My third post goes to the heart of what my book is about, the fact that federal ethics regulation focuses too much on that which doesn’t matter and too little on that which matters.
Executive Branch employees, for example, cannot accept gifts worth more than $20 from so called “prohibited sources”, although there are numerous exceptions to this rule including gifts from personal friends, attendance at widely attended gatherings (WAGs), gifts of politically related travel, gifts of official travel, and more. If I were to send a copy of my book (some of you have already pointed out what that costs) to a member of the White House staff who was not my personal friend, it would be sent unread to the federal government’s gift warehouse. The warehouse I understand contains everything from Rolex watches given to U.S. intelligence officials by the Saudis to a wine collection. The federal gift rules meanwhile are exceedingly complex, making many ethics officials yearn for some of that wine to accompany their well worn copy of the Code of Federal Regulations. With the exception of the wine, and perhaps some of the watches, however, almost everything in the warehouse is stuff that nobody wants anyway, and stuff that even if accepted in violation of the gift rules would not have affected performance of official duties.
The gifts that really matter are more loosely regulated. Campaign contributions and private sector employment opportunities are chief among them. True, there are limits on individual campaign contributions, but that is where bundling of contributions comes in, and in any event unlimited amounts of money can be given to 527s and other special purpose entities (SPEs) that do what political campaigns also do (attack an opponent, promote an agenda, educate the electorate, etc.) As for post-government employment, here too there are rules, such as the prohibition on participating personally and substantially in an official matter that has a direct and predictable impact on an entity with which you are negotiating for employment. 18 U.S.C., Section 208. These rules also are easy to evade.
Consider the following conversation:
“Treasury Official: You said you need some bailout money. Is $20 billion really enough? Don’t you think you need 30?
Investment Bank CEO: I’ll take 30, although $40 billion would be better. You really ought to work for us someday when you finish at Treasury; I know just the position we could give you.
Treasury Official: My ethics lawyer told me I can’t talk to you about that, at least if I am going to participate personally and substantially in this particular matter, which is to give you the $50 billion, or whatever it is you need.
Investment Bank CEO: I understand. All I really meant to say is that we have a lot of talented people like yourself around our firm and that we want to keep them and hire some more. Speaking of keeping the people we have, I hope that $60 billion you are talking about does not come with strings attached that would affect our bonus program.
Treasury Official: Of course not. We made sure the bill Congress passed had a provision that would protect our – excuse me I mean your – compensation arrangements.”
This smells for sure, but probably passes muster under Section 208.
Solving the problems that really matter – excessive influence of campaign cash and corrupting elements of the revolving door – is not easy. I have a few ideas that I will discuss in later posts. My point here is that existing regulation does not come close. Indeed, existing regulation may be a smokescreen that makes government appear ethical while doing little that actually makes government more ethical. If so, could the regulations be doing more harm than good?
Richard W. Painter
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