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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10470 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                               H. R. 10470

   To amend section 207 of title 18, United States Code, to prohibit 
  certain former Federal officials from investing in or serving in a 
managerial role in an investment fund in which a foreign principal owns 
 shares within a certain time period if such investment or managerial 
 role is based on conversations between such former officials and such 
   foreign principal while such former official was employed by the 
              Federal Government, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           December 18, 2024

Mr. Beyer (for himself and Ms. Scanlon) introduced the following bill; 
          which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

 
   To amend section 207 of title 18, United States Code, to prohibit 
  certain former Federal officials from investing in or serving in a 
managerial role in an investment fund in which a foreign principal owns 
 shares within a certain time period if such investment or managerial 
 role is based on conversations between such former officials and such 
   foreign principal while such former official was employed by the 
              Federal Government, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Political Appointee Illicit Dealings 
Act'' or ``PAID Act''.

SEC. 2. PROHIBITION RELATING TO FOREIGN ENTITIES.

    (a) Prohibition.--Section 207(f) of title 18, United States Code, 
is amended by striking paragraph (3) and inserting the following:
            ``(3) Special rule for former federal officials on 
        investments or management roles.--
                    ``(A) Rule.--Any person who--
                            ``(i) is subject to the restrictions 
                        contained in subsection (c), (d), or (e); or
                            ``(ii) would have been subject to the 
                        restrictions in such subsection if such person 
                        received compensation for service or employment 
                        in the position, office, or employment referred 
                        to in such subsection at a rate which would 
                        have made the person subject to such 
                        restrictions,
                and who knowingly, within 4 years of any exchange of 
                communication between such person and a foreign 
                principal or agent of a foreign principal makes a 
                substantial investment, or accepts or assumes a 
                managerial role, in a business entity knowing that such 
                foreign principal or agent of a foreign principal has a 
                direct or indirect substantial investment in such 
                business entity, shall be subject to the penalties set 
                forth in section 216 of this title.
                    ``(B) Exception.--The rule under subparagraph (A) 
                does not apply to a person referred to in such 
                subparagraph--
                            ``(i) who has no managerial role in a 
                        business entity described in such subparagraph 
                        and in which such person has a financial 
                        interest solely through--
                                    ``(I) an employer-sponsored 
                                retirement plan; or
                                    ``(II) a trust in which such person 
                                has a beneficial interest; and
                            ``(ii) who does not control or recommend, 
                        either directly or through a relative of such 
                        person, any investment of the plan or trust.
                    ``(C) Compliance.--To comply with the rule under 
                subparagraph (A), such person shall divest such 
                investment or terminate such role within 120 days of 
                discovering that such foreign principal or agent of the 
                foreign principal has a direct or indirect substantial 
                investment in such business entity.
            ``(4) Definitions.--In this subsection:
                    ``(A) Agent of a foreign principal.--The term 
                `agent of a foreign principal' means any person who--
                            ``(i) acts as an agent, representative, 
                        employee, or servant, or any person who acts in 
                        any other capacity at the order, request, or 
                        under the direction or control, of a foreign 
                        principal; or
                            ``(ii) a person any of whose activities are 
                        directly or indirectly supervised, directed, 
                        controlled, financed, or subsidized in whole or 
                        in major part by a foreign principal.
                    ``(B) Business entity.--The term `business entity' 
                has the meaning given such term in section 334 of the 
                Gramm-Leach-Bliley Act (15 U.S.C. 6764), except the 
                term does not include--
                            ``(i) a management company (as defined 
                        under section 4 of the Investment Company Act 
                        of 1940 (15 U.S.C. 80a-4)) that is registered 
                        with the Securities and Exchange Commission 
                        under that Act;
                            ``(ii) an investment company (as defined 
                        under section 3 of the Investment Company Act 
                        of 1940 (15 U.S.C. 80a-3)) that is a regulated 
                        investment company under section 851 of the 
                        Internal Revenue Code of 1986 (26 U.S.C. 851); 
                        or
                            ``(iii) the issuer of a security that is 
                        registered with the Securities and Exchange 
                        Commission pursuant to section 12 of the 
                        Securities Exchange Act of 1934 (15 U.S.C. 78l) 
                        and listed on a national exchange.
                    ``(C) Foreign entity.--The term `foreign entity' 
                means the government of a foreign country as defined in 
                section 1(e) of the Foreign Agents Registration Act of 
                1938, as amended, or a foreign political party as 
                defined in section 1(f) of that Act.
                    ``(D) Foreign principal.--The term `foreign 
                principal' has the meaning given such term in section 1 
                of the Foreign Agents Registration Act of 1938, as 
                amended (22 U.S.C. 611).
                    ``(E) Indirect substantial investment.--The term 
                `indirect substantial investment' includes a 
                substantial investment made by any foreign principal or 
                agent of a foreign principal acting on directions from 
                the foreign principal or agent of a foreign principal 
                described such subparagraph.
                    ``(F) Managerial role.--The term `managerial role' 
                means an assignment within an organization which 
                entails--
                            ``(i) managing the organization, or a 
                        department, subdivision, function, or component 
                        of the organization;
                            ``(ii) supervising and controlling the work 
                        of other supervisory, professional, or 
                        managerial employees, or managing an essential 
                        function within the organization, or a 
                        department or subdivision of the organization;
                            ``(iii) if another employee or other 
                        employees are directly supervised, having the 
                        authority to hire and fire or recommend those 
                        as well as other personnel actions (such as 
                        promotion and leave authorization) or, if no 
                        other employee is directly supervised, 
                        functioning at a senior level within the 
                        organizational hierarchy or with respect to the 
                        function managed; and
                            ``(iv) exercising discretion over the day-
                        to-day operations of the activity or function 
                        for which the employee has authority.
                    ``(G) Relative.--The term `relative' in relation to 
                a person described in paragraph (3)(A) has the meaning 
                given such term in section 13101 of title 5.
                    ``(H) Substantial investment.--The term 
                `substantial investment' means any investment that 
                exceeds $25,000 or one percent of the value of the 
                business entity, whichever amount is greater.''.
    (b) Applicability.--The amendments made by this section shall apply 
on and after the date that is 120 days after the date of enactment of 
this Act.
                                 <all>
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