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A Tale of Two LobbyistsWhat's wrong with Obama's order barring lobbyists from his administration?

By Jacob WeisbergUpdated Saturday, April 18, 2009, at 7:24 AM ET

On his first full day in office, Barack Obama issued an executive order designed to restrain lobbyists. The new rules say that if you were a registered lobbyist in the past two years, you can't work for the administration on any issue you touched or even for an agency that handles such an issue. After you leave government, you can't lobby the administration at all. The only way around this ban is with a waiver from the White House budget director that says you're essential to economic policy or national security.

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The instinct behind this decree is a sound one. The mercenary culture of Washington flourished under Republican rule, with the Jack Abramoff scandal and Tom DeLay's K Street Project, which treated lobbying rents as spoils to be doled out by the party in power. Obama knows it's going to take some strong garlic to ward off the vampires on his side of the aisle and restore a sense of integrity in government. Unfortunately, his intended reform is driving stakes through the hearts of innocent bystanders only. The problem isn't that his rules are too strict. It's that they miss the crucial distinction between the kind of lobbying that's good for democracy and the kind that perverts it.

An example of the kind of lobbying Obama ought to decry came to light last week when the New York Times revealed that Tony Podesta and Jamie Gorelick, two Democratic fixers, had signed on to help save Sallie Mae from extinction. Sallie Mae is a government-sponsored enterprise that insures college loans made by private banks. Like Fannie and Freddie, her inbred cousins in the housing business, Sallie embodies the principle of privatizing gains and socializing losses. Obama has sensibly proposed eliminating it. According to the Congressional Budget Office, having the feds make these loans directly would save $94 billion over the next decade, providing funds for millions more students to go to college.

For Sallie Mae, a useless and wasteful middleman fighting to preserve its vig, Tony Podesta has an understandable appeal. He is one of Washington's top Democratic fundraisers. His wife, Heather Podesta, is a former aide to Bill Bradley and a well-connected lobbyist in her own right. They like to entertain politicians at their home, filled with ghastly contemporary art, and recently made news by donating the original of Shepard Fairey's iconic Obama poster to the National Portrait Gallery. But Tony Podesta's biggest advantage is being the brother and former partner of John Podesta, who was Bill Clinton's final chief of staff and who headed Obama's presidential transition. It is hard not to see their respective silhouettes as expressions of their career choices. John, who has focused on advancing liberal causes by founding a think tank called the Center for American Progress, is kinetic and wiry. Tony, who partnered with disgraced Republican Robert Livingston to represent tobacco interests, defense contractors, and oil companies (as well as Slate's parent company, the Washington Post), looks like, well, a fat lobbyist.

As an illustration of the good kind of lobbying, consider Tom Malinowski, who worked as a speechwriter at the State Department and National Security Council during the Clinton administration. Since leaving government, Malinowski—who declined to comment for this story—has been Washington advocacy director for Human Rights Watch, where he has spoken up for political prisoners abroad and against the Bush administration's policies on torture and detention. As reported on Foreign Policy's blog "The Cable," Malinowski was a top candidate to head the State Department's Democracy, Human Rights, and Labor Bureau and remains a possible candidate for various other foreign policy posts. But because he was registered as a lobbyist, he can't be hired without a waiver. After drawing fire for granting one to Deputy Secretary of Defense William Lynn, who worked for the defense contractor Raytheon, officials have been reluctant to grant any more of these.

There is every imaginable ethical difference between Podesta's work and Malinowski's. Podesta represents nasty clients, like the human-rights-abusing government of Egypt; Malinowski advocates only for causes he views as virtuous, like the victims of Egyptian oppression. Podesta greases the skids for his clients with maximum legal campaign contributions; Malinowski tries to convince legislators of the merits of his case without donating money. Podesta's firm grossed $19 million last year and has been signing up new clients at a ferocious clip since the Democratic victory in November; Malinowski earns a nonprofit sector salary. Podesta undermines democratic principle by selling his influence on the market. Malinowski enhances democracy through legitimate advocacy.

As a matter of law, however, it is probably impossible to distinguish between what these two men do. Both are exercising the same First Amendment right to petition the government. Both have a legal obligation to register under disclosure laws. The rule that bars the one Obama doesn't want to hire prevents him from hiring the one he does. In addition to denying the president the service of any number of desirable nominees, the rules are undermining disclosure laws, because if registration is a bar to government employment, both kinds of lobbyists will avoid registering. Allowing a few arbitrary exceptions to this kind of bad policy only makes the unfairness worse.

The president could deal with the problem much more effectively through explanation and symbolism. Instead of tying his own hand with counterproductive rules, he could instruct his staff to avoid dealing with hired-gun lobbyists, which would discourage interest groups from hiring them. He could explain in public the difference between influence-peddlers and committed advocates, reminding the country that he was one of the latter, when he lobbied for public-housing residents in Chicago. Best of all, he could say people like Tom Malinowski are welcome in his White House and that people like Tony Podesta aren't.

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Jacob Weisberg is chairman and editor-in-chief of the Slate Group and author of The Bush Tragedy. Follow him at http://twitter.com/jacobwe.

Illustration by Rob Donnelly.

COMMENTS

Jamie Gorelick sent the following response to Slate on Monday afternoon:

Jacob -

I am out of the country but wanted to get you a quick response to your piece. As a lawyer, when I am engaged by clients to affect policy, I try to make sure that I am comfortable with the policy direction that the client wants to take, which I did before taking on the representation of Sallie Mae.

Sallie Mae has endorsed the key goal of the Obama Administration proposal which is to use the earnings from government -- as opposed to private lender -- funding of student loans to support the funding of Pell Grants. This is a different position than some other lenders have taken and a vastly different position than Sallie Mae had taken in the past. The concept that Sallie Mae has been discussing with policy-makers would permit lenders to provide origination and servicing on a fee-for-service basis, competitively, and lenders would retain some of the risk in the loan to provide an incentive to avoid defaults. The concept is described here.

I understand that there are concerns about whether the Department of Education has the capacity to take on all lending services for all schools, particularly at a time when many schools are struggling. This alternative - a choice for schools - would eliminate any implementation risk.

I know that there are those who believe that lenders should have no role and that the sole provider of services should be the government (and its contractors). The range of disagreement here, though, is small compared to the argument over the last two decades whether student loans should be funded by the government or by the private sector, on which Sallie Mae agrees with the position of the Obama Administration.

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