The ethics rules that apply to presidential appointees have undergone significant changes this month, with wide-ranging implications for incoming Biden appointees and their former employers, as well as for outgoing Trump officials and their prospective employers.

President Biden issued an executive order just hours after being sworn in as president, requiring certain members of his administration to sign an ethics pledge outlining incoming and outgoing employment, gift, and lobbying restrictions. The pledge requires presidential appointees throughout the federal government to commit to the following:

• Lobbyist Gift Ban. Biden appointees are barred from accepting gifts from registered lobbyists and organizations that employ them. While certain exceptions apply, it is a shorter list than the one that applies to career employees. For example, political appointees may not rely on the exception for gifts of $20 or less or the exception for gifts of free attendance at widely attended gatherings, unless the official is speaking at such a gathering. This provision remains the same as the prior two administration gift bans.
• Revolving Door Restrictions for Entering the Government. Any appointee who, within the preceding two years, was registered as a federal lobbyist under the Lobbying Disclosure Act (LDA) or foreign agent under the Foreign Agents Registration Act (FARA) is subject to a two-year ban on (i) participating in any particular matter on which they lobbied or engaged in registrable activity under FARA, (ii) participating in the specific issue area in which that particular matter falls, or (iii) seeking or accepting employment with any executive agency that they lobbied or with which they engaged in registrable activity under FARA. The Trump pledge did not apply to FARA activity and allowed former lobbyists to accept positions with agencies they had lobbied.
• Revolving Door Restrictions for Leaving the Government. Appointees exiting the federal government are not permitted to communicate with employees of their former agencies for two years following the end of their government service, which is similar to Obama’s and Trump’s pledges. However, Biden’s executive order also prohibits communications with Senior White House staff during this period. Senior and Very Senior Appointees, as defined under 18 U.S.C. § 207, are additionally prohibited for one year from “shadow lobbying,” defined as materially assisting others in making lobbying communications or appearances that the former official is prohibited from undertaking. For the remainder of the Biden administration (or for two years after departing the federal government, whichever is later), former officials may neither lobby any covered executive branch official (or non-career Senior Executive Service) nor engage in any activity on behalf of a foreign government or foreign political party that would require FARA registration.
• Golden Parachute Ban. New in Biden’s pledge is a provision banning appointees from accepting any cash payments or non-cash benefits from a former employer that were given because the appointee accepted a position in the federal government, also known as “golden parachutes.” This will have an impact on employees whose employers have a practice of making cash payments to employees who leave to go into public service.

Is the Pledge Enforceable?

As with the ethics pledges required of Obama and Trump officials, the Biden pledge purports to impose a contractual obligation on appointees that can be enforced through civil actions for declaratory, injunctive, or monetary relief. We are unaware of efforts to enforce the pledges of prior administrations, though regardless of how the Biden administration approaches enforcement, the media, watchdog groups, and others keep a close eye on ethics restrictions, and revolving door rules, in particular.

Waivers

Similar to the Obama and Trump administrations, the Biden administration will permit waivers of any restrictions contained in the pledge under certain circumstances. Waivers will be granted by the director of the Office of Management and Budget—not by the president, as they were under Trump—and will become public 10 days after they are issued, as they were under Obama.

Navigating Biden’s Expanded Ethics Pledge

Employees, lobbyists, foreign agents, and their employers will face challenges as they assess the new ethical landscape resulting from Biden’s expanded Ethics Pledge. For example, your business’s former employees who are appointed as administration officials will not be able to review matters in the same issue area in which they lobbied. Thus you may need to develop alternative strategies to accommodate the presence of former lobbyists in the administration. You may also need to reassess your lobbying strategy if your business intends to hire former federal officials—certain individuals will not be able to assist with behind-the-scenes advice for one year following their federal service and will be prohibited from lobbying for at least the remainder of Biden’s administration.

What About Outgoing Trump Officials?

On January 20, 2021, hours before leaving office, President Trump issued an executive order revoking the ethics pledge made by all appointees serving in his administration. The order states, “Employees and former employees subject to the commitments in Executive Order 13770 will not be subject to those commitments after noon January 20, 2021.” Trump’s order most notably lifts the five-year ban, or “cooling off period,” for lobbying activities related to the former official’s agency, assuming no other restrictions apply. It also lifts a lifetime ban prohibiting the official from engaging in any activity on behalf of a foreign government that would require the official to register under FARA. Although it is unusual for a president to revoke his own executive order, it is not unprecedented. President Clinton signed a similar waiver of his ethics pledge near the end of his second term.

Venable’s Political Law Practice Group has extensive experience assisting clients of all sizes in navigating complicated ethics issues, as employees or hired lobbyists enter or exit federal service, or as businesses develop their advocacy strategy for a new Congress or administration. Please contact us if you have questions about these issues or, for more information on developments in federal and state campaign finance, lobbying, and ethics laws, please visit Venable’s political law blog at www.PoliticalLawBriefing.com.