Executive branch employees have a continuing obligation to take the actions necessary to comply with ethics laws and regulations concerning conflicting financial interests and impartiality. Executive branch agencies are required to educate employees about these and other ethics provisions. Moreover, many employees are required to file periodic financial disclosure reports.
Disqualification Required by Conflict of Interest Statute
A criminal conflict of interest statute, 18 U.S.C. § 208, prohibits an employee from participating personally and substantially, in an official capacity, in any “particular matter” that would have a direct and predictable effect on the employee’s own financial interests or on the financial interests of:
- the employee’s spouse or minor child;
- a general partner of a partnership in which the employee is a limited or general partner;
- an organization in which the employee serves as an officer, director, trustee, general partner, or employee; or
- a person with whom the employee is negotiating for or has an arrangement concerning prospective employment.
A “particular matter” is virtually any Government matter to which an employee might be assigned, including policy matters and matters involving specific parties, such as contracts or grants. (A few matters in Government, however, may be so broad in scope that the conflict of interest law does not require an employee’s disqualification even though the employee’s own or “imputed” financial interests are among those affected by the matter.)
Disqualification (“recusal”) is mandatory in the circumstances specified in the statute. Moreover, disqualification is often the appropriate way to prevent a conflict of interest in the long term, unless an “exemption” applies or the circumstances warrant use of other means of resolving conflicts of interest.
Example: John owns stock in ABC Corporation. John may not work personally and substantially on any particular matter that would have a direct and predictable effect on the financial interests of ABC Corporation unless an exemption applies or the potential conflict of interest is resolved in another way, such as by requiring John to sell the stock.
Disqualification Warranted Due to Impartiality Concerns
An executive branch-wide regulation recognizes that a reasonable person may believe that an employee’s impartiality can be influenced by interests other than the employee’s own or those that are imputed to the employee by the conflict of interest laws. Under 5 C.F.R. § 2635.502, employees are required to consider whether their impartiality would be questioned whenever their involvement in a “particular matter involving specific parties” might affect certain personal or business relationships.
The term “particular matter involving specific parties” refers to a subset of all “particular matters,” and includes Government matters such as a contract, grant, permit, license, or loan. If a particular matter involving specific parties is likely to have a direct and predictable effect on the financial interests of a member of the employee’s household, or if a person with whom the employee has a “covered relationship” is or represents a party to such matter, the employee must consider whether a reasonable person would question the employee’s impartiality in the matter. An employee has a covered relationship with:
- a person with whom the employee has or seeks a business, contractual, or other financial relationship;
- a person who is a member of the employee’s household or is a relative with whom the employee has a close personal relationship;
- a person for whom the employee’s spouse, parent, or dependent child serves or seeks to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor, or employee;
- any person for whom the employee has within the last year served as an officer, director, trustee, general partner, agent, attorney, consultant, contractor, or employee; or
- any organization (other than a political party) in which the employee is an active participant.
If the employee concludes that participation in such a matter would cause a reasonable person to question the employee’s impartiality, the employee should not work on the matter pending possible authorization from the appropriate agency official. Moreover, an employee should not work on any matter if the employee is concerned that circumstances other than those expressly described in the regulation would raise a question regarding the employee’s impartiality. The employee should follow agency procedures so that the agency can determine whether participation is appropriate.
Example: Jane’s father leaves his position as a professor to become president of a non-profit organization. He signs a grant proposal on behalf of the organization and submits it to Jane’s agency. If Jane is assigned to review the proposal, she should not work on it and should follow agency procedures to ask if she must be disqualified from the matter.
Disqualification Required Due to Extraordinary Payment
Under 5 C.F.R. § 2635.503, an individual must be disqualified for two years, in certain circumstances, from any particular matter in which the individual’s former employer is a party or represents a party. The disqualification requirement applies if, prior to joining the Government, the individual received a special severance payment or other benefit in excess of $10,000 from the former employer (and provided certain other factors are present).
Disqualification Required by Ethics Pledge
Executive Order 13490 requires every full-time political appointee, appointed on or after January 20, 2009, must sign an Ethics Pledge. Under the Ethics Pledge, if an appointee served as a registered lobbyist at any time during the two years prior to appointment, the appointee cannot serve in an executive agency for a period of two years after he lobbied that particular agency. Even if not barred from serving in an agency (e.g., because the appointee lobbied the legislative branch only), the Ethics Pledge requires a two-year disqualification from the particular matters and specific issue areas on which the appointee lobbied. In addition, all appointees must be disqualified for two years from particular matters involving specific parties in which a former employer or former client is or represents a party. Also, the Ethics Pledge generally prohibits an employee from having a meeting or communication with a former employer or former client concerning any matter unless the meeting involves a multiplicity of parties. The appointee’s designated agency ethics official may waive one or more of these restrictions.
Restriction on Holding Specified Property
An agency may, by supplemental agency regulation, prohibit or restrict all or a group of agency employees from holding certain financial interests. For example, some regulatory agencies prohibit employees from owning stock in any regulated entity. A few agencies extend such restrictions to the employee’s spouse and minor children. Also, employees of some agencies are subject to statutory provisions that restrict the holding of certain financial interests.
Payment Prohibited by Criminal Conflict of Interest Statute
Under a criminal conflict of interest law, 18 U.S.C. § 209, an employee may not receive any salary or supplementation of salary, from any person other than the Government, as compensation for services as a Government employee. Issues under this statute can arise, for example, if a former employer makes a payment to a Government employee and there is an indication that the payment is intended to compensate the employee for doing his Government job rather than to compensate the person for past service to the former employer (or for some other reason unrelated to Government service).
Note: Some ethics provisions discussed above apply differently to an employee who qualifies as a "special Government employee" (SGE), or do not apply at all.
The information on this page is not a substitute for individual advice. Agency ethics officials should be consulted about specific situations.