Nonprofits and the Revolving Door
According to <a href="http://www.nytimes.com/2009/04/21/us/politics/21lobby.html" target="”_blank”">an
article</a> in Tuesday's New York <span>Times,</span>
nonprofits are seeking an exception to the Obama administration's rule
that lobbyists cannot serve in areas where they have lobbied. This raises
the issue of the purpose of revolving-door provisions, which are common
in local government ethics codes.<br>
<br>
One purpose of revolving-door provisions is to prevent government
officials from profiting, or appearing to profit, from their government
positions by creating the appearance of, or actually, promising to help
a firm or lobbyist with its government business in return for a future
job. This purpose would apply to both for-profit and not-for-profit
entities, both of which can offer jobs in return for preferential treatment,
although not-for-profit entities cannot usually offer as much pay.<br>
<br>
Another purpose of revolving-door provisions is to prevent the
appearance that government is giving preferential treatment to certain
interests by hiring people from companies that do business with or
lobby the government. For example, hiring employees of contractors for
a city's procurement office (especially letting them write contract
specifications and oversee bidding) sends a message that the local government might be in
cahoots with contractors and that, most likely, contracts are being
handed out preferentially rather than competitively.<br>
<br>
This is the purpose of the Obama administration's rule. There are two
possibilities here, one financial, one policy-oriented. Hiring an
inside person for a procurement office is not about policy, it's about
profit. Hiring someone for a policy position might be about profit --
easing regulations on an industry or selecting an area of town to be
developed -- but it is may have nothing to do with profit, such as
hiring someone to create a prisoner re-entry program who has been a lobbyist for an organization seeking to
have such a program created.<br>
<br>
In the latter, nonprofit example, there are two further
possibilities. One is that the nonprofit would be in a position to run
the program. If this were true, the
desire to grow the nonprofit may not create profit, but it involves a
clear financial benefit. There is no important difference here from the
for-profit situation above.<br>
<br>
But if the nonprofit is just an advocacy group, with no operational
wing, then there is no financial benefit. What is preferred by the government is not a
firm or a person, but a point of view, a policy approach. The only people with a legitimate complaint are people who
disagree with this policy approach, but they lost the election and are
free to advocate against the policy. This is not about ethics, but about
politics.<br>
<br>
The difference between these two possibilities has been ignored by the
Obama administration, and nonprofits appear to be ignoring it, as well.
The example they are pointing to is the fact that the advocacy director
of Human Rights Watch was turned down for a position due to the fact
that he has lobbied for human rights laws. Were he to enter government
and help write such laws, he and his firm would not benefit at all,
except by achieving some of their policy goals. Nonprofits are right to say
that this lobbyist should not have been treated like someone who lobbied for a
military contractor.<br>
<br>
But there many instances where a nonprofit lobbyist is in the same
position as a military contractor lobbyist, and should be treated the
same way.<br>
<br>
These problems arise less often at the local level, but they do occur,
and rules like the Obama administration rule, which are far too few at the local level,
should take cognizance of the inherent differences between these two
kinds of situations, only one of which involves a conflict of interest
and the appearance of collusion or favoritism.<br>
<br>
In short, there is nothing wrong with favoring a particular policy
approach. In fact, that is what officials are elected to do.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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