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Lobbyists in Obama Transition Team Draw Attention

Unveiling new restrictions on the lobbying activities of members of President-elect Barack Obama’s transition team, Obama-Biden transition co-chair John Podesta said the new rules were “the strictest” ever applied.

Transition team members are barred from working in policy areas on which they lobbied the federal government in the last year. Looking forward, members will be prohibited from lobbying the Obama administration on issues related to their transition work for 12 months.

However, while the new administration may technically be living up to the letter of the rules, limiting the presence of former lobbyists in the transition has proved easier said than done — and one member of the team appears to violate the restrictions.

From Politico:

One of the leading members of President-elect Barack Obama’s Health and Human Services transition team was an anti-tobacco lobbyist as recently as September, a position that would appear to break a transition team rule that prevents lobbyists from serving in policy areas they have worked to influence within the past year.

But in an example of how the tough-sounding rules can provide Obama plenty of wiggle room, the campaign explained how the lobbyist’s work didn’t violate the restrictions.

Bill Corr, executive director of the Campaign for Tobacco-Free Kids, unsuccessfully pushed Congress to give the Food and Drug Administration the authority to regulate tobacco. But because the legislation granting that authority failed, there is no dovetail between Corr’s lobbying and HHS policies, said a transition spokeswoman, who did not wish to be identified.

Asked whether it created a problem that Corr would now be in charge of reviewing HHS after having lobbied to increase the authority of the FDA, which falls under HHS’ jurisdiction, the spokeswoman said it wasn’t an issue because the HHS secretary and FDA commissioner are separately confirmed by the Senate.

Also, she said, Corr has agreed to recuse himself from tobacco-related issues.

Other former lobbyists and current transition officials, though they pass the team’s requirements, served some ethically questionable clients. ABC News reports that Thomas Donilon “oversaw an aggressive, backdoor lobbying campaign by mortgage giant Fannie Mae to undermine the credibility of a probe into the firm’s accounting irregularities.”

The effort — which reportedly included attacks on the funding for the oversight agency, the Office of Federal Housing Enterprise Oversight, and an attempt to launch a separate investigation into OFHEO itself — was ultimately unsuccessful, and regulators eventually discovered top Fannie Mae executives had been manipulating the company’s financial reporting to maximize their bonuses [...]

Obama transition advisor and ex-Fannie Mae executive Donilon has not been accused of participating in the accounting irregularities. But he did oversee its lobbying, and helped paint a rosy picture of Fannie’s financial health to the company’s board, OFHEO investigators concluded, a picture that was ultimately proven false.

Donilon is an advisor to the transition in its review of the State Department. But with the bailout of Fannie Mae and Freddie Mac set to cost the federal government up to $200 billion, it’s difficult to ignore Donilon’s possible role in the current financial crisis.

Ron Klain, who was recently named as Vice President-elect Joe Biden’s chief of staff, also lobbied on behalf of Fannie Mae with his old firm, O’Melveny & Myers, according to Politico.

From 2002 through 2005, the now-failed mortgage lender Fannie Mae paid as much as $120,000 for an O’Melveny team, including Klain, to lobby Congress and the Housing and Urban Development Department on “regulatory issues.”

While there is nothing unusual about lobbyists serving in high-level positions within the federal government, some within Obama’s team may raise some eyebrows among those who are eager to see the new administration live up to its pledges to break with the old ways of “business as usual” in Washington.

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