Gilman, Stuart (1997) case study for US Federal Govt.
http://www.oecd.org//puma/gvrnance/ethics/ethicsus.htm
THE MANAGEMENT OF ETHICS AND CONDUCT
IN THE PUBLIC SERVICE
THE UNITED STATES
FEDERAL GOVERNMENT
By Stuart Gilman, Office of Government Ethics, United States
(This Case Study reflects the situation in December 1995)
This report describes the management of the ethics and conduct of public servants in
the United States. Its focus is on the public service environment and on the structures
and processes at the Federal Government level, particularly within the executive
branch.
B. New Initiatives
C. The Ethics Infrastructure
Attachment A: Legislative and Executive Branch
Initiatives
Attachment B: Excerpts from the Report of the Senate
Committee on
Governmental Affairs Accompanying the Government
Performance and Results
Act of 1993
Attachment C: Executive Branch Agencies with Ethics
Responsibilities
Public Confidence in Government
Constitutional government in the United States is founded on the principle that
government authority is derived from the consent of the governed. This is reflected in
the Preamble to the US Constitution which begins by saying that "we the people . . . do
ordain and establish this Constitution for the United States of America." The notion
that public officials, whether they hold elective or non-elective office, must be
accountable to the citizenry thus has constitutional underpinnings. Public confidence is
vital to successful democratic governance.
Throughout US history there have been events that have shaken public confidence in
the integrity of the Federal Government. Often the response has been new legislation
to deal with the problem and restore public trust. For example, abuses in government
procurement during the Civil War lead to enactment of a statute that is the ancestor of
today's conflict of interest law in the Federal criminal code. More recently, the
Watergate crisis of the early 1970's lead to a series of reform measures including the
Ethics in Government Act of 1978.
By most objective measures of performance, the Federal civil service today is more
effective, productive and professional than at any time in its history. Paradoxically,
there is a broad consensus about the negative state of public confidence in the Federal
government and its institutions. There is little agreement, however, as to the cause.
Some public opinion polls reported in the media suggest that there has been a decline
in public confidence in the Federal government. The dilemma is determining the target
of the publics ire. For example, when referring to the Federal government most
Americans do not distinguish between the executive and legislative branches; or
within the executive branch between the political and career civil servants. Since
most publicised "scandals" concern political appointees or Congressmen, it is easy to
see why the entire government is often broad-brushed as corrupt.
With respect to the career civil service, the criticism that is perhaps most often
expressed is that the civil service, like the Federal Government in general, is too
large, too powerful and should be trimmed back. This is probably a more typical
criticism than that there has been a decline in the ethical standards of the average
Federal employee. In fact, empirical measures of ethical violations at both the Federal
and State level suggest that there are a relatively small number of such cases.
Nevertheless, certain highly publicised cases involving senior appointed or elected
officials can have a very detrimental effect on public confidence in Government.
There is intense scrutiny of Government officials and programs not only by the media
but also by various public interest groups. Finally, charges of ethical violations have
more and more frequently been used as a weapon against a political opponent. Related
to this is the fact that campaigning against the bureaucratic establishment in
Washington has been a feature of electoral politics for several decades. The
cumulative effect of this rhetoric has been to generate a degree of scepticism about
government and government officials.
Forces Impacting on the Public Service Environment
One factor currently affecting the environment in which public servants operate is the
current effort to reduce the size of the Federal government. There are proposals to
reorganise department structures, to consolidate agency operations, to privatise
certain functions, and even to sunset or abolish entire agencies. As an example, some
legislative proposals would take a federal electrical power administration and in
effect turn it into a completely private energy company. Finally, all agencies and
departments are going through a process of redefining themselves as they attempt to
restate their missions and develop strategic plans.
Closely related to this structural initiative is the effort to reduce government
expenditures. Government is being asked to maintain its level of services and
operations with less resources. Organisational structures have been flattened.
Personnel levels have been reduced.
This restructuring of the Federal Government has a direct impact on the civil service.
Downsizing creates insecurity to the extent that Federal employees view their
positions as being at risk. Reduced resources may create greater work demands.
Tighter agency budgets may mean delayed promotions or compensation levels that fall
behind those of the private sector. All of this may have an adverse effect on employee
morale.
Downsizing also has ethics implications. At the programmatic level, there is a risk
that agencies may not devote adequate resources to their ethics programs as they are
forced to make hard budget choices. Reduced resources (both funding and personnel)
would then place a greater (or impossible) burden on agency ethics officials as they
seek to maintain the quality of their ethics programs. In addition, complex ethics issues
are raised by privatisation and reductions in personnel. These include conflicts of
interest and seeking employment issues, as well as post-employment questions for
former Government employees. The irony is that these initiatives create a need for
more counselling and guidance at a time when agencies are trimming ethics programs.
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Ethics Developments
One ongoing development in the United States has been the establishment of new
Government offices or agencies to promote ethics and financial integrity in
Government programs and operations. Following their establishment, a number of
these agencies have subsequently been strengthened and given enhanced authority. The
1970's saw the creation of the Federal Elections Commission, the Office of
Government Ethics (OGE), the Merit Systems Protection Board (MSPB) and the
Office of Special Counsel (OSC). Also in the late 1970's a system of Inspector
General offices was brought into being. The 1980's witnessed the establishment of the
President's Council on Integrity and Efficiency, and the strengthening of OGE and
OSC. The 1990's have seen the establishment of the Office of Federal Financial
Management within the Office of Management and Budget and the reauthorization of
the independent counsel law.
A second development has been the use of disclosure as a tool for achieving greater
accountability on the part of public officials. A public financial disclosure system for
all three branches of Government was established by law in 1978. More recently, the
1989 Ethics Reform Act provided for an improved system of confidential financial
disclosure. These financial disclosure systems, which apply the principle of
transparency to the financial interests of public officials, are a basic tool for
identifying potential conflicts of interest and working out appropriate remedies. Most
recently, the mechanism of disclosure has been applied to lobbying activity under the
Lobbying Disclosure Act of 1995 which in late 1995 is pending being signed into law.
A third development has been the promulgation of more detailed rules to govern the
conduct of Government officials in both the executive and legislative branches.
Standards of Conduct for the executive branch recently issued by the Office of
Government Ethics provide specific guidance on such questions as gifts, conflicting
financial interests, impartiality, seeking employment, misuse of position and outside
activities. In 1995, both the House and Senate adopted strict gifts rules for Members
and staff.
Finally, a current development that affects all Federal Government programs,
including the ethics program, is the effort in all of the programs and operations of the
executive branch to find ways of making Government more efficient and responsive,
more performance driven. As it applies to executive branch ethics, this initiative
builds on past efforts to eliminate fraud, waste and mismanagement of Government
programs and operations through a system of inspectors general, through protection
provided to whistleblowers, and through heightened importance of chief financial
officers. The challenge now is to develop measures of effective performance of the
ethics programs.
A summary of specific ethics initiatives is provided in Attachment A.
Impetus for New Initiatives
Some legislative initiatives developed out of a high level crisis in Government such
as Watergate in the early 1970's which led to a number of political reform measures
including the Ethics in Government Act of 1978. In other instances the driving force
was the highly publicized actions of certain individual Government officials. This was
particularly true for legislation dealing with post-employment restrictions on former
Government officials. In yet other instances widespread abuse revealed the
vulnerability of a particular Government system which led to reform. This was the
case with Government procurement abuses which led to a reform of procurement law.
In the case of the Ethics Reform Act of 1989, an earlier Presidential commission on
ethics was a strong influence leading to subsequent reform. Finally, a general
influence on Government ethics is the efforts of public interest groups to focus public
attention on certain issues and the vigilant scrutiny by the media.
The major current pending issue on the Congressional political reform agenda is
amendment of the laws governing the financing of political campaigns. Recent
legislative proposals on this subject have dealt with such issues as campaign spending
limits, improved disclosure of campaign contributions and expenditures and reform of
the Federal Election Commission.
Influence of the Experience of Other Countries
Recent legislative efforts to improve efficiency and performance of the Federal
Government (and thereby reduce waste and promote greater public confidence) have
reflected an interest in the experience of other countries. In 1993, Congress passed the
Government Performance and Results Act of 1993. This legislation provided for
strategic planning and performance measurement in the Federal Government. It was
intended to reduce waste and inefficiency in Federal programs and improve the
confidence of the American people in the capability of the Federal Government. The
report of the Senate Committee on Governmental Affairs which accompanied the
Government Performance and Results Act of 1993 acknowledged that the Committee
had looked to the experience of other countries in seeking examples of efficient
government. The report exemplifies an interest in learning from the experiences of
other countries in developing a more efficient, performance based government.
Excerpts from the Committee Report are provided in Attachment B.
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The Federal System
The ethics infrastructure in the United States is in large measure dictated by the
Governmental framework ordained by the US Constitution. Because the Constitution
establishes a Federal system of Government, there are distinct systems of ethics laws
and regulations at the Federal, State and local government levels. At the Federal level,
for example, laws and regulations apply in such areas as financial disclosure, conflict
of interest, employee conduct, and mismanagement and fraud in Federal programs.
Each of the States also has its own statutes and regulations, covering many or all of
these areas, that apply within its jurisdiction. In addition, many local government
bodies have regulations, ordinances or policies that address issues of ethics and
accountability at the local level.
At the Federal level, in a number of areas, separate legal requirements apply to, and
are independently administered by, each of the three branches of Government:
legislative, judicial and executive. In the legislative branch, for example, each of the
Houses of Congress has established its own rules of conduct which are administered
by its own committees. Ethics matters fall within the scope of the Select Committee on
Ethics in the Senate and within the Committee on Standards of Conduct in the House of
Representatives. Similarly, in the judicial branch, ethics matters such as the financial
disclosure system, are administered by the Judicial Conference of the United States. In
the executive branch, the Office of Government Ethics is responsible for providing
overall direction for the individually administered ethics programs of the Federal
departments and agencies.
Elements of an Ethics Infrastructure
(a) Capacities in investigation and prosecution
Criminal justice system
The basic conflict of interest laws in the United States are criminal statutes that appear
in title 18 of the United States Code. These laws include prohibitions on bribery,
conflict of interest, supplementation of salary, representation of private interests in
matters in which the United States has an interest, and an extensive array of
post-employment restrictions on former Federal officials after they have left
Government service.
The penalty for violation of these criminal statutes includes imprisonment for up to
five years. Violations may also be processed civilly and civil penalties of up to
$50,000 may be imposed. The law also provides for injunctive relief to prohibit
specific conduct.
Possible violations of the criminal code are handled by the Department of Justice.
They may be investigated and prosecuted either by the Public Integrity Section within
the Criminal Division of the Justice Department or by the various United States
Attorney's Offices throughout the United States. The Inspector General within the
various agencies also has authority to investigate possible criminal violations.
Federal law requires that a matter that may involve violation of the criminal conflict
of interest laws be referred to the Department of Justice. If the Justice Department
decides to prosecute, it may proceed either civilly or criminally. Whenever such cases
are tried, they proceed through the regular processes of the Federal court system with
appeals to the Federal circuit courts and ultimately, of course, to the United States
Supreme Court.
Administrative Sanctions System
If the Justice Department declines prosecution, agencies may nevertheless proceed
administratively and impose administrative sanctions as warranted. The Office of the
Inspector General within an agency would typically be used to investigate any such
matters. In addition to possible follow up on matters in which criminal prosecution
has been declined, the various agencies of the executive branch also investigate
matters that originate solely as a possible violation of administrative standards of
conduct. Again these matters are handled under the regular administrative procedures
for discipline of executive branch employees. The usual range of disciplinary
sanctions, such as reprimand, suspension, dismissal, may be imposed depending on
the offense. Appeals from certain more serious sanctions imposed by an employing
agency may be taken to the Merit Systems Protection Board. Appeals from MSPB
decisions may be taken to the Federal court system.
(b) Special bodies responsible for ethics
The Office of Government Ethics (OGE)
The Office of Government Ethics was created by the Ethics in Government Act of
1978 as an office within the Office of Personnel Management. In 1989, Congress
established the Office of Government Ethics as a separate agency within the executive
branch. OGE is administered by a Director who is appointed by the President, with
the advice and consent of the Senate, for a 5-year term.
OGE provides policy leadership and direction for the ethics program in the executive
branch. This system is a decentralised one with each department or agency having the
responsibility for the management of its own ethics program. That responsibility rests
with the head of each agency who, in turn, designates a Designated Agency Ethics
Official or "DAEO" who is responsible for the day-to-day management of the ethics
program.
OGE maintains a close liaison with the ethics officials at the 129 agency ethics offices
throughout the executive branch through its desk officer system. Each OGE desk
officer has a portfolio of client agencies that he or she serves by providing
information, advice and program assistance. OGE also regularly conducts reviews of
agency ethics programs and makes appropriate recommendations for improvement of
financial disclosure systems, counselling and advice, training and other program
matters.
OGE regularly conducts training workshops for ethics officials both in Washington,
DC and at cities throughout the United States. OGE has established an ethics
information center at its office that makes educational materials available to executive
branch agencies. Other ways of communicating with agency ethics officials are
through an OGE newsletter and through the regular issuance of memoranda on a broad
range of issues. And OGE holds an annual ethics conference to exchange information
and build a strong ethics community. In 1994, OGE participated in the sponsorship of
an international conference on ethics in government. Finally, OGE maintains an
electronic bulletin board that provides an abundance of information to the ethics
community in a fast, convenient, direct way.
Other Executive Branch Agencies With Ethics Responsibilities
Within the executive branch, no single office or agency has jurisdiction for the entire
array of laws and regulations that come to mind when we think of Government ethics
and accountability. Rather there are a number of agencies and officials that have
significant responsibility for maintaining Government ethics, accountability and
employee discipline, either at the policy or the programmatic level. In some areas,
responsibility may overlap to some extent. OGE interrelates with these agencies in a
variety of ways, including consultation and referral of certain matters.
A description of other executive branch agencies with ethics responsibilities is
provided in Attachment C.
(c) Effective Accountability and Control Mechanisms
The authority that defines the boundaries of administrative discretion and
responsibility in the executive branch is the Administrative Procedure Act (APA). The
APA establishes standards against which the exercise of administrative action may be
judged. There are specific requirements for both adjudicative and rulemaking
proceedings, some of which have constitutional foundations. Where an affected party
believes that there has been a violation of the standards set forth in the APA, an
appeal may be taken to the Federal courts which have authority to set aside abuses of
administrative discretion. The ultimate judicial review of questions of the legality of
administrative agency action is provided by the United States Supreme Court.
In addition to the Administrative Procedure Act which establishes boundaries for
administrative action, there are a number of other laws that are intended to promote
greater transparency in official decision making. Most notable is the Government in
the Sunshine Act which requires that meetings of administrative agencies be open to
the public unless certain specified exceptions apply. Notice of meetings must be
provided to the public in the Federal Register. Another major mechanism for open
Government is the Freedom of Information Act which provides that Government
records must be made available upon request unless certain specific exceptions may
be applied. Finally, there is the Federal Advisory Committee Act which governs the
activity of the many advisory groups that serve executive branch agencies.
The public fiasco is protected by an array of laws that provide for financial controls
and accounting systems. An elaborate body of law dealing with the proper use of
appropriated funds has developed over the years. The Office of Inspector General in
each agency has authority to investigate misuse of public funds. Most recently a system
of Chief Financial Officers has been put into place to provide for greater
accountability. Finally, the General Accounting Office, an agency in the legislative
branch, provides oversight of Federal executive branch programs and operations.
(d) Code of Conduct/Ethics
The Office of Government Ethics has issued Standards of Ethical Conduct for
Employees of the Executive Branch that apply to all officers and employees in
executive branch agencies and departments. These regulations contain a statement of
14 general principles that should guide the conduct of Federal employees. Central to
these principles is the concept that public service is a public trust. Federal employees
must be impartial in their actions and not use public office for private gain. These
regulations also contain specific standards that provide detailed guidance in a number
of areas: gifts from outside sources, gifts between employees, conflicting financial
interests, impartiality, seeking employment, misuse of position and outside activities.
The rules are enforced through the regular disciplinary process.
The rules provide for a uniform, clear set of standards for employees throughout the
executive branch. At the same time, individual agencies may supplement the executive
branchwide standards with limited rules that are tailored to meet individual agency
needs. Areas addressed in supplemental agency standards include prohibited financial
interests, prohibited outside activities and prior approval of outside activities.
(e) Professional Socialisation Mechanisms
Each executive branch agency is required to maintain a program of ethics training to
ensure that all of its employees are aware of the requirements of the conflict of interest
laws and the standards of conduct. Agencies are required to provide one hour of
ethics training for all new agency employees to acquaint them with the ethical
obligations of public service. In addition, certain covered employees (approximately
250,000 in number) are required to receive one hour of ethics training annually.
Finally, although not required by regulation, many agencies provide ethics briefings to
employees who are leaving Government service, particularly with respect to their
obligations under the post-employment laws.
The Office of Government Ethics provides assistance to agencies by conducting ethics
training for agency ethics officials, a so-called "train the trainers" program. OGE also
develops ethics training materials such as ethics pamphlets and videotapes. Each year
OGE plans and supports an annual Government ethics conference.
(f) The Conditions of Public Service
Although the pay of Government employees lags behind that of persons in comparable
positions in the private sector, low pay is probably not as significant an adverse factor
on the civil service as the general public perception of public servants. Hostile
criticism of Government in general over the past decades has taken its toll on the civil
service. Recently Government downsizing and restructuring has had a significant
impact.
(g) Political Support -- Statements from Top Leadership
Support from the heads of agencies is absolutely critical to the effective functioning of
the executive branch ethics program. This support is important not only in terms of
setting the tone or climate within an agency but also in assuring that the agency devotes
adequate resources to the ethics program. This is especially true because the ethics
program in the executive branch is decentralised with each agency head having
responsibility for that agency's ethics program.
The overall responsibility for providing leadership and direction for the ethics
program in the executive branch resides with the US Office of Government Ethics. The
actual management of agency ethics programs is the individual responsibility of each
agency head and is carried out by the Designated Agency Ethics Official in each
agency.
In the Federal Government the recent trend has been toward more specific guidelines
for employee conduct. This is reflected in the Standards of Conduct issued by the
Office of Government Ethics. The importance of general principles, however, is
recognised in the Standards which begin with a broad statement of 14 general
principles of public service. The training efforts in the executive branch seek not only
to familiarise employees with their obligations under the specific rules, but also to
develop sound ethical judgement.
The general principles or values that are sought for the public service are reflected in
the statement of general principles in the executive branch standards of conduct. The
foremost obligation of the Federal public servant is a responsibility to the United
States Government and its citizens to place loyalty to the Constitution, laws and
ethical principles above private gain. Public service is regarded as a public trust.
Employees are expected to act impartially and not give preference to any private
organisation or individual. Public office is not to be used for private gain. Employees
should preserve the confidentiality of non-public information and not use such
information for private gain. Finally, employees are expected to avoid any actions that
would create even the appearance of a violation of law or ethical standards.
The public service in the executive branch has a number of components. The
Secretaries of the cabinet level departments, the agency heads and administrators, as
well as certain other top level officials, are political appointees. There are also a
number of other employees who serve in a confidential capacity to the political
appointees who hold their appointments outside the permanent career civil service.
The political appointees establish the policy goals for their agencies and departments
consistent with the policy and philosophy of the incumbent Administration. The
non-political career service includes career members of the Senior Executive Service.
These senior managers interact with the political appointees in the formation of policy
and in turn administer the programs of their agencies. As might be expected, questions
regarding the proper boundaries between the political and non-political components
of the public service do occur.
The US Constitution defines the boundaries between the three branches of
Government. Unlike parliamentary governmental systems, the executive and
legislative branches are separate and distinct. There is, of course, substantial liaison
between the executive and legislative branches that involves both political and career
executive branch officials.
US Federal law provides protection for persons who make appropriate disclosures of
violation of law, gross mismanagement, gross waste of funds, an abuse of authority, or
a substantial and specific danger to public health or safety. The law makes it a
prohibited personnel practice to retaliate against a whistleblower. The primary role of
the Office of Special Counsel is to protect employees, former employees, and
applicants from prohibited personnel practices.
As already noted, OGE provides overall direction for the executive branch ethics
program and has promulgated a uniform set of ethical standards for all officers and
employees of the executive branch, whether political appointees or career employees.
Individual agencies (with OGE concurrence) may supplement these standards with
rules that meet their own unique program needs. The actual administration of an ethics
program, however, is de-centralised and is the responsibility of each agency head.
The Office of Government Ethics consulted with the Department of Justice, the Office
of Personnel Management and the White House in developing a draft proposed
regulation that would establish a new set of ethical standards for executive branch
employees. A proposed regulation was then published in the Federal Register in 1991
and all interested persons were invited to comment. This proposed regulation
generated 1,068 sets of comments. Comments were submitted by executive branch
agencies, including agency Inspectors General, and more than a thousand individuals
and organisations, including Government employee organisations and unions.
Following a review of this extensive public comment, OGE issued a final regulation
in 1992 with an effective date of February 3, 1993. Where appropriate, the final
regulation incorporated the suggestions made in the comments.
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ATTACHMENT A
LEGISLATIVE AND EXECUTIVE BRANCH INITIATIVES
The following is a description of some of the specific ethics developments at the
Federal Government level in the United States. Legislation from the 1970's is included
in order to provide background information regarding the statutory basis for the ethics
infrastructure in the Federal Government. The discussion of executive branch
initiatives treats only the more recent developments.
The principal catalyst for Federal ethics legislation in recent United States history
was the Watergate crisis of the early 1970's. As a direct result of reports of financial
abuses in the 1972 Presidential election campaign, Congress amended Federal
election law by passing the Federal Elections Campaign Act of 1974. This statute set
limits on contributions by individuals, by political parties, and by political action
committees known as PAC's. It also established an independent agency, the Federal
Elections Commission, to enforce the law, facilitate disclosure and administer a
public campaign funding program.
The influence of Watergate continued to be felt in the passage of the Ethics in
Government Act of 1978. The 1978 Act established the Office of Government Ethics
within the Office of Personnel Management and charged it with providing overall
leadership and direction for the ethics program within the executive branch. The 1978
Act established a comprehensive public financial disclosure system for all three
branches of the Federal Government. It also enacted procedures for the appointment of
a special prosecutor with authority to conduct independent investigations and
prosecutions of Government officials and thereby remove politics from the
administration of justice in certain highly sensitive cases. Finally, the 1978 Act
strengthened the post-employment restrictions on former officials of the executive
branch.
The year 1978 saw the enactment of another important ethics-related law. The
Inspector General Act of 1978 established Offices of Inspector General within a
number of executive branch departments and agencies. The Inspectors General were
given a significant degree of independence (as well as subpoena power) to carry out
their responsibility for the detection and prevention of fraud, waste and
mismanagement in Government programs.
Another 1978 legislative enactment that had important ethics-related provisions was
the Civil Service Reform Act of 1978. The Civil Service Reform Act created the
Merit Systems Protection Board to oversee the personnel practices of the executive
branch and protect the integrity of the Federal merit systems. It prohibited a number of
improper personnel practices including acts of reprisal against an employee who
"blew the whistle," i.e., made a lawful disclosure of mismanagement, waste or abuse
in Government programs and operations. The Civil Service Reform Act also enlarged
the functions and powers of the Office of Special Counsel, an investigating and
litigating office within the MSPB that was authorised to receive whistleblower
complaints.
This Act required ongoing evaluations and reports of the adequacy of the systems of
internal accounting and administrative control of each executive agency. The purpose
of the Act was to avoid waste in Federal resources, funds and property by a system of
more stringent and effective internal auditing controls. Agencies were required to
report on any material weaknesses in their internal control systems. Budget requests of
the Offices of Inspector General were given close review and any changes in original
requests were required to be noted in the President's budget submitted to Congress.
The late 1980's witnessed further efforts by Congress to strengthen the ethics
infrastructure within the executive branch. In 1988, Congress passed the Office of
Government Ethics Reauthorization Act of 1988. This law removed OGE from the
Office of Personnel Management and established it as a separate executive agency.
The purpose of this legislation was to ensure the effectiveness of the executive branch
ethics program, to clarify OGE's mandate and to increase its stature, independence and
effectiveness.
In 1989, Congress took further action to strengthen the ethics organisational
infrastructure by passing the Whistleblower Protection Act of 1989. This law
established the Office of Special Counsel as an independent agency within the
executive branch that litigates before the Merit Systems Protection Board. The 1989
enactment stated that the primary role of OSC was the protection of Federal
employees, especially whistleblowers, from prohibited personnel practices.
In addition to these organisational changes, Congress took significant actions in the
late 1980's to amend substantive law. The Office of Federal Procurement Policy Act
Amendments of 1988 contained new provisions to ensure the integrity of the Federal
procurement process. These procurement provisions covered four areas: (1) post
employment, (2) seeking employment, (3) gratuities and (4) disclosure of information.
With the exception of the post-employment restrictions, the law covered not only
officers and employees but also contractors, subcontractors, consultants, experts and
advisors acting on behalf of or providing advice to an agency regarding an agency
procurement.
In late 1989, Congress enacted legislation that made a number of significant changes in
the ethics laws of the United States by passing the Ethics Reform Act of 1989. The
1989 Act expanded the coverage of post-employment law so that it covered Members
of Congress and top Congressional staff. A number of changes were made in existing
post-employment law applicable to executive branch officials and new restrictions in
the areas of trade and treaty negotiations and representation of foreign entities were
added. The Act made changes in the existing public financial disclosure system and
expressly authorised all three branches of Government to implement a system of
confidential financial reporting. It also made amendments to the criminal conflict of
interest statutes.
The Act prohibited officers and employees of all three branches from soliciting or
accepting gifts from certain prohibited sources and authorised the supervising ethics
office in each branch to issue implementing regulations. The Act also authorised
executive branch agencies to accept payment from non-federal sources for travel
expenses incurred by employees in attending meetings, conferences or other similar
activities relating to official duties.
The Act also imposed certain outside earned income limitations and employment
restrictions on covered senior officials in all three branches. Under the Act, covered
officials shall not (1) receive outside earned income in excess of 15 percent of annual
salary, (2) receive compensation from the practice of a profession that involves a
fiduciary relationship or allow the use of their names by a firm or entity providing
such services, (3) receive compensation for service as an officer or board member on
any association, corporation or other entity, and (4) receive compensation for teaching
without prior notification and approval of the appropriate ethics office.
Finally, the Act banned the receipt of honoraria by a Member of Congress, or officer
or employee of all three branches of Government regardless of salary level.
Honoraria was defined as a payment of money or anything of value for an appearance,
speech or article. This provision was challenged in court by a union of Government
employees and, in 1995, the United States Supreme Court declared the honoraria
restriction unconstitutional insofar as it applied to certain executive branch
employees. See United States v. National Treasury Employees Union, 115 S.Ct. 1003
(1995).
In 1990, Congress enacted the Chief Financial Officers Act to improve the financial
management within the executive branch and prevent losses through fraud, waste,
abuse and mismanagement of Government programs. The Act made structural changes
within the Office of Management and Budget by establishing an Office of Federal
Financial Management to set Government-wide financial management policies. The
Act also established the position of Chief Financial Officer within the cabinet
departments and certain large agencies.
In 1993, Congress reformed the Hatch Act, a law originally enacted in 1939 that
places restrictions on the political activities of Government employees. The 1993 law
relaxed some of the restrictions on Federal civilian employees to allow greater
participation, as private citizens, in the political process. At the same time, it
continued to protect Federal employees and the general citizenry from improper
political solicitations.
In 1994, Congress reauthorized the independent counsel law for five years after a
two-year hiatus caused by the expiration of the statute in 1992. The law strengthened
the fiscal and administrative controls on independent counsel proceedings, clarified
the role of the Attorney General in independent counsel matters, and made clear that
Members of Congress were covered by the law.
In 1995, both the House and the Senate amended their respective rules to drastically
restrict the acceptance of gifts. Both Senate Resolution 158 and House Resolution 250
contain a broad prohibition on the acceptance of gifts by Members and staff. The
definition of gift is comprehensive and covers any item of monetary value, including
gifts of services, transportation, lodging and meals. The rules of both Houses take
effect on January 1, 1996.
In late 1995, the Lobbying Disclosure Act of 1995 was passed by both Houses of
Congress and at the date of submission of this paper was awaiting the signature of the
President. The bill is intended to address concerns about undue influence by special
interests. It is the first major overhaul of Federal lobbying laws since the 1946
lobbying act which was generally regarded as obsolete and inadequate to deal with
lobbying activity. When enacted, the new law will require lobbyists to both the
Congress and the executive branch to register and to report on the identity of their
clients, the issues they are lobbying on, and the amount of money they are being paid.
The law will also apply stringent post-employment restrictions on the US Trade
Representative and the Deputy US Trade Representative. These officials will be
barred for life from representation of certain foreign entities after they leave office.
In 1989, the Administration undertook a comprehensive review of Federal ethics
laws. President Bush issued Executive Order 12668 which established a Commission
on Federal Ethics Law Reform to review existing Federal ethics laws, regulations and
policies and to "make recommendations to the President for legislative,
administrative, and other reforms needed to ensure full public confidence in the
integrity of all Federal public officials and employees."
In March 1989, the Commission submitted its report to the President entitled "To
Serve with Honor: Report of the President's Commission on Federal Ethics Law
Reform." The Commission was guided by a number of principles in conducting its
study: (1) ethical standards must be exacting enough to ensure that public officials act
with the utmost integrity and fulfil the public's confidence in them; (2) standards must
be fair and objective; (3) standards must be equitable across all three branches of the
Federal Government; and (4) standards must not be so unreasonably restrictive that
they discourage able citizens from entering public service. The Commission made 27
recommendations dealing with issues during employment, post-employment
restrictions, financial disclosure, the structure of Federal ethics regulation, and
remedies and enforcement mechanisms. The Commission recommended that a 1965
executive order prescribing the standards of conduct be revised and that the Office of
Government Ethics be directed to consolidate all executive branch standards of
conduct in a single set of regulations.
In April 1989, President Bush issued Executive Order 12674, "Principles of Ethical
Conduct for Government Officers and Employees." This executive order revised and
superseded the President Johnson executive order which had governed the conduct of
executive branch employees since 1965. The executive order sets forth 14 principles
of ethical conduct. The first principle stated is that public office is a public trust,
requiring employees to place loyalty to the Constitution, the laws, and ethical
principles above private gain.
The order prohibited full-time non-career officials in the executive branch, including
full-time employees in the White House Office and the Office of Policy Development,
from receiving any earned income for any outside employment or activity performed
during the Presidential appointment.
The order directed the Office of Government Ethics to promulgate a single,
comprehensive, and clear set of executive branch standards of conduct that shall be
objective, reasonable and enforceable. The order also directed OGE to promulgate
regulations establishing a system of confidential financial disclosure to complement
the system of public disclosure. The order directed executive branch agencies, in
co-ordination with OGE, to develop annual ethics training plans and to conduct annual
ethics training for certain covered employees.
As noted above, Executive Order 12674 directed OGE to develop a single, uniform,
and comprehensive set of ethical standards for officers and employees of the
executive branch. In August of 1992, the Office of Government Ethics issued a final
rule promulgating standards of conduct for executive branch employees. The rules
became effective on February 3, 1993. The rules are codified in Part 2635 of Title 5
of the Code of Federal Regulations. As noted above, the new standards grew out of
the recommendations of the President's Commission on Federal Ethics Law Reform
and Executive Order 12674 which directed the Office of Government Ethics to
promulgate a comprehensive uniform set of standards for executive branch employees
and officials. The standards incorporate the statement of general principles contained
in the executive order and set forth specific standards in the areas of gifts, conflicting
financial interests, impartiality, seeking employment, misuse of position and outside
activities. The standards replaced previous standards adopted by each agency based
on a model rule promulgated by OPM pursuant to an executive order of 1965.
On the first day of his Administration, President Clinton signed Executive Order
12834, "Ethics Commitments by Executive Branch Appointees." This order requires
certain non-career senior appointees and trade negotiators to sign a pledge which
establishes a contractual commitment regarding their post-employment activities.
Persons covered by the order must sign pledges limiting their lobbying activities for a
period of five years after the termination of employment or after personal and
substantial participation in a trade negotiation.
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ATTACHMENT B
EXCERPTS FROM THE REPORT OF THE SENATE COMMITTEE ON
GOVERNMENTAL AFFAIRS ACCOMPANYING THE GOVERNMENT
PERFORMANCE AND RESULTS ACT
OF 1993
Ethics concerns regarding matters such as waste and mismanagement are related to
concerns regarding Government efficiency and performance. Recent efforts to improve
the functioning of the Federal Government have reflected an interest in the experience
of other countries. The following are excerpts from the report of the Senate Committee
on Governmental Affairs which accompanied the Government Performance and
Results Act of 1993.
The Committee report stated:
The Committee found the use of program goal-setting and performance measurement is
a growing trend in State and local governments, and also at the national government
level in several foreign countries.
The Committee noted further that:
With regard to foreign countries experiences with performance measures, work by the
Paris-based Organisation for Economic Co-operation and Development suggests that
several countries may be 5 to 10 years ahead of the US in this effort, and that their
performance measurement efforts are a key part of broader efforts to better manage for
results. The key themes in their efforts have been, first, to better clarify agency and
managerial accountability for results by defining goals clearly, developing measures,
and reporting on progress. And second, to give managers the flexibility to manage for
results by providing them the tools and incentives to act.
The Committee cited the 1992 testimony of the then Deputy Director for Management
of the Office of Management and Budget which acknowledged a successful
performance measurement program in Australia. It also cited the experience of the
United Kingdom under its Financial Management Initiative which it compared to the
United States' Chief Financial Officers Act.
The Committee summed up its review of the experience of foreign countries as
follows:
The Committee agrees with OMB's conclusion in its hearing testimony that because of
the uniqueness of the US Federal Government's structure, "there are no domestic or
international prototypes on which we might model a Federal system." Those national
governments which have been much greater progress than our own in program
performance measurement have a Parliamentary form of government, where heads of
ministries are usually also members of Parliament. Nonetheless, as OMB points out,
"Even though no specific prototype exists, our review of these systems has been
helpful in determining what elements appear to be essential for a successful system.
The review can also help us to learn from others’ experiences and mistakes."
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ATTACHMENT C
EXECUTIVE BRANCH AGENCIES WITH ETHICS RESPONSIBILITIES
The following is a brief description of other agencies within the executive branch that
have ethics responsibilities.
OGE is involved with a number of offices and entities within the Executive Office of
the President. OGE works closely with the White House Office in the process of
clearing Presidential nominees to Senate confirmed positions, as well as on other
ethics matters. OGE participates as a member of two interagency groups located
within the Office of Management and Budget (OMB): the President's Council on
Integrity and Efficiency (PCIE) and the Executive Council on Integrity and Efficiency
(ECIE). Both groups are charged with promoting integrity and effectiveness in Federal
programs. Also located within OMB is the Office of Federal Procurement Policy
(OFPP) which has responsibility for providing overall direction of procurement
policy and leadership in the development of procurement systems of the executive
agencies. OFPP plays a key role in formulating the uniform Federal procurement
regulations that are issued by the Federal Acquisition Regulatory Council. OGE
co-ordinates with the Council on the issuance of regulations under the Procurement
Integrity Act. OGE also maintains a close liaison with OMB regarding pending
legislation with ethics implications.
The responsibility for bringing both criminal and civil actions to enforce the Federal
conflict of interest statutes resides with the Public Integrity Section within the
Criminal Division of the US Department of Justice and the Offices of the United States
Attorneys. OGE, as are all agencies, is obligated by statute to refer to the Justice
Department cases that may involve possible violation of the criminal conflicts
statutes. OGE also consults with the Office of Legal Counsel (OLC) in the Department
in connection with the issuance of OGE regulations. OGE regularly confers with OLC
on issues of interpretation of the conflict of interest statutes when it issues informal
advisory letters. Finally, the Department of Justice represents OGE in connection with
any litigation that may arise out of the statutes and regulations which OGE administers.
The investigation of fraud, waste and mismanagement is generally conducted by an
agency Inspector General pursuant to the authority of the Inspector General Act of
1978. Most agencies have an Inspector General either by statute or by the agency's
own administrative determination. An Inspector General may investigate allegations
of violations of ethics rules and laws as well as other Federal statutes and regulations.
Where it is necessary and appropriate, OGE customarily refers allegations of ethics
violations to an agency ethics official with a request that the ethics official ask the
Inspector General of the agency to look into the matter. On occasion, OGE may refer a
matter directly to the Inspector General office of an agency.
In keeping with a decentralised ethics program in the executive branch, it is the
individual agency that initially reviews allegations of violations of ethics rules. As
noted above, allegations of criminal misconduct must be referred to the Department of
Justice. On the other hand, allegations of violations of administrative rules are
handled by the agency. It is up to the individual agency initially to determine the
appropriate administrative sanction. However, an employee may appeal an adverse
action to the Merit Systems Protection Board (MSPB). MSPB administrative
decisions establish authoritative precedent regarding the appropriate disciplinary
sanction for violations of administrative rules, including violations of the standards of
conduct.
Regulation of political activity on the part of Federal employees is carried out by the
Office of Special Counsel (OSC). OSC investigates and rules on allegations that
employees have violated restrictions on political activity. In addition, OSC
investigates cases of reprisal for "whistleblowing" and other prohibited personnel
practices.
The General Services Administration establishes policy for and manages Government
property and records. It has responsibility for regulations on the proper use of
Government property, equipment and vehicles. GSA consults with OGE on regulations
issued by GSA on the acceptance by agencies of gifts of travel. Agency reports
regarding the use of travel reimbursement authority are filed with the Office of
Government Ethics.
The Office of Personnel Management (OPM) has general responsibility for Federal
personnel law throughout the executive branch. OPM has responsibility for certain
conduct-related areas such as nepotism and gambling. OGE consults with OPM in
connection with the issuance of regulations.
In the United States, the Federal election campaign process is subject to regulation by
the Federal Election Commission (FEC). The FEC is an independent agency that
administers and enforces the Federal Election Campaign Act of 1971, as amended, 2
U.S.C. ? 431 et seq., and the Revenue Act, 26 U.S.C. ? 1 et seq. The FEC oversees the
public financing of Presidential elections, provides for public disclosure of campaign
finance activities, and administers the law with respect to limits and prohibitions on
contributions and expenditures made to influence Federal elections, i.e., the
Presidency, the US Senate, and the US House of Representatives. In addition, at the
State level, each of the States has enacted its own state election laws.
Finally, one agency that is not in the executive branch, but which has a significant
impact on ethics matters within the executive branch is the General Accounting Office.
This investigating and auditing arm of the Congress issues opinions by the
Comptroller General which deal with a wide range of ethics-related subjects
including frequent flyer benefits, appropriations law and various fiscal matters. GAO
performs audits of Federal programs and issues reports on its findings and
recommendations.
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Last updated: 09 June, 1997