Ross Gianfortune  
This is the GovExec Daily, where we bring you the federal stories that really matter. It's March 16 2021 I'm Ross Gianfortune.

When talking about ethics rules in government, a lot of the conversation revolves around the rules, but enforcement is far more complicated. With appointees and higher-level executives, enforcement is largely absent, but rank-and-file public servants can face fines, suspensions and other punishments for violating the Hatch Act. 

In the second of our two-part conversation with the Project on Government Oversight’s 
Dylan Hedtler-Gaudette and Walter Shaub, we discuss the enforcement of ethics rules  including the Hatch Act and how ethics enforcement can be strengthened. We also talked about the revolving door provisions of Biden’s ethics executive order and concerns about the revolving door going forward.

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Ross Gianfortune    
Little bit about enforcement we have email sometimes we had comments about how many hatbox violations, there were by appointees, in the last administration and your colleague, Elizabeth woods in her baker's dozen Opus from a few weeks ago, sort of outlined some of the things involving the Hatch Act and how to kind of prevent that. Once you mentioned OSC. It has different enforcement powers over career employees for appointees so even within the ethics executive order or without it. What's the future of Hatch Act enforcement and what does the projection government oversight, want to see, you know to beef that up.

Walter Shaub 
So, one of the disappointing things was that in my view, OSC did not use all of the authorities that were available to it in the last administration, it had the authority to pursue $1,000 fine for every violation, and when you have one particular member being accused by the Office of Special Counsel have dozens and dozens and dozens of violations somewhere between like I lost count after about 20 or 30 $1,000 for each one of those would truly add up. There's also a position always see has taken that it has no ability to seek any action along those lines or otherwise, against a presidential appointee, but when you look at the statute the statute says they lack authority to pursue penalties against presidential appointees in positions for which they were confirmed by the Senate, that does not include White House officials there's no restriction written into that law that would prevent them from seeking $1,000 Fine, against a presidential appointee who wasn't Senate confirmed but instead was just appointed and put in the White House so right there I think you have a practical enforcement problem of an agency that wasn't willing to use all of the authorities in hand. I also think that you need to set up more significant penalties. Now you can run quickly into constitutional problems if someone other than the President is attempting to fire a presidential appointee, But you could for instance incentivize them by having a series of escalating civil penalties that could go very quickly to such a high level that they would be incredibly burdensome and threatening to an individual, and give them the option that if they quit the penalty will be suspended, and if they don't come back before the administration, the penalty is eliminated, so that they still are found guilty of a violation, but the fine isn't there and what that would enable you to do is push out bad actors in government, and frankly I'm more interested in pushing them out. Then, in, penalizing them. We just want them away from the levers of power if they don't respect the rule of law, and really put me I think similarly one of the provinces where you have what looks like. Conflict of Interest concerns or somebody may be bumping up against the criminal conflict of interest statute, the FBI and the Department of Justice and even some inspectors are unwilling to investigate that and even more, the Department of Justice is unwilling to prosecute those things. And I think part of the problem counter intuitively is that the, these are criminal laws that criminal conflict of interest laws, and naturally you want a government, perhaps to be restrained in its enforcement of criminal law and supports interpret those laws narrowly and Justice Department is skeptical about pursuing a prosecution, that I think we would have more success if they were civil penalties and again along these lines where the fines, increase rapidly, and somebody has to choose whether or not to leave particularly, even the case of a conflict of interest the fine was the total value of the asset that presents the conflict of interest. So if somebody has $50 million in a stock that poses a conflict of interest, they face losing $50 million, dollars and we don't have the situation where a multimillionaire shrugs and say I don't mind paying $1,000 Fine. And, again, let them off the hook if they quit within a deadline I mean obviously like within 30 days of the fine not waiting until the last day of the administration. So I actually think you could increase the willingness of the government officials with power to enforce laws, if, if some of the criminal laws or civil laws and in the case of the Hatch Act. If you had political will on the part of the appointee to actually use the existing and learnings. Give him even more authorities as well.

Dylan Hedtler-Gaudette   
Right in returning to the role that Congress often land that there is congressional interest in trying to beef up the Hatch Act, there is actually another package of pro democracy can have guardrail reforms called the protecting Democracy Act that was introduced at the end of last Congress, and we're hoping will be introduced again this conference, we are very supportive of the bill and one of the suite of things that it would do is beef up the Hatch Act along the line, as a means of trying to reinvigorate as I said earlier the guardrails around the executive branch and around our democracy, more broadly.

Ross Gianfortune   
Yeah, I mean that could set up some interesting notions just because there's there's some gray areas there for sure when it comes to state elections, or state, just to pull one out of the air. Theoretical recall efforts, because we've even seen that in the first couple months of the Biden administration, which admittedly is, is a gray area for sure but those kinds of concerns can always gets my hackles up, and when things like that happen so. So, I let's hit the revolving door. The thing that I've been sort of stressed about we, you know, again, and I think we've talked about this I have concerns about the revolving door even within the current cabinet, we, you know, you mentioned the sort of shadow lobbying are the sort of loopholes in a lobbying, there are Cabinet Secretaries who are confirmed, who have, you know, worked for. I'll just name them Tom Vilsack worked for an industry group that he is now going to, You know regulate. How does the IAU deal with this kind of stuff. I mean, they'll sex kind of us there there's not, not much is going to happen there but we see that litigation is often how some of these ethics things get enforced. It's what does the EO do for these loopholes.

Dylan Hedtler-Gaudette
Well here's one of the problems and one of the things we highlight, as far as we think the EO could be improved and things that we think Congress needs to legislate which is, you're exactly right, Bill sack was the head of the largest dairy trade association in the country for the last four years and then he comes in to be USDA pan, which means you're going to deal directly with dairy policy with this huge conflict of interest and while he may not have the technically technically had the register as a lobbyist, it is obvious what is going on there, you know, and it is obvious that he should not be involved in anything relating to dairy policy but that would mean that the Secretary of Agriculture would have to recuse himself from a pretty broad swath of stuff that his, his agency is doing right so we see that there is this problem with like we have these narrow legally technical definitions of things like lobbying but, But that aren't sufficient to capture the real threat of actual kind of corruption or potential corrupted or soft corruption that actually happened and we all live in DC and we are aware of how this goes and what, what shadow lobbyists are and who they are and what they do and they often they oftentimes play a larger role at the actual person who is registered. And so we need to need to expose the definition of what lobbying is to try and capture that kind of activity. And if the bind administration is serious about being the cleanest least corrupt administration ever then they need to like not do things that fly in the face of their proclamation proclamations particularly in the spirit of their model of aging, you know, Tom Vilsack, probably should not be Agriculture Secretary I'm sure he's a great guy, I'm sure he makes pretty good secretary given that he had the role previously but he's also got conflicts of interest around his work in the dairy sector so that's an issue we also have a secretary of defense right now wait often again. I'm sure he's a wonderful man. I admire his service to the country, but he was on the board of Raytheon, and then he gets appointed to be this, Secretary of Defense, we already have a giant problem with corruption and with the defense industry basically dictating a different policy in a lot of ways and absolutely vacuuming up a lot of taxpayer dollars on dubious projects like the F 35 And I have serious questions about the objectivity of US Secretary of Defense who was on the board of one of the major defense contractors. So there are definitely problems with the current administration that we already see, and we would hope that Congress would take them seriously and and would do something about,

Walter Shaub 
you know this, I agree 100% On what Dylan said this is a situation where you can see quite clearly. The distinction between this administration of the last one, and the limits of what this administration's shift toward ethics, are you definitely I think have a group of people who are focused on literal compliance with the existing laws and i i so far haven't seen instances where I've been able to point to any deviation from that and that's a welcome shift. On the other hand, there seems to be this silence in the area of reform or doing things differently. On the campaign trail there were quite a number of very lofty admirable ethics proposals and we haven't been hearing about them and they made the decision not to appoint an ethics are in the Obama administration they had no mindset. And as a result we haven't been able to find someone in the administration to communicate with, and discuss reform issues or inspectors general or whistleblowers. And that's the kind of situation where when you lack a leader in an area, you're going to let progress. The administration knows this because they appointed. Jeff science and Andy Slavitt to lead the COVID response. And that seems to be going well, so they know that appointing people to run point on an issue is effective, and there's no comparable personnel in the ethics space. And I think you also see a willingness to revert to business as usual in Washington where people like Bill sack and Austin are now leading the agencies that the industries they were part of are making a lot of money off the end. They may be absolutely pristine honorable ethical people and they may impress us by the time they're done, leaving, but it does send a signal that these agencies are in danger of capture by the industries they either do business with or regulate and. For one thing, you could broaden the definition of lobbyists and then you wouldn't have been able to have Bill sack working there so that actually can be an easy fix, but I think you hear the phrase personnel is policy enough in Washington. I wish people in Washington would take that a step further and say personnel is ethics. Do we have people who appear to be representing the public or appear to be representing their industries and I emphasize the word appear because again, these two individuals could turn out to be terrific in their job and could do great jobs. But we'll have to wait and see. And in the meantime, there's an appearance of coziness with industries that often leave you on guard watching whether the public's interest is going to come first and so I'm very optimistic about the commitment of this administration that compliance, I'm less optimistic so far about its commitment to reform and my attitude on that can be shifted quite easily. Suddenly they appointed somebody to lead these efforts, the way they did with COVID and gave us somebody to interact with

Dylan Hedtler-Gaudette 
Maybe they can appoint Walt

Walter Shaub
no, not me. I don't want to have anybody think I'm pitching this because I want the job. And by the way, I really liked the job I have just started working with Dylan. I am I am not going anywhere.

Ross Gianfortune
I'll take the job. I'm not qualified for it in any way shape or form, other than just being someone interested in ethics but I'm sure we've, we found out that there are a decent amount of Biden administration people who do listen to the show but I'm, my guess is they're not enraptured with. With me so far. But let's, let's talk a little bit about that and we'll end on this, the sort of perception is reality thing I think is important here because you don't want to end up in a place where we are now, where trusting government is really low, we had Bill Eggers on last week talking about some, you know, the Pew surveys about how we have one in five people surveyed, thinking that the federal government can be trusted to quote, do the right thing. So I guess we'll end on this, like I said, broadly speaking, how important are the ethics rules, and the enforcement to a stretch to reestablish trust in the federal government. And how does the administration and its executive order kind of move the ball forward in that direction.

Dylan Hedtler-Gaudette   
I think that ethics are, as we've been talking about all throughout this discussion Ross, I think, I think ethics are critical and I think it's important to also take a step back and sort of contextualize why that is to the average, average person. I mean think this is all kind of inside baseball inside the beltway type of stuff that, that only a select few people should care about a new care about but if you think about like what ethics are actually all I think for me, all it's really doing because it's the way we try to try to ensure that the integrity of our government is as strong as it can possibly be. And in doing so, you ensure that people who are getting their salaries and their office space and whatnot, paid for by the American taxpayer, are getting the return on that investment that we expect which is public servants who serve in the public interest right and the way you make that that idea a reality is by having, you know, rules and regulations, and a lot that they don't have a choice for is about hopping into and out of and that don't have massive Mac's the Mack Truck side loopholes in them right so we tighten up the rules and regulations around ethics and hopefully over time. This isn't an overnight thing hopefully over time, that improve, improve the cleanliness of the government and improve the responsiveness of the government to the needs and interests of the American people, which in turn had the positive multiplier effect on the public trusting government, so it's all it's all related ethics, they are not the only thing that matter but they are certainly among the top things that matter when it comes to how well the government perform, and how much the people trust the government that is supposed to be doing that.

Walter Shaub 
And I think sometimes people have this tendency to view ethics as like Miss Manners things we're talking about etiquette and propriety when in reality, it can be life and death. A few years ago there was a major overpass in Italy that just collapsed as people were driving over it and people died. We've got infrastructure problems here. What if America sets about rebuilding its bridges, and somebody has a financial interest in an inferior product and pushes that through and then our bridges collapse under drivers. Well, your loved one will have guide so that some government official with a conflict of interest could make more money on their investment. That's what conflicts of interest are. And that's why ethics matter. That's a very concrete example, no pun intended since road surveillance or bridges are but just extrapolate from that but there are much more subtle ways that government affects your quality of life or the dangers you face in this world. And if the people making those decisions have a financial interest in that will benefit if you wind up dying or face a greater risk of dying. Or it could be much less serious than that. But conflicts of interest can directly affect your life, and they're not just a matter of polite manners and they're not a matter of partisan gotcha where you go after one side or the other, it's about making sure that the government officials who are serving us are in fact serving our interest in their own.

Ross Gianfortune 
I've had another set of conversations with people in general about recent, recent administrations and even going all the way back to the Clinton administration's as a public service as public service, it's not to, to put money in your own pocketbook or to help your friends and that's always a concern and hopefully this executive order is one step on that path. Dylan, Walter, thanks so much for being on the show with us. Thank you. 

Walter Shaub 
Thanks for having us, Ross.

Dylan Hedtler-Gaudette   
Thanks, Ross.

Ross Gianfortune
Thanks for listening to GovExec Daily. Our show was produced by Adam Butler and hosted by me, Ross Gianfortune. We want to thank the project on government oversight’s Dylan Hedtler-gaudette and Walter shaub  for joining the program. Our music is the song “Signals” by Catfish Dancing. Be sure to rate, review and subscribe on Apple Podcasts or Spotify or wherever you get your podcasts. You can email us any feedback at podcast @ govexec.com or hit us on Twitter @ Govexec.  

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