Decisions Regarding Lobbyists Sitting on Advisory Boards

I believe that the best solution to the problem of having lobbyists and others seeking special
benefits from the government sitting on government
advisory boards is to get rid of these advisory boards.
Conflicts involving these boards are important because, although they are "merely
advisory," their recommendations are often accepted, and their
members are often selected (or seen to be selected) in order to reach a particular
conclusion. The membership of such boards is difficult for well-meaning officials to balance
so that the board's recommendations do not reflect the
self-serving views of one side or one industry, usually one that has
a financial interest in the outcome. Equally as serious, it appears
to the public that the recommendations of these boards is biased.
That is not a good basis for government decision-making.<br>
<br>
In 2010, the Obama administration tried to solve this government ethics
problem by prohibiting registered lobbyists from sitting on federal
government advisory boards. The 130 lobbyists who sat on the 16
Industry Trade Advisory Committees (ITAC), which make
recommendations concerning U.S. trade policy, filed a suit to have
this prohibition declared unconstitutional. Their suit was dismissed
by a federal district court, and the lobbyists appealed.<br>
<br>
The appellate court decision in the case of <i>Autor</i> v. <i>Pritzker
</i>(attached; see below) came out in January and, in response, this week the
Office of Management and Budget (OMB) made a change in the policy
(attached; see below) that will allow lobbyists to sit on advisory
boards in their representative capacity (like employees for
companies), but not in their individual capacity (as individuals who
happen to be lobbyists).<br>
<br>

This compromise follows a suggestion in the appellate decision, but
it is an inappropriate suggestion. If anything, it should be the
other way around. Someone who happens to be a registered lobbyist,
but is not representing anyone in matters relevant to an advisory
board, is not conflicted and, therefore, should be allowed to sit on the advisory board. It is only
when a lobbyist is representing someone who could benefit from her
recommendations that she should withdraw (or be asked to withdraw) from
participation. It appears that the OMB does not have a basic
understanding of government ethics or did not see this as a
government ethics issue.<br>
<br>
The appellate court decision exhibits no more understanding of
government ethics or its application to the case. The court
took the position that a seat on an advisory board constitutes an
important governmental benefit (the district court found it did not
and, according to the appellate court, the federal government did
not defend this position). The appellate court says that the
benefits of a seat on an advisory board include that members "are
able to play a significant role in shaping national trade
policy:  they consult with top-government officials before,
during, and after the conclusion of trade negotiations; they submit
reports assessing the impact of trade agreements on industry; and
the Trade Representative is required to respond to these reports.
... Also, ... ITAC members receive 'valuable expertise,'
'experience,' and 'a resume-enhancing characteristic.'"<br>
<br>
According to the court, these benefits should not be prohibited
where there are constitutional issues involved, in this case the
First Amendment right to petition for grievances and Fifth Amendment
equal protection. In contrast, from a government ethics point of
view a government should not be rewarding those who are seeking
special benefits from the government, or their representatives.
Such a reward is part of the very kind of ongoing reciprocal
relationship that government ethics finds problematic, because it
appears to the public that government is acting not only for the
benefit of special interests (at the local level, this means
primarily contractors, developers, and grantees), but also for the
benefit of high-level officials who, by selecting members for
advisory boards, may be giving preferential treatment to those who give
them large campaign contributions, send them on free trips, etc.<br>
<br>
In short, the court used a constitutional argument to prohibit a
government's reasonable attempt to limit these reciprocal
relationships and the appearance of preferential treatment given to
those seeking special benefits from the government. By recognizing
these benefits, the court made the government's position more
reasonable. Perhaps that is why the federal government did not
defend the district court's finding that a seat on an advisory board
provides no benefits.<br>
<br>
The federal government argued that its prohibition of lobbyists on
advisory boards would have no effect on their ability to petition
for grievances. They could continue to participate in all lobbying
activities. They just couldn't sit on advisory boards.<br>
<br>
Since the right to seek redress of grievances has not been litigated
very often, both courts were forced to look at cases with different
contexts. This is reasonable to do, but then one must consider the
context and see how good the fit is. The appellate court never came
back to the government ethics context. Instead, it rejected a case
from another context, which the district court had followed, because
in that case public funds were expended, and in this case (as in
most advisory board situations) no public funds were expended.<br>
<br>
But public funds are not very important to this matter, because it
is not primarily about the advisory nature of the board. More
important are issues involving conflict of interest and preferential
treatment. However, these terms do not even appear in the decision.
Instead, the court went even further afield than the district court,
to a case involving student organizations at a public
university, where a court had found that preventing an officer of a student organization from being officially recognized was not
acceptable just because the organization could still meet (the
constitutional right here was First Amendment freedom of
association). This application of an inappropriate case, without any
consideration of more appropriate issues, ends up being
decisive:  keeping lobbyists off advisory boards impinges on
their right to petition for grievances, even though they are
permitted to spend huge amounts of time and money petitioning for
their clients' grievances.<br>
<br>
If this decision stands and gets support from other circuits, the
best solution is for governments to end the practice of having
official advisory boards. Instead, officials can hold open meetings,
at which various interests present their cases publicly. Or
unofficial advisory boards could be formed by those debating an
issue or project, without government involvement. Since possible
members would be able to insist on balance or, at least, on separate
recommendations (or dueling boards), and the boards' recommendations would be less
likely to be rubber-stamped by officials who had selected the board
members in the first place, there would be fewer real or apparent
government ethics problems with the boards. If no such boards were
created and those without a financial interest in a matter were not
as well organized and able to pay for lobbyists, officials could
take initiative by inviting their input. If this were the only
result of the decision in this case, it would actually be helpful,
even if the court did ignore the government ethics aspects of the
case.<br>
<br>
But this decision could lead to problems, even for those
jurisdictions that do not prohibit lobbyists and their principals
from sitting on advisory boards. Will officials feel they have to
invite lobbyists to meetings even if they prefer to speak to their
clients? Will officials feel that they can't turn down requests from
lobbyists to meet with them? Will laws limiting lobbyists from
making campaign contributions or making gifts be found to be
unconstitutional, because these are simply other means to petition
for grievances? Will good government-oriented officials think twice
about saying that they will accept no campaign contributions from
lobbyists or accept any gifts or invitations from them? Will they be
concerned that this would be seen as unconstitutionally
discriminating, just as if they said they wouldn't accept
contributions or invitations from members of minorities?<br>
<br>
See <a href="http://www.cityethics.org/content/alternatives-allowing-conflicted-indi…; target="”_blank”">another blog post</a> for more alternatives to having conflicted individuals sitting on advisory boards.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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