IV. The FCC and the Public Trust
STANDARDS OF ETHICAL CONDUCT
Employees of the FCC, like others working for the U.S. Government, are subject to specific rules governing their official and professional conduct. The Office of Government Ethics (OGE), an independent agency of the U.S. Government, has promulgated standards of ethical conduct for employees of the Executive Branch of the government and independent agencies like the FCC. The Standards of Ethical Conduct are designed to instill confidence in the integrity of the federal government and its officers.
These standards regulate such diverse subjects as the acceptance of gifts from sources outside the federal government, the giving and accepting of gifts among co-workers, holding financial interests that might conflict or appear to conflict with the independent exercise of an employee's duties, impartiality in the performance of official duties, misuse of government property, and engaging in outside activities.
The FCC has supplemented the OGE rules with regulations that are applicable to its employees only, and that cover the outside practice of one's profession and the FCC's specific financial disclosure requirements. In addition to these two sets of regulations, FCC and other government employees are also subject to the conflict of interest statutes contained in the United States criminal code. Moreover, attorneys working for the FCC, like other attorneys employed by the federal government, also remain subject to the professional ethics requirements of the state governments where they are admitted to the bar.
Gifts from Outside Sources
Employees of the federal government may not solicit or accept gifts that are given to them because of their official positions in the government or that come from what are termed "prohibited sources." A "prohibited source" is defined in the standards of conduct as anyone who is doing business with or who is regulated by the FCC, or who has interests that would be substantially affected by the performance of the official duties of the employees who have been offered the gifts. The term "gift" in the standards of conduct is defined to include almost anything of monetary value.
Several exceptions to this general gift acceptance prohibition are provided for in the standards. Such exceptions include unsolicited items with a minimal market value ($20 or less), or gifts that are clearly motivated by a family relationship or personal friendship between the giver of the gift and the employee who receives it. In addition, with the prior approval of the Commission's legal officials, employees are permitted to accept invitations to widely-attended events, where it has been determined that their presence is in the interests of the agency because it will further agency programs or operations.
Gifts Between Employees
There are also specific restrictions on the giving of gifts to one's supervisors at the FCC and on the acceptance of certain gifts from some government employees who are subordinate to the recipient. Specifically, an employee may not give gifts or solicit contributions for a gift to an official superior, nor accept a gift from an employee paid at a lower rate of pay, unless they are personal friends and not in a superior-subordinate relationship. Exceptions exist that permit the giving or accepting of such gifts on certain infrequent occasions of personal significance to the recipient of the gift. Such occasions could include a marriage, the birth of a child, or retirement.
The purpose of this restriction is, of course, to ensure that personnel actions taken by the Commission are not motivated by (or do not appear to anyone to be motivated by) the giving of gifts to one's official superiors, and that the integrity of the Commission's employee actions is preserved.
Conflicting Financial Interests
In order to ensure the integrity and independence of the FCC's official actions, employees are not permitted to act in any matter in which they have an official stake. Unless they have received advance permission from the FCC's legal officials to do so, employees of the FCC are prohibited from participating in an official capacity in any matter -- whether it is a specific adjudication of an issue between particular parties or a general industry-wide rulemaking -- in which they, or certain other persons whose interests are imputed to them, have a financial interest, if the matter will have a direct and predictable effect on that financial interest. The interests of a spouse, minor child or general business partner, for example, would be imputed to an employee, under the standards of conduct.
Impartiality in Performing Official Duties
In addition to the above restriction, FCC employees may not participate in any adjudicatory-type matter involving specific parties if the matter could affect the financial interests of a member of the employee's household, or if certain persons with whom the employee has a close relationship are parties or represent a party to the matter. This rule is designed to prevent even the appearance of conflict of interest between the employee's personal interests and his or her official responsibilities at the Commission. Under this rule an employee is considered to have a close enough relationship to raise appearance concerns with, for example, his or her spouse's employer, his or her dependent child's employer, or anyone for whom the employee served as an agent, attorney, general partner or employee within the past year.
For example, a new employee who comes to the government from a company or law firm will generally be required not to participate for one year in matters in which his former employer is a party or represents a party. This rule is designed to reassure the public that FCC decisions are not based on outside influences or old loyalties and are free from even the appearance of conflicting interests on the part of FCC employees.
Seeking Other Employment
The standards of conduct also require Commission employees to obtain permission before they participate in an official capacity in any particular matter that could have a direct and predictable effect on the financial interests of any person or company with whom they are seeking employment or with whom they have an arrangement concerning future employment. This rule, like several of those discussed above, is designed to ensure that all parties to a Commission action are perceived to be acting on the merits and not out of self-interest.
Misuse of Position
FCC employees are also specifically prohibited by the standards of conduct from using their public office for their own private gain or for the gain of friends, relatives, or persons with whom they are affiliated in a private capacity. FCC employees have a duty to protect and preserve government property and ensure that it is used only for authorized purposes.
Both the OGE regulations and FCC supplemental rules address the misuse of information not routinely available to the public. Specifically, the FCC rules provide that, absent specific authorization, "nonpublic information shall not be disclosed, directly or indirectly, to any person outside the Commission." The disclosure of such information may subject an employee to disciplinary or other remedial actions.
Miscellaneous Ethics Provisions
In addition to the regulations discussed above, federal employees, including those working at the FCC, are subject to several other sets of rules that govern their activities on and off the job. Some of the more important of these rules are summarized below.
FCC employees, like other employees of the federal government, are subject to restrictions on their involvement in certain political activities. This is to ensure that the public does not perceive that the actions of the Commission's civil servants are aimed at directly promoting the interests of a particular political party and that the activities of individual employees are independent of party interests. The Office of Personnel Management implements the statute and regulations that balance the interests of individual employees as citizens of the United States against the public's need for a government workforce independent of party politics.
Travel Expense Payments by Non-Federal Sources
Under the regulations of the General Services Administration, employees of a federal agency, including the FCC, are authorized to accept certain offers of payment of employee travel expenses from non-Federal sources. Such sources can include individuals and companies, including those regulated by the Commission, under certain narrowly-specified circumstances. This rule is designed to save the government money by permitting individuals and companies to pay for employees to travel to industry meetings, seminars and conferences. Prior to acceptance of any such offer, the agency's legal office must review the circumstances of the offer to determine that no conflict of interest or appearance of conflict would be created by the Commission's acceptance of the offer.
Statutory Gift Acceptance Authority
The general rule in the United States is that government departments and agencies may not receive money except as authorized by Congress, unless there is specific statutory authority to do so. Congress has authorized the FCC to accept certain gifts that may be offered from entities. As with offers of gifts of travel discussed above, the agency's legal office must review such offers to make sure that their acceptance would not create any conflicts or appearance problems.
FCC Supplemental Rules
The FCC has supplemented the Standards of Ethical Conduct discussed above with regulations that apply only to its employees and that reflect some of the specific concerns of the telecommunications industry. For example, Commission employees are required to obtain prior approval from their supervisors and from the Commission's legal officials before they engage in any outside practice of their professions. The Commission also has certain specific financial disclosure requirements in addition to those that apply to all government officials.
CONFLICTS OF INTEREST
In addition to the standards of ethical conduct discussed above, employees of the Commission and the rest of the federal government are subject to various conflict of interest statutes found in the United States Criminal Code. The following are among the more commonly encountered provisions of these statutes.
The most fundamental aspect of this series of criminal statutes prohibits anyone from offering a government employee money or anything else of value in exchange for performing any official act. Likewise, government employees are prohibited from requesting any payment or gift in exchange for performing or failing to perform any official act. This prohibition is designed to prevent bribery. In addition to this criminal scenario, several companion statutes seek to prevent more subtle actions that also could raise appearance concerns and cast doubt on the integrity of governmental actions.
Two statutes prohibit federal employees, other than in their official capacities, from representing anyone before any department or agency of the U.S. Government in any matter in which the United States is a party or has a direct and substantial interest. Although limited exceptions exist, the courts have interpreted both of these statutes quite broadly. It is not necessary that an employee receive compensation for his or her representational activities in order to violate one of these two statutes, as their purpose is merely to ensure that federal employees do not appear to be acting contrary to the interests of the government.
Another statute imposes certain restrictions on the activities in which former employees can engage for a period after leaving government service. In particular, representational activities before the government on matters in which the former employees participated or which were under their official responsibilities while in government service are limited by this statute. These restrictions are discussed in detail below.
Financial Conflicts of Interest
Finally, there is a statute which forms the basis for the regulatory prohibition on conflicting financial interests. It prohibits Commission employees from participating in their official capacity in any matter in which they or certain others whose interests are imputed to them have a financial interest if that matter will have a direct and substantial effect on that interest. Under certain circumstances this prohibition can be waived.
Overview and Purpose of Post Employment Restrictions
After they leave federal service, former employees are generally free to work for any employer -- even one that represents clients before the federal government. Congress has passed laws that impose restrictions on the types of activities that former federal employees may engage in, prohibiting those activities that are most likely to give the appearance of a person's making unfair use of prior government employment and affiliations.
These post-employment restrictions, which are found in the United States Criminal Code, are not intended to discourage the movement of skilled professionals in government to and from positions in industry, research institutions, law and accounting firms, or universities. Such a flow of skills and exchange of communication between government and private activities is essential to the success of government programs, especially in the rapidly evolving area of telecommunications. Only certain acts which are detrimental to the public confidence in the government are prohibited.
When a former government employee who has been involved with certain matters decides to act as the representative for another person on that matter, such "switching sides" undermines confidence in the fairness of government proceedings and creates the impression that personal influence, gained by government affiliation, is decisive. Thus, a former employee may never represent anyone in a particular matter involving specific parties in which the United States is a party or has a substantial interest if the former employee participated personally and substantially in that same matter while in federal service. A "particular matter involving specific parties" does not include general industry- wide rulemakings, but would encompass adjudicatory-type matters involving defined parties, and those rulemakings that are aimed at a particular entity or limited class.
Two Year Restriction
For two years from his or her departure from federal service, a former employee may not represent anyone before the United States government if this same matter was under the former employee's official responsibility during his or her final year of federal service. This ban covers supervisors who may not themselves have been involved in the matter but whose subordinates were. Again, this prohibition is limited to "particular matter involving specific parties" which is usually an adjudicatory-type matter, and does not include general industry-wide rulemakings.
One Year Restriction for Highly Paid Senior Officials
A more restrictive -- although temporary -- rule governs certain highly paid officials. For one year from their departure from federal service, these former high-ranking senior officials may not come before the Commission to represent anyone on any matter. This ban applies even if the former senior official was not personally involved in the matter and even if it was not under this former official's official responsibility while in government service. The purpose of this prohibition is to limit any real or apparent ability of former officials to receive favorable treatment because of their former government position.
All FCC employees are subject to restrictions that focus on financial interests. Depending on the employee's salary and duties and responsibilities, FCC employees may also be required to file an annual report disclosing certain financial interests. Certain high-level federal officials are required to publicly disclose their personal financial interests for the purpose of ensuring confidence in the integrity of the federal government by demonstrating that they are able to carry our their duties without compromising the public trust. There is also a confidential (non-public) financial disclosure system for less senior federal employees in certain designated positions to assist the Commission in its own internal conflict of interest review. These reports require information about the official's interests, outside positions, liabilities, and gifts accepted. The financial interests of spouses and minor children must also be disclosed.
The purpose of public and confidential financial disclosure is to prevent conflicts of interest and to identify potential conflicts, by providing for the systematic review of the financial interests of both current and prospective federal employees. These reports assist agencies in administering their ethics programs and providing counseling to employees. Financial disclosure reports are not net-worth statements but seek only information deemed relevant to the administration and application of conflict of interest laws and regulations, both criminal and civil.
Prohibition on Financial Interests in Significantly Regulated Entities
In addition to possible financial disclosure reporting requirements, the Communications Act prohibits Commission employees from holding a financial interest in any entity which is significantly regulated by the FCC. The United States Criminal Code also prohibits federal employees from participating in a particular matter, such as a rulemaking or licensing proceeding, that could affect their own financial interests or the interests of someone with whom they have a specified relationship (i.e., a spouse, minor child or general partner, or any organization or entity in which the employee serves as an officer, director, trustee, general partner or employee). The financial disclosure forms are used by FCC ethics officials to determine whether the filer has prohibited financial holdings that may create a conflict of interest.