Application of Conflict of Interest Rules to Members of Department of Health and Human Services Advisory Committee

Opinion

Application of Conflict of Interest Rules to Members of Department of Health and Human Services Advisory Committee

N e ith e r th e la w n o r th e D e p a rtm e n t o f H e a lth a n d H u m a n S e rv ic e s ’ S ta n d a rd s o f C o n d u c t c o n stra in a m e m b e r o f th e A d v iso ry C o u n c il o n S o c ia l S e c u rity fro m lo b b y in g th e D e p a r t­ m e n t o n b e h a lf o f p riv a te c lie n ts w ith re s p e c t to p o lic y is su e s th a t a re b e in g a d d re s s e d b y th e C o u n c il. W h e th e r to re ta in th e p ru d e n tia l re s tric tio n s b a rrin g s u c h lo b b y in g th a t h a v e b e e n im p o s e d b y th e D e p a rtm e n t’s e th ic s o ffic ia l is a d is c re tio n a ry is su e fo r th e S e c re ta ry .”

April 13, 1990

M e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l D e p a r t m e n t o f H e a l t h a n d H u m a n S e r v ic e s

This responds to your request for advice on what ethics constraints apply to members of the Department of Health and Human Services’ (“Depart­ ment”) 1989 Advisory Council on Social Security (“Council”). Specifically, you wish to know whether it is lawful for Council members to lobby the Department on behalf of private clients with respect to policy issues that are being addressed by the Council. We believe that it is. Neither the law nor the Department’s Standards of Conduct constrain a member from lobbying the Department on policy issues that are subject of Council discussions. Whether to retain the prudential restrictions barring such lobbying that have been imposed by the Department’s ethics official is a discretionary issue for the Secretary.

I. Background

The Council is a statutory federal advisory committee whose members are appointed by the Secretary. 42 U.S.C. § 907; 5 U.S.C. app. I. It is reviewing a wide range of Social Security programs, including the provision of old-age, disability and mandatory health insurance. Council members are special government employees since they will serve less than 130 days a year. 18 U.S.C. § 202(a).

' E ditors N ote: T h is o p in io n w as originally w ritten using an o u t-o f-date version o f sections 203 and 205 o f title 18. T h is p u b licatio n o f the opinion reflects rev isio n s based on the N ovem ber 1989 am e n d ­ m ents, but those a m en d m en ts w ere m inor and the substance o f the op inion is unchanged.

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One of the Council’s members is a private sector lobbyist. Business cli­ ents hire her to present their views to the Department on many of the same policy issues that the Council is examining. You have asked whether the member may continue to lobby the Department on those policy issues not­ withstanding her membership on the Council. We believe that, as a legal m atter she may.

There are two statutory provisions that govern the conduct of special government employees in this context — 18 U.S.C. §§ 203 and 205. Sec­ tion 203 bars special government employees from receiving compensation for representational activities before an agency in relation to any particular matter involving a specific party or parties in which they have participated personally and substantially and in which the United States is a party or has a substantial interest. 18 U.S.C. § 203(c)(1).1 Similarly, section 205 bars special government employees from acting as agents for claims against the United States or as agents in any particular matter pending before a depart­ ment involving a specific party or parties in which they have participated personally and substantially and in which the United States is a party or has a direct and substantial interest.2 We do not believe that lobbying on policy issues, such as the position the Department should take on mandatory health care, involves a “particular

1S e c tio n 2 0 3 p ro v id e s, in relevant p art:

(a ) W h o ev er, o th erw ise than as p ro v id ed by law fo r the p ro p e r d ischarge o f official d u ties (1 ) . . . re c eiv es . . . any co m p e n sa tio n fo r any services rendered o r to be rendered e ith e r by h im s e lf o r another —

( B ) . . . at a tim e when su ch person is an o ffice r o r em ployee o f the U nited S tates . . .

in re la tio n to an y . . . particular m atter in w hich th e U nited States is a party o r has a direct an d su b sta n tia l interest, befo re any dep artm en t [or] agency . . . shall be fined u n d e r this title o r im p riso n e d for not m o re than tw o y ears, o r both; and shall be incapable o f holding an y o ffice o f h onor, trust, o r p ro fit un d er th e U nited States. (b ) A sp ecial G overnm ent em p lo y e e shall be su b ject to subsection (a) only in relatio n to a p a rtic u la r m a tte r involving a sp ec ific party o r p arties —

(1 ) in w h ich su ch em ployee h a s at any tim e p articip ated personally and sub stan tially as a G o v e rn m e n t em ployee or as a special G o v ern m en t e m ployee through d ecision, approval, d isa p p ro v a l, recom m endation, the rendering o f ad v ice, investigation o r o therw ise . . . .

2 S e c tio n 205 states, in relevant part;

W h o ev e r, b e in g a officer or e m p lo y e e o f th e U n ited States . . . otherw ise than in the p ro p e r d isch a rg e o f h is o fficial duties —

(1 ) acts as a g en t o r attorney fo r pro secu tin g any claim ag ain st the U nited S tates, or (2 ) acts as ag en t o r attorney fo r anyone b efo re any d e partm ent . . . [on any] p articu lar m a tte r in w h ic h th e U nited States is a party o r has a d irect and substantial interest —

S h a ll be fin e d not m ore than $ 1 0 ,0 0 0 o r im p riso n ed fo r not m ore than tw o years, o r both. A s p ec ia l G o v e rn m e n t em ployee shall be su b ject to the preceding paragraphs only in rela­ tio n to a p a rtic u la r m atter in v o lv in g a specific party o r p arties (1) in w hich he has at an y tim e p a rtic ip a te d p e rso n ally and su b stan tially as a G o v ern m en t em ployee o r as a special G o v e rn ­ m e n t e m p lo y e e th ro u g h decision, approval, d isap p ro v al, recom m endation, the rendering o f ad v ic e, in v e stig atio n o r otherw ise . . . .

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matter involving a specific party or parties” as required by 18 U.S.C. §§ 203 and 205. General discussions between a lobbyist and a government em­ ployee of why one policy is preferable to another do not involve a specific party or parties.

This conclusion is supported by the interpretation of the same “particular matter involving a specific party or parties” language in 18 U.S.C. § 207, language which this Office views as identical in meaning to that in sections 203 and 205.3 The Office of Government Ethics regulations interpreting this phrase in 18 U.S.C. § 207 state that discussions of policy matters do not constitute participation in a “particular matter involving a specific party or parties.” 5 C.ER. § 2637.201(c)(1). The regulations provide:

Such a matter typically involves a specific proceeding affect­ ing the legal rights of the parties or an isolatable transaction or related set of transactions between identifiable parties. Rulemaking, legislation, the formulation of general policy, stan­ dards or objectives, or other action of general application is not such a matter. Therefore, a former Government employee may represent another person in connection with a particular matter involving a specific party even if rules or policies which he or she had a role in establishing are involved in the pro­ ceeding.

Id. The examples given in the regulations illustrate that an em ployee’s participation in the formulation of agency policy does not bar the employee from subsequently discussing the application of the policy with the agency after he or she has left the government. Id. If, as the regulations make clear, policymaking is not a “particular matter involving a specific party or parties,” then 18 U.S.C. §§ 203 and 205 do not bar an employee from dis­ cussing with Department personnel a policy on which he or she has worked. We therefore believe that a Council member may participate in policy dis­ cussions on the Council and lobby the Department on those same policy issues without violating 18 U.S.C. §§ 203 or 205.

There are also Department regulations that impose additional constraints on members of advisory committees. Standards o f Conduct , 45 C.F.R. pt. 73. The regulations require Department employees to make every effort to avoid negotiating with the Department for contracts or grants whose subject matter is related to the subject matter of his or her consultancy. Id.* This

5See M em o ran d u m for the S o licito r o f the Interior, from Sam uel A. A lito, Jr., D eputy A ssista n t A tto r­ ney G en eral, O ffice o f Legal C ounsel, Re: Scope o f the Term "Particular M atter" Under 18 U.S.C. 208 (Jan. 12, 1987).

'T h e reg u latio n states, in relev an t part:

To a con sid erab le extent the prohibitions o f sections 203 and 205 are aim ed at the sale o f influence to g ain special fav o rs for p riv ate b usinesses and o th er o rganizations an d a t the C ontinued

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regulation is inapplicable to the Council member’s concern because she is not involved in negotiating grants or contracts with the Department. She simply wishes to bring the policy views of her clients to the Department’s attention and to persuade the Department of their validity. As long as she limits herself to this function, we are not aware of any Department regula­ tion that would prevent her from acting.

We have also reviewed the memorandum prepared for Council members by the Department’s ethics official.5 The DAEO Memorandum states:

We have consistently counseled advisory committee members in the Department to refrain from representing others before any component of the Department on issues pending before th e ir com m ittees, com m ission or council. W here the com m ittee’s charge is extremely broad, such as that of the Advisory Council on Social Security, this advice may seem unduly restrictive in that it may require members to forego lobbying activities relating to a broad range of programs, in­ cluding Medicare, Medicaid and other Social Security Act programs. However, this prohibition is necessary [to avoid any appearance of impropriety].6

This advice prohibits the Council member’s proposed lobbying activity be­ cause she would be engaged in representational activities before various Departm ent components regarding policy issues pending before the Council.

The Council member’s lobbying of the Department policy issues pending before the Council is not prohibited by law or Department regulation. It is barred by the DAEO Memorandum, which seeks as a matter of policy to ensure that advisory committee members avoid any appearance of impropri­ ety. W hether to continue this policy is a matter of discretion, to be exercised ultimately by the Secretary. He must decide, as a matter of judgment, whether the DAEO Memorandum is indeed unduly restrictive in its impact on advi­ sory committee members. If he or his designee believes that the DAEO Memorandum is too broad, the Department is free to impose a less onerous

'( ....c o n tin u e d )

m isu se o f g o v ern m en tal position o r inform ation. In accordance w ith these aim s, a consult­ ant, even when not compelled to do so by sections 203 and 20S, should make every effort in his o r her private work to avoid any personal contact with respect to negotiations fo r con­ tracts o r grants with the component o f the department in which he or she is serving, i f the subject m atter is related to the subject matter o f his or her consultancy or other service.

4 5 C .F .R . § 7 3 .7 3 5 -1003(b)(2) (em phasis added).

3 M e m o ra n d u m fo r M em bers o f th e A dvisory C o u n cil on Social S ecurity, from Sandra H. Shapiro, A c tin g D e sig n a te d A g en cy Ethics O fficial (F eb. 9, 1990) ( “D A E O M em orandum ” ).

6Id. a t 2.

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standard based simply on the law and existing regulations. Once a judgment has been made as to which standard to adopt, the decision can be conveyed to all advisory committee members, including those on the Council.

WILLIAM P. BARR Assistant Attorney General office o f Legal Counsel