Court Opinion

ID: 4120004
Source: CourtListenerOpinion
Date Created: 2017-01-27 22:44:27.011447+00
Date Added: 2024-06-11T14:37:23.162278
License: Public Domain

Restrictions on a Federal Appointee’s Continued
                Employment by a Private Law Firm

Federal conflict o f interest laws, 18 U.S.C. §§ 202-209, and Department o f Justice Standards of
  Conduct, 28 C.F.R. pt. 45, restrict the private practice o f law by an attorney while employed
  by the Departm ent of Justice.

If the attorney is hired as a “regular government em ployee,” i.e., expected to serve more than 130
    days in any 365-day period, he will be prohibited from acting as an agent or attorney for
    anyone other than the United States in any matter in w hich the United States is a party o r has
    a direct and substantial interest, and from receiving compensation for services rendered by
    him self or another in such matters. In addition, Departm ent regulations prohibit the outside
    practice o f law by Department of Justice employees, in the absence of a waiver.

If the attorney is hired as a “special government em ployee,” i.e., expected to serve 130 days or
    less in any 365-day period, he will be subject to representation and compensation restrictions
    only with respect to m atters in which he has participated personally and substantially w hile in
    government or which are pending in the Department o f Justice. The D epartm ent's regulation
    prohibiting the outside practice of law does not apply to special government employees.

Under 18 U.S.C. § 208 all government employees must disqualify themselves from participating
  for the governm ent in any matters in which they or their employers, among others, have a
  financial interest.

                                                                                   August 1, 1983

      M   em orandum       O p in io n   for th e   A s s o c ia t e A t t o r n e y G   eneral

   We have been asked to advise you whether, from the perspective of conflict
of interest and professional ethics, Mr. A may continue as a member of his law
firm once he has been employed by this Department as General Counsel to the
President’s Commission on Organized Crime. We understand that Mr. A is
presently a senior partner at a law firm, and that he proposes to remain in the
employ of that firm on a salaried basis through December 1983. We understand
that Mr. A expects to be working on essentially three major matters for the firm
during this period. Two of those matters do not involve the United States. The
third involves his continued representation of domestic steel producers in steel
dumping cases. At the same time that Mr. A is handling these private matters
for the law firm, he proposes to serve in the Department without federal
compensation. We understand that during this period the Department would
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hire Mr. A as a consultant pursuant to 5 U.S.C. § 3109.1 Mr. A’s proposed
employment status after December 31, 1983 has not been described to us, but
we presume that he will continue to serve, in some capacity, in the Department.
After December 31, 1983, Mr. A believes he will be in a position to adjust his
relationship with the firm.
   In general, we conclude that the ultimate decision in this matter involves
findings of fact which this Office is not in a position to make. We will therefore
describe to you the factual test that you should apply and the legal conse­
quences of the two alternative factual outcomes. More specifically, our conclu­
sions can be summarized as follows:
            (1) If Mr. A will be a regular government employee (i.e., ex­
            pected to serve more than 130 days in any period of 365 days),
            his proposed dual employment will present significant and prob­
            ably insurmountable problems under the conflict of interest
            statutes and the Department’s Standards of Conduct.
            (2) If Mr. A will be a “special government employee” {i.e.,
            expected to serve 130 days or less during any period of 365
            days) his proposed dual employment can be accomplished with­
            out violating the statutes or regulations.
            (3) In either event, the Department should consider as a policy
            matter whether it wishes to permit an employee to serve simulta­
            neously in a private law firm and in this Department and it
            should reach an understanding with Mr. A concerning various
            areas where issues of impropriety (actual or apparent) may arise.

               I. Rules Applicable To Regular Government Employees

   If Mr. A is deemed to be a regular government employee, he will be subject
to the full restrictions of the Federal conflict of interest statutes, 18 U.S.C.
§§ 202-209, and this Department’s Standards of Conduct, 28 C.F.R. Part 45.
Among other things, this will mean that Mr. A will be prohibited from acting as
agent or attorney for anyone other than the United States in any particular
matter in which the United States is a party or has a direct and substantial

   1 W e h ave left it to the Justice M anagement D ivision to d eterm ine w hether it is appropriate to hire Mr. A as
a co n su ltan t in th is co n tex t, and w e will lik ew ise leave the adm inistrative aspects of his appointm ent to their
charge. S ee g en era lly D ecisions o f the C o m p tro ller G eneral, B - 192406 (O ct. 12, 1978) (dealing w ith the
h iring o f law yers un d er 5 U .S.C . § 3109); B -l 14868-18 (Feb. 10, 1978) (sam e).
   W e also have considered the legality of th is D epartm ent's acceptance o f M r. A ’s voluntary services in light
o f 31 U .S.C . § 1342. In o ur v iew , it is appropriate for this D epartm ent to accept the voluntary services o f Mr.
A in this c o n tex t because 1) he w ill be serving as a consultant under 5 U .S.C . § 3109, a position fo r which
there is no m inim um salary set b y law and 2) h e w ill execute a docum ent clearly indicating that he waives any
right to co m pensation from the United S ta te s for his services through December 1983. See generally
“ E m ploym ent S tatus o f ‘V olunteers’ C onnected W ith Federal A dvisory Com m ittees,” 6 Op. O.L.C. 160
(1982). If M r. A is unw illing to execute such a docum ent, the D epartm ent may not accept his voluntary
services.

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interest. See 18 U.S.C. § 205. In addition, he would be prohibited from receiv­
ing compensation for services rendered by himself or another in such matters.
See 18 U.S.C. § 203. As we see it, these provisions will effectively bar Mr. A
from his proposed participation in the steel dumping cases on behalf of the
private clients. See also 28 C.F.R. § 45.735-9 (prohibiting the outside practice
of law by Department of Justice employees, absent a waiver by the Deputy
Attorney General or the presence of other factors not relevant here).2
   Although there are, of course, other conflict of interest and ethical restric­
tions that would apply to Mr. A as a regular government employee, we have not
undertaken a full description of them in this memorandum. If you find that Mr.
A will in fact be a regular government employee, and you are inclined to pursue
his dual employment proposal despite the restrictions described above, we will
provide you with materials that describe more fully the ethics requirements for
regular Department of Justice employees.

              II. Rules Applicable to Special Government Employees

   The conflict of interest statutes impose fewer and less rigorous restrictions
on certain short-term or intermittent employees called “special government
employees.” If Mr. A meets the test for special government employment
described below, he would be subject only to these less rigorous restrictions
and he would not be faced with statutory requirements that are necessarily and
substantially inconsistent with his dual employment proposal.
   As a special government employee, Mr. A would be subject to the represen­
tation and compensation restrictions of 18 U.S.C. §§ 203 and 205 only with
respect to matters (1) in which he has participated personally and substantially
while in government; or (2) which are pending in the Department of Justice.3
See 18 U.S.C. §§ 203, 205. See also 18 U.S.C. § 209 (exempting special
government employees from its restriction on private sources of compensation
for services rendered to the government). Similarly, the Department’s regula­
tion restricting outside professional practice does not apply to special govern­
ment employees. See 28 C.F.R. § 45.7359(b).
   In addition to the limited application of §§ 203 and 205, as a special govern­
ment employee Mr. A would also be subject to the full disqualification rule of

   2 It is not necessary at this point, regardless o f the findings o f fact made, for us to reach the question o f
w hether Mr. A would qualify for a w aiver o f the D epartm ent's regulation. If you decide Mr. A w ill be a
regular governm ent em ployee and that the obstacles o f 18 U.S.C. §§ 203 and 205 can be overcom e, we w ould
be happy to provide the D eputy A ttorney General with w hatever assistance he requires in considering a
possible waiver.
   3 T his latter restriction w ould not apply until Mr. A had actually served in the D epartm ent fo r sixty-one
days. See 18 U.S.C. §§ 203(c) and 205. The D epartm ent has not generally view ed m atters in litigation before
federal courts to be pending in this D epartm ent, but we do consider investigative m atters and other p re­
litigation m atters (such as adm inistrative tort claim determ inations) to be pending in the D epartm ent for
purposes o f these statutes. In light o f these precedents, we w ould be reluctant to assert that contact by Mr. A
with this D epartm ent relating to the steel cases w ould violate §§ 203 or 205. N onetheless, w e would
encourage you as a m atter o f discretion to lim it the extent o f Mr. A ’s direct contact with D epartm ent officials
on these cases during the tenure o f his governm ent em ploym ent.

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 18 U.S.C. § 208.4 Section 208 requires employees (including special govern­
ment employees) to disqualify themselves from participating for the govern­
ment in any matters in which they or, among others, their employers have a
financial interest. So long as Mr. A maintains an employment relationship with
his law firm, he would have to disqualify himself from any government matters
in which the firm has a client or other financial interest.5 Given the limited
subject matter of his proposed duties, we would not anticipate that this restric­
tion will present any significant obstacle to Mr. A’s dual employment proposal.6

                      ML Test for Special Goveriminnieinit Employmeinit

   The term “special Government employee” is defined to include “an officer
or employee of the executive or legislative branch of the United States Govern­
ment . .. who is retained, designated, appointed, or employed to perform, with
or without compensation, for not to exceed one hundred and thirty days in any
period of three hundred and sixty-five days, temporary duties either on a full
time or intermittent basis.” 18 U.S.C. § 202. To be so appointed, the Depart­
ment must in good faith estimate in advance of appointment that the individual
will serve for no more than 130 days in the succeeding 365-day period,
beginning on the day of appointment. In estimating the number of days to be
served, the Department must count as a full day any day (including Saturday,
Sunday or holiday) during which any time is expected to be devoted to
performing government duties. See Federal Personnel Manual, Ch. 735, Ap­
pendix C.
   The test for special government employment, of course, must be applied
without regard to any preferred result. In this case, you must consider Mr. A’s
anticipated employment through August o f 1984. Although we understand that
Mr. A’s plans beyond December 1983 may be somewhat vague, this fact does
not relieve you of responsibility for making a good faith estimate of his
employment for the entire 365-day period.
   As a general matter, employees are presumed to be regular government
employees unless their appointing Department is comfortable with making an
estimate that the employee will be needed to serve 130 days or less. The 130-
day standard can be met because (1) the length of employee’s entire tenure with
the government will be less than 130 days; (2) the employee is expected to
   4 M r. A w ill a lso be subject to the post-em ploym ent restrictions o f 18 U .S.C § 207(a) and (b). These post-
em ploym ent restrictions w ill be specific to M r. A’s work and responsibilities. In addition, he will be subject
to the D ep artm en t's Standards o f Conduct, 28 C.F.R. Part 45 and the Code o f Professional Responsibility of
the A m erican B ar A ssociation. W e will be available to provide specific ethics and post-em ploym ent advice to
M r. A upon request.
   3 T his D epartm ent ordinarily requires disqualification from any m atter in which the law firm represents a
c lie n t having such a financial interest, even though the financial interest in the m atter may actually belong to
the clien t rath er than the firm .
   6 O u r anticipation in this regard must be evaluated in the context o f our lim ited know ledge and understand­
ing o f the subject m atter o f Mr. A ’s proposed duties. Mr. A ’s firm is a w ell-know n firm that represents
essentially Fortune 500 com panies. Your o ffice should consider, based upon your expertise in these matters,
to w hat e x ten t M r. A ’s clients w ould potentially be involved. In o rd er to accom plish this consideration, Mr. A
should probably be required to provide w hatever listing o f clients w ould be helpful.

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serve only intermittently over a period of more than 130 days; or (3) some
combination of the above. Although it is possible that the proposed duties will
not continue for the full three years presently anticipated, we think that you
must presume that they will. Accordingly, you must presume that Mr. A will be
needed to serve for the full 365-day period relevant for purposes of the special
government employee test. This means that Mr. A would only qualify as a
special government employee, if you can estimate, in good faith, that the
Department’s need for his services will be so intermittent that they will not
involve more than 130 days, in whole or in part, during any 365-day period. In
making this factual determination you should rely on your own view of the
needs of the Department, rather than on the employee’s views of the time he
will devote to the job. You should bring to the decision your own knowledge of
the nature of the work, and the Department’s expectations. You should also
consult with the relevant Department officials about their expectations for the
work to be preferred.
                                    IV. Other Considerations

   Assuming that you are satisfied that Mr. A’s dual employment proposal can
be compatible with the statutes described above, you should also consider the
proposal from a policy perspective. As you know, the Department normally
requires its lawyers to sever all connections with law firms. See 28 C.F.R.
§ 45.735-9. We assume that this policy represents an attempt to avoid actual
and apparent conflicts of interest, and a desire to demand the undivided
professional attention of the Department’s lawyers. Although the latter policy
may be less compelling in a case like this where the employee’s services may
indeed be needed only in a part-time capacity, the concern about actual or
apparent impropriety persists. For this reason, we would recommend, if you go
forward with the dual employment proposal, that you reach an understanding
with Mr. A concerning limiting his contacts with this Department on behalf of
private clients — for example, that he would not participate in settlement
discussions in the steel cases nor attempt to gamer the Department’s support of
legislation that would benefit domestic steel producers.
   Although no such problems may in fact arise, it would be prudent to antici­
pate and avoid them to the extent feasible.7
                                                                     R a lph W . T arr
                                                         Acting Assistant Attorney General
                                                              Office o f Legal Counsel

  7 Along the sam e lines, you should reach some understanding with Mr. A concerning the problem o f using
support services and legal research assistance from his law firm . As you know , this D epartm ent does not have
statutory authority to accept gifts, and any donation o f such services by the law firm w ould constitute an
unauthorized augm entation o f this D epartm ent's appropriations. See generally General A ccounting O ffice,
Principles o f F ederal A ppropriations Law 5 -6 2 , 5 -9 4 (1982). M oreover, use o f the firm ’s associates and
support staff w ould constitute a greater com m ingling o f the firm and the Department than we have contem ­
plated in this opinion, and may well extend the potential for conflicts o f interest beyond sim ply those cases
handled by Mr. A him self.

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