Overview
On his first day in office, President Biden moved quickly to issue a new ethics pledge for political appointees that expands on those imposed by his predecessors and is aimed especially at combating the so-called “revolving door” issue for government officials who come from, or leave for, the private sector.
The Executive Order on Ethics Commitments by Executive Branch Personnel contains a number of key restrictions, including:
- A Government-Specific Golden Parachute Ban. Appointees may not accept any salary, cash payment, or non-cash benefit (e.g., stock options) from their former employers for taking a position in government. Importantly, this "golden parachute" ban only applies to payments made pursuant to arrangements that are limited to individuals going into the government, and may not apply to payouts that are more broadly defined. The ban also may not apply to accelerated vesting for compensation or equity that an appointee has already earned.
- Revolving Door Bans – Entering Government. Appointees are prohibited for two years from participating in any particular matter involving specific parties that is "directly and substantially related" to their former employers or former clients, including regulations and contracts (an extension of the one-year ban under applicable regulations). Appointees who are registered lobbyists or registered under the Foreign Agents Registration Act (FARA) are further restricted.
- Revolving Door Bans – Leaving Government. Appointees agree to abide by the post-employment restrictions on communicating with their former executive agency for two years (an extension from the one-year "freeze" under the regulations), and further agree that these restrictions extend to communications with senior White House staff. Appointees leaving government also are prohibited from lobbying any covered executive branch official or non-career Senior Executive Service appointee, or engaging in any activity on behalf of any foreign government or foreign political party which, were it undertaken on January 20, 2021, would require registration under FARA, for the remainder of the Biden-Harris administration or two years following the end of their appointments, whichever is later.
- "Shadow" Lobbying Bans on Senior and Very Senior Appointees. In addition to the post-employment prohibitions contained in the regulations, senior and very senior appointees leaving government may not engage in "shadow lobbying" – i.e., they may not "materially assist" others in making communications or appearances that they are prohibited from undertaking themselves, sometimes called the "behind-the-scenes" loophole. Interestingly, though, to "materially assist" others does not include providing background or general education on a matter of law or policy based upon an individual’s subject matter expertise, potentially providing continuing opportunities for significant activities upon leaving government.
- Lobbyist Gift Ban. Finally, as was the case under the Obama and Trump ethics pledges, appointees are prohibited from accepting gifts from registered lobbyists or lobbying organizations for the duration of an appointee's service in the administration. What constitutes a gift is defined by regulation, but generally does not include modest food and non-alcoholic beverages, coffee, and donuts. Appointees, however, are prohibited from accepting gifts of $20 or less, and may not accept gifts of free attendance even if the gatherings are widely attended.
- Transparency and Waivers. The executive order prioritizes transparency. While the Director of the Office of Management and Budget may grant waivers to appointees from the above restrictions when "it is in the public interest to grant the waiver," she must consider specific factors and the waiver must be made public.
- Enforcement. The enforcement mechanisms of the pledge also are couched in transparency, allowing for notice of and a hearing for any violations. The Attorney General may investigate and commence civil actions, imposing penalties that include being barred from lobbying for up to five years. These penalties also are in addition to the criminal penalties that could result from violating the post-employment restrictions contained in the regulations.
- Department of Justice. In addition to the ethics provisions above, appointees also must "commit to conduct that upholds the independence of law enforcement and precludes improper interference with investigative or prosecutorial decisions of the Department of Justice."
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On January 19, 2021, President Trump issued an executive order revoking his ethics pledge, essentially freeing former political appointees from any of the constraints ostensibly imposed by the pledge. For example, those Trump-era political appointees no longer face a lifetime ban on certain FARA-registrable activities nor are they subject to the five-year prohibition on lobbying their former agencies.
All eyes now turn to the implementation and enforcement of Biden's ethics pledge. Those wishing to serve in the Biden-Harris administration should carefully review the new pledge, which sets a high bar for future government service.
