The Office of Government Ethics (“OGE”) has issued a legal advisory to designated agency ethics officials to ensure that executive branch employees are avoiding conflicts of interest as they perform their governmental duties. Federal law prohibits executive branch employees from participating personally and substantially in any action that would have a direct and predictable effect on their own financial interest, or any financial interests imputed to them.
The OGE treats the financial interests of a company and the financial interests of a company’s stockholders as one in the same. Therefore, employees are prohibited from participating personally and substantially in any action that would “have a direct and predictable effect on the financial interests of a company” in which the employee, or any family member or associated group, owns stock – not just actions that would affect a stock’s price.
The interpretation of federal law assumes that any governmental impact on the financial interests of a company have an effect on its stockholders. Therefore, the OGE has provided guidance to designated agency ethics officials, reminding them to counsel executive branch employees that they may not participate in such matters, even if there is not a probable effect on the company’s stock price.
Accordingly, the relevant analysis that agency ethics officials should apply under federal law should be “whether the particular matter would have a direct and predictable effect on the financial interest of the company whose stock the employee owns.”
The full release by the Office of Government Ethics can be found here.
About Americans for Public Trust
APT is an independent, nonpartisan watchdog organization committed to restoring the people’s trust in our public institutions by holding politicians and political groups accountable. We use in-depth investigations and bold legal action to ensure those who disregard the rule of law are held responsible. By raising awareness of this work, we help to rebuild public faith in our elected leaders.
For press inquiries, please email firstname.lastname@example.org