COAST GUARD

Communication of 

Post-Government 

Employment 

Restrictions Can Be 

Strengthened

Report to Congressional Committees

December 2011

GAO-12-174

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-174, a report to 

congressional committees

December 2011

COAST GUARD

Communication of Post-Government Employment 

Restrictions Can Be Strengthened

Why GAO Did This Study

The Coast Guard has over $27 billion 

in acquisitions with hundreds of 

millions of dollars going to major 

contractors each year. High-ranking 

officials leave the Coast Guard each 

year and may go to work for these 

contractors. To avoid conflicts of 

interest and promote public trust, these 

officials must comply with restrictions 

on their post-government employment 

activities. These restrictions do not 

necessarily prohibit them from working 

for a contractor. In response to the 

Coast Guard Authorization Act of 2010, 

which directed GAO to examine Coast 

Guard contractor compensation of 

former high-ranking officials, GAO 

identified (1) the extent such former 

officials were compensated by Coast 

Guard contractors and assigned to 

programs for which they previously had 

official responsibility, and (2) Coast 

Guard and contractor practices to help 

ensure compliance with postgovernment employment restrictions. 

GAO analyzed Coast Guard, 

contractor, and Internal Revenue 

Service data on former officials, and 

interviewed officials from the Coast 

Guard and 11 major contractors 

representing over 40 percent of Coast 

Guard obligations in calendar year 

2010 to identify practices used 

regarding these restrictions.

What GAO Recommends

GAO makes one recommendation that 

the Commandant of the Coast Guard

require its ethics officials to provide 

guidance on post-government

employment restrictions to all highranking officials, at a minimum, as the 

officials enter into those senior 

positions and as they transition out of 

the Coast Guard. DHS concurred with 

GAO’s recommendation. 

What GAO Found

Of the 40 former high-ranking Coast Guard officials (Admirals or Senior 

Executive Service members) who separated from the Coast Guard from 2005 

through 2009, 22 have been compensated by Coast Guard contractors. Twelve 

of these officials were compensated in 2010 by major Coast Guard contractors—

contractors that received at least $10 million in Coast Guard contracts in 2010. 

One of the 12 officials was assigned by a major Coast Guard contractor to work 

on a program for which the individual previously had official responsibility. 

According to a Coast Guard ethics opinion, this individual was permitted to work 

for the contractor. Coast Guard and contractor documentation does not 

specifically indicate whether any of the other 11 officials were assigned to work 

on programs for which they previously had official responsibility. Based on the 

information provided on official roles and responsibilities, we did not find any 

evidence these former officials represented themselves to the government in 

violation of post-government employment restrictions.

Compensation of 40 Former High-Ranking Coast Guard Officials by Coast Guard Contractors 

from 2005 through 2010

The Coast Guard and contractors employ a variety of practices to help ensure 

compliance with post-government employment restrictions. The Coast Guard 

provides training, counseling, and ethics opinions to inform high-ranking officials 

of post-government employment restrictions. However, the practices are not 

designed to ensure these officials are fully aware of the restrictions before 

negotiating with potential employers or separating from the government. Training 

on the topic is only mandatory for new employees and both counseling and 

ethics opinions are optional. Most major Coast Guard contractors GAO 

interviewed described a variety of voluntary practices in use—including guidance 

on restrictions, controls during the hiring process, training, and monitoring 

mechanisms—to help ensure compliance with post-government employment 

restrictions. 

View GAO-12-174. For more information, 

contact John Hutton at (202) 512-4841 or 

huttonj@gao.gov.
Page i GAO-12-174 Coast Guard

Letter 1 

Background 4

About Half of Former High-Ranking Coast Guard Officials Were 

Compensated by Coast Guard Contractors 6

Practices to Help Ensure Individuals Comply with PostGovernment Employment Restrictions 11

Conclusions 16

Recommendation for Executive Action 17

Agency Comments 17

Appendix I Scope and Methodology 19

Appendix II Comments from the Department of Homeland Security 22

Appendix III GAO Contact and Staff Acknowledgments 24

Table

Table 1: Contractor Reported Practices to Help Ensure Compliance 

with Post-Government Employment Restrictions 15

Figures

Figure 1: Compensation of 40 Former High-ranking Coast Guard 

Officials by Coast Guard Contractors from 2005 through 

2010 7

Figure 2: Timing of Twelve Former High-ranking Officials’ 

Separation from the Coast Guard and Employment by 

Major Coast Guard Contractors 9

Contents
Page ii GAO-12-174 Coast Guard

Abbreviations

DOD Department of Defense 

DHS Department of Homeland Security 

FPDS-NG Federal Procurement Data System-Next Generation 

GAO Government Accountability Office 

IRS Internal Revenue Service 

SES Senior Executive Service 

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Page 1 GAO-12-174 Coast Guard

United States Government Accountability Office

Washington, DC 20548

December 15, 2011

The Honorable John D. Rockefeller IV

Chairman

The Honorable Kay Bailey Hutchison

Ranking Member

Committee on Commerce, Science and Transportation

United States Senate

The Honorable John L. Mica

Chairman

The Honorable Nick J. Rahall

Ranking Member

Committee on Transportation and Infrastructure

House of Representatives

The Coast Guard, a component of the Department of Homeland Security 

(DHS), manages over $27 billion in its acquisition portfolios. These 

portfolios include major acquisitions to modernize ships, aircraft, 

command and control systems, and other capabilities used to perform its 

missions. As a result of these acquisitions and other purchases, 

contractors receive significant funding from Coast Guard contracts—last 

year the largest recipients received hundreds of millions of dollars in 

Coast Guard contracts.

Our prior work has found that, each year, some government officials 

leave their agencies and go to work for contractors that do business with 

their agencies—potentially the same contractors whose contracts they 

oversaw or were otherwise involved with prior to leaving.1

 

1

GAO, Defense Contracting: Post-Government Employment of Former DOD Officials 

Needs Greater Transparency, 

Government 

officials who serve in senior positions and leave for jobs with contractors 

are subject to laws restricting their post-government employment 

activities. These laws seek in part to protect against conflicts of interest—

such as former officials using their government contacts to the improper 

benefit of the contractor and to the detriment of the government. The laws 

also seek to promote public trust in the integrity of the government’s 

decision-making process, but do not explicitly require the contractor to 

GAO-08-485 (Washington, D.C.: May 21, 2008).

 
 

Page 2 GAO-12-174 Coast Guard

maintain comprehensive policies and procedures to prevent violations of 

post government employment restrictions.2

Section 402 (a) of the Coast Guard Authorization Act of 2010, Pub. L. No. 

111-281, as amended, added section 569 to title 14 of the United States 

Code mandating that GAO report, no later than December 31, 2011, and 

annually thereafter, on the extent to which former Coast Guard officials 

have been compensated by Coast Guard contractors. Section 569 

defines the term “Coast Guard contractors” to be any person that 

received at least $10 million in contractor awards from the Coast Guard in 

the calendar year covered by the report. For the purposes of this report, 

we refer to these contractors as major Coast Guard contractors. Section 

569 defines “Coast Guard officials” as Rear Admirals, Vice Admirals, and 

Admirals (the rank of O-7 and above) and members of the Senior 

Executive Service (SES). For the purposes of this report, we refer to them 

as high-ranking officials. This report examines: (1) to what extent former 

high-ranking Coast Guard officials have been compensated by Coast 

Guard contractors and assigned to work on programs for which they 

previously had decision-making authority or oversight responsibility, and 

(2) what practices the Coast Guard and its contractors have in place to 

help ensure individuals comply with post-government employment 

restrictions.

Violation of these laws may 

result in criminal, administrative, or civil penalties for former officials and, 

in some circumstances, the contractors that employ them.

To address these objectives, we identified which former high-ranking 

officials departed from the Coast Guard from 2005 through 2009 based 

on Coast Guard personnel data. We obtained and analyzed information 

from the Coast Guard, Coast Guard contractors, the Federal Procurement 

Data System-Next Generation (FPDS-NG), USA Spending, and the 

Internal Revenue Service (IRS) Information Returns Master File to (1) 

determine the number of former officials who were compensated by 

Coast Guard contractors and (2) identify which, if any, of the former highranking officials who separated from the Coast Guard were compensated 

by a major Coast Guard contractor from 2005 through 2010 and their 

compensation amounts. Due to the lack of data on government 

subcontractors in the FPDS-NG and USA Spending, we did not assess 

 

2

Federal Acquisition Regulation clause 52.203-13 (c) does require contractors to establish 

a business ethics awareness program and internal control system for this program.
 

Page 3 GAO-12-174 Coast Guard

whether the former officials were compensated by Coast Guard 

contractors via subcontracts. To assess the reliability of our data sources, 

we compared the data we obtained from the Coast Guard and Coast 

Guard contractors to IRS data and conducted interviews with 

knowledgeable agency officials to identify any outliers or obvious errors 

that could reflect inaccuracies. Based on the results, we found the data to 

be sufficiently reliable to meet our reporting objectives.

To determine whether the former officials were assigned to work on 

programs or projects for which they previously had official responsibility,3

To describe practices the Coast Guard and contractors use to help 

ensure compliance with post-government employment restrictions, we 

reviewed Coast Guard and 11 major contractors’ policies, interviewed 

Coast Guard and contractor officials, and analyzed contractor 

documentation on hiring, training, and monitoring practices. The 11 

contractors we interviewed represented over 40 percent of the dollar 

value of Coast Guard obligations in calendar year 2010, including the top 

6 recipients of Coast Guard obligations. For a detailed description of our 

scope and methodology, see appendix I.

we obtained and compared information from contractors and the Coast 

Guard on the individuals’ responsibilities to identify any overlap. We did 

not assess whether the actual duties performed by the former employees 

were in compliance with post-government employment restrictions; 

however, we asked Coast Guard officials whether they had 

documentation of any of these former officials meeting with the Coast 

Guard on behalf of the contractor that compensated them. We also 

contacted the DHS Hotline, the Coast Guard Investigative Service, and 

GAO’s FraudNet regarding whether they had received any allegations of 

violations of post-government employment restrictions by the former 

officials in our analysis.

We conducted this performance audit from March 2011 through 

December 2011 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

 

3

For the purpose of this report, we use “official responsibility” for the terms “oversight 

responsibility” and “decision-making authority,” which include program oversight and direct 

authority exercisable alone, with others, or through subordinates, to direct government 

action.
 

Page 4 GAO-12-174 Coast Guard

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.

Congress has long been concerned about the hiring of former federal 

employees by private contractors who do business with their former 

government agencies and has passed laws subjecting federal personnel 

to certain conflict of interest restrictions. Executive branch employees, 

including Coast Guard officers and civilian employees, are subject to 

federal (felony) criminal conflict-of-interest statutes. More specifically:

• 18 U.S.C. § 207 (a)(1): lifetime ban—All former officers and 

employees of the executive branch and certain other agencies are 

permanently barred from knowingly making, “with the intent to 

influence,” a communication to or appearance before a U.S. employee 

on behalf of any other person (i.e., business entity or individual) on 

the same particular matter involving specific parties in which the 

former employees participated personally and substantially when 

working for the federal government (e.g., specific contract, legal 

investigation, etc.).

• 18. U.S.C. § 207 (a)(2): 2-year ban—All former officers and 

employees are barred for 2 years from knowingly making, “with the 

intent to influence,” a communication to or appearance before a U.S. 

employee on behalf of another person (i.e., business entity or 

individual) on a particular matter involving specific parties, in which (1) 

the U.S. is a party or has a direct and substantial interest, and (2) the 

person knows or should know this particular matter was actually 

pending under the “official responsibility” of the employee during the 

last year of government service.

• 18 U.S.C. § 207 (c): 1-year ban—Former officers and senior 

employees are barred for 1-year (cooling off period) after leaving their 

senior positions, from knowingly making, “with intent to influence,” a 

communication to or appearance before an employee of an agency in 

which they served during the last year of government service, if that 

communication or appearance is made on behalf of a person (i.e., 

Background 
 

Page 5 GAO-12-174 Coast Guard

business entity or individual) on a matter on which the former senior 

employees seek official action from the agency’s employee.4

The Procurement Integrity Act (41 U.S.C. §§ 2101-2107) imposes a 

further bar on certain former government officials from accepting 

compensation from a contractor for one year after having served in 

specific positions or made certain decisions for contracts exceeding $10 

million. However, former government officials can work in the contractor’s 

divisions or affiliates that do not produce the same or similar products or 

services that were produced under the contract.5

The Office of Government Ethics oversees ethics standards across the 

executive branch and specifies appropriate regulations for the executive 

branch. Individual agencies, such as DHS, are responsible for 

implementing ethics programs and have discretion regarding whether and 

how to help ensure compliance with post-government employment 

restrictions. With the Office of Government Ethics’ concurrence, agencies 

may supplement executive branch ethics regulations with their own 

policies to include additional restrictions or specific procedures to help 

ensure compliance with the restrictions. For example, Securities and 

Exchange Commission employees, within 2 years of separating from the 

agency, must submit a statement to request approval to appear before 

the Securities and Exchange Commission for purposes of 

representational activity.

Violation of these laws 

may result in criminal, administrative or civil penalties for former 

government officials and, in some circumstances, the contractors that 

employ them.

DOD has also adopted additional requirements to help ensure 

compliance with post-government restrictions. According to a Department 

of Defense (DOD) memorandum, DOD employees shall avoid any activity 

that would affect the public’s confidence in the integrity of the federal 

government, even if it is not an actual violation of the law. Further, DOD 

 

4

Regarding the one-year ban, the Coast Guard ethics attorney explained that former 

senior coast Guard officials are prohibited from representing any company to any part of 

DHS in connection with any matter whatsoever. In effect, the entire DHS is off limits for 1 

year for all former senior Coast Guard officials with respect to company representational 

activities.

5

Compensation from subcontractors of the involved prime contractor is not barred under 

the Procurement Integrity Act.
 

Page 6 GAO-12-174 Coast Guard

added several procedures to help ensure compliance with postgovernment employment restrictions, including:

• components are required to provide annual training that addresses 

relevant federal and DOD post-government employment restrictions;

• components must also provide guidance on relevant federal and DOD 

post-government employment restrictions, as part of out-processing 

procedures, to all DOD personnel who are leaving federal service; 

and

• personnel who file Public Financial Disclosure Reports are required to 

certify annually that they are aware of the disqualification and 

employment restrictions of 18 U.S.C. § 207 and § 208, and 41 U.S.C. 

§§ 2101-2107, and that they have not violated those restrictions.

DHS and Coast Guard policies do not add to restrictions included in postgovernment employment-related laws or specify procedures to help 

ensure compliance. Commandant Instruction M5370.8B reiterates how 

federal laws on post-government employment restrictions apply to the 

Coast Guard and does not add policies specific to the Coast Guard.

Of the 40 former officials who were admiral-level or members of the SES 

and separated from the Coast Guard from 2005 through 2009, 22 were 

compensated at some point from 2005 through 2010 by contractors to 

which the Coast Guard obligated funding in calendar year 2010. We 

found that 12 of the 22 were compensated at some point during that time 

frame by major Coast Guard contractors—those contractors that received 

at least $10 million in Coast Guard contracts in 2010. Furthermore, all 12 

former officials were compensated by a major contractor in 2010.

About Half of Former 

High-Ranking Coast 

Guard Officials Were 

Compensated by 

Coast Guard 

Contractors 
 

Page 7 GAO-12-174 Coast Guard

Figure 1: Compensation of 40 Former High-ranking Coast Guard Officials by Coast 

Guard Contractors from 2005 through 2010

Coast Guard ethics officials advised over half of the 12 former officials 

who were compensated by major Coast Guard contractors that they were 

permitted to work for these contractors. At least 7 obtained an ethics 

opinion from the Coast Guard regarding employment with the respective 

contractor, although an ethics opinion is not required by the Coast 

Guard.6

 

6

For the 12 former officials who were compensated by major contractors, we received 7 

ethics opinions specific to the respective contractor. The Coast Guard provided copies of 

2 of the 7 opinions; the contractors provided copies of the 7 ethics opinions. For the 40 

former officials in our analysis, the Coast Guard only had records of providing ethics 

opinions to 6 individuals.

For the other five officials, it is unclear whether an opinion was 

obtained. In no cases were the 7 individuals barred from receiving 

compensation from the contractor. However, the opinions identified 

restrictions on certain representational activities. For example, because 

the former officials held senior positions, all had a 1-year cooling off 

period, during which they were barred from representing their new 

employers to any person in the Coast Guard on any matter for which the 

new employer was seeking official action. According to the ethics 
 

Page 8 GAO-12-174 Coast Guard

opinions, the former officials were not to appear before, or to have any 

communication or contact with, any person in the Coast Guard on behalf 

of the company with the intent to influence a government decision. Most 

opinions stated that individuals were not prohibited from social contacts or 

factual communication. In addition, the opinions explained that for the first 

2 years after leaving the Coast Guard, they were barred from 

representing their respective company to any part of the executive or 

judicial branches of the federal government with intent to influence on any 

particular matter that they were officially responsible for during their last 

year of Coast Guard service. Further, the opinions stated that the former 

officials were permanently barred from representing their employer to any 

part of the executive or judicial branch of the federal government on any 

of the same particular matters that they participated in personally and 

substantially while in the Coast Guard. However, 6 of the 7 of the ethics 

opinions did not specify what particular matters were barred.

At least 9 of the 12 former officials compensated began working for a 

major Coast Guard contractor within one year of separating from the 

Coast Guard. The other 3 former officials began work from over 2 to 

almost 4 years after separating. Employment with a contractor after 

leaving government employment is not necessarily a violation of postgovernment employment statutes. Figure 2 reflects the timing of the 

former officials’ separation from the Coast Guard and employment by 

major contractors.
 

Page 9 GAO-12-174 Coast Guard

Figure 2: Timing of Twelve Former High-ranking Officials’ Separation from the 

Coast Guard and Employment by Major Coast Guard Contractors

Major contractors assigned business development responsibilities to at 

least 9 of the 12 former Coast Guard officials. Business development 

roles encompass a broad range of activities, which are generally 

permitted, but could be limited by representational restrictions in statute.

Examples of business development responsibilities described in the 

former officials’ position descriptions include: creating strategies and 

plans and developing business in the homeland security market, 

developing and maintaining strong relationships with key decision-makers 

in relevant markets, and staying actively informed of business and 

management developments affecting present and potential customers. 

Based on the information provided by contractors and the Coast Guard 

about official roles and responsibilities, we did not find any evidence 

these former officials represented themselves to the government in 

violation of post-government employment restrictions. For some of the 

former officials who were compensated by major contractors, business 

development roles entailed maintaining or increasing the employers’ 

business with the Coast Guard and DHS. 
 

Page 10 GAO-12-174 Coast Guard

In one case, a major Coast Guard contractor assigned a former highranking official, 3 months after retirement, to work on a program for which 

the official previously had official responsibility. As one of their business 

development duties, the person was assigned to sustain or increase the 

funding levels for the acquisition of an item, according to the contractor’s 

position description. Prior to retiring, that individual had broad official 

responsibility for the Coast Guard program that was acquiring the item.7

The 12 former high-ranking officials who were compensated by major 

Coast Guard contractors received varying compensation levels from 

those contractors from 2005 through 2010. During this period the 12 

former high-ranking officials were compensated by a total of 7 major 

Coast Guard contractors. In addition, some of the former officials were 

employed full-time, while others were employed part-time or as 

consultants. In 2010, all 12 officials were compensated, with amounts 

ranging from a low of $4,015 to a high of $296,839. Contractors reported 

that 10 had compensation levels of at least $100,000, with six of the 

officials compensated at levels greater than $200,000.

According to a Coast Guard ethics opinion, this individual was permitted 

to work for the contractor; however, the Coast Guard was off-limits to the 

individual during the first year of retirement for all contractor 

representation, communications, and contacts. For the other 11 officials, 

documentation provided by the Coast Guard and major Coast Guard 

contractors does not specifically indicate whether major contractors 

assigned them to work on programs for which they previously had official 

responsibility. In most cases, the documentation did not provide details or 

insight into specific programs former officials were assigned to or which 

programs they were to include in their business development roles. 

Further, the Department’s Office of Inspector General and Coast Guard 

Investigative Service officials told us that they had not received 

allegations of violations of post-government employment restrictions for 

any of the officials.

 

7

We did not determine whether the individual participated personally and substantially with 

the specific acquisition to determine compliance with section 207 of title18 of the U.S. 

Code. 
 

Page 11 GAO-12-174 Coast Guard

The Coast Guard and most of the 11 major Coast Guard contractors we 

examined employ practices such as training to help ensure awareness of 

and compliance with post-government employment restrictions. The 

Coast Guard uses multiple approaches to inform its service members and 

civilian employees of post-government employment restrictions, such as 

training, counseling, and ethics opinions. However, because training on 

this topic is only mandatory for new employees, the Coast Guard has no 

assurance that high-ranking officials are well-informed of the restrictions 

prior to separating from the Coast Guard. In addition, Coast Guard 

service members and civilian employees can report potential violations of 

post-government employment restrictions to the DHS Hotline and the 

Coast Guard Investigative Service. However, the Coast Guard does not 

have its own hotline number and the Coast Guard Investigative Service 

only recently began to publicize the DHS Hotline number. Nine of the 11 

major contractors reported having voluntary practices to help ensure 

compliance, such as guidance on post-government employment 

restrictions, controls during the hiring process, training for employees, 

and monitoring mechanisms. However, two major contractors had no 

formal practices.

Although the DHS General Counsel has the authority to plan, direct, 

implement, and coordinate the ethics program and policies within DHS, 

the agency has given the Coast Guard and other components flexibility in 

developing their ethics programs, including discretion over procedures to 

help ensure compliance with post-government employment restrictions.8

The Coast Guard provides ethics training to new service members and 

civilian employees and provides optional training to outgoing officials. 

However, there is no certainty that high-ranking Coast Guard officials are 

informed of the relevant post-government employment restrictions prior to 

negotiating employment with a contractor or separating from the Coast 

Guard. The Coast Guard addresses the restrictions in a mandatory 

training course for new hires within 90 days of employment and during a 

The Coast Guard in turn delegates to its ethics officials the responsibility 

to implement training and provide advice regarding post-government 

employment restrictions.

 

8

Components are given flexibility through DHS Management Directive 0480.1, Ethics of

Standard Conduct, March 1, 2003. 

Practices to Help 

Ensure Individuals 

Comply with PostGovernment 

Employment 

Restrictions 

Coast Guard Provides 

Training, Advice, and 

Reporting Mechanism on 

Restrictions 

Training
 

Page 12 GAO-12-174 Coast Guard

1-hour presentation by the ethics attorney at a voluntary pre-retirement 

course available to high-ranking officials. The Coast Guard also provides 

annual ethics training, but the ethics training does not usually cover postgovernment employment restrictions. Of the 11 high-ranking officials who 

separated from the Coast Guard between July 2008 and December 2010, 

the Coast Guard indicated that 5 participated in the pre-retirement course. 

Depending on an official’s length of service, there is likely to be a 

considerable amount of time between new hire training, when an official is 

first exposed to the post-government employment restrictions, and 

retirement. In contrast, DOD policy requires that its annual ethics training 

address post-government employment restrictions.

The Coast Guard’s ethics attorney provides ethics advice, including 

counseling and ethics opinions, to personnel who request it, but 

personnel are not required to obtain advice nor are they required to 

inform the ethics attorney if they plan to leave the Coast Guard. 

According to the Coast Guard’s Office of General Counsel, the Coast 

Guard headquarters ethics attorney provides oversight and overall 

management of the Coast Guard’s ethics program, including aspects 

related to post-government employment restrictions. The Coast Guard 

ethics attorney explained that, while legal staff in district offices execute 

day-to-day ethics functions for field personnel, SES officials and admirals 

typically work with the headquarters ethics office and consult with the 

headquarters ethics attorney, who is the designated agency contact for 

that office. Coast Guard officials may request counseling and ethics 

opinions, which, according to the attorney, are developed with input from 

a questionnaire about an official’s job description during the previous two 

years, types of contracting positions held, and prospective employers. 

Ethics opinions may detail the applicant’s previous government work 

experience and specify whether employment with a prospective company 

is permitted under the post-government employment laws. In other cases, 

the opinions provide more generalized advice, including a reiteration of 

potential restrictions.

To help ensure that high-ranking officials are aware that such services 

are available, the Coast Guard ethics attorney distributes annual email 

reminders that request officials to notify the attorney if they plan to leave 

the Coast Guard. If officials indicate to the attorney that they plan to 

separate, the attorney provides to them a memorandum describing postgovernment employment restrictions. However, unless individuals inform 

the ethics attorney that they plan to separate, or request counseling or an 

ethics opinion, the official may not necessarily receive a communication 

about the restrictions. During the course of our review, the Coast Guard 

Ethics Advice
 

Page 13 GAO-12-174 Coast Guard

provided documentation of ethics opinions for 6 of the 40 former officials 

in our analysis.9

Coast Guard service members and civilian employees may report 

suspected violations of post-government employment restrictions to the 

DHS Hotline or to the Coast Guard Investigative Service. Allegations 

related to post-government employment could be investigated by the 

DHS Office of the Inspector General or the Coast Guard Investigative 

Service depending on the circumstances. The Coast Guard does not 

have its own hotline dedicated to fraud, waste, and abuse. The lack of 

such a hotline was cited as a deficiency in an independent audit of the 

Coast Guard’s ethics program, although, according to the ethics attorney, 

there are no federal requirements that the Coast Guard maintain a hotline 

because the DHS hotline is applicable to all DHS employees. During the 

course of our review, the Coast Guard Investigative Service added 

information about the hotline to its website.

DHS requires headquarters senior employees to certify 

that they are aware of their restrictions as part of their out-processing 

procedures; however this does not apply to the Coast Guard. In contrast, 

DOD components are required under DOD policy to provide guidance on 

relevant federal and DOD post-government employment restrictions, as 

part of out-processing procedures, to all DOD personnel who are leaving 

federal service.

The 11 contractors we examined stated they have a variety of voluntary 

practices to help ensure individuals comply with the post-government 

employment restrictions. Nine of the contractors had relatively formal 

processes in place, including specific guidance tailored to the restrictions, 

controls during the hiring process, training for employees, and monitoring 

mechanisms. Several of these contractors told us they choose to 

implement such processes and procedures to avoid the risk of ethical 

misconduct and costly civil and criminal penalties. The remaining 2 

appeared to have fewer practices in place to help ensure compliance with 

the restrictions.

 

9

According to the Coast Guard ethics attorney, he generally maintains ethics opinions for 

2 years.

Reporting Mechanisms

Contractor Practices
 

Page 14 GAO-12-174 Coast Guard

As shown below, 9 of the 11 contractors told us they use a variety of 

practices to help ensure compliance with post-government employment 

restrictions. These practices include:

• Addressing post-government employment restrictions in company 

policy or guidance to heighten employee awareness of restrictions. 

Two of the contractors provided electronic links in their ethics policies 

to detailed guidance on the restrictions.

• Using safeguards to avoid conflicts of interest in hiring and assigning 

former government officials to certain roles and responsibilities. For 

example, to identify applicants that previously worked for the 

government, some contractors tailored their hiring process to identify 

them by including specific detailed screening questions in their 

employment applications that ask applicants to disclose prior 

government employment.

• Providing training to human resources or other employees to help 

ensure they are aware of restrictions and do not inappropriately hire, 

assign, or contact government officials. The type of training, frequency 

of training, and processes to monitor employee compliance with postgovernment employment training requirements varied among 

contractors. Approaches include testing employees on the restrictions, 

reviewing restrictions with new employees, and providing detailed 

briefings to staff with specific case examples on the application of the 

post-government employment restrictions.

• Monitoring current employees’ compliance with restrictions. Two 

contractors told us they require a review of an employee’s ethics 

opinion by human resources or legal staff before approving 

reassignments. Nine contractors reported having ethics hotlines for 

employees to anonymously report conflicts of interest or potential 

violations of the post employment laws.

Table 1 provides more details on the range of practices reported by 

the contractors.
 

Page 15 GAO-12-174 Coast Guard

Table 1: Contractor Reported Practices to Help Ensure Compliance with Post-Government Employment Restrictions 

Practice

Contractor responses

1 2 3 4 5 6 7 8 9 10 11

Policy/Guidance

Has policy/guidance addressing restrictions x x x x x x x x x 

Hiring

Application screens for restrictions x x x x x x x x x 

Requests ethics opinionsa x x x x x x x x x 

Training

Regular training for all employees that addresses restrictions x x x 

Regular training is tracked x x x 

Training for Human Resource staff on restrictions x x x x x x x x 

Human Resource staff training is tracked x x x x x 

Monitoring

Process to check restrictions when responsibilities change x x x x x x x x 

Has ethics hotline x x x x x x x x x 

Has had audits in this area

Source: GAO analysis of contractor responses and documentation.

a

Requires government ethics opinions of applicants who identify themselves as former government 

officials and who the company determines could potentially have post-government employment 

restrictions.

As is indicated in table 1, most contractors we examined appear to have 

relatively formal processes to help ensure they do not hire and assign

former government officials to perform prohibited tasks. For example, the 

Associate General Counsel and Manager of Corporate Ethics and 

Compliance at one major contractor indicated the company had 

particularly thorough processes and described several controls it put in 

place to promote employee awareness of post-government employment 

restrictions. The company provides an overview of post-government 

employment restrictions in its code of conduct. In addition, the company 

requires all employees to take an annual test on the code of conduct and 

its senior vice presidents receive a list of all employees who have not 

taken the test. To help ensure that the human resources department 

identifies any restrictions an applicant might have, the Associate General 

Counsel said it had a rigorous screening process. For example, its 

employment application includes a series of detailed screening questions 

to help identify restrictions and requires the applicant to certify that they 

will report any restrictions they may have. The company has also 

developed a screening matrix for its recruiters to use, including details 
 

Page 16 GAO-12-174 Coast Guard

regarding what policies and practices apply, depending on the applicant’s 

position and responsibilities. All recruiters are required to take an annual 

test covering post-government employment restrictions. To help ensure 

former officials are not assigned to perform prohibited tasks when they 

are assigned a new role in the company, the employee’s career manager 

is expected to review the transfer and check for any restrictions which 

would be included in the ethics opinion that the company maintains in the 

official’s personnel files. The company also has an anonymous hotline 

that may be used to report potential violations of restrictions. Its code of 

conduct includes a non-retaliation policy for people who report potential 

misconduct.

In contrast, two contractors did not appear to have any of the practices 

employed by the other nine contractors.10 For example, one company’s 

policies do not address post-government employment restrictions and the 

company does not include any steps in its hiring process to help identify 

former government officials and potential restrictions. However, the head 

of human resources indicated that the company would ask an applicant to 

obtain an ethics opinion from the Coast Guard depending on what the 

applicant discloses in the application, but that situation has not yet arisen. 

The same company does not provide training that addresses postgovernment employment restrictions for relevant new hires. In addition, it 

does not have a hotline for employees to report potential misconduct. 

Company officials indicated that their processes are not tailored to 

address restrictions in part because most of its employees work in 

manufacturing and fabricating-related positions which do not typically 

include activities that are restricted.

Just over half of the 40 former high-ranking officials who left the Coast 

Guard from 2005 through 2009 have been compensated by Coast Guard 

contractors. Many of these former officials were assigned to business 

development roles and responsibilities, which may entail increasing the 

employer’s business with the Coast Guard and DHS. In order to avoid 

possible conflicts of interests and to promote public trust, former high 

ranking officials must comply with restrictions on their post-government 

employment activities. Currently, the training the Coast Guard provides 

 

10None of the former high-ranking officials in our analysis were compensated by these two 

contractors at the time of our review.

Conclusions 
 

Page 17 GAO-12-174 Coast Guard

on post-government employment restrictions is mandatory only for new 

personnel. Ethics advice and training are optional for officials leaving the 

Coast Guard. As a result, high-ranking officials may not be fully aware of 

restrictions before they negotiate with potential employers or separate 

from the government. In contrast, Department of Defense policy requires 

that its components provide their personnel with annual training and preseparation guidance on relevant post-government employment 

restrictions. Given the gaps we identified in the Coast Guard procedures, 

the Coast Guard could do more to help ensure its employees are fully 

informed of post-government employment restrictions.

In order to help ensure high-ranking officials receive timely and relevant 

information on post-government employment restrictions, we recommend 

that the Commandant of the Coast Guard require Coast Guard ethics 

officials to provide guidance on restrictions to all admirals and members 

of the SES, at a minimum, as the officials enter into those senior positions 

and as they transition out of Coast Guard service.

DHS provided us with written comments on a draft of this report. DHS 

agreed with our recommendation that Coast Guard ethics officials provide 

guidance on restrictions to all admirals and members of the SES, at a 

minimum, as the officials enter into those senior positions and as they 

transition out of Coast Guard service. DHS noted that the Coast Guard 

plans to amend the Commandant’s Instruction Manual for Standards of 

Ethical Conduct (CIM 5370.8B) to require this practice. DHS explained 

that, in the interim, the Coast Guard’s Chief Counsel will sign a 

memorandum that will immediately implement our recommendation. 

DHS’s response is reprinted in appendix II. DHS also provided technical 

comments, which we have incorporated, as appropriate.

We are sending copies of this report to the Coast Guard and the 

Department of Homeland Security. In addition, the report is also available 

at no charge on the GAO website at http://www.gao.gov. 

Recommendation for 

Executive Action

Agency Comments
 

Page 18 GAO-12-174 Coast Guard

If you or your staff have any questions about this report, please contact 

me at (202) 512-4841 or huttonj@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix III.

John P. Hutton

Director, Acquisition and Sourcing Management
Appendix I: Scope and Methodology

Page 19 GAO-12-174 Coast Guard

To determine to what extent former high-ranking Coast Guard officials 

have been compensated by Coast Guard contractors, we identified which 

former high-ranking officials to include in our analysis by using Coast 

Guard data on former Coast Guard officials who were of rank O-7 and 

above (Admiral) or in the Senior Executive Service (SES) and departed 

from the Coast Guard from January 1, 2005, through December 31, 2009, 

as mandated in section 402 (a) of the Coast Guard Authorization Act of 

2010, Pub. L. No. 111-281, as amended, which added section 569 to title 

14 of the United States Code.

To determine the number of former officials who were compensated by 

Coast Guard contractors; which, if any, of the former high-ranking officials 

who separated from the Coast Guard were compensated by a major 

Coast Guard contractor from 2005 through 2010, and were assigned to 

programs for which they previously had official responsibility; and their 

compensation amounts, we obtained and analyzed information from the 

Coast Guard, Coast Guard contractors, the Federal Procurement Data 

System-Next Generation (FPDS-NG), the Internal Revenue Service (IRS) 

Information Returns Master File, USA Spending, and other publicly 

available information sources. Due to the lack of data on government 

subcontractors in the FPDS-NG, we did not assess whether the former 

officials were compensated by Coast Guard contractors via subcontracts. 

For major Coast Guard contractors—contractors that received at least 

$10 million in obligations from the Coast Guard in 2010—we provided our 

list of former officials to the 39 major Coast Guard contractors and asked 

them to inform us whether they compensated any of the individuals from 

January 1, 2005, through December 31, 2010.1

To assess the reliability of our data sources, we conducted interviews 

with knowledgeable agency officials and examined data for outliers and 

obvious errors. We also compared the data we obtained from the Coast 

We also asked the 

companies to identify any additional individuals meeting the same criteria 

who were not on the list. We cross-checked this against information 

regarding individuals’ employers, which we obtained from the Coast 

Guard and other publicly available sources.

 

1

This methodology was used due to restrictions associated with use of IRS data. To 

ensure we did not act on IRS data, it was only used at the end of our audit work. Instead, 

we identified major contractors that compensated former officials using the above 

approaches, followed up regarding the officials’ roles and responsibilities, and only 

afterwards verified our list of former officials using IRS data.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 20 GAO-12-174 Coast Guard

Guard and Coast Guard contractors to the IRS data. Based on the 

results, we found the data to be sufficiently reliable to meet our reporting 

objectives.

To determine whether the 12 former Coast Guard officials compensated 

by major Coast Guard contractors were assigned to work on programs or 

projects for which they previously had oversight authority or decisionmaking responsibility, we obtained information from:

• contractors on the roles and responsibilities assigned to the former 

officials they compensated;

• the Coast Guard on the former officials’ roles and responsibilities for 

the five years prior to their separation from the Coast Guard; and 

• contractors and the Coast Guard documenting ethics opinions which, 

in some cases, identified Coast Guard experience with programs or 

contracts. 

We then compared the information regarding Coast Guard responsibilities 

with responsibilities assigned by the contractors to identify any overlap. 

We did not assess whether the actual duties performed by the former 

employees were in compliance with post-government employment 

restrictions; however, we asked Coast Guard officials whether they had 

documentation of any of these former officials meeting with the Coast 

Guard on behalf of the contractor that compensated them. Coast Guard 

officials could not provide us with evidence of former senior officials 

having attended meetings. Also, we queried the Department of Homeland 

Security (DHS) Hotline, the Coast Guard Investigative Service, and 

GAO’s FraudNet regarding whether they had received any allegations of 

violations of post-government employment restrictions by the former 

officials in our analysis during the 2005 to 2010 time period.

To determine what practices the Coast Guard uses to help ensure 

individuals comply with post-government employment restrictions, we 

interviewed Coast Guard officials, reviewed policies, analyzed training 

documents, and reviewed procedures for providing ethics counseling and 

advice, reporting misconduct, and monitoring compliance. In addition, we 

interviewed Office of Government Ethics officials to identify federal 

government policies and recommended practices. We also reviewed 

DOD and Security and Exchange Commission policies related to postgovernment employment restrictions to compare them with the Coast 

Guard’s. We interviewed the Coast Guard’s designated agency ethics 

official in headquarters because we were told SES officials and Flag 

officers typically work with the headquarters ethics office and consult with 
Appendix I: Scope and Methodology

Page 21 GAO-12-174 Coast Guard

the headquarters ethics attorney, who is the designated agency contact 

for that office. We also interviewed officials in the Coast Guard 

Investigative Service and DHS-Office of the Inspector General to 

determine the roles and responsibilities of these offices in ensuring Coast 

Guard service members and civilians are aware of mechanisms to report 

potential misconduct. In addition, we spoke to Coast Guard officials in 

contracting administration to determine if they monitor contractor ethics 

programs and compliance with post-government employment restrictions.

To describe the practices contractors told us they use to help ensure 

individuals comply with post-government employment restrictions, we 

interviewed contractors about hiring, training, and monitoring policies and 

practices, and we reviewed documentation from 11 contractors that 

represented over 40 percent of the dollar value of Coast Guard 

obligations in calendar year 2010, including the top 6 recipients of Coast 

Guard obligations. We did not assess contractor compliance with the 

restrictions but conducted our review to identify ways contractors may 

help ensure compliance with the post-government employment 

restrictions.

We conducted this performance audit from March 2011 through 

December 2011 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.
Appendix II: Comments from the Department 

of Homeland Security

Page 22 GAO-12-174 Coast Guard

Appendix II: Comments from the Department 

of Homeland Security
Appendix II: Comments from the Department 

of Homeland Security

Page 23 GAO-12-174 Coast Guard
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 24 GAO-12-174 Coast Guard

John P. Hutton, (202) 512-4841 or huttonj@gao.gov

In addition to the contact named above, Penny Berrier, Assistant Director; 

Steve Caldwell; Jenny Chanley; Maria Durant; Laura Holliday; Julia 

Kennon; James Lager; Sylvia Schatz; Bob Swierczek, and James 

Ungvarsky made key contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Acknowledgments 

(120970)
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