The extension comes after a particularly vitriolic 60-day comment session on the rule that provoked the ire of dozens of trade and lobbyist groups. In an Op-Ed about the issue written to The Hill, Gary Shapiro, the president of the Consumer Electronics Association, said the regulations amount to “criminalizing efforts by government officials — and especially Executive Branch employees — to learn about business trends.” Politico put the clash succinctly, leading an article: “President Barack Obama isn’t finished with K Street.”

The Office of Government Ethics (OGE) has made the new deadline for comments about the rule Dec. 14 — after which the office will proceed with making final determinations. Comments received thus far by leading lobbyist and trade organizations as well as by individuals have been posted to the OGE website and are available for view by the public.

Unhappiness with the rule has centered on it whether it will prevent government officials from learning more about a particular industry or business organization. The Washington Times described it preventing “a representative from the Department of Transportation from attending the Auto Show in Detroit, for example, or a Federal Communications Commission employee from going to the Consumer Electronics Show in Las Vegas.”

Craig Holman, government affairs lobbyist for Public Citizen, a good government group that supports the bill, says that assessment is not accurate. “In no way does this prevent members of congress and staffers and others to have communications with trade associations and others,” he said. He says that trade groups would have to charge admittance fees but that federal employees would still be free to attend.

Lobbying groups, though, say concern over gift-giving and comped trade show passes will affect more transactions than paid hotel rooms. They say programs, seminars and other events in which industry experts instruct government officials may become impractical and need to be overhauled.

A precautionary note on a prominent K-Street law firm‘s website describes how the rule might change lobbying culture:

No longer would a federal employee of any kind be able to accept a $15 lunch from a registered lobbyist or go to a [widely-attended gathering] put on (in whole or in part) by a registered lobbying organization. Nor would career executive branch employees any longer be able to accept social invitations from registered lobbyists or lobbying organizations, or enjoy meals or entertainment provided overseas by such individuals or entities.

A representative from another firm was recently quoted in The Hill outlining how government employees day-to-day lives might be jostled. “If you’re a rank-and-file member of the executive branch, and you’re attending a corporate event … you can’t have cheese,” he said. Groups opposed to the law say it will turn casual interactions into potential infractions.

Public Citizen — along with a group of public watchdog organizations that includes the Campaign Legal Center, Common Cause, Democracy 21 and U.S. PIRG — have argued for the rule and against maintaining that coziness between the executive branch and the lobbying industry. In a press release, the groups say current regulations have “allowed people with business pending before an agency from offering free gifts of food, entertainment and travel to agency employees.”

The OGE says the rule is needed to put a stop to “attendance at events, particularly social events, where the nexus to the government’s interest was attenuated.”

Industry groups are also outraged that the regulation makes exclusions for certain types of groups from the regulation, including non-profits, the news media and higher education institutions.

Non-profits in particular have come under the spotlight for being used as funnels for outside organizations to pay for gifts. A recent report found that non-profit spending on traveling junkets has spiked.

Current rules for lobbyist gifts break into two key categories depending on how far from Washington, DC the gift-giving occurs.

Government employees can receive individual gifts from lobbyists or lobbying organizations worth less than $20 up to a maximum of $50 per calendar year. The rule would set that limit to zero dollars.

If an employee is traveling more than 30 miles outside the D.C. area, they are allowed to accept gifts to attend “widely-attended gatherings” (WAGs) sponsored by lobbyist and trade associations. Gifts to attend those events also frequently include paying for  travel expenses, including airfare, hotel accommodations and more. The rule would severely limit that practice.

The issue of lobbyist gifts has come up repeatedly of late as notorious lobbyist Jack Abramoff has taken his case to the public that the lobbying industry is in need of reform. Abramoff served more than three years in a Federal prison after being convicted of crimes made during his tenure as a sought-after lobbyist on Capitol Hill.

A recent special in CBS aired Abramoff’s regulatory proposals. Many of the practices of which he formerly partook would be curbed by the rule.

Abramoff would provide freebies and gifts – looking for favors for his clients in return. He’d lavish certain congressmen and senators with access to private jets and junkets to the world’s great golf destinations like St. Andrews in Scotland. Free meals at his own upscale Washington restaurant and access to the best tickets to all the area’s sporting events; including two skyboxes at Washington Redskins games.

Out of about 14,000 people on the current congressional payroll, 605 have lobbied Congress for outside interests in the last ten years; they are only a fraction of the 5,400 current and former congressional staffers that have come through the revolving door in the last decade.

“On average, every business day this year at least two Hill staffers have decided to cash in their experience and connections to become registered lobbyists,” said Jock Friedly, founder and president of LegiStorm.

Since January 2011, 388 congressional aides have become newly-minted lobbyists. Meanwhile, in that time, 155 lobbyists have become congressional staffers.

The majority of former lobbyists joining this year are Republicans given the GOP-led House.

The record number of lobbyists entering Congress was in 2007, when 206 lobbyists joined Congress.

These numbers do not consider hundreds of other individuals who may be able to evade registering as lobbyists because they are doing work, such as grassroots lobbying, public relations or policy analysis, that doesn’t trigger reporting requirements, or spending less than 20 percent of their time lobbying.

“For every person the American people have elected to sponsor legislation of public benefit, special interests have more than one former legislative advocate now working on the inside in Congress,” said in a story on the group’s website. “That represents a large network of people to influence decisions and to provide valuable intelligence.”

The leading candidates for the [Appropriations] panel’s chairmanship, Reps. Jerry Lewis (R., Calif.) and Rep. Harold Rogers (R., Ky.), are longtime members of the panel who have been stalwart defenders of earmarks, which allowed lawmakers to direct money to local projects outside the normal federal funding system.

Mr. Lewis was a senior member and chairman of the panel during the George W. Bush [era]. Conservative critics say Republicans allowed spending to run out of control at that time.

“Have Republicans learned their lesson?” asked David Keating, executive director of Club for Growth, a political group that has backed many tea-party candidates. “One way to find out is who they put in charge of Appropriations. If it’s Jerry Lewis, the answer is: Probably not.”

Also up in the air is the chairmanship of the House Energy Committee. The ranking Republican, Rep. Joe Barton (Texas), is also seeking a waiver on the term limit rule, but some colleagues are arguing his public apology to BP executives during the hearings following the Gulf of Mexico oil spill may be hurting his chances.

The plan, which the lobbyists and watchdog groups have been presenting to Congressional staff members in recent closed-door meetings, would limit the contributions that lawmakers can take from the beneficiaries of earmarks they arrange. Top officials from companies getting earmarks would be limited to donating $5,000 to lawmakers in each two-year election cycle, and they would not be allowed to give at all while seeking an earmark.

In addition, legislative staff working on earmarks would be banned from participating in campaign fund-raising — a practice that drew sharp criticism in a recent investigation by the Office of Congressional Ethics involving earmarks.

And to promote transparency, Congress would be required to disclose all earmarks on a central database, submit to audits by the Government Accountability Office and certify that the contractors are qualified to do the work.

Any coherent system, members of both camps agree, would be better than the current patchwork of partial regulations that Congress has imposed. At present, House Republicans have forsworn the process; House Democrats have banned earmarks for commercial businesses; and the Senate has continued par for the course. The result is that House members have often simply put in requests for earmarks from their respective Senators, while for-profit businesses have often funneled their same requests through affiliated non-profit organizations.

The odd couple that initiated the process was Rich Gold, a lobbyist for Holland & Knight, and Melanie Sloan, who leads Citizens for Responsibility and Ethics in Washington (CREW). The two met over the summer before seeking out partners to join their campaign. They don’t have active backing in Congress yet but the involved groups claim that their unlikely coalition will build momentum by itself:

Mr. Gold said in an interview that Congressional aides have asked incredulously: “Now, who are you doing this with again? And how did this happen?”

He said he already received some criticism from fellow lobbyists. “I’m wearing a flak jacket today” to withstand the attacks, he said, “but to be honest, so are the good government groups from their own supporters. We are strange bedfellows.”

According to Politico, Murkowski’s top aide sent an e-mail to a number of lobbyists late last week inviting them to participate in a conference call. While it is unclear what they discussed, the clear implication of the Politico article is that the conference call was designed to solicit money for the write-in campaign.

The story says:

Write-in campaigns are notoriously difficult and expensive because they require a massive voter education components — even for Murkowski, who aides say still has about $1 million in the bank. Murkowski will need to collect funds from many sources — including from Washington lobbyists — in order to continue her race.

On the call, Politico reports, were employees at a number of major oil companies, including Chevron, Conoco Phillips and Marathon Oil.

Murkowski is a key player on energy policy in the Senate. The ranking Republican on the Senate Energy and Natural Resources Committee, she worked alongside Chairman Jeff Bingaman (D-N.M.) to craft the committee’s comprehensive energy legislation. At the same time though, Murkowski has been critical of legislation to cap carbon emissions.

The site picks up where Obama left off, taking special care to point out the plenitude of connections the minority leader has to lobbyists in Washington and asking voters to “imagine the huge influence they’ll have if he becomes Speaker of the House.”

All in all, singling out Boehner represents a major shift for the President, who spent most of his first year and a half in office attempting to signal to voters that he was above the fray of partisan politics. With Democrats down in the polls by such large margins, especially when voters are asked to pick a generic Republican over a generic Dem, however, Democrats best hope is in pointing out the most corrupt or eccentric aspects about their opponents in order to keep the races local and personal.

Boehner, with his close circle of lobbyists and former aides now working for Goldman Sachs, Google, Citigroup, R. J. Reynolds, MillerCoors and UPS, among other companies, seems like the perfect target for this strategy.

The administration began posting online a partial log of White House visitors, and it instituted policies aimed at responding more quickly and completely to Freedom of Information Act requests from journalists, academics and the public. It has also restricted the hiring of lobbyists within the administration, banned gifts from lobbyists and taken other steps to slow the “revolving door” between government and the private sector.

But for transparency junkies, it wasn’t all roses:

On transparency issues, the administration has raised concerns among open-government advocates by regularly using the “state secrets” privilege to continue keeping some national security issues out of public view, and Mr. Obama reversed course last year and refused to make public photos showing abuses of terrorism detainees. The controversy over the public release of some 90,000 documents from the Afghanistan war by the group WikiLeaks could result in more pressure to limit public disclosures.

And then there’s superlobbyist Tony Podesta, who jokingly hailed Eisen’s departure ”the biggest lobbying success we’ve had all year.” Maybe the watchdog groups have good reason to be worried after all.

But considering the flood of liability claims and congressional inquiries facing BP and the contractors who worked on the ill-fated Deepwater Horizon rig, their existing K Street help is sure to be followed by high-powered legal teams. And as the National Law Journal reported on Tuesday, the corporations on the hook for the Gulf disaster are hiring lawyers with high-level bipartisan political connections.

BP has signed up Jamie Gorelick, the Department of Justice’s No. 2 official during the Clinton administration and a former member of the 9/11 Commission. Gorelick, also a registered lobbyist with Wilmer Cutler Pickering Hale & Door, told Greenwire that her duties would focus on responding to congressional requests rather than “advocat[ing] for any position.” Still, her status in the capital — Gorelick was said to be in the mix as a possible Obama Attorney General — makes her an invaluable ally for the beleaguered oil giant.

Cameron International Corp., the contractor that manufactured the “blowout preventer” that failed on the Deepwater rig, has signed up Williams & Connolly counselor Emmet Flood, according to the Law Journal. Flood is best known for serving as special counsel to then-President George W. Bush, when he was a leading player in the complex negotiations over which high-ranking White House officials would agree to testify about the U.S. attorney firings scandal. Flood’s official biography notes that he also represented Vice President Dick Cheney in the civil lawsuit filed by outed CIA agent Valerie Plame and President Bill Clinton during his impeachment trial.

Transocean, the company that owned the Deepwater rig, has anted up by retaining John Beisner of Skadden Arps. Beisner is currently a registered lobbyist on judicial issues for the U.S. Chamber of Commerce, but the Law Journal points out that his most significant experience lies in high-profile corporate liability cases:

A decade ago, when Beisner was an O’Melveny & Myers partner, he represented Ford Motor Co. regarding defects in more than 60 million tires, and he was part of the legal team in 2007 for Merck & Co. in litigation over its prescription pain killer, Vioxx.

Halliburton, another contractor on the Deepwater rig, has turned to a counsel with less time in the corporate misconduct trenches and fewer political connections but a strong background in the oil industry. Jeffrey Turner at Patton Boggs, reported as Halliburton’s point man on the Gulf spill, currently lobbies for the Ad Hoc Deep Water Exploration and Production Coalition, a group of oil companies (including BP) that has spent years fighting congressional attempts to rewrite offshore drilling royalty contracts that helped corporations reap a windfall during the Bush administration.

Sen. Blanche Lincoln (D-Ark.) has written an aggressive proposal to regulate the derivatives market. (WDCpix)

This week, Sen. Chris Dodd’s (D-Conn.) financial regulatory reform bill moved to the floor of the Senate. And with that bill close to passage, Wall Street and lobbyists turned their attention to Sen. Blanche Lincoln (D-Ark.) and the Senate Agriculture Committee’s proposal to regulate derivatives, a $450 trillion market and a major source of investment-banking profits.

[Economy1]Derivatives are essentially a type of financial insurance. They let two parties trade a contract derived from the price of some underlying security, currency or commodity. For instance, say you were a major airline. You might go to your bank to purchase a derivative locking in the price of gas, just in case a summertime oil shortage pushed up prices at the pump. In this case, you would be an “end user,” meaning you actually take delivery of the good. About 90 percent of the derivatives market involves financial firms trading derivatives like credit-default swaps back and forth for profit — and just 10 percent involves end users, non-financial firms using derivatives to mitigate risk.

Still, end users have become the unlikely center of the fight on derivatives legislation. With the reputation and credibility of big financial firms weak, companies in industries from agriculture to aviation came forward to say that this legislation might not only dampen big business’ profits but also hurt them. On Tuesday, the U.S. Chamber of Commerce and other business lobbies — via a group called the Coalition for Derivatives End-Users — took to the Hill for a flurry of meetings between corporate representatives of those worried end users and members of Congress.

“The legislation has the potential to take hundreds of billions of dollars out of the economy through margin and capital requirements,” says Cady North, a lobbyist at Financial Executives International and a member of the Coalition for Derivatives End-Users’ steering committee. “We estimate that the bill could require up to $900 billion in capital expenditures.” Moreover, the Coalition argues, the bill will increase the cost of derivatives for end users. (The Coalition declined to provide a list of participating executives or their companies, or a list of the legislators or assistants with whom they met, and the Chamber of Commerce did not respond to repeated requests for comment.)

But there’s just one problem. The Lincoln bill forces financial firms to put up collateral and use clearinghouses when they trade derivatives, but specifically exempts end users from those requirements. Banks are using their end-using clients as proxies to help kill off the legislation, lawyers and lobbyists contend. And for most end users, the opposition to the bill makes little sense.

Other lobbying organizations representing end-using white-collar companies said they had no issues with the legislation. For instance, Michael Griffith, a legislative analyst at the Association for Financial Professionals, which represents 16,000 of “the folks that manage your average companies’ money,” says he has no issues with it. “We’re pretty happy with what the Agriculture Committee approved,” he says. “It has a broad end user exemption on it, and we haven’t had many complaints from our members.”

“I know the banks are screaming about it,” says Brian Kalish, the director of AFP’s finance practice. “[My members are] getting panicky emails from their bankers. But [of] my members, no one’s panicking.”

But this week, some end users got more than panicky emails from their banks. Lawyers and lobbyists say that banks clearly misled companies about how the legislation might impact their business costs. In one case, a derivatives broker told a company that the legislation would force it to pay the same fees and put up the same collateral as financial firms, even where it explicitly would not.

“I’ve heard of a few folks who use derivatives [as end users who] called up their banks to talk about the legislation,” another lobbyist said. “Of course, their bankers told them to expect the whole market getting disrupted, price increases, collateral calls. Now, for most of them, they’re buying swaps to hedge. The legislation specifically exempts them.”

Legislators this week repeated the concern. Senate Banking Committee Chairman Dodd said he sees evidence of the bankers’ influence when end users lobby him. “The end users have been basically used by the major investment banks,” he told the Huffington Post’s Ryan Grim on Tuesday.

Indeed, Lincoln took pains to ensure most end users are not impacted by the legislation. Some firms with “captive finance entities” — financial-products divisions within big, diversified companies, like Cargill — might not qualify as end users on some transactions, and might have to post collateral when they use derivatives to speculate rather than hedge. But they represent a small proportion of end users, who represent a small portion of derivatives users.

Furthermore, the legislation might eventually drive end-users’ costs down. Many derivatives experts — off of Wall Street, at least — believe that Lincoln’s reforms will increase competition and transparency, reducing prices. Robert Litan, a derivatives expert at the Brookings Institution, explains, “In a world of nontransparency, the world the derivatives market is in right now, the way I understand it, if you try to call four or five dealers, to shop around, none give you a real price. They might quote you an indicative price. If you commit, then they give you pricing information.”
The White House concurs. Jen Psaki, the deputy communications director, recently argued, “The unregulated OTC derivatives markets were at the center of the recent financial crisis. The Wall Street banks that dominate this market want to keep it unregulated so they can make money off regular firms.”

Six of Lincoln’s former staffers currently lobby for interests invested in influencing carbon capping legislation. These interests include oil & gas trade groups, agriculutural [sic] companies, the airplane industry and biofuel and bioenergy firms. [...]

The most influential of Lincoln’s former staffers is Kelly Bingel, a lobbyist for Mehlman Vogel Castagnetti. Bingel is a former chief of staff to Lincoln and has been called “Sen. Lincoln’s alter ego.” Bingel’s clients include two incredibly powerful organizations opposed to carbon capping: the American Petroleum Institute (API), the lead trade group for the oil industry, and Koch Industries, one of the largest oil manufacturing, trading and investment companies in the country.

One of the two owners of Koch Industries is David Koch, who has taken credit for sponsoring much of the Tea Party movement — whose adherents are no great supporters of climate legislation. Other former Lincoln staffers now lobby on behalf of the anti-cap-and-trade USA Rice Federation, the utility-advocacy Edison Electric Institute and the agricultural giant Monsanto. (The latter two have voiced support for climate legislation, but have sought to secure favorable terms for their industries.)

Need further evidence of the massive Lincoln-lobbying-industrial complex? According to Sunlight, Lincoln’s the top recipient of campaign funds from the oil and gas industries and a variety of agricultural industries.

Of course, given the entrenched history of close ties between lobbyists and the Hill, none of this should come as a surprise — but it does serve as a reminder of the powerful forces environmental advocates are up against.