Source: https://www.pogo.org/testimony/2019/02/h-r-1-and-executive-branch-conflicts-of-interest-scott-amey-testifies-before-the-house-committee-on-oversight-and-reform/
Timestamp: 2019-04-19 18:56:59+00:00

Document:
I want to thank Chairman Cummings, Ranking Member Jordan, and the Committee for asking the Project On Government Oversight (POGO) to testify about executive branch ethics. I am Scott Amey, POGO’s General Counsel. POGO is a nonpartisan independent watchdog that investigates and exposes waste, corruption, abuse of power, and when the government fails to serve the public or silences those who report wrongdoing. We champion reforms to achieve a more effective, ethical, and accountable federal government that safeguards constitutional principles. POGO strives above all else to be fair and accurate in our investigations and reporting. We are diligent in our research. We give credit where credit is due and hold those to account who need to be held accountable—without regard to party.
While some Members of Congress and some in the public might think H.R. 1, the For the People Act of 2019,1 is solely aimed at President Trump and his Administration—and there are some bills drafted in the 115th and 116th Congresses with that purpose in mind—H.R. 1 is not such a bill. In fact, it addresses some problems that many good government groups have assembled for over a decade to correct, problems created by the revolving door and the unlevel playing field that have long existed. Organizations have worked for many years to strengthen ethics and conflict-of-interest standards, including badgering the ethics czar in the Obama Administration.
This Committee did not sit idle. On January 31, 2017, Chairman Jason Chaffetz and Ranking Member Elijah Cummings convened a gathering of Members and government watchdogs to discuss ethics concerns plaguing the federal government. Many groups in attendance followed up with Committee staff. POGO followed up with meetings and sent a letter to Chairman Chaffetz and Ranking Member Cummings with our thoughts on reauthorizing and improving the Office of Government Ethics (OGE).3 H.R. 1 is an opportunity to make good on the previous work this Committee has performed and to reform the ethics system to meet old and emerging challenges.
H.R. 1 is a comprehensive reform bill aimed at closing gaps in ethics and conflict-of-interest standards, and at reforming election and campaign finance processes. My testimony today will provide insights into the bill, focusing on the ethics reforms for the executive branch contained in Title VIII.14 In addition, I will provide supplementary thoughts on common-sense ethics solutions to long-standing problems that are missing from the bill—reforms to the revolving door that many good government groups have promoted for years.
In 2018, there were 645 instances of the top 20 defense contractors hiring former senior government officials, military officers, Members of Congress, and senior legislative staff as lobbyists, board members, or senior executives.15 Since some lobbyists work for multiple defense contractors, there are more instances than officials.
Of those instances, nearly 90 percent became registered lobbyists, where the operational skill is influence-peddling.
At least 380 high-ranking Department of Defense officials and military officers shifted into the private sector to become lobbyists, board members, executives, or consultants for defense contractors.
The most significant takeaway from POGO’s study is that the vast majority of the high-ranking military officials who revolve through the door to the defense industry they once oversaw or dealt with are not being lured to the private sector because of their knowledge and experience with programs. Instead, they are jumping ship to go lobby their former colleagues and to provide their new employer or clients with access to information and government officials.
have an unfair advantage over competitors, which could be used to the detriment of the public.
For years, POGO has advocated for stronger policies to ensure that high-level government officials going through the revolving door do so in a way that protects government policies from undue industry influence. H.R. 1 would help slow the revolving door, including the cycling of procurement officials leaving government service to work for companies they might have been doing business with. For instance, the bill would prohibit “golden parachute” incentive payments from non-government sources to former employees entering government service. It would also codify ethics restrictions created by executive orders since 1993 governing appointees.19 These reforms are common-sense steps that will help ensure that those serving in the government are doing so with the public, not their own wallets, in mind.
We have witnessed through the years that ethics enforcement is weak and inconsistent across agencies.20 Acting in part on long-standing recommendations from civil society, H.R. 1 would also strengthen the OGE, giving the OGE director final approval over any executive branch recusals, exemptions, or waivers from ethics laws or regulations, and requiring those recusals, exemptions, or waivers to be publicly posted on OGE’s website. This centralization of authority ensures consistent application of ethics rules and the exceptions to them, and greatly increases transparency. The bill would also give OGE improved investigatory powers over possible violations of ethics laws, and the authority to issue administrative remedies when an ethics violation has occurred, increasing the likelihood that those who violate ethics laws will be held accountable. Finally, the bill would limit any president’s ability to remove the OGE director to instances where there is cause for firing, allowing the director to truly serve independently and ensuring continuity after elections, which should provide more independence to this vital government position.
Not only does H.R. 1 address long-standing executive branch ethics concerns, it also addresses deficiencies in the Foreign Agents Registration Act (FARA). FARA requires all American citizens working to influence U.S. policy on behalf of foreign governments or political parties to register with the Department of Justice and report information about those lobbying efforts. However, a POGO investigation in 2014 found routine failures to follow the law and systemic non-prosecution by the Justice Department.21 H.R. 1 would give the Department the authority to levy civil fines to punish offenders who do not properly comply with the law, providing an effective enforcement mechanism between civil injunctions and criminal charges that would help end the Department’s reliance on voluntary compliance.
The government isn’t alone in the ethics game. Companies in the private sector require conflict-of-interest reviews and non-disclosure and non-compete agreements to protect their knowledge base, intellectual property, and bottom lines, all in an effort to best serve their stakeholders.22 The federal government’s ethics system similarly needs to protect its stakeholders, the American public. H.R. 1 was created to do that by mending cracks in the current ethics system, and sometimes adjust for conflicts of interest that were not envisioned. Provisions in Title VIII achieve that mission, although some of those provisions should be amended to better serve their purpose.
Previous well-intentioned lobbying reforms have created a shadow influence industry of advisors, consultants, and trade-association chiefs who can peddle influence but are not required to register as lobbyists. To address this problem at the Department of Defense, Congress recently legislated a ban prohibiting “behind the scenes” activities34 that should be extended government-wide.35 Congress should also require departing federal employees to wait at least two years before taking a job with any entity that had business before the agency within a year prior to their departure. POGO also urges Congress to amend H.R. 1 to include a prohibition on political appointees and Senior Executive Service policymakers (people who develop rules and determine program requirements) seeking employment for a period of two years from companies materially impacted by—including financially benefiting from—the policies they helped draft. The term “materially benefiting” would include obtaining a direct and predictable economic, financial, business, or competitive advantage or right.
5. Subtitle B—Presidential Conflicts of Interest creates new ethics requirements for the president and vice president, which we support. Specifically, Section 8012 states that “[i]t is the sense of Congress that the president and the vice president should conduct themselves as if they were bound by section 208 of title 18, United States Code, by divesting conflicting assets…or by establishing a qualified blind trust[.]” While constitutional concerns have been raised about the application of certain conflict-of-interest laws to the President and Vice President,36 this section strikes the right balance by asking those executives to “conduct themselves as if they were bound” by the personal financial conflict-of-interest law. This request follows decades of presidential precedents when it comes to such situations, and will help avoid real or apparent financial conflicts of interest.
6. Section 8022 implements standards for waivers granted under Executive Order 13770.37 POGO supports the provision because the public has little information about waivers under the President’s order. We also urge Congress to provide more transparency of waivers, exemptions, and recusals granted under other ethics laws and regulations, including those under 18 U.S.C. §§ 207 and 208 and 5 CFR §§ 2635.502 and 2635.503.
7. Section 8033 amends the tenure of the OGE director. H.R. 1 limits the president’s ability to remove the director to only when there is just cause for removal. Traditionally, “just cause for removal” means only when there is “inefficiency, neglect of duty, or malfeasance in office.”38 In recent years we have come to learn about OGE’s importance, whether in vetting presidential nominees or providing ethics training. In order to avoid potential impasses when ethics allegations involve White House staff, Cabinet-level officials, or agency officials, OGE needs to be insulated from political pressure rather than to be in the position of serving at the pleasure of the president. Yet a president also needs to be able to remove a director who engages in misconduct. Section 8033 appropriately balances the need for independence and the need for accountability. In addition to this, H.R. 1 should establish a line of succession in case the OGE director resigns or is terminated, which would help preserve the independence of the agency and avoid creating a lapdog who is trying to impress or appease senior leadership inside the White House.
8. Section 8034 authorizes mandatory education and training programs for designated ethics officials, which would help ensure consistent and fair application of ethics laws. Absent is the frequency with which those programs should be required. I would urge Congress to amend the current provision in H.R. 1 to require education and training programs every two years.
H.R. 1 also includes provisions that allow OGE to “investigate an allegation” and recommend “appropriate disciplinary action.” While POGO supports these provisions, OGE already has limited authority to take these actions.39 H.R. 1 should expand that authority to ensure OGE has clear, independent authority to investigate complaints and to issue binding corrective and disciplinary actions when there are ethics violations in noncriminal cases. POGO also supports the provision granting OGE subpoena power for the production of information, documents, records, and other data, which is essential to properly investigating an ethics allegation. That power, in addition to OGE’s existing authority to receive comments from an official or employee and hold a hearing,40 would assist OGE investigations into violations. Congress should require OGE to report the use of such authority to the president and Congress.
9. Section 8062 codifies the ethics pledge rules that started with the Clinton Administration and have continued through the Trump Administration.41 POGO supports making the pledge rules a law, because otherwise they exist only at the whim of each president. For instance, President Clinton revoked his pledge on is last day in office, thereby lifting the restrictions that prohibited conflicts of interest.42 Codifying the pledge would prevent a similar circumstance and add continuity within the ethics community, which has to adjust for changes in the ethics rules with each incoming Administration.
3. Revolving Door Ban—All Appointees Leaving Government.
(a) If, upon my departure from the Government, I am covered by 207(c) of title 18, United States Code, I will abide by post-government restrictions on communications to or appearances before my former executive agency as set forth in section 207(c) of title 18, United States Code, for a period of 2 years. Additionally, I will do the same with respect to such communications to or appearances before the Executive Office of the President.
(b) I will not for a period of 2 years from the end of my appointment accept employment from, or representation of, any party that materially benefited from a particular matter involving specific parties, or from a particular matter benefiting a single source, in which I personally and substantially participated. I agree that my Stop Trading On Congressional Knowledge (STOCK) Act notifications and recusals will be made publicly available upon my leaving government service.
(c) Upon my departure from the Government I will not have any communications with or appearances before any executive branch agency, including the Executive Office of the President, regarding a particular matter involving specific parties on which I worked and I, my current employer, my current client, or a member of my household have a financial interest.
Finally, Section 8062 should require that all records related to the codified ethics pledge, including any recusals, waivers, or exemptions to that pledge, be publicly posted by OGE with other ethics records (ethics agreements, financial disclosure reports, certificates of divestiture, and certification compliance forms).
The following are additional recommendations that Congress should pass to make the government more ethical and to help restore the public’s faith in government.
Create a government-wide database of senior officials who go through the revolving door. Ten years ago, Congress required the Department of Defense (DoD) to create a system for officials to obtain “a written opinion regarding the applicability of post-employment restrictions to activities that the official or former official may undertake on behalf of a contractor.”46 That law also required DoD to store those opinions in a database to ensure compliance. Congress should amend H.R. 1 to create a similar system for civilian agencies. Congress should also expand the coverage to include covered officials who are involved in the planning, creation, awarding, administration, and oversight of a contract or grant. POGO has urged DoD to make its database public since March 2009.47 As a fervent believer in the aphorism “sunshine is the best disinfectant,” we recommend that Congress make the civilian database public. Taxpayers have a right to know when former senior officials seek employment with those they were doing government business with.
Require the Justice Department’s Office of Professional Responsibility to report findings of intentional misconduct or reckless disregard. Through Freedom of Information Act requests, POGO learned the Justice Department’s Office of Professional Responsibility (OPR) documented more than 650 instances from 2002 to 2013 of federal prosecutors and other Justice Department employees violating rules, laws, or ethical standards that governed their work. Because the Department of Justice does not generally make the names of those officials public, the Department is largely insulated from meaningful public scrutiny and accountability.48 Congress should require OPR to notify both the relevant state bar authorities and the House and Senate Judiciary Committees about any findings of intentional misconduct or reckless disregard by Justice Department attorneys. Further, Congress should give the Justice Department’s Inspector General explicit authority to investigate allegations of misconduct throughout the agency, including those against attorneys, an authority that other agency inspectors general already have.
Improving foreign-influence transparency. POGO applauds the inclusion of reforms to the Foreign Agents Registration Act (FARA) in H.R. 1. Since 2014, POGO has recommended incorporating civil fines into the statute to give the Department of Justice a middle-of-the-road enforcement mechanism to punish offenders who do not properly label their FARA filings, who file late, who don’t file if they should have, or who do not register if they should have. We support the provision in H.R. 1 that creates a dedicated enforcement unit. We believe this change will significantly boost the compliance by foreign agents and public access to FARA disclosures the law is supposed to afford.
However, more can be done to clarify registration and reporting requirements under the law. For example, a lack of Departmental guidance or definitions for terms like “principal beneficiary” has left many wondering exactly what triggers a registration requirement. POGO recommends that FARA be amended to eliminate a confusing exemption that allows those representing foreign companies to register under the far less strict domestic lobbying law, the Lobbying Disclosure Act. Foreign governmental and commercial interests are not always as distinct from one another as they are in the United States, and this exemption has frequently been misunderstood and exploited.
Require nominees to disclose when someone with a financial interest in a nomination helps with the process. Individuals, known as “Sherpas,” guide presidential nominees through the confirmation process and gain access to senior officials and information. While these Sherpas are sometimes government officials, they can be government outsiders, where existing conflict-of-interest laws do not apply.52 The risk is that these individuals can use the access and information for personal or private gain. Congress should ensure that nominees publicly disclose any material benefit they received throughout their confirmation process from any individual who currently has or had in the past year employers or clients with financial interests involving the nominee’s agency.
Require clear limits to employment for departing government officials. Congress should require government officials to enter into a written, binding revolving-door exit plan that sets forth the programs and projects from which the former employee is banned from working. Like financial disclosure statements, these reports should be filed with the Office of Government Ethics and made available to the public.
Our support for Title VIII of the For the People Act of 2019 and the improvements that I have detailed for the Committee are common sense. Government ethics are important, and improving that system is vital. H.R. 1 is a step forward in reducing improper influence over government decisions, missions, programs, and spending that is often contrary to what is in the public’s interest.
Thank you for inviting me to testify today. I look forward to answering any questions from Committee Members and to working with the Committee to further explore how the federal ethics and conflict-of-interest system can be improved.
Prohibition on lobbying activities with respect to the Department of Defense by certain officers of the Armed Forces and civilian employees of the Department following separation from military service or employment with the Department.
5 U.S.C. Appendix, Ethics In Government Act of 1978—(§§ 101—505).
5 CFR § 2635.502(b)(1)(iv) (restricting government activities for “[a]ny person for whom the employee has, within the last year, served as officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee.”).
Executive Order 13490, January 21, 2009. President Trump’s ethics pledge restates the one-year ban at 18 U.S.C. § 207(c). See Appendix A.
2 U.S.C. § 1602(7) (defining “lobbying activities”); P.L. 115-91, §1045 (2017). See Appendix B.
The Office of Special Counsel, the agency in charge of protecting whistleblower, has a similar removal-for-cause provision. 5 U.S.C. § 1211(b).
5 U.S.C. Appendix, Ethics in Government Act, § 402(f)(2)(A)(ii) and (B)(iii); 5 CFR § 2635.106(b); 5 CFR § 2638.504.
5 U.S.C. Appendix, Ethics in Government Act, § 402(f)(2)(B)(ii) and (iii).
Executive Order 12834, January 20, 1993. https://www.oge.gov/Web/OGE.nsf/0/5DEB1725A191ABB385257E96006A90F9/$FILE/eo12834.pdf; See Appendix A.
Executive Order 13184, December 28, 2000.
Executive Order 13770, Section 1.1.
Federal Awardee Performance and Integrity Information System. https://www.fapiis.gov/fapiis/viewcorpreldetail.action?rctrID=146390067&rctrCage=8X637&rctrName=AHNTECH%2C+INC.

References: § 2635
 § 207
 § 1602
 §1045
 § 1211
 § 402
 § 2635
 § 2638
 § 402