IEC Journal

Greenberg Traurig law firm at the center of ‘political intelligence’ case

A lobbyist hears from “very credible sources” that the White House is going to reverse a major health-care proposal. He tells a client in an e-mail, and that person then tells his own clients in a research note.

It sounds like the game of telephone that lobbyists, government officials and even reporters are drawn into every day in Washington. Except in this case, the chain of information may have triggered a spike in trades on Wall Street — and has now led to a government investigation into possible insider trading.

How the lobbyist, who works at the law firm Greenberg Traurig, stepped into this morass offers a window into what has become a routine and profitable practice at law firms and lobbying shops: In addition to their usual work, lobbyists share with financial firms the latest political tidbits they are gathering from sources, sending an e-mail here and there with the latest “political intelligence.” The financial firms value the information because it can inform their investments.

Recent attention has focused on a new breed of companies that offer political intelligence exclusively for investor clients, but some of the country’s most prominent law firms have gotten into the business, too.

SEC subpoenas firm, individuals in a case of leaked information

The Securities and Exchange Commission has issued subpoenas to a firm and individuals in connection with the leak last month of a federal funding decision that appeared to cause a surge in stock trading of several major health companies.

The move deepens the government’s scrutiny of the growing “political intelligence” industry, which has been thriving on delivering valuable information from Washington to investors. This relatively new breed of companies capitalizes on the fact that decisions made in Washington — whether a regulator blocking a big merger or a lawmaker tweaking legislation — can create opportunities for stock traders to make money.

The latest case emerged April 1 when Height Securities, a Washington-based stock brokerage firm, alerted its clients that the government would soon make a decision favoring private health insurers who participate in a Medicare program. The alert went out 18 minutes before the end of the trading day, sparking a surge in trading in the shares of several major health-care firms, including Humana and Aetna. The official government announcement was made after trading closed for the day.

OGE Proposes Changes to OGE Form 201

The comment period for OGE's proposed change to Form 201 is now open, closing June 25, 2013.  You may find the proposal at this link:  

http://www.gpo.gov/fdsys/pkg/FR-2013-04-26/html/2013-09932.htm

OGE proposes to modify the title of the OGE Form 201 and add a warning to requestors that intentional falsification of the information required by the form may result in prosecution under 18 U.S.C. Sec. 1001. OGE is proposing that this renewal request to OMB also cover the fully automated version of the OGE Form 201, available only through the OGE Web site at www.oge.gov

 

President Signs Bill Limiting Online Posting Requirement of the STOCK Act

On April 15, 2013, President Obama signed into law S. 716, a bill that, among other things, limits the STOCK Act’s requirement for online posting of public financial disclosure reports.

The enacted bill limits the STOCK Act’s online posting requirement to the President, the Vice President, and any officer occupying a position at Levels I and II of the Executive Schedule as defined by 5 U.S.C. §§ 5312 and 5313. Approximately 67 officials in the Executive Branch hold such positions.

With regard to e-filing, the bill extends the date by which OGE must develop an e-filing system to January 1, 2014, and eliminates the requirement that the system allow for the searching, sorting and downloading of data contained in the reports.

You can access the full text of S. 716 at: http://thomas.loc.gov/cgi-bin/query/z?c113:S.716:

Congress Passes Bill Limiting Online Posting Requirement of the STOCK Act; Bill Heads to President

Congress has passed a bill that, among other things, would limit the STOCK Act’s requirement for online posting of public financial disclosure reports that is set to go into effect on April 15, 2013.

If enacted by the President, the bill (S. 716) would limit the STOCK Act’s online posting requirement to the President, the Vice President, and any officer occupying a position at Levels I and II of the Executive Schedule as defined by 5 U.S.C. §§ 5312 and 5313. Approximately 67 officials in the Executive Branch hold such positions.

The bill would also extend the date by which OGE must develop systems to enable the electronic filing of public reports to January 1, 2014, and would eliminate the requirement that the systems allow searching, sorting and downloading of data contained in the reports. The bill will now proceed to the President for his consideration. 

 

OGE Letter to Congress Concurs with the NAPA Report

On April 5, 2013, the U.S. Office of Government Ethics (OGE) sent a letter to congressional leadership concurring with the National Academy of Public Administration (NAPA) study recommendation to indefinitely suspend a STOCK Act provision that would require online posting of the personal financial data of approximately 28,000 federal employees.

A copy of OGE’s letter may be found on OGE’s website at: http://www.oge.gov/About/Legislative-Affairs-and-Budget/Congressional-Correspondence/

 

OGE Issues Legal Advisory Regarding Ethics-Related Legislative Activity from the 112th Congress and Updated Compilation of Ethics Laws

The U.S. Office of Government Ethics (OGE) has issued a Legal Advisory updating relevant legislative activity from the recently ended 112th Congress, including the Stop Trading on Congressional Knowledge Act of 2012 and the Presidential Appointment Efficiency and Streamlining Act of 2011. The Legal Advisory also discusses other ethics-related provisions of note and trends in legislative activities. For more information, please see Legal Advisory LA-13-03 dated April 4, 2013, http://www.oge.gov/OGE-Advisories/Legal-Advisories/Legal-Advisories/

In addition, OGE has published a newly updated “Compilation of Federal Ethics Laws” that includes all provisions signed into law through January 13, 2013. The compilation includes not only the laws within the jurisdiction of the ethics program, but also related statutes of interest to the Executive Branch ethics programs, such as the Hatch Act. The Compilation may be found on OGE’s website at: http://www.oge.gov/Laws-and-Regulations/Statutes/Compilation-of-Federal-Ethics-Laws/

 

National Academy of Public Administration Releases Report on STOCK Act

On March 28, 2013, in accordance with section 2 of Public Law 112-178, the National Academy of Public Administration (NAPA) submitted an independent study on the impact of the STOCK Act to Congress and the President of the United States.

The five-member Panel of Fellows that conducted the study made the following recommendation: Congress should indefinitely suspend the online posting requirements that are due April 15, 2013, and the unrestricted access to searchable, sortable, downloadable databases, currently planned for October 2013, while continuing implementation of other requirements of the STOCK Act.

Read the NAPA report, The STOCK Act: An Independent Review of the Impact of Providing Personally Identifiable Financial Information Online at http://www.napawash.org/wp-content/uploads/2013/03/STOCKactFinal1.pdf

 

OGE Issues Legal Advisory Regarding the Periodic Reporting of Spouse and Dependent Children Transactions

The U.S. Office of Government Ethics (OGE) has issued a Legal Advisory explaining that covered Executive Branch employees must file periodic reports of transactions involving separately owned assets of their spouses and dependent children. OGE is in the process of amending the OGE Form 278-T to reflect this requirement. This Advisory amends the guidance provided in OGE LA-12-04. You can access this Legal Advisory, LA-13-01, dated January 18, 2013, at:

http://www.oge.gov/OGE-Advisories/Legal-Advisories/Legal-Advisories/

 

Reminder: Beginning on Jan. 1, 2013: Include Spouse and Dependent Children Transactions on 278-T

Just a reminder that an employee subject to the periodic transaction reporting requirement (278-T) under subsection 103(l) of EIGA must also report any purchase, sale, or exchange of securities by the employee’s spouse or dependent children.  The periodic transaction reporting requirements for an employee’s spouse and dependent children covers transactions occurring on or after January 1, 2013.

President Signs Amendment to Extend STOCK Act Posting Deadline to December 8th

The Office of Government Ethics reports:  On September 28, 2012, President Obama signed into law S. 3625, which extends the date by which certain Executive Branch public financial disclosure forms must be made available on the internet to December 8, 2012.   Subsection 11(a)(1) of the STOCK Act (Public Law 112-105), originally required that by August 31, 2012, public financial disclosure forms filed pursuant to title I of the Ethics in Government Act of 1978 (EIGA) in calendar year 2012, and in subsequent years, be made available to the public on the official websites of the respective Executive Branch agencies not later than 30 days after such forms were filed. The STOCK Act was amended by S. 3510 (Public Law 112-173) to move this deadline to September 30, 2012, and the U.S. District Court for the District of Maryland Southern Division subsequently enjoined posting under the STOCK Act until October 31, 2012.  Section 1 of S. 3625 extends the effective date of subsection 11(a)(1) of the STOCK Act to December 8, 2012, except for certain high-level filers occupying positions listed at Level I and II of the Executive Schedule.

S. 3625 also directs the National Academy of Public Administration to study the issues raised by website publication of financial disclosure forms and to issue a report with findings and recommendations. In addition, section 3 of S. 3625 clarifies that an employee subject to the periodic transaction reporting requirement under subsection 103(l) of EIGA must also report any purchase, sale, or exchange of securities by the employee’s spouse or dependent children.  The periodic transaction reporting requirements for an employee’s spouse and dependent children cover transactions occurring on or after January 1, 2013.

S. 3625 is available in portable document format (PDF) on OGE’s website at: http://www.oge.gov/About/Legislative-Affairs-and-Budget/Ethics-Legislation/

 

Full Opinion of Temporary Injunction of Section 11, STOCK Act

For those interested in reading the full opinion from the U.S. District Court for the District of Maryland, Southern Division, regarding the temporary injunction against implementing Section 11 of the STOCK Act, the link is below.

http://www.lawfareblog.com/wp-content/uploads/2012/09/SEA-26-Memorandum-Opinion.pdf

 

Federal District Court Issues Temporary Injunction Against Section 11 of STOCK Act

On September 13, 2012, the Federal District Court for the District of Maryland Southern Division issued a temporary injunction against implementing section 11 of the STOCK Act until October 31, 2012. The Office of Government Ethics will provide an update by close of business September 14, 2012.

President Signs Amendment to Extend STOCK Act August 31st Posting Deadline to September 30th

The Office of Government Ethics announced today that the President signed the amendment to extend the STOCK Act posting requirement to September 30. 

Deadline to Post Reports Per STOCK Act Extended and Other Related News

The Washington Post reports that the ACLU has sued to stop the online financial disclosure requirement for federal workers.  In addition, Congress extended the posting requirement deadline to September 30.

Maryland Congressman Voices Security Concerns Re: the STOCK Act

Rep. Chris Van Hollen has voiced concerns over disclosure requirements for federal workers included in the recently passed Stop Trading on Congressional Knowledge Act.

In a letter written to the U.S. Office of Government Ethics on Tuesday, Rep. Van Hollen called himself an “advocate of open and transparent government” and said he supports the disclosure requirements in principle, but pointed to security concerns that should be addressed.

Scientists Voice Opposition to the STOCK Act

An article in Government Executive reports that the Association of Scientists, which represents scientists in the National Institutes of Health and others receiving federal research grants, said the STOCK Act will put its members at risk for identity theft and will drive top scholars to the private sector, where they can have more privacy. The organization said the requirements that were in effect prior to the April 4 signing of the STOCK Act are sufficient, and the new provisions are creating superfluous administrative tasks that take away from accomplishing real work.

The group wrote a letter Monday to the chairman and ranking member of the Senate Homeland Security and Governmental Affairs Committee -- Sens. Joe Lieberman, I-Conn., and Susan Collins, R-Maine, respectively -- to voice its concerns.

STOCK Act Backlash

A Washington Post article summarizes negative reactions to the STOCK Act. Here's an excerpt:

The Senior Executives Association on Tuesday sent letters to congressional leaders on civil service issues, saying that “intrusive requirements” of the Stop Trading on Congressional Knowledge Act “are already having a chilling effect on the recruitment and retention of career executives.”

It's not unusual for a reform to have negative side effects. It remains to be seen whether the SES public reporting provisions of the STOCK Act will turn out to be a net plus or net negative. We welcome your thoughts on this issue. One of our Reporters has been on top of this issue for months, but community feedback can only strengthen her efforts.

Use of our "Category" system for organizing archival material may facilitate tracking developments on the STOCK Act:

Issues: Financial Disclosure

Clicking this category name in the list in the left hand column enable instant access to all our posts on this topic.

Interesting Washington Post Article on Presidential Candidates 278s

A Washington Post article discussed in depth the OGE 278 (Public Financial Disclosure) requirements for Presidential candidates, including focus on what must be disclosed and when.

President signs STOCK Act

OGE reports:

"On April 4, 2012, the President signed the Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act) (S. 2038). The Act establishes new requirements for Executive Branch ethics programs, ethics officials, and the thousands of employees who currently file financial disclosure reports pursuant to the Ethics in Government Act. OGE fully supports the Act’s focus on improving transparency and promoting public confidence in government and is carefully analyzing the provisions of the new law. In consultation with DAEOs and other senior agency ethics officials, OGE will issue a series of Legal, Program, and Education Advisories to implement the Act’s provisions.

Questions from agency ethics officials should be directed to the OGE Team that supports your agency. Media and related inquiries should be directed to Vincent Salamone at (202) 482-9292."

See STOCK Act: Download STOCK Act

STOCK Act passes Senate and heads to President

POLITICO reports (3/22/12 2:03pm):

After weeks of delays, the Senate on Thursday sent a bill banning congressional insider trading to President Barack Obama for his expected signature.

The Senate voted 96 to 3 to pass a watered-down STOCK Act, which would bar members of Congress, their staff and some federal workers from profiting from non-public information obtained through their jobs.

• Read more: http://www.politico.com/news/stories/0312/74364.html
• Read CBS Story: http://www.cbsnews.com/8301-503544_162-57402604-503544/congress-passes-scaled-back-stock-act/ (discussing drop of additional lobbyist registration amendment).
• Read Huffington Post article: http://www.huffingtonpost.com/2012/03/22/stock-act-senate-insider-trading-ban_n_1373081.html
• See OGE side-by-side comparison of House and Senate versions. http://www.oge.gov/About/Legislative-Affairs-and-Budget/Congressional-Correspondence/NEW--OGE-Comparison-of-Certain-Provisions-of-the-Senate-and-House-Versions-of-the-Stop-Trading-on-Congressional-Knowledge-Act-(STOCK-Act)(S--2038)/ 

 

Federal Times reports on possible STOCK Act vote

The Federal Times reports that the Senate may vote on the STOCK Act as early as Thursday morning.  See full article at http://www.federaltimes.com/article/20120320/CONGRESS02/203200306/1001.

More Discussion of the Stock Act

The Washington Post ran an article detailing OGE's plan to post the public financial disclosure reports of Presidentially-Appointed, Senate-Confirmed employees on its web site, as soon as next week.  It also discusses some of the details in the Stock Act. 

Checklists, Other Aids for OGE Form 450 Review?

If March 8 is not too late for OGE to distribute a belated though still welcome e-mail on the subject "OGE Resources Available to Assist Ethics Officials Reviewing OGE Form 450," then maybe it's not too late for us to issue the following query:

Have any ethics offices developed their own checkists or other materials to facilitate review of OGE Form 450s?

If so, we would be glad to help you share them with other ethics officials.

Edited March 12 to correct typos.

Draft STOCK Act Would Increase Senior Manager Financial Disclosures

Federal Times suggests that thousands of government employees could be adversely affected by the proposed STOCK Act:

The financial disclosure forms for at least 28,000 senior federal civilians and military officers would be posted on the Internet under a bill now moving through Congress.

The Stop Trading on Congressional Knowledge (STOCK) Act , already passed by the House, would require that financial disclosure forms be posted on a government website. Those who fill out called Office of Government Ethics (OGE) Form 278 include the president and vice president, presidential appointees, Senior Executive Service members, and general and flag officers. The forms, which are filed annually, are typically available only in paper form in response to a request.

Senate language that would include even SF-450 forms is expected to be deleted, but senior managers are concerned:

Putting the forms on the Internet would appear to be "a gross violation of the spirit of the Privacy Act," Bonosaro and SEA General Counsel William Bransford said in a recent letter to Senate leaders. ...

Supervisors could be subject to "unwarranted personal scrutiny by their subordinates, causing tension and problems in the workplace," they wrote, while foreign interests, including terrorists, could get access to information on federal employees serving abroad, Bonosaro and Bransford said.

OGE's side-by-side comparision of the STOCK Act

It is worthy to take a look at the Office of Government Ethics side-by-side comparison of the various versions of the STOCK Act, which could create a public, sort and searchable, database of financial disclosure information in an effort to stymie insider trading concerns.  See Download S2038 side-by-side[1]

Govt attorney pleads guilty to conflict of interest

Consumer Products Safety Commission attorney plead guilty to a conflict of interest violation and filing false statements on his "ethics forms."  The charges stem from his claim to have “Insider Knowledge” in advertising his private law practice and his failure to disclose this outside business on his disclsoure reports.  He also represented a private client before the Federal Government.

Read the full DOJ press release, see http://www.justice.gov/usao/md/Public-Affairs/press_releases/press08/GovernmentLawyerGuiltyofConflictofInterestandFilingFalseDisclosureForms.html.

IT Contractor's Security Lapse on Disclosure Forms Creates Big Headaches for SEC

This morning's New York Times reports:

Two years ago, the S.E.C. began monitoring its employees’ investments more closely to allay public concern about possible conflicts of interest. Until then, its ethics office had encouraged employees to police themselves by checking a limited database of prohibited transactions.

The new system required employees to use a more comprehensive database, the Ethics Program System, to clear their securities transactions in advance and to record details about their financial holdings. To manage E.P.S., the agency hired Financial Tracking Technologies of Riverside, Conn., which provides similar services for money managers and large public companies.

At the time, the S.E.C. assured its employees that their brokerage account numbers and other financial data would be safe. The S.E.C.’s security personnel, the agency said, would test and audit the system. Besides, only “a small number of employees at the contractor” would have access to E.P.S., and those employees would undergo rigorous background checks, according to an e-mail sent to S.E.C. employees in the fall of 2009.

As it turns out, the IT contractor did not fulfill its security representations. The Times article describes the SEC's efforts to contain the problem and prevent similar issues. A National Treasury Employees Union representative noted:

This is particularly disturbing since the S.E.C. apparently had no mechanism to ensure that the outside contractor was maintaining the appropriate level of privacy and security in handling this private data.

By this time our more thoughtful ethics official readers will be asking themselves:

    How does my agency's security for financial disclosure information in electronic format stack up?

Determining Who Should File SF 450

Think maybe you are requiring too many people to file SF 450 forms? Not enough? 

One place to seek help is the analytical aid OGE released in 2009.

Update: With today's upgrade of the OGE website, the material is at a different URL. Thanks to Patrick Sheperd for the tip. 

OGE updates regs for gift reporting

The Office of Government Ethics issued its final rule (technical amendment) increasing the financial disclosure reporting threshold for gifts from $335 to $350, to correspond with the Foreign Gifts & Decorations Act.  See 5 CFR 2634.304 and 2634.907(g).  The rule is effective July 1, 2011, and retroactive to January 1, 2011.  The rule also increases the threshold for exclusion for individual items from $135 to $140.  The amendment also increases the gift exception ceiling for non-sponsor gifts of free attendance at widely attended gatherings.  See 5 CFR 2635.204(g).

See Fed. Reg. notice at http://www.gpo.gov/fdsys/pkg/FR-2011-07-01/pdf/2011-16642.pdf.

Former Army Contracting Officials Charged with ... Filing False Ethics Forms

A Justice press release reports that a former Army contracting official and his spouse were indicted for conspiracy to defraud the US, filing false tax statements, and filing false statements on their Government ethics financial disclosure documents.  See full press release at http://www.justice.gov/opa/pr/2011/June/11-tax-821.html.

President's 2010 Public Financial Disclosure Report Released

Cnn.com ran an article this morning that discusses the changes to President Obama's investments, as reflected on his 2010 public financial disclosure report, released Monday.  Among the biggest changes from last year's report- more college savings in his 529 plans and large investments in U.S. Treasury securities.  The President and Vice-President's reports are posted on the White House web site.

Interesting articles on Congressional Financial Disclosures

Amanda Becker authors an interesting article about Congressional financial disclosure requirements and penalties.  See full article at http://www.rollcall.com/issues/56_119/financial-disclosure-congress-205462-1.html.  She previously published another article on the same revision of the instruction manual from the House Ethics Committee, which avoided including same-sex spouse interests as a reportable information.  See http://www.rollcall.com/issues/56_117/financial-disclosure-same-sex-couples-205356-1.html?pos=adp.

For access to the new House Ethics Committee guidance, see: http://ethics.house.gov/Subjects/List.aspx?subid=6 

Confirmation Process Reforms Proposed

Via The American Prospect

It's hard to overstate the extent to which the confirmation process has become a mess for everyone involved; presidents are responsible for filling thousands of positions, nominees are forced to endure endless background checks and intense personal scrutiny, and appointees -- even minor ones -- face the prospect of needless, partisan obstruction in the Senate. Over the years, a bevy of experts have offered a stream of suggestions on how to reform the process, but they tend to fall on deaf ears, for mostly straightforward reasons. Simply put, legislators are incredibly loath to give up influence, particularly when it affords them an opportunity to pressure the administration; it's not rare for presidential appointees to become bargaining chips in legislative fights, either as hostages (to be used against the White House) or as sweeteners (from the president) to placate lawmakers.

Resolving Conflicts If Google Exec Appointed to Cabinet

An IEC member tipped us off to a wonderful CNN article about conflicts of interest implicated by a possible appointment of Google Chairman Eric Google to be Secretary of Commerce. Here's an excerpt:

"Putting it in a blind trust would be hopelessly ineffective," said Alan Morrison, professor at George Washington Law School. "It's the worst kind of fig leaf, because it's not 'blind' in any sense of the word. What's Schmidt going to say? 'Do I own Google? Really?'"

The Office of Government Ethics mandates that employees of the executive branch can't own more than $15,000 of a stock or asset that would conflict with their work. Going from $5 billion to $15,000 isn't going to happen in a day.

To get around that requirement, the OGE allows people in conflict to recuse themselves from certain activities. That means even after his Google shares are put in trust, Schmidt would still have to recuse himself if a conflict arises with Google.

The good news for Schmidt is that the Department of Commerce doesn't deal all that heavily in Google's businesses.

Articles about high-profile, real-life occurrences make some of the best training material. It's hard to imagine a better example than this to illustrate the OGE 278, financial disclosure and divestiture of assets.

IEC Journal lives or dies by reader contributions, so keep us in mind when you come across something of interest to the community, especially something this useful.

 

What Information to Report on OGE Form 450

Not sure what should be reported on the OGE Form 450?

Here is a reformatted version of a resource list Mark Stone distributed last year.  As always, we welcome reader suggested additions and improvements:

1. The Confidential Financial Disclosure Report form (OGE Form 450). This contains some very good instructions. 
2. OGE's Frequently Asked Question (FAQ) sections, one for filers of the OGE Form 450, and one is for ethics officials who review the OGE Form 450. 
3. OGE's Guidance for Reviewers of the OGE Form 450, Part I (Assets & Income) (2008).
4. DAEO-Gram entitled “Diversified and Sector Mutual Funds.” (August 25, 2000). Contains guidance on how to determine whether a mutual fund is a “diversified mutual fund” (which does not have to be reported) or a “sector mutual fund” (which does have to be reported).  At the end of the memo are two helpful lists (lists of examples of each type of fund).
5. Public Financial Disclosure:  A Guide to Reporting Selected Financial Instruments (2008). Contains guidance on how to report 20 sophisticated financial assets (such as American Depositary Receipts and Phantom Stock).  Originally intended as guidance for the Public Financial Disclosure Report (SF 278), it can also be useful when completing or reviewing the OGE Form 450.  
6. 5 C.F.R. 2634.90

Former Staff Member in U.S. House of Representatives Convicted on Corruption Charges

A jury found a former staff member in the U.S. House of Representatives guilty on corruption charges relating to his acceptance of an all-expenses paid trip to Game One of the 2003 World Series.  See DOJ Press Release at: http://www.justice.gov/opa/pr/2011/February/11-crm-176.html.  Charges included lying on his financial disclosure about the gift from a lobbyist.

Thomas to amend financial disclosures for past 13 years

Supreme Court Justice Thomas neglected to include it, as required, on the report of his spous's positions with Michigan's Hillsdale College, the Heritage Foundation and the Republican leadership in the House. Thomas blamed the error on misunderstanding the filing instructions.  See Washington Post article at http://www.washingtonpost.com/wp-dyn/content/article/2011/01/24/AR2011012404092.html or CNN article at http://www.cnn.com/2011/US/01/24/thomas.financial.disclosure/index.html.

To view Supreme Court Justices' financial disclosures see http://moneyline.cq.com/flatfiles/editorialFiles/moneyLine/reference/scotus/scotus.html.

SF 450 Review Checklist

The Pipeline and Hazardous Materials Safety Administration (PHMSA) was gracious enough to provide their formatted user-friendly, one-page checklist to help with OGE Form 450 reviews.  It is based on their interpretation of materials and notes from an OGE course.

Download 450 Review ChecklistPHMSA

We very much appreciate PHMSA's generous spirt, and we strongly encourage other IEC members to share their similar work products.  We can all operate more efficiently if we are not constantly reinventing the wheel. We have been receiving many more user contributions this month. Please help continue this desirable trend!

OGE 2009 Prosecution Survey

The Office of Government Ethics issued DAEOgram DO-10-017 on November 9, 2010 announcing the publication of the 2009 Conflict of Interest Prosecution Survey.   The survey contains summaries of cases involving conflict of interest violations.  The Department of Justice prosecuted the cases. See http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2010/do10017.pdf

Difference in conflict rules for Congressional and Executive Branch Personnel

An interesting article from the Wall Street Journal which discusses how Congressional staffers can gain from trading on stock related to the Congressional work without fear of legal consenquences in part because Insider Training rules don't apply to Congress.  See full article at http://online.wsj.com/article/SB10001424052748703431604575522434188603198.html#

Full Disclosure for Military Mentors

A Federal Times story discusses a development in the "senior mentor" issue.  Here's the lead:

After pressure from two key senators, the Pentagon has reversed course and will require that the retired generals and admirals it hires as consultants file public, not confidential, financial disclosure statements, according to letters from Congress and the Defense Department.

Senators Carl Levin, D-Mich., and John McCain, R-Ariz., the chairman and ranking member on the Armed Services Committee, told the Pentagon that "senior mentors exercise a level of ... influence" that demands public disclosure. They wrote that if the Pentagon resisted, they would propose legislation mandating it.

Questions About Medicare Chief Interests

A Washington Times article raises questions about possible undisclosed conflicts of interest on the part of the chief administrator for Medicare and Medicaid: 

White House officials say Dr. Berwick is in full compliance with all ethics rules, and his financial disclosure form instructs nominees to list only former clients of a business or nonprofit in which the nominee was directly involved in providing a service for a fee for more than $5,000.

Dr. Berwick, 63, would have faced standard questioning about the finances of the Massachusetts-based nonprofit group if he had gone through the normal confirmation process, but his recess appointment last month means he can serve until the end of the next session of Congress without a Senate vote or a hearing. ...

"Dr. Berwick will be responding to Senator Grassley's letter," White House spokesman Reid Cherlin said. "But the independent office of government ethics has certified that Dr. Berwick is in full compliance with all of the ethics rules and conflict rules that Congress has set forth."

Scrutiny of Military Senior Mentor Program

This morning's USA Today has an article discussing the loosening of financial disclosure requirements in the Pentagon's "senior mentor" program. 

SF-278 Forms for Pres & V.P. Available

2009 financial disclosure forms for the President and Vice President are available at the White House web site. These could make good training examples.

FBI Agent Indicted for Ethics Violations

An FBI agent in Oxford, Mississipi has been indicted for, among other things, failing to disclose to the FBI the fact that he had a financial interest in an under-construction building Oxford FBI Building, and failing to truthfully complete an annual report of his assets and income, liabilities, and positions with organizations outside of his FBI employment.  The indictment further alleges that the agent knowingly and willfully made and used, and caused to be made and used, a false writing and document (that is, his 2004 and 2005 Confidential Financial Disclosure Reports), knowing the Reports to contain material false and fraudulent statements and entries. A DOJ press release is available.

Mark Stone: What Must Be Reported on SF-450

Mark Stone's e-mail newsletter is a great source of ethics information. His annotated bibliography of guidance on what must be reported on a Form 450 is a recent example. Old issues of the newsletter are available on the Air Force Materiel Command (AFMC) ethics website (registration required). Contact Mr. Stone to be added to the mailing list (address modified to reduce spam):

Mark --DOT-- Stone --AT-- wpafb -- DOT af --DOT-- mil

Former DHS Chief Nominee Guilty of Lying to White House Vetters

Kerik Confesses to Cheating I.R.S. and Telling Lies - NYTimes.com.

Bernard B. Kerik, a former detective who rose to lead the New York Police Department through the 9/11 attack before his career crumbled in scandal, pleaded guilty Thursday to eight charges including tax fraud and lying to White House officials.

Proposed FAR Change To Address Contractor Employee Conflicts of Interest

A November 13 Federal Register notice outlines a proposal to amend the Federal Acquisition Regulation (FAR) to address personal conflicts of interest by employees of Government contractors.

Government Executive has analysis of the proposal, including these comments:

But the burden for enforcing the rule -- written by the Civilian Agency Acquisition Council, Defense Acquisition Regulations Council and the Office of Federal Procurement Policy -- is placed almost exclusively on the contractor.

The company would be required to inform covered employees of their obligation to disclose and prevent "even the appearance of personal conflicts of interest." To enforce the rule, the contractor would be required each year to obtain, maintain and update financial disclosure statements from each covered employee assigned to a task under the contract.

The disclosure statement would spell out all personal conflicts of interest the employee could face in impartially executing the contract, including the financial assets of the worker or their close family members. The rule stipulates a host of financial connections that must be disclosed, including salaries, consulting relationships, research funding, stocks and real estate.

The deadline for comments on the proposed rule is January 12, 2010.

Vetting Gone Wrong

Fedblog has some comments about the vetting process in the case of the recent TSA nominee:

Tax errors and employer reprimands are the front line of things that show up in a background check of someone. If you miss them, something is wrong. And it's unstrategic to have this stuff leak out the way it has. It means you're setting up your own minefield, and forcing your own people to walk through it with you. I have no idea how things got to this state, but it's pretty pronounced.