I 
117TH CONGRESS 
2D SESSION 
H. R. 8754 
To amend the Ethics in Government Act of 1978 to prohibit transactions 
involving certain financial instruments by senior Federal employees, their 
spouses, or dependent children, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 30, 2022 
Mr. CLOUD (for himself and Mr. GOLDEN) introduced the following bill; which 
was referred to the Committee on Oversight and Reform, and in addition 
to the Committee on Ways and Means, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Ethics in Government Act of 1978 to prohibit 
transactions involving certain financial instruments by 
senior Federal employees, their spouses, or dependent 
children, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Dismantling Invest-
ments in Violation of Ethical Standards through Trusts 
Act’’. 
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SEC. 2. PROHIBITING TRANSACTIONS AND OWNERSHIP OF 
CERTAIN FINANCIAL INSTRUMENTS BY SEN-
IOR FEDERAL EMPLOYEES, THEIR SPOUSES, 
OR DEPENDENT CHILDREN. 
(a) IN GENERAL.—The Ethics in Government Act of 
1978 (5 U.S.C. App.) is amended by inserting after title 
I the following: 
‘‘TITLE 
II—RESTRICTIONS 
RE-
GARDING FINANCIAL INSTRU-
MENTS 
‘‘SEC. 201. DEFINITIONS. 
‘‘In this title: 
‘‘(1) COVERED FINANCIAL INSTRUMENT.— 
‘‘(A) IN GENERAL.—The term ‘covered fi-
nancial instrument’ means— 
‘‘(i) any investment in— 
‘‘(I) a security (as defined in sec-
tion 3(a) of Securities Exchange Act 
of 1934 (15 U.S.C. 78c(a))); 
‘‘(II) a security future (as de-
fined in that section); or 
‘‘(III) a commodity (as defined in 
section 1a of the Commodity Ex-
change Act (7 U.S.C. 1a)); and 
‘‘(ii) any economic interest com-
parable to an interest described in clause 
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(i) that is acquired through synthetic 
means, such as the use of a derivative, in-
cluding an option, warrant, or other simi-
lar means. 
‘‘(B) EXCLUSIONS.—The term ‘covered fi-
nancial instrument’ does not include— 
‘‘(i) a diversified mutual fund; 
‘‘(ii) a diversified exchange-traded 
fund; 
‘‘(iii) a United States Treasury bill, 
note, or bond; or 
‘‘(iv) compensation from the primary 
occupation of a spouse or dependent child 
of a senior Federal employee. 
‘‘(2) QUALIFIED
BLIND
TRUST.—The term 
‘qualified blind trust’ has the meaning given the 
term in section 102(f)(3). 
‘‘(3) SENIOR FEDERAL EMPLOYEE.—The term 
‘senior Federal employee’ means any individual occu-
pying a Senior Executive Service position (as that 
term is defined in section 3132 of title 5, United 
States Code). 
‘‘(4) SUPERVISING ETHICS OFFICE.—The term 
‘supervising ethics office’ has the meaning given the 
term in section 109. 
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‘‘SEC. 202. PROHIBITION ON CERTAIN TRANSACTIONS AND 
HOLDINGS INVOLVING COVERED FINANCIAL 
INSTRUMENTS. 
‘‘(a) PROHIBITION.—Except as provided in sub-
section (b), a senior Federal employee, their spouse, or 
their dependent children may not, during the term of serv-
ice of the employee, hold, purchase, or sell any covered 
financial instrument. 
‘‘(b) EXCEPTIONS.—The prohibition under sub-
section (a) does not apply to— 
‘‘(1) a sale by a senior Federal employee, their 
spouse, or their dependent child that is completed by 
the date that is— 
‘‘(A) for an employee serving on the date 
of enactment of this title, 180 days after that 
date of enactment; and 
‘‘(B) for any employee who commences 
service as an employee after the date of enact-
ment of this title, 180 days after the first date 
of the initial term of service; 
‘‘(2) a covered financial instrument held in a 
qualified blind trust operated on behalf of, or for the 
benefit of, a senior Federal employee, their spouse, 
or their dependent child; or 
‘‘(3) a covered financial instrument exempted 
from coverage under section 208 of title 18, United 
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States Code, pursuant to section 2640.202 of title 5, 
Code of Federal Regulations (or any successor regu-
lation). 
‘‘(c) APPLICATION OF CERTIFICATE OF DIVESTITURE 
PROGRAM.—For purposes of section 1043 of the Internal 
Revenue Code of 1986— 
‘‘(1) this section shall be treated as a Federal 
conflict of interest statute; and 
‘‘(2) any person required to dispose of any 
property by reason of this section shall be treated as 
an eligible person. 
‘‘(d) PENALTIES.— 
‘‘(1) DISGORGEMENT.—A senior Federal em-
ployee, their spouse, or their dependent child shall 
disgorge to the general fund of the Treasury any 
profit from a transaction or holding involving a cov-
ered financial instrument that is conducted in viola-
tion of this section. 
‘‘(2) INCOME TAX.—A loss from a transaction 
or holding involving a covered financial instrument 
that is conducted in violation of this section may not 
be deducted from the amount of income tax owed by 
the applicable senior Federal employee, their spouse, 
or their dependent child. 
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‘‘(3) FINES.—A senior Federal employee who 
holds or conducts a transaction involving a covered 
financial instrument in violation of this section may 
be subject to a civil fine assessed by the supervising 
ethics office under section 204. 
‘‘SEC. 203. CERTIFICATION OF COMPLIANCE. 
‘‘(a) IN GENERAL.—Not less frequently than annu-
ally, each senior Federal employee shall submit to the su-
pervising ethics office a written certification that the em-
ployee, their spouse, or their dependent child has achieved 
compliance with the requirements of this title. 
‘‘(b) PUBLICATION.—The supervising ethics office 
shall publish each certification submitted under subsection 
(a) on a publicly available website. 
‘‘SEC. 204. AUTHORITY OF SUPERVISING ETHICS OFFICE. 
‘‘(a) IN GENERAL.—The supervising ethics office 
may implement and enforce the requirements of this title, 
including by— 
‘‘(1) issuing— 
‘‘(A) for applicable senior Federal employ-
ees— 
‘‘(i) rules governing that implementa-
tion; and 
‘‘(ii) 1 or more reasonable extensions 
to achieve compliance with this title, if the 
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supervising ethics office determines that an 
employee is making a good faith effort to 
divest any covered financial instruments; 
and 
‘‘(B) guidance relating to covered financial 
instruments; 
‘‘(2) publishing on the internet certifications 
submitted by senior Federal employees under section 
203(a); and 
‘‘(3) assessing civil fines against any senior 
Federal employee who is in violation of this title, 
subject to subsection (b). 
‘‘(b) REQUIREMENTS FOR CIVIL FINES.— 
‘‘(1) AMOUNT.—A fine imposed under this sec-
tion against a senior Federal employee shall be equal 
to the greater of— 
‘‘(A) $1,000, or 
‘‘(B) an amount equal to 10 percent of the 
greatest dollar value of the applicable covered 
financial instrument during any period that 
such instrument was held by the applicable sen-
ior Federal employee or their spouse or depend-
ent child (as the case may be). 
‘‘(2) IN GENERAL.—Before imposing a fine pur-
suant to this section, the supervising ethics office 
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shall provide to the applicable senior Federal em-
ployee— 
‘‘(A) a written notice describing each cov-
ered financial instrument transaction for which 
a fine will be assessed; and 
‘‘(B) an opportunity, with respect to each 
such covered financial instrument transaction— 
‘‘(i) for a hearing; and 
‘‘(ii) to achieve compliance with the 
requirements of this title. 
‘‘(3) PUBLICATION.—The supervising ethics of-
fice shall publish on a publicly available website a 
description of— 
‘‘(A) each fine assessed pursuant to this 
section; 
‘‘(B) the reasons why each such fine was 
assessed; and 
‘‘(C) the result of each assessment, includ-
ing any hearing under paragraph (2)(B)(i) re-
lating to the assessment. 
‘‘(4) APPEAL.—A senior Federal employee may 
appeal to the supervising ethics office a fine assessed 
under this section during the 30-day period begin-
ning on the date the fine is so assessed. 
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‘‘SEC. 205. AUDIT BY GOVERNMENT ACCOUNTABILITY OF-
FICE. 
‘‘Not later than 2 years after the date of enactment 
of this title, the Comptroller General of the United States 
shall— 
‘‘(1) conduct an audit of the compliance by sen-
ior Federal employees with the requirements of this 
title; and 
‘‘(2) submit to each supervising ethics office a 
report describing the results of the audit conducted 
under paragraph (1).’’. 
(b) APPLICATION.—The amendments made by sub-
section (a) shall apply to individuals described in section 
202(a) of the Ethics in Government Act of 1978 (5 U.S.C. 
App.) beginning on the date that is 12 months following 
the date of enactment of this Act. 
(c) ADDITIONAL EMPLOYEES.—Section 401(c)(1) of 
the Ethics in Government Act of 1978 (5 U.S.C. App.) 
is amended by inserting ‘‘up to 100’’ after ‘‘appoint’’. 
(d) FUNDING.—The Director of the Office of Man-
agement and Budget may transfer such funds as the Di-
rector considers appropriate, to be derived from unobli-
gated amounts available for executive branch programs 
identified by the Director to be duplicative, to the Office 
of Government Ethics for the purpose of carrying out this 
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Act, to remain available until the date that is 5 years fol-
lowing the date of the enactment of this Act. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 109 of the Ethics in Government 
Act of 1978 (5 U.S.C. App.) is amended— 
(A) in the matter preceding paragraph (1), 
by striking ‘‘For the purposes of this title, the 
term—’’ and inserting ‘‘In this title:’’; 
(B) in paragraph (1), by striking ‘‘means’’ 
and all that follows through ‘‘Representatives;’’ 
and inserting the following: ‘‘means, as applica-
ble— 
‘‘(A) the Select Committee on Ethics of 
the Senate; and 
‘‘(B) the Committee on Ethics of the 
House of Representatives.’’; 
(C) in each of paragraphs (2) through 
(17), by striking the semicolon at the end of the 
paragraph and inserting a period; 
(D) in paragraph (18)— 
(i) in subparagraph (B), by striking 
‘‘Standards of Official Conduct’’ and in-
serting ‘‘Ethics’’; and 
(ii) in subparagraph (D), by striking 
‘‘; and’’ at the end and inserting a period; 
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