The Office of Government Ethics (OGE) is proposing amendments to the ethics rules for government employees. OGE was directed by the White House to write regulations extending the lobbyist gift ban for political appointees to all executive branch employees. (See Federal Register Vol. 76, No. 177, September 13, 2011).
The proposed rule would impose limits on the use of gift exceptions by all employees to accept gifts from registered lobbyists and lobbying organizations and would not allow government employees to use the “widely attended gathering” exception to attend various programs and events held by lobbying organizations. They would also implement the lobbyist gift ban for appointees required to sign the Ethics Pledge prescribed by Executive Order 13490.
The rules, however, carve out exceptions for events held by professional societies, scientific organizations and learned societies, even if the organization is engaged in lobbying. Trade associations are not covered by the exception because, OGE said, their “primary concern” is not education and professional development.
Comments on the proposed rules must be submitted to OGE and can be sent via email to usoge@oge.gov. All comments must be identified by RIN 3209–AA04, and in the subject line, include “‘Proposed Amendments to Part 2635.”
Comments are due to OGE before Nov. 14, 2011. For further information contact Richard M. Thomas, Associate General Counsel, Office of Government Ethics, telephone: 202–482–9300; TYY: 800– 877–8339; FAX: 202–482–9237
Background
Standards of Conduct for Employees of the Executive Branch were first promulgated by OGE in 1992. Under these standards, executive branch employees are subject to two general prohibitions: employees must not, directly or indirectly, solicit or accept a gift either (1) from a prohibited source, or (2) given because of the employee’s official position.
A prohibited source is broadly defined to include any person seeking official action from the employee’s agency, doing or seeking to do business with the employee’s agency, conducting activities regulated by the employee’s agency, or having interests that may be substantially affected by the employee’s official duties. OGE, itself, imposed the regulatory prohibition on gifts given because of official position as a further check against appearances that an employee might use their official position for private gain.
A prohibited source includes registered lobbyists and lobbying organizations. However, there are several exceptions in the current regulations that cover a range of situations, such as gifts from family members and friends, de minimis gifts (valued under $20), and gifts of free attendance at widely attended gatherings.
In addition to these existing regulations, President Obama signed a Jan. 20, 2009 Executive Order that imposes an additional gift prohibition on full-time political appointees. The order requires appointees to sign an “Ethics Pledge” that they will not accept gifts from lobbyists and organizations that are registered under the Lobbying Disclosure Act (LDA), and restricts appointees from using the widely attended gatherings exception that had previously been permissible.
The Secretary of the Senate and the Clerk of the House of Representatives maintain searchable, online databases of registrants and lobbyists under the LDA, from which appointees and ethics counselors may determine whether a particular person is a permissible source for a gift under the Pledge ban.
In a guidance published by OGE in 2009, they made clear that the lobbyist gift ban for political appointees “is in addition to the OGE prohibitions on gifts from prohibited sources’ and gifts given because of the employee’s official position.” Thus, for example, the ban applies to gifts from registered lobbyists and lobbying organizations even if they do not lobby the appointee’s own agency or they confine their lobbying solely to the Legislative Branch. Moreover, the lobbyist gift ban in the Pledge is subject to a more limited set of exceptions than those otherwise applicable under the OGE gift regulations and it intentionally broadened existing gift restrictions.
The OGE guidance also emphasized that the Pledge ban is not limited to gifts from lobbyists and lobbying firms that provide lobbying services to others. Under the plain meaning of the Executive Order, the phrase ‘‘registered lobbyist or lobbying organization’’ includes any ‘‘organization filing a registration’’ under the LDA, not just lobbying firms. The ban also includes, therefore, organizations that register because they employ ‘‘at least one in-house lobbyist’’ to lobby on their own behalf, such as a corporation that employs its own governmental affairs officer who meets the LDA definition of lobbyist.
Highlights of Proposed OGE Rules
Like the 2009 guidance, the proposed rules exclude certain types of organizations from the definition of lobbying organizations from which gifts are banned. OGE intends that these exclusions from the gift rules would be applicable to all employees, including political appointees.
Similarly, like the 2009 Executive Order, the proposed OGE rules would limit the use of certain gift exceptions for all government employees. The proposed rules would not allow any employee to use the following exceptions in connection with gifts from registered lobbyists or lobbying organizations: the $20 de minimis exception; the widely attended gathering exception; and the social invitation exception.
However, the OGE carved out two categories of organizations from the definition of lobbying organizations: 501(c)(3) nonprofit organizations, and media organizations, although the guidance provides that an appointee ‘‘still may not accept a gift if the organization employee who extends the offer is a registered lobbyist him- or herself.’’ Additionally:
- OGE determined that the social invitation exception should be unavailable to employees for lobbyist gifts.
- OGE indicates, that it “does not believe that employees, including political appointees subject to the Pledge, should be precluded categorically from accepting offers of free attendance at substantive events that would provide a legitimate educational or professional development benefit that furthers the interests of an agency.”
- OGE proposes to exclude from the definition of registered lobbyist or lobbying organization the following types of organizations, even if these organizations are registered under the LDA: “nonprofit professional associations, scientific organizations, and learned societies.”
- OGE proposes to adjust the current guidance concerning gifts from 501(c)(3) organizations to do away with the requirement that an invitation to an event not come directly from a registered lobbyist. Basically, if the gift is coming from a 501(c)(3) organization – even one that is registered under the LDA – it’s allowable.
- A major change, however, in the OGE exception for gifts from 501(c)(3) organizations states that government employees can still rely on the “widely attended gathering” exception to accept free attendance at a training or professional development event hosted by a nonprofit professional association, scientific organization, or learned society, but the WAG exception does NOT apply to invitations to purely social events, including gala dinners, fundraisers, parties, etc.
- OGE proposed to bar employees from relying on this foreign areas exception if the gift is offered by a registered lobbyist or lobbying organization
Commenting on the proposed OGE rules, The Center for Association Leadership (ASAE) noted how OGE’s proposed rules specifically exclude trade associations from the list of organizations that can extend invitations to government employees to attend widely attended gatherings. In its reasoning, OGE states that, “Trade associations may sponsor educational activities for their members and even the public, but the primary concern of such associations generally is not the education and development of members of a profession or discipline, which is the focus of the proposed exclusion.”
As a result, ASAE asserted that the OGE rules do not acknowledge that both trade associations and professional societies are typically exempt under section 501(c)(6) of the tax code. The proposed rules appear to allow employees to attend widely attended gatherings that are held by professional societies, stating that, “OGE would not limit this exclusion to scientific organizations but would extend it to any professional or learned societies that promote the development or education of members of a profession or discipline.”
The proposed rules do not affect the ability of employees to accept offers of free attendance at events if an employee is speaking or presenting information on behalf of the government. OGE’s explanation is that a speaking engagement is not a gift, and the employee’s participation in these events is viewed as a customary and necessary part of his or her duties.
The proposed rules permit employees to accept offers of free attendance at social events attended by several persons, provided that the invitation does not come from a registered lobbyist or lobbying organization and no attendance fee is charged to anyone.
Finally, with respect to the large and diverse class of career and other employees who are not required to sign the Pledge, OGE has determined that there is no demonstrated need for a new general prohibition against accepting gifts from lobbyists, as long as those lobbyists are not prohibited sources for an employee and do not even extend gifts because of the employee’s official position.