2 Chapter 2 History of Government Ethics 2 Chapter 2 History of Government Ethics
2.2 Mississippi Valley Generating Company (background) 2.2 Mississippi Valley Generating Company (background)
The Mississippi Valley Generating Company case is one of the seminal government ethics cases, and to some degree represents the "high water mark" of the cases in the course. The Warren opinion captures some of the historical background but can be confusing. The decision in the United States Court of Claims (the predecessor of the Federal Circuit), and the dissents, provides a somewhat clearer picture of the players and the issues. The dissent in the Court of Claims by retired Justice Reed became the basis for the majority in the Supreme Court.
2.3. United States v. Mississippi Valley Generating Co. 364 U.S. 520 (1961)
2.4. Mississippi Valley Generating Co. (Court of Claims appellate decision, extract)
2.5. United States v. Mammoth Oil Co. 14 F.2d 705 (8th Cir. 1926) (Teapot Dome)
2.6. Government Contracts: Implied Invalidity Resulting from Violation of Conflicts of Interest Statute, 1961 Duke L. J. 498 (1961)
2.7. Crandon v. United States, 494 U.S. 152 (1990)
2.8. R. Perlstein, Nixonland: The Rise of a President and the Fracturing of America (2009) (pp. 35-43)
2.9. B. Jones, “The Lessons that Watergate Holds for Lawyers,” 12 Minn. Law. (2008)
2.10. M. Schmidt and L. Broadwater, "For Trump's Lawyers, Legal Exposure Comes With the Job," New York Times, (Sept. 10, 2022)
2.11. Disciplinary Action: Jeffrey B Clark (July 31, 2025)
2.12. Remarks of Walter M. Shaub, Jr., Director, U.S. Office of Government Ethics, at Brookings Institute (Jan. 11, 2017)
2.13 R. Jackson, Opinion of the Attorney General, 39 Op. Atty. Gen. 501 (1940) 2.13 R. Jackson, Opinion of the Attorney General, 39 Op. Atty. Gen. 501 (1940)
The statute involved in this Opinion of the Attorney General was the predecessor of 18 USC 209, the "anti-supplementation" statute involved in Crandon.
The President,
My Dear Mr. President: I have the honor to comply with your request of September 30 for my opinion to whether section 66 of title 5 of the United States Code would prevent the granting of leave with pay by universities to their faculty members while the latter are rendering consulting services to the United States.
The situation is stated as follows in the letter addressed to you by the President of the Massachusetts Institute of Technology:
"Professor X, married and with a family of three children, is asked by the Navy Department to serve as a consultant, on the subject of protection of ships against magnetic mines. He has unique expert knowledge for this job. To accept it, however, at the rate of pay permissable under Government regulations and with the additional expense of travel and temporary living quarters would involve a financial sacrifice which he is unable to stand. Consequently M.I.T. would propose in such a case to give him leave of absense at a reduced salary from M.I.T., which is adjusted so that Professor X can do this work for the Navy without financial sacrifice.
"I happen this year to be president of the Association of American Universities which holds its annual meeting in November. A topic of discussion is to be Cooperation of Educational Institutions with the Federal Government in the Present Critical Siuation. I can therefore raise this question not only as it involves the Massachusetts Institute of Technology but also as it involves the institutions of higher education generally."
The statue mentioned provides that "no Government official or employee shall receive any salary in connection with his services as such an official or employee from any source other than the Government of the United States, exept as may be contributed out of the treasury of any State, county, or municipality, and no person, association, or corporation shall make any contribution to, or in any way supplement the salary of, any Government official or employee for the services performed by him for the Government of the United States." (March 3, 1917, c. 163, sec. 1, 39 Stat. 1070, 1106).
The question involved was discussed in an opinion to you of September 28, 1935 (38 Io. 294), wherein it was concluded that there was no legal objection to the appointment of Dr. Carlos Chardon as Regional Administrator of the Puerto Rico Reconstruction Administration while on leave of absense with pay as Chancellor of the University of Puerto Rico. Although the case of Dr. Chardon might be distinguished on one ground, namely, that the University of Puerto Rico derives its support from the Government of Puerto Rico, which is, in effect, a branch of the Federal Government, the other reasons set forth in that opinion lead me to the conclusion that there is no legal objection to the granting of leave with pay by the Massachusetts Institute of Technology or other universities to faculty members rendering consulting services to the United States.
The same position has been taken by this Department in some other cases not involving formal or published opinions. Thus, while in section 3 (f) of the Selective Training and Service Act of 1940 (c.720, 54 Stat. 885, approved September 16, 1940) now expressly provides that nothing contained in that act or in any other act shall be construed as forbidding the payment of compensation by former employees to persons called into the armed forces of the United States, this Department, in a mater informally submitted, had prior to that statute approved the view that the making of such payments and the acceptance thereof were not forbidden. The payments in such circumstances are made with respect to the former employment and incidental to the leave granted; they are not made "in connection with" the services of the individual as an official or employee of the United States within the contemplation of the statue.
Respectfully,
ROBERT H. JACKSON
2.14 31 U.S.C. Section 329 2.14 31 U.S.C. Section 329
- "Corruption's such an old song that we can sing along in harmony." (Hamilton the Musical)
31 USC Section 329 (a)
(1)The Secretary of the Treasury and the Treasurer may not—
(A)be involved in trade or commerce;
(B)own any part of a vessel (except a pleasure vessel);
(C)buy or hold as a beneficiary in trust public property;
(D)be involved in buying or disposing of obligations of a State or the United States Government; and
(E)personally take or use a benefit gained from conducting business of the Department of the Treasury except as authorized by law.
(2)An officer violating this subsection shall be fined $3,000, removed from office, and thereafter may not hold an office of the Government.
(3)An individual (except prosecutors) giving information leading to the prosecution and conviction of an individual violating this subsection shall receive $1,500 of the fine when paid.
(b)
(1)An officer or employee of the Department (except the Secretary or Treasurer) may not—
(A)carry on a trade or business in the funds, debts, or property of a State or the Government; and
(B)personally use a benefit gained from conducting business of the Department.
(2)An officer or employee violating this subsection shall be fined $500 and removed from office.
(Pub. L. 97–258, Sept. 13, 1982, 96 Stat. 884.)
2.15 ABA Model Rules of Professional Conduct, Rule 1.7: Conflicts of Interest 2.15 ABA Model Rules of Professional Conduct, Rule 1.7: Conflicts of Interest
Client-Lawyer Relationship
(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if:
(1) the representation of one client will be directly adverse to another client; or
(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.
(b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in writing.
2.16. S. Pearlstein, “Power or Money: Power and Money,” Washington Post (Dec. 27, 2013)
2.17. "The Single Most Damning Email Exchange in the New January 6 Committee Filing" CNN Politics (Mar. 3, 2022)
2.18. Oracle America, Inc. v. United States, 975 F.3d 1279 (Fed. Cir. 2020) (Part VI only)
2.19. "American Democracy is Cracking. These Forces Help Explain Why," Washington Post (Aug. 18, 2023)
2.20 The Concept of "Honest Graft" 2.20 The Concept of "Honest Graft"
- George Washington Plunkitt (of Tammany Hall): “Honest Graft and Dishonest Graft”(1905)
"Just let me explain by examples. My party's in power in the city, and it's goin' to undertake a lot of public improvements. Well, I'm tipped off, say, that they're going to layout a new park at a certain place. * * * I go to that place and I buy up all the land I can in the neighborhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particular for before. * * * “Ain't it perfectly honest to charge a good price and make a profit on my investment and foresight? of course, it is. Well, that's honest graft.”
“Every good man looks after his friends, and any man who doesn’t isn’t likely to be popular. If I have a good thing to hand out in private life, I give it to a friend—Why shouldn’t I do the same in public life?”