This is an archived article that was published on sltrib.com in 2017, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
"I am aware of the views of the White House's current Designated Agency Ethics Official. In a letter dated February 28, 2017, he asserted that Presidential appointees serving in the White House are beyond the reach of basic ethics requirements universally applicable to millions of executive branch employees."- Walter M. Shaub Jr., director of the Office of Government Ethics, in a letter to White House budget director Mick Mulvaney, May 22, 2017
—-
This was a rather pointed statement made by Shaub, who is increasingly in a tense battle of wills with the Trump administration. He offered this observation in a letter to budget director Mulvaney, insisting that he would continue to request copies of waivers that Trump had granted to former lobbyists appointed to government positions involved in issues they had previously lobbied. Mulvaney later relented and said the Trump administration would not block the inquiry.
But Shaub's words help shed light on the tug of war between the Office of Government Ethics and the White House. What prompted them and can they be justified?
—-
This all started with White House adviser Kellyanne Conway's touting of Ivanka Trump clothing and shoes during an interview in February at the White House. "Go buy Ivanka's stuff is what I would say," Conway told Fox News from the White House briefing room, after a number of retailers had dropped her line. "I'm going to give a free commercial here: Go buy it today, everybody; you can find it online."
Shaub then looked into the matter, and a letter he received in response from the White House prompted his statement in May. First we have to get past a bunch of legal mumbo-jumbo, which we will explain, so non-lawyers can just skip to the explanation
In a Feb. 28 letter concerning Shaub's inquiry into Conway's comments, White House ethics adviser Stefan C. Passantino wrote:
—-
"We note initially although many regulations promulgated by the Office of Government Ethics ("OGE") do not apply to employees of the Executive Office of the President, the Office of the White House Counsel has instructed all such employees to abide by 3 CFR § 100.1 which provides: "Employees of the Executive Office of the President are subject to the executive branch-wide standards of ethical conduct at 5 CFR Part 2635, and the executive branch-wide financial disclosure regulations at 5 CFR Part 2634."
—-
This sentence had a footnote that added:
—-
"Thus, while employees of the White House Office are not agency 'employees' as referred to in 5 CFR § 2635.702(c) and as defined by 5 CFR § 2635.1029(h), the Office of the White House Counsel has instructed all employees of the White House Office that they are still subject to 5 CFR Part 2635 by operation of 3 CRF § 100.1."
—-
Okay, let's hack our way through the legal thicket. We've talk to various experts and interested parties to unravel this.
First, the letter rather broadly asserts that "many regulations" issued by the OGE do not apply to the Executive Office of the President (EOP), which would include the Office of Management and Budget, the U.S. Trade Representative and other entities. The footnote appears to narrow that just to the White House Office.
Why is that distinction important? Virtually all federal government employees are hired under "Title 5" of the U.S. code, but the president is given specific hiring authority for a select group of aides under a different part — "Title 3." So the White House staff logically could be treated differently, which is one reason why the Justice Department decided that the federal anti-nepotism rules for the federal government did not apply to the hiring of Ivanka Trump, the president's daughter.
If Passantino was actually claiming many rules also did not apply to anyone working in EOP, that would be a sweeping statement. The White House routinely considers itself an agency for OGE's purposes, such as when it files reports (as Trump has done) on the acceptance of travel expenses from non-federal sources. But the footnote appears to narrow the issue to the White House office.
Second, Passantino's letter mentioned two specific regulations that applied to White House staff, having to do with ethical conduct and financial disclosure. By implication, that meant that four other key regulations associated with OGE — 5 CFR Part 2636, 5 CFR Part 2638, 5 CFR Part 2640 and 5 CFR Part 2641 — did not apply to White House staff.
But, for a variety of reasons, dismissing all of those regulations does not make much sense for the White House. Part 2640, for instance, deals with conflicts of interest and Part 2641 concerns post-employment restrictions. And Part 2636 has to do with limitations on outside income. Without those in place, White House officials would not be able to receive waivers for conflicts of interest or possibly obtain jobs after working for an administration, for instance. That might be why the letter did not identify specific regulations that the White House said did not apply to its staff.
That just leaves one regulation: Part 2638. And that regulation specifically concerns the responsibilities of the Office of Government Ethics, including its ability to request documents, seek information or suggest corrective action, such as initiating an investigation.
So one could conclude that's the actual subtext of the sentence in the letter — a shot across the bow of the OGE's authority.
Remember that we said that the letter was in response to a query about Kellyanne Conway? The authority embedded in 5 CFR 2638 was used by Shaub to ask the White House about Conway's statement.
"When OGE has reason to believe that an employee may have violated the Standards of Ethical Conduct for Employees of the Executive Branch (Standards of Conduct), OGE is authorized to recommend that the employing agency investigate the matter and consider taking disciplinary action against the employee," Shaub wrote Feb. 13. "Under the present circumstances, there is strong reason to believe that Ms. Conway has violated the Standards of Conduct and that disciplinary action is warranted. . . . Therefore, I recommend that the White House investigation Ms. Conway's actions and consider taking disciplinary action against her" and "notify OGE of the findings of your investigation and any disciplinary or other corrective taken in connection with this matter."
Passantino replied that Conway had made the statement in a "light, offhand manner" and that she was "highly unlikely to do so again." He added that he had met with Conway and she said she would commit to abide by the standards of conduct in the future.
There's one other wrinkle. The footnote stated that White House employees — while not "agency employees" — "are still subject to 5 CFR Part 2635 by operation of 3 CRF § 100.1." From OGE's perspective, the phrase "by operation of" are fighting words, as it suggests that White House could one day simply decide those regulations no longer apply to its employees.
But these regulations stemmed from an effort by President George H.W. Bush to harmonize ethical standards across the federal government. (He was reacting to a series of ethical scandals during the Reagan administration.). He issued two executive orders in 1989 and 1990. In 1999, the Executive Office of the President implemented the order by repealing its old standards of conduct and adopted the OGE standards by inserting a cross-reference to the CFR parts 2634 and 2635.
The notice in the Federal Register said: "Because the EOP's Standards of Conduct have been superseded by the new executive branch financial disclosure regulations at 5 CFR part 2634, and by the Standards at 5 CFR part 2635, the EOP is repealing all of its existing 3 CFR part 100. To ensure that employees are on notice of the currently effective ethical standards which apply to them, the EOP is replacing its old standards at 3 CFR part 100 with a residual provision that cross-references 5 CFR parts 2634 and 2635."
We asked the White House to provide an on-the-record statement clarifying the meaning of Passantino's sentence and footnote but did not receive one.
—-
Was it an overreaction by Shaub when he claimed that the White House asserted its officials "are beyond the reach of basic ethics requirements universally applicable to millions of executive branch employees"?
The plain language of Passantino's letter is that key ethical standards do apply to the White House staff, as notified by the White House counsel. Passantino is supposed to enforce the ethics rules, and he does not assert directly that the rules did not apply to White House officials. Instead, he said the White House was not "an agency" but nonetheless the ethical rules applied to officials working there.
It's only when you dig beneath the legalese that you encounter legal trap doors that — in another moment — might allow the White House to wiggle free of some of its obligations to OGE.
The White House could clear this up by issuing a statement clarifying that the OGE regulations do apply to White House staff — no ifs, ands or buts.
Still, it's worth noting that, despite initial reluctance, the White House has released information on the waivers granted to White House officials. Perhaps Shaub's sharp blast has something to do with the change in position — or perhaps not.
We're not going to issue a ruling on this, given that it involves legal interpretation. The evidence of the White House commitment to ethical standards — and the OGE's role — will become apparent in the coming months, especially after Shaub's five-year term ends in early 2018 and the president appoints a replacement.