March 01, 2023

Warren, Jayapal Push Federal Watchdogs to Review Ethics Rules Amid Reports of Widespread Financial Conflicts of Interest

One in Five Senior Federal Employees Has Stock Investments in Companies Actively Lobbying their Agency Warren, Jayapal Championed Anti-Corruption and Public Integrity Act

Text of Letters (PDF)

Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) and Representative Pramila Jayapal (D-Wash.) sent letters to eight federal Inspectors General (IGs) across the executive branch, urging them to review their agencies’ ethics policies and conflict of interest rules. The lawmakers’ letters follow reports of widespread financial conflicts of interest across multiple federal agencies. The lawmakers also requested the IGs provide recommendations on actions Congress can take to strengthen and improve federal ethics laws and rules, eliminate financial conflicts of interest, and improve the public’s trust in government. 

“Although federal financial conflict of interest law prevents executive branch officials from ‘participating in a government matter that will have a direct and predictable effect on their financial interests,’ the law appears to have been frequently circumvented or outright overlooked by officials across the executive branch,” wrote the lawmakers. “Even in cases where no law was broken, many officials violated ‘the spirit behind the law,’ adding to widespread issues of soft corruption in the executive branch.”

A recent investigation by The Wall Street Journal found widespread and frequent instances of financial conflicts of interest across fifty surveyed executive branch agencies. The Journal reported that one in five senior federal employees had stock investments in companies actively lobbying their agency, ranging from defense contractors, to big tech companies, to pharmaceutical companies. Alarmingly, at the beginning of the pandemic, the rate and volume of stock trading increased at agencies responsible for pandemic response, suggesting that senior government officials may have used the pandemic as an opportunity for personal enrichment. 

In light of these reports, the lawmakers are requesting that the IGs review their agencies’ internal ethics policies and financial conflict of interest rules and provide recommendations on steps Congress and the executive branch can take to strengthen and improve ethics laws and rules.

Senator Warren has long championed stronger ethics rules to fundamentally change the way Washington does business and restore the American public’s faith in democracy:

  • In 2018, Senator Warren and Representative Jayapal first introduced the Anti-Corruption and Public Integrity Act, which was the most ambitious anti-corruption legislation since Watergate. They reintroduced the bill in 2020, and again last year ( 5315, 117th Congress). The bill includes a host of provisions to strengthen ethics laws, including cracking down on government officials’ ability to profit from their public offices. 
  • In 2019, Senator Warren introduced the Department of Defense Ethics and Anti-Corruption Act, which would enforce limits to the influence of contractors on the military, restrict foreign influence on retired senior military officers, and assert greater transparency over contractors and their interaction with the DoD. She reintroduced the bill in 2021 ( 2396, 117th Congress).
  • Last year, Senator Warren and Representative Jayapal introduced their Judicial Ethics and Anti-Corruption Act (S. 4177, 117th Congress) to overhaul our nation’s judicial ethics laws and restore public faith in our court system.
  • Also last year, Senator Warren and Representative Jayapal introduced their Bipartisan Ban on Congressional Stock Ownership Act (S. 3631, 117th Congress), bipartisan legislation to ban Members of Congress and their spouses from owning and trading stocks.
  • Also last year, Senator Warren introduced the Political Corruption Review of Infractions for Misconduct by Executive Servants (CRIMES) Act (S. 3582, 117th Congress), to strengthen the Hatch Act, which is a federal law that bars executive branch employees from engaging in partisan political activities using their official title, or taxpayer-funded government resources, and prevents sitting presidents from using the federal government as an arm of their political campaigns. 
  • In March 2021, Senator Warren sent a letter to Secretary of Defense Lloyd Austin praising his decision to suspend dozens of Defense Department advisory boards and relieve hundreds of appointees to these boards pending a “zero-based review.” In the letter, Senator Warren also called for improvements as the Department of Defense (DoD) considers candidates for repopulating the boards that survive DoD's review.
  • Senator Warren has also fought to preserve existing ethics laws, including defeating a DoD provision in the fiscal year 2021 National Defense Authorization Act to weaken post-government lobbying restrictions. 
  • In December 2022 Senator Warren sent a letter to the Department of Defense regarding press reports that former Google chief executive officer Eric Schmidt used his positions on defense advisory boards to further his own financial interests.

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