September 26, 2016 | Special Report on United States Government
Nearly every incoming Administration has pledged that its appointees will be subject to and will comply with the highest standards of ethical conduct. The Obama Administration, like the Clinton Administration, imposed additional ethics restrictions to close or narrow the “revolving door” between an Administration and the private sector, ostensibly to reduce the influence of lobbyists and lobbying firms on political appointees and civil servants. Regrettably, however, the current ethics regime, especially President Barack Obama’s Executive Order 13490, dissuades many highly qualified candidates from serving. This is a disservice to the American people. Federal government ethics reform is long overdue. It may seem overly optimistic to task the new Administration with embracing the necessary reforms, but the stakes are too high to maintain the status quo and keep away from government many of the best problem solvers based on their experience in government and in lobbying firms.
Every incoming presidential Administration promises that it will pursue excellence in the administration of foreign and domestic policy by appointing well-qualified candidates to key executive positions. Likewise, nearly every incoming Administration has pledged that its appointees will be subject to and will comply with the highest standards of ethical conduct. The Obama Administration, like the Clinton Administration, imposed additional ethics restrictions by executive order to close or narrow the so-called revolving door between an Administration and the private sector, ostensibly to reduce the influence of lobbyists and lobbying firms on political appointees and civil servants.
It is the position of this paper that although this objective is laudable, the Obama executive order in particular, in its zeal to reduce the influence of lobbyists, has deterred some of the best and brightest professionals from accepting positions in the Administration. This paper also examines the current statutory, regulatory, and political framework governing presidential nominations and appointments and finds that this framework has similarly discouraged well-qualified persons from entering government service, albeit in more subtle ways.
Of course, this is not the purpose of the statutes, rules, customs, and other norms that regulate various activities of presidential appointees before, during, and after government service, and the Obama Administration disputes that its executive order has prevented staffing the White House and Cabinet departments and agencies with excellent candidates. However, the cumulative effect of the prohibitions, restrictions, and conditions of appointment—some of which are unnecessary, overbroad, duplicative, and in some cases punitive—is to dissuade many of the most experienced, competent, and qualified contenders from government service.
Obviously, ethics in government service is a paramount concern, and the integrity of presidentially appointed officials is critically important. Cabinet secretaries and other high-profile public servants must have impeccable reputations, especially for honesty and integrity, because of the authority vested in these officials and because they represent the Administration to the public.
Competence and experience, however, are equally important. A nominee who is judged ethical but lacks experience and competence in the area in which he or she is appointed contributes to the public’s lack of respect for decision-making. The public’s trust in an Administration’s competence is vitally important. Inexperience and incompetence result in bad decisions and inefficiencies, adding to the cost of government and making government programs more susceptible to waste, fraud, and abuse.
There are myriad ways in which a person can gain experience in a given field that, when he or she is called upon to serve in the federal government, can benefit the public good. Considering the breadth of jobs in the federal government, where experienced, skilled leaders are critical, an Administration should be able to draw from the private sector, Wall Street, the defense industry, the military, the biotech and technology sectors, the space industry, the insurance industry, the medical community, and thousands of other private-sector areas.
Competence and experience can also come from a person having worked in a previous Administration, in a state or local government, or most recently as a lobbyist. Experience in shaping and drafting laws, rules, and policies and in assembling coalitions, addressing concerns from a variety of both public and private interests, and negotiating to reach a consensus is invaluable to a new Administration seeking to advance its policy objectives in Congress as well as to the civil servants in the particular department, agency, or commission.
Experience with industry, markets, and the legislative process should be valued along with experience in government. Faculty tenure at a college or university may qualify a person for a few jobs in the federal government, but actual experience in the private sector with a proven track record of success is arguably more valuable for most leadership positions in an Administration.
The current ethics regimen is not the only factor that discourages highly qualified individuals from pursuing and accepting a presidential appointment. Three other factors also commonly deter men and women from pursuing a move from the private sector to the public sector.
These three factors are all independent of the impediments posed by the ethics, vetting, and confirmation system that have developed since the Ethics in Government Act in 1978.
The Confirmation Process. The confirmation process is part and parcel of the current ethics regimen, particularly with respect to the vetting process. Presidential appointments are political acts and therefore cannot be divorced from political concerns.
When the Senate majority is the same party as the President, for example, the confirmation process typically goes smoothly. However, the lack of a filibuster-proof majority and such Senate practices as the hold a single Senator can place on a nomination provide ample opportunities for the minority party to raise questions about a nominee’s qualifications, background, and written record, thus delaying the confirmation process. Occasionally, the result of such a delay is the nominee’s withdrawal or, more rarely, a defeat in the Senate. When the President and Senate majority are from different parties, the confirmation process can be much more challenging to a nominee. Many individuals do not want to endure a protracted, highly charged political fight in which the individual’s current and past employment, as well as articles, op-eds, speeches, or testimony, are scrutinized for opposition fodder.
Although the Senate’s delay in processing a nomination is public knowledge and can be measured, the time it takes to move a nomination forward within the Administration is not public and thus not measurable. From the perspective of many potential appointees, the pre-nomination vetting process often takes months, with little if any transparency from the White House as to the prospects and timing of a nomination. Once all required forms and information have been completed and submitted, the individual has no control over the timing of this process.
The weeks and months that pass until the President announces a nomination (or announces his intent to nominate) keep individuals in limbo. Apart from the stress this may place on the individual’s family, the uncertainty of a nomination may interfere with his or her decision about accepting new business: Should a lawyer or consultant take on a new client or a new matter with an existing client? Should a professor agree to teach the next semester? Should a policy expert commit to writing a paper or managing a project?
The internal vetting process involves the White House Office (both the Office of Presidential Personnel and the White House Counsel’s Office); the Federal Bureau of Investigation; the department, agency, board, or commission to which the individual is to be appointed; and the Office of Government Ethics (OGE). At some early point, the President agrees to consider one or more persons for a particular appointment and gives the Office of Presidential Personnel (OPP) the go-ahead to proceed.
The OPP begins the process by contacting an individual to determine whether he or she is interested in an appointment and, if the interest is there, sends the forms that the individual must complete. These include:
These forms are duplicative. There is much overlap in the information requested, and while filling out these forms certainly imposes a burden on the nominee, most are more concerned with the invasive and intrusive nature of many questions the forms contain. Some nominees are reluctant to disclose certain financial interests, severance agreements, and previous sources of income (including the names of clients) on OGE Form 278, which is publicly available. Others are concerned with disclosure to the White House and FBI of personal information with respect to convictions, arrests, marital and family disputes, and medical issues. Neither the SF-86 nor the SF-86 Supplement is available to the public; nor is the information gathered during the FBI investigation. Information disclosed in response to the White House personal data statement also is not available to the public.
Even if the risk that highly personal information might be leaked is remote, most persons do not relish disclosing such information in writing and submitting it without knowing who and how many people will review it. From Administration to Administration (and presidential transition to transition), the personal data statement became increasingly lengthy, comprehensive, and intrusive. This resulted in part from an attempt to avoid problems that have come up in a previous Administration: For example, several questions concerning a person’s hiring of a housekeeper or nanny were added to avoid another “Nannygate.” The information requested on a personal data statement expanded significantly when it focused on social media, examining a person’s writings, thoughts, and pictures posted on the Internet and in particular on such sites as Facebook and Twitter.
For the Obama transition, the personal data statement was the most intrusive to date, as is plain by a review of several representative questions:
(8) Briefly describe the most controversial matters you have been involved with during the course of your career.
(13) Electronic communications: If you have ever sent an electronic communication, including but not limited to an email, text message or instant message, that could suggest a conflict of interest or be a possible source of embarrassment to you, your family, or the President-elect if it were made public, please describe.
(14) Diaries: If you keep or have ever kept a diary that contained anything that could suggest a conflict of interest or be a possible source of embarrassment to you, your family, or the President-elect if it were made public, please describe.
(58) Please provide the URL address of any websites that feature you in either a personal or professional capacity (e.g., Facebook, My Space, etc.).
(59) Do you or any members of your immediate family own a gun? If so, provide complete ownership and registration information. Has the registration ever lapsed? Please also describe how and by whom it is used and whether it has been the cause of any personal injuries or property damage.
The intrusive nature of the personal data statement was present from its inception: The standard final question is whether there is anything in the person’s background, personal or otherwise, that would be embarrassing to the individual or the President if revealed in connection with the appointment.
By 2012, the Obama White House had discontinued using the personal data statement, “relying instead on oral interviews and the other paperwork involved in the vetting process[.]” One should assume that the Obama White House has continued to ask the same types of questions in interviews that were contained in the latest version of the personal data statement. It perhaps is little solace to a prospective appointee to be asked the same intrusive questions in person or over the phone rather than in writing.
Remedies to Avoid Conflicts of Interest and Apparent Conflicts That Also Discourage Interest in Serving. A nominee is often required to sell one or more holdings to avoid posing a conflict of interest. For some positions, this requirement is imposed by statute. More common is the direction to a prospective appointee to divest certain holdings.
Recognizing that requiring an appointee to sell holdings could impose capital gains taxes, Congress provided that an appointee can obtain a Certificate of Divestiture and avoid capital gains treatment provided that the proceeds from the sale are reinvested in a mutual fund. However, the appointee may not sell the holding unless the OGE Director determines that selling the asset is “reasonably necessary” to resolve a conflict (or if a Senate committee demands divestiture as a condition of confirmation) and the appointee does not sell the asset until receipt of the Certificate of Divestiture. There is no similar remedy for an appointee who must sell one or more holdings at a loss. In a down market, there may be a significant cost to a person who must sell.
Moreover, the determination of whether a person must sell a holding to resolve or avoid a conflict of interest varies by department or agency as well as by Senate committee. In some departments and agencies, prospective appointees may be advised to sell insubstantial holdings that have no more than a tenuous connection to the appointee’s position when a recusal would accomplish the same objective without requiring divestiture.
The Senate Armed Services Committee requires presidential appointees to the Department of Defense to sell stock in any DOD contractor that does at least $25,000 in business annually with the Pentagon. Apart from the low dollar threshold, this requirement is wholly unwarranted given both the requirements in section 208 of Title 18 of the United States Code and the availability of recusal to resolve the potential conflict.
A prospective appointee’s commitment to recuse from participation in certain particular matters is often the best remedy for both the government and the individual. Recusal commitments, however, may be so broad as to disqualify an appointee from participating in a particular field of policy. Senate committees commonly require a broader recusal than would be required to comply with section 208.
Section 208 also authorizes granting a waiver to an individual who makes full disclosure of the particular matter and the financial interest in such matter upon the determination that the interest “is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect” from that individual. For a Cabinet secretary, the President has authority to grant a waiver. For lower-ranking officers, the Cabinet secretary has waiver authority. Individual waivers, however, are uncommon and may be less likely to be offered to a prospective appointee where recusal or divestiture is an alternative. A waiver also carries some stigma in that by its very nature it admits the presence of a conflict or potential conflict.
Resignation is the remedy where a prospective appointee’s position on a board of directors or trustees, or as an officer with a for-profit or not-for-profit company, may pose a conflict or potential conflict of interest or where the time and attention needed to perform these outside duties would distract the person from the full-time attention to the his or her government appointment. Executive Order 12674 signed by President George H. W. Bush in 1989 prohibits a full-time presidential appointee from receiving any outside earned income during federal service.
White House practice since the George H. W. Bush Administration has also required a full-time presidential appointee to resign from any unpaid position—whether officer, director, or trustee—with a for-profit company. The Obama Administration broadened this prohibition to require a presidential appointee to resign from all nonprofits (save for some family trusts), regardless of the presence of a conflict or potential conflict and regardless of whether the outside position would interfere in any way with the appointee’s discharge of official duties. While this overbroad policy may not itself be the dispositive factor in whether a person accepts a presidential appointment, it may be a one of several reasons why a person declines to do so.
Pre-employment Restrictions. The foregoing restrictions and limitations certainly make a presidential appointment less attractive to many potential public servants, but even considered together, they pale in comparison to the perceived adverse impacts of pre-employment and post-employment restrictions. Pre-employment restrictions are sometimes referred to as “reverse revolving door” restrictions.
There are modest pre-employment restrictions in federal law and OGE regulations. The conflict of interest statute, section 208, requires an appointee to sever all financial interests in a former employer or be recused from any particular matter in which the former employee is or represents a party or has an interest. OGE requires a two-year recusal from participating in any particular matter in which a former employer is a party or represents a party and for which the appointee received an “extraordinary payment” from that former employment. An “extraordinary payment” is any cash or stock with a value over $10,000 that is made after the employer knows that the person is under consideration for a government position and is not made pursuant to a pre-established compensation, partnership, or benefits program.
OGE regulations also require an individual to seek a government ethics official’s approval to participate in any particular matter involving a specific party in which the individual has a “covered relationship,” a term that includes any former employee or client within the previous year. After expiration of one year, an officer or employee concerned about whether there may be an appearance of impropriety may also use this process. Unlike President Barack Obama’s Executive Order 13490, discussed below, none of these provisions prohibits a person from serving in a particular government position.
Executive Order 13490 is the first attempt to systematically disqualify otherwise talented, experienced individuals from working in a presidential Administration—at any level of political rank, from Cabinet secretary, to non-career Senior Executive Service, to Schedule C—simply because of the individual’s experience outside of government. Under paragraph 2 of the order’s Ethics Pledge, for example, a political appointee is prohibited for two years from participating in any “particular matter” that is directly and substantially related to the appointee’s former employer or clients for whom the appointee worked over the previous two years. “Directly and substantially” means a matter in which the former employer or client is a party or represents a party. This ban applies even where the political appointee was not involved in that particular matter for a former employer or client.
This prohibition explicitly includes regulations even though OGE does not generally regard regulations as particular matters involving specific parties. Thus, the scope of recusal is uncertain and potentially overbroad. Recusing an appointee from working on broad-based regulations simply because a former employer or client has an interest is unwarranted as a general proposition where the appointee has completely severed any financial relationship with the employer or client.
This restriction is also underinclusive. “Former employer” does not include having worked for a state or local government. This provision has the effect of skewing an Administration toward attracting former state and local government officials and discouraging persons who have worked in the private sector.
The impact of this provision is substantial. Many presidential appointees serve in a position less than four years. A two-year recusal covering a rulemaking in which a former employer or client is participating may discourage the very persons who have gained knowledge and expertise in subjects to be addressed in the rulemaking. Many experienced and knowledgeable lawyers, professionals, and consultants are unlikely to take a position or be considered for a position in the department or agency in which they have the most relevant background and competence if they have been active in the department’s or agency’s highest-profile rulemakings.
Under paragraph 3 of the order’s Ethics Pledge, the “revolving door ban” for lobbyists entering the Administration is more restrictive and thus a more significant impediment to attracting the best qualified talent. Under this prohibition, if the appointee was a registered lobbyist at any time during the two years before appointment, the appointee, for two years going forward, may not (a) participate in any particular matter on which the appointee lobbied in the previous two years; (b) participate in the specific issue area in which that particular matter falls; or (c) seek or accept employment in any department or agency that the appointee lobbied in the previous two years.
By contrast, OGE standards of conduct do not distinguish whether an appointee served as a lobbyist. There is no specific provision addressing an appointee’s former role as lobbyist; OGE uses the concept of former employer or client. The executive order allows for a waiver from paragraph 3 of the Ethics Pledge where the former lobbyist’s contact with the federal department or agency was “de minimis,” a term the order does not define. This waiver has been sparsely used during the first seven years of the Obama Administration, in part perhaps because of the criticism it received when the Administration granted a waiver to William Lynn to serve as Deputy Secretary of the Department of Defense. Thus, this provision likely sweeps in its coverage short-term, tangential, and peripheral lobbying activity that would not raise appearance concerns.
The first restriction in paragraph 3 may be adapted from the “switching sides” lifetime ban in section 207(a)(1), but it is broader in encompassing “particular matters,” whereas the lifetime statutory ban is confined to particular matters involving a specific party or parties.
The second restriction in paragraph 3 blocks former lobbyists for two years from working in the very area in which they have direct and relevant experience, regardless of whether the appointee lobbied on the particular issue that may come before the appointee’s department, agency, board, or commission. There is no limit to particular matters, much less particular matters involving specific parties. “Specific issue area” is not defined but is clearly broad enough to encompass broad-based regulatory and policy matters.
The third restriction in paragraph 3, which prohibits a lobbyist from serving in any position in a department or agency that the appointee lobbied in the previous two years, suffers from the same above-noted infirmities with respect to the second restriction but is even more overbroad. It fails to recognize the broad scope of authority vested in many departments and agencies where the focus of one component may have little or no overlap with another component. For example:
The Departments of Defense and State perhaps have the broadest, most varied authority, with some components that have no significant relationship to each other.
The clear message of this provision is that a person who lobbied a department or agency is not welcome to serve in that department or agency. Thus, the Obama Administration has deprived itself of many highly qualified persons with deep, relevant experience and knowledge in issues before a department or agency. Some of these individuals gained the relevant experience and knowledge by previously serving in that department or agency or on the staff of a House or Senate member or committee, yet a single lobbying effort disqualifies such persons from that department or agency for two years. As a result, many highly qualified candidates have not sought an appointment in the Obama Administration. Moreover, an unknown number of talented and experienced people who have sought positions in the Administration have been rejected because of their prior lobbying work.
Post-employment Restrictions. If there is one set of restrictions that has dissuaded the largest number of highly qualified individuals from seeking a presidential appointment, it is the post-employment restrictions, comprising long-standing statutory restrictions, albeit broadened over the years, and Executive Order 13490. The purpose of the statutory restrictions is to reduce the risk that a former employee will have an improper influence over government policymaking because of non-public information the former employee gained, or because of the close relationships the former employee developed, while in government.
All of the statutory restrictions are contained in section 207, save one: the one-year employment restriction with respect to procurements of goods and services.
Switching Sides: The Lifetime Ban on Representational Activities. Upon leaving the government, a former employee becomes subject to a lifetime ban on switching sides and a two-year ban on representational activities with respect to a particular matter involving specific parties that the former employee knew was under his or her official responsibility in the last year of service. These restrictions are narrowly focused on particular matters involving specific parties and prohibit only representational activities: making a communication to or an appearance before the government.
The permanent ban applies to any former officer or employee of the United States who knowingly makes, with intent to influence,
any communication to or appearance before any officer or employee of any department [or] agency…of the United States…in connection with a particular matter, (A) in which the United States…is a party or has a direct and substantial interest, (B) in which the person participated personally and substantially as such officer or employee, and (C) which involved a specific party of specific parties at the time of such participation.
This ban on “switching sides” covers only the same particular matters involving specific parties in which the former employee personally and substantially participated while in government.
The lifetime ban applies only to a representational act, either a communication or an appearance; it does not apply to any assistance provided “behind the scenes.” Also, the lifetime ban covers only those particular matters involving a specific party in which the former employee participated “personally” and “substantially” while in government:
[O]nly those particular matters that involve a specific party or parties fall within the prohibition of section 207(a)(1). Such a matter typically involves a specific proceeding affecting the legal rights of the parties or an isolatable transaction or related set of transactions between identifiable parties, such as a specific contract, grant, license, product approval application, enforcement action, administrative adjudication, or court case.
Excluded from the lifetime ban are matters of general applicability. Legislation or rulemaking of general applicability and the formulation of general policies, standards, or objectives or other matters of general applicability are not particular matters involving specific parties.
Switching Sides: The Two-Year Ban on Representational Activities. The two-year ban prohibits a former official from making a communication or appearance with respect to any particular matter involving specific parties in which the United States is a party or has a direct and substantial interest in which the former official “knows or reasonably should know was actually pending under his official responsibility as such officer or employee within a period of 1 year before the termination of his service or employment with the United States.”
The term “official responsibility” means “direct administrative or operating authority, whether intermediate or final, and either exercisable alone or with others, and either personally or through subordinates, to approve, disapprove, or otherwise direct Government action.”
The One-Year Cooling-off Period. A cooling-off period is a special type of post-employment restriction both because it restricts a former employee’s conduct without regard to whether the employee was involved in the matter while in government, or even whether the matter was pending during the employee’s government tenure, and because it covers all matters, regardless of their scope or specificity. A cooling-off period is designed to protect the government’s decision-making processes from being improperly skewed either by former officials on the outside or by current officials on the inside, as well as to avoid the public perception that the government’s processes are tainted.
Cooling-off periods are intended primarily to reduce what is perceived as the disproportionate access and influence that former officials possess by virtue of the relationships they developed while in government. They are also intended to limit the opportunity of federal officials to give preferential treatment to former colleagues. A third justification is to prevent former employees from using confidential or other non-public information obtained while in government on behalf of a private interest.
Former “senior” employees are prohibited, for a period of one year after leaving the government, from knowingly making on behalf of another person, with intent to influence, any communication to or appearance before any officer or employee in the department or agency in which the former employee served in the last year of federal service in connection with any matter on which the former senior employee seeks official action.
The term “senior” official covers most commissioned officers in the White House Office (Assistants, Deputy Assistants, and Special Assistants to the President) and Office of the Vice President; political appointees whose position is listed on Executive Schedule Levels I through V; and employees paid at the rate of basic pay equal to or greater than 86.5 percent of the rate of basic pay for Executive Schedule Level II. The term “matter” covers the entire gamut of executive branch activities: contracts, grants, loans, permits, rules, policies, programs, legislation, adjudication, appointments, speeches, and testimony.
The Two-Year Cooling-off Period. For a period of two years after leaving government service, former “very senior officials” are prohibited from knowingly making on behalf of another person, with intent to influence, any communication to or appearance before any officer of employee in the department or agency in which the former employee served in the last year of federal service. This prohibition extends to contacting any political appointee whose position is included by statute in Executive Schedule Levels I-V in connection with any matter on which the former senior employees seeks official action.
The term “very senior” official includes the Vice President, political appointees whose position is included on Executive Schedule Level I, and political appointees employed in the Executive Office of the President whose positon is listed on Executive Schedule Levels I or II.
One-Year Cooling-off Period on Representing or Advising a Foreign Entity. A former “senior employee” is also subject to a one-year prohibition from representing or advising (behind the scenes) foreign entities with the intent to influence a decision of any officer or employee of any department or agency of the United States in carrying out his or her official duties. Foreign entities include foreign governments and foreign political parties. A person who served as United States Trade Representative or Deputy U.S. Trade Representative is subject to a lifetime ban on representing or advising foreign entities. This is the broadest post-employment cooling-off period, which by itself poses a strong disincentive to any person who is not at the twilight of his or her career to accept the USTR or Deputy USTR position.
One-Year Employment Restriction with Respect to Procurements of Goods and Services. A one-year employment restriction with respect to procurements of goods and services is part of the Procurement Integrity Act enacted in 1986 in the wake of Pentagon contracting scandals during the Reagan Administration. The post-employment provision is limited to procurements valued at $10 million or more. Under this provision, a former official is prohibited for a period of one year from accepting compensation from any contractor (whether hired as an employee or retained as a consultant) if the former official (1) served in a procurement position with respect to the selection or award of a contract to the contractor; (2) served in certain positions relating to administration of a contract with the contractor; or (3) personally made decisions in excess of $10 million in relation to such contract.
One-Year Ban on Representing or Advising any Party in a Trade or Treaty Negotiation. There is a one-year restriction on representing, aiding, or advising any other person with respect to an ongoing trade or treaty negotiation in which a former official participated personally and substantially where that representation, aid, or advice is provided on the basis of covered information. This prohibition applies to representational activity and behind-the-scenes advice only when based on non-public information.
Executive Order 13490. The Obama Administration executive order extends the one-year cooling-off period for “senior” employees in 18 U.S.C. § 207(c) to two years and bans a former appointee from lobbying any political appointee for the remainder of the Administration. Extending the cooling-off period to two years is of very limited benefit to the integrity of government but likely has been a factor in discouraging persons from seeking an appointment in the Administration.
In subsection 207(d) of 18 U.S.C. § 207, only “very senior employees” such as department heads and senior White House officials are subject to the two-year ban. The executive order extends this prohibition to all former senior employees within a department or agency. What is the purpose of extending a cooling-off period from one year to two years? Realistically, if the concern is motivated by a fear that a former official will have special access to the department because of the professional relationships developed during the official’s tenure, what is the likelihood that such access will be significantly reduced or eliminated after two years?
The ban on a former appointee’s lobbying any political appointee in the Administration for the remainder of the Administration may also have been adapted from section 207(d), which bans for two years former department heads and senior White House officials from contacting any presidential appointee. The executive order extends this cooling-off period for the remainder of the Administration and also expands the ban to all political appointees (including non-career SES officials and Schedule C appointees).
This provision is overbroad in two respects. If the reason for extending the departmentwide or agencywide cooling-off period to two years was that after this time, there is no longer an appearance of impropriety from a former official’s contact with that department or agency’s career officers and employees, what is the danger in contacting a political appointee after this time rather than a career employee? Is a political appointee more susceptible to providing preferential treatment to a former political appointee than a civil service official is?
An Administration may reasonably be concerned about the impropriety, potential impropriety, or appearance of impropriety if a former political appointee lobbies a current Administration political appointee, particularly one who serves in the same department or agency in which the former political appointee worked, but whether that concern may be reasonable in a particular circumstance does not warrant this prophylactic prohibition. What is the risk to the integrity of government programs when a former political appointee of one department or agency contacts a political appointee in a different department or agency? The former political appointee is unlikely to possess any relevant inside information.
This sort of provision accepts the premise of critics who are generally suspicious of a government run by political appointees, specifically the complaint about the odious influence of lobbyists with ties to the Administration. It does not accept the efficacy of current ethics restraints and general principles that guide both political and career officials in serving the public interest without favor to any outside interest based on considerations other than the merits. It is a statement that the President and his Administration, supported by a cadre of ethics officials in every department and agency, cannot be trusted to address on a case-by-case basis the risk of impropriety posed by lobbyists who previously served in the Administration. Even accepting these premises, there is no question that this post-employment restriction has discouraged individuals from seeking to serve in the Administration.
There are several actions that a new President should take to remove the current disincentives to government service, most notably to repeal or significantly revise Executive Order 13490. Other actions are within the regulatory authority of the Office of Government Ethics, and some require the cooperation of the White House and Senate committees.
1. Repeal Executive Order 13490.
Both the pre-employment and post-employment provisions in Executive Order 13490 discourage experienced and knowledgeable candidates from seeking to serve in the Administration generally and in a particular department or agency specifically. The order also displays a bias against former lobbyists, effectively placing more value on the previous experience of academics; federal, state, and local government officials; and private sector-workers whose positions did not involve lobbying. The order should be repealed in its entirety.
The costs imposed by Executive Order 13490 have largely been ignored by both the media and government watchdog groups. Instead, the focus has been concentrated on the waivers the Administration has granted, suggesting that the ostensibly bad influence of lobbyists may be disregarded when the Administration wants a former lobbyist for a particular position. In this respect, the waiver provision stands in stark contrast to the statutory waiver provision in the conflict of interest provision, section 208 of Title 18.
That statutory provision allows a waiver where the responsible appointing official (the President in the case of a Cabinet member) determines that the financial interest the official has in a particular matter “is not so substantial as to be deemed likely to affect the integrity of the services which the Government may expect from such officer[.]” Executive Order 13490, however, allows a waiver when the Director of the Office of Management and Budget determines either “that the literal application of the restriction is inconsistent with the purposes of the restriction” or “that it is in the public interest to grant the waiver.” The concept of the public interest “shall include, but not be limited to, exigent circumstances relating to national security or to the economy.”
While the statutory waiver provision involves a consideration of the appearance of impropriety resulting from a financial interest, the executive order involves a consideration of the Administration’s need for a particular individual to serve in a particular position. This is situational ethics. Under the executive order, as a general matter, lobbyists should be kept from the department or agency that the lobbyists contacted, except when the Administration determines that they should not.
After the waiver granted on January 22, 2009, to William Lynn revealed the President’s flexible consideration of the value of former lobbyists to his Administration, the Administration may have recognized this inherent weakness, because thereafter it exercised its waiver authority only sparingly with respect to paragraph 3 of the Ethics Pledge. Two White House officials received waivers from paragraph 3 within a month of Mr. Lynn’s waiver, and it appears that only two waivers from paragraph 3 have been issued since then.
With respect to the executive order’s impact on attracting and hiring the most talented and experienced persons, only recently has a discordant note been sounded, and it comes from someone in a position to know. Frank Kendall, Undersecretary of Defense for Acquisition, Technology, and Logistics, spoke on March 2, 2016, at the D3 Innovation Summit:
We used to have very, very talented, the best and brightest people in government. They’d come in from industry for a few years, they’d make a contribution to their country, and they’d go back and nobody assumed they were a crook. I think we’ve gone too far trying to protect ourselves from the rare person who is really going to do wrong and we deny ourselves an enormous amount of talent.
Why has it taken until the last year of the Obama Administration for an Administration official to point out what was obvious to those outside of the Administration at the time the executive order was issued? The answer may be that the public image of lobbyists has sunk dramatically.
To understand how the public perception of the influence of lobbyists may have changed in the past 20 years, it is instructive to review President Bill Clinton’s post-employment restrictions, which also were imposed by an ethics pledge in Executive Order 12834 issued at the beginning of his Administration. Like President Obama’s executive order, President Clinton’s was criticized for its adverse effect on attracting the best talent. Unlike the Obama executive order, however, this criticism was widespread, echoed throughout the tenure of the Clinton Administration, and in his last month in office, President Clinton repealed these restrictions.
Executive Order 12834 contained three main provisions:
President Clinton essentially lengthened the basic statutory cooling-off period from one year to five years, broadened the scope of the ban for senior EOP officials to include all agencies with respect to which they had substantial responsibility, and imposed a lifetime ban on serving as a registered foreign agent. Executive Order 12834, like President Obama’s Executive Order 13490, required the political appointee to sign an ethics pledge as a condition of appointment and thus enter into a binding contract for which the Administration could take remedial action, including specific performance, debarment, and a constructive trust over proceeds received as a result of a breach of the pledge.
While President Clinton’s executive order was riddled with loopholes—the definition of lobbying, for example, did not include lobbying for a state or local government or an educational or scientific institution—it certainly was tougher than Section 207. Yet no sooner than November of President Clinton’s first year in office, the costs imposed by the executive order were laid bare when two high-ranking Executive Office of the President officials left for the private sector, prompting a cascade of criticism. President Clinton explained, “I don’t think we should have a permanent government class and a permanent private sector…across the divide from each other.” Even at the time the executive order concept was announced in December 1992, Warren Christopher acknowledged that “we of course have sought to balance the need for reform with the desire to attract the very best people in government.”
Just one year into the Clinton Administration, Treasury Secretary Lloyd Bentsen, OMB Director Leon Panetta, and White House Deputy Chief of Staff Phil Lader each publicly acknowledged that the executive order seemed to have discouraged a number of persons from applying for certain posts. Panetta suggested: “It probably isn’t a bad idea to begin to take another look to make sure that it isn’t inhibiting us from getting the most talented people back into government. Somehow there’s got to be a better way to do this and protect the public interest.”
The American Bar Association’s Committee on Government Standards also criticized President Clinton’s executive order:
For reasons of both political principle and pragmatic necessity, our country prizes the ability to draw on the skills of citizens who have been, and will return to be, private-sector managers, physical and social scientists, technical experts, and medical and legal professionals. Truly effective regulation in this area will forestall the exploitation of public office without so cabining post-employment activities that noncareer government service becomes undesirable to these people. Moreover, it will take into account the tacit but fundamental premise of citizen government. Most who serve are honorable persons who would disdain any intentional abuse of power or position.
…[W]e are convinced that the five-year period chosen by Executive Order 12,834 is considerably too long…. The risk that the abusive power of personal influence and contacts will survive not only the passage of time but also the vicissitudes of politics is too insignificant to justify such substantial curtailment of citizens’ professional lives after they leave government.
In 1995, just before Abner Mikva left his position as White House Counsel, he said, “I am very unhappy about the pledge that President Clinton exacted from people before they came to work for the White House,” lamenting that “we are losing good people.”
The significant costs of revolving-door restrictions have been recognized for decades. In the wake of enactment of the first cooling-off period in 1978, Justice Department attorney Ed Kneedler spoke eloquently about how the revolving door benefits government, the public, and individuals:
Turnover at all levels also serves to infuse fresh blood into what is increasingly criticized as an overgrown, unresponsive bureaucracy. It allows government policies to be established with the advice of those who have in the past felt the effects of those policies or who have special insights into the sector of society to which government action is directed.
…[T]he free movement out of government enhances the government’s ability to recruit people to come in because it assures them they will not substantially injure their future career prospects and life choices by accepting an appointment.
…Persons who have held a position in an agency are often in the best position to point out errors or abuses by that agency after they have left. They can educate the public, their advocates and clients about the agency’s work. Because of their expertise, they are often more effective advocates on behalf of those whom they serve in the private sector. This expertise can frequently increase the efficiency of the government’s response to private sector concerns as well.
A decade later, President George H.W. Bush’s Commission on Federal Ethics Reform warned that:
[Post-employment restrictions] must tread a narrow line, because the so-called “revolving door” has many healthy attributes. In particular, the flow of individuals between private life and occasional government service is a source of invigoration to both sectors, and provides a valuable exchange of information about the workings of government which improves the understanding of each sector about the other. Our system of government in a sense mandates a substantial amount of “revolving door” activity every four or eight years.
Just before President Clinton left office in January 2001, he repealed Executive Order 12834. Because there appears to be no reason to be sanguine that President Obama will do the same, it must fall to the new President to do so. There is no more important single action that the President-elect can take to attract the most talented individuals to service in the new Administration.
2. Focus financial disclosure and other restrictions on actual and potential conflicts.
Revisit regulatory exemptions. Congress gave OGE authority to promulgate regulatory exemptions from the conflict of interest restrictions in section 208 when an official’s financial interest is “too remote or too inconsequential to affect the integrity of” the government programs over which the official has authority. In 1997, OGE promulgated six exemptions, including three exemptions for de minimis financial interests held in publicly traded or municipal securities:
For particular matters involving specific parties when the aggregate market value of the holdings of the official and the official’s family in a security that would otherwise be disqualifying does not exceed $15,000; For particular matters involving specific parties when the disqualifying financial interest arises from ownership of stock in a non-party where the aggregate market value of the holdings of the official and the official’s family does not exceed $25,000; and For matters of general applicability such as rulemaking when the aggregate market value of the holdings of the official and official’s family in one or more securities that would otherwise be disqualifying do not exceed $25,000 for any one entity and $50,000 for all affected entities.
These exemptions presuppose that an official’s net worth and income are sufficient in magnitude to conclude that investments from $15,000 to $50,000 are de minimis amounts to the official. Yet, while this will often be the case, it will not always be such. A more appropriate regulatory exemption would look at a de minimis percentage of an official’s net worth or the diversified nature of an official’s holdings.
With respect to using net worth as a basis for a regulatory exemption, it is true that the financial disclosure requirements are not intended to determine a filer’s net worth, but only to determine the potential for conflicts. Nonetheless, for some individuals, the sheer amount of value of their investments (minus liabilities) would provide a substantial cushion to exempt individual holdings that are no more than 1 percent to 5 percent of the approximate aggregate value of the assets disclosed in OGE Form 278. For those individuals, holdings that are valued below that percentage would be considered de minimis amounts.
Another challenge is that asset values are expressed on the OGE Form 278 in ranges of amounts, and the precise value of each asset is therefore not shown. However, this problem can be solved by the filer’s providing precise asset (and liability) values or by using numbers in the middle of the range of each amount. Accordingly, OGE should exempt an official from section 208 restrictions for any financial interest in a publicly traded or available security that does not exceed a certain percentage: 1 percent to 5 percent of the official’s aggregate value of assets minus liabilities.
For diversified accounts such as self-directed 401(k)s and IRAs that do not qualify as “excepted investment funds,” OGE should exempt an official from section 208 restrictions for an interest in a publicly traded or municipal security that does not exceed 5 percent of the value of the portfolio holdings in the account. OGE has determined that a fund is “widely diversified” if no one security constitutes more than 5 percent of the value. Where the disqualifying financial interest arises from a stock that does not constitute more than 5 percent of the value of the fund, a regulatory exemption would be appropriate.
Rely more on recusals and less on divestiture. Neither the Administration nor OGE nor a Senate committee should insist on divestiture where recusal is adequate. Section 208 never requires divestiture, only nonparticipation in the particular matter. At some point, the scope and extent of a recusal may be so broad that it removes the appointee from key elements of the position, and divestiture is the more appropriate remedy. But in many cases, a deputy may handle the particular matter without any impact on a government policy or program.
It is likely that the Senate committees are more insistent on divestiture than the White House, OGE, or department or agency ethics offices are. The Armed Services Committee requirement that a DOD appointee must sell any holding in a company with $25,000 in business with the Pentagon is the epitome of an unreasonable divestiture requirement. Thus, a new Administration would need to work with Senate committees to revisit their predilection for divestiture.
Abandon the categorical prohibition on board or officer service on a nonprofit board. Up until the Obama Administration, a presidential appointee would be permitted to continue to serve as an officer, trustee, or director of a nonprofit entity provided there was no conflict of interest and the outside position would not require an undue investment of time and attention. There is no reason to impose a categorical prohibition other than perhaps a reluctance to draw lines between what constitutes a permissible or impermissible outside position. Yet ethics officials have had to draw such lines for decades without any evidence of abuse or laxity.
In any event, whatever challenge may be imposed on ethics officials is clearly outweighed by the disappointment, anger, and in some cases hardship that results when a prospective appointee is told to resign from an outside position that has no relation whatsoever to the department, agency, board, or commission. Even where there may be some relevance, recusal should be explored where the matter or matters from which the official would be disqualified are not critical and may be delegated to a deputy. It is conceivable that requiring a resignation as a condition of being nominated could prompt an individual to withdraw his or her name from consideration.
3. Improve the vetting process.
There are three steps a new Administration can take to improve the vetting process and thereby reduce the risk of losing good candidates for senior positions, whether during a protracted and personally invasive process or by discouraging the best and the brightest from accepting an invitation to be considered for a presidential appointment. These reforms are not controversial; indeed, there is widespread support for them. Yet they remain elusive because of the need for the cooperation of the Senate committees that have the constitutional “advice and consent” responsibility under Article II of the Constitution.
First, there is a significant overlap in the information required by the White House, the FBI, the Office of Government Ethics, and the Senate committees of jurisdiction. A White House can eliminate or shorten the personal data statement and change the SF 86 supplement so that any question asked on the SF 278 is not repeated on these White House forms. The Senate committee does not see a personal data statement or the answers to the SF 86 supplement, and it therefore may not be realistic to expect the committee’s questionnaire to be shortened in these respects.
But there remains a significant amount of overlap between the financial and outside position information required by a Senate committee questionnaire and the same type of information required on OGE Form 278. Assuming that the OGE Form 278 provided to the Senate committee is complete and accurate, there is no reason why any such information should be requested on a Senate committee questionnaire.
A second, related step is to reduce the intrusiveness of the information requested by the White House and Senate committees. The Obama Administration has reportedly eliminated the personal data statement, but it is not at all clear that the same information is not being requested in interviews in person or over the phone. Senate questions should be relevant to the position for which the President has nominated an individual.
A third step is to provide transparency to prospective appointees at an early stage in the process with respect to any facts the Administration regards as disqualifying. This could be past or current use of illegal substances, certain criminal convictions or arrests, or use of an illegal or undocumented alien as nanny or housekeeper. It is not fair to require an individual to complete lengthy and burdensome forms and to move through the nomination process if the nomination will not be made or may need to be withdrawn because of conduct in which the individual engaged and which was known to the White House early on.
The White House also should provide periodic status reports to prospective appointees. Many prospective appointees complete and submit forms and then wait for weeks or months without word of when or whether a nomination will be made.
Under a fairer and more balanced system, we should be able to entice the best people to public service. We should be able to match the most experienced candidate to the right job in the government. Regrettably, however, the current ethics regime, especially the Obama executive order, dissuades many highly qualified candidates from serving, and this is a disservice to the American people.
Federal government ethics reform is long overdue. The solutions offered in this paper are commonsense, comprehensive, and achievable. It may seem overly optimistic to task the new Administration with embracing these reforms, given campaign rhetoric from candidates in both parties, but the stakes are too high to maintain the status quo and keep away from government many of the best problem solvers based on their experience in government and in lobbying firms.—Gregory S. Walden is Senior Counsel with Akin Gump Strauss Hauer & Feld LLP. He served as Associate Counsel to President George H. W. Bush, providing ethics guidance to White House Office staff; ethics counsel for the George W. Bush transition; and ethics clearance counsel for the Romney Readiness Project before the 2012 election. The views expressed herein are Mr. Walden’s and do not necessarily reflect the position of his firm or any client.
 The White House makes an FBI summary report available to Senators on the committee of jurisdiction but does not allow the Senate to retain the document or make copies of it.
 Report to the President, Working Group on Streamlining Paperwork for Executive Nominations (Nov. 2012), at 3.
 26 U.S.C. § 1043. See also 5 C.F.R. Part 2634 Subpart J.
 5 C.F.R. § 2634.1004.
 National Academy of Public Administration, The STOCK Act: An Independent Review of the Impact of Providing Personally Identifiable Financial Information Online (Mar. 2013), at 18.
 18 U.S.C. § 208(b)(1).
 5 C.F.R. § 2635.503.
 Id. 18 U.S.C. § 209 prohibits an employee receiving a supplement to the employee’s government salary, which would include a payment from a former employer intended to compensate the appointee from a diminution of pay during federal service, but only if the payment is made to the appointee after having begun federal service.
 5 C.F.R. § 2635.502.
 Exec. Order No. 13490, § 1(3).
 Id. at § 2(k).
 See 5 C.F.R.§ 2641.201(h).
 Ironically, a former lobbyist is more welcome to take a position in which the person has no experience. Richard Painter, who served as senior ethics official in the George W. Bush White House, stated, “It seems to me that you really aren’t going to be able to hire from [the] private sector…. The finance lawyer would have to go to [the Department of Energy], the energy lawyer would go to the SEC. That strips what the good parts of the revolving door are.” Justin Miller, The Revolving Door Is Spinning Out of Control. Can It Be Slowed? Amer. Prospect (July 30, 2015), http://prospect.org/article/revolving-dor-spinning-out-control-can-it-be-slowed.
 See, e.g., Joel Jankowsky, Obama and “Special Interests,” Wall St. J. (Nov. 2 , 2009) (“Talented women and men who registered themselves as lobbyists under the Lobbying Disclosure Act are being excluded from contributing their expertise at a critical time in our nation’s history.”).
 Kevin Bogardus, Ethics Pledge Stymies Appointee, Hill (Feb. 11, 2011) (listing Larry Mirel, a possible appointee to the National Flood Insurance Program; Peg Seminario, under consideration to be Administrator of the Occupational Safety and Health Administration; and Tom Malinowsky, considered for appointment as senior human rights official in the Department of State).
 The original post-employment restrictions were enacted in 1872. The current lifetime ban on switching sides was enacted in 1962, and the first generally applicable cooling-off period was enacted in 1978.
 18 U.S.C. §§ 207(a)(1), (a)(2).
 18 U.S.C. § 207(a)(1). Note that the lifetime ban does not apply to communications to or appearances before Congress or any Member or staff person thereof, because the Congress is not a “department” or “agency” of the United States. The ban applies only to communications to or appearances before any executive branch department or agency, including so-called independent agencies, as well as certain agencies of the legislative branch (i.e., Government Accountability Office, Library of Congress, Congressional Budget Office) and federal courts and judicial agencies.
 To participate “personally” is to participate directly or through direct and active supervision of the participation of another. To participate “substantially” means that the employee’s involvement is of significance to the matter. Participation may be substantial even though it is not determinative of the outcome of the particular matter. However, it requires more than official responsibility, knowledge, perfunctory involvement, or involvement on an administrative or peripheral issue. This is a low bar: Drafting a single paragraph in a 100-page white paper may be considered “substantial.”
 5 C.F.R. § 2641.201(h)(1).
 5 C.F.R. § 2641.201(h)(2). While rulemaking is generally not considered a particular matter involving specific parties, petitions for rulemaking and requests for an exemption or waiver from a rule are likely to be considered particular matters involving a specific party or parties.
 18 U.S.C. § 207(a)(2).
 5 C.F.R. § 2641.202(j). This prohibition applies even to particular matters from which the former employee was recused. “Official responsibility for a matter is not eliminated through self-disqualification or avoidance of personal participation in a matter[.]” 5 C.F.R. § 2641.202(j)(5).
 18 U.S.C. §207(c). Executive Schedule Levels I–V are set forth in 5 U.S.C. §§ 5312–5316.
 The one-year cooling-off period also extends to communications others make on the former senior employee’s behalf. This interpretation comes from a 2001 Department of Justice Office of Legal Counsel (OLC) opinion. OGE has explained that while the OLC opinion may blur the line between “permissible behind-the-scenes assistance and prohibited communications, we also think it is more consistent with the purposes of section 207 to prohibit former employees from using third party intermediaries to make their contacts for them under circumstances in which the former employees intend to be recognized as the source of the information conveyed.” 73 Fed. Reg. at 36172; 5 C.F.R. § 2641.201(d)(1) and Example 5.
 18 U.S.C. § 207(d).
 18 U.S.C. § 207(d)(1).
 18 U.S.C. §207(f). Foreign entities include foreign governments and foreign political parties. A foreign NGO is not a foreign entity, nor are foreign corporations, including foreign state-owned companies, considered foreign entities for the purpose of this restriction. 18 U.S.C. § 207(f)(3) (“foreign entity” as defined under the Foreign Agents Registration Act). This ban applies whether or not any compensation is received from the foreign entity.
 18 U.S.C. § 207(f)(2).
 41 U.S.C. § 423(d), codified in regulation in 48 C.F.R. §3.104-3(d).
 A “procurement position” is defined as a contracting officer, source selection authority, member of the source selection evaluation board, or chief of a financial or technical team. Positions relating to the administration of a contract include program manager, deputy program manager, or contracting officer. Personally making procurement decisions includes awarding the contract or modification, establishing rates, approving payments, or paying or settling claims. Another procurement integrity statute, enacted in 1987, prohibits a former employee who personally and substantially engaged in a particular procurement from participating in any matter in negotiations leading to the award of modification of the contract or from participating personally and substantially in the performance of that contract. 41 U.S.C. § 423(f). This conduct is subsumed in the switching sides prohibition in 18 U.S.C. § 207(a)(1) but goes beyond it to prohibit providing guidance behind the scenes.
 18 U.S.C. § 207. The term “covered information” means records exempt from required disclosure under the Freedom of Information Act, 5 U.S.C. § 552.
 Exec. Order No. 13490, § 1, paragraphs 4 and 5.
 See, e.g., Public Citizen, Financial Services Conflict of Interest Act (July 15, 2015).
 See 5 C.F.R. § 2635.101(a) (“Public service is a public trust.”) (emphasis in original); (b)(8) (“employees shall act impartially and not give preferential treatment of any private organization or individual.”).
 18 U.S.C. § 208(b)(1).
 Exec. Order No. 13490, § 3(a), (b). As previously noted, a waiver is also allowed where the former lobbyist’s contact with an executive agency was “de minimis.” Id. at § 3(b).
 A review of the waivers issued by the White House and the executive departments and agencies shows that 61 waivers from paragraph 2 of the Ethics Pledge have been issued through 2015. Paragraph 2 prohibits a political appointee, for a period of two years, from participating in any particular matter involving specific parties that is directly and substantially related to the political appointee’s former employer or a former client.
 President Obama issued the waiver to Deputy Secretary Lynn Jocelyn Frye, Director of Policy and Projects in the Office of the First Lady, and Cecilia Munoz, Director of Intergovernmental Affairs in the Executive Office of the President, received waivers from paragraphs 2 and 3 of the Ethics Pledge on February 20, 2009. Martin Paone, Deputy Assistant to the President and Senate liaison, received a waiver from paragraph 3 on December 19, 2014. Tanya Clay House, Deputy Assistant Secretary for P–12 Education, received a waiver from paragraph 3 on September 30, 2015. The waivers issued by the White House are available on the White House website, at http://www.whitehouse.gov/21stcenturygov/tools/ethics-waivers. Waivers issued to executive department and agency officials are available on the Office of Government Ethics website, http://www.oge.gov.
 Scott Maucione, DoD’s Kendall Says “Revolving Door” Is Too Thick, Federal News Radio (Mar. 2, 2016), http://federalnewsradio.com/defense/2016/03/kendall-says-revolving-door-thick/.
 David Broder, Clinton Defends Circumstances of Aides’ Exit, Wash. Post (Dec. 9, 1993), at A4.
 Gwen Ifill, Clinton Team Issues 5-Year Lobby Ban, N.Y. Times (Dec. 19, 1992), at D19.
 Gregory S. Walden, On Best Behavior: The Clinton Administration and Ethics in Government (Hudson Inst. 1996), at 445.
 ABA Committee on Government Standards, Keeping Faith: Government Ethics and Government Ethics Regulation, 45 Admin. L. Rev.287, 326–27 (summer 1993).
 Walden, supra note 43, at 447.
 The “Revolving Door”—Should It Be Stopped? 32 Admin. L. Rev. 396–97 (remarks of Edwin S. Kneedler).
 To Serve With Honor: Report of the President’s Commission on Federal Ethics Law Reform (Mar. 1989), at 53.
 18 U.S.C. § 208(a)(2).
 5 C.F.R. § 2640.202.
 When OGE sought comments on its proposal to adopt these regulatory exemptions, one agency commenter suggested that the de minimis amounts in the proposal “be set on a sliding scale according to an employee’s net worth and that the exemption for matters of general applicability… should be conditioned on the employee’s interest not being affected in a disproportionate manner.” 61 Fed. Reg. 66830, 66834 (Dec. 18, 1996). OGE did not specifically address this suggestion in the preamble to the final rule.
 An “excepted investment fund” is a fund that is publicly traded or publicly available, or a fund in which the assets are “widely diversified” and the filer has no authority to control the financial interests held by the fund. “Widely diversified” means that no more than 5 percent of the funds may be in one issuer and no more than 20 percent may be in one economic or geographic sector. 5 C.F.R. § 2634.310(c).
 See Report to the President, supra note 2.