New Executive Order May Significantly Expand Number of Executive Branch Officials “Covered” Under the Lobbying Disclosure Act

Despite his promises to “drain the swamp,” last week President Trump issued an Executive Order that may inadvertently create a large number of new lobbyists.  The order creates a new category of federal employees who are exempt from competitive service requirements, all of whom may qualify as “covered executive branch officials” under the Lobbying Disclosure Act (LDA), potentially requiring those who communicate with those officials on behalf of a client to register as lobbyists and file reports.

Pursuant to the LDA, an individual who makes two or more “lobbying contacts” with “covered legislative branch officials” or “covered executive branch officials” may be required to register as a lobbyist, if certain other criteria are satisfied.    The definition of “covered executive branch official” includes the President, Vice President, Executive Office of the President employees, certain senior agency officials and senior military officers, and “any officer or employee serving in a position of a confidential, policy-determining, policy-making, or policy-advocating character described in section 7511(b)(2)(B) of title 5, United States Code.”

Section 7511(b)(2)(B), in turn, exempts from civil service rules employees “whose position has been determined to be of a confidential, policy-determining, policy-making or policy-advocating character by . . . the Office of Personnel Management for a position that the Office has excepted from the competitive service.”  This category of covered officials, until now, only referred to appointees to positions listed in “Schedule C” of the Excepted Service.  According to the legislative history of the 1997 amendments to the LDA, “[t]he change to the definition . . . reflects the stated intent by narrowing the statutory reference in the [LDA] to ensure that only ‘Schedule C’ employees are ‘covered executive branch employees.’”  LDA guidance issued by Clerk of the House and Secretary of the Senate also confirms that only Schedule C appointees, and not other categories of Excepted Service appointees, are covered officials under the LDA.

In establishing Schedule F, the order creates, for the first time, a second category of positions of a “confidential or policy-determining character.”  Prior to the President’s order, Schedule C was the only category of Excepted Service appointments that encompassed positions of that nature.  However, under the order, appointees to the newly-created Schedule F will hold “positions of a confidential, policy-determining, policy-making, or policy-advocating character.”  Schedule C and Schedule F are primarily distinguishable not by their responsibilities, but by their tenure: non-career appointees who normally leave office when the President who appointed them leaves office are listed in Schedule C, while career appointees who normally remain in their position when their appointing President’s term ends are listed in Schedule F.

Because the order requires OPM to except Schedule F appointees (“positions of a confidential, policy-determining, policy-making, or policy-advocating character”) from the competitive service,  the Clerk of the U.S. House and Secretary of the Senate might now conclude that employees in Schedule F serve “in a position … of a confidential, policy-determining, policy-making, or policy-advocating character described in section 7511(b)(2)(B),” and are therefore “covered executive branch officials” under the LDA.

The order amends OPM regulations effective immediately, but requires all federal agencies to conduct a review to determine whether existing Schedule A, B, or D positions should be reclassified as Schedule F.  Agencies must complete a “preliminary review” within 90 days of the order, and a “complete review” within 210 days.

Although it is not immediately clear how many career positions could be reclassified as Schedule F, the order could result in the creation of thousands of new covered officials, assuming the Clerk of the House and Secretary of the Senate conclude that Schedule F employees are now covered.  A dramatic expansion of executive branch positions covered by the LDA would presumably result in more individuals meeting the definition of lobbyist, thereby triggering registration for themselves and their employers.  Further, existing lobbying firms and companies that employ lobbyists would now be required to track and report a broader universe of activities including by capturing costs associated with lobbying activities that support contacts with Schedule F officials.

It is not certain that the Clerk of the House or Secretary of the Senate—much less a court—would conclude that new Schedule F appointees would qualify as “covered executive branch officials.”  Schedule F did not exist when the LDA, 1997 LDA amendments, and LDA guidance were adopted, and the legislative history and the LDA guidance issued by the Clerk of the House and Secretary of the Senate expressly state that among Excepted Service appointees, only Schedule C appointees are covered under the LDA.    Thus, there may be some room to challenge the conclusion that all Schedule F appointees are now covered officials.  The future of the order may also depend on the outcome of the upcoming election—Democrats in Congress have expressed a willingness to overturn the order by statute.