Entering the Executive Branch of Government: Potential Conflicts of Interest With Previous Employments and Affiliations
Entering the Executive Branch of Government:
Potential Conflicts of Interest With Previous
Employments and Affiliations
Updated December 11, 2007
Jack Maskell
Legislative Attorney
American Law Division
Entering the Executive Branch of Government:
Potential Conflicts of Interest With Previous
Employments and Affiliations
Summary
Ethics and conflict of interest concerns have been expressed about the
impartiality, bias, or fairness of government regulators, administrators, and other
executive branch decision makers who, shortly before entering government service,
had represented, owned, or were employed by industries, firms, or other entities that
they must now regulate and oversee. Federal conflict of interest law and regulation,
for the most part, deal with the potential influence of existing and current financial
assets, properties, arrangements, and relationships of the federal official. While the
laws and regulations focus primarily on current economic and financial interests of
a government official and those closely associated with the official, there are some
limited conflict of interest regulations and ethics standards which look also to
previous employment and past associations of those entering federal service.
The regulatory scheme regarding financial interests encompasses what has
colloquially been called the “three-D” method of conflict of interest regulation, that
is: disclosure, disqualification and divestiture. Public financial disclosure is required
of in-coming federal officials who will be compensated above certain amounts,
including those officials nominated by the President who must receive Senate
confirmation. Disclosure information will cover not only existing assets, property,
debts and income, but also certain information about past clients and employers who
during the previous two years compensated the in-coming federal official over $5,000
in a year, other past income sources, and certain past positions held in private
organizations and entities in the preceding two years.
Disqualification or “recusal” is the principal statutory method of dealing with
potential conflicts of interest of an executive branch officer or employee, whereby
the officer or employee is prohibited from participating in any particular official
governmental matter in which that official, or those close to the official whose
financial interests may be “imputed” to the official, has any financial interest. While
the statutory provision requiring disqualification is a criminal provision of law, and
covers only current or existing financial interests of the officer or employee, there is
also a “regulatory” recusal requirement that may apply to certain past affiliations and
previous economic interests. Such recusals may be required in particular matters
involving specific parties when organizations, entities, or clients with which the
federal official had been associated during the previous one-year period are or
represent parties in those matters. Additionally, executive branch regulations also
provide for a two-year recusal requirement barring an official in the executive branch
from participating in a particular matter in which a former employer is a party (or
represents a party) when that former employer had made an “extraordinary payment”
to the official prior to entering government. Aside from the specific regulatory and
statutory restrictions and requirements on past associations and employments, there
is no general regulation or standard on possible or perceived “philosophical” or
“ideological” biases which a federal regulator or administrator may allegedly have
on a subject because of the past affiliations or previous employments or professional
activities of that official.
Contents
Background/Issues .................................................1
Conflicts of Interest Generally........................................2
Conflict of Interest Regulation........................................3
Financial Disclosure: Identifying and Deterring Potentially
Conflicting Financial Interests................................3
Who Must File, Generally...................................4
Where Filed..............................................5
Advice and Consent Positions................................5
Information to Be Reported: Current Financial Interests...........6
Information to Be Reported: Past Associations, Clients............7
Executive Branch Review and Ethics Agreements................7
Committee Requirements for Advice and Consent Positions........8
Disqualification and Prohibited Conflicts of Interest..................8
Statutory Disqualification or Recusal..........................9
Regulatory Disqualification for Current Conflicts of Interest.......10
One-Year Regulatory Disqualification for Past Affiliations........11
Two-Year Regulatory Disqualification for Extraordinary Payments
From Past Employers..................................12
Severance Payments, Generally..............................12
Pensions: Past or Present Financial Interest?....................13
Divestiture ..................................................15
A Note on General “Impartiality,” Alleged “Bias,” and
Past Affiliations or Activities...............................17
Entering the Executive Branch of Government:
Potential Conflicts of Interest With Previous
Employments and Affiliations
This report examines the federal laws and regulations relevant to entering into
federal government employment from the private sector, with respect particularly to
the potential conflicts of interest that may arise because of the past employment,
affiliations or financial interests or involvements of a nominee or new officer or
employee in the executive branch of government. The report is intended to provide
those conducting congressional oversight with an outline of some of the issues, rules,
regulations, and oversight tools that may be available regarding this subject.
Background/Issues
There has been expressed ongoing concerns about the impartiality, bias, or
fairness of government regulators, administrators and other executive branch decision
makers who, shortly before entering government service, had represented, owned or
were employed by industries, firms or other entities which they must now regulate
and oversee, or concerning whom such officials must otherwise make or advise the
government on policies directly and significantly impacting those former clients,
employers or firms. Several instances of alleged conflicts of interest, “appearances”
of conflicts of interest or bias, or “cozy relationships” between the regulated entities
and the government official who had formerly worked for or represented that
regulated entity, have been examined in the press over the last few years.1 The
allegations and concerns in such instances are that loyalty to private economic and
business interests, rather than fealty to the general public interest, is being served by
such officials in their actions.
Individuals entering federal service will, of course, bring with them existing
financial investments, ownerships, properties, and other economic arrangements
typical of anyone similarly placed in American society. Those entering federal
1 Washington Post, “Official’s Lobbying Ties Decried: Interior’s Griles Defends Meetings
as Social, Informational,” September 25, 2002, p. A1: “Within weeks of taking office, Griles
began a series of meetings with former clients and administration officials on regulatory
matters important to several of his former clients”; Washington Post, “Pitt’s Role in AOL
Time Warner Case Uncertain,” October 18, 2002, p. E1: “Pitt, who has been criticized for
participating in SEC cases involving former law clients, represented [AOL’s chairman] and
the company on several significant accounting matters in recent years”; Washington Post,
“Pentagon Official From Enron in Hot Seat,” January 27, 2002, p. A8: “[White’s] corporate
experience - his role at ... Enron Energy Services (EES) - is raising questions of possible
conflicts of interest... In his first major speech as secretary, he vowed to step up privatization
of utility services at military bases. EES ... had been seeking to contract with the military.”
service immediately from private industry will also enter with certain former
affiliations, employment or other financial, economic or business associations with
particular private interests. While federal conflict of interest law and regulation
focuses primarily on current economic and financial interests of a government
official and those closely associated with the official, there are some limited conflict
of interest regulations and ethics standards which look also to previous employment
and past associations of those becoming federal officers and employees.
Conflicts of Interest Generally
The term “conflict of interest” may have a broad meaning in general usage.
However, under federal law and regulation a “conflict of interest,” for the most part,
deals with a conflict between a federal employee’s official, governmental duties and
responsibilities on the one hand, and the personal, financial or economic interests of
the employee on the other.2 When the official duties of a government employee may
impact upon the outside, private business or economic interests of that employee, or
the economic interests of those closely associated with the employee, a conflict of
interest situation presents itself.
The overall scheme of the conflict of interest laws adopted by Congress
generally embodies the principle “that a public servant owes undivided loyalty to the3
Government,” and that advice and recommendations given to the government by its
employees and officials be made in the public interest and not be tainted, even4
unintentionally, with influence from private or personal financial interests. The
House Judiciary Committee, reporting out major conflict of interest revisions made
to federal law in the 1960’s found:
The proper operation of a democratic government requires that officials be
independent and impartial; that Government decisions and policy be made in the
proper channels of the governmental structure; ... and that the public have
confidence in the integrity of its government. The attainment of one or more of
these ends is impaired whenever there exists, or appears to exist an actual or
potential conflict between the private interests of a Government employee and5
his duties as an official.
2 Manning, Federal Conflict of Interest Law, at 2-3 (1964); Association of the Bar of the
City of New York, Conflict of Interest and Federal Service, at 3 (1960); House Committee
on Standards of Official Conduct, House Ethics Manual, 102d Cong., 2d Sess. at 87 (April
1992); see Regulations of the Office of Government Ethics, 5 C.F.R. part 2635. There may
be certain so-called “conflict of interest” statutes or regulations which do not expressly deal
with financial interests or compensated activities, such as, for example, 18 U.S.C. § 205,
which prohibits a federal employee from acting as an agent or attorney for a private party
before a federal agency, even if the activity is uncompensated.
3 H.Rept. 87-748, 87th Congress, 1st Session, at 3 (1961). House Judiciary Committee
report on the comprehensive amendments and revisions to conflict of interest laws in 1962.
4 H.Rept. 87-748, supra at 4-6; see also United States v. Mississippi Valley Generating Co.,
5 H.Rept. 87-748, supra at 5-6.
The concern in such regulation “is not only the possibility or appearance of private
gain from public office, but the risk that official decisions, whether consciously or
otherwise, will be motivated by something other than the public’s interest. The
ultimate concern is bad government...”6 The conflict of interest laws are thus
directed not only at conduct which is improper, but rather are often preventative in
nature, directed at situations which merely have the potential to tempt or subtly
influence an official in the performance of official public duties. As explained by the
Supreme Court with regard to a predecessor conflict of interest law requiring
disqualification of officials from matters in which they have a personal financial
interest:
This broad proscription embodies a recognition of the fact that an impairment of
impartial judgment can occur in even the most well-meaning men when their
personal economic interests are affected by the business they transact on behalf7
of the Government.
Conflict of Interest Regulation
The application of federal conflict of interest laws and regulations, particularly
the laws requiring an official’s recusal or disqualification from certain matters, or
regulations or procedures requiring the divestiture of certain assets, have traditionally
been directed at current and existing financial interests and ties of that official, and
those closely associated with the official. The regulatory scheme regarding financial
interests encompasses what has colloquially been called the “three-D” method of
conflict of interest regulation, that is: disclosure, disqualification and divestiture.
Financial Disclosure: Identifying and Deterring Potentially
Conflicting Financial Interests
Upon entering the Federal Government, and then annually on May 15 thereafter,
high-level government officials must file detailed, public financial disclosure
statements. Public financial disclosures were first required by law with the passage
of the Ethics in Government Act of 1978 (P.L. 95-521, as amended), and were
intended to serve the purpose of identifying “potential conflicts of interest or
situations that might present the appearance of a conflict of interest” for government8
officials in policy making positions.
In addition to the purpose of merely identifying potential conflicts, and then
attempting to resolve such conflicts of interest, the committees considering the ethics
legislation adopted in 1978 recognized the fact that there was potentially a “deterrent
6 The Association of the Bar of the City of New York, Special Committee on Congressional
Ethics, James C. Kirby, Executive Director, Congress and the Public Trust, 38-39 (1970).
7 United States v. Mississippi Valley Generating Co., supra at 549, concerning 18 U.S.C. §
8 S.Rept. 95-170, 95th Cong., 1st Sess. 117 (1977). The fact that the disclosures were to be
made public was also seen as serving the purpose of increasing public confidence in the
integrity of the institutions of government and in those who serve them.
factor” in requiring public disclosure of a government official’s personal and family
financial information, — both in deterring the holding of certain assets (and thus
deterring certain potential conflicts of interest), but also possibly in deterring the
recruitment of certain persons into the government because of such persons’
uneasiness with the required details of public financial disclosure. As noted by the
Senate Committee, however, this latter deterrent effect was not necessarily a negative
consequence of required public disclosures, but could be a positive consideration in
the enactment of the financial disclosure requirement:
Public financial disclosure will deter some persons who should not be entering
public service from doing so. Individuals whose personal finances would not
bear up to public scrutiny ... will very likely be discouraged from entering public
office altogether, knowing in advance that their sources of income and financial9
holdings will be available for public review.
Who Must File, Generally. Anyone entering the federal service who is
covered by the public financial disclosure laws generally must, within 30 days of
appointment, file an entry report.10 Thereafter, covered employees must file annual
reports by May 15. Whether an employee of the Federal Government is required to
file public financial disclosure statements is determined, in the first instance, by the
rate of compensation that the employee receives or will receive from the Federal
Government, and then, secondly, by the number of days such an employee works for
the Federal Government. Any officer or employee of the executive branch of
government who “occupies a position classified above GS-15,” or, if “not under the
General Schedule,” is in a position compensated at a “rate of basic pay ... equal to or
greater than 120 percent of the minimum rate of basic pay payable for GS-15,” is11
generally subject to the public disclosure provisions. Those employees
compensated at the rate of pay described above will be required to file public
disclosure statements if the individual works for the government for more than 60
days in the calendar year.12
This requirement for detailed, public financial disclosure under the Ethics in
Government Act of 1978 currently applies to more than 20,000 officials in the
Federal Government.13 In addition to the statutory mandate for public disclosure
9 S.Rept. 95-170, supra at 22.
10 5 U.S.C. app. §§ 101(a), 102(b).
11 5 U.S.C., app. § 101(f)(3). As of this writing in 2003, for example, the threshold rate of
pay for 2003 will be $102,168 annually. The definition for legislative employees, it should
be noted, differs slightly and covers anyone who is compensated at a rate in excess of 120%
of a the base salary of a GS-15, regardless of whether or not that person is on the General
Schedule or not, thus covering certain GS-15’s in the legislative branch not covered in the
executive branch.
12 5 U.S.C., app. § 101(d). Certain exemptions and waivers may be permitted upon
particular findings and determinations regarding special Government employees. See 5
U.S.C., app. § 101(i).
13 Statement of Amy L. Comstock, Director of the Office of Government Ethics, before the
Senate Committee on Governmental Affairs, “OGE Recommendations on Streamlining
(continued...)
based on salary level, the Office of Government Ethics requires by regulation that all
“Schedule C” employees, regardless of salary, file public disclosures.14
Where Filed. For most incoming federal officials filing their entry report, as
well as for current employees filing their annual financial disclosure statements by
May 15 of each year, such reports are generally to be filed with the designated agency
ethics officer (most commonly in the office of general counsel) in the agency in
which the reporting officer or employee serves or is to serve.15 The President and the
Vice President, however, file their reports with the Director of the Office of
Government Ethics. All filed reports by officials are open generally for public
inspection upon request made in writing, subject to rules on the impermissible
commercial or political use of the information contained in the reports.16 The
agencies having such reports are instructed to keep them as public records for six
years.17
Advice and Consent Positions. All presidential nominees requiring Senate
confirmation must file public disclosure statements regardless of salary (but
uniformed and foreign service nominees file only if they meet the pay threshold),18
and such reports incur other specific procedural steps. Their disclosure statements
are not only filed with and reviewed by their department or agency, but are also
“transmitted” to the Office of Government Ethics for review, and are “foward[ed]”
for review to the Committee of the Senate with jurisdiction over the particular
individual’s nomination.
Once the President has transmitted to the Senate the nomination of a person
required to be confirmed by the Senate, the nominee must within five days of the
President’s transmittal (or any time after the public announcement of the nomination,
but no later than five days after transmittal), file a financial disclosure statement.19
This financial disclosure statement is filed with the designated agency ethics officer
13 (...continued)
Public Financial Disclosure and Other Aspects of the Presidential Appointment Process,”
April 5, 2001, p. 2.
14 5 C.F.R. § 2634.202(e). Exceptions may be provided under some circumstances. There
are also confidential reporting requirements which apply generally to certain lower-level
“rank and file” employees, that is, those compensated below the threshold rate of pay for
public disclosures (GS-15 or below, or less than 120% of the basic rate of pay for a GS-15),
and who are determined by the employee’s agency to exercise responsibilities regarding
government contracting or procurement, government grants, government subsidies or
licensing, government auditing, or other governmental duties which may particularly require
the employee to avoid financial conflicts of interest. 5 C.F.R. §§ 2634.901-908.
15 5 U.S.C. app. § 103(a).
16 5 U.S.C.,app. § 105(a), (b).
17 5 U.S.C. app. § 105(d).
18 5 U.S.C. app. § 101(b).
19 5 U.S.C. app. § 101(b); 5 C.F.R § 2634(c)(1). The disclosure report form is provided to
the nominee by the Executive Office of the President. 5 C.F.R. § 2634.605(c)(1).
of the agency in which nominee will serve,20 and copies of the report are transmitted
by the agency to the Director of the Office of Government Ethics.21 The Director of
OGE then forwards a copy to the Senate committee which is considering the
nomination of that individual.22 A presidential nominee must file an updated report
to the Committee reviewing his nomination at or before the commencement of
hearings, updating the information through the period “not more than five days prior
to the commencement of the hearing,” concerning specifically information related to
honoraria and outside earned income.23
Information to Be Reported: Current Financial Interests. Most of the
information to be filed and publicly disclosed concerns current and existing financial
information on assets, property, debts, income and existing associations which may
present or potentially involve a conflict of interest with the officer’s or employee’s
official responsibilities for the government. The regular annual financial disclosure
reports to be filed in May of each year generally require information concerning eight
different categories of financial information. The disclosure statement24 requires
public listing of the identity and/or the value (generally in “categories of value”) of
such items as: (1) the official’s private income of $200 or more (including earned and
unearned income such as dividends, rents, interest and capital gains) and the source
of income; (2) gifts received over a certain amount (including reimbursements for
travel over threshold amounts); (3) the identification of assets and income-producing
property (such as stocks, bonds, other securities, rental property, etc.) of over $1,000
in value (including savings accounts over $5,000); (4) liabilities owed to creditors
exceeding $10,000 (but not including one’s home mortgage or car loans); (5)
financial transactions, including purchases, sales or exchanges exceeding $1,000 in
value, of income-producing property, stocks, bonds, or other securities; (6) positions
held in outside businesses and organizations; (7) agreements for future employment
or leaves of absence with private entities, continuing payments from or participation
in benefit plans of former employers; and (8) the cash value of the interests in a
qualifying blind trust.25
The incoming reports, including the reports of incoming presidential appointees
requiring Senate confirmation, include most of the information required in the annual
reports under § 102(a) of the Ethics Act, but does not include the information on
gifts and travel reimbursements (§ 102(a)(2)), nor does it need to include the
information on financial transactions during the previous year (§ 102(a)(5) or the26
cash value of trusts (§ 102(a)(8)). The new entrant reports specifically require
disclosure of private income received for the filing year and the preceding calendar
20 5 C.F.R. §2634.602(a).
21 5 U.S.C. app. § 103(c), 5 C.F.R. § 2634.602(c)(1)(vi),.
22 5 U.S.C. app. § 103(c), 5 C.F.R. § 2634.602(c)(3).
23 5 U.S.C. app. § 101(b). 5 C.F.R. § 2634.606(a).
24 In the executive branch, disclosure form SF 278.
25 5 U.S.C. app. § 102(a)(1) - (8). For items to be disclosed in relation to the official’s
spouse and dependent children, see 5 U.S.C. app. § 102(e)(1)(A) - (F).
26 5 U.S.C. § 102(b)(1).
year; ownership interests in assets and income producing property over $1,000 in
value, and liabilities of over $10,000 owed, as of the date specified in the report, but
which must be no more than 31 days before the filing date; the identity of positions
held in private entities; and any future agreements for employment, leave of absence,
continuing payments from or participation in benefit plans of former employers.27
Information to Be Reported: Past Associations, Clients. While most
of the financial disclosure requirements are directed at current and existing financial
holdings and interests, there are certain provisions which look to past affiliations and
interests. Perhaps most significantly for first-time filers, including nominees to
Senate-confirmed positions, the public disclosure law requires non-elected reporting
individuals to list in public reports the identity of persons, including clients, from
whom the reporting official had received more than $5,000 in compensation in any
of the two calendar years prior to the year in which the reporting official files his or28
her first disclosure report. Such listing of clients and others who paid the reporting
individual compensation above the statutory threshold, should also include a
statement of “the nature of the duties performed or services rendered” for such client
or employer. Furthermore, new entrant reports, including reports of nominees, are
to contain the required information concerning all private income received for the
filing year, and additionally for the preceding calendar year; and the identity of
positions held in private entities must be disclosed not only for positions held during
the current calendar year, but also during the two preceding years.29
Executive Branch Review and Ethics Agreements. The ethics officials
to whom the annual disclosure reports are made are instructed to review the reports
within 60 days to determine if the filer is in compliance with applicable conflicts of
interest laws and ethical standards of conduct regulations, and if so, to sign off on
such reports.30 If there are assets, ownerships, income or associations which indicate
a conflict of interest or ethics problem, that is, that “an individual is not in
compliance with applicable laws and regulations,” then after consultation with the
individual, the reviewing ethics official or office may recommend several steps which
may be appropriate to rectify the ethics problems, including “divestiture,”
“restitution,” the establishment of a “blind trust,” the request for a personal conflict
of interest exemption under 18 U.S.C. § 208(b), or a request for a “transfer,
reassignment, limitation on duties or resignation.”31
Presidential nominees who are subject to Senate confirmation also file with the
agency or department in which they will serve. That agency or department conducts
an expedited (“accelerated”) review of disclosure report,32 and where appropriate the
reviewing official is to certify that there are no problems with the private financial
27 5 U.S.C. app. § 102(b)(1), referencing § 102(a)(1),(3),(4), (6) and (7).
28 Ethics in Government Act, Section 102(a)(6)(B); see now 5 U.S.C. app. § 102(a)(6)(B).
29 5 U.S.C. app. § 102(b)(1)(C) and 102(a)(6)(A).
30 5 U.S.C. app. § 106(a),(b)(1).
31 5 U.S.C. app. § 106(b)(3).
32 5 C.F.R. § 2634.605(c).
interests of the nominee, that is, that there are “no unresolved conflict of interest”
issues.33 Where there are real or apparent conflict of interest problems revealed in
the financial disclosure reports, the reviewing official, consulting with the reporting
officer, must determine what “remedial action” is to be taken. “Remedial action”
may include divestiture where appropriate, agreements to recuse, and the
establishment of a qualified blind trust or a diversified trust.34 Subsequently, a letter
to the Director of the Office of Government Ethics must be provided setting out the
apparent or real conflicts of interest, the remedial measures taken to resolve those
issues, and any “ethics agreements” entered into to resolve such conflicts.35 Ethics
agreements are specific agreements between the nominee or official and the agency,
as approved by OGE, as to future conduct that the nominee or official will take, such
as divestiture, recusal or resignation from an outside position, to resolve a conflict
of interest problem.36 If the Director of OGE is satisfied that all conflicts have been
resolved, the Director signs and dates the report form, then submits the form and any
ethics agreement, with a letter to the appropriate Senate committee expressing the
Director’s opinion that the nominee has complied with all conflict of interest laws
and regulations.37
Committee Requirements for Advice and Consent Positions. As
noted, all financial disclosure statements from presidential nominees who require
Senate confirmation are forwarded to the committee of jurisdiction from the Office
of Government Ethics. The nominee is also required to update the disclosure
statement with respect to certain items within five days before nomination hearings.
Committees of the Senate, because of the Senate’s express constitutional power of38
approval of presidential nominations of officers of the United States, are not limited
nor restrained by the disclosure forms as to the information that they may request
from a nominee to assist in its constitutional “advice and consent” function; and may
require any additional information from a nominee that it deems necessary or
desirable. Furthermore, a Senate Committee, or the Senate, may require certain
ethics agreements from the nominee as to the disposition of certain assets, or the
intention to recuse oneself from certain governmental matters, even beyond any
“ethics agreement” made between the nominee and agency or OGE officials.39
Disqualification and Prohibited Conflicts of Interest
The principal statutory method of dealing with potential conflicts of interest of
an executive branch officer or employee is to require the disqualification (or
33 5 C.F.R. § 2634.605(c)(2).
34 5 C.F.R. § 2634.605(b)(4) and (5).
35 5 C.F.R. § 2634.605(c)(2)(iii)(B).
36 See, generally, 5 C.F.R. § 2634.801 et seq. Ethics agreements are monitored for future
compliance by the agency and OGE. 5 C.F.R. § 2634.804; OGE Memoranda, DO-01-013,
March 28, 2001, and DT-02-004, March 8, 2002, to Designated Agency Ethics Officials.
37 5 C.F.R. § 2634.605(c)(3).
38 United States Constitution, Article II, Section 2, clause 2.
39 5 U.S.C. app. § 101(b); see 5 C.F.R. § 2634.803(a)(2).
“recusal”) of the officer or employee from participating in any official governmental
matter in which that official, or those close to the official whose financial interests
may be “imputed” to the official, has any financial interest. The statutory provision
requiring disqualification and recusal is a criminal provision of law, and covers only
current or existing financial interests of the officer or employee. There is also a
“regulatory” recusal requirement that may be broader in some instances than the
statutory restriction, and may apply to certain past affiliations and previous economic
interests. Current regulations promulgated by the Office of Government Ethics
expressly require in certain circumstances that the executive branch official refrain
from participating in certain particular matters when businesses, entities, or economic
enterprises with which the official had been affiliated in the past one year are parties
to or represent parties in that matter; and require as well certain disqualifications for
two years in cases where the private entity had made “extraordinary” payments to the
government official upon the official’s departure.
Statutory Disqualification or Recusal. The federal statutes deal with
existing conflicts of interest principally by requiring the disqualification of a federal
official from certain governmental matters in which he may be financially interested,
as opposed to specifically requiring the divestiture of conflicting interests. The
federal statute at 18 U.S.C. § 208, which is the principal, general conflict of interest
provision under federal law, thus requires an official’s disqualification (recusal) from
a particular governmental matter in which the officer, his or her spouse or dependent
“has a financial interest,” or where there is affected a financial interest of an outside
entity “in which he [the government official] is serving” as an employee, officer or
director, or with whom he “is negotiating or has an arrangement” for future
employment.40 The statutory language is thus stated in the present tense and is
directed only to current financial interests and existing arrangements or current
understandings for future employment, and the statutory provision does not require
disqualification on a matter because of a past affiliation or previous economic
interest. 41
The statutory provision at 18 U.S.C. § 208 specifically bars a federal officer or
employee in the executive branch of the Federal Government from taking official
action “personally and substantially” through “decision, approval, disapproval,
recommendation, the rendering of advice, investigation or otherwise,” in any
“particular” governmental matter, such as a proceeding, request for a ruling, claim,
or a contract, which affects the financial interests of that officer or employee, that
employee’s spouse or dependents, or which affects the financial interests of an
organization in which the employee is affiliated as an officer, director, trustee,
general partner or employee, or “with whom he is negotiating or has any arrangement
concerning prospective employment.” While there is no de minimis exception
expressly stated in the statute, the law does provide that regulations may exempt
certain categories of investments and interests which are deemed too remote or
40 18 U.S.C. § 208 (2000 Code ed.), emphasis added.
41 CACI, Inc.-Federal v. United States, 719 F.2d 1567,1578 (Fed. Cir. 1983); Center for
Auto Safety v. F.T.C., 586 F. Supp. 1245, 1246 (D.D.C. 1984).
inconsequential to affect the performance of an official’s governmental duties.42 The
current Office of Government Ethics regulations exempt several such interests,
including all interests in “diversified” mutual funds; interests in sector funds which
have some companies affected by a governmental matter but where those companies
are outside of the primary sector in which that fund specializes; and other sector
funds even specializing in the particular sector but where one’s interest in the fund
is no more than $50,000; securities, stocks and bonds in a publicly traded company
which is a party to and directly affected by a governmental matter if one’s ownership
value is no more than $15,000; securities, stocks and bonds in such a company which
is not a specific party to a matter but is in a class affected by the governmental
matter, if the employee’s ownership interest is no more than $25,000 (if securities in
more than one such company are owned, then the aggregate value can not exceed
$50,000 to be exempt from the statute).43
Regulatory Disqualification for Current Conflicts of Interest. In
addition to the statutory recusal requirement, there also exists regulatory
requirements for disqualification for other financial interests and connections.
Although the range of private interests potentially affected by an official’s
governmental actions are broadened in the regulation, the regulatory recusal
provision is more narrowly focused than the statutory provision as to those specific
governmental matters covered. The regulations of the Office of Government Ethics
provide this regulatory disqualification provision to help assure the avoidance of “an
appearance of loss of impartiality in the performance of” official duties by a federal
employee.44 The regulation, in comparison to the statutory recusal requirement,
expands the persons and entities who are deemed to be so connected to the employee
that their financial interests may be “imputed” to that employee (and, as such, would
constitute cause for recusal or disqualification of the employee from a governmental
matter affecting or involving those interests); but, as compared to the statutory
disqualification, narrows those particular governmental matters that are included in
the disqualification requirement. Even if covered by this particular regulatory
provision, there are circumstances in which the employee may still be authorized by
his or her agency to participate in the particular matter when warranted.45
The regulation requires a government employee in the executive branch to
recuse himself or herself from a “particular matter involving specific parties” when
(1) the employee knows that the matter will have a direct and predictable effect on
the financial interests of a member of his or her household, or (2) when a person or
entity with whom the employee has a “covered relationship” is a party or represents
a party to the matter. Such recusal should be done under those circumstances when
the employee believes that his or her impartiality may be questioned, unless the
42 18 U.S.C. § 208(b)(2). There may also be an individual exception for a particular
government officer made in writing by the officer’s appointing authority that the interest in
question is “not so substantial as to ... affect the integrity of the services” of that officer. 18
U.S.C. § 208(b)(1).
43 5 C.F.R. §§ 2640.201 (mutual funds); 2640.202 (securities in companies).
44 5 C.F.R. § 2635.501(a).
45 5 C.F.R. § 2635.502(c),(d).
employee first advises his or her agency about the matter and receives authorization
to participate in the matter.46 As to current and existing financial interests, the
regulation provides that a “covered relationship” is one with: those persons or entities
with whom the employee seeks a business, contractual or other financial relationship;
a member of the employee’s household, or a relative with whom the employee has
a close personal relationship; a person or entity with whom the employee’s spouse,
child or parent is serving or seeks to serve as an officer, director, trustee, general
partner, agent, attorney, consultant, contractor, or employee; or an organization (other
than a political party) in which the employee is an active participant.47
As noted, the regulatory recusal requirement, although broader as to the affected
financial interests, applies to a narrower range of governmental matters than the
statutory provision. The regulation applies only to particular governmental matters
“involving specific parties,” and as such would not cover such “particular matters”
as general policymaking or drafting regulations affecting an economic or business
sector; while the statutory recusal requirement applies to all governmental “particular
matters,” including even the drafting of such regulations.48
One-Year Regulatory Disqualification for Past Affiliations. In addition
to the Office of Government Ethics regulations applying a recusal requirement
beyond the interests and relationships set out in the criminal conflict of interest
statute concerning other current or existing interests, the regulations also expand and
apply a potential recusal and disqualification requirement of a federal executive
branch official for certain past business and economic associations. The regulations
provide that a federal official should recuse or disqualify himself or herself from
working on a particular governmental matter involving specific parties if a “person
for whom the employee has, within the last year, served as an officer, director,
trustee, general partner, agent, attorney, consultant, contractor or employee ...”49 is
a party or represents a party in such matter. This one-year recusal requirement as to
matters involving an official’s former employers, businesses, clients or partners,
applies to any officer or employee of the executive branch, but applies narrowly only
to “a particular matter involving specific parties” when such former employer or
business associate is or represents a party to the matter. As noted above, such matters
“involving specific parties” cover generally things such as contracts, investigations,
or prosecutions involving specific individuals or parties, as opposed to broader
“particular matters” which may involve a number of persons or entities (such as most
rule making). Notwithstanding the fact that a past employer, client, or business
associate with whom the employee has a “covered relationship” may be a party or
represent a party to such a matter, an employee may, as with the regulatory restriction
46 5 C.F.R. § 2635.502(a).
47 5 C.F.R. § 2635.502(b)(1).
48 The statutory disqualification requirement need not involve specific or identified parties,
and therefore may apply to any “discrete and identifiable matter” such as “general
rulemaking” or proposed regulations (2 Op.O.L.C. 151, 153-154 (1978); 5 C.F.R. §
2635.402(b)(3)), while the regulatory recusal applies only to particular matters involving
specific parties, such as a contract or grant, or a particular investigation.
49 5 C.F.R. § 2635.502(a), (b)(1)(iv).
on current interests, receive authorization by his or her agency to participate in the
matter.50
Two-Year Regulatory Disqualification for Extraordinary Payments
From Past Employers. In addition to the one-year recusal requirement for
particular matters involving specific parties when a former client, employer, firm, or
business is or represents a party in that matter, the regulations of the Office of
Government Ethics also provide for a two-year recusal requirement which bars an
official in the executive branch from participating in a particular matter in which a
“former employer” is or represents a party when that former employer had made an
“extraordinary payment” to the official prior to entering government. An
“extraordinary payment” is one in excess of $10,000 in value made by an employer
after the employer has learned that the employee is to enter government service, and
one which is not an ordinary payment, that is, is a payment other than in conformance51
with the employer’s “established compensation, benefits or partnership program.”
This disqualification provision may be waived in writing by an agency head, or if the
individual involved is the head of an agency, by the President or his designee.
Severance Payments, Generally. There is a criminal provision of federal
conflict of interest law, at 18 U.S.C. §209, which prohibits a federal employee from
receiving any outside, additional or supplemental compensation from a private source
for his or her official government duties as a federal employee. One who has entered
federal service may not, therefore, accept a salary supplementation from a business
or organization intended to “make up the difference” between private sector and
Federal Government salaries or to otherwise reward or compensate the new federal
employee for his or her public service. This statutory restriction originated in 1917
from an initial legislative concern over private foundations paying the compensation
of persons who were serving under a cooperative agreement in the Bureau of
Education within the Department of Interior, and the undue and, to some, “noxious”
influence of such foundations on national educational policy.52 The law at §209 has
been described as a conflict of interest statute “in the strictest sense,” that is, an
“employee does not have to do anything improper in his office to violate the statute,”
but rather his or her special status as a government employee “makes an
unexceptionable act wrongful — wrongful because of the potential dangers in serving
two paymasters.”53 The law thus seeks to assure that a federal employee is
compensated for his or her services to the government only by the government, is not
placed in a position of “serving two masters,” and is not, nor appears to be, beholden
50 5 C.F.R. § 2635.502(c),(d).
51 5 C.F.R. § 2635.503(b)(1).
52 Formerly 18 U.S.C. §1914; see discussion in The Association of the Bar of the City of
New York, Special Committee on the Federal Conflict of Interest Laws, Conflict of Interest
and Federal Service, 53-56 (Harvard University Press 1960), and Bayless Manning, Federal
Conflict of Interest Law, 148-149 (Harvard University Press 1964).
53 Conflict of Interest and Federal Service, supra at 55-56. There needs to be no wrongful
or “corrupt” intent or motivation in the payment of private compensation to an employee for
his or her public duties for a violation of the law.
or grateful to any outside group or private interest which “could affect the
independent judgment of the employee.”54
This provision might come into play, therefore, regarding certain “severance”
payments, packages, or plans from a former private employer to an individual who
has entered federal service if there is evidenced an “intent to compensate” an
individual for that person’s federal employment.55 The provision is not as broad in
application to severance payments, however, as it may seem at first glance, since the
language of the statute applies expressly only to “an officer or employee of the
executive branch of the United States Government,” and has been interpreted by the
courts as applying only to persons who at the time payments were received were
federal employees, that is, the restriction does not apply to severance payments which
are made at the time one leaves private employment but before the individual actually
becomes an officer or employee of the government.56 Even if made to reward the
employee for taking a public service job, or is intended to or has the effect of
instilling in the about-to-become-official a sense of gratitude or goodwill towards the
private employer, there is no violation of this criminal conflict of interest provision
for severance payments made before one is a federal official, since federal
employment status is an express element of the statute. Of course, as noted above,
“extraordinary payments” from a private employer to an incoming federal official,
even if made before the person is actually a federal employee (and thus not within
§209), may still encounter the two-year disqualification requirement under OGE
regulations, requiring the recusal of the employee for two years from any particular
governmental matter involving that former employer as a party.
Pensions: Past or Present Financial Interest? One of the issues that
arises with respect to current or past associations under the statutory recusal or
disqualification requirement is the treatment of pensions from outside entities.
Pensions generally involve current payments or vested interests from a fund
controlled by an outside entity, but in recognition of or as compensation for past
services. There are thus questions raised as to whether an employee’s vested interest
in a pension is a current financial interest or association with or in the entity making
the payment, subject to all of the disqualification restrictions and limitations on
current and existing financial interests, or whether pensions are excluded from being
a disqualifying interest of an employee. The issue under the statutory recusal
requirement is, as stated by the Office of Government Ethics, the concern “about an
employee’s participation in a Government matter that could have an effect on the
54 Roswell B. Perkins, “The New Federal Conflict of Interest Law,” 76 Harvard Law Review
55 United States v. Muntain, 610 F.2d 964, 969-970 (D.C.Cir. 1979). “Buyouts” of
ownership interests, even those made on an installment basis over a few years after the
recipient becomes a federal official, may thus not violate the provision since such buyouts
are generally moneys received for past interests and work, and as such would lack the
“intent to compensate” an employee for current federal duties for the government.
56 Crandon v. United States, 494 U.S. 152, 159 (1990).
sponsoring organization that is responsible for funding or maintaining the
Government employee’s pension plan.”57
In interpreting the law at 18 U.S.C. § 208 and the regulations under it, the Office
of Government Ethics has distinguished between two common types of pension
plans, the “defined benefit plan,” and the “defined contribution plan.” In a “defined
benefit plan,” the employer typically “makes payments to an investment pool which
it holds and invests for all participating employees”; and such plans are the
“obligation of the employer” which pays the former employee an amount generally
based on some percentage of what the employee’s compensation had been.58 A
“defined contribution plan,” however, typically involves contributions by the
employer and/or the employee to a specific, individual retirement account, and the
payout of income or annuity is based on the amounts, earnings, gains or losses
generated by such account.
The expressed conflict of interest concerns thus generally arise more typically
with a “defined benefit plan” type of pension where the employer itself is obligated
to make the pension payments, but not so in a “defined contribution plan” where the
pension payments come out of an already established and funded retirement account.
For purposes of the statutory disqualification requirement, therefore, the Office of
Government Ethics would not consider a “defined contribution plan” as a
“disqualifying” financial interest of the employee: “For matters affecting the sponsor
of a defined contribution plan, an employee’s interest is not ordinarily a disqualifying
financial interest under section 208 because the sponsor is not obligated to fund the
employee’s pension plan.”59
If the employee’s pension is based on a “defined benefits plan,” then the Office
of Government Ethics would consider such a pension as a current, disqualifying
interest under 18 U.S.C. § 208, in some circumstances. A defined benefit plan will
be considered a disqualifying interest in governmental matters relating to the sponsor
of the employee’s pension if the governmental matter involved is so significant to the
pension’s sponsor that it could actually affect employee’s pension plan, that is, that
“the matter would have a direct and predictable effect on the sponsor’s ability or
willingness to pay the employee’s pension benefit,” such as if the matter could result
in “the dissolution of the sponsor organization.”60 OGE notes that in a practical
sense, it is unlikely that a governmental matter will have such an effect on a private
pension sponsor, since even large contracts worth, for example, $500,000 to a firm,
would not materially affect a sizable corporation’s ability to pay its pension
obligations to former employees.
57 OGE Memorandum, 99 x 6, to Designated Agency Ethics Officials, April 14, 1999.
58 Id.
59 Id. It may be noted that stocks, bonds or other securities being held in an employee
benefit plan or other retirement plan, such as an IRA or 401(k), are not disqualifying
interests if the plan is “diversified,” as long as the plan is administered by an independent
trustee and the employee does not choose the specific assets in the plan, and the plan is not
a profit sharing or stock bonus plan. 5 C.F.R. § 2640.210(c).
60 Id.
In most cases it is therefore unlikely that a current interest in or receipt of
payment from a pension plan, either a defined benefit or defined contribution plan,
would trigger the broad statutory, criminal recusal or disqualification requirement of
18 U.S.C. §208, for a federal employee as to the sponsor of his or her private
pension; and the Office of Government Ethics has advised agencies to no longer
“automatically presume that employees have a conflict of interest in matters affecting
the sponsor of their defined benefit plans.”61 The private sponsor of a defined benefit
pension plan would, however, for purposes of the regulatory “impartiality”
requirement, be one with whom the federal employee has a “covered relationship.”62
In such a case, absent a disclosure to and authorization from the agency, the
employee should therefore disqualify himself or herself concerning any official
governmental matter which involves the sponsor of the pension plan as a “specific
party. ”63
Divestiture
There is no federal statute which expressly implements a general requirement
for federal employees to divest particular private assets or holdings to resolve likely
or potential conflicts of interest with employees’ public duties. Occasionally, a
statutory provision, often the organic act establishing an agency, bureau or
commission, will provide expressly that the directors or board members of such
entities shall have no financial interests in the business or sector which the agency,
bureau or commission is to regulate or oversee. Furthermore, an agency may by
regulation prohibit or restrict the ownership of certain financial assets or class of
assets by its officers and employees where, because of the mission of the agency,
such interests would “cause a reasonable person to question the impartiality and
objectivity with which agency programs are administered.”64 In such instances, these
statutory and regulatory provisions would, in their effect, require the divestiture of
particular assets and holdings of certain individuals to be appointed to such positions
or who are incumbents in such positions.
While there is no general statutory divestiture requirement, the divestiture of
assets, properties or holdings may be required as a conflict of interest avoidance
mechanism by administrative provisions and oversight, as well as by a Senate
committee or the Senate as a whole as a condition of favorable action on a
presidential nominee requiring Senate confirmation. As noted earlier, the principal
statutory method of conflict of interest avoidance, with respect to particular assets
and holdings of a federal official, is to require the disqualification of that official
from a governmental matter affecting those financial interests. However, under
current regulations of the Office of Government Ethics, as part of the ethics review
process, an agency may require the divestiture of certain assets of an individual
employee where those interests would require the employee’s disqualification from
matters so central to his or her job that it would impair the employee’s ability to do
61 Id.
62 5 C.F.R. §2635.502(b)(1)(i), see OGE Memorandum, 99 x 6, supra at n.3
63 5 C.F.R. §2635.502(a).
64 5 C.F.R. § 2635.403(a).
perform his or her duties, or where it could adversely affect the agency’s mission
because another employee could not easily be substituted for the disqualified
employee.65 When divestiture is required for ethics reasons, a current employee
should be afforded a “reasonable amount of time” to effectuate the disposal of the
asset; furthermore, it is possible to ameliorate potential unfair tax burdens that may
arise because of such required sale of an asset by receiving a certificate of divestiture
and postponing capital gains taxes.66
In some instances, the establishment of a “qualified blind trust” may be used as
a conflict of interest avoidance device as an alternative “divestiture” of conflicting
assets. While the underlying assets in a trust in which one has a beneficial interest
must normally be disclosed in annual public financial disclosure reports,67 and would
under conflict of interest law generally be “financial interests” of the
employee/beneficiary for disqualification purposes, federal officials may, as a
conflict of interest avoidance measure, place certain assets with an independent
trustee in what is called a “qualified blind trust.”68 The nature of a “blind trust,”
generally, is such that the official will have no control over, will receive no
communications about, and will (eventually as existing assets are sold and new ones
obtained by the trustee) have no knowledge of the identity of the specific assets held
in the trust. As such, an official will not need to identify and disclose the particular
assets in the corpus of a “blind trust” in future financial disclosure reports,69 and
such assets will not be “financial interests” of the employee for disqualification
purposes.70 The conflict of interest theory under which the blind trust provisions
operate is that since the official will not know the identity of the specific assets in the
trust, those assets and financial interests could not influence the official decisions and
governmental duties of the reporting official, thus avoiding potential conflict of
interest problems or appearances.71 Assets originally placed into the trust by the
official will, of course, be known to that official, and therefore will continue to be
“financial interests” of the public official for conflict of interest purposes until the
65 5 C.F.R. § 2635.403(b).
66 See 5 C.F.R. §§ 2635.403(d),(e), and 2634.1001 et. seq.
67 5 U.S.C. app. §102(f)(1).
68 See, generally, 5 U.S.C. app. § 102(f). Assets of an official may also be in a qualified
“diversified trust” which has been established for the benefit of the official, the official’s
spouse or children, and may avoid disclosure and conflict of interest disqualification
requirements. 5 U.S.C. app. § 102(f)(4)(B). However, in addition to being required to be
well-diversified, such a trust may not consist of the assets of entities “having substantial
activities in the area of the [official’s] primary area of responsibility.” 5 U.S.C. app. §
with no conflicting assets in the trust portfolio, are not considered “financial interests” of
the employee for conflict of interest purposes at any time. 5 C.F.R. § 2634.401(a)(1)(iii).
69 5 U.S.C. app. §102(f)(2)(A).
70 5 U.S.C. app. § 102(f)(4)(A); 5 C.F.R. § 2634.401(ii).
71 S.Rept. 95-639, 95th Cong., 2d Sess., Report of the Committee on Governmental Affairs,
“Blind Trusts,” at 13 (1978).
trustee notifies the official “that such asset has been disposed of, or has a value of
less than $1,000.”72
A Note on General “Impartiality,” Alleged “Bias,”
and Past Affiliations or Activities
The standards of conduct regulations promulgated by the Office of Government
Ethics and derived from Executive Order, provide generally that an employee in the
executive branch must “act impartially and not give preferential treatment to any73
organization or individual.” As to past associations, the Office of Government
Ethics has noted that “It has long been recognized that former employment with a
private organization can raise impartiality concerns. Members of the public, the
press, and even the Congress sometimes have questioned whether a particular public74
official might be subject to continuing influence by a former employer.”
The “general principles” in the OGE regulations regarding financial interests
and connections, outside employment or activities, and “impartiality,” are fleshed out75
and covered in the more specific regulations promulgated by OGE. Although the
basic impartiality language is fairly broad on its face, the “impartiality” actually
required of a federal employee in a governmental matter by the specific conflict of
interest and federal ethics standards, is a disinterestedness in the matter from the
point of view of any financial impact that such a matter may have upon the employee
personally, or upon certain entities or persons which are closely associated with the
employee, that is, those whose financial interests may be fairly “imputed” to the
employee.76 As noted by the Office of Government Ethics:
Questions regarding impartiality necessarily arise when an employee’s official
duties impact upon the employee’s own financial interests or those of certain77
other persons, such as the employee’s spouse or minor child.
Thus, while past employment or other past professional affiliations or
connections to private entities may implicate conflict of interest concerns and trigger
certain restrictions under regulations, the current ethical standards of conduct and
conflict of interest rules do not necessarily imply a prohibited “favoritism” or
“impartiality” by the mere fact of past employments or past professional associations
72 5 U.S.C. app. §102(f)(4)(A); 401(a)(1)(ii). One of the requirements of a blind trust is that
there can be no conditions placed on the independent judgment of the trustee to dispose of
any assets in the corpus of the trust. 5 U.S.C. app. §102(f)(3)(B).
73 5 C.F.R. § 2635.101(b)(8).
74 OGE Letter Opinion, 01 x 5, July 9, 2001.
75 5 C.F.R. § 2635.101(b): “Where a situation is not covered by the standards set forth in this
part, employees shall apply the principles set forth in this section in determining whether
their conduct is proper.”
76 “Impartiality in Performing Official Duties,” 5 C.F.R. part 2635, subpart E, §§ 2635.501
et seq.
77 5 C.F.R. § 2635.501, note.
or positions beyond those past employment connections that are specifically covered
and dealt with in the regulatory disqualification restrictions.78 That is, no matter how
philosophically pre-disposed an administrative official may arguably seem towards
an issue because of his or her professional or employment background, a specific
“bias” or “partiality” in a decision cannot be gleaned, as a matter of federal law,
merely by the past associations and /or past employment of a federal regulatory or
administrative official beyond the specific regulatory restrictions.
In general, the “impartiality” required of a federal employee in a matter clearly
does not mean that every federal employee must be completely “neutral” on an issue
or matter before him or her, in the sense that the employee has no opinion, view,
position or predilection on a matter based either on past associations of the employee,
or based upon current non-economic factors such as the ethical, religious,
ideological, or political beliefs in the background or in the current affiliations of the
employee. In the specific regulations on “impartiality” and participation in outside
organizations, in fact, the Office of Government Ethics notes that “Nothing in this
section shall be construed to suggest that an employee should not participate in a
matter because of his political, religious or moral views.”79
As to the issue of “bias” or “impartiality” generally in decision making of
federal officials, federal cases dealing with the alleged bias of a federal official have
arisen on occasion in a due process context with respect to rule making of an agency,
in that there had been alleged a lack of due process or fairness in the agency
proceeding because of some claimed “bias” of a federal agency official. In those
cases, the courts have noted that when a federal official is not acting in an
adjudicatory capacity, that is, in a similar position as a judge, then judicial standards
of impartiality need not apply.80 The Court of Appeals for the District of Columbia
Circuit has noted: “We must not impose judicial roles upon administrators when they
perform functions very different from those of judges.”81 The disqualification
requirement for those who are part of formal adjudications was “never intended ...
to apply in a rulemaking procedure,” even a formal rulemaking procedure.82 In an
earlier case in the District of Columbia Circuit, the court had explained:
78 In addition to bias because of past employment affiliations, it should be noted that federal
employees are specifically prohibited by ethics regulations from using their public office for
the financial gain of themselves, their personal friends or for entities with which they are
currently affiliated. 5 C.F.R. § 2635.702.
79 5 C.F.R. § 2635.502(b)(1)(v), note.
80 Association of National Advertisers, Inc. v. F.T.C., 627 F.2d 1151 (D.C. Cir. 1979), cert.
denied, 447 U.S. 921 (1980). The “judicial standard” cited involves such factors as “would
lead a reasonable person with the knowledge of all the facts to conclude that [an official’s]
impartiality might reasonably be questioned.” Note discussion in Center for Auto Safety v.
F.T.C., 586 F. Supp. 1245, 1248-1249 (D.D.C. 1984); United States v. Halderman, 559 F.2d
81 Association of National Advertisers, Inc. v. F.T.C., supra at 1168.
82 Id.
Agencies are required to consider in good faith, and to objectively evaluate,
arguments presented to them; agency officials, however, need not be subjectively83
impartial.
Going beyond specific statutory or regulatory restrictions on employees’
economic interests and attempting to judicially apply very broad bias or impartiality
standards upon regulators and administrators beyond those standards, noted one
court, “is to invite challenges to officials based not upon true conflicts of interest but
upon their philosophical or ideological leanings ....”84 While there could, of course,
be legitimate questions raised about general notions of “bias” or partiality in a
governmental function based on alleged conflicts or associations of particular
employees involved in a certain matter, issues involving the ethics and conflict
standards in internal governmental standards of conduct regulations are generally not
amenable to legal resolution by private litigants, that is, those regulations do not raise
an actionable standard for litigation by outside private parties, but rather are generally
considered internal, discretionary or disciplinary matters within the agency.85
83 Carolina Environmental Study Group v. United States, 510 F.2d 796, 801 (D.C.Cir. 1975).
84 Center for Auto Safety v. Federal Trade Commission, 586 F.Supp. 1245, 1248 (D.D.C.
85 Note, Wathan v. United States, 527 F.2d 1191, 1200-1201,1203 (Ct. Claims 1975),
rehearing denied, January 30, 1976; Wild v. HUD, 692 F.2d 1129,1131,1133 (7th Cir. 1982).
No private cause of action, CACI, Inc.-Federal v. United States, 719 F.2d 1567,1581 (Fed.
Cir. 1983); Center for Auto Safety v. Federal Trade Commission, supra.