Trade groups oppose new rule

Proposal would curb federal socializing with the regulated

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Washington trade groups say a proposed new Obama administration rule sharply curbing the ability of federal employees to attend industry shows or interact with those they regulate goes too far.

“It could have a potential chilling effect on all industries,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council. “That’s a mistake in our view.”

The Office of Government Ethics plans to strike down exceptions that allow federal employees to receive gifts worth less than $20 - like paying for a cheap lunch meeting - and attend industry trade shows for free.

It could prevent a representative from the Department of Transportation from attending the Auto Show in Detroit, for example, or a Federal Communications Commission employee from going to the Consumer Electronics Show in Las Vegas. That, in turn, could hurt innovation and stifle the economy.

“We need to stop making business the enemy of government and make them a partner in job creation and economic growth,” said Gary Shapiro, president and CEO of the Consumer Electronics Association. “I cannot understand why the administration would seek to further segregate business and government when we need and must have economic growth and job creation.”

This proposal is part of the Obama administration’s crackdown on lobbying corruption to prevent scandals like the one involving Jack Abramoff. Watchdog groups are calling it a win for government ethics.

“The existing gift rule for career employees has largely been ignored,” said Craig Holman, legislative representative at Public Citizen. “We’ve had a very inconsistent and chaotic enforcement of ethics when it comes to the executive branch.

“This further clarifies exactly the ethics standards that are to be followed,” he added.

But business leaders and lobbyists fear it will stunt innovation and hurt the economy.

“That’s the concern we have,” said Jim Clarke, senior vice president of public policy at the American Society of Association Executives.

The ASAE wrote two letters, one to the White House and one to the Office of Government Ethics, about the issue. The organization also plans to file an official comment on the matter before the Nov. 14 deadline.

“We believe that policies restricting knowledge sharing between the government and trade associations are counterproductive to the administrations stated aspirations to work in partnership with the business community to create jobs and grow the economy,” ASAE said in a letter to White House Chief of Staff Bill Daley.

“There are tremendous benefits in allowing agency officials and other government employees to attend programs and other events that have a clear nexus to the governments interest,” the group went on to explain in a letter to Don Fox, acting director and general counsel at OGE. “… Banning government employees from these types of events does not promote informed policymaking or rulemaking.”

Mr. Shapiro fears that restricting federal employees’ access to trade shows will limit their understanding of the industry and lead to poor regulations. They could also lose opportunities to woo potential international business partners without them being able to meet government representatives.

“The present White House restrictions on political appointee participation is embarrassing, problematic and not helpful to our hosting responsibilities,” he said. “It also hinders efforts to expand travel to the U.S. Extending this requirement to career civil servants would deny government employees the ability to learn about what is happening in business, forge relationships and understand how their actions impact jobs-creating businesses.”

Still, some exceptions remain.

Federal employees can, of course, ask their own agencies to pay for them to attend these conferences. But it might be too much of a hassle for many, Mr. Chvotkin fears.

“Many certainly would not pay out of their own pockets to go,” he said. “Many would be reluctant to request the agency to pay. There will be many that don’t go through that process. They don’t want to take the time, the work, some don’t want the visibility.”

Federal employees will be allowed to continue attending events hosted by nonprofit charity groups and professional associations that are seeking to educate them. They will also be allowed to attend lobbying events where they are speaking.

Events hosted by media organizations also are exempted.

“The lobbyist gift ban is not intended to erect unnecessary barriers to interaction between appointees and journalists,” the rules read.

And this doesn’t prevent gifts from personal relationships. “Thus, an appointee may accept a birthday present from his or her spouse who is a registered lobbyist,” the rules read.

This offers little comfort, however, to business groups that are hoping to forge meaningful relationships with their government counterparts.

“It’s important content,” Mr. Clarke said. “They need to have that type of dialogue so everyone’s on the same page.”

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