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18
Federal
Ethics Management
and
Public
Trust
Robert Roberts
James
Madison University,
Harrisonburg,
Virginia
From
the
colonial period
of
American history through today,
the
problem
of
maintaining
public
trust
in
federal government agencies
has
confronted
the
nation (Locke,
1995:
14-
24). Despite some extremely bleak
periods
(Summers,
1993),
the
last
forty
years
has
seen
federal
agencies
and
departments make considerable progress
in the
development
of
ethics
programs designed
to
protect public trust
in
government.
The
chapter argues that
the
exec-
utive
branch ethics program deserves much
of the
credit
for the
improved ethical climate
in
federal agencies
and
departments.
The
federal executive branch ethics management
program
has
proven exceptionally
effective
in
reducing
the
frequency
of
conflict-of-inter-
est
controversies involving federal employees
and
officials.
Interestingly, public administration ethics scholars have
not
welcomed
the
evolution
of
public ethics codes
and
conflict-of-interest focused public ethics programs. They criti-
cize public ethics
codes
for
typically
dealing
with
only
a
limited number
of
ethical issues;
where
a financial
conflict-of-interest
raises questions regarding
the
ability
of a
public
offi-
cial
or
employee
to
perform their public duties
in an
impartial manner.
In
contrast, many
public ethics scholars argue that public ethics programs should
focus
their
efforts
on
per-
suading public managers
to '
'weigh
the
ethics
of the
programs
and
policies
they
set in
motion"
(Cohen
and
Eimicke, 1995: 107).
The
sharp
difference
of
opinion over
the
usefulness
of
public ethics codes
has
com-
plicated
the
process
of
reaching
a
consensus over
the
best strategy
for
protecting public
confidence
in
public institutions.
An
objective analysis
of
public ethics codes
and
ethics
programs that
focus
upon
the
ethical implications
of
public policy decisions provide strong
evidence that both types
of
ethics programs help public employees
and
officials
to
resolve
ethical
problems directly related
to the
performance
of
official
duties.
I.
THE
EVOLUTION
OF THE
FEDERAL EXECUTIVE BRANCH PUBLIC
INTEGRITY MANAGEMENT SYSTEM
Annually,
a
relatively small number
of
federal employees
and
officials
come under
in-
vestigation
for
possible violations
of
criminal public corruption statutes (Miller, 1992).
Today,
the
Federal Bureau
of
Investigation,
the
Public Integrity Section
of the
United
367
368
Roberts
States Department
of
Justice, United States Attorneys,
and
independent counsels exer-
cise responsibility
for
investigating
and
prosecuting possible violations
of
these criminal
public
corruption prohibitions
involving
federal employees
and
officials
(Roberts
and
Doss, 1997:
88-91).
However,
from
the
beginning
of
this republic,
the
vast majority
of
public ethics controversies have
not
involved allegations
of
criminal wrongdoing.
Despite
this fact,
it
took until
the
early
1960s
for the
White House
and
federal agencies
and
depart-
ments
to
begin putting
in
place
a
formal
executive branch ethics management program
designed
to
reduce
the
number
of
public
ethics controversies
involving
federal employees
and
officials.
Long before
a
series
of
1950s
political ethics scandals persuaded
the
Kennedy White
House
to
establish
an
executive branch ethics program,
a
small number
of
federal
agencies
experimented
with administrative ethics codes
as a
method
of
protecting public trust
in
government.
For
instance, Postmaster General Amos Kendall,
in
1829, created
a
model
ethics
code
of
conduct
for
postal employees. Kendall's
code
"included
a
long
list
of
rules governing work habits,
office
conduct,
the use of
government property,
and
personal
morals"
(Roberts, 1988:8). Kendall believed that
the
post
office's
credibility depended,
in
part, upon
his
employees remaining above reproach
in the
performance
of
their
official
duties
as
well
as in
their private
lives.
The
commitment
of
Kendall
to
high
ethical standards
in
government proved
to be
much more
the
exception than
the
rule.
From
the
early 1830s through
the
1880s,
public corruption scandals
involving
fed-
eral departments multiplied like rabbits (Summers, 1987).
By the end of the
Civil War,
critics focused
on the
"spoils
system"
as one of the
primary causes
for the
collapse
of
ethical
standards
in
federal agencies
and
departments (Roberts, 1988:
19-21).
And re-
former-minded
individuals
and
groups came
to
regard
civil
service reform
as the
best
hope
of
restoring integrity
to
management
of
federal departments (Roberts, 1982:
105-
125).
Decades
of
struggle culminated
in the
passage
of the
Pendleton
Act of
1883 which
authorized
the
establishment
of an
executive branch merit system. Equally significant,
the act
provided
for the
establishment
of the
Civil
Service Commission
and
delegated
it
responsibility
for
protecting
the
integrity
of the
process
for
selecting members
of the new
merit system.
The
Pendleton
Act
made
it a
crime punishable
by "a fine up to
$1000
or
imprisonment
up to a
year
or
both''
for any
commissioner
or
public employee
to
engage
in any
"collusion
or
corruption
in the
administration
of the
examinations"
used
to
select
individuals
for
merit system positions (Van Riper, 1979:
9). The
passage
of the
Pendelton
Act of
1883
represented
the
beginning
of a
long road back
from
a low
point
in
federal
public
service ethics (Mosher, 1982: 65). Public corruption prevention
and
civil
service
reform
went hand
in
hand.
From 1900
to
1950,
the
nation experienced
an
unprecedented explosion
in the
size
and
power
of the
federal government. With
the
proliferation
of
federal agencies
and
pro-
grams, came
the
necessity
to
delegate
to a new
generation
of
federal employees
and
offi-
cials
increased discretion
to
formulate
and
implement solutions
for
pressing national prob-
lems
(Rosenbloom,
1994:
3-36).
By the end of the
1930s,
a
growing number
of
Americans
began
to
raise legitimate questions regarding
the
accountability
of
federal
officials
and
the
agencies that employed them.
As
explained
by
Kenneth
F.
Warren, "the Brownlow
Commission's 1937 recommendations
for
procedural reform, along with reports
by the
American
Bar
Association
on the
state
of
administrative law,
and the
1941 report
of the
Attorney
General's Committee
on
Administrative Procedure, inspired Congress
after
World
War II to
draft
and
unanimously pass
the
Administrative Procedure
Act of
1946"
Federal
Ethics Management
and
Public
Trust
369
(Warren, 1996:
183).
The
passage
of the
Administrative Procedure
Act did
little
to
stop
growing
public concern over
the
perceived ability
of
powerful
special interests
to
influence
federal
decision-makers.
During
the
early 1950s,
a
series
of
public ethics controversies involving
close
associ-
ates
of
President Harry Truman
and a
number
of
high-profile federal
agencies
(Dunar,
1984)
led
many Americans
to
doubt
the
impartiality
of
federal employees
and
officials.
During
the
fall
of
1951,
the
Senate subcommittee
on
Labor
and
Public Welfare issued
a
report titled Proposals
for
Improvement
of
Ethical Standards
in the
Federal Government.
The
report urged federal agencies
and
departments
to
adopt
new
codes
of
ethics
to
prevent
federal employees
and
officials
from
becoming involved
in
situations that tend
'
'to
make
public
officials
consciously
or
unconsciously partial
in
handling issues which come before
them"
(U.S. Senate, Committee
on
Labor
and
Public Welfare,
1951:
11).
In
addition,
the
report argued that
conflict
of
interests
often
'
'create
a
suspicion
of
bias even where
it may
not
exist; they tempt public
officials
to put
personal interests ahead
or in
conflict
with
the
public interest;
or
they
are
damaging
or
unfair
to
members
of the
public"
(U.S. Senate,
Committee
on
Labor
and
Public Welfare,
1951:
11).
Throughout
the
1950s,
a
battle swirled around
the
future
of
federal ethics reform.
Defenders
of the
administrative state argued that, without
a
major
overhaul
of the way
federal
agencies
and
departments resolve ethics controversies
involving
their employees
and
officials,
public support
for
major
federal programs
would
continue
to
erode.
On the
other hand, critics
of
existing federal ethics restrictions argued that confusion regarding
the
scope
of
public ethics prohibitions deterred some individuals
from
accepting government
positions
and
made
it
extremely
difficult
for
individuals with private sector backgrounds
to
move back
and
forth
between government
and the
private sector.
By the
close
of the
1950s,
the
search
intensified
for a new
approach
to
federal ethics management that would
reduce
the
number
of
ethics controversies
without
making
it
impossible
for
federal agen-
cies
and
departments
to
recruit
and
retain essential personnel.
A.
Presidential Ethics Reform
and the
Standards
of
Ethical Conduct
for
Government Officers
and
Employees
In
1960,
the
Association
of the Bar of the
City
of New
York issued
a
report titled
Conflict
of
Interest
in
Federal Service.
The
report called
for a
major overhaul
of the
system
for
regulating conflict-of-interest situations involving federal employees
and
officials
(Associ-
ation
of the Bar of the
City
of New
York,
1960).
The
report
did not find a
crisis
in
federal
service ethics.
To the
contrary,
it
found
that
the
vast
majority
of
federal employees
and
officials
tried
to do the
right thing. However,
a
confusing
web of
outdated criminal
conflict-
of-interest
statutes
did
little
to
protect public trust
in
government
and had
proven next
to
impossible
to
enforce. Equally important,
the
report expressed serious concern that
the
existing system
made
it
difficult
to
recruit essential personnel
for
political
and
career
positions.
To
deal
with
these problems,
the
Association
of the Bar of the
City
of New
York
threw
its
full
support behind
the
issuance
of new
administrative ethics rules
to
supplement
revised criminal bribery
and
conflict-of-interest prohibitions (Association
of the Bar of
the
City
of New
York, 1960:
8). In
other words,
the
report argued that reliance upon
criminal bribery
and
conflict-of-interest statutes hindered
efforts
to
protect public
confi-
dence
in the
impartiality
of
executive branch decision-making. According
to the
report,
a new
administrative ethics program
offered
the
best opportunity
for
protecting public
370
Roberts
support
for
government policies
and
programs without making
it
even more
difficult
to
recruit
full-time
career
and
political employees
as
well
as
part-time employees.
From
the
spring
of
1961 through
the
close
of
1968,
the
Kennedy White House
and
then
the
Johnson White House
directed
efforts
to put in
place
a new
executive branch
ethics program.
No one in the
Kennedy
or
Johnson White House viewed
the new
ethics
program
as a
solution
to the
unethical problems faced
by
federal employees
and
officials.
Both
administrations
saw the new
ethics program
as
helping
to
reduce
the
number
of
instances where ethics controversies disrupted
the
formulation
and
implementation
of
pub-
lic
policies
and
programs. Both administrations
saw the new
ethics program
as a way to
reduce reliance upon criminal ethics restrictions
as the
primary tool
for
assuring
the
objec-
tivity
and
impartiality
of
actions taken
by
federal employees
and
officials.
Through
the
1960s,
the
Kennedy
and
Johnson administrations issued
a
series
of
directives
and
executive
orders
establishing
new
non-criminal ethics guidelines
for
federal
employees
and
officials
(Gilman, 1995: 71). Interestingly,
the
Civil Service Commission
Chairperson, John Macy, played
a
pivotal role
in the
development
and
implementation
of
the new
ethics policies
and
proved instrumental
in the
development
and the
subsequent
implementation
of the new
ethics guidelines (Macy, 1971:
249-256).
This fact helps
to
explain
why the new
guidelines reflected
a
much more progressive approach
for the
resolu-
tion
of
ethics controversies.
In
this 1971 book, titled Public Service:
The
Human Side
of
Government, Macy
explained
why the
Kennedy
and
Johnson administrations pursued their ethics reform
agenda.
'
'Although
the
federal standards
are by no
means
ideal
and
must
be
reevaluated
frequently
to
assure that they match
the
requirements
of the
times,"
stressed Macy,
"they
do
constitute
a
valid starting point
for
other jurisdictions. Such standards
can
emphasize
for
the
benefit
of the
public
the
strong intention
of the
public
administrators
that
the
affairs
of
government
be
conducted openly, honestly,
and
impartially" (Macy,
1971:
256).
Not
surprisingly,
the first
directives
sought
to
clarify ethics rules governing
the
con-
duct
of
high-level presidential nominees
and
appointees. Executive Order
10939
directed:
All
heads
of
departments
and
agencies, full-time members
of
boards
and
commissions
appointed
by the
president,
and
members
of the
White House
staff
not to
accept
any
fee,
compensation,
gift,
payment
of
expenses,
or
anything
of
monetary value,
or
create
the
appearance
of, or
resulting
in (1) use of
public
office
for
private gain,
(2) an
under-
taking
to
give preferential treatment
to any
person,
(3) any
loss
of
complete indepen-
dence
and
impartiality,
(4) the
making
of a
Government decision outside
official
chan-
nels
and (5) any
adverse
effect
on the
confidence
of the
public
in the
integrity
of the
Government
(Roberts, 1988: 84).
The
Kennedy White House subsequently directed
all
federal agencies
and
depart-
ments
to
require
all
federal employees
and
officials
to
comply with similar ethics guide-
lines.
On
May 9,
1965, President Johnson issued Executive Order
11222,
"Prescribing
Standards
of
Ethical Conduct
for
Government
Officers
and
Employees" (Newland, 1967:
158).
Of
great significance, Executive Order
11222
delegated
to the
United States
Civil
Service Commission day-to-day responsibility
for
overseeing
the
implementation
of the
new
ethics
code
by
federal
agencies
and
departments (Gilman, 1995:
71).
The new
executive order differed
in
three significant respects
from
the
earlier
Ken-
nedy
standards
of
conduct order.
In the first
place,
the
order directed
all
federal employees
and
officials
to
avoid
any
action that
"might
result
in, or
create
the
appearance
of (1)
Federal
Ethics Management
and
Public
Trust
371
using
public
office
for
private gain;
(2)
giving
preferential treatment
to any
organization
or
person;
(3)
impeding government
efficiency
or
economy;
(4)
losing complete indepen-
dence
or
impartiality
of
action;
(5)
making
a
government decision outside
official
channels;
or (6)
affecting
adversely
the
confidence
of the
public
in the
integrity
of the
Government''
(Oilman,
1995: 71). Second,
the
order gave
the
Civil
Service
Commission
the
authority
to
require tens
of
thousands
of
federal employees
to file
confidential
financial
disclosure
statements. Third,
the
order directed every federal agency
and
department
to
appoint
an
individual
to
oversee ethics programs
within
individual
federal agencies
and
departments.
Of
equal importance
to the
future
evolution
of the
executive branch ethics program
was
the
requirement that every federal agency
and
department appoint
a
Designated
Agency
Ethics
Official
(DAEO)
to
implement
the
Executive Order
11222
at the
agency
and
department level. Over time, agency
and
department DAEOs assumed primary respon-
sibility
for
reviewing
confidential
financial
disclosure statements
for
conflicts
of
interest
problems,
fashioning
remedies
for
actual
and
potential
conflicts
of
interest,
and for
issuing
agency standards
of
conduct.
As
explained
by
John Macy, Executive Order
11222
"en-
couraged individuals faced with problems involving sensitive judgments
to
seek
counsel''
(Macy, 1971: 253).
To
facilitate effective ethics problem solving, President Johnson
di-
rected Chairman Macy
"to
work
with
each department
and
agency head
to
designate
within
his
organization
qualified
persons
who
could provide guidance
and
interpretation
in
specific
situations" (Macy, 1971: 253).
Looking back more than three decades, little doubt remains that
the
actions taken
by
the
Kennedy
and
Johnson administrations succeeded
in
reducing
the
dependence
on
criminal statutes
as the
primary method
for
guaranteeing
the
impartiality
of
decisions
made
or
actions taken
by
federal agencies
and
officials.
By the end of the
1960s,
federal agencies
and
departments came
to
depend upon
the new
standard
of
conduct regulations
as the
primary
tool
for
resolving
conflict-of-interest
problems
involving
federal employees
and
officials.
B.
The
Public Integrity
War and
Public Ethics Reform
Through
the
1960s
and
early
1970s,
the
executive branch ethics program received little
public
or
media attention, until
the
Watergate scandal.
In the
aftermath
of the
Watergate
scandal, Congress
and
public interest groups placed
the
blame
for the
scandal
on
inade-
quate ethics regulations rather
on the
character
flaws of a
group
of
individuals
who
proved
unable
to
distinguish
between right
and
wrong.
A
consensus
quickly
developed that Con-
gress needed
to
enact
new
ethics measures designed
to
prevent
the
repeat
of
Watergate.
Other critics
of
Washington ethics used
the
Watergate scandal
to
push
a
much
broader reform agenda. Critics
of
federal regulatory
agencies
argued that powerful special
interests exercised
too
much influence over federal regulatory policies. They
placed
part
of
the
blame
for
this situation
on
former federal
officials
leaving
key
regulatory agencies
to
become lobbyists
for
regulated industries
and
enterprises (Roberts
and
Doss,
1997:
63-
85).
To
deal with
the
so-called
'
'revolving
door''
problem, reformers urged Congress
to
enact
new
restrictions
on
former
high-level
federal
officials
lobbying their former agencies.
The
aggressive lobbying campaign culminated
in the
passage
of the
Ethics
in
Gov-
ernment
Act of
1978 (Roberts, 1988:
147-162).
Today,
the
Ethics
in
Government
Act of
1978
has
come
to
symbolize
a
turning point
in the
management
of
federal public
service
ethics.
In the first
place,
the act
established procedures
for the
appointment
of
special
prosecutors (now independent counsels)
to
investigate allegations
of
criminal wrongdoing
372
Roberts
made against certain
high-level
executive branch
and
White House
officials
(Carroll
and
Roberts,
1988-1989:
437-438).
Second,
the act
established
within
the
Office
of
Personnel Management
a new
United
States
Office
of
Government Ethics (USOGE) headed
by a
presidential nominee. Congress
delegated
to OGE
responsibility
for
coordinating ethics policy through agency-designated
ethics
officials
(DAEOs)
(Oilman,
1995: 72). Third,
the act put
into
place
a far
reaching
public
financial
disclosure system
for
high-level
officials
in all
three branches
of the
federal
government
(Carroll
and
Roberts,
1988-1989:
439-440).
Fourth, Congress enacted
a
number
of new
restrictions
on
former high-level federal
officials
lobbying their former
agencies
after
leaving federal agencies
and
departments. Yet,
the
Ethics
Act
left
unchanged
the
vast majority
of
public corruption statutes
and
executive branch ethics standards.
Although
the
Ethics
Act
added
only
a few new
ethics restrictions,
Watergate
ushered
in
an
unprecedented period
of
scrutiny
of the on- and
off-duty
conduct
of
federal employ-
ees and
officials.
Investigative reporters looked behind every door
in
Washington
for the
next
Watergate scandal. From 1981 through 1988,
a
significant number
of
Reagan nomin-
ees and
appointees
found
themselves caught
up in
public ethics controversies
(Oilman,
1995: 73).
Not
unexpectedly, many Reagan administration
officials
blamed their predica-
ment
on
political opponents
who
used ethics allegations
as a way to
destroy
the
reputations
of
honest
public
servants (Garment,
1991:
83-107).
Many incorrectly thought that
the
Ethics
in
Government
Act had
significantly
tightened federal ethics laws
and
rules.
On
the
other hand, Reagan administration critics blamed
the
situation
on the
failure
of
these
officials
to
follow well established
ethical
rules
or
guidelines (Kurtz, 1986:
11-13).
Neither
the
Reagan administration
officials
who
faced intense scrutiny
for
their con-
duct
nor the
critics
of
Reagan administration ethics understood that Watergate
had set
back
efforts
to
decriminalize federal ethics management
for at
least
two
decades.
The
enactment
of an
independent counsel
law and the
establishment
of the
Public Integrity
Section
of the
Department
of
Justice pumped
new
resources into public corruption investi-
gations (Roberts
and
Doss, 1987:
88-94).
Badly damaged
by its
failure
to
uncover
the
Watergate conspiracy,
the
Federal Bureau
of
Investigation developed
the
capacity
to
con-
duct
elaborate public corruption stings.
From
the
Watergate scandal through much
of the
1980s,
the
executive branch ethics
program
found
itself caught between groups arguing
for
more aggressive criminal investi-
gations
of
federal
officials
and
those complaining about
the use of
ethics allegations
to
discredit
honest public servants. These factors, along with
a
lack
of
resources,
made
it
extremely
difficult
for the
Office
of
Government Ethics
to
make
any
significant
progress
in
improving
the
effectiveness
of the
executive branch ethics program.
C. The
Professionalization
of
Federal Ethics
Management
Early
in
1989,
the
executive branch ethics program received help
from
an
unlikely source.
Wishing
to
avoid
a
repeat
of the
ethics scandals that
had
damaged
the
reputation
of
Presi-
dent
Reagan, President Bush took immediate steps
to
evaluate
the
effectiveness
of the
executive
branch ethics program.
In
late January 1989, President Bush established
the
President's Commission
on
Federal Ethics
Law
Reform (Roberts
and
Doss, 1997: 133).
President Bush directed
his
ethics commission
to
take
a
close
look
at
federal ethics regula-
tion
in all
three branches
of the
federal government.
To the
dismay
of
some observers,
President Bush appointed Washington insiders
who had
strong
views
regarding
the
direc-
tion
of the
federal ethics program (Clinton, 1989: 10).
Federal
Ethics Management
and
Public
Trust
373
The
March
1989
report
of the
Bush ethics commission turned
out to be
remarkably
similar
to the
1960
report
of the
Association
of the Bar of the
City
of New
York.
The
commission
found
that
the
vast
majority
of
federal
officials
and
employees experienced
few
ethics problems.
At the
same time,
the
report
found
that certain federal criminal con-
flict-of-interest
statutes
significantly complicated
the
process
of
recruiting individuals
for
career
and
political
positions. Instead
of
significantly tightening executive branch ethics
rules,
the
report argued that
the
same ethics rules should apply
to
members
of
Congress
and
executive branch employees
and
officials.
In
particular,
the
commission criticized
Congress
for
requiring executive branch employees
to
comply with much stricter
gift
acceptance
and financial
conflict-of-interest laws than members
of
Congress (Roberts
and
Doss,
1997: 134). Finally,
the
report
recommended
the
relaxation
of a
small number
of
ethics rules
in
order
to
ease
the
burden
of
ethics rules
on
federal
employees
and
officials
(President's Commission
on
Ethics
Law
Reform, 1989).
Shortly
after
the
president's ethics commission released
its
report, President Bush
issued Executive Order 12674 which
replaced
President Johnson's 1965 Executive Order
11222.
The new
standards
of
conduct order increased
the
number
of
fundamental princi-
ples
of
ethical conduct
from
six to
fourteen
and '
'changed
the
standards-of-conduct
frame-
work
from
a
model program,
with
agencies writing their
own
variations,
to a
single, com-
prehensive
set of
standards applicable
to the
entire executive
branch"
(Oilman,
1995: 73).
Equally
significant,
the
order delegated
to the
Office
of
Government Ethics responsibility
for
assuring
government-wide
implementation
of the
uniform ethical guidelines.
The
issu-
ance
of
Bush's standards
of
conduct executive order provided
the OGE the
authority
to
restructure
the
federal executive branch ethics program. Between 1990
and
1994,
the Of-
fice
of
Government Ethics issued hundreds
of
pages
of
ethics-related regulations (Ethics
Resource Library,
1999).
More important, over
the
next
five
years, Congress
significantly
increased
the
budget
of the
ethics
office
which permitted
OGE to
expand federal executive
branch ethics programs.
The
Bush White House ethics reform program
did not
stop with
the
issuance
of the
new
executive branch standards
of
conduct executive order. When Congress passed
the
Ethics
in
Government Reform
Act of
1989,
they included
a
number
of
ethics initiatives
which
the
Bush White House demanded
in
return
for
supporting
a
congressional
pay in-
crease
(Roberts
and
Doss, 1997:
139-141).
With little fanfare, Congress agreed
to
expand
the
authority
of
federal agencies
to
accept travel reimbursements
from
nonfederal
sources
to
defray
the
cost
of
travel
by
federal employees
and
officials.
Congress also agreed
to
allow
federal employees
and
officials
to
defer capital gains
on financial
holdings
sold
to
comply
with federal
conflict-of-interest
rules. Congress also agreed
to
place
new
restric-
tions
on the right of
members
of
Congress
to
accept honoraria
from
nonfederal sources.
Although
the
Ethics Reform
Act did
expand
the
scope
of
federal'
'revolving
door''
restric-
tions
and
prohibited
all
federal executive branch employees
and
officials
from
accepting
honoraria,
the
Ethics Reform
Act did not
significantly tighten ethics restrictions
on
federal
employees
and
officials.
II.
THE
FEDERAL ETHICS MANAGEMENT PROGRAM TODAY
As
discussed previously,
the
federal executive branch ethics program
has
taken some
40
years
to
evolve.
The
main ethics management topics include:
(1)
gifts
from
outside
sources,
(2)
gifts
between employees,
(3)
conflicting
financial
interests,
(4)
impartiality
374
Roberts
in
performing
public
duties,
(5)
seeking outside employment,
(6)
restrictions
on
former
employees,
(7)
misuse
of
position
and (8)
outside activities (USOGE, 1993b).
The
ethics
program relies upon criminal
and
administrative conflict-of-interest sanctions
to
protect
public confidence
in the
impartiality
and
objectivity
of
actions taken
by
federal
officials
and
employees.
Since
the
passage
of the
Ethics
in
Government
Act of
1978,
the
Office
of
Govern-
ment Ethics
has
issued hundreds
of
pages
of
regulations
denning
the
scope
of
administra-
tive
and
criminal ethics prohibitions. During early 1993, USOGE (1993a) took
the
major
step
of
issuing uniform standard
of
conduct regulations
for the
eight program topic areas.
The
Office
of
Government Ethics issued
the
uniform standard
of
conduct regulations
in
an
effort
to
establish minimum standards
of
conduct
for all
federal employees
and
officials.
Written
in an
easily understandable question
and
answer format,
the
regulations went
a
long
way
toward reducing
confusion
with
respect
to
major
areas
of
federal ethics regula-
tion.
In
issuing
the
standards
of
conduct rules,
the
USOGE took great care
to
draft
the
regulations
to
reduce
the
impact
of
federal ethics
rales on the
day-to-day operations
of
federal
agencies
and
departments. Yet,
the
complexity
of the new
regulations required
a
significant
increase
in
agency
and
department resources devoted
to
ethics education, train-
ing,
and
enforcement.
A.
Gifts from Outside Sources
and
Travel Reimbursements
Setting clear
and
workable
policies
governing
the
acceptance
of
private hospitality
by
federal
employees
and
officials
has
constituted
the
most
difficult
undertaking
for the
execu-
tive
branch ethics management program (Roberts
and
Doss,
1992:
260).
Federal
gift
accep-
tance prohibitions take
two
different
approaches
for
distinguishing between permissible
and
impermissible
gifts.
One
rule prohibits federal employees
and
officials
from
accepting
gifts
from
certain sources.
A
second
rale
prohibits federal employees
and
officials
from
accepting
gifts
from
nonfederal sources motivated
by
official
acts performed
by the
federal
employee
or
official.
The
executive branch, administrative, prohibited-source rule states that federal
em-
ployees
and
officials
may not
accept
anything
of
value
from
persons
or
organizations that
(1)
seek
a
particular action
from
their agency,
(2)
does business
or
seeks business with
their agency,
(3) are
regulated
by the
employee's agency,
or (4)
"have
interests that
may
be
substantially affected
by" the
performance
or
nonperformance
of the
employee's
offi-
cial
duties (USOGE,
1993b:
5). The
prohibited-source rule requires federal employees
to
inquire
into
the
relationship between
any
source
of a
potential
gift
and the
federal employ-
ee's
official
activities.
To
reduce
the
impact
of the
prohibited-source
rale on the
routine activities
of
federal
employees
and
officials,
USOGE regulations established
a
category
of
permissible
gifts
or
gift
"exclusions"
(USOGE,
1993b:
6).
Gift
acceptance exclusions permit federal
em-
ployees
to
accept
"soft
drinks,
coffee,
donuts,
and
other modest items
of
food
and
refresh-
ment when
not
offered
as
part
of a
meal,"
and
"items
of
inherent value such
as
plaques
and
certificates
and
items
which
federal employees
pay
full
market value for" (USOGE,
1993b:
6). In
addition
to
items treated
as
"gift
exclusions,"
federal
gift
acceptance
rales
allow federal employees
to
accept
'
'certain
unsolicited
gifts
with
a
value
of $20 or
less
per
occasion (but
not
cash
gifts
and not
gifts
that
add up to
over
$50 in
value
in any
year
from
any
single
source"
(USOGE, 1993b:
6).
Federal
Ethics Management
and
Public Trust
375
Prior
to the
passage
of the
Ethics
in
Government Reform
Act of
1989, federal
law
prohibited
the
vast majority
of
federal agencies
and
departments
from
accepting travel
reimbursements
from
private sources
to
cover
the
travel expenses
of
federal employees.
To
remedy this situation,
the
Ethics Reform
Act
granted
the
General
Services
Administra-
tion
the
authority
to
issue regulations permitting
all
federal agencies
and
departments
to
accept travel reimbursements
from
nonfederal sources (USOGE, 1997a:
1). For
instance,
a
corporation would like
to
host
a
conference
to
examine ways
to
reduce
air
pollution
by
commuters.
The new law
permits
the
corporation
to pay the
travel
and
lodging costs
of
Environmental Protection Administration
officials
invited
to the
conference.
To
guard against possible conflict-of-interest problems,
the law
requires
all
federal
agencies
and
departments
to
certify, prior
to the
acceptance
of any
payments, that
the
acceptance
of a
travel reimbursement would
not
lead
a
reasonable person
to
"question
the
integrity
of
agency programs
or
operations''
(USOGE,
1997a:
1
-2).
The
establishment
of
government-wide
agency
gift
acceptance authority constituted
a
major
relaxation
of
executive branch ethics rules.
Besides
being subject
to the
prohibited-source
gift
acceptance rule, federal employ-
ees and
officials
must comply with
the
federal illegal-gratuity statute (Roberts
et
al.,
1996:
1).
The
illegal-gratuity statute prohibits federal employees
from
accepting anything
of
value
from
a
nonfederal source
for the
performance
of
official
acts
or
duties. Despite
the
fact
that
the
provision became
law in
1962,
considerable controversy
still
continues over
the
scope
of the
illegal-gratuity statute.
It
would take
the
Supreme Court
to
resolve
the
dispute.
On
the one
hand, some experts argued that
the
statute prohibited federal employees
and
officials
from
accepting
all
"non
quid
pro
quo"
gifts
motivated
by the
position held
by
the
federal employee
or
official.
In
other words,
the
illegal-gratuity statute prohibited
private
sources
from
providing federal employees
and
officials
a
wide variety
of
private
hospitality (Greenhouse, 1998: A18).
On the
other hand, other ethics experts argued that
illegal-gratuity
statute only prohibited federal employees
and
officials
from
accepting pri-
vate
hospitality
from
private sources
if the
federal employee knew that
a
particular action
taken
by the
employee motivated
the
gift
(Greenhouse, 1998:
A18).
Prior
to the
criminal prosecution
of
former Secretary
of
Agriculture, Mike Espy,
for
accepting illegal-gratuity from companies regulated
by the
Department
of
Agriculture,
few
Americans ever heard
of the
illegal-gratuity statute (Greenhouse,
1998:
A18).
In
late
1998,
a
federal jury rejected this broad interpretation
of the
statute
put forward by
indepen-
dent counsel Donald Smaltz. After
the
verdict, members
of the
federal jury
publicly
criti-
cized independent counsel Donald Smaltz
for
bringing
the
charges without being able
to
prove that Espy
had
done something
in
return
for the
gifts
(Miller, 1998: Al).
On
April
27,
1999,
in
United
States
v.
Sun-Diamond Growers
of
California,
the
Supreme Court rejected
the
broad interpretation
of the
illegal-gratuity
statute supported
by
the
Department
of
lustice
and
independent council Donald Smaltz.
The
Court held
that
"in
order
to
establish
a
violation
of 18
U.S.C.
&
201(c)(l)(A),
the
Government must
prove
a
link
between
a
thing
of
value conferred upon
a
public
official
and a
specific
'official
act'
for or
because
of
which
it was
given"
(U.S.
v.
Sun-Diamond, 1999,
526
U.S. 398).
In
rejecting
the
argument that
the
illegal-gratuity statute prohibited
all
private
hospitality
of
federal
officials,
Justice Scalia pointed
to
gift
acceptance regulations issued
by
the
Office
of
Government Ethics which permitted executive branch employees
and
officials
to
accept certain types
of
private hospitality.
As
Justice Scalia explained,
"we
376
Roberts
are
frankly
not
sure that even
our
more narrow interpretation
of
18
U.S.C.
&
201(c)(l)(B)
will
cause
OGE's
assurance
of
nonviolation
if the
regulation
is
complied with
to be
entirely
accurate;
but the
misdirection,
if
any,
will
be
infinitely
less"
(U.S.
v.
Sun-Diamond, 1999).
The
criminal
ban on
nonfederal sources supplementing
the
salaries
of
executive
branch employees
and
officials
constitutes
the final
type
of
gift
acceptance ban. Originally
enacted
in
1917,
the
salary supplementation prohibits nonfederal sources
from
supple-
menting
the
salaries
of
executive branch employees.
For
instance,
a
major
corporation
may
not pay the
difference
between what
an
executive earned
and his or her
salary
as a
cabinet secretary. However,
the
Supreme Court ruled
in the
1990 case
of
Crandon
v.
United
States that
the ban did not
apply
to
payments made prior
to the
date individuals
legally become
an
executive branch employee
or
official
(Crandon
v.
United
States,
1990).
Prior
to the
decision,
the
Department
of
Justice
had
ruled that
the
salary supplementation
ban
also applied
to
payments made
to
individuals
prior
to the
date they became
a
federal
employee
or
official.
B.
Gifts Between Employees
A
separate ethics policy regulates
gifts
between federal employees.
As a
general
rule,
federal
employees
may not
provide superiors
gifts
or
accept
gifts
from
superiors.
In
addi-
tion,
federal employees
may not
accept
gifts
"from non-subordinates
who
receive less
pay''
than another federal employee (USOGE,
1993b:
8).
Much like
the
exemption provis-
ions
of the
prohibited-source
gift
acceptance policy, federal ethics regulations permit cer-
tain types
of
gifts
between subordinates
and
superiors,
and
between superiors
and
subordi-
nates.
The first
exception permits
gifts
"given
on an
occasional
basis"
to
express
appreciation
for
private hospitality.
The
second exception permits federal employees
to
give
or
accept certain small
gifts
"recognizing special,
infrequent
events such
as a
mar-
riage, illness,
the
birth
or
adoption
of a
child,
and a
retirement, resignation
or
transfer''
(USOGE,
1993b:
9).
Like
the
outside
gift
acceptance rules,
the
gift-between-employees
rules demonstrate
sincere
effort
by
USOGE
to
adopt
flexible
ethics rules which
do not
unreasonably interfere
with
social activities that occur
routinely
in all
types
of
organizations.
C.
Conflicting
Financial
Interests
Without
question,
the
regulation
of
conflicting
financial
interests
has
proven
the
most
difficult
federal executive branch ethics rule
to
enforce.
As
part
of the
1962
revision
of
federal
criminal
conflict-of-interest
laws, Congress enacted
a new
criminal
conflicting-
financial-interests
statute
(Roberts, 1988:
101-102).
At the
urging
of the
Kennedy White
House
and
federal agencies
and
departments, Congress exempted
from
coverage
so
called
"special
government
employees"
from
coverage under
the
statute; individuals employed
for
less than
135
days
in any
365-day period
by a
federal agency
or
department (Roberts,
1988:
97).
The
action reduced
the
problem
of
paid
or
unpaid experts
or
consultants being
unable
to
work
on
certain projects because
of the
fact
that they held certain
financial
interests.
On
the
other hand,
the
statute established
a
sweeping
financial
conflict-of-interest
rule
for the
vast majority
of
executive branch employees
and
officials.
Section
208 of
title
18
of the
United States
Code
prohibits executive branch employees
or
officials
"from
participating
personally
and
substantially
in
certain
matters''
in
which federal employees
[...]... infrequent use of waiver authority to resolve the financial conflictof-interest problems of federal employees and officials At the urging of the Bush White House, Congress included liberalized waiver authority among the provisions of the Ethics Reform Act of 1989 (USOGE, 1999: 12) Between the enactment of the 1962 federal conflict -of- interest law and the passage of the Ethics Reform Act of 1989, federal... After decades of struggling with the issue of how to enforce financial conflict-ofinterest rules without working an undue hardship on executive branch employees and officials, it appears that agency ethics officials now have sufficient flexibility to effectively resolve the financial conflict -of- interest problems of federal employees and officials D Impartiality in the Performance of Official Duties... States v Sun-Diamond Growers of California (1999) 526 U.S 398 United States Office of Government Ethics (1995) Do it Right: An Ethics Handbook for Executive Branch Employees United States Office of Government Ethics, Washington, D.C United States Office of Government Ethics (1999) Ethics Program Topics URL: http:// www.usoge.gov/usoge003.htm, February 16 United States Office of Government Ethics (1998)... Certificates of Divestiture, 5 CFR Part 2635 United States Office of Government Ethics (1998) Interpretation, Exemption and Waiver Guidance Concerning 18 U.S.C 208 (Acts Affecting a Personal Financial Interest) 5 CFR 2640 United States Office of Government Ethics (1997a) Gifts of Travel and Other Benefits United States Office of Government Ethics, Washington, D.C United States Office of Government... States Office of Government Ethics (1993a) Standards of Ethical Conduct for Employees of the Executive Branch 5 C.F.R Part 2636 United States Office of Government Ethics (1993b) Take the High Road: An Ethics Booklet for Executive Branch Employees United States Office of Government Ethics, Washington, D.C Van Riper, P (1979) Americanizing a foreign invention: The pendleton act of 1883 In Classics of Public... empowered the Director of the Office of Government Ethics with the authority to issue certificates of divestiture permitting executive branch employees and officials to roll over capital gains resulting from the forced sale of financial interests (Roberts and Doss, 1996: 49-60) Between 1990 and today, the director of the USOGE has issued hundreds of certificates 375 Roberts of divestiture to both political... government ethics as if people mattered: Some thoughts on the ethics reform act of 1989 The George Washington University Law Review, 58:502-525 Newland, C (1967) Federal employee conduct and financial disclosure Record of the Association of the Bar of the City of New York, 22:158-180 Plant, J.F (1994) Codes of ethics In Handbook of Administrative Ethics (T Cooper, ed.) New York, Marcel Dekker, p 221-241 President's... Westport, CT Roberts, R., Doss, M.T., and Hammond, J (1996) Lobbyists beware: The rise of the illegal-gratuity statute The Journal of Social, Political and Economic Studies, 21:383-420 Rosenbloom, D.H (1994) The evolution of the administrative state and transformation ofadministrative law In Handbook of Regulation and Administrative Law (D.H Rosenbloom and R.D Schwartz, ed) Marcel Dekker, New York, pp... rights of federal employees and officials below the grade of GS-16 (U.S v National Treasury Employees Union, 1995) Significantly, the decision left in place the authority of Congress to regulate outside appearances, speeches, and written articles of high-level federal officials Fourth, federal law places a cap on the outside earned income received by certain types of executive branch employees and officials... federal employees and officials for violating the appearance -of- impropriety rule (Brownstein, 1985: 640) During this period, the Merit Systems Protection Board had upheld the authority of federal agencies and departments to enforce the rule (Dickenson, 1985: A17) Between 1981 and the end of 1988, the ethics problems of a number of Reagan administration officials led to the development of intense interest . Record
of
the
Association
of
the Bar of the
City
of
New
York,
22 :158-180.
Plant,
J.F.
(1994).
Codes
of
ethics.
In
Handbook
of
Administrative. conflict-
of- interest
problems.
As
part
of the
Ethics Reform
Act of
1989,
Congress empowered
the
Director
of the
Office
of
Government Ethics