A Tale of Two Executive Orders: Biden and Trump Ethics Commitments for Executive Branch Personnel
January 22, 2021, Covington Alert
The ethics rules that apply to Presidential appointees shifted Wednesday, in some ways significantly, as President Biden, just hours after being sworn in, signed an “Executive Order on Ethics Commitments by Executive Branch Personnel” and President Trump, just hours before his term expired, revoked his Executive Order on Ethics. This alert summarizes the key differences between the Biden and Trump Executive Orders on Ethics and highlights the implications of these orders for those entering or exiting the Administration and the companies that hire former Administration officials.
While the Biden and Trump Executive Orders differ in some significant ways, it would be too simplistic to characterize the new rules as more restrictive. President Biden did announce additional ethics restrictions not present in the now-repealed Trump Executive Order, but he also relaxed some of the more restrictive provisions in the Trump Executive Order. Generally speaking, President Biden has imposed greater restrictions on people joining government but fewer restrictions on people leaving government. We discuss these various changes and differences below.
Restrictions on Appointees Leaving Government
The Biden Executive Order imposes three “revolving door” bans on appointees who leave the federal government, two of which are generally less restrictive than the Trump Executive Order counterparts:
- "Shadow Lobbying” Ban. Pursuant to the Biden Executive Order, certain senior and very senior presidential appointees are subject to a one-year ban on “materially assist[ing] others in making communications or appearances” that the individual is prohibited from undertaking personally. This restriction prohibits appointees from holding themselves “out as being available to engage in lobbying activities in support of any such communications or appearances” or “engaging in any such lobbying activities.” “Materially assist” means “to provide substantive assistance but does not include providing background or general education on a matter of law or policy based upon an individual’s subject matter expertise.” “Shadow lobbying” is common in Washington, and describes efforts by former officials to influence policy by advising others who lobby government officials, rather than making lobbying contacts themselves. Under the executive order, certain senior Biden appointees will face a one-year cooling off period before they can engage in such practices.
In many ways, the Biden “shadow lobbying” ban is narrower and less restrictive than the now-repealed Trump Administration “shadow lobbying ban.” The Trump ban restricted similar behind-the-scenes lobbying activities for five years (when directed at the appointee’s former agency) or for the duration of the Administration (when directed at covered executive branch officials or non-career Senior Executive Service appointees), a longer cooling off period. Also, the Trump ban on “shadow lobbying” applied to all Trump appointees, while the Biden ban applies only to certain “senior” or “very senior” executive branch appointees. The upshot of these changes is that departing Biden Administration officials may find it easier to find positions at lobbying firms and corporate government relations departments, although they will need to be very careful that behind-the-scenes work in the first year after departing the Administration does not violate the Biden Ethics Pledge.
The Biden shadow lobbying ban is, however, broader than the Trump ban in one significant respect. While the Trump ban carved out an exception for lobbying activities regarding “any agency process for rulemaking, adjudication, or licensing,” the Biden ban includes no such exception, meaning that behind-the-scenes advice regarding efforts to influence agency regulations could be restricted for a year.
- Duration of Administration/Two-Year Ban on Appointees Leaving Government to Lobby. The Biden Executive Order requires appointees to agree “not to lobby any covered executive branch official or non-career Senior Executive Service appointee” for the remainder of the Administration or two years following the end of the person’s appointment, whichever is later. “Lobby” means “to act or have acted as a registered lobbyist. ”Thus, if an appointee leaves the Biden Administration, the appointee cannot engage in activities that trigger lobbying registration at least until after President Biden’s last day in office, but no sooner than two years from their last day of government service. The Executive Order also imposes a similar ban, for the same term, on activities that would trigger registration under the Foreign Agents Registration Act.
Again, this provision is in some ways less restrictive than the Trump Ethics Pledge, which restricted lobbying activities by all former appointees, not just those who become registered lobbyists. The Biden Executive Order therefore leaves room for some former appointees to lobby the Executive Branch as long as they do not hit the triggers that would require registration under the Lobbying Disclosure Act. For example, a former appointee could potentially still lobby certain Biden executive branch officials as long as that employee makes only one lobbying contact on behalf of a client or does not spend 20% or more of the employee’s worktime for a particular client during a three-month period engaged in lobbying activities, subject to the “shadow lobbying” ban described above.
Also, this restriction is, in some ways, of shorter duration than the Trump post-employment restrictions, which prohibited certain lobbying activities for five years after the termination of the individual’s government employment and imposed a lifetime restriction on activities on behalf of foreign governments or foreign political parties that would trigger registration under the Foreign Agents Registration Act.
On the other hand, the Executive Order requires the Director of the Office of Government Ethics “to ensure” that this requirement “of the pledge is honored by every employee of the executive branch.” This provision seems to suggest that every executive branch employee — not just every Presidential appointee — will now be restricted from registering to lobby the executive branch or engaging in FARA-triggering activities for the duration of the Administration. This would be a very significant departure from current practice and sweep in millions of federal employees. Companies and other organizations that hire former federal employees to engage in lobbying will need to be especially mindful of these restrictions. We expect that the Office of Government Ethics will have more to say on this restriction in the coming months.
Two-Year Ban on Communications with Former Agency. Currently, federal criminal law imposes a one-year cooling off period on certain former “senior” executive branch employees. Prior to the expiration of that period, covered employees are generally barred from communicating with or appearing before their former agency. While the original Trump Executive Order required appointees to pledge to abide by this restriction, the Biden Administration extends the prohibition from one year to two years. In doing so, the Biden Administration reverted back to the Obama Administration’s Executive Order on Ethics, which also imposed a two-year ban. The Biden Executive Order also took the ban a step further, to include a restriction on communications not only with the individual’s former agency, but also with senior White House staff.
Restrictions on Appointees Joining Government
The Biden Executive Order includes four key restrictions on appointees joining the federal government, one of which is broader than its Trump Administration counterpart and one of which is entirely new.
- Revolving Door Ban on Lobbyists and Registered Foreign Agents Entering Government: Under the Biden Order, all appointees who were, within the preceding two years, lobbyists or registered foreign agents are subject to a two-year ban on: (i) participating in any particular matter on which they lobbied (or engaged in FARA registrable activity) within the previous two years; (ii) participating in the specific issue area in which that particular matter falls; or (iii) seeking or accepting employment with an executive agency with respect to which the individual lobbied or engaged in FARA-registrable activity within the preceding two years. This restriction is broader than the corresponding Trump restriction, which did not apply to FARA registrable activities and which did not prevent former lobbyists and foreign agents from accepting positions in agencies that they had lobbied.
Revolving Door Ban on Appointees Entering Government: In keeping with the Trump and Obama Executive Orders, all appointees entering the Biden Administration are prohibited from participating in “any particular matter involving specific parties” that is directly and substantially related to their former employer or clients for two-years, regardless of whether the appointee was a lobbyist or registered foreign agent.
- Golden Parachute Ban: The Biden Executive Order includes a new provision, not present in the Trump or Obama Executive Orders, that prohibits all incoming appointees from receiving from their former employer any type of compensation (salary, cash, or non-cash payment), “the eligibility for and payment of which is limited to individuals accepting a position in the United States Government.” As “Golden Parachute” bans go, this one seems relatively narrow. It does not prevent the award of all “golden parachutes,” but rather only those that employees receive merely for accepting a position in the United States Government. If an employer has a practice of providing golden parachutes to all departing executives, there may be arguments that the ban is not implicated. This provision will be consequential, however, for employees of firms that have had a practice of making cash awards to employees who chose to leave for public service.
Gift Restriction: Like the Obama and Trump Executive Orders, the Biden Order prohibits appointees from accepting gifts from individual lobbyists and entities registered under the Lobbying Disclosure Act. Executive branch employees are already prohibited by law from accepting gifts from certain “prohibited sources,” but federal regulations spell out many different exceptions to these restrictions. Biden appointees will not be permitted to rely on many of these exceptions. For example, Biden appointees cannot rely on the exceptions for gifts of $20 or less, awards and honorary degrees, gifts of free attendance at widely attended gatherings (unless the official is speaking or presenting information in an official capacity), social invitations, meals and entertainment in foreign areas, and informational materials.
Waivers and Enforcement
The Biden Executive Order also makes significant changes in how waivers to these rules will be granted by designating the Director of the Office of Management and Budget (“OMB”) as the individual responsible for granting any waiver. According to the Executive Order, the OMB Director may, in consultation with the Counsel to the President, grant any current or former appointee a written waiver of any restriction set forth in the Order. A waiver may be granted if it is in the public interest. If granted, the waiver must be made available to the public within 10 days. In granting a waiver, the Director of OMB may consider the government’s need for the individual’s services, the individual’s qualifications, and the scope and nature of the individual’s prior lobbying activities (including whether their previous lobbying work was on behalf of a nonprofit corporation).
One might ask how this Executive Order can be enforced against federal appointees at all once they have left federal government service? The Biden Order makes use of the same creative enforcement mechanism adopted by the Clinton, Trump, and Obama Administrations. Appointees are required to sign an “Ethics Pledge,” in which they agree to abide by the restrictions in the Executive Order. If they fail to comply, the Attorney General can bring a civil action against them for “declaratory, injunctive, or monetary relief.” Whether the Biden Administration will aggressively enforce this pledge remains to be seen. Notably, so far as we are aware, neither the Clinton, Trump, or Obama Administrations brought any civil actions to enforce their Ethics Pledges.
Report on Compliance with Executive Branch Procurement Lobbying Disclosure
In addition to the ethics commitments, the Biden Order tasks the Director of the Office of Government Ethics and the Director of the Office of Personnel Management with reporting to the President “on whether full compliance is being achieved with existing laws and regulations governing executive branch procurement lobbying disclosure.” This report could include a review of compliance with the “Standard Form LLL,” which requires federal government contractors to disclose certain information about their lobbying activities to secure government contracts. Any report must also “include recommendations on steps the executive branch can take to expand, to the fullest extent practicable, disclosure of both executive branch procurement lobbying and of the lobbying for Presidential pardons.”
Separately, the Director of the Office of Government Ethics is tasked with reporting to the President on steps to expand the “shadow lobbying” revolving door ban discussed above to “all executive branch employees who are involved in the procurement process.”
What About Departing Trump Administration Appointees?
As noted, early Wednesday morning, President Trump revoked his Executive Order on Ethics. Pursuant to that new order, former Trump Administration appointees are no longer subject to the restrictions in the Ethics Pledge.
This revocation will have a material effect on executive branch officials who served in the Trump Administration and who are now seeking employment. Notably, the revocation of the Trump Order allows former Trump Administration officials to engage in lobbying activities with respect to their former agencies as of noon Wednesday, assuming no other restrictions apply. The revocation of the Trump Order also lifts the lifetime ban on former Trump Administration officials engaging in FARA-triggering activities on behalf of foreign governments.
It is important to note, however, that while former Administration officials are no longer subject to the restrictions laid out in the Trump Order, they may still be subject to other post-employment restrictions set forth in federal criminal law, agency regulations, and (if they are lawyers) bar rules.
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