4 Chapter 4 Regulatory Design: Statutes and Regulations 4 Chapter 4 Regulatory Design: Statutes and Regulations
Introduction to Substantive Law of Government Ethics
The federal system of regulating the conduct of public officials – government ethics – is designed around substantive law that began with the Founding and that has evolved over 150 years. The body of law that regulates government ethics is well-defined and consists of:
- Provisions of the Constitution, including the Emoluments Clause and the Appointments Clause
- Statutes, including provisions of the Criminal Code, the Hatch Act, and others
- Executive Orders
- Various regulations, many issued by the Office of Government Ethics (OGE) and other administrative agencies
- Rulings by OGE and opinions issued by the Office of Legal Counsel of the Department of Justice
- Unpublished but publicly available ethics agreements, waivers, and other materials
There is relatively little case law interpretation, especially as compared with other regulatory regimes, although recently the Supreme Court has weighed in, especially in connection with application of the Criminal Code to certain types of conduct of public officials.
This chapter includes the key authorities regarding this regulatory system.
The regulatory design of government ethics shares features with other “code” systems -- securities regulation, bankruptcy law, corporate law, tax, and others. The design also shares some of the defects of other regulatory systems. These design defects include the overlap between rules-based and principles-based systems, substantial regulatory costs and trade-offs concerning the goals of government, rules that are over and under inclusive, and others. An understanding of these features and flaws is important to the ongoing project of improving the government ethics system.
4.1 U.S. Constitution Art. I, § 9, cl. 8 (Foreign Emoluments Clause) 4.1 U.S. Constitution Art. I, § 9, cl. 8 (Foreign Emoluments Clause)
No Title of Nobility shall be granted by the United States: And no Person holding any Office of Profit or Trust under them, shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.
4.2. 18 U.S.C. §§ 201-203, 205, 207-209, 216, 218, and 219
4.3 18 U.S.C. § 1001: False Statements to Federal Officer 4.3 18 U.S.C. § 1001: False Statements to Federal Officer
(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully-
(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.
(b) Subsection (a) does not apply to a party to a judicial proceeding, or that party's counsel, for statements, representations, writings or documents submitted by such party or counsel to a judge or magistrate in that proceeding.
(c) With respect to any matter within the jurisdiction of the legislative branch, subsection (a) shall apply only to-
(1) administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch; or
(2) any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.
(June 25, 1948, ch. 645, 62 Stat. 749 ; Pub. L. 103–322, title XXXIII, §330016(1)(L), Sept. 13, 1994, 108 Stat. 2147 ; Pub. L. 104–292, §2, Oct. 11, 1996, 110 Stat. 3459 ; Pub. L. 108–458, title VI, §6703(a), Dec. 17, 2004, 118 Stat. 3766 ; Pub. L. 109–248, title I, §141(c), July 27, 2006, 120 Stat. 603 .)
4.4 Executive Order 12674 (Apr. 12, 1989)("14 Principles") 4.4 Executive Order 12674 (Apr. 12, 1989)("14 Principles")
Principles of Ethical Conduct for Government Employees
"By virtue of the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to establish fair and exacting standards of ethical conduct for all executive branch employees, it is hereby ordered as follows:”
Part I Principles of Ethical Conduct
Section 101. Principles of Ethical Conduct
To ensure that every citizen can have complete confidence in the integrity of the Federal Government, each Federal employee shall respect and adhere to the fundamental principles of ethical service as implemented in regulations promulgated under sections 201 and 301 of this order:
(a) Public service is a public trust. requiring employees to place loyalty to the Constitution, the laws, and ethical principles above private gain.
(b) Employees shall not hold financial interests that conflict with the conscientious performance of duty. (c) Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to futher any private interest.
(d) An employee shall not, except pursuant to such reasonable exceptions as are provided by regulation, solicit or accept any gift or other item of monetary value from any person or entity seeking official action from. doing business with, or conducting activities regulated by the employee's agency, or whose interests may be substantially affected by the performance or nonperformance of the employee's duties.
(e) Employees shall put forth honest effort in the performance of their duties.
(f) Employees shall make no unauthorized commitments or promises of any kind purporting to bind the Government.
(g) Employees shall not use public office for private gain.
(h) Employees shall act impartially and not give preferential treatment to any private organization or individual.
(i) Employees shall protect and conserve Federal property and shall not use it for other than authorized activities.
(j) Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that confiict with official Government duties and responsibIlities.
(k) Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities. (l) Employees shall satisfy In good faith their obligations as citizens, including all just financial obligations, especially those such as Federal, State, or local taxes-that are imposed by law.
(m) Employees shall adhere to all laws and regulations that provide equal opportunity for all Arnericaas reger:lless of race, color, religion, sex, national origin. age, or handicap.
(n) Employees shall endeavnor to avoid any actions creating the appearance that they are violating the law or the ethical standards promulgated pursuant to this order.
Sec. 102. Limitations on Outside Earned Income
(a) No employee who is appointed by the President to a full-time noncar reer position in the executive branch (including full-time noncareer employees in the White House Office, the Office of Policy Development, and the Office of Cabinet Affairs), shall receive any earned income for any outside employment or activity performed during that Presidential appointment.
(b) The prohibition set forth in subsection (a) shall not apply to any full-time noncareer employees employed pursuant to 3 U.S.C. 105 and 3 U.S.C. 107(a) at salaries below the minimum rate of basic pay then paid for GS-9 of the General Schedule. Any outside employment must comply with relevant agency standards of conduct, including any requirements for approval of outside employment.
Part II Office of Government Ethics Authority
Sec. 201. The Office of Government Ethics
The Office of Government Ethics shall be responsible for administering this order by:
(a) Promulgating, in consultation with the Attorney General and the Office of Personnel Management, regulations that establish a single, comprehensive, and clear set of executive-branch standards of conduct that shall be objective, reasonable, and enforceable.
(b) Developing, disseminating, and periodically updating an ethics manual for employees of the executive branch describing the applicable statutes, rules, decisions, and policies.
(c) Promulgating, with the concurrence of the Attorney General, regulations interpreting the provisions of the post-employment statute, section 207 of title 18, United States Code; the general conflict-of-interest statute, section 208 of title 18, United States Code; and the statute prohibiting supplementation of salaries, section 209 of title 18, United States Code.
(d) Promulgating, in consultation with the Attorney General and the Office of Personnel Management, regulations establishing a system of non-public (confidential) financial disclosure by executive branch employees to complement the system of public disclosure under the Ethics in Government Act of 1978. Such regulations shall include criteria to guide agencies in determining which employees shall submit these reports.
(e) Ensuring that any implementing regulations issued by agencies under this order are consistent with and promulgated in accordance with this order.
Sec. 202. Executive Office of the President
In that the agencies within the Executive Office of the President (EOP) currently exercise functions that are not distinct and separate from each other within the meaning and for the purposes of section 207(e) of title 18, United States Code, those agencies shall be treated as one agency under section 207(c) of title 18, United States Code.
Part III Agency Responsibilities
Sec. 301. Agency Responsibilities
Each agency head is directed to:
(a) Supplement, as necessary and appropriate the comprehensive executive branch-wide regulations of the Office of Government Ethics, with regulations of special applicability to the particular functions and activities of that agency. Any supplementary agency regulations shall be prepared as addenda to the branch-wide regulations and promulgated jointly with the Office of Government Ethics, at the agency's expense, for inclusion in Title 5 of the Code of Federal Regulations.
(b) Ensure the review by all employees of this order and regulations promulgated pursuant to the order.
(c) Coordinate with the Office of Government Ethics in developing annual agency ethics training plans. Such training shall include mandatory annual briefings on ethics and standards of conduct for all employees appointed by the President, all employees in the Executive Office of the President, all officials required to file public or nonpublic financial disclosure reports, all employees who are contracting officers and procurement officials, and any other employees designated by the agency head.
(d) Where practicable, consult formally or informally with the Office of Government Ethics prior to granting any exemption under section 208 of title 18, United States Code, and provide the Director of the Office of Government Ethics a copy of any exemption granted.
(e) Ensure that the rank, responsibilities, authority, staffing, and resources of the Designated Agency Ethics Official are sufficient to ensure the effectiveness of the agency ethics program. Support should include the provision of a separate budget line item for ethics activities, where practicable.
Part IV Delegations of Authority
Sec. 401. Delegations to Agency Heads
Except in the case of the head of an agency, the authority of the President under sections 203(d), 205(e), and 208(b) of title l8, United States Code, to grant exemptions or approvals to individuals is delegated to the head of the agency in which an individual requiring an exemption or approval is employed or to which the individual (or the committee, commission board, or similar group employing the individual) is attached for purposes of administration.
Sec. 402. Delegations to the Counsel to the President
(a) Except as provided in section 401, the authority of the President under sections 205(d), 205(e), end 208(b) of title 18, United States Code, to grant exemptions or approvals for Presidential appointees to committees, commissions, boards, or similar groups established by the President is delegated to the Counsel to the President. (b) The authority of the President under sections 208(d), 205(e), and 208(b) of title 18, United States Code, to grant exemptions or approvals is delegated to the Counsel to the President.
Sec. 403. Delegation Regarding Civil Service
The Office of Personnel Management and the Office of Government Ethics, as appropriate, are delegated the authority vested in the President by 5 U.S.C. 7301 to establish general regulations for the implementation of this Executive order.
Part V General Provisions
Sec. 501. Revocations
The following Executive orders are hereby revoked:
(a) Executive Order No. 11222 of May 8, 1965.
(b) Executive Order No. 12565 of September 25, 1986.
Sec. 502. Savings Provision
(a) All actions already taken by the President or by his delegates concerning matters affected by this order and in force when this order is issued, including any regulations issued under Executive Order 11222, Executive Order 12565, or statutory authority, shall, except as they are irreconcilable with the provisions of this order or terminate by operation of law or by Presidential action, remain in effect until properly amended, modified, or revoked pursuant to the authority conferred by this order or any regulations promulgated under this order. Notwithstanding anything in section 102 of this order, employees may carry out preexisting contractual obligations entered into before April 12, 1989. "(b) Financial reports filed in confidence (pursuant to the authority of Executive Order No. 11222, 5 C.F.R. part 735, and individual agency regulations) shall continue to be held in confidence. "Sec 503. Definitions. For purposes of this order, the term: (a) Contracting officers and procurement officials' means all such officers end officials as defined in the Office of Federal Procurement Policy Act Amendments of 1988. (b)Employee' means any officer or employee of an agency, including a special Government employee.
(c) `Agency' means any executive agency as defined in 5 U.S.C. Executive Order 12674 105, including any executive department as defined in 5 U.S.C. 101, Government corporation as defined in 5 U.S.C. 103, or an independent establishment in the executive branch as defined in 5 U.S.C. 104 (other then the General Accounting Office), and the United States Postal Service end Postal Rate Commission.
(d) `Head of an agency' means, in the case of as agency headed by more then one person, the chair or comparable member of such agency.
(e) `Special Government employee' means a special Government em ployee as defined in 18 U.S.C. 202(a).
Sec. 504. Judicial Review
This order is intended only to improve the internal management of the executive brench end is not intended to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers, or any person.".
GEORGE BUSH THE WHITE HOUSE, October 17, 1990.
4.5. 5 CFR Part 2635, Subpart D ("Appearance" Regulations)
4.6 5 CFR § 2635.702 (Public Office for Private Gain) 4.6 5 CFR § 2635.702 (Public Office for Private Gain)
An employee shall not use his public office for his own private gain, for the endorsement of any product, service or enterprise, or for the private gain of friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity, including nonprofit organizations of which the employee is an officer or member, and persons with whom the employee has or seeks employment or business relations. The specific prohibitions set forth in paragraph (a) through (d) of this section apply this general standard, but are not intended to be exclusive or to limit the application of this section.
(a) Inducement or coercion of benefits. An employee shall not use or permit the use of his Government position or title or any authority associated with his public office in a manner that is intended to coerce or induce another person, including a subordinate, to provide any benefit, financial or otherwise, to himself or to friends, relatives, or persons with whom the employee is affiliated in a nongovernmental capacity.
Example 1:
Example 2:
(b) Appearance of governmental sanction. Except as otherwise provided in this part, an employee shall not use or permit the use of his Government position or title or any authority associated with his public office in a manner that could reasonably be construed to imply that his agency or the Government sanctions or endorses his personal activities or those of another. When teaching, speaking, or writing in a personal capacity, he may refer to his official title or position only as permitted by §2635.807(b). He may sign a letter of recommendation using his official title only in response to a request for an employment recommendation or character reference based upon personal knowledge of the ability or character of an individual with whom he has dealt in the course of Federal employment or whom he is recommending for Federal employment.
Example 1:
(c) Endorsements. An employee shall not use or permit the use of his Government position or title or any authority associated with his public office to endorse any product, service or enterprise except:
(1) In furtherance of statutory authority to promote products, services or enterprises; or
(2) As a result of documentation of compliance with agency requirements or standards or as the result of recognition for achievement given under an agency program of recognition for accomplishment in support of the agency's mission.
Example 1:
Example 2:
Example 3:
Example 4:
(d) Performance of official duties affecting a private interest. To ensure that the performance of his official duties does not give rise to an appearance of use of public office for private gain or of giving preferential treatment, an employee whose duties would affect the financial interests of a friend, relative or person with whom he is affiliated in a nongovernmental capacity shall comply with any applicable requirements of §2635.502.
(e) Use of terms of address and ranks. Nothing in this section prohibits an employee who is ordinarily addressed using a general term of address, such as “The Honorable”, or a rank, such as a military or ambassadorial rank, from using that term of address or rank in connection with a personal activity.
4.7. Lobbying Disclosure Act, 2 U.S.C. § 1601 et seq.
4.8. Foreign Agents Registration Act, 22 U.S.C. § 611 et seq.
4.9. U.S. v. Stadd, 636 F.3d 630 (D.C. Cir. 2011)
4.10. OGE DO-06-029: "Particular Matter Involving Specific Parties," "Particular Matter," and "Matter" (Oct. 4, 2006)
4.11. OGE DAEOgram 98 x 11, Letter to Deputy Ethics Official “Personal and Substantial” as Modifier of “Participation” (July 17, 1998)
4.12. OLC Opinion, “Applicability of the Emoluments Clause and the Foreign Gifts and Decorations Act to the President’s Receipt of the Nobel Peace Prize” (Dec. 7, 2009)
4.13 18 U.S.C. § 1341. Frauds and Swindles 4.13 18 U.S.C. § 1341. Frauds and Swindles
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
4.14 18 U.S.C. § 1343. Fraud by Wire, Radio or Television 4.14 18 U.S.C. § 1343. Fraud by Wire, Radio or Television
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
4.15 18 U.S.C. § 1346. Definition of "scheme or artifice to defraud" 4.15 18 U.S.C. § 1346. Definition of "scheme or artifice to defraud"
§1346. Definition of "scheme or artifice to defraud"
For the purposes of this chapter, the term "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services.
(Added Pub. L. 100–690, title VII, §7603(a), Nov. 18, 1988, 102 Stat. 4508 .)
4.16 18 U.S.C. § 1951 ("Hobbs Act") 4.16 18 U.S.C. § 1951 ("Hobbs Act")
§1951. Interference with commerce by threats or violence
(a) Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined under this title or imprisoned not more than twenty years, or both.
(b) As used in this section-
(1) The term "robbery" means the unlawful taking or obtaining of personal property from the person or in the presence of another, against his will, by means of actual or threatened force, or violence, or fear of injury, immediate or future, to his person or property, or property in his custody or possession, or the person or property of a relative or member of his family or of anyone in his company at the time of the taking or obtaining.
(2) The term "extortion" means the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear, or under color of official right.
(3) The term "commerce" means commerce within the District of Columbia, or any Territory or Possession of the United States; all commerce between any point in a State, Territory, Possession, or the District of Columbia and any point outside thereof; all commerce between points within the same State through any place outside such State; and all other commerce over which the United States has jurisdiction.
(c) This section shall not be construed to repeal, modify or affect section 17 of Title 15, sections 52, 101–115, 151–166 of Title 29 or sections 151–188 of Title 45.
(June 25, 1948, ch. 645, 62 Stat. 793 ; Pub. L. 103–322, title XXXIII, §330016(1)(L), Sept. 13, 1994, 108 Stat. 2147.)
4.17 18 U.S.C. § 666. Theft or Bribery Concerning Programs Receiving Federal Funds 4.17 18 U.S.C. § 666. Theft or Bribery Concerning Programs Receiving Federal Funds
(a) Whoever, if the circumstance described in subsection (b) of this section exists—
(1) being an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof—
(A) embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that—
(i) is valued at $5,000 or more, and
(ii) is owned by, or is under the care, custody, or control of such organization, government, or agency; or
(B) corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving any thing of value of $5,000 or more; or
(2) corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State, local or Indian tribal government, or any agency thereof, in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more; shall be fined under this title, imprisoned not more than 10 years, or both.
(b) The circumstance referred to in subsection (a) of this section is that the organization, government, or agency receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance.
(c) This section does not apply to bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business.
(d) As used in this section—
(1) the term "agent" means a person authorized to act on behalf of another person or a government and, in the case of an organization or government, includes a servant or employee, and a partner, director, officer, manager, and representative;
(2) the term "government agency" means a subdivision of the executive, legislative, judicial, or other branch of government, including a department, independent establishment, commission, administration, authority, board, and bureau, and a corporation or other legal entity established, and subject to control, by a government or governments for the execution of a governmental or intergovernmental program;
(3) the term "local" means of or pertaining to a political subdivision within a State;
(4) the term "State" includes a State of the United States, the District of Columbia, and any commonwealth, territory, or possession of the United States; and
(5) the term "in any one-year period" means a continuous period that commences no earlier than twelve months before the commission of the offense or that ends no later than twelve months after the commission of the offense. Such period may include time both before and after the commission of the offense.