January 30, 2017
Last weekend, President Trump announced his long awaited ethics pledge. We’ve gotten a lot of questions about it—what’s in it? what’s missing? what’s different than Obama’s? We break it down:
Section 1 – The Trump Ethics Pledge
Paragraph 1 – A new five-year lobbying activity ban with respect to an appointee’s former agency contains an exception for “communicating or appearing with regard to … any agency process for rulemaking, adjudication or licensing” This exception does not track the language in the relevant exceptions in the Lobbying Disclosure Act and could give former appointees the opportunity to lobby their former agency on rulemaking, adjudication and licensing matters. These matters are excluded from the definition of “lobbying activities” under section (2)(n). Otherwise, the definition of “lobbying activities” is the same as in the Lobbying Disclosure Act, which covers both lobbying contacts and any efforts in support of such contacts (i.e. behind- the-scenes assistance).
Paragraph 2 – The revolving door ban for appointees leaving government is essentially a restatement of a statutory prohibition senior employees are already subject to under 18 U.S.C. 207(c). The ban omits the important two-year extended restriction placed on appointees in the Obama Pledge.
Paragraph 3 – The revolving door ban for appointees leaving government to lobby contains an exception for “communicating or appearing with regard to …any agency process for rulemaking, adjudication or licensing” This exception does not track the language in the relevant exceptions in the Lobbying Disclosure Act and could give former appointees the opportunity to lobby covered officials on rulemaking, adjudication and licensing matters. As noted above, these matters are excluded from the definition of “lobbying activities” under section (2)(n). Otherwise, the definition of “lobbying activities” is the same as that term is defined in the Lobbying Disclosure Act, which bars both lobbying contacts and any efforts in support of such contacts (i.e. behind-the-scenes assistance).
Paragraph 4 – A new permanent ban bars appointees leaving the government from engaging in any activity that would require them to register under the Foreign Agents Registration Act. By registering under the Lobbying Disclosure Act, former Trump appointees may find a way to circumvent this restriction. The Foreign Agents Registration Act exempts from registration any agent who is engaged in lobbying activities on behalf of a foreign business interest and is registered under the Lobbying Disclosure Act. Furthermore, this prohibition is misleading since it does not address the significant revolving door issue that will most likely benefit senior Trump nominees and appointees, such as Rex Tillerson (formerly with ExxonMobil), Gary Cohn (formerly with Goldman Sachs) and Anthony Scaramucci (formerly with Skybridge Capital), in business dealings with foreign governments. These individuals are unlikely to engage in FARA covered activities upon leaving the Administration. Rather, after making significant policy decisions regarding sanctions, trade and similar matters they are more likely to engage in business dealings with foreign governments or their agents on behalf of new employers once they leave the Administration.
Paragraph 5 – Lobbying gift ban is the same as the Obama Pledge.
Paragraph 6 – The revolving door ban on all appointees entering government is the same as the Obama Pledge, which bars appointees for 2 years from the date of appointment from participating in any specific party matters that directly and substantially relates to their former employer or former clients, including regulations and contracts.
Paragraph 7 – The revolving door ban on lobbyists entering government omits a significant two-year Obama Pledge restriction barring lobbyists from seeking or accepting employment with any agency that they lobbied within the two-year period before the date of their appointment, although they continued to be barred from participating in particular matters on which they lobbied or in the specific issue area on which they lobbied.
Paragraph 8 – The employee qualification commitment is the same.
Section 2 – Definitions
Paragraph (2)(e) – The definition of “Executive Agency” is narrowed to specifically exclude separate agency components from the scope of the revolving door restrictions. Thus, a former Treasury Department appointee may be able to lobby the IRS but not the Department of the Treasury.
Paragraph (2)(n)-(p) -The new Executive Order includes a new definition of “lobbying activities” that was not in the Obama Pledge. As noted above, it excludes “communicating or appearing with regard to … rulemaking, adjudication and licensing” from the scope of the revolving door ban. This exception does not track the language in the relevant exceptions in the Lobbying Disclosure Act and could give former appointees the opportunity to lobby their former agency and covered officials on rulemaking, adjudication and licensing matters. Otherwise, the definition of “lobbying activities” is the same as in the Lobbying Disclosure Act, which covers both lobbying contacts and any efforts in support of such contacts (i.e. behind- the-scenes assistance).
The new EO also excludes the definition of “registered lobbyist or lobbying organization,” but retains the definition of “lobby” and “lobbyist.” The new EO also adds a separate definition of “Lobbying Disclosure Act.”
Paragraph (2)(r) – The term “particular matter” is defined by reference to a statute – 28 U.S.C. 207 – that does not exist. It appears that the drafters of the Executive Order intended to model Paragraph (2)(r) after the definition contained in the Obama Ethics Pledge, but inadvertently omitted the correct statutory citation. Paragraph (2)(g) of the Obama Ethics Pledge referenced 18 U.S.C. 207, which includes a definition of “particular matter.”
Paragraph (2)(q) – A new term “on behalf of another” is added and defined to mean “on behalf of a person or entity other than the individual signing the pledge or his or her spouse, child, or parent.” There is no reference in the Executive Order to “on behalf of another.” The only close reference is in paragraph (4), which does not appear to be relevant (“I will not, at any time after the termination of my employment in the United States Government, engage in any activity on behalf of any foreign government or foreign political party…”). However, if you read this definition in conjunction with Paragraph (2)(x), it is possible that the Executive Order is intending to limit the application of 18 USC § 207(c) to permit communications made with the intent to influence “on behalf of any other person” as that term is defined in 5 CFR § 2641.204(g) and (h). Read broadly, this would override the restrictions in section 207(c) to permit an appointee such as Jared Kushner when he leaves government service to communicate with his former agency (i.e., the White House) regarding matters involving the President who would presumably qualify as a parent.
Section 3 – Waiver
The Executive Order makes the standard for granting a waiver completely discretionary. Specifically, the Executive Order removes the standard for granting waivers set forth in the Obama Pledge. The Obama Pledge provided for waivers to be granted under the following circumstances: (1) when the literal application was inconsistent with the purposes of the restriction or (2) if it was in the public interest, which was defined to include “exigent circumstances relating to national security or the economy.” Waivers are no longer granted by the Director of the Office of Management and Budget in consultation with the White House Counsel or his designee, but rather by the President or his designee.
Section 4 – Administration
Paragraph 4(a) – The Executive Order removes the requirement from the Obama Pledge for compliance with the terms of the Ethics Pledge to be implemented through a written ethics agreement, and for spousal employment and other conflicts not addressed in the Pledge to be similarly addressed in written ethics agreements.
Paragraph (4)(c)(5) – A significant accountability measure – an annual public report – has been omitted from the Executive Order. By doing so, the EO removes the mechanism for requiring waivers to be publicly disclosed and made electronically available on the website. Now, copies of waivers will need to be requested under the Freedom of Information Act or through similar requests.