GAO-13-153R Coast Guard 

United States Government Accountability Office 

Washington, DC 20548

December 20, 2012

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 II

Ranking Member

Committee on Transportation and Infrastructure

House of Representatives

Subject: Information on Former High-Ranking Coast Guard Officials’ Employment with Major 

Contractors

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

manages a broad, multibillion dollar major acquisition portfolio. This portfolio includes 

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 substantial funding from Coast Guard contracts.

In previous work, we found that each year some individuals leave government employment 

(hereafter referred to as former government officials) and go to work for federal government 

contractors—potentially the same contractors whose contracts they oversaw or were 

otherwise involved with prior to leaving.1 Last year, we reported that about half of the highranking officials who separated from the Coast Guard from 2005 through 2009 were 

compensated by a Coast Guard contractor at some point from the time they left through 

calendar year 2010.2

 

1

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

Transparency, 

Former government officials employed by contractors are subject to 

laws restricting their post-government employment activities. The purpose of these laws is, 

in part, to protect against conflicts of interest—such as former government officials using 

their prior relationships, standing, or position in the government for the improper benefit of 

the contractor or to the detriment of the government, or both. Violation of these laws may 

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

2

GAO, Coast Guard: Communication of Post-Government Employment Restrictions Can Be Strengthened, 

GAO-12-174 (Washington, DC: Dec.15, 2011). This report was based on an analysis of those contractors that 

received obligations from the Coast Guard in calendar year 2010.
Page 2 GAO-13-153R Coast Guard 

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

some instances, the contractors that employ them.

The Coast Guard Authorization Act of 2010 requires GAO to report annually, no later than 

December 31 of each year, on the extent to which former high-ranking Coast Guard officials 

have been compensated by Coast Guard contractors.3 This act defines a Coast Guard 

contractor as any person that received at least $10 million in contract awards from the Coast 

Guard in the calendar year covered by the annual report (hereafter referred to as major 

Coast Guard contractors). Further, the act defines Coast Guard officials as individuals who 

were compensated at a rate of pay of the grade O-7 or above, which are Rear Admirals, 

Vice Admirals, and Admirals and members of the Senior Executive Service (SES). For the 

purposes of this report, we refer to these individuals as “high-ranking officials.” This report 

(1) examines the extent to which former high-ranking Coast Guard officials who left 

government service between January 1, 2006 and December 31, 2010 have been 

compensated by Coast Guard contractors in calendar year 2011, and (2) compares the 

responsibilities assigned to these former officials by the Coast Guard with those assigned by 

major Coast Guard contractors.4

To determine the extent to which former high-ranking Coast Guard officials were 

compensated by Coast Guard contractors, we identified which officials separated from the 

Coast Guard from 2006 through 2010 using Coast Guard personnel data. We obtained a list 

of contractors that received any obligations from the Coast Guard in calendar year 2011 

using USAspending.gov data.5

We conducted this performance audit from May 2012 through December 2012 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.

We contacted each contractor that received more than $10 

million dollars in obligations from the Coast Guard to confirm employment of and obtain 

compensation levels for the former officials we identified. We used the Internal Revenue 

Service Information Returns Master File to corroborate employment and compensation data 

collected from the major Coast Guard contractors and to identify the number of officials 

employed by all other Coast Guard contractors. Based on the results of this corroboration, 

we found the data obtained from major contractors to be sufficiently reliable to meet our 

reporting requirements. To compare Coast Guard and contractor responsibilities for the 

former high-ranking officials, we obtained and analyzed position descriptions and other 

information from major contractors and the Coast Guard that described each individual’s 

official roles and responsibilities. We did not assess whether the actual duties performed by 

the former officials were in compliance with post-government employment laws.

 

3

Pub. L. No. 111-281, § 402(a) (codified at 14 U.S.C. § 569).

4

For the purposes of this report, we use “official responsibility” for the statutory 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.

5

USAspending.gov is a free, publicly accessible website established by the Office of Management and Budget 

containing data on federal awards (e.g., contracts, loans, and grants) across the government. The Federal 

Procurement Data System-Next Generation, the primary governmentwide contracting database, is one of the 

main data sources for this website.
Page 3 GAO-13-153R Coast Guard 

Summary

A total of 22 of the 39 former high-ranking officials (admiral-level and SES officials) who 

separated from the Coast Guard from 2006 through 2010 were compensated at some point 

from 2006 through 2011 by contractors that received obligations from the Coast Guard in 

calendar year 2011. We found that 12 of these former officials were compensated in 

calendar year 2011 by major Coast Guard contractors—those contractors receiving more 

than $10 million in obligations during that calendar year. The responsibilities of these 

officials vary, but 9 of these 12 officials were assigned by major contractors to positions 

involving the development of new business.

Background

Congress has been concerned about contractors hiring former government officials because 

these individuals can be put in a unique position to make or influence decisions that 

positively or negatively affect the relationships between contractors and the government and 

has passed laws subjecting these individuals to certain post-government employment 

restrictions (see table 1). Employment with a contractor after leaving government service is 

not a violation of post-government employment laws. Rather, there are restrictions on the 

timing of the employment and on certain employment activities that take place. There are 

potential benefits of post-government employment for the government and the contractor. 

For example, the former government official may possess unique knowledge, skills, and 

familiarity that could strengthen the relationship and communication between the 

government and contractor. Conversely, these attributes could also be used to improperly 

benefit contractors to the detriment of the government.

Table 1: Summary of Post-Government Employment Laws 

Prohibition Duration of bar Summary

18 U.S.C. 

§ 207(a)(1) 

Lifetime Former federal employees are barred from knowingly making, “with the 

intent to influence,” any 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 matters 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 Years Former federal employees are barred from knowingly making, “with the 

intent to influence,” any 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 a specific party or parties, in which (1) the 

United States 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 Former high-ranking federal employees are barred from knowingly 

making, “with intent to influence,” any communication to or appearance 

before an employee of an agency in which they served during their last 

year of government service, if that communication or appearance is made 

on behalf of a person (i.e., business entity or individual) on a matter on 

which the former senior-level employees seek official action from the 

agency’s employee. 

The 

Procurement 

Integrity Act 

(41 U.S.C. 

§ 2104(a))

1 year Former specified acquisition officials who performed certain procurement 

duties for the government on a contract valued in excess of $10 million 

are barred from accepting any compensation (e.g., as an employee, 

independent contractor, or consultant) from the contractor involved within 

1 year after performing those duties.

Source: GAO summary of U.S. Code
Page 4 GAO-13-153R Coast Guard 

As we reported in 2011, the Coast Guard uses multiple approaches to inform its service 

members and civilian employees of the aforementioned post-government employment laws.6

In addition, the Coast Guard requires training on post-government employment restrictions 

for certain employees. We reported in 2011 that this training was only mandatory for new 

employees and ethics advice is optional, so officials leaving the Coast Guard at that time

may not have been fully aware of current post-government employment restrictions. In 

response to our recommendation to provide timely and relevant information on postgovernment employment restrictions to all admirals and members of the SES as they enter 

and leave these senior positions, the Coast Guard issued a memo in January 2012 

implementing this recommendation.

For example, individuals separating from the Coast Guard have the option to request ethics 

advice and opinions on future employment opportunities from the Coast Guard’s ethics 

attorney. Ethics opinions provide a legal interpretation of the applicability of post-government 

restrictions for a particular official. An ethics opinion is prepared by the ethics attorney using 

information disclosed by the official regarding their previous government experience and 

prospective employers, including specific contracts and programs under their official 

responsibility. With complete and accurate disclosure, these optional ethics opinions may 

provide officials a safeguard against violations that might otherwise result in criminal, 

administrative, or civil penalties. Ethics opinions may also detail whether prospective 

employment with a particular contractor is permitted under the post-government employment 

laws or provide more generalized advice, including a reiteration of potential restrictions.

Our 2011 report also found that most of the major contractors we examined use a variety of 

practices to help ensure their employees comply with post-government employment 

restrictions. Examples include having policies and guidance in place concerning these 

issues, providing training for employees, using controls during the hiring process such as 

requesting ethics opinions for self- or contractor-identified former government officials, and 

using monitoring mechanisms such as a hotline to receive anonymous reports of conflicts of 

interest or potential violations. Several of these contractors reported that they use these 

practices, not only to help ensure compliance with post-government employment laws, but 

also to avoid the risk of ethical misconduct and costly civil and criminal penalties.

More Than Half of Former High-Ranking Coast Guard Officials Were 

Compensated by Coast Guard Contractors in Calendar Year 2011

Of the 39 former high-ranking Coast Guard officials who were admiral-level or members of 

the SES and separated from the Coast Guard from 2006 through 2010, 22 were 

compensated at some point from 2006 through 2011 by contractors to which the Coast 

Guard obligated funds in calendar year 2011. We confirmed contractor data indicating that 

14 of the 22 former officials were compensated by major Coast Guard contractors—those 

contractors receiving at least $10 million in obligations from the Coast Guard during 

calendar year 2011. Of these 14 former officials, 12 received compensation from major 

contractors in calendar year 2011. Compensation for the 12 former Coast Guard officials in 

 

6

GAO-12-174. 
Page 5 GAO-13-153R Coast Guard 

calendar year 2011 ranged from $30,000 to $287,061 with over half receiving more than 

$200,000 in compensation.7

Figure 1: Compensation of 39 Former High-Ranking Coast Guard Officials by Coast Guard Contractors 

from 2006 through 2011

a

Some of the individuals compensated by major Coast Guard contractors may have also been compensated by other Coast 

Guard contractors at some point during this period. 

Responsibilities Assigned to Former Coast Guard Officials Compensated by 

Major Contractors Varied

Of the 12 former Coast Guard officials that were compensated by major Coast Guard 

contractors in calendar year 2011, 9 were employed by major contractors to develop or 

expand business, at times in the area of homeland security. Examples of business 

development activities in these officials’ position descriptions are: identifying and developing 

new business opportunities, drafting and implementing strategies, and coordinating 

interactions with new and existing customers. These types of activities are generally 

permitted, but could be limited by the representation restrictions in post-government 

employment laws. Most Coast Guard and contractor position descriptions we reviewed did 

not provide insight into specific activities such as programs and contracts that were under an 

individual’s official responsibility. Based on the information contained in these position 

descriptions, it was not possible to determine if these individuals continued to work on 

programs for which they had official responsibility while in the Coast Guard. For those 

former officials compensated by major contractors and not involved in business 

development, the responsibilities described in their position descriptions varied and included 

providing consultation on a specific Coast Guard project and leading intelligence analysis 

supporting homeland security. Further, Department of Homeland Security Hotline, Coast 

Guard Investigative Service, and GAO’s FraudNet officials told us that they had not received 

allegations of violations of post-government employment restrictions for any of the officials.

 

7

For the purposes of this report, compensation refers to salary and monetary bonuses received by individuals. It 

does not include the value of benefits supplied by contractors to its employees.
Page 6 GAO-13-153R Coast Guard 

Eleven of the 12 officials who were compensated by major Coast Guard contractors in 

calendar year 2011 received ethics advice concerning potential restrictions on postgovernment employment. Three officials received generic ethics memos outlining the 

standard post-government employment restrictions and eight received ethics opinions for 

employment with specific major contractors. Once a current or former Coast Guard official 

requests a contractor-specific ethics opinion, it is prepared by the Coast Guard’s ethics 

attorney using a questionnaire that the high-ranking official completes. This questionnaire 

collects information about an individual’s previous Coast Guard experience, including 

programs and contracts under their official responsibility, as well as the anticipated duties, 

potential programs, and related contracts associated with a prospective employment. 

Further, the questionnaire makes clear that the resulting ethics opinion is only as good as 

the information disclosed by the official and that incomplete or inaccurate information could 

result in advice that is of little or no use to the official or prospective employer. According to 

the Coast Guard ethics attorney, to help ensure completeness, he will follow-up with the 

official through email or in-person meetings to clarify questionnaire data and to address any 

ethics questions. Most of the ethics opinions reiterated the representation restrictions placed 

upon officials separating from government service and none of the officials were barred from 

accepting employment with a major contractor.

Agency Comments

We provided a draft of this report to DHS for comment. DHS provided written comments, 

noting that it remains committed to ensuring proper performance of government business. 

DHS’s comments can be found in enclosure II. DHS also provided technical comments, 

which we incorporated as appropriate.

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

Secretary of Homeland Security. In addition, this report is also available at no charge on the

GAO website at http://www.gao.gov. 

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 enclosure III.

John P. Hutton

Director

Acquisition and Sourcing Management

Enclosures – 3 
Page 7 GAO-13-153R Coast Guard 

Enclosure I: Scope and Methodology

To determine the extent to which former high-ranking Coast Guard officials have been 

compensated by Coast Guard contractors in calendar year 2011, we obtained personnel 

data from the Coast Guard to identify those individuals, admiral-level (O-7 and above) or in 

the Senior Executive Service (SES), who separated from the Coast Guard between January 

1, 2006 and December 31, 2010. We used USAspending.gov data to identify all contractors 

that received obligations from the Coast Guard in calendar year 2011. We narrowed this list 

to major contractors by determining which received more than $10 million in obligations that 

year. Due to the lack of data on government subcontractors in USAspending.gov, we did not 

assess whether the former officials were compensated by Coast Guard contractors via 

subcontracts. We contacted all of the major contractors, provided the list of identified former 

high-ranking Coast Guard officials, and requested information on whether any of the officials 

had been compensated, by how much, and for what purposes between January 1, 2006 and 

December 31, 2011. We then corroborated the information collected from the major Coast 

Guard contractors by comparing it to Internal Revenue Service Information Returns Master 

File data. We also used the Internal Revenue Service Information Returns Master File data 

to identify those high-ranking officials on our list who were compensated by any other Coast 

Guard contractor in 2011.8

To compare the responsibilities of former Coast Guard officials compensated by major 

Coast Guard contractors to those which they held while in the Coast Guard, we obtained 

and reviewed position descriptions and other information from these major contractors on 

the roles and responsibilities assigned to the former officials they compensated. We also 

obtained and reviewed position descriptions, ethics advice or opinions, and additional 

information from the Coast Guard on the former officials’ roles and responsibilities for the 5 

years prior to their separation. We then compared the Coast Guard and major contractor 

information on the officials’ responsibilities to determine if an individual may have worked on 

programs or contracts in both government and as a contractor. As noted in our finding, we 

were not able to make this determination as most position descriptions did not provide 

information on specific programs or contracts for which former Coast Guard officials had 

responsibility. We did not assess whether the actual duties performed by the former Coast 

Guard officials were in compliance with post-government employment restrictions; however, 

we queried the Department of Homeland Security Hotline, the Coast Guard Investigative 

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

violations of post-government employment laws by the former officials in our analysis.

Based on the results of this corroboration, we found the data 

received from contractors to be sufficiently reliable to meet our reporting objectives.

We conducted this performance audit from May 2012 through December 2012 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.

 

8

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.
Page 8 GAO-13-153R Coast Guard 

Enclosure II: Comments from the Department of Homeland Security
Page 9 GAO-13-153R Coast Guard 

Enclosure III: GAO Contact and Staff Acknowledgments

GAO Contact

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

Acknowledgments

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

Helena Brink; Stephen Caldwell; Virginia Chanley; Julia Kennon; James Lager; Sylvia 

Schatz; Tom Twambly; and James Ungvarsky made key contributions to this report.

(121079) 
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