Rules May Tighten on Invites From Lobbyists

Posted October 17, 2011 at 6:32pm

I work for a lobbying firm, and I have a question about possible changes to the executive branch gift rules. A lobbyist friend of mine told me that the changes would eliminate some important exceptions to the ban on gifts to executive branch employees. Specifically, he said, organizations with lobbyists would no longer be able to invite executive branch employees to widely attended events hosted by the organization. We have been having these types of events for years. Is this really true?

A: Federal law prohibits executive branch employees from accepting certain types of gifts. Other branches of government have similar rules, all of which are generally designed to avoid the appearance of impropriety.

In the case of executive branch employees, the Office of Government Ethics, which oversees the relevant gift rule, has said that “accepting a gift offered because of the employee’s official position may create an appearance of using public office for private gain.” Moreover, if a government employee accepts a gift from someone with business before the employee, “the public may be concerned that the donor will receive favored treatment as a result of the gift.”

I sometimes tell clients that most government gift rules can be stated in two words: no gifts. Under the executive branch gift rule, employees are subject to two prohibitions. They may not accept a gift either (1) from a prohibited source or (2) given because of the employee’s official position. A prohibited source essentially means any person or entity seeking to do business with the employee’s agency, conducting business regulated by the agency or having interests that may be substantially affected by the agency.

Moreover, the term “gift” is defined very broadly. The Office of Government Ethics has said it includes “anything of monetary value.” Regarding events, the office has said that “payment by an outside source of fees charged for an event is considered to be a gift under the ethics regulations.”

There is a long list of exceptions, without which it would be nearly impossible for government employees to carry on everyday lives. One exception allows gifts from family members. Another permits gifts motivated by personal friendship.

One long-standing exception has allowed executive branch employees to attend “widely attended gatherings.” The House and Senate have a similar exception allowing Congressional employees to attend “widely attended events.” The Office of Government Ethics has explained that the “basic purpose” of the exception is as follows: “so that employees may be able to meet on a less formal basis and have an interchange of ideas with a variety of individuals, including members of nongovernmental groups, legislators and other Government agency personnel, who are interested in but may have divergent positions on the same issues.”

In accordance with this basic purpose, an executive branch employee may not use the exception unless several criteria are met. Most significantly, an employee must obtain approval from his agency’s ethics officer. Moreover, an ethics officer may not provide such approval unless he determines that the employee’s attendance will further agency interests and  furthering those interests outweighs any appearance that attending might improperly influence the employee’s official duties. The exception has previously been deemed applicable to trade shows, seminars and similar conferences.

Last month, the Office of Government Ethics proposed significant revisions to this exception. Most notably, if the proposed revisions become law, the exception would no longer be available to organizations that employ federally registered lobbyists. Thus, even if it would be in an agency’s interest for its employee to accept an invitation to an event and even if that interest were to outweigh any appearance of impropriety, the employee would no longer be permitted to attend the event if the invitation were to come from an organization with in-house lobbyists.

Conversely, the proposed revisions would not affect the availability of the exception to organizations that do not employ registered lobbyists. An agency employee would still be able to use the exception to accept invitations to events from such an organization. This would remain true even where the organization making the invitation has business before the agency employee, so long as the organization does not employ lobbyists. Under the new rule, the crucial distinction is whether the organization extending the invitation employs in-house lobbyists.

At this stage, the revisions are mere proposals. The Office of Government Ethics is soliciting public comments on the rules, which must be received by Nov. 14.

Assuming the Office of Government Ethics proceeds with the new rules, however, organizations with in-house lobbyists should take particular notice. Given the long history of the widely attended gathering exception in government gift rules at both the federal and state level, many organizations have grown accustomed to it. If the proposed revisions become law, organizations will need to make adjustments when it comes to federal executive branch employees.

C. Simon Davidson is a partner with the law firm McGuireWoods. Click here to submit questions. Readers should not treat his column as legal advice. Questions do not create an attorney-client relationship.