YOU WANT TO HIRE A FED? Rules on Seeking Employment and Post-Employment OBJECTIVES

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1 YOU WANT TO HIRE A FED? Rules on Seeking Employment and Post-Employment Society for Corporate Compliance and Ethics Institute Las Vegas October 15, 2012 John L. Szabo, Esq. Former Special Counsel for Ethics U.S. Nuclear Regulatory Commission OBJECTIVES Describe the major laws and rules affecting Federal employees on seeking future employment and post-employment Advise on how to discuss future employment with Federal employees under government rules Advise on activities of former Federal employees that are permissible and prohibited under government rules 1

2 MAJOR LAWS AND REGULATIONS Criminal Statutes (18 USC 207, 208) Standards of Conduct Regulations (5 CFR 2635) Post-Employment Regulations (5 CFR 2641) Procurement Integrity Act (41 USC 2104) STOCK Act (Public Law ) Ethics Pledge (EO 13490) WHO ARE SUBJECT TO THESE RULES Full-time and part-time employees of U.S. department or agency Special Government Employees (e.g. consultants) unless specifically exempted Not apply to contractors or other non- Federal personnel 2

3 SEEKING EMPLOYMENT CRIMINAL LAW PROHIBITION (18 USC 208(a); 5 CFR ) Prohibits Personal and Substantial Participation In Particular Matter Employee Knows Directly and Predictably Affects Financial Interests of Person With Whom Employee: Is Negotiating or Has Arrangement For Prospective Employment SEEKING EMPLOYMENT ELEMENTS OF VIOLATION I. Particular Matter Specific Proceeding Involving Deliberation, Decision, or Action Focused on Specific Persons or Discrete and Identifiable Class Includes Investigation, Application, Request for Ruling or Determination, Contract, Controversy, Charge, Accusation, Arrest, or Judicial or Other Proceeding General rulemaking 3

4 SEEKING EMPLOYMENT ELEMENTS OF VIOLATION II. Negotiating -- Discussion or Communication with a View Toward Reaching Agreement on Possible Employment Not Limited to Discussion of Terms and Conditions Discussion Not Limited by Setting SEEKING EMPLOYMENT DISQUALIFICATION Required Disqualification from Particular Matter Affecting Person With Whom Seeking Employment Should Inform Management of Disqualification (Recommend Written Documentation) No Required Disqualification if Granted Waiver If Employment Accepted, Disqualification Continues Until Termination of Federal Service 4

5 SEEKING EMPLOYMENT NO LONGER SEEKING EMPLOYMENT Employee or Prospective Employer Rejects Employment Possibility and Discussions Terminate, or Two Months After Sending Resume, Employee Received No Indication of Interest from the Prospective Employer Deferral of Employment Discussions is Not Rejection of Employment STOCK ACT Post-Government Employment Applies to all public financial disclosure report filers (i.e., senior employees and certain appointees) Requires submitting notification statement when engaged in negotiation or having agreement for future employment outside Federal government Does not apply to outside employment while Federal employee (still subject to agency outside employment regulation) Statement to include signature, name of entities in negotiation, and date commenced Must be submitted within 3 days of negotiation to designated agency ethics official 5

6 STOCK ACT Post-Government Employment Negotiation begins when employee enters into discussion or communication with another person mutually conducted toward future employment Does not include general mailings of resume Requires filing separate recusal with ethics official whenever there is a conflict of interest or appearance of conflict of interest PROCUREMENT INTEGRITY ACT (41 USC 2103) Applies to employees personally and substantially working on procurement for contract above simplified acquisition threshold ($150,000) Requires employee providing written notice of contact with an offeror about prospective employment, even if employee immediately rejects possibility of employment Requires employee to file written disqualification if employee commences to seek employment 6

7 INTERVIEW EXPENSES (5 CFR (e)(3)) Conduct regulations allow employees to accept travel expenses (e.g., meals, lodging, and transportation) from prohibited source in connection with bona fide employment discussions Prohibited sources include agency contractors, vendors, licensees, grantees, and others affected by employee MYTHS ABOUT POST-EMPLOYMENT Can t Work for Anyone Can t Work for a Government Contractor, Licensee, or Grantee Can t Contact Any Federal Employees Can t Be Involved in Work Performed as a Federal Employee 7

8 MAJOR POST-EMPLOYMENT LAWS CRIMINAL LAW (18 USC 207; 5 CFR 2641) PROCUREMENT INTEGRITY ACT (41 USC 2104) CRIMINAL LAW (18 USC 207; 5 CFR 2641) MAJOR RESTRICTIONS Lifetime Bar 2-Year Bar (Supervisors) 1-Year Bar (Senior Employees) 2-Year Bar (Very Senior Employees) 1-Year Bar on Trade or Treaty Negotiation 8

9 ENFORCEMENT AND PENALTIES (5 CFR ) Department of Justice Has Enforcement Responsibilities Agencies Required to Report Allegations to Justice Department and Notify Office of Government Ethics Criminal and Civil Penalties Under 18 USC 216 LIFETIME PROHIBITION (18 USC 207 (a)(1)) Affects All Former Federal Employees Prohibits for Life-- Appearances Before or Communications to Any Federal Employee With Intent to Influence On Behalf of Anyone, Other Than the United States On Any Government Particular Matter Involving Specific Parties In Which the Former Employee Participated Personally and Substantially while a Federal Employee 9

10 LIFETIME PROHIBITION ELEMENTS OF VIOLATION I. Appearances or Communications to Any Federal Employee -- Physical Presence or Imparting or Transmitting Information (Whether Orally, in Writing, or by Electronic Means) To Employee of U.S. Agency or Court (Excludes Congress) No Bar to Behind-the-Scenes Assistance LIFETIME PROHIBITION ELEMENTS OF VIOLATION II. With Intent to Influence Purpose is Seeking Government Ruling, Benefit, Approval, or Other Discretionary Action or Affecting Government Action No Bar to Routine Requests for Documents, Inquiring on Status of Matter, or Making Factual Statements or Asking Factual Questions, or Social Contacts 10

11 LIFETIME PROHIBITION ELEMENTS OF VIOLATION III. On Behalf of Anyone, Other Than U.S. -- Acting as Agent for Another or With Consent of Another and Subject to Control or Direction (Except U.S. Government) Includes Government Contractors No Bar to Self-Representation LIFETIME PROHIBITION ELEMENTS OF VIOLATION IV. Particular Matters Involving Specific Parties -- Specific Matter Involving Specific Parties in Which the United States is a Party or Has a Direct and Substantial Interest, Including Investigation Application Request for Ruling or Determination Contract Controversy Claim Charge Judicial or Other Proceeding Excludes Legislation or Generic Matters, Such as Rulemaking 11

12 LIFETIME PROHIBITION ELEMENTS OF VIOLATION V. Participation Action Through Decision, Approval, Disapproval, Recommendation, Advice, Investigation Personal : Direct Involvement or Active Supervision Substantial : Involvement is of Significance TWO-YEAR PROHIBITION (18 USC 207 (a)(2)) Affects All Former Federal Supervisors Prohibits for Two Years-- Communications to or Appearances Before any Federal Employee With Intent to Influence On Behalf of Anyone, Other Than the U.S. On Any Particular Government Matter Involving Specific Parties They Know Was Pending Under Their Official Responsibility Within One Year Before Terminating Service 12

13 ONE-YEAR SENIOR EMPLOYEE PROHIBITION (18 USC 207(c)) Affects Senior Employees: Basic Pay Equal to or Greater Than 86.5% of Level II Basic Pay Currently $155, or Above (Excluding Locality or Bonus Pay) Prohibits for One Year-- Appearances Before or Communications to Any Employee of Former Agency With Intent to Influence On Behalf of Anyone, Other Than the United States On Any Particular Agency Matter That Former Senior Employee Seeks Action ONE-YEAR SENIOR EMPLOYEE PROHIBITION (18 USC 207(h)) SEPARATE AGENCY COMPONENTS Office of Government Ethics May Designate Agency Components Distinct and Separate From Parent Agency (E.g., Air Force, FAA, CDC, OSHA) Only Applies to This One-Year Bar Permits Representation to Other Components of Agency 13

14 TWO-YEAR VERY SENIOR EMPLOYEE PROHIBITION (18 USC 207(d)) Affects Very Senior Employees: 5 USC 5312 Position or Pay Rate for EX- I (E.g. Cabinet) and Certain Senior White House Personnel Prohibited for Two Years-- Appearances Before or Communications to 5 USC Officials (EX I V) or Employees of Former Agency With Intent to Influence On Behalf of Anyone, Other Than United States On Any Matter Former Employee Seeks Action ONE-YEAR SENIOR/VERY SENIOR PROHIBITION (18 USC 207(f)) Affects Former Senior and Very Senior Employees Prohibits for One Year-- Knowingly Representing or Aiding or Assisting a Foreign Government or Party With Intent to Influence Decision of a Federal Employee 14

15 ONE-YEAR PROHIBITION ON TRADE OR TREATY NEGOTIATION (18 USC 207(b)) Affects All Former Federal Employees Prohibits for One Year Representing, Aiding, or Advising Anyone, Other Than United States on Ongoing Trade or Treaty Negotiation In Which Former Employee Participated Personally and Substantially During Last Year of Government Service MAJOR EXCEPTIONS AND WAIVERS (18 USC 207(j), (k)) Acting on Behalf of the United States Acting on Behalf of State or Local Governments as Elected Official Acting on Behalf of State or Local Governments or Certain Research Organizations (Only Applies to One-Year Ban) Uncompensated Statements Based on Special Knowledge (Only Applies to One-Year Ban) Furnishing Scientific or Technological Information to Government Pursuant to Waiver Testimony Under Oath 15

16 PROCUREMENT INTEGRITY ACT (41 USC 2104) Prohibits Former Employees Who Served in Certain Procurement Positions-- For One Year After Working on a Procurement Over $10 Million From Accepting Compensation for Service to the Contractor Prohibits-- Current or Former Employees with Access to Source Selection Information From Disclosing This Information Prior to the Award OTHER POST-EMPLOYMENT LAWS Compensation for Representations (18 USC 203) Prohibits receipt of compensation for representational services to Government Foreign Agents Registration Act (22 USC 611) Requires registration of agents of foreign governments 16

17 ADVICE OR QUESTIONS (5 CFR ) Current or Former Employees Should Seek Advice on These Rules From Their Agency s Ethics Official, Who Has Primary Responsibility Reliance on Ethics Official s Advice is Factor on Possible Prosecution Former Employees Should Not Rely on Private Counsel on These Rules FEDERAL ATTORNEYS AND JUDGES Attorneys Should Check With Their Bar Associations About Bar Rules Before Seeking Employment or Post-Employment Restrictions After Terminating Government Service Judges in Executive Branch Should Also Check Their Judicial Rules 17

18 ETHICS PLEDGE Executive Order (January 21, 2009) Applies to all non-career appointees appointed after January 20, 2009 Restricts acceptance of gifts from lobbyists or lobbying organizations Revolving door bans for appointees and lobbyists entering government and appointees leaving government ETHICS PLEDGE REVOLVING DOOR BAN ALL APPOINTEES ENTERING GOVERNMENT For Two Years, Prohibits Participation in Particular Matters Involving Specific Parties Directly and Substantially Related to Former Employer or Former Client, Including Regulations and Contracts. Exception for Particular Matter of General Applicability at Meetings Open to all Interested Parties. Regulations Only Includes Rulemakings Focusing on Rights of Specifically Identifiable Parties. 18

19 ETHICS PLEDGE REVOLVING DOOR BAN LOBBYISTS ENTERING GOVERNMENT For Two Years, Former Registered Lobbyists Also Agree To: Not Participate in Particular Matters on Which They Lobbied within Two Years before Appointment Not Participate in Specific Issue Areas in Which Particular Matter Falls Not Seek or Accept Employment with any Federal Agency They Lobbied Within Two Years Before Appointment ETHICS PLEDGE REVOLVING DOOR BAN APPOINTEES LEAVING GOVERNMENT Applies to Senior Appointees Leaving Government Who are Subject to the One- Year Post-Employment Restriction Agree to Abide by Those Restrictions for Two Years After Termination of Appointment 19

20 ETHICS PLEDGE REVOLVING DOOR BAN APPOINTEES LEAVING GOVERNMENT TO LOBBY On Leaving Government, Agree Not to Lobby Any Covered Official or Non-Career Senior Executive Service Employee for Remainder of Administration Covered Officials are President, Vice- President, Officials in Executive Office of President, Executive Schedule Official, Schedule C Employees, Senior Uniformed Officers, and Non-Career SES ASK BEFORE YOU LEAP Employees and Former Employees Should Seek Advice on the Seeking and Post-Employment Restrictions from an Agency Ethics Official if They Have any Questions or Concerns Advice from an Agency Ethics Official Could Prevent Problems And It s Free 20