Title: Department of Defense Ethics and Anti-Corruption Act of 2021
Policy area: Armed Forces and National Security

Summary:
Department of Defense Ethics and Anti-Corruption Act of 2021
This bill addresses the conduct of Department of Defense (DOD) officials and military personnel regarding relationships with contractors.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2396 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                S. 2396

   To promote ethics and prevent corruption in Department of Defense 
       contracting and other activities, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 20, 2021

  Ms. Warren introduced the following bill; which was read twice and 
              referred to the Committee on Armed Services

_______________________________________________________________________

                                 A BILL


 
   To promote ethics and prevent corruption in Department of Defense 
       contracting and other activities, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Department of 
Defense Ethics and Anti-Corruption Act of 2021''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
            TITLE I--REVOLVING DOOR AND CONTRACTOR INFLUENCE

Sec. 101. Heightened revolving door requirements.
Sec. 102. Requirements for defense contractors relating to certain 
                            former Department of Defense officials and 
                            lobbying activities.
Sec. 103. Ban on hiring contracting officials enforceable on certain 
                            contracts.
Sec. 104. Ban on hiring senior officials by giant defense contractors.
Sec. 105. Modification of prohibition on lobbying activities with 
                            respect to the Department of Defense by 
                            certain officers of the Armed Forces and 
                            civilian employees of the Department of 
                            Defense following separation from military 
                            service or employment with the Department.
Sec. 106. Enhancement of recusal for conflicts of personal interest 
                            requirements for Department of Defense 
                            officers and employees.
Sec. 107. Prohibition on ownership or trading of stocks in certain 
                            companies by Department of Defense officers 
                            and employees.
                  TITLE II--LIMITING FOREIGN INFLUENCE

Sec. 201. Advising foreign governments.
Sec. 202. Ban on former military and civilian intelligence officers 
                            from foreign employment.
                        TITLE III--TRANSPARENCY

Sec. 301. Affirmative contractor record disclosures.
Sec. 302. Ownership of information.
Sec. 303. Financial disclosure by large contractors.

            TITLE I--REVOLVING DOOR AND CONTRACTOR INFLUENCE

SEC. 101. HEIGHTENED REVOLVING DOOR REQUIREMENTS.

    Section 847 of the National Defense Authorization Act for Fiscal 
Year 2008 (Public Law 110-181; 10 U.S.C. 1701 note) is amended--
            (1) in subsection (a)(1), by striking ``within two years of 
        leaving service'' and inserting ``within four years of leaving 
        service''; and
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) by striking ``retained by the 
                        Department of Defense in a central database or 
                        repository maintained by the General Counsel of 
                        the Department for not less than five years'' 
                        and inserting ``retained by the Department of 
                        Defense in a central database or repository 
                        maintained by the General Counsel Standards and 
                        Conduct Office of the Department for not less 
                        than ten years''; and
                            (ii) by inserting ``and shall be posted on 
                        a publicly available Internet website of the 
                        General Counsel Standards and Conduct Office'' 
                        after ``opinion was provided''; and
                    (B) in paragraph (2), by inserting ``not less than 
                biannually'' after ``conduct periodic reviews''.

SEC. 102. REQUIREMENTS FOR DEFENSE CONTRACTORS RELATING TO CERTAIN 
              FORMER DEPARTMENT OF DEFENSE OFFICIALS AND LOBBYING 
              ACTIVITIES.

    (a) Requirements.--
            (1) In general.--Chapter 141 of title 10, United States 
        Code is amended by adding at the end the following new section:
``Sec. 2410t. Defense contractors report: requirements concerning 
              former Department of Defense officials and lobbying 
              activities
    ``(a) In General.--Each contract for the procurement of goods or 
services in excess of $10,000,000, other than a contract for the 
procurement of office supplies or food and beverage (vending) services, 
that is entered into by the Department of Defense shall include a 
provision under which the contractor agrees to submit to the Secretary 
of Defense, not later than April 1 of each year such contract is in 
effect, a written report setting forth the information required by 
subsection (b).
    ``(b) Report Information.--Except as provided in subsection (c), a 
report by a contractor under subsection (a) shall--
            ``(1) list the name of each person who--
                    ``(A) is a former officer or employee of the 
                Department of Defense or a former or retired member of 
                the armed forces who served--
                            ``(i) in an Executive Schedule position 
                        under subchapter II of chapter 53 of title 5;
                            ``(ii) in a position in the Senior 
                        Executive Service under subchapter VIII of 
                        chapter 53 of title 5;
                            ``(iii) in a position compensated at a rate 
                        of pay for grade O-7 or above under section 201 
                        of title 37; or
                            ``(iv) as a program manager, deputy program 
                        manager, procuring contracting officer, 
                        administrative contracting officer, source 
                        selection authority, member of the source 
                        selection evaluation board, or chief of a 
                        financial or technical evaluation team for a 
                        contract with a value in excess of $10,000,000; 
                        and
                    ``(B) during the preceding calendar year was 
                provided compensation by the contractor, if such 
                compensation was first provided by the contractor not 
                more than four years after such officer, employee, or 
                member left service in the Department of Defense;
            ``(2) in the case of each person listed under subparagraph 
        (A)--
                    ``(A) identify the agency in which such person was 
                employed or served on active duty during the last two 
                years of such person's service with the Department of 
                Defense;
                    ``(B) state such person's job title and identify 
                each major defense system, contract, modification, 
                subcontract, task order, and delivery order in excess 
                of $10,000,000, if any, on which such person performed 
                any work with the Department of Defense during the last 
                two years of such person's service with the Department; 
                and
                    ``(C) state such person's current job title with 
                the contractor and identify each major defense system, 
                contract, modification, subcontract, task order, and 
                delivery order in excess of $10,000,000, on which such 
                person has performed any work on behalf of the 
                contractor; and
            ``(3) if the contractor is a client, include--
                    ``(A) a statement that--
                            ``(i) lists each specific issue for which 
                        the contractor, any employee of the contractor, 
                        or any lobbyist paid by the contractor engaged 
                        in lobbying activities with the Department of 
                        Defense; and
                            ``(ii) specifies the Federal rule or 
                        regulation, Executive order, or other program, 
                        policy, contract, or position of the Department 
                        of Defense to which the lobbying activities 
                        described in clause (i) related;
                            ``(iii) lists each lobbying activity 
                        relating to the Department of Defense that the 
                        contractor, any employee of the contractor, or 
                        any lobbyist paid by the contractor has engaged 
                        in on behalf of the contractor, including--
                                    ``(I) each document prepared by the 
                                contractor, any employee of the 
                                contractor, or any lobbyist paid by the 
                                contractor that was submitted to an 
                                officer or employee of the Department 
                                of Defense by the lobbyist;
                                    ``(II) each meeting that was a 
                                lobbying contact with an officer or 
                                employee of the Department of Defense, 
                                including the subject of the meeting, 
                                the date of the meeting, and the name 
                                and position of each individual who 
                                attended the meeting;
                                    ``(III) each phone call made to an 
                                officer or employee of the Department 
                                of Defense that was a lobbying contact, 
                                including the subject of the phone 
                                call, the date of the phone call, and 
                                the name and position of each 
                                individual who was on the phone call; 
                                and
                                    ``(IV) each electronic 
                                communication sent to an officer or 
                                employee of the Department of Defense 
                                that was a lobbying contact, including 
                                the subject of the electronic 
                                communication, the date of the 
                                electronic communication, and the name 
                                and position of each individual who 
                                received the electronic communication;
                            ``(iv) lists the name of each employee of 
                        the contractor who--
                                    ``(I) did not participate in a 
                                lobbying contact with an officer or 
                                employee of the Department of Defense; 
                                and
                                    ``(II) engaged in lobbying 
                                activities in support of a lobbying 
                                contact with an officer or employee of 
                                the Department of Defense; and
                            ``(v) describes the lobbying activities 
                        referred to in clause (iv)(II); and
                    ``(B) a copy of any document transmitted to an 
                officer or employee of the Department of Defense in the 
                course of the lobbying activities described in 
                subparagraph (A)(iv)(II).
    ``(c) Duplicate Information Not Required.--An annual report 
submitted by a contractor pursuant to subsection (b) need not provide 
information with respect to any former officer or employee of the 
Department of Defense or former or retired member of the armed forces 
if such information has already been provided in a previous annual 
report filed by such contractor under this section.
    ``(d) Definitions.--In subsection (b)(3), the terms `client', 
`lobbying activities', `lobbying contact', and `lobbyist' have the 
meanings given the terms in section 3 of the Lobbying Disclosure Act of 
1995 (2 U.S.C. 1602).''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 141 of such title is amended by adding at 
        the end the following new item:

``Sec. 2410t. Defense contractors report: requirements concerning 
                            former Department of Defense officials and 
                            lobbying activities.''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) shall take effect on the date of the enactment of this 
        Act, and shall apply with respect to contracts entered into on 
        or after that date.
    (b) Future Transfer.--
            (1) Transfer and redesignation.--Section 2410t of title 10, 
        United States Code, as added by subsection (a), is transferred 
        to chapter 363, as added by section 1862(b) of the William M. 
        (Mac) Thornberry National Defense Authorization Act for Fiscal 
        Year 2021 (Public Law 116-283), and redesignated as section 
        4661.
            (2) Clerical amendments.--
                    (A) Target chapter table of sections.--The table of 
                sections at the beginning of chapter 363 of title 10, 
                United States Code, as added by section 1862(b) of the 
                William M. (Mac) Thornberry National Defense 
                Authorization Act for Fiscal Year 2021 (Public Law 116-
                283), is amended by inserting after the item relating 
                to section 4660 the following:

``Sec. 4661. Defense contractors report: requirements concerning former 
                            Department of Defense officials and 
                            lobbying activities.''.
                    (B) Origin chapter table of sections.--The table of 
                sections at the beginning of chapter 141 of title 10, 
                United States Code, is amended by striking the item 
                relating to section 2410t.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on January 1, 2022.
            (4) References; savings provisions; rule of construction.--
        Sections 1883 through 1885 of the William M. (Mac) Thornberry 
        National Defense Authorization Act for Fiscal Year 2021 (Public 
        Law 116-283) shall apply with respect to the amendments made 
        under this subsection as if such amendments were made under 
        title XVIII of such Act.

SEC. 103. BAN ON HIRING CONTRACTING OFFICIALS ENFORCEABLE ON CERTAIN 
              CONTRACTS.

    (a) Prohibition.--
            (1) In general.--Any contract for the procurement of goods 
        or services, other than a contract for the procurement of 
        commercial products or services, with a value of excess of 
        $10,000,000 shall include a contract clause prohibiting the 
        contractor from providing compensation to a former Department 
        of Defense official described in paragraph (2) within four 
        years after such former official leaves service in the 
        Department of Defense.
            (2) Covered department of defense official.--An official or 
        former official of the Department of Defense is covered by the 
        requirements of this section if such official or former 
        official is a former officer or employee of the Department of 
        Defense or a former or retired member of the Armed Forces who 
        served as a program manager, deputy program manager, procuring 
        contracting officer, administrative contracting officer, source 
        selection authority, member of the source selection evaluation 
        board, or chief of a financial or technical evaluation team for 
        a contract with a value in excess of $10,000,000, and such 
        person--
                    (A) participated in the contract or license 
                selection;
                    (B) determined or signed off on the technical 
                requirements of the contract or license; or
                    (C) granted the contract or license.
    (b) Administrative Actions.--In the event that an official or 
former official of the Department of Defense described in subsection 
(a)(2), or a Department of Defense contractor, knowingly fails to 
comply with the requirements of this subsection, the Secretary of 
Defense may take any of the administrative actions set forth in section 
2105 of title 41, United States Code, that the Secretary of Defense 
determines to be appropriate.

SEC. 104. BAN ON HIRING SENIOR OFFICIALS BY GIANT DEFENSE CONTRACTORS.

    (a) Prohibition.--
            (1) In general.--Any Department of Defense contract for the 
        procurement of goods or services with a giant defense 
        contractor shall include a contract clause prohibiting the 
        contractor from hiring or paying (including as a consultant or 
        lawyer) any covered Department of Defense official within four 
        years after such former official leaves service in the 
        Department of Defense.
            (2) Definitions.--In this section:
                    (A) Covered department of defense official.--The 
                term ``covered Department of Defense official'' means a 
                former officer or employee of the Department of Defense 
                or a former or retired member of the Armed Forces who 
                served--
                            (i) in an Executive Schedule position under 
                        subchapter II of chapter 53 of title 5, United 
                        States Code;
                            (ii) in a position in the Senior Executive 
                        Service under subchapter VIII of chapter 53 of 
                        title 5, United States Code;
                            (iii) in position compensated at a rate of 
                        pay for grade O-7 or above under section 201 of 
                        title 37, United States Code; or
                            (iv) in a supervisory position compensated 
                        at a rate of pay for grade GS-15 of the General 
                        Schedule under section 5107 of title 5, United 
                        States Code, or higher.
                    (B) Giant defense contractor.--The term ``giant 
                defense contractor'' means a contractor (other than an 
                institution of higher education) that received an 
                average of more than $1,000,000,000 in annual revenue 
                from the Department of Defense or the Department of 
                Energy for contracted work related to the United States 
                nuclear program in the previous three fiscal years.
    (b) Administrative Actions.--In the event that a covered Department 
of Defense official, or a Department of Defense contractor, knowingly 
fails to comply with the requirements of this section, the Secretary of 
Defense may take any of the administrative actions set forth in section 
2105 of title 41, United States Code that the Secretary of Defense 
determines to be appropriate.
    (c) Annual Report.--The Inspector General of the Department of 
Defense shall submit to the Committee on Armed Services of the Senate 
and the Committee on Armed Services of the House of Representatives an 
annual report listing the officials or former officials of the 
Department of Defense described in subsection (a)(2)(A), or any 
Department of Defense contractor, subject to any of the administrative 
actions from the Secretary of Defense under the requirements of 
subsection (b) during the prior calendar year.

SEC. 105. MODIFICATION OF PROHIBITION ON LOBBYING ACTIVITIES WITH 
              RESPECT TO THE DEPARTMENT OF DEFENSE BY CERTAIN OFFICERS 
              OF THE ARMED FORCES AND CIVILIAN EMPLOYEES OF THE 
              DEPARTMENT OF DEFENSE FOLLOWING SEPARATION FROM MILITARY 
              SERVICE OR EMPLOYMENT WITH THE DEPARTMENT.

    Section 1045 of the National Defense Authorization Act for Fiscal 
Year 2018 (Public Law 115-91; 131 Stat. 1555) is amended--
            (1) in subsection (a)--
                    (A) in the subsection heading, by striking ``Two-
                year Prohibition'' and inserting ``Four-year 
                Prohibition'';
                    (B) in paragraph (1), by striking ``during the two-
                year period'' and inserting ``during the four-year 
                period''; and
                    (C) in paragraph (2)(A), by striking ``grade O-9 or 
                higher'' and inserting ``grade O-7 or higher'';
            (2) by striking subsection (b);
            (3) by redesignating subsection (c) as subsection (b); and
            (4) in subsection (b)(1)(A), as redesignated by paragraph 
        (3), by inserting ``, including activities in support of 
        lobbying contact with an officer or employee of the Department 
        of Defense'' before the period at the end.

SEC. 106. ENHANCEMENT OF RECUSAL FOR CONFLICTS OF PERSONAL INTEREST 
              REQUIREMENTS FOR DEPARTMENT OF DEFENSE OFFICERS AND 
              EMPLOYEES.

    (a) In General.--An officer or employee of the Department of 
Defense may not participate personally and substantially in any covered 
matter that the officer or employee knows, or reasonably should know, 
is likely to have a direct and predictable effect on the financial 
interests of any of the following:
            (1) Any organization, including a trade organization, for 
        which the officer or employee has served as an employee, 
        officer, director, trustee, or general partner in the past 4 
        years.
            (2) A former direct competitor or client of any 
        organization for which the officer or employee has served as an 
        employee, officer, director, trustee, or general partner in the 
        past 4 years.
            (3) Any employer with whom the officer or employee is 
        seeking employment.
    (b) Construction.--Nothing in this section shall be construed to 
terminate, alter, or make inapplicable any other prohibition or 
limitation in law or regulation on the participation of officers or 
employees of the Department of Defense in covered matters having an 
effect on their or related financial or other personal interests.
    (c) Covered Matter Defined.--In this section, the term ``covered 
matter''--
            (1) means any matter that involves deliberation, decision, 
        or action that is focused upon the interests of specific person 
        or a discrete and identifiable class of persons; and
            (2) includes policy making that is narrowly focused on the 
        interests of a discrete and identifiable class of persons.

SEC. 107. PROHIBITION ON OWNERSHIP OR TRADING OF STOCKS IN CERTAIN 
              COMPANIES BY DEPARTMENT OF DEFENSE OFFICERS AND 
              EMPLOYEES.

    (a) Definition.--In this section:
            (1) Covered official.--The term ``covered official'' means 
        any official described in section 847(c) of the National 
        Defense Authorization Act for Fiscal Year 2008 (10 U.S.C. 1701 
        note).
            (2) Publicly traded stock.--The term ``publicly traded 
        stock'' does not include a widely held mutual investment fund 
        as defined in regulations issued by the Office of Government 
        Ethics under section 208(d)(2) of title 18, United States Code.
    (b) Prohibition on Ownership and Trading Publicly Traded Stocks.--
            (1) Covered officials.--No covered official may own or 
        trade a publicly traded stock of a company if, during the 
        preceding calendar year, the company received more than 
        $1,000,000,000 in revenue from the Department of Defense, 
        including through 1 or more contracts with the Department.
            (2) Other officers and employees.--No officer or employee 
        of the Department of Defense who is not a covered official may 
        own or trade a publicly traded stock of a company that is a 
        contractor or subcontractor of the Department if the Standards 
        of Conduct Office of the Office of the General Counsel of the 
        Department of Defense determines that the value of the stock 
        may be directly or indirectly influenced by any official action 
        of the officer or employee.
            (3) Penalty.--Whoever violates paragraph (1) or (2) shall 
        be subject to the penalties set forth in section 216 of title 
        18, United States Code.

                  TITLE II--LIMITING FOREIGN INFLUENCE

SEC. 201. ADVISING FOREIGN GOVERNMENTS.

    Section 207(f) of title 18, United States Code, is amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by inserting after paragraph (2) the following new 
        paragraph:
            ``(3) Permanent restriction without prior approval.--
                    ``(A) In general.--Any person who has been employed 
                as a senior official in the White House, the Department 
                of State; the Department of Defense, or the Department 
                of the Treasury who, without the explicit prior 
                approval of the Secretary of State, performs 
                compensated work for the benefit of a foreign entity 
                that might benefit from the knowledge obtained by the 
                person as a result of such United States Government 
                employment, shall be punished as provided in section 
                216 of this title.
                    ``(B) Limitation on approval.--The Secretary of 
                State may not approve any work described in 
                subparagraph (A) that conflicts with the national 
                security interests of the United States, as determined 
                by the Secretary and verified by the Director of 
                National Intelligence.
                    ``(C) Annual report.--The Secretary of State shall 
                submit an annual report listing all of the approvals 
                under subparagraph (A), to include the related foreign 
                entity, the duties as assigned and performed by senior 
                official, and the work role (billet) held by the senior 
                official during the prior calendar year to the 
                Committee on Foreign Relations of the Senate, the 
                Committee on Armed Services of the Senate, the Select 
                Committee on Intelligence of the Senate, the Committee 
                on Foreign Affairs of the House of Representatives, the 
                Committee on Armed Services of the House of 
                Representatives, and the Permanent Select Committee on 
                Intelligence of the House of Representatives.''.

SEC. 202. BAN ON FORMER MILITARY AND CIVILIAN INTELLIGENCE OFFICERS 
              FROM FOREIGN EMPLOYMENT.

    (a) In General.--Except as provided in subsection (b), military and 
civilian intelligence personnel employed by a military intelligence 
organization possessing a security clearance, upon separation from 
service or resignation, are prohibited from obtaining employment with a 
foreign government or a private company doing work predominantly on 
behalf of a foreign government.
    (b) Exemption.--
            (1) In general.--Employment with the Government of 
        Australia, of Canada, of New Zealand, or of the United Kingdom 
        is not subject to the prohibition under subsection (a).
            (2) Waivers.--
                    (A) Authority.--Individuals may seek and be granted 
                a waiver by the Secretary of Defense, in consultation 
                with the Secretary of State, for employment by any 
                other foreign government. Such waiver will be 
                presumptively granted in cases that personnel seek 
                employment in jobs focused on humanitarian aid, 
                development, or civilian or nonmilitary infrastructure 
                improvement. Waivers for employment in other jobs shall 
                be determined based on whether such employment would 
                reasonably involve the use or disclosure or 
                appropriation of sources, methods, or skills that could 
                pose a threat to United States' interests when employed 
                by other countries or enable the repression of the 
                nationals of such countries.
                    (B) Annual report.--The Secretary of Defense shall 
                submit to the Committee on Armed Services of the Senate 
                and the Committee on Armed Services of the House of 
                Representatives an annual report on all waivers granted 
                under subparagraph (A).

                        TITLE III--TRANSPARENCY

SEC. 301. AFFIRMATIVE CONTRACTOR RECORD DISCLOSURES.

    The Secretary of Defense shall publish on a publicly available 
Internet website the following information to the extent such 
information is unclassified and non-confidential:
            (1) In the case of a contract with the Department of 
        Defense for goods or services above the simplified acquisition 
        threshold specified in section 134 of title 41, United States 
        Code--
                    (A) copies of each contract and task delivery order 
                the contractor on such contract has entered into with 
                the Department of Defense during the previous three 
                fiscal years; and
                    (B) past performance information about the 
                contractor to the extent it is maintained by the 
                Department.
            (2) In the case of a contract with the Department of 
        Defense for goods or services in excess of $10,000,000, all 
        correspondence and documents related to the contract.
            (3) The contractor report required under section 2410t of 
        title 10, United States Code, as added by section 102 of this 
        Act.

SEC. 302. OWNERSHIP OF INFORMATION.

    Any entity of the Department of Defense that enters into a contract 
or agreement with, or provides funding to, a nongovernmental entity for 
the purposes of procuring goods or services shall--
            (1) for the purposes of paragraph (3), be deemed to have 
        control over all information of the entity related to--
                    (A) any costs or the expenditure of any funds 
                related to the contract or agreement; and
                    (B) any other information related to the 
                performance of the contract or agreement;
            (2) provide access to the information described in 
        paragraph (1), which shall be considered an ``agency record'', 
        to any person upon request made pursuant to paragraph (3); and
            (3) include compliance with this subsection as a material 
        term in any contract, agreement, or renewal of a contract or 
        agreement with any nongovernmental entity for the purposes of 
        procuring goods or services.

SEC. 303. FINANCIAL DISCLOSURE BY LARGE CONTRACTORS.

    (a) Disclosure Requirement.--
            (1) In general.--The Secretary of Defense shall require a 
        covered contractor, as a condition for entering into a contract 
        with the Department of Defense, to make publicly available the 
        following information (excluding information determined to be 
        classified by the Secretary):
                    (A) Audited financial statements.
                    (B) A listing of the salaries of employees 
                performing work on the contract that receive 
                compensation from the contractor in excess of $250,000 
                per year.
                    (C) A description of all Federal political 
                spending, including lobbying, by the contractor.
            (2) Suspension and debarment.--The Secretary of Defense may 
        suspend or debar any covered contractor that fails to comply 
        with the disclosure requirements under paragraph (1).
            (3) Covered contractor defined.--The term ``covered 
        contractor'' means a contractor (other than an institute of 
        higher education) that--
                    (A) received more than $10,000,000 in annual 
                revenue from Federal Government contracts or licenses 
                in any of the previous three fiscal years; or
                    (B) earned more than 20 percent of its total annual 
                revenue from Federal Government contracts or licenses 
                in any of the previous three fiscal years.
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