With the approaching national election, one thing is clear—there will be a new administration in Washington, D.C. For individuals working in or supporting one of the Presidential campaigns, there may be an opportunity to serve in the next administration. Service in the Executive branch will create new and unique issues to consider.
First and foremost is complying with the Federal Ethics in Government Act of 1978. This Act requires Federal employees to make financial disclosures to ensure there are no conflicts-of-interest during their government service. The Act prohibits officers and employees of the Executive branch from participating in matters in which they have any financial or other interest. Individuals serving in the administration (officers, Presidential appointees, employees at GS-15 or higher, etc.) are required to file Form SF-278 upon nomination or appointment to a position in the Executive branch, and annually thereafter.
Form SF-278 requires information on the employee’s investments and income from any trust, estate, investment fund, or other financial arrangement producing income or the beneficial right to income. Disclosures are for the individual, his or her spouse, and minor children. All forms are filed with the Office of Government Ethics (OGE) and are publicly accessible. There are criminal penalties for noncompliance. Further information and a copy of Form SF-278 with instructions are available online.
Each reporting employee must enter into a customized ethics agreement at the start of government service, requiring the employee to take actions necessary to avoid any actual or perceived conflict-ofinterest. This agreement commits the employee to resign from any positions the employee holds and to divest any financial interests that could create a conflict of interest or an appearance of a conflict of interest with the employee’s official government duties.
Planning tools are available to minimize potential conflicts and to address disclosure requirements. For example, a Qualified trust may limit actual or potential conflicts-of-interest. A Qualified trust can be either a “Qualified Blind Trust” or a “Qualified Diversified Trust,” both of which require the appointment of an independent trustee. The OGE must approve all Qualified trusts prior to execution. Model forms for trust provisions, trust certification, and official communications are available at www.usoge.org, along with model confidentiality agreements.
Under certain circumstances, the Act provides limited exemptions and waivers to individuals. Even with an exemption or waiver, however, an individual may be disqualified from participating in certain official government matters.
An individual is a more attractive candidate for government service when conflicts-of-interest are minimized, and government service will be more rewarding when an individual is not barred from participating in certain matters because of a conflict-of-interest. An ounce of prevention is worth a pound of cure. If you think you will be joining the Executive branch, you should become familiar with conflict-ofinterest rules and you should work with legal and accounting professionals to develop a proactive plan for complying with these requirements.