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Ethics for an Outsourced Government

Ethics for an Outsourced Government. Kathleen Clark Washington University in St. Louis Board of Contract Appeals Bar Association December 2013. Research Support. Administrative Conference of the United States (ACUS). Methodology. 90+ interviews with: Procurement & Ethics Officials

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Ethics for an Outsourced Government

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  1. Ethics for an Outsourced Government Kathleen Clark Washington University in St. Louis Board of Contract Appeals Bar Association December 2013

  2. Research Support Administrative Conference of the United States (ACUS)

  3. Methodology 90+ interviews with: • Procurement & Ethics Officials • Government Investigators • Contractors • NGOs • Capitol Hill • False Claims Act lawyers

  4. An Illustration of the Problem Dan Jester advised Treasury on AIG bailout owned Goldman Sachs stock handled AIG bailout in way that benefited Goldman Sachs -- & himself

  5. Criminal Conflict of Interest Statute18 U.S.C. § 208(a) “employeeof the executive branch . . . participates personally and substantially . . . through . . . the rendering of advice, . . . in a . . . particular matter in which, . . . he . . . has a financial interest”

  6. Federal Government Spending

  7. Number of Federal Employees

  8. Spending on Service Contracting

  9. Spending on Services v. Products

  10. Ethics Restrictions onGovernment Employees • financial influences • use of government position • outside activities • post-government employment • pre-government employment

  11. One Size Does Not Fit All • Stricter Rules - Sensitive Positions • High-Level • Procurement • Bank Examiners • Looser Rules - Temporary Employees “Special Government Employees” or SGEs

  12. Principles Underlying Government Ethics Restrictions • Fiduciary nature of public office (2) Public’s confidence in government integrity • Congressional and executive branch control of federal resources • Devote adequate attention

  13. Few Ethics Restrictions on Government Contractor Personnel • A few agencies - narrow regulations re: contractor [personal] PCI • Government-Wide Regulations re: Contractors’[organizational] OCI • Contractors’ Internal Ethics Codes

  14. Exception: FDIC • Deems some contractor personnel to be government employees • Comprehensive regulations for contractors personnel • Financial influences - including family • Misuse of government resources - including info • Outside activities • Post-employment

  15. ACUS Recommendation Optional FAR clauses for contracts with high risk of: • personal conflicts of interest (PCI) • misuse of non-public information Contractors must: • train • internally report PCIs • screen employees • externally report (to government) violations

  16. FAR Clause on PCI (2011) Contractor personnel who perform acquisition functions closely associated with inherently governmental functions

  17. ABA House of Delegates (2013) Supports 2011 FAR rule Recommends - expanding PCI standards to high-risk contracts - requiring certifications by contractors

  18. Publications Fiduciary Standards for Bailout Contractors: What Treasury Got Right and Wrong in TARP, 95 Minn. L. Rev. 1614(2011) Financial Conflicts In and Out of Government: Ethics, Employees and Contractors, 62 Alab. L. Rev. 955 (2011) Ethics for an Outsourced Government Administrative Conference of the United States (2011)

  19. Ethics for an Outsourced Government Kathleen Clark kathleen_clark@mac.com Board of Contract Appeals Bar Association December 2013

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