New Rules for TARP Lobbyists Expected Tomorrow

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Tuesday, January 27, 2009 at 5:30 pm

Spending bailout money to lobby for more bailout money might soon become slightly more difficult.

Incoming Treasury Secretary Tim Geithner is expected to announce some new rules tomorrow governing the behavior of lobbyists for financial institutions seeking bailout money under the $700 billion financial rescue plan, according to the The Associated Press:

The new rules are designed to crack down on lobbyist influence over the rescue program, according to an administration official with knowledge of the changes.

This official, who spoke to The Associated Press on grounds of anonymity because the new rules had not yet been announced, said that they went farther than restrictions the Bush administration imposed.

The new rules will restrict the contact officials can have with lobbyists in connection with applications for funds from the bailout program, the official said. This official said the rules, which are aimed at making sure political influence is not a factor in awarding rescue money, will take as a model the limits that are imposed on political lobbying of the Treasury Department on tax matters.

However, Geithner’s new rules might seem more impressive if the incoming treasury secretary showed more concern about lobbyists on his own staff.

As my colleague Mary Kane reported today, Geithner’s own chief of staff, Mark Patterson, is a former lobbyist. Public lobbying disclosure records available from the Senate Office of Public Records show that Patterson lobbied for the Goldman Sachs Group as recently as April of 2008. At that time, Patterson was registered to lobby on credit default swaps, foreclosures, credit rating agencies, sovereign wealth funds, and a host of other financial issues that are directly related to the collapse of the financial sector and the Treasury’s attempts to clean up the mess.

Goldman Sachs is already a major recipient of TARP funds.

The fact that Patterson is eligible to work for Geithner appears to illustrate some gaping loopholes in Obama’s supposedly tough executive order on ethics for executive branch employees. Under Obama’s new rules, lobbyists are forbidden from seeking employment at any agency they lobbied.

The last two years of SOPR records show that Patterson lobbied Congress on legislation that affected the Treasury Department, but not the Treasury Department itself. If Patterson had lobbied the Treasury Department directly, he would appear to be ineligible to serve under Obama’s executive order, which bars former lobbyists from “seek[ing] or accept[ing] employment with any executive agency that [they] lobbied within the 2 years before the date of [their] appointment.”

The same executive order also forbids lobbyists from having any contact with their former clients or making any decisions regarding their old lobbying issues during their first two years on the job. Is the Bailout Czar’s chief of staff going to be making decisions about his old lobbying issues? I guess it depends on what the meaning of “is” is.

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