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.

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.

The appellate court decision in the case of Autor v. Pritzker (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).

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.

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.'"

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.

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.

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.

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.

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.

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.

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?

See another blog post for more alternatives to having conflicted individuals sitting on advisory boards.

Robert Wechsler
Director of Research-Retired, City Ethics

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