Non-APA Matters

1. Non-APA Matters Applies to 1) , policy statements, 2) interpretative rules, 3) procedural, and 4) where there is a finding of good cause. If no notice is required, then neither will there be comment. Test: If there is a substantial impact or legally binding, then, it is a legislative rule requiring notice and comment minimally. Should not make new policy, The more specificity in the rule, the more likely legislative. Interpretative rule should not be inconsistent with legislative rule. • An agency can change its interpretation.

2. Ex Parte Communications • Section 557 applies where action is subject to a hearing and decision on the record, usu. Adjudication. • Ex parte communications between anyone outside agency, decision maker and an interested party on a matter relevant to merits of the proceeding. • Any such communications shall be put on the record, including all written communications, memos, written responses. • Require to show cause why proceeding should not be dismissed. • Apply once the matter is subject to notice of a hearing. • Does not authorize withholding information from Congress.

3. Problem • Problem: Is there a legally permissible way to restrict executive influence in rulemaking and decision making in adjudication through ex parte communications with agency personnel by OMB per Executive Order 12866; or by the Justice Department in enforcement of laws through executive guidelines, policy statements or interpretative rules that limit or expand the scope of the agency action? • If the subject of such information is not part of the record or disclosed, what impact should it have on judicial review of action rulemaking and/or adjudication?

4. Discussion Questions 1) What are the ways the Executive can informally influence agency decision making? 2) Should the existence of such information or exchanges be required to be made public and included in the record? 3) Are the interests in adjudication and rulemaking similar that the rules governing ex parte communication should be the same? 4) In adjudication, the standard of judicial review for factual issues in formal rulemaking and adjudication or hybrid rulemaking requires substantial evidence; in informal proceedings the standard is arbitrary and capricious. What does this say about the need for on the record decision making?

5. Discussion Questions Would you include or exclude the following information in a rulemaking and adjudication? a) Executive memo clarifies a policy interpretation of how a statute is to be implemented. b) Empirical evidence given to the OMB about the cost of a proposed rule not requested by the agency. c) Contents of a meeting between OMB and a top contributor of PAC to the head of a subcommittee on pending rulemaking that will adversely affect his business. d) Meeting between agency head and OMB regarding their decision in a formal proceeding. e) Confidential internal memorandum revealing wrongdoing by the agency in the decision making process made by an agency whistleblower.

6. Addressing Ethics and Corruption in Government Part 1: Context

7. Module Theme • In order for the United States to maintain its position as a world leader, to what ethical standards should we hold our public officials?

8. Who has the Authority of Law? • U.S. Constitution: Supreme Law of Land • Congress Passes laws codified as statutes • Delegates authority to Federal Agencies to Implement law. • Serve a particular interest or constituency. • Executive Executes laws via Executive Orders • Guidelines to Justice Department re enforcement of laws. • OMB oversight of budget of federal agencies. • Judiciary Interprets laws • Only hears what comes before it • Can set aside, remand back to agency, or affirm. • Right and Scope of judicial review defined by Statute. • Decision can be “As applied” or “establish precedent”.

9. Constitutional Authority

10. Legal Remedies Elect someone else; Change in party representation; Criminal actions where violation of law; Censure; Sanctions Judicial Review of decisions; Congressional action to restrict; Impeachment; Practical Effect Remedial vs. preventive; Burden on victims or special interests to challenge; Public opinion makes it clear lack of tolerance; and Protracted legal process for legal remedies gives Gov. time to achieve goal; i.e., detention, intelligence, & war. Remedies for Abuse of Executive Authority

11. Standards for Ethical Conductfor Legislature • Legislative authority to delegate to other branches or reserve oversight. • What requirements of a branch system of checks & balances must be upheld? • Preserve broad delegation of authority. • Preserve congressional oversight and accountability.

12. Standards for Ethical Conduct for Executive Branch • Context: Executive authority to act independent of other branches. • What requirements of a branch system of checks & balances must be upheld? Government Generally • Preserve an independent judicial branch. • Preserve two-party political system in government. • Ensure a person’s vote is counted.

13. Standards for Ethical Conduct for Judicial Branch • Context: Context: Judicial authority to review actions of agencies and other branches. • What checks and balances must be in place in the judiciary to maintain ethical standards? • Right to judicial review • Standing to sue

14. Holding Public Officials Accountable Part 2: House Ethics Committee

15. Code of Ethics for Government Service 1. Loyalty to highest moral principals and to country above loyalty to government persons, party or department. 2. Uphold the Constitution, laws, and legal regulations of the United States and of all governments therein and never be a party to their evasion. 3. Give a full day's labor for a full day's pay; giving to the performance of his duties his earnest effort and best thought. 4. Seek to find and employ more efficient and economical ways of getting tasks accomplished. 5. Never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not; and never accept for himself or his family, favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of his governmental duties. (Passed July 11, 1958.)

16. Code of Ethics for Government Service 6. Make no private promises of any kind binding upon the duties of office, since a Government employee has no private word which can be binding on public duty. 7. Engage in no business with the Government, either directly or indirectly which is inconsistent with the conscientious performance of his governmental duties. 8. Never use any information coming to him confidentially in the performance of governmental duties as a means for making private profit. 9. Expose corruption wherever discovered. 10. Uphold these principles, ever conscious that public office is a public trust. (Passed July 11, 1958.)

17. Defense contracts fraud Foreign military sales fraud Government contractor fraud Medicare, Medical and Medicaid fraud Quality Assurance and Test Falsification Product Substitution GSA Services and Supply Utilities fraud Telecommunications fraud HUD fraud Shipbuilding Weapons systems Anti-terrorism Airport Construction USDA fraud Postal Fraud Building and Roadway Construction Energy contract fraud Food and Drug Administration Military procurement Fraud Against the Government Source: Whistleblowers Center

18. Potential Ethical Violations By Elected Officials • Influence peddling: Receiving value for influence in contract, legislation, voting, & committee oversight. • Nepotism: Giving jobs to family without proper disclosure. • Cronyism: Giving contracts, jobs, appointments to friends and family without following procedures, notice, and recusal. • Fraud: Actions involving intent to deceive. • Perjury: Misrepresentation in communications before official meeting or hearing. • Conflict of Interest: Use of office for personal gain. • Sexual Harassment: Use of office to obtain action or reaction from a subordinate or another; includes advantage, exploit, misuse, threats of loss for sexual favors.

19. Post-Clinton Impeachment • Ethical violations declined after both sides made unwritten agreement not to pursue for 5 years. • Ethical violations now occur only if court convicts of a crime or a lot of evidence gathered and turned over to member.

20. 105th -109th Congress • Rep. Earl Hilliard (AL)- improper loans by campaign committee. Letter of reproval citing serious misconduct. Defeated in 2002. • Rep. James Traficant (Ohio)- convicted of improper award of contracts. Expelled • Sen. Robert Torricelli – investigated by Justice for accepting gifts from a political donor turned felon. Admonished, but no criminal charges. • Rep. Jay Kim - reprimanded after campaign officials convicted on felony counts of accepting illegal donations. They overhauled the process so that individuals and outside groups, e.g., watchdogs lack standing to initiate an ethics probe.

21. House Ethical Violations 109th-110th Congress -Tom Delay (R-Tx) reprimanded twice by House Ethics Committee in 2004-2005, leading to an indictment and resignation for influence peddling and improper contributions during 2002 Texas election. -Jack Abramoff, Republican lobbyist is indicted on wire fraud for bribery. Influence peddling re Indian casinos. - Duke Cunningham (R. Ca) resigned after pleading guilty of taking $2.4 million in bribes for Pentagon contracts. -Mark Foley (R-Fl) Sex emails to pages forced resignation. -Rep Rob Ney (R-Oh) Accepting bribes re House Admin. Comm.

22. Ethical vs. Unethical Behavior • What distinguishes effective politics from abuse of power, corruption, or ethical violations? • Can actions be unethical in the absence of a statute or rule prohibiting such behavior? • If so, on what basis should the Ethics Committee act; independent counsel, and judiciary?

23. What distinguishes effective politics from abuse of power, corruption, or ethical violations? Can actions be unethical in the absence of a statute or rule prohibiting such behavior? If so, on what basis should the Ethics Committee act; independent counsel, and judiciary?  Nature and level of disclosure; approval, compliance with rules.  Under the ethics rules, probably not. However, does not mean there will not be public backlash, or other legal action. No ex post facto laws. E.g. House members inaction re Rep Foley  Ethics Committee-Violation of branch ethics rules; IC-currently unrestricted; judiciary-when violation of law, adverse impact on individual or group rights, or statute authorizes judicial review and confers standing on individuals or group to seek redress. Ethical vs. Unethical Behavior

24. PAC Influence • Over the last two years, 300 PAC controlled by lawmakers raised about $156 million. • Only 1/3 of monies used for political campaigns • Sponsor vacation-like fundraising events for lobbyists and lawmakers.

25. Democrats Republicans Executive Special Interests Public Currently control both Houses ’07;  Significant presence; control White House, Bush asserts strong Executive power Lobbyists-Need Rules of engagement Watchdog Organizations-Process for oversight and standing. Mission to disclose corruption; distrustful of government Players

26. Ethics Action vs. Rep.Tom Foley

27. +Can’t accept gifts & meals from lobbyists +Public reporting by lobbyists in searchable database. +Prior approval (temp) for trips (lodging & transport) paid for with private money. -Disclosure report on private aircraft re purpose and attendees. -Lobbyist ban vs. contacting family of members and staff. -> fines from $50K-$100K -Pt of order re earmarks or projects later attached to bill. 60 senators must vote to keep. -Bans secret “holds” on bill. Must disclose that blocking action on bill. Exceptions: -Private funded travel ok -Can fly on corporate jets at reduced price -Earmarks okay for pet projects Senate Ethics Reforms (3-’06) (GOP-lead bipartisan 90-8 )

28. - Ban lobbyists from paying directly for meals, trips, stadium box seats, or discounted seats on private jets. - No gifts by lobbyists to congresspersons Exceptions -Ok to make contributions to PAC committees who organize fundraising. -Political contributions ok but subject to FEC rules. -Paying to attend a fundraiser ok -Restrictions N/A to personal PAC use of funds. 110th Congress Ethics Reforms (2/11/07)

29. -Tom Delay (R-Tx) reprimanded twice by House Ethics Committee in 2004-2005, leading to an indictment and resignation for influence peddling and improper contributions during 2002 Texas election. -Jack Abramoff, Republican lobbyist is indicted on wire fraud for bribery. Influence peddling re Indian casinos. - Duke Cunningham (R. Ca) resigned after guilty of taking $2.4 million in bribes for Pentagon contracts. -Mark Foley (R-Fl) Sex emails to pages forced resignation. Resigned. Trial on indicted offense pending ’07. Convicted & sentenced to 5 years, 10 mo (3/06) Sentenced to 8 years. (3/06)  Treatment for alcohol abuse; admitted homosexual. House ethics found members did not protect male pages, but broke no rules. (2/07) Disposition of House Ethical Violations

30. Who are indispensable parties in Ethical Violations? • Accused • Victim • Whistleblowers • Watchdog organizations

31. Whistleblower Protections Part 3

32. False Claims Act, 31 USC 3730(h) • Person discharged, demoted, suspended, threatened, harassed or discriminated against because of lawful acts is entitled to all relief necessary to make whole. • Requires • 1) protected conduct, • 2) notice to employer that assisting Government in investigating actions, • 3)Termination in retaliation of actions.

33. Whistleblower Protection Laws • Federal laws: Individual can make a complaint or charge of retaliatory discrimination to a federal agency. • Often limit to administrative actions via US Dept of Labor; • ALJ is the fact finder; • Several category of exemptions, e.g., Department of Homeland Security; • Limited judicial review • Short statute of limitations, e.g., 30 days

34. Whistleblower Protection Laws

35. Protection • In 2005 House considered bill to strengthen Whistleblower protections for government employees. • Executive sought to exempt staff of Dept. of Homeland Security from whistleblower protections. • Pulled from agenda at the last minute. GOP did not want public debate of issue. • FBI, CIA, Defense Intelligence Agency, National Imagery and Mapping Agency, and National Security Agency have never had whistleblower protection.

36. Bush Waives Whistleblower Protection for Staff under Clean Air Act • 9/06: Bush claims government is immune from claims under Clean Air Act. • Effect: federal workers have little protection from official retaliation for reporting water pollution enforcement breakdowns, manipulations of science or cleanup failures. • 170,000 federal workers affected. • Reverses nearly 20 years of precedent. • EPA claims no protection for its employees under Clean Air Act; Safe Drinking Water Act. • Basis: Unpublished Atty. Gen. Report

37. Watchdog Groups • Citizens for Responsibility and Ethics in Washington (Melanie Sloan, Exe. Dir.) leaked Foley emails • Common Cause (James Benton) • Democracy 21 (Fred Wertheimer)

38. Case Study: Independent Counsel Part 4

39. Questions for Students 1) Is the separation of power doctrine effective when it comes to ethical misconduct and corruption within the executive branch and Congress. Explain your answer. 2) Who should have the authority to appoint the IC: the Attorney General, members of Congress, and/or the Judiciary. 3) What types of limits should be placed upon the scope of investigations by the IC and do any of the proposals adequately address the problem.

40. Morrison v. Olson • RULE: An inferior officer is one who is • Appointed by agency head, Pres. or judiciary; • For limited purpose, with limited function and tenure; and • Is subordinate to higher official. Bottom line: Not subject to Article II appointment by President with confirmation by Senate.

41. Appointing Independent CounselRole of Attorney General • AG conducts the preliminary investigation and shall make a determination within 90 days; • No authority to convene a grand jury, plea bargain, grant immunity or issue subpoenas; • State of mind is not to be considered; • AG notifies the court, and if no reasonable grounds to believe further investigation; • AG can apply to the court to appoint if there are reasonable grounds; • Decision by AG is not reviewable by court.

42. Appointment of Independent Counsel • Has full power and authority to investigate and prosecute functions and powers of the Department of Justice and the AG • Can convene grand juries; • Participate in court proceedings and engage in any litigation, appeal any decision of a court in any case; • Review all documentary evidence available from any source; • Determine whether to contest assertion of any testimonial proceedings, receiving appropriate national security clearances, making applications to any grant for a grant of Immunity of any witness, inspecting obtaining or using tax return, initiating or conducting prosecutions in any court of competent jurisdiction; • Consult with the U.S. attorney general for the district.

43. Congress Has Oversight • Oversee the conduct of IC; • Receive a report from IC; and • House may advise on impeachment recommendations.

44. Case Study: Addressing Corruption Proposed Bipartisan Changes Appointment • Allowing the Attorney General (AG) to consider an official's intent in determining whether to investigate; • Court appoints the IC from a roster of predetermined list of persons approved by the AG; • Creating a two-step process where the Attorney General will appoint and the Special Division will confirm an IC; Scope of Investigation • Reducing the number of officials covered by the law; • Redefine covered persons to focus on discreet vs. general conduct that focuses on manner in which they conduct; • Empower Department of Justice at preliminary investigation state with subpoena power, change the time limits to allow a more thoughtful preliminary investigation, use notice requirement so work can continue;

45. Case Study: Addressing Corruption Proposed Bipartisan Changes Disposition of Investigation • Eliminating the Independent Counsel (IC) final report; • Impose the burden of proof on the Independent Counsel to prove by substantial evidence, the existence of criminal activity; • Announce closure on issues at it happens.

46. Next Steps • Break into groups representing: Democrats, Republicans, Executive, Special Interests-Watchdog Special interests-PAC, Lobbyists • Answer the 3 questions as a group; Negotiate which of the proposals should be addressed & make recommendations (up to 3 proposals)