $50,000 and $99,999.99.

Kirk in 2007 made $745,765.01 for lobbying on behalf of the Fort Worth-based Texas Energy Future Holdings Limited Partnership, a private equity firm that bought TXU Corp. Combined, both Energy Future Holdings Corp. and TXU paid Kirk an additional figure totalling somewhere between $200,000 and $299,999.98 that year as well, according to documents filed with the Texas Ethics Commission.

Ethics Commission records also indicate that Merrill Lynch paid Kirk between $25,000 and $49,999.99 that same year.

Merrill Lynch also paid Kirk between $25,000 and $49.999.99 in 2006. Vinson & Elkins paid him between $50,000 and $99,999.99

"Ron Kirk has never been a registered federal lobbyist," White House spokesman Ben LaBolt told ABC News. "While he does not expect to encounter matters specifically relating to Merrill Lynch at USTR, Mr. Kirk will of course follow the administration’s ethics rules for former clients which require that he recuse himself from certain matters in which Merrill Lynch is a party for a period of two years."

In one of his first acts as president, Mr. Obama announced "firm rules of the road for my administration and all who serve in it … We need to close the revolving door that lets lobbyists come into government freely and lets them use their time in public service as a way to promote their own interests over the interests of the American people when they leave."

The Executive Order on Ethics Commitments by Executive Branch Personnel requires that lobbyists who become members of the Obama administration will not be able to work on matters they lobbied on for two years, or work in the agencies they lobbied during the previous two years. Anyone who leaves the Obama administration will not be able to lobby his administration. The orders also instituted a ban on gifts by lobbyists to members of the administration.

But the president has allowed exceptions to his anti-lobbying rules:

* Deputy Defense Secretary Bill Lynn, a lobbyist as recently as last September for Raytheon, was granted a waiver, and said he would recuse himself from issues pertaining to Raytheon for one year.

* Treasury Department chief of staff Mark Patterson, a former Goldman Sachs lobbyist, wrote a letter affirming that he would recuse himself from relevant issues.

* Health and Human Services deputy Secretary-designate Bill Corr, an anti-tobacco lobbyist, has done the same.

* Likely HHS chief of staff Mark Childress, a partner at the law and lobbying firm Foley Hoag, represented the Susan G. Komen Breast Cancer Foundation and PanFlu. The Obama administration says Childress will recuse himself "from matters and specific issues he worked on while employed at Foley Hoag.”

The Obama administration has so far refused to provide ABC News with copies of the recusal letters, or precise information about how many former lobbyists now in the Obama administration have written such letters, a request made more than two weeks ago and several times since then.

- jpt

UPDATE: "How precisely is it a loophole when we
never pledged to bar state lobbyists?" a Democratic official asks.

A legitimate question.

I would say it’s a loophole from the president’s original language on this, like for instance, in November 2007: "I have done more to take on lobbyists than any other candidate in this race –
and I’ve won. I don’t take a dime of their money, and when I am president, they won’t find a job in my White House."

I don’t see any distinction between federal and local lobbyists there, and certainly President Obama has retreated quite a bit from that pledge not to hire any lobbyists at all.

But more to the point, if Mr. Obama only pledged in January to restrict the hiring of former federal lobbyists, but not state lobbyists, can that be construed as a loophole?

I think it can, especially when one compares the language the president used last month
– when he said, "We need to close the revolving door that lets lobbyists
come into government freely and lets them use their time in public service as a
way to promote their own interests over the interests of the American people
when they leave."

But what say you? Is it not fair to call this a "loophole"?

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