A year later, TARP rules revealed

Nearly one year after Congress passed a $700 billion package to rescue the financial system, the federal government has released its first restrictions on lobbying for bailout money.

The government late on Thursday quietly released rules governing communications between federal officials and outside parties regarding the rescue package. The rules are posted without fanfare deep on the Treasury website.


The new rules came the same day Treasury Secretary Timothy Geithner testified that the package is already shifting to a “new phase” of recovery after the worst of the crisis has passed.

Geithner said on Jan. 27 that the Obama administration would release new rules to limit lobbyist influence, but the policy was released only eight months later. The government already is planning to wind down several of the programs.

Some of the nation’s biggest and most connected banks, such as Goldman Sachs and JPMorgan Chase & Co., have already repaid more than $70 billion in bailout money to the government. Meanwhile, more than 600 banks have already received help under the program.

The bailout package has also been used to commit tens of billions of dollars to General Motors, Chrysler and American International Group (AIG), as well as to support the beleaguered housing market.

The new policy bans oral communications with any person or entity concerning a pending application for aid under the $700 billion program, whether or not they are federally registered lobbyists.

But the rules allow government officials to communicate with outside parties regarding general inquiries about deadlines and logistics under the Emergency Economic Stabilization Act (EESA) of 2008. The policy allows communication that “does not involve advocacy about EESA policy or a specific application for funding under the EESA.”

“The purpose of this policy is to provide transparency to certain communications with federally registered lobbyists concerning the EESA, not to bar such communications,” the Treasury Department said in a fact sheet.

The policy lets federal officials meet with lobbyists representing firms interested in bailout money, but that have not already submitted an application. The policy requires that officials “immediately end the conversation” with representatives or entities seeking aid on behalf of a specific interest that has an application.

Some lobbyists said on Friday they were concerned about the thrust of the new restrictions.

“Our concern is with the limitations and new restrictions on free speech and the constitutional right to petition your government,” said Scott Talbott, a lobbyist at the Financial Services Roundtable.

Federal officials must also document all written and oral communications with federally registered lobbyists, unless the discussion is purely about logistics. Officials are required to document the name and date of every communication with a federally registered lobbyist for posting on Treasury’s website.

All written communications from a federally registered lobbyist on behalf of a client or employer concerning EESA policy or pending applications will be posted within three business days.