Former Federal Trade Officials
Laws on Post-Employment Activities, Foreign Representation, and Lobbying Gao ID: GAO-10-766 June 23, 2010Congress 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.
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.
GAO-10-766, Former Federal Trade Officials: Laws on Post-Employment Activities, Foreign Representation, and Lobbying
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
June 2010:
Former Federal Trade Officials:
Laws on Post-Employment Activities, Foreign Representation, and
Lobbying:
GAO-10-766:
GAO Highlights:
Highlights of GAO-10-766, a report to congressional requesters.
Why GAO Did This Study:
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.
What GAO Found:
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.
Table: Comparison of the Revolving Door, FARA, and LDA Laws:
Individuals affected:
Revolving Door: Federal executive branch employees as well as certain
restrictions for members of Congress, their staff, and legislative
branch employees.
FARA: All individuals acting, in the United States, as agents of
foreign principals.
LDA: All individuals working as lobbyists a certain percentage of the
time.
Purpose:
Revolving Door: Conflict of interest law that prohibits certain
activities with the intent to influence government action for various
periods of time once the employee leaves federal employment.
FARA: Disclosure law that requires registration with Justice‘s
Registration Unit. Foreign agents‘ registration records publicly
available.
LDA: Disclosure law that requires registration with the Secretary of
the Senate and the Clerk of the House of Representatives. Lobbyists‘
registration records publicly available.
Source: GAO analysis of Revolving Door, FARA, and LDA.
Note: Further Revolving Door limitations are placed on procurement
personnel. Exemptions exist for Revolving Door, FARA, and LDA.
[End of table]
View [hyperlink, http://www.gao.gov/products/GAO-10-766] or key
components. For more information, contact Loren Yager at (202) 512-
4347 or yagerl@gao.gov.
[End of section]
Contents:
Letter:
Background:
Post-Employment Restrictions for Former Federal Officials and
Disclosure Laws Related to Foreign Representation and Lobbying:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Overview of Revolving Door Law and Regulations:
Appendix III: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Comparison of the Revolving Door, FARA, and LDA Laws6:
Figure:
Figure 1: Number of Senior and Very Senior Officials Who Separated
from USTR, ITA, and USITC, 2004 - 20098:
Abbreviations:
FARA: Foreign Agents Registration Act:
ITA: International Trade Administration:
USITC: U.S. International Trade Commission:
LDA: Lobbying Disclosure Act:
OGE: Office of Government Ethics:
USTR: Office of the United States Trade Representative:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
June 23, 2010:
Congressional Requesters:
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.[Footnote 1] 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[Footnote 2] 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.[Footnote 3]
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[Footnote 4] 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.
Background:
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.[Footnote 5] 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"[Footnote 6]
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.
Post-Employment Restrictions for Former Federal Officials and
Disclosure Laws Related to Foreign Representation and Lobbying:
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.
Table 1: Comparison of the Revolving Door, FARA, and LDA Laws:
Individuals affected;
Revolving Door: Federal executive branch employees as well as certain
restrictions for members of Congress, their staff, and legislative
branch employees;
FARA: All individuals acting, in the United States, as agents of
foreign principals;
LDA: All individuals working as lobbyists a certain percentage of the
time.
Purpose;
Revolving Door: Conflict of interest law that prohibits certain
activities with the intent to influence government action for various
periods of time once the employee has left federal government
employment. Further limitations are placed upon the post-government
private employment activities of former procurement personnel;
FARA: Disclosure law that requires registration with Justice's
Registration Unit. Foreign agents' registration records are publicly
available;
LDA: Disclosure law that requires registration with the Secretary of
the Senate and the Clerk of the House of Representatives. Lobbyists'
registration records are publicly available.
Exemptions;
Revolving Door: Some post-employment restrictions do not apply to
certain duties carried out by elected officials; testimony given under
oath; communications made on behalf of educational, medical, or
international organizations; communications made for providing
scientific information, if approved by the former agency and with OGE
consultation; and certain political candidates' communications;
FARA: Numerous exemptions exist for legal, commercial, diplomatic,
religious, scholastic, scientific, and humanitarian activities, and
for instances in which the foreign principal is a foreign government,
the defense of which the President has deemed vital to the interest of
the United States. In addition, certain individuals registered under
LDA are exempt from registering under FARA;
LDA: Communications made on behalf of a foreign government or foreign
political party by an individual registered under FARA are not
considered "lobbying contacts," and these individuals are exempt from
LDA registration. Lobbyists who do not meet certain financial
thresholds for their lobbying activities are not required to register.
Compliance and enforcement;
Revolving Door: The Department of Justice investigates and prosecutes
criminal and civil violations;
FARA: Justice's Registration Unit relies primarily on foreign agents'
voluntary compliance. The Registration Unit sends letters of inquiry
to individuals it considers potential registrants;
LDA: The Secretary of the Senate and Clerk of the House of
Representatives refer cases of noncompliance to the U.S. Attorney's
Office for the District of Columbia.
Penalties;
Revolving Door: Civil and criminal penalties exist for knowing and
willful violations of the law;
FARA: Civil and criminal penalties exist for willful violations of
FARA requirements and for willful false statements or omissions on
FARA registration statements and supplements;
LDA: Civil penalties exist for knowingly failing to comply with the
law. Criminal penalties exist for knowingly and corruptly failing to
comply with the law.
Source: GAO analysis of Revolving Door, FARA, and LDA.
[End of table]
Revolving Door Law:
Revolving Door Restrictions More Stringent for Former Senior and Very
Senior Officials:
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[Footnote 7] or who meet a specific
financial threshold--86.5 percent of Executive Schedule Level II.
[Footnote 8] 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
[Footnote 9] of the Executive Schedule, and employees in certain other
named and appointed positions.[Footnote 10]
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 separated from USITC (see figure 1).
Figure 1: Number of Senior and Very Senior Officials Who Separated
from USTR, ITA, and USITC, 2004-2009:
[Refer to PDF for image: table]
Agency: USTR;
2004, Number of all separations: 15;
2004; Number of separations that were senior or very senior employees:
2;
2005, Number of all separations: 25;
2005; Number of separations that were senior or very senior employees:
4;
2006, Number of all separations: 23;
2006; Number of separations that were senior or very senior employees:
2;
2007, Number of all separations: 29;
2007; Number of separations that were senior or very senior employees:
3;
2008, Number of all separations: 24;
2008; Number of separations that were senior or very senior employees:
2;
2009, Number of all separations: 28;
2009; Number of separations that were senior or very senior employees:
6;
Total Number of all separations: 144;
Total Number of separations that were senior or very senior employees:
19.
Agency: ITA;
2004, Number of all separations: 178;
2004; Number of separations that were senior or very senior employees:
8;
2005, Number of all separations: 175;
2005; Number of separations that were senior or very senior employees:
12;
2006, Number of all separations: 185;
2006; Number of separations that were senior or very senior employees:
10;
2007, Number of all separations: 108;
2007; Number of separations that were senior or very senior employees:
3;
2008, Number of all separations: 103;
2008; Number of separations that were senior or very senior employees:
6;
2009, Number of all separations: 108;
2009; Number of separations that were senior or very senior employees:
8;
Total Number of all separations: 857;
Total Number of separations that were senior or very senior employees:
47.
Agency: USITC;
2004, Number of all separations: 64;
2004; Number of separations that were senior or very senior employees:
0;
2005, Number of all separations: 67;
2005; Number of separations that were senior or very senior employees:
2;
2006, Number of all separations: 62;
2006; Number of separations that were senior or very senior employees:
0;
2007, Number of all separations: 54;
2007; Number of separations that were senior or very senior employees:
2;
2008, Number of all separations: 58;
2008; Number of separations that were senior or very senior employees:
0;
2009, Number of all separations: 56;
2009; Number of separations that were senior or very senior employees:
1;
Total Number of all separations: 361;
Total Number of separations that were senior or very senior employees:
5.
Agency: Total;
2004, Number of all separations: 257;
2004; Number of separations that were senior or very senior employees:
10;
2005, Number of all separations: 267;
2005; Number of separations that were senior or very senior employees:
18;
2006, Number of all separations: 270;
2006; Number of separations that were senior or very senior employees:
12;
2007, Number of all separations: 191;
2007; Number of separations that were senior or very senior employees:
8;
2008, Number of all separations: 185;
2008; Number of separations that were senior or very senior employees:
8;
2009, Number of all separations: 192;
2009; Number of separations that were senior or very senior employees:
15;
Total Number of all separations: 1,362;
Total Number of separations that were senior or very senior employees:
71.
Source: GAO analysis of data provided by USTR, ITA, USITC and the
Office of Personnel Management‘s Central Personnel Data File data.
Note: The table does not include individuals who separated from one
federal agency to transfer to another; it only includes individuals
who separated entirely from government service.
[End of figure]
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.[Footnote 11] 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.[Footnote 12] According to OGE, when Congress restored
similar fast track authority in 2002, it did so by creating new
authority[Footnote 13] 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.[Footnote 14] 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.
USTR, ITA, and USITC Ethics Officials Train Current Employees and
Advise Former Employees on Revolving Door Restrictions:
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.[Footnote 15] The memorandum also
explains that the USITC's ethics counseling service is available to
employees with any questions concerning post-employment activities.
Revolving Door Enforcement:
Former government officials who violate the Revolving Door law may be
subject to criminal and civil penalties.[Footnote 16] Anyone knowingly
engaging in 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.
According to Justice officials, the U.S. Attorneys' offices and
Justice's Criminal and Civil Divisions investigate allegations of
Revolving Door violations in conjunction with Inspectors General.
[Footnote 17] 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[Footnote 18] 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.[Footnote 19] 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.
Foreign Agents Registration Act (FARA):
[Side bar:
Key FARA Terms
* ’Foreign principal“– (1) A government of a foreign country, (2) a
foreign political party, (3) an individual outside the United States
unless the person is a U.S. citizen domiciled in the United States,
(4) a combination of individuals outside the United States, unless
they are organized under or created by U.S. federal or state laws and
have their principal place of business in the United States, and (5)
any combination of persons organized under the laws of or having a
principal place of business in a foreign country.
* ’Agent of a Foreign Principal“ – Any person who acts as an agent,
representative, employee, or servant, or at the order, request, or
under the direction or control of a foreign principal, or who is
financed, supervised, controlled, or subsidized by a foreign
principal, and who, within the United States: (1) engages in political
activities in the interests of the foreign principal, (2) acts as
public relations counsel, publicity agent, information-service
employee, or political consultant for the foreign principal, (3)
solicits, collect, disburses, or dispenses money or other things of
value in the interest of the foreign principal, or (4) represents the
interests of the foreign principal before any agency or official of
the U.S. government.
End of side bar]
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.[Footnote 20] 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,[Footnote 21] 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.
Numerous FARA Exemptions:
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;
[Footnote 22] 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.[Footnote 23] 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.[Footnote 24] 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.[Footnote 25] 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.[Footnote 26] 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.[Footnote 27]
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.
[Footnote 28] However, this exemption does not apply if the foreign
principal is a foreign government or foreign political party.[Footnote
29]
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.[Footnote 30] 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.[Footnote
31]
FARA Compliance and Enforcement:
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.[Footnote 32]
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.[Footnote 33] 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.
Lobbying Disclosure Act:
[Side bar:
Key LDA Terms
* ’Lobbyists“– Individuals who are employed or retained by clients for
compensation for services that include more than one lobbying contact.
Individuals who spend less than twenty percent of their time for a
client engaged in lobbying activities within a 3-month period do not
meet the definition of lobbyist.
* ’Lobbying contact“ – Oral or written communications to covered
executive or legislative branch officials on behalf of a client
regarding (1) the formulation, modification, or adoption of federal
legislation or federal rules, regulations or policies, (2) the
administration or execution of federal programs or policies, or (3)
the nomination and confirmation of a candidate for a position that
requires Senate confirmation.
* ’Covered officials“ – Executive branch employees serving in
positions on the Executive Schedule and other high-ranking executive
branch officials, members of Congress and their employees, and certain
other legislative branch employees.
End of side bar]
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.[Footnote 34] 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.[Footnote 35] 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.
[Footnote 36]
The Secretary and the Clerk are required by law to provide guidance
and develop common standards and procedures for compliance with the
LDA.[Footnote 37] 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.
LDA exemptions:
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 excluded from the definition of a "lobbying
contact."[Footnote 38] Agents of foreign 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.
LDA Compliance and Enforcement:
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.[Footnote 39] 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.[Footnote 40] 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.
Agency Comments and Our Evaluation:
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 [hyperlink, 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.
Signed by:
Loren Yager:
Director, International Affairs and Trade:
List of Requesters:
The Honorable Louise M. Slaughter:
Chairwoman:
Committee on Rules:
House of Representatives:
The Honorable Dennis J. Kucinich:
Chairman:
Subcommittee on Domestic Policy:
Committee on Oversight and Government Reform:
House of Representatives:
The Honorable Gene Green:
House of Representatives:
The Honorable Phil Hare:
House of Representatives:
The Honorable Marcy Kaptur:
House of Representatives:
The Honorable Michael H. Michaud:
House of Representatives:
The Honorable Tim Ryan:
House of Representatives:
The Honorable Betty Sutton:
House of Representatives:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
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:[Footnote 41]
* 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.[Footnote
42]
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.
[End of section]
Appendix II: Overview of Revolving Door Law and Regulations:
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.[Footnote 43] 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.[Footnote
44] 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.
[Footnote 45] ’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.[Footnote 46]
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.[Footnote 47]
* 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.[Footnote 48] 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,[Footnote 49] which expired
in 1993. According to OGE, when Congress restored similar fast track
authority in 2002, it did so by creating new provisions[Footnote 50]
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.[Footnote 51] 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.[Footnote 52] ’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.[Footnote 53]
* 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.[Footnote 54] 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.[Footnote 55]
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.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Loren Yager (202) 512-4347 or yagerl@gao.gov.
Staff Acknowledgments:
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.
[End of section]
Footnotes:
[1] For this report, the term ’post-employment restrictions“ refers to
the laws codified at 18 U.S.C. § 207, which contains restrictions on
former officers, employees, and elected officials of the executive and
legislative branches. Other ethics laws applicable to government
employees, such as personal financial interest laws, are not addressed
here. In addition, we do not address the limitations placed upon the
post-employment activities of procurement personnel in federal
agencies.
[2] ’Foreign principals“ include governments of foreign countries,
foreign political parties, and other individuals and organizations as
defined in the Foreign Agents Registration Act. See the sidebar on
page 13 for a description of these terms. 22 U.S.C. § 611(b).
[3] GAO has conducted prior work on FARA and LDA, as well as work on
the procurement-related aspects of the Revolving Door law. Recent
reports include GAO, Post-Government Employment Restrictions and
Foreign Agent Registration: Additional Action Needed to Enhance
Implementation of Requirements, [hyperlink,
http://www.gao.gov/products/GAO-08-855] (Washington, D.C.: July 30,
2008); 2009 Lobbying Disclosure: Observations on Lobbyists‘ Compliance
with Disclosure Requirements, [hyperlink,
http://www.gao.gov/products/GAO-10-499] (Washington, D.C.: Apr. 1,
2010); and Defense Contracting: Post-Government Employment of Former
DOD Officials Needs Greater Transparency, [hyperlink,
http://www.gao.gov/products/GAO-08-485] (Washington, D.C.: May 21,
2008).
[4] Level of pay and certain designated positions are used to
categorize employees as ’senior“ or ’very senior“ under post-
employment restrictions. We chose to obtain data on former senior
officials separated from USTR, ITA, and USITC from 2004 through 2009
because that definition of ’senior“ changed in November 2003 as a
result of changes to the senior executive service compensation system.
[5] 18 U.S.C. § 207(f).
[6] ’Covered employees“ are executive branch employees serving in
positions on the Executive Schedule and other high-ranking executive
branch officials, members of Congress and their employees, and certain
other legislative branch employees.
[7] 5 C.F.R. § 2641.104.
[8] In 2009, employees at Level II of the Executive Schedule earned
$177,000 annually; 86.5 percent of that is $153,105.
[9] Employees at Level I of the Executive Schedule earned $196,700 in
2009.
[10] 5 C.F.R. § 2641.104.
[11] According to OGE regulations, ’covered information“ means agency
records that the employees had access to and which the employee knew
or should have known were designated exempt from disclosure under the
Freedom of Information Act. See 5 C.F.R. § 2641.203.
[12] See 19 U.S.C. § 2902.
[13] See 19 U.S.C. § 3803.
[14] See OGE, Report to the President and to Congressional Committees
on the Conflict of Interest Laws Relating to Executive Branch
Employment (January 2006).
[15] 19 C.F.R. § 201.15(b).
[16] 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.
[17] According to Justice officials, the responsible offices within
Justice are the Public Integrity Section within the Criminal Division
and the Fraud Section within the Commercial Litigation Branch of the
Civil Division.
[18] The survey counts 18 U.S.C. § 207 prosecutions as reported to OGE
by Justice officials.
[19] According to the survey, former employees have been prosecuted
under sections 207 (a), 207(a)(1), 207(a)(2), 207(c), 207(c)(1), and
207 (e) of Title 18 of the U.S. Code from 1990 through 2008.
[20] 22 U.S.C. § 611 et seq.
[21] This number may not include all former senior official separated
from USTR, ITA, and USITC between 2004 and 2009 who represented
foreign principals because individuals engaged in exempted activities
under FARA, such as diplomatic, commercial, and legal activities, and
those registered under the Lobbying Disclosure Act, are not required
to register.
[22] 28 C.F.R. § 5.300.
[23] 28 C.F.R. §§ 5.301-5.302.
[24] 22 U.S.C. § 613(d)-(e).
[25] 28 C.F.R. § 5.304(b).
[26] 22 U.S.C. § 613(g).
[27] 28 C.F.R. § 5.306.
[28] 22 U.S.C. § 613(h).
[29] 28 C.F.R. § 5.307.
[30] 22 U.S.C. § 613(f).
[31] 28 C.F.R. § 5.305.
[32] However, ethics officials we spoke to at USTR, ITA, and USITC
said that they did not typically counsel employees on FARA
requirements since the requirement is not specific to government
employees.
[33] See GAO, Post-Government Employment Restrictions and Foreign
Agent Registration: Additional Action Needed to Enhance Implementation
of Requirements, [hyperlink, http://www.gao.gov/products/GAO-08-855]
(Washington, D.C.: July 30, 2008).
[34] 2 U.S.C. § 1601.
[35] Federal law requires that a lobbying firm register if the firm‘s
total income from a client exceeds or is expected to exceed $2,500 in
a quarterly reporting period. An organization that employs internal
lobbyists must register if the organization‘s lobbying expenses exceed
or are expected to exceed $10,000 in a quarterly period. According to
an official at the Clerk of the House of Representatives, these
financial thresholds have increased due to consumer price index
adjustments. Currently, a lobbying firm is exempt from registration
for a particular client if its total income from that client for
lobbying activities does not exceed and is not expected to exceed
$3,000 during a quarterly period. Organizations employing in-house
lobbyists file a single registration, but are exempt from registration
if their total expenses for lobbying activities do not exceed and are
not expected to exceed $11,500 during a quarterly period. 2 U.S.C.
§1603(a).
[36] 2 U.S.C. § 1603.
[37] 2 U.S.C. § 1605.
[38] 2 U.S.C. § 1602(8)(B)(iv).
[39] 2 U.S.C. § 1606(a).
[40] The Honest Leadership and Open Government Act of 2007 mandated
GAO to use a random sample to annually determine the extent to which
lobbyists are able to provide support for information contained in
their reports and registrations, provide recommendations related to
improving compliance by lobbyists, and report on resources and
authorities available to Justice for effective enforcement of the LDA.
See GAO, 2009 Lobbying Disclosure: Observations on Lobbyists‘
Compliance with Disclosure Requirements, [hyperlink,
http://www.gao.gov/products/GAO-10-499] (Washington, D.C.: Apr. 1,
2010); 2008 Lobbying Disclosure: Observations on Lobbyists‘ Compliance
with Disclosure Requirements, [hyperlink,
http://www.gao.gov/products/GAO-09-487] (Washington, D.C.: Apr. 1,
2009); and Lobbying Disclosure: Observations on Lobbyists‘ Compliance
with Disclosure Requirements, [hyperlink,
http://www.gao.gov/products/GAO-08-1099] (Washington, D.C.: Sept. 30,
2008).
[41] 18 U.S.C. § 207(c).
[42] In 2003, the rate of basic pay payable for Level 5 of the Senior
Executive Service was $134,000.
[43] 5 C.F.R. § 2641.201(d).
[44] 5 C.F.R. § 2641.201(e).
[45] 5 C.F.R. § 2641.201(h).
[46] 5 C.F.R. § 2641.201(i).
[47] 5 C.F.R. § 2641.202.
[48] See 5 C.F.R. § 2641.203.
[49] See section 1102 of the Omnibus Trade and Competitiveness Act of
1988 (codified at 19 U.S.C. § 2902).
[50] See 19 U.S.C. § 3803.
[51] 5 C.F.R. § 2641.104.
[52] 05 C.F.R. § 2641.204(i).
[53] 15 C.F.R. § 2641.104.
[54] 22 U.S.C. § 611(e).
[55] 22 U.S.C. § 611(f).
[End of section]
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