February 11, 2020
Update: The day after CREW called attention to the issue in the report below, Ambassador Braithwaite amended his nominee financial disclosure report and ethics agreement to reflect his continuing financial interest in Vizient Inc.
Ambassador Braithwaite wrote that he was amending his nominee report to reflect information that he “had inadvertently omitted from the report.” He explained that when he filed his nominee report, he believed that he would receive “employee benefit and compensation plan payments … immediately upon my resignation from the company.” Ambassador Braithwaite added that at the time, “I did not realize I was eligible for continued benefits under these two separate incentive plans, or that these plans provided for staggered payments over the course of several years.” Though Ambassador Braithwaite disclosed those continued benefits and staggered payments in his 2019 annual financial disclosure report, he did not amend his nominee report until February 12, 2020, the day after CREW called attention to the payments.
The State Department’s Alternate Designated Agency Ethics Official David Huitema wrote that after reviewing the amendments Ambassador Braithwaite made to the documents, “I continue to believe that Mr. Braithwaite is in compliance with the applicable laws and regulations governing conflicts of interest.”
President Donald Trump’s Ambassador to Norway, Kenneth Braithwaite, disclosed that he is still receiving payments from his former employer despite committing in ethics documents that he would forgo payments from the company once he started at the State Department. Now President Trump wants to give him a promotion.
On November 24, 2019, President Trump announced his intent to nominate Ambassador Braithwaite to be Secretary of the Navy. In the documents associated with the ambassador’s nomination to his current position, he indicated that he would not receive any payments from his former employer after entering government. Months after he was confirmed, however, he represented in ethics documents that he may have received as much as $339,538 in incentive payments from his former employer after entering government and wrote that he will continue to receive annual payments—together totaling another six-figure sum—through 2021.
President Trump has not yet sent Braithwaite’s nomination to Congress. Before he does, it is imperative that Ambassador Braithwaite publicly explain why he reported that he is continuing to receive payments from his former employer, and revise his original ethics agreement and nominee financial disclosure report to reflect his continuing financial interest in the company.
Braithwaite committed to receive payment prior to entering government
In ethics documents submitted along with his 2017 nomination, Ambassador Braithwaite told the Senate that he would not receive payments from Vizient Inc., his former employer, after starting his government position. Ambassador Braithwaite worked at the “health care performance improvement company” as its Executive Officer and Group Senior Vice President from November 2011 until January 2018. Ambassador Braithwaite was confirmed on December 21, 2017 and appears to have assumed his duties as Ambassador to Norway on February 8, 2018.
In the financial disclosure report associated with his nomination, Ambassador Braithwaite wrote that he expected to receive a $250,001 – $500,000 “incentive payment” from Vizient. In part 3 of the report, he added that the “[p]ayment will be received prior to the assumption of duties… I will realize no other benefits or severance payments” from Vizient.
Ambassador Braithwaite made a similar commitment in his ethics agreement, promising to receive the payment “[b]efore I assume the duties of the position of Ambassador.” He also committed to recuse from certain matters relating to Vizient for two years after receiving the payment unless he received a “waiver pursuant to 5 C.F.R. § 2635.503(c).” That section of the Code of Federal Regulations refers to “extraordinary payments from former employers,” which officials must receive prior to assuming their government duties.
As a result, the senators who confirmed Ambassador Braithwaite to his current position did so following a promise that he would not receive any payments from Vizient once he joined the government.
Braithwaite disclosed payments from Vizient made after entering government
Ambassador Braithwaite, however, indicated in a 2018 document detailing the extent to which he complied with the terms of his ethics agreement that he may have received the payment after he assumed his duties as Ambassador to Norway. While Ambassador Braithwaite did not specify on the form that the payment was from Vizient, it appears it must be since the document only tracks commitments officials make in their ethics agreements and the payment from Vizient was the only one Ambassador Braithwaite stated he was expecting to receive in his ethics agreement.
Not only did Ambassador Braithwaite represent that he received payments from Vizient after taking office, but he said in a subsequent form that he intends to keep getting more of them. He wrote in his 2019 annual financial disclosure report that he will continue to receive annual payments from Vizient through 2021.
Ambassador Braithwaite reported that he received a $156,962 payment from Vizient’s Short Term Incentive Plan (STIP) as well as a $182,576 payment from Vizient’s Long Term Executive Incentive Plan (LTEIP) on his 2019 annual report.
It is not entirely clear when Ambassador Braithwaite may have received the $156,962 payment from the STIP, though he indicated in his ethics agreement certification that he did not receive a payment from Vizient before entering government. Ambassador Braithwaite wrote in his 2019 annual report that he was “due to receive” a disbursement from the LTEIP in April 2018, which suggests that he received at least part of the $182,576 LTEIP payment roughly two months after he assumed his government duties
Ambassador Braithwaite also wrote that he expected to receive an additional $1,001 – $15,000 from the STIP in April 2019 as well as additional payments from the LTEIP “every April for the years 2019-2021” totaling $100,001 – $250,000.
CREW’s analysis of these documents was based on the most recent copies of Ambassador Braithwaite’s ethics agreement and certification of ethics agreement compliance available on the Office of Government Ethics’ (OGE) website as well as a copy of his nominee and 2019 annual reports obtained from OGE on February 11, 2020.
Ambassador Braithwaite must explain the discrepancies in his reports
Ambassador Braithwaite appears to have modified the terms of the payment from Vizient he referenced in his ethics agreement and nominee report without any acknowledgement by ethics officials on those documents that there had been a material change. Based on his ethics agreement, the payments from Vizient would fall into a category known as “extraordinary payments,” because they are made on the basis of a determination after it became known that the employee was entering government service and not pursuant to an established compensation, payment, or benefit plan. While permissible to receive before entering government services, payments made on this basis are prohibited after entering government services as an unlawful supplementation of salary per 18 U.S.C. § 209. However, the regulation permits payments made pursuant to established programs as “contained in bylaws, a contract or other written form, or if there is a history of similar payments made to others not entering into Federal service.” Ambassador Braithwaite’s note that the incentive payments from Vizient “are afforded to all other employees similarly situated that have retired from the company” suggests that the payments are part of Vizient’s established compensation program.
Even if the payments he receives from Vizient after entering government service are made pursuant to an established compensation program and are now deemed permissible by ethics officials, he would need to amend his ethics agreement and nominee report to reflect this change. And, there is no indication that Ambassador Braithwaite has done so.
It is possible that government ethics officials signed off on these changes but it is important for Ambassador Braithwaite to publicly explain the continuing financial interest in Vizient he later disclosed to ethics officials and why it is not consistent with the plan laid by his ethics agreement and nominee report. CREW has found that at least one other Trump administration official has submitted a supplement to his financial disclosure report due to a similar issue. Last year, the Director of OGE sent a letter to the Chair of the Senate Committee on Environment and Public Works informing him that Peter Wright, President Trump’s nominee for an Assistant Administrator role at the Environmental Protection Agency, “continued to hold an equity interest in DowDuPont at the time he filed his nominee financial disclosure report, and continued to do so until March 12, 2019.” Mr. Wright was Senior Counsel to the EPA Administrator at the time he held the conflicting asset.
OGE’s General Counsel also enclosed a letter from EPA as well as a supplement to Mr. Wright’s nominee report disclosing the asset, which he donated on March 12, 2019, “[t]o correct the previous error in Mr. Wright’s financial disclosure report and ethics agreement.”
OGE attached those letters as well as the supplement to Mr. Wright’s nominee report. No such letters or supplements, however, are included in Ambassador Braithwaite’s financial disclosure reports as of February 11, 2020. Like Mr. Wright, Ambassador Braithwaite should work with government ethics officials to revise his reports and explain why the information he later reported did not live up to their original terms.
Ambassador Braithwaite must account for his apparent failure to comply with the terms he outlined in his original ethics agreement and nominee financial disclosure report. It is particularly important that he explain the discrepancies between the ethics documents he filed when the Senate was considering whether to confirm him to his current position and those he filed after he was confirmed given his possible nomination for Navy Secretary. Congress and the public need to know the scope of Braithwaite’s ties to his former employer before they decide whether to hand him a massive promotion.