Jack Maskell
Legislative Attorney
Ethics and conflict of interest concerns have been raised concerning the impartiality or bias of government regulators or administrators who, shortly before entering government service, represented, owned, or were employed by firms or other entities that such officials must now regulate and oversee. Federal conflict of interest law and regulation, for the most part, deal with the potential influence of existing financial assets, properties, and relationships of a federal official. There are, however, some limited conflict of interest regulations and standards which look also to previous employment and past associations of those entering federal service. Additionally, in 2009, by Executive Order, certain “appointees” of President Obama must file an “ethics pledge” agreeing to further limitations on participating in governmental matters affecting some former employers and clients, and the Administration’s policy of not having registered lobbyists serve on advisory committees was formalized in 2010.
The regulatory scheme regarding financial interests and federal officials encompasses generally what has colloquially been called the “three-D” method of conflict of interest regulation, that is: disclosure, disqualification, and divestiture. Public financial disclosure is required of incoming federal officials who will be compensated above certain amounts, including those officials nominated by the President who must receive Senate confirmation. Disclosure information covers not only existing assets, property, debts, and income, but also certain information about past clients and employers, and positions held in organizations.
Disqualification or “recusal,” the principal statutory method of dealing with potential conflicts of interest in the executive branch, prohibits a federal official from participating in any particular governmental matter in which that official, or those close to the official, has any financial interest. While the statutory disqualification provision is a criminal law covering only current financial interests of the official, there are also “regulatory” recusal requirements that may apply to certain past affiliations and previous economic interests. Such recusals generally apply to particular matters involving specific parties, when entities or organizations previously affiliated with the federal official are now parties to or represent parties in those matters. There are also recusal requirements in regulations concerning such matters when a party (or one representing a party) had made an “extraordinary payment” to the official prior to the official’s entry into government. Further limitations on participation in governmental matters have been imposed on certain presidential and vice presidential “appointees” in the Obama Administration who are required to take an “ethics pledge” concerning past clients and employers.
Other than certain specific and narrow divestiture requirements on particular regulatory officials that are generally part of the organic act establishing the regulatory entity, there are no overall, general divestiture requirements in federal law. Divestiture, however, may be an important device in conflict of interest avoidance, and can be required under regulatory authority by agency ethics officers to deal with potential conflicts of interest regarding ownership of particular private assets by those entering government service. .
Date of Report: September 14, 2010
Number of Pages: 21
Order Number: RL31822
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Legislative Attorney
Ethics and conflict of interest concerns have been raised concerning the impartiality or bias of government regulators or administrators who, shortly before entering government service, represented, owned, or were employed by firms or other entities that such officials must now regulate and oversee. Federal conflict of interest law and regulation, for the most part, deal with the potential influence of existing financial assets, properties, and relationships of a federal official. There are, however, some limited conflict of interest regulations and standards which look also to previous employment and past associations of those entering federal service. Additionally, in 2009, by Executive Order, certain “appointees” of President Obama must file an “ethics pledge” agreeing to further limitations on participating in governmental matters affecting some former employers and clients, and the Administration’s policy of not having registered lobbyists serve on advisory committees was formalized in 2010.
The regulatory scheme regarding financial interests and federal officials encompasses generally what has colloquially been called the “three-D” method of conflict of interest regulation, that is: disclosure, disqualification, and divestiture. Public financial disclosure is required of incoming federal officials who will be compensated above certain amounts, including those officials nominated by the President who must receive Senate confirmation. Disclosure information covers not only existing assets, property, debts, and income, but also certain information about past clients and employers, and positions held in organizations.
Disqualification or “recusal,” the principal statutory method of dealing with potential conflicts of interest in the executive branch, prohibits a federal official from participating in any particular governmental matter in which that official, or those close to the official, has any financial interest. While the statutory disqualification provision is a criminal law covering only current financial interests of the official, there are also “regulatory” recusal requirements that may apply to certain past affiliations and previous economic interests. Such recusals generally apply to particular matters involving specific parties, when entities or organizations previously affiliated with the federal official are now parties to or represent parties in those matters. There are also recusal requirements in regulations concerning such matters when a party (or one representing a party) had made an “extraordinary payment” to the official prior to the official’s entry into government. Further limitations on participation in governmental matters have been imposed on certain presidential and vice presidential “appointees” in the Obama Administration who are required to take an “ethics pledge” concerning past clients and employers.
Other than certain specific and narrow divestiture requirements on particular regulatory officials that are generally part of the organic act establishing the regulatory entity, there are no overall, general divestiture requirements in federal law. Divestiture, however, may be an important device in conflict of interest avoidance, and can be required under regulatory authority by agency ethics officers to deal with potential conflicts of interest regarding ownership of particular private assets by those entering government service. .
Date of Report: September 14, 2010
Number of Pages: 21
Order Number: RL31822
Price: $29.95
Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports
Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.
Posts
