I 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Political Appointee Il3 licit Dealings Act’’ or ‘‘PAID Act’’. 

4 SEC. 2. PROHIBITION RELATING TO FOREIGN ENTITIES. 

5 (a) PROHIBITION.—Section 207(f) of title 18, United 

6 States Code, is amended by striking paragraph (3) and 

7 inserting the following: 

8 ‘‘(3) SPECIAL RULE FOR FORMER FEDERAL OF9 FICIALS ON INVESTMENTS OR MANAGEMENT

10 ROLES.— 

11 ‘‘(A) RULE.—Any person who— 

12 ‘‘(i) is subject to the restrictions con13 tained in subsection (c), (d), or (e); or 

14 ‘‘(ii) would have been subject to the 

15 restrictions in such subsection if such per16 son received compensation for service or 

17 employment in the position, office, or em18 ployment referred to in such subsection at 

19 a rate which would have made the person 

20 subject to such restrictions, 

21 and who knowingly, within 4 years of any ex22 change of communication between such person 

23 and a foreign principal or agent of a foreign 

24 principal makes a substantial investment, or ac25 cepts or assumes a managerial role, in a busi26 ness entity knowing that such foreign principal 


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1 or agent of a foreign principal has a direct or 

2 indirect substantial investment in such business 

3 entity, shall be subject to the penalties set forth 

4 in section 216 of this title. 

5 ‘‘(B) EXCEPTION.—The rule under sub6 paragraph (A) does not apply to a person re7 ferred to in such subparagraph— 

8 ‘‘(i) who has no managerial role in a 

9 business entity described in such subpara10 graph and in which such person has a fi11 nancial interest solely through— 

12 ‘‘(I) an employer-sponsored re13 tirement plan; or 

14 ‘‘(II) a trust in which such per15 son has a beneficial interest; and 

16 ‘‘(ii) who does not control or rec17 ommend, either directly or through a rel18 ative of such person, any investment of the 

19 plan or trust. 

20 ‘‘(C) COMPLIANCE.—To comply with the 

21 rule under subparagraph (A), such person shall 

22 divest such investment or terminate such role 

23 within 120 days of discovering that such foreign 

24 principal or agent of the foreign principal has 


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1 a direct or indirect substantial investment in 

2 such business entity. 

3 ‘‘(4) DEFINITIONS.—In this subsection: 

4 ‘‘(A) AGENT OF A FOREIGN PRINCIPAL.— 

5 The term ‘agent of a foreign principal’ means 

6 any person who— 

7 ‘‘(i) acts as an agent, representative, 

8 employee, or servant, or any person who 

9 acts in any other capacity at the order, re10 quest, or under the direction or control, of 

11 a foreign principal; or 

12 ‘‘(ii) a person any of whose activities 

13 are directly or indirectly supervised, di14 rected, controlled, financed, or subsidized 

15 in whole or in major part by a foreign 

16 principal. 

17 ‘‘(B) BUSINESS ENTITY.—The term ‘busi18 ness entity’ has the meaning given such term in 

19 section 334 of the Gramm-Leach-Bliley Act (15 

20 U.S.C. 6764), except the term does not in21 clude— 

22 ‘‘(i) a management company (as de23 fined under section 4 of the Investment 

24 Company Act of 1940 (15 U.S.C. 80a–4)) 


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1 that is registered with the Securities and 

2 Exchange Commission under that Act; 

3 ‘‘(ii) an investment company (as de4 fined under section 3 of the Investment 

5 Company Act of 1940 (15 U.S.C. 80a–3)) 

6 that is a regulated investment company 

7 under section 851 of the Internal Revenue 

8 Code of 1986 (26 U.S.C. 851); or 

9 ‘‘(iii) the issuer of a security that is 

10 registered with the Securities and Ex11 change Commission pursuant to section 12 

12 of the Securities Exchange Act of 1934 

13 (15 U.S.C. 78l) and listed on a national 

14 exchange. 

15 ‘‘(C) FOREIGN ENTITY.—The term ‘foreign 

16 entity’ means the government of a foreign coun17 try as defined in section 1(e) of the Foreign 

18 Agents Registration Act of 1938, as amended, 

19 or a foreign political party as defined in section 

20 1(f) of that Act. 

21 ‘‘(D) FOREIGN PRINCIPAL.—The term ‘for22 eign principal’ has the meaning given such term 

23 in section 1 of the Foreign Agents Registration 

24 Act of 1938, as amended (22 U.S.C. 611). 


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1 ‘‘(E) INDIRECT SUBSTANTIAL INVEST2 MENT.—The term ‘indirect substantial invest3 ment’ includes a substantial investment made 

4 by any foreign principal or agent of a foreign 

5 principal acting on directions from the foreign 

6 principal or agent of a foreign principal de7 scribed such subparagraph. 

8 ‘‘(F) MANAGERIAL ROLE.—The term 

9 ‘managerial role’ means an assignment within 

10 an organization which entails— 

11 ‘‘(i) managing the organization, or a 

12 department, subdivision, function, or com13 ponent of the organization; 

14 ‘‘(ii) supervising and controlling the 

15 work of other supervisory, professional, or 

16 managerial employees, or managing an es17 sential function within the organization, or 

18 a department or subdivision of the organi19 zation; 

20 ‘‘(iii) if another employee or other em21 ployees are directly supervised, having the 

22 authority to hire and fire or recommend 

23 those as well as other personnel actions 

24 (such as promotion and leave authoriza25 tion) or, if no other employee is directly 


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1 supervised, functioning at a senior level 

2 within the organizational hierarchy or with 

3 respect to the function managed; and 

4 ‘‘(iv) exercising discretion over the 

5 day-to-day operations of the activity or 

6 function for which the employee has au7 thority. 

8 ‘‘(G) RELATIVE.—The term ‘relative’ in 

9 relation to a person described in paragraph 

10 (3)(A) has the meaning given such term in sec11 tion 13101 of title 5. 

12 ‘‘(H) SUBSTANTIAL INVESTMENT.—The 

13 term ‘substantial investment’ means any invest14 ment that exceeds $25,000 or one percent of 

15 the value of the business entity, whichever 

16 amount is greater.’’. 

17 (b) APPLICABILITY.—The amendments made by this 

18 section shall apply on and after the date that is 120 days 

19 after the date of enactment of this Act. 

Æ 


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