Recommendation The Commission recommends that restrictions in 18 U.S.C. § 208 on A. Present Law As described in greater depth earlier in this report, the general conflict of interest statute, 18 U.S.C. § 208(a) prohibits federal executive branch employees taking actions in particular matters in which they have a financial interest. The statute includes a specific prohibition against an employee's participation in any particular matter in which "any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest." The penalty for a violation is a fine or imprisonment of not more than two years, or both, and the general standards for waiver of § 208(b) apply. The practical effect of the prohibition is to require the employee to recuse himself from any official actions that might involve an entity with which he is negotiating for employment. In addition to the proscriptions of § 208, 10 U.S.C. § 2397a requires DOD employees at pay rates of GS-11 or higher and military officers in pay grades O-4 or higher to report any contact they have had, or will have, with defense contractors regarding future employment. These persons must also disqualify themselves from any participation in a Department of Defense procurement related to such contractors. Finally, the recently enacted Office of Federal Procurement Policy Act Amendments (OFPPA) of 1988, Pub. L. No. 100-679, 102 Stat. 4055, impose additional restrictions on negotiating for employment activities. Section 27(a) of the OFPPA, a new provision, prohibits any employee, agent, representative, or consultant of a competing contractor, during the conduct of any federal agency procurement, from knowingly making an improper offer of employment or discussing future employment with any procurement official of the agency. Section 27(b) of the OFPPA prohibits executive branch employees who participated personally and substantially in the conduct of a particular procurement, or who personally reviewed and approved the award, modification, or extension of any contract for that procurement, from soliciting or accepting future employment or engaging in any discussion of future employment with any employee or representative of a competing contractor. The OFPPA amendments add a number of complex issues to the negotiating for employment process. For example, the legislation defines the term "employee" to include a contractor, subcontractor, consultant, expert, or adviser (other than a competing contractor) acting on behalf of, or providing advice to, the agency with respect to any phase of the agency procurement concerned. The new statute also mandates an intricate certification system to assure compliance. No specific rules restrict negotiating for employment by employees of the legislative branch, although Senate Rule XXXVII and House Rule XLIII generally prohibit the furtherance of an employee's pecuniary interest through the improper exercise of influence. Additionally, a Senate interpretive ruling provides that Members, officers and employees are under a substantial obligation to avoid a conflict of interest or an appearance of a conflict of interest between their Senate duties and the interests of their prospective employers. See Senate Committee on Ethics, Interpretive Ruling No. 380. March 1, 1984. The Code of Conduct for United States Judges does not contain a specific negotiating for employment restriction. However, Canon 3 requires a judge to disqualify himself in any proceeding in which he has a financial interest, however small. Further, Canon 5 requires a judge to refrain from engaging in business and from financial activities that might interfere with the impartial performance of his judicial duties. B. Considerations The Commission has already noted the benefits that accrue from the free flow of individuals between the private and government sectors. In allowing this exchange, we must also be cognizant of the need to protect the government's decision-making process during the time that a government employee is conducting a search for private employment. The Commission acknowledges, however, that there are problems inherent in attempting to regulate the conduct of employees engaging in negotiations for employment. For example, requiring disclosure of discussion and recusal when firm negotiations have not been begun, may jeopardize an employee's federal career prospects. And, from the government's perspective, recusal can so reduce an employee's responsibilities as to reduce substantially his value to the government. In addition, persons doing or desiring to do business with the government may be able to affect the procurement process by "seeding" offers of employment and thereby causing the removal of a government employee from the particular action. In analyzing the restrictions on negotiating for employment, the Commission also noted that the proliferation of separate statutes in this area could make it difficult for a given employee to identify and understand the various restrictions that might apply. In considering the potential for employees to be influenced in their official actions by considerations of ongoing negotiations for employment, the Commission concluded that the risks of improper influence are no greater for the executive branch employees than for employees in the other branches. In particular, we believe that a congressional officer or employee -- including a Member of Congress -- should be prohibited from acting officially on any particular matter if a person or organization with whom he is negotiating or has an agreement for employment has a financial interest in the matter. In arriving at this recommendation concerning the applicability of the prohibition to Members of Congress, we initially shared a sense of misgiving. As discussed earlier, we do not believe that the entirety of § 208 should be applied to members (see Recommendation 1, supra). However, we are of the view that the public interest in protecting the integrity of the legislative process extends far enough to create a separate negotiating for employment section within 18 U.S.C. § 208 and to apply that section to Members of Congress. Such a prohibition would have to be narrowly drawn in order to avoid constitutional infirmities." The Commission also recommends that the same restriction be applied to the judiciary. We perceive no fundamental reason for excluding employees of either branch from the relatively slight burden of recusal in those instances in which the person is negotiating for employment with a particular entity. Indeed, public confidence in the integrity of our legislative and judicial process would be enhanced by the imposition of such a limitation. As noted earlier, there are other statutory restrictions that affect employees who are considering leaving government service for private employment. Although significant participation in the decision-making process or participation in the procurement process may merit more stringent restrictions on negotiating, the Commission questions whether additional statutory restrictions such as those imposed by 10 U.S.C. § 2397a, and § 27(a) and (b) of the OFPPA are an efficient method for dealing with such issues. Because 18 U.S.C. § 208 already requires an employee to recuse himself if engaged in negotiations for employment, we are unsure whether these additional statutes add any meaningful safeguard to the integrity of the government's decision-making processes. Any employee who would participate in a decision in violation of § 208 seems equally likely to disregard the reporting and recusal requirements of § 2397a. As for the virtual ban on seeking employment that is created by § 27(a) and (b) of the OFPPA, the Commission questions whether such an unequivocal prohibition is appropriate, or whether, instead, recusal is adequate to protect the interests of the government decision-making process. The OFPPA legislation presents an additional problem in that it is to be codified at 41 U.S.C. § 423. This means that federal employees will have to consider two (three if employed by the Department of Defense) separate titles of the United States Code for guidance concerning negotiating for employment. See 10 U.S.C. § 2397a; 18 U.S.C. § 208; and 41 U.S.C. § 423. 5 For example, the Speech and Debate clause of the Constitution (U.S. Const. art. I, § 6, cl. 1) protects members from liability for conduct necessary to perform their duties within the sphere of legitimate legislative activity. Davis v. Passman, 442 U.S. 228 (1979). The Commission considered these issues and believes that both the Constitution and the public interest would be served by imposing negotiating-for-employment restrictions on Members of Congress. We would also note that an individual Member's responsibility to his constituents may require avoidance of, or withdrawal from, negotiations in order to avoid a violation. Accordingly, we recommend that, in addition to amending 18 U.S.C. § 208 to apply the negotiating for employment restrictions to employees of the legislative and judicial branches, Congress should consider the value of retaining the prohibitions of 10 U.S.C. § 2397a, and § 27(a) and (b) of the OFPPA. In the alternative, if Congress should determine that these supplementary restrictions to 18 U.S.C. § 208 are necessary to protect the integrity of the government decision-making process, then the Commission would recommend that the prohibitions be extended appropriately to cover federal employees across all three branches and incorporated into 18 U.S.C. § 208. In weighing alternatives, we considered the amendment of § 208 to impose an absolute bar on all negotiations while employed by the federal government. While this would provide a truly "bright line" rule, the probable negative impact of such a provision dictates against implementation. An absolute bar on negotiations for employment would require that all government employees endure a period of unemployment while they look for a job following termination of their government service. Such a result is neither fair nor necessary to protect the governmental decision-making process. It would also be a massive disincentive to government service. We also considered amending § 208 to require disclosure of all contacts or overtures by employees and/or prospective employers. This approach was rejected for several reasons. First, the current § 208 prohibition provides a clear restriction on negotiating for employment activities. (That is, if an employee is negotiating with a firm, he has a financial interest in that company and may not take official action that has a direct and predictable effect on the organization.) While the addition of a disclosure requirement might assist the enforcement effort, the Commission concluded that creation of a government-wide reporting requirement would be needlessly burdensome and ineffective in discouraging improper actions. IV. POST-EMPLOYMENT RESTRICTIONS Restrictions on the activities of former government employees are intended to ensure the integrity of the government's decision-making process, and thereby to protect the public interest. At the same time, post-employment statutes should not be unduly onerous so as to become a disincentive to government service by qualified individuals. The Commission envisioned three specific functions that we believe should be served by the imposition of post-employment restrictions. First, the restrictions should be fashioned in such a manner as to prohibit the use of improper influence by departed employees. The specific evils to be prevented are "switching sides" on the same matter and allowing a former employee to make improper use of his contacts within the government. In prohibiting such contacts, we must tread a narrow line, because the so-called "revolving door" has many healthy attributes. In particular, the flow of individuals between private life and occasional government service is a source of invigoration to both sectors, and provides a valuable exchange of information about the workings of government which improves the understanding of each sector about the other. Our system of government in a sense mandates a substantial amount of "revolving door" activity every four or eight years. A second related function of post-employment restrictions is the creation of a protective shield for sensitive government information. While the exchange of information between government and industry can be and usually is of mutual benefit, the release of some specific types of government information must be barred in order to protect the public or national interest. Accordingly, to be truly effective, any effort to regulate post-employment activities must account for both the exchange of information and the protection of certain types of sensitive information. Third, the post-employment restrictions may in some respects augment the restrictions on current employees in § 208 and help provide an additional protective function, by discouraging current employees from letting thoughts of future employment possibilities shape their official conduct against government interests while in office. The public interest suffers when a government employee makes decisions that can affect the business interests of a company the employee is pursuing as a potential future private employer. For example, employees should not, upon leaving the government, be able to take with them and use certain specific types of information. Although our recommendations are generally grouped by category, the Commission believes that the necessary changes call for an overall revision of the laws governing postemployment restrictions. Reference to existing law is made in order to identify issues and recommend appropriate changes. In particular, the Commission strongly believes that all substantive post-employment restrictions should be consolidated into one section in the |