Former Federal Trade Officials: Laws on Post-Employment Activities, Foreign Representation, and Lobbying
Published: 2010-06-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress has enacted laws to safeguard against former federal employees, including former trade officials, from using their access to influence government officials. These former officials' post-employment activities are restricted by a federal conflict of interest law, known as the "Revolving Door" law. Two other laws--the Foreign Agents Registration Act (FARA) and the Lobbying Disclosure Act (LDA)--are disclosure statutes that do not prohibit any activities per se, but require individuals conducting certain representation activities to publicly disclose them. FARA and LDA are not specific to former federal officials; they apply to all individuals. GAO was asked to provide a summary of the Revolving Door law, FARA, and LDA. GAO reviewed these laws, as well as guidance from the Office of Government Ethics (OGE). GAO interviewed ethics officials at three agencies whose missions focus on trade--the United States Trade Representative (USTR), the International Trade Administration (ITA), and the International Trade Commission (USITC)--and collected data on the number of senior officials who separated from these agencies from 2004 through 2009. In addition, GAO interviewed Department of Justice (Justice) officials concerning enforcement of these laws. GAO makes no recommendations in this report.
section_title: What GAO Found
paragraphs: Post-employment restrictions in the Revolving Door law, codified at 18 U.S.C. 207, prohibit some federal employees from engaging in certain activities, such as communicating with their former agency with the intent to influence government action, for a specified period of time after leaving federal service. The restrictions include a ban, for 1 year, on all former senior and very senior employees of federal agencies from representing, aiding, or advising a foreign government or political party with the intent to influence a government official, including the President, Vice President, and members of Congress. Level of pay and certain designated positions are used to categorize employees as "senior" or "very senior." A life-time ban on representing or advising foreign entities in this capacity applies to former U.S. Trade Representatives and Deputy Trade Representatives. In addition, all former federal employees who participated personally and substantially in an ongoing treaty negotiation are prohibited for 1 year from aiding any other person in that negotiation, if the employee had access to certain nonpublic information. Ethics officials at USTR, ITA, and USITC reported that they counsel current, as well as former, employees on post-employment restrictions. Justice officials said they viewed the Revolving Door law as being more useful as a preventative measure rather than a tool for prosecution; they believed that guidance from agency ethics officials deterred most violations. In contrast to post-employment restrictions specific to former government officials, FARA and LDA are disclosure laws that require all individuals, unless exempt, to publicly disclose certain foreign representation or lobbying activity. Individuals who act as agents of foreign governments or foreign political parties must register with Justice's Registration Unit. Individuals who conduct a certain amount of lobbying must register with the Secretary of the Senate and the Clerk of the House of Representatives. Both FARA and LDA disclosure information is publicly available.

section_title: Letter
paragraphs: Congress has enacted laws to safeguard against former federal employees,  including employees who may have been involved in the development and  negotiation of trade policy, from using their access to influence  government officials.  When former federal employees separate from  government service, their post-employment activities are restricted by a  federal conflict of interest law, known as the "Revolving Door" law. This  law prohibits federal employees from engaging in certain activities with  the intent to influence government action for various periods of time once  they have left federal government employment. With the signing of  Executive Order 13490 in January 2009, President Obama has placed  additional emphasis on ethics commitments for executive branch  personnel, requiring each of his full-time, non-career appointees to sign an  ethics pledge that lengthens the time of certain post-employment  restrictions applicable to them and prohibits them from engaging in  certain lobbying activities for the remainder of the Obama administration.
In addition to these post-employment restrictions, there are certain  registration requirements for representational activities that affect all  individuals, not just former government personnel. The Foreign Agents  Registration Act (FARA) requires all individuals who act on behalf of  foreign principals to disclose this activity by publicly registering with the  Department of Justice (Justice). The Lobbying Disclosure Act (LDA), as  amended, requires individuals acting as lobbyists to publicly register their  activity with the Secretary of the Senate and the Clerk of the House of  Representatives.
In response to your request to provide information on the post- employment activities of former government personnel who were involved  in the development and implementation of trade policy, we are providing a  summary and comparison of the relevant federal laws governing post- employment activities, foreign representation, and lobbying. This  information includes data on the number of senior officials who separated  from the Office of the United States Trade Representative (USTR), the  Department of Commerce’s International Trade Administration (ITA), and  the United States International Trade Commission (USITC) from 2004  through 2009, as well as information on the number of these officials who  registered under FARA or LDA.
To address this objective, we reviewed the relevant laws and regulations  governing post-employment restrictions, foreign representation, and  lobbying activities. We interviewed officials from the Office of  Government Ethics (OGE) regarding interpretation and implementation of  post-employment restrictions. We interviewed ethics officials from USTR,  ITA, and USITC regarding these laws and the guidance they provide to  current and former employees of their respective agencies. We included  USTR and ITA in our scope because their respective missions concern  trade policy formulation and trade promotion. We included the USITC  because of its role in administering U.S. trade remedy laws and providing  independent analysis on trade matters. We interviewed Justice officials  regarding administration of FARA and enforcement actions for post- employment restrictions and FARA. We obtained data on the number of  former senior officials who separated from USTR, ITA, and USITC from  2004  through 2009 from each of the respective agencies as well as from the Office of Personnel Management’s Central Personnel Data File. We  focused our work specifically on the number of former senior officials  separated from these agencies because post-employment restrictions are  more stringent for former senior and very senior officials, although we  also obtained the number of all separated employees from these three  agencies from the Central Personnel Data File for contextual purposes.  From Justice, we obtained data on the number of these former senior  officials who had registered under FARA after separating from the  government. From the Clerk of the House of Representatives, we obtained  data on the number of these former senior officials who had registered as  lobbyists after separating from the government. We did not assess any  former officials’ compliance with post-employment restrictions, nor did  we determine if individuals who did not register under FARA or LDA  should have registered. We assessed the reliability of data on former  officials separated from USTR, ITA, and USITC, as well as data on FARA  and LDA registrations and found the data to be sufficiently reliable for our  purposes.
We conducted our work from January 2010 to June 2010 in accordance  with all sections of GAO’s Quality Assurance Framework that are relevant  to our objective. The framework requires that we plan and perform the  engagement to obtain sufficient and appropriate evidence to meet our  stated objectives and to discuss any limitations in our work. We believe  that the information and data obtained, and the analysis conducted,  provide a reasonable basis for the findings in this product. For additional  details regarding our scope and methodology, see appendix I.
subsections: section_title: Background
paragraphs: In 1962, the U.S. government enacted conflict of interest laws that were  designed to protect against the improper use of influence and government  information by former employees, as well as to limit the potential  influence that a prospective employment arrangement may have on  current federal officials when dealing with prospective private clients or  future employers while still in government service. Congress broadened  post-employment restrictions as part of the Ethics Reform Act of 1989,  including, for example, a restriction against certain former government  officials representing, aiding, or advising on foreign entities. The  executive branch promotes compliance with post-employment restrictions  through agency ethics-in-government programs, which are guided by OGE,  an executive branch agency. OGE is responsible for providing overall  direction to executive branch policies related to preventing conflicts of  interests on the part of officers and employees of any executive agency.  Individual agencies are responsible for the day-to-day administration of  their own ethics programs.
In contrast to post-employment restrictions specific to former government  personnel, there are federal disclosure statutes concerning foreign  representation and lobbying activities that affect all individuals. Enacted  in 1938, FARA is a disclosure law that requires all individuals in the United  States working as agents of a foreign principal to publicly disclose these  connections. LDA is a disclosure law that requires all individuals working  a certain percentage of the time as lobbyists to publicly disclose these  activities. Lobbying regulations began with the Federal Regulation of  Lobbying Act of 1946, which required lobbyists to disclose the identities of  their clients, report the receipts and expenses involved, and describe the  nature of the legislative objectives that were pursued for each client.  Lobbying was interpreted under the 1946 act as direct communication  with a member of Congress in an attempt to influence the passage or  defeat of any proposed or pending legislation. Congress replaced this law  with the Lobbying Disclosure Act of 1995, which expanded the definition  of lobbying to include communications with “covered” employees in both  the legislative and executive branch regarding legislation, regulations,  policies, or the nomination or confirmation of a person for a position  subject to confirmation by the Senate.
section_title: Post-Employment Restrictions for Former Federal Officials and Disclosure Laws Related to Foreign Representation and Lobbying
paragraphs: Post-employment restrictions in the Revolving Door law prohibit federal  employees from engaging in certain conduct with the intent to influence  government officials for a specified period of time after leaving federal  employment. In contrast to post-employment restrictions for former  government officials, the disclosure laws in FARA and LDA are not  specific to former government employees. FARA and LDA do not prohibit  any activities; rather, they require individuals engaging in certain foreign  representation and lobbying activities to make these activities public.  Table 1 describes the key attributes of the three laws.
subsections: section_title: Revolving Door Law
subsections: section_title: Revolving Door Restrictions More Stringent for Former Senior and Very Senior Officials
paragraphs: The post-employment restrictions contained in the Revolving Door law  prohibit categories of former federal employees from conducting certain  activities, with the intent to influence government officials, for various  periods of time once they have left federal government employment. Most  executive branch employees are affected by only one restriction: a life- time ban on “switching sides,” that is, representing any person with the  intent to influence, in a communication to or appearance before a  government official, in connection with a matter (1) in which the United  States is a party or has a direct and substantial interest, (2) in which the  former executive branch employee had worked personally and  substantially for the government, and (3) that involved specific parties at  the time of the former employee’s participation. Additional restrictions,  however, apply to senior or very senior employees: a 1-year “cooling off”  period bars certain former senior employees from representing anyone  with the intent to influence individuals at their former agency and a 2-year  “cooling off” period bars former very senior employees’ representation and  attempted influence concerning any matter. These former senior and very  senior employees are also banned for 1 year from representing, aiding, or  advising foreign entities with the intent to influence a decision of a  government official, and former U.S. Trade Representatives and Deputy  Trade Representatives are banned for life from such activity.
Level of pay and certain designated positions are used to categorize  employees as “senior” or “very senior.” Senior employees include  employees whose rate of pay is specified in or fixed according to the  Executive Schedule, as well as certain other employees who hold specific  appointed positions or who meet a specific financial threshold—86.5  percent of Executive Schedule Level II. Most employees in the Senior  Executive Service are considered senior employees under the Revolving  Door law because their pay exceeds this financial threshold. “Very senior  employees” include employees whose rate of pay is equal to the rate of pay  for Level I of the Executive Schedule, and employees in certain other  named and appointed positions.
The number of senior and very senior officials separating from USTR, ITA,  and USITC, and to whom certain Revolving Door restrictions apply, varies  from year to year. From 2004 through 2009, a total of 19 senior or very  senior officials separated from USTR, 47 separated from ITA, and 5  , 47 separated from ITA, and 5  separated from USITC (see fig. 1).  separated from USITC (see fig. 1).
One section of the Revolving Door law is of specific relevance to former  officials who participated in treaty negotiations. This section prohibits all  former employees (regardless of level) who participated personally and  substantially in ongoing treaty negotiations for 1 year from aiding or  advising any other person in that treaty negotiation, on the basis of certain  “covered” information to which the employee had access. This section of  the law also used to apply to employees who negotiated certain trade  agreements; however, the specific definition of “trade agreements” as used  in the section of the law refers only to the “fast track” trade agreement  authority that expired in 1993. According to OGE, when Congress  restored similar fast track authority in 2002, it did so by creating new  authority rather than by amending the prior fast track provisions that are  referenced in the section of the Revolving Door law, and made no  conforming changes to reference the new fast track provisions.  Consequently, the prohibition no longer applies to former government  employees who negotiated trade agreements. As a result, former  employees may advise another party on “covered” information related to  trade negotiations as long as doing so would not violate other provisions  of the Revolving Door law. OGE did not take a position on whether this  section of the law should be amended to again cover fast track trade  agreement authority. However, an OGE official told us that the Revolving  Door prohibition relating to trade negotiations had applied only in  relatively narrow circumstances, for example when the employee used  information that he or she knew was designated as exempt from  disclosure under the Freedom of Information Act. See appendix II for a  more detailed discussion of all post-employment restrictions in the  Revolving Door law.
section_title: USTR, ITA, and USITC Ethics Officials Train Current Employees and Advise Former Employees on Revolving Door Restrictions
paragraphs: Ethics officials at USTR, ITA, and USITC described a variety of activities  they use to inform senior employees of the post-employment restrictions,  such as conducting training programs and providing counseling to former  employees. Ethics officials at all three agencies told us that they provide  special, one-on-one counseling to senior officials separating from the  government regarding what post-employment activities are permitted.  They said that they also advise former employees who contact them with  questions on post-employment restrictions. The ethics officials at the three  agencies described the ethics training they provide that is specific to post- employment restrictions:    USTR. According to USTR’s designated ethics official, all new employees  receive training from the Executive Office of the President’s Office of  Administration as well as an additional briefing from a USTR ethics official  on issues of particular concern to USTR. New senior employees receive  one-on-one training. Current employees receive annual ethics training  during which employees are encouraged to contact the ethics official with  any questions or concerns regarding contact they receive from former  employees. All separating employees receive one-on-one training that  addresses the post-employment provisions applicable to them; they also  receive an outline of the post-employment restrictions. This counseling is  documented on the employees sign out form, which is retained by the  agency. Senior employees complete financial disclosure reports that  identify any agreements they have for future employment. Separating  employees are informed that they may contact the USTR ethics official  after leaving the agency to ask questions on post-employment restrictions.  The USTR ethics official said that many former employees do contact the  ethics office; specific advice provided is documented in either an e-mail or  in notes of the conversation.
ITA. According to a Commerce ethics official, all new ITA employees  located in the Washington, D.C., area receive an in-person briefing at the  time of appointment; employees located outside of Washington, D.C.,  receive a written copy of the summary of ethics rules for new employees.  All ITA officials appointed by the President receive individual ethics  briefings from the Assistant General Counsel for Administration, upon  appointment and each year thereafter, including a post-employment  briefing. Current ITA employees who are required to file a private or  public financial disclosure report (which includes all senior officials)  receive a written copy of the summary of ethics rules and those in the  Washington, D.C., area attend an in-person ethics briefing every year. The  ethics office also routinely provides in-person briefings at regional  conferences to ITA employees stationed at foreign posts. The office also  provides individual briefings to separating ITA officials upon request. The  office typically provides a 1-page summary of the post-employment  restrictions and/or a 17-page detailed summary of the post-employment  restrictions for employees requesting post-employment guidance. A  Commerce ethics official reported that former ITA officials have contacted  the ethics office for post-employment guidance on numerous occasions.
USITC. According to an USITC ethics official, all employees separating  from the USITC have one-on-one meetings with an ethics official to  receive counseling and documentation on post-employment restrictions.  Senior officials receive specific information regarding the parts of the  Revolving Door restrictions specific to them. All separating employees  must sign a form to acknowledge receipt of a memorandum describing the  post-employment restrictions. Attached to the memorandum is OGE  guidance on post-employment restrictions, a copy of the Revolving Door  law, and various other information regarding how ethics rules apply to  former officials’ post-employment activities. The packet also contains  information on a rule specific to the USITC: no former officer or employee  of the USITC who personally and substantially participated in a  matter that was pending in any manner or form before the USITC during  his or her employment shall be eligible to appear before the USITC as  attorney or agent in connection with such matter. No former officer or  employee of the USITC shall be eligible to appear as attorney or agent  before the USITC in connection with any matter that was pending in any  manner or form before the USITC during his or her employment, unless he  or she first obtains written consent from the USITC. The memorandum  also explains that the USITC’s ethics counseling service is available to  employees with any questions concerning post-employment activities.
section_title: Revolving Door Enforcement
paragraphs: Former government officials who violate the Revolving Door law may be  subject to criminal and civil penalties. prohibited activity can be imprisoned for up to 1 year, or fined for each  violation, or both. Any person who willfully engages in conduct violating  the provisions of the law may be imprisoned for up to 5 years, or fined for  each violation, or both. In addition to criminal punishment, the Attorney  General is authorized to bring civil suits against anyone who violates the  law. If found to have engaged in misconduct, the defendant can be subject  to a civil penalty up to $50,000 for each violation, or the amount of  compensation that he or she received or was offered for the prohibited  conduct, whichever is greater. Finally, the Attorney General may also  petition for injunctive relief in federal court to prevent the defendant from  engaging in conduct that violates the law.
Our discussion on enforcement of the Revolving Door law refers only to enforcement of  18 U.S.C § 207, the sections of the law related to post-employment activities of former  federal employees. violations in conjunction with Inspectors General. Justice officials  reported that the record of Revolving Door prosecutions is limited and  that there are no prosecutions on record for violations by former USTR,  ITA, and USITC officials. Through its annual Conflict of Interest  Prosecution Survey, OGE collects information from Justice on all  indictments, pleas, convictions, etc., that deal with the conflict of interest  laws. According to OGE’s prosecution surveys, there have been 26  reported cases for Revolving Door prosecutions from 1990 through 2008.  These cases included, for example, prosecutions of former officials who  had violated their cooling off periods or life-time representation ban.  None of these cases involved prosecutions of the section of the law that  prohibits former senior officials from representing, aiding, or advising a  foreign interest.
Justice officials cited several reasons for the limited number of  prosecutions. First, they said that they receive a limited number of  referrals from the investigative agencies. In particular, the Civil Division  reported that the division had received no referrals of Revolving Door  violations by USTR, ITA, and USITC officials in at least 15 years. Second, it  is difficult to bring cases to a criminal level because Justice must show  that the former employee knowingly broke the law. One Justice official  noted that it is difficult to prove that the former employee knew he or she  was violating the law and that it is often hard to prove that the employee’s  actions resulted in real harm. Moreover, it is possible that a former official  misunderstood guidance received from his or her ethics official regarding  post-employment restrictions, or that the former official did not receive  accurate guidance. Justice officials said they viewed the Revolving Door  law as being more useful as a preventative measure rather than a tool for  prosecution; they believed that guidance from agency ethics officials  deterred most violations. In many cases, according to a Justice official, the  former employee can be counseled to stop doing what he or she is doing  and that is all that needs to be done.
section_title: Foreign Agents Registration Act (FARA)
paragraphs: FARA is a disclosure law that requires all individuals acting as agents of  foreign principals to register their activities with Justice, unless exempt by  law. FARA registration requirements are not specific to former federal  employees, but rather apply to all individuals and organizations  performing certain activities on behalf of a foreign principal, unless  specifically exempt. The purpose of the act is to ensure that the U.S.  government and the American people are informed of the source of  representational activity in the United States and the identity of persons  attempting to influence U.S. public opinion, policy, and laws. Under FARA,  a person is considered an agent of a foreign principal when the person acts  in any capacity at the order or request or is under the control, supervision,  or financing of the foreign principal, and engages in the following within  the United States:    political activities for or in the interest of the foreign principal;    public relations, information-service employment, or political consulting  for or in the interest of the foreign principal; fundraising, collecting, or disbursing of money or things of value for or in  the interest of the foreign principal; or representing the interests of a foreign principal before any agency or  official of the U.S. government.
Justice’s Registration Unit, in the National Security Division, is responsible  for the administration of the law. FARA requires individuals engaged in the  listed activities above to file a registration statement, which collects  detailed information on the registrant and the activities he or she will  perform on behalf of the foreign principal listed. Additionally, foreign  agents are required to file a supplemental statement every 6 months for the  duration of the foreign principal-agent relationship, providing updated  information on the agent’s activities.
According to the Registration Unit, 5 of the 71 former senior officials who  separated from USTR, ITA, and USITC from 2004 through 2009 registered  as foreign agents at one point, but only one is currently registered. The  other four individuals were FARA registrants for periods of time while  working for private law firms either before their government service or in  between 2 periods of government service. They are no longer registered.  The individual who is currently registered was a former senior official at  USTR and separated from the federal government in 2006. This individual  first registered under FARA in 2008, more than 2 years after separating  from the federal government, and, as of April 2010, remains actively  registered. According to the individual’s initial FARA registration in 2008,  the individual is employed by a law firm and facilitates interaction  between the U.S. government and the government of Mexico’s agriculture  department on meat inspection issues and Mexican meat imports.
subsections: section_title: Numerous FARA Exemptions
paragraphs: Individuals and organizations engaging in certain diplomatic,  humanitarian, commercial, and legal activities on behalf of a foreign  principal are exempt from registering with Justice. FARA regulations state  that the burden of establishing the availability of the exemption is on the  person for whose benefit the exemption is claimed; however, there is no  requirement for such persons to provide any notification about their  exempted activities and thus they are not formally tracked.
Diplomatic and consular officers of foreign governments, officials of  foreign governments, and staff members of diplomatic and consular  officers of foreign governments are exempt from registering under FARA.  Diplomatic and consular officers must be accredited by the Department of  State, and foreign officials and diplomatic and consular staff must file with  the Department of State notifications of status with a foreign  government. Other exempted categories of agents of foreign principals  include individuals who (1) engaged only in private and nonpolitical  activities in furtherance of trade or commerce for the foreign principal; (2)  engaged in collecting funds or contributions within the United States for  humanitarian purposes such as medical aid, food, and clothing; and (3)  engaged only in activities in furtherance of bona fide religious, scholastic,  academic, scientific, or artistic pursuits. Activities are considered  “private” for the commercial trade exemption, so long as they do not  directly promote the public or political interests of the foreign  government. This applies even if the foreign principal is a corporation  that is owned by the foreign government. The religious and scholastic  pursuit exemption does not apply to any agent of a foreign principal who  is engaged in political activity for the foreign principal.
Lawyers engaging in legal representation of foreign principals before an  adjudicatory body in the United States are exempt from registering under  FARA. The legal exemption does not include attempts to influence  officials other than in the course of judicial or law enforcement  investigations or proceedings. Examples of activities for which lawyers  still must register include attempts to influence the formulation, adoption,  or change of domestic or foreign U.S. policy, or to persuade agency  personnel or officials with reference to the political or public interests of a  foreign country or foreign political party.
Agents of foreign principals who have registered as lobbyists under LDA  are exempt from registering under FARA, if the LDA registration is  connected with the agent’s representation of the foreign principal.  However, this exemption does not apply if the foreign principal is a foreign  government or foreign political party.
Another exemption exists for agents whose foreign principal is a  government of a foreign country, the defense of which the President  deems vital to the defense of the United States. This exemption is only  available for people who are conducting activities that do not conflict with  any domestic or foreign policies of the United States, who only  disseminate accurate information within the United States and disclose  their true identity in the disseminated information, and whose government  has furnished information to the United States about the identity and  activities of the agent of the foreign principal. This exemption does not  become available until the President has published in the Federal Register  the country whose defense is deemed vital to the defense of the United  States.
section_title: FARA Compliance and Enforcement
paragraphs: According to Justice officials, the cornerstone of the Registration Unit’s  enforcement efforts is encouraging voluntary compliance. This includes  providing registration forms, copies of the FARA law, and other  information to registrants, as well as members of the public and press. The  Registration Unit proactively outreaches to various professional  communities (e.g., law, advertising, political, and public relations firms)  from which the majority of foreign agents are drawn, as well as educates  prosecutors and other federal agencies about FARA. The Registration Unit  meets with potential registrants to discuss their possible obligation to  register, and with current registrants regarding whether they should  continue to register. Justice has a public Web site that provides an  overview of FARA and key information. In addition, Justice officials said  they answer inquiries from agency ethics officers on FARA requirements  and provide information on FARA registration and reporting requirements  for federal employees to ethics officers.
Justice officials said that the Registration Unit is proactive in identifying  potential registrants. It reviews publications such as Congressional  Quarterly; monitors the Lobbying Disclosure Web site; and acts on tips  provided from various sources. These referrals may come from sources  such as the Department of State and the Federal Bureau of Investigation,  or from competing legal firms or members of the public. The Registration  Unit officials send out letters of inquiry to individuals it has reason to  believe may be acting as foreign agents. The letters of inquiry start a  process in which the Registration Unit requests more information on these  individuals’ activities to determine whether they need to register. In 2008,  we reported that from January 2004 through May 2008, the Registration  Unit had sent letters to approximately 130 individuals or firms it believed  may have had an obligation to register as foreign agents under FARA, and  received approximately 25 registrations as a result of these letters; the  remaining entities were either determined not to have an obligation to  register or were still being reviewed at the time of our 2008 report. We  requested updated information from Justice regarding inquiries sent from  June 2008 through March 2010; Registration Unit officials reported that it  had sent 18 letters of inquiry, and that two individuals were found to have  obligations to register and have since registered. The remaining 16 were  either found to have no obligation to register or the Registration Unit is  continuing to evaluate whether a registration obligation exists.
Civil and criminal penalties exist for willful violations of FARA  requirements and for willful false statements or omissions on FARA  registration statements and supplements. Individuals who willfully violate  FARA, or willfully make a false statement or omission on their registration  form, can be imprisoned for up to 5 years or be fined up to $10,000, or  both. For certain violations, including the failure to properly label  propaganda that is disseminated in the United States, the punishment is  imprisonment for up to 6 months or a fine of up to $5,000, or both. The  Registration Unit handles enforcement of FARA violations. According to  the Registration Unit, it has prosecuted one violation of FARA since 1990.
section_title: Lobbying Disclosure Act
paragraphs: The Lobbying Disclosure Act of 1995, as amended, requires public  disclosure by registrants of certain lobbying activities. The LDA was  enacted to enhance public awareness of paid lobbyists’ efforts to influence  the public decision-making process in the legislative and executive  branches, and to increase public confidence in the integrity of  government. Under LDA, a registrant can be an individual, a lobbying  firm, or an organization that has employees lobbying on its own behalf,  depending on the circumstances. Registrants are required to file a  registration with the Secretary of the Senate and the Clerk of the House of  Representatives for each client on whose behalf a lobbying contact is  made if a minimum dollar threshold is passed. For reporting purposes, a  lobbyist is defined as a person who has made two or more lobbying  contacts and whose lobbying activities represent at least 20 percent of the  time that he or she spends on behalf of the client during any quarter.  Registrations and reports must also identify any covered official positions  a lobbyist held in the previous 20 years.
Lobbyist registration requirements apply to all individuals conducting  lobbying activities, not only to former federal officials. Within 45 days of  first making a lobbying contact or being employed to make a lobbying  contact with a covered official, whichever is earlier, the lobbyist or  organization employing the lobbyist must register with the Secretary of the  Senate and Clerk of the House of Representatives.
The Secretary and the Clerk are required by law to provide guidance and  develop common standards and procedures for compliance with the  LDA. They must also review, verify, and inquire to ensure the timeliness  and accuracy of the reports, as well as develop a publicly available list of  all registered lobbyists and their clients. The Secretary and the Clerk must  retain registrations and reports for 6 years after they are filed, and make  all filed documents searchable on the Internet for free. If lobbyists are not  in compliance with the LDA, the Secretary and Clerk must notify them in  writing, after which the registrant has 60 days to provide an appropriate  response. If the registrant does not reply, the Secretary and Clerk must  refer the noncompliance to the U.S. Attorney for the District of Columbia.
According to the Clerk of the House of Representatives, 15 of the 71  former senior or very senior officials who separated from USTR, ITA, and  USITC registered as lobbyists. Nine were former USTR officials, four were  former ITA officials, and two were former USITC officials.
During a calendar quarter, lobbyists who do not spend at least 20 percent  of their time conducting lobbying activities, or whose lobbying activities  do not meet the above mentioned financial thresholds for either a  particular client or for total expenses, are not required to register. In  addition, communications made on behalf of a government of a foreign  country or a foreign political party and disclosed under FARA are   Agents of foreign  excluded from the definition of a “lobbying contact.” principals registered under FARA, whose only contacts are on behalf of  foreign governments or political parties, therefore do not meet the  definition of a lobbyist, because they would not have conducted any  activities that meet the definition of “lobbying contact.” These individuals  are therefore exempt from registering as lobbyists under the LDA for these  activities.
subsections: section_title: LDA Compliance and Enforcement
paragraphs: The U.S. Attorney’s Office for the District of Columbia is responsible for  the enforcement of the LDA. It fulfills its responsibilities, administratively,  by researching and responding to referrals made from the Secretary of the  Senate and the Clerk of the House of Representatives of non-complying  lobbyists by sending additional noncompliance notices to the lobbyists,  requesting that the lobbyists file reports or correct reported information.  The U.S. Attorney’s Office has the authority to pursue a civil or criminal  case for noncompliance. Civil penalties exist for instances in which  lobbyists knowingly fail to remedy a defective filing within 60 days after  notification from the Secretary or Clerk, and for any other knowing failure  to comply with provisions of the LDA. If these violations occur, lobbyists  can be subjected to fines up to $200,000, depending on the gravity of the  violation. In addition, anyone who knowingly and corruptly fails to  comply with the LDA requirements can be imprisoned for up to 5 years or  fined, or both.
In past work, we have reported in detail on the U.S. Attorney’s Office’s  enforcement efforts. To enforce LDA compliance, it has primarily  focused on sending letters to lobbyists who have potentially violated the  LDA by not filing disclosure reports as required. The letters request that  the lobbyists comply with the law and promptly file the appropriate  disclosure documents. In our 2008 lobbying disclosure report, we noted  that the U.S. Attorney’s Office had settled with three lobbyists and  collected civil penalties totaling about $47,000 in 2005. All of the settled  cases involved a failure to file. Since then, no additional settlements or  civil actions have been pursued, although the U.S. Attorney’s Office is  following up on hundreds of referrals each year. In a response to a GAO  recommendation, the U.S. Attorney’s Office developed a system to help  monitor and track its enforcement efforts.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to USTR, ITA, USITC, Justice, and OGE  and requested that they provide comments. We also provided a draft to  staff at the Clerk of the House of Representatives and the Secretary of the  Senate. We received comments from officials at all of these agencies,  except ITA, to clarify our descriptions of the various laws, regulations, and  agency practices. We considered their suggestions and made changes  throughout the report in response, as appropriate.
We are sending copies of this report to the United States Trade  Representative, the Secretary of Commerce, the Chairman of the U.S.  International Trade Commission, the Director of the Office of Government  Ethics, and the Attorney General, as well as appropriate congressional  committees. In addition, the report will be available at no charge on the  GAO Web site at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-4347 or yagerl@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 contributions to this report are listed  in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This report describes a summary and comparison of the relevant federal  statutes governing post-employment, foreign representation, and lobbying  activities. This information includes data on the number of senior officials  who separated from the Office of the United States Trade Representative  (USTR), the Department of Commerce’s International Trade  Administration (ITA), and the United States International Trade  Commission (USITC) from 2004 through 2009, as well as information on  the number of these officials who registered under FARA or LDA.
To address this objective, we reviewed the post-employment restrictions  of 18 U.S.C. § 207, referred to as the “Revolving Door” law in this report,  the Foreign Agents Registration Act (FARA), and the Lobbying Disclosure  Act (LDA), as amended. We interviewed officials from the Office of  Government Ethics (OGE) regarding the interpretation and  implementation of the Revolving Door law. We interviewed ethics officials  from USTR, ITA, and USITC regarding these laws and the guidance these  officials provide to current, separating, and former employees of their  respective agencies. We included USTR and ITA in our scope because  their respective missions concern trade policy formulation and trade  promotion. We included the USITC because of its role in administering  U.S. trade remedy laws and providing independent analysis on trade  matters. We interviewed Department of Justice (Justice) officials  regarding administration of FARA and enforcement actions for post- employment restrictions and FARA.
We focused our work specifically on the number of former senior and very  senior officials separated from these agencies because post-employment  restrictions are more stringent for former senior and very senior officials.  We obtained data on the number of former senior officials who separated  from USTR, ITA, and USITC from 2004 through 2009 from each of the  respective agencies and cross-referenced these data with data we  extracted from the Office of Personnel Management’s Central Personnel  Data File. We defined “senior” as being any official who met the definition  of “senior employee” in the post-employment restrictions on former  federal employees:    Employees whose rate of pay was specified in or fixed according to the  Executive Schedule.
For employees whose rate of pay was not tied to the Executive Schedule,  any employee whose rate of basic pay was at 86.5 percent or higher of the  rate of basic pay for Level II of the Executive Schedule.
For the period between November 24, 2003, to November 24, 2005:  employees who, as of November 23, 2003, were in a position for which the  rate of basic pay was equal or greater than the rate of basic pay payable  for Level 5 of the Senior Executive Service in 2003.
We collected data on all senior officials separated from these three  agencies, regardless of job title or description. We did not include officials  who had separated from one of the agencies but who had continued  working for the federal government at another agency. For contextual  purposes, we queried the Central Personnel Data File to ascertain the  number of all staff who separated from USTR, ITA, and USITC from 2004  through 2009 and left government service. To assess the reliability of data  on senior officials who separated from USTR, ITA, and USITC, we used  data from the Central Personnel Data File to determine the reliability of  the agency-supplied data. After reconciling discrepancies with the  agencies and receiving revised data from them, we determined that the  data provided to us from the agencies were sufficiently reliable.
Using the names of the 71 former senior officials we had identified as  having separated from USTR, ITA, and USITC between 2004 and 2009, we  requested Justice’s Registration Unit to determine which of these  individuals had registered under FARA. As our work focused only on  senior level employees, we did not ask the Registration Unit to search for  FARA registrations for all former employees from these three agencies.  We did not attempt to determine whether any of these 71 former senior  officials who did not register should have registered under FARA.
Using this same list of 71 former senior officials, we requested the Clerk of  the House of Representatives to conduct a search of the publicly-available  LDA database maintained by the Clerk to ascertain the number of these  individuals who had registered as lobbyists. As our work was focused only  on senior employees, we did not search the LDA databases for all former  employees from these three agencies. We did not attempt to determine  whether any of these 71 former senior officials who did not register should  have registered under LDA.
To assess the reliability of the FARA and LDA registration data, we  reviewed documentation related to the data sources and interviewed  knowledgeable agency officials about the data. Although both FARA and  LDA are publicly-available databases, we requested that officials at  Justice’s Registration Unit search the FARA database and that officials at  the Clerk of the House of Representatives search the LDA database as  those officials are knowledgeable about search terms for their databases.  These officials described to us the structure of their databases and the  methods used for searching. We determined that the data were sufficiently  reliable for the purpose of our report.
We conducted our work from January 2010 to June 2010 in accordance  with all sections of GAO’s Quality Assurance Framework that are relevant  to our objective. The framework requires that we plan and perform the  engagement to obtain sufficient and appropriate evidence to meet our  stated objectives and to discuss any limitations in our work. We believe  that the information and data obtained, and the analysis conducted,  provide a reasonable basis for the findings in this product.
section_title: Appendix II: Overview of Revolving Door Law and Regulations
paragraphs: OGE has promulgated regulations that clarify many of the terms in the  Revolving Door law and that provide examples of what constitutes  prohibited behavior by a former federal employee, as discussed below:    18 U.S.C. § 207(a)(1) Permanent restrictions on representations in  particular matters for all officers and employees of the executive  branch. This section of the law prohibits any former employee of the  executive branch from knowingly, with the intent to influence, making a  communication to or appearance before a federal employee on behalf of  another person in connection with a particular matter involving a specific  party, in which he or she participated personally and substantially as an  employee, and in which the United States is a party or has a direct and  substantial interest.
For the life-time ban under this section of the law, federal regulations state  that “communications” occur when information of any kind is transmitted  by any means, as long as the employee intends the information to be  attributed to himself or herself. “Appearances” occur when the former  employee is physically present before an employee of the federal  government in either a formal or informal setting. This section does not  prohibit any behind-the-scenes assistance from former federal employees,  so long as no communications or appearances occur. For example, if a  former employee of an agency accompanies representatives of a grantee of  that agency to an agency meeting, the former employee is considered to be  making an appearance, even if he or she never speaks during the meeting.
Communications and appearances are only prohibited if they are made  knowingly and with the intent to influence the United States government.  Federal regulations clarify that this occurs when the former employee’s  purpose is to: (1) seek a government ruling, benefit, approval, or other  discretionary government action, or (2) affect government action in  connection with an issue or aspect of a matter which involves actual or  potential controversy. For example, a former employee who calls an  agency official to complain about how that agency is auditing the  employee’s current employer has made a communication with the intent to  influence government action. Certain communications and appearances  are not considered to be made with the intent to influence, including  routine requests not involving controversy, factual statements or inquiries  that are not in dispute or do not seek discretionary government action, and  purely social contacts. For example, a former employee who calls his or  her prior agency to ask for the date of a scheduled hearing for her current  client is not intending to influence the government. However, if he or she  calls his or her former agency to request that the hearing date be moved,  that may be considered a communication made with the intent to  influence.
The prohibition in this section of the law applies only to communications  or appearances made in connection with particular matters involving  specific parties. According to federal regulations, “particular matters  involving specific parties” include those that involve specific proceedings  that affect the legal rights of parties, or an isolatable transaction between  identified parties, such as specific contracts, grants, licenses, product  approval applications, enforcement actions, administrative adjudications,  or court cases. “Particular matters involving specific parties” do not  include matters of general applicability, such as rulemaking or the  formulation of general policies. The regulations state that international  agreements may sometimes be considered particular matters involving  specific parties, depending in part on whether the agreement focuses on  specific property or claims, or instead includes a large number of diverse  issues. For example, the regulations state that a former employee of the  Department of State who participated in a treaty negotiation concerning  transfer of ownership of a piece of land may not later represent the foreign  government in the final stages of that negotiation without violating this  provision.
The prohibition in this section of the law only applies to employees who  participate “personally and substantially” in the matter. Federal  regulations state that this means the employee participated directly or  through direct and active supervision, and that the employee’s  involvement was of significance to the matter. Substantial participation  requires more than official responsibility or involvement on an  administrative or peripheral issue.    207(a)(2) Two-year restrictions on all former executive branch  employees for particular matters under official responsibility. A 2- year prohibition, similar to the life-time prohibition that exists under  section 207(a)(1) for all former federal employees, exists under section  207(a)(2). However, whereas section 207(a)(1) requires personal and  substantial participation in a matter on the part of the former employee,  section 207(a)(2) merely requires that the employee had “official  responsibility” for the particular matter. According to OGE regulations,  “official responsibility” means direct administrative or operating authority  to approve, disapprove, or otherwise direct government action.   207(b)(1) One-year restrictions on aiding or advertising  concerning treaty negotiations. All former federal employees who  participated personally and substantially in an ongoing treaty negotiation  are prohibited for 1 year from aiding or advising any other person in that  treaty negotiation, if the employee had access to certain covered  information. According to OGE regulations, “covered information” means  agency records that the employee had access to and that were designated  exempt from disclosure under the Freedom of Information Act. The same  prohibition used to exist for employees who negotiated certain trade  agreements; however, the specific definition of “trade agreement,” as used  in section 207(b)(2)(A), refers only to the fast track trade agreement  authority, which expired in 1993. According to OGE, when Congress  restored similar fast track authority in 2002, it did so by creating new  provisions rather than by amending the prior fast track law that is  referenced in section 207(b) and made no conforming changes to section  207(b) to reference the new fast track provisions. Consequently, section  207(b) no longer covers any existing trade agreement authorities.   207(c) One-year restrictions on former senior officials concerning  any matter. For 1 year following termination of service in a senior  position, former senior employees may not knowingly, with the intent to  influence, make communications to or appearances before their former  agency, if it is made on behalf of another person in connection with a  matter on which the former employee seeks official action by the agency.  “Senior employees” include employees whose rate of pay is specified in or  fixed according to Level II of the Executive Schedule, as well as certain  other employees who meet a specific financial threshold or hold specific  appointed positions. Federal regulations state that a senior employee  seeks official action when he attempts to induce a current employee to  make a decision by his communication or appearance. Additionally,  “matter” is not limited to just “particular matters” for this section, but also  includes the consideration of broad policy options, new matters that were  not previously pending at the employee’s former agency, and matters  pending before any other agency or the legislative or judicial branches of  government.   207(d) Two-year restriction on former very senior employees’  representations concerning any matter. A similar prohibition that  applies to former senior federal employees also applies to former very  senior federal employees, except that the prohibition lasts for two years,  and also applies to representational contacts with Executive Schedule  officials in the federal government and the President and Vice President.  “Very senior employees” include employees whose rate of pay is equal to  the rate of pay for Level I of the Executive Schedule, and employees in  certain other named and appointed positions.   207(e) Two-year restriction on former Senators and 1-year  restriction on former members of the House of Representatives  and congressional staff. For 2 years for Senators, and for 1 year for  members of the House of Representatives and congressional staff, former  members of Congress and employees are prohibited from contacting  current members of Congress and congressional staff with the intent to  influence any matter on which the former member or staffer seeks action.   207(f) One-year restriction on former senior and very senior  employees’ representations on behalf of, or aid or advice to, a  foreign entity. For 1 year after leaving a senior or very senior position,  employees cannot knowingly represent a foreign government or foreign  political party before the United States government, or aid or advise the  foreign entity with the intent to influence decisions of U.S. government  officials. A life-time ban on representing, aiding, or advising foreign  entities in this capacity applies to the United States Trade Representative  and the Deputy United States Trade Representatives.
Section 207(f) states that “foreign entity” means both “foreign  government” and “foreign political party” as defined in FARA. Under  FARA, foreign governments include any person or groups of persons  exercising actual or legal political jurisdiction over any foreign country or  portion thereof, including factions and insurgents that may exercise  governmental authority but have not been recognized by the United  States. Foreign political parties include organizations outside the United  States that are engaged in activities devoted to establishing, controlling, or  acquiring control of foreign governments, or that are furthering or  influencing political or public interests, policies or relations of a foreign  government.
However, it is sometimes difficult to discern whether certain foreign  organizations meet the definition of “foreign entity” under 207(f). Justice’s  Office of Legal Counsel issued a legal opinion in 2008 stating that a foreign  corporation can be considered a foreign entity for purposes of 207(f) if it  exercises sovereign authority in fact or by formal delegation. In this  opinion, Justice clarified that ownership of a foreign corporation by the  foreign government does not itself make the corporation a foreign entity,  but that if the corporation “exercises political jurisdiction over part of a  foreign country,” then it would be considered a foreign entity under 207(f)  and the prohibition would apply.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Loren Yager (202) 512-4347 or yagerl@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Adam Cowles (Assistant  Director), Kate Brentzel, Ashley Alley, Greg Wilmoth, and Karen Deans  made key contributions to this report.