What does the Biden order do and to whom does it apply?

Generally, the Biden order requires appointees to sign an Ethics Pledge that:

• Requires an appointee to commit to not accept gifts or gratuities from lobbyists or companies employing lobbyists throughout the duration of his or her service as an appointee.
• Broadens the revolving-door rules impacting lobbyists and foreign agents.

The Biden order applies to:

• Every political appointee in an executive agency appointed on or after January 20, 2021.
• Individuals appointed to a career position are not required to sign the Ethics Pledge.

Do any of the Office of Government Ethics (“OGE”) rules regulating gifts remain for appointees?

The Order adopts the definition of “gift” from the current OGE rules which includes the following: a gratuity, favor, discount, entertainment, hospitality, loan, forbearance, service, training, transportation, local travel, lodging, meals, or other item with a monetary value. The term specifically excludes the following (not an exhaustive list):

• Modest items of food and non-alcoholic refreshments, such as soft drinks, coffee, and donuts, offered other than as part of a meal;
• Greeting cards and items with little intrinsic value, such as plaques, certificates, and trophies, which are intended solely for presentation;
• Opportunities and benefits, including favorable rates and commercial discounts, available to the public or to a class consisting of all Government employees or all uniformed military personnel, whether or not restricted on the basis of geographic considerations.

In addition, the following relevant OGE exceptions to the “gift ban” still apply:

• Personal friendship;
• Discounts and similar benefits (may accept reduced membership fees in a professional organization if the discount is offered to all government employees with the appropriate professional qualifications);
• Benefits resulting from outside business/employment of spouse;
• Benefits customarily provided by a prospective employer in connection with bona fide employment discussions;
• Gifts accepted under specific statutory authority;
• Gifts authorized by supplemental agency regulations.

Therefore, gifts that fall within these exceptions may still be accepted by Ethics Pledge signatories.

How does the Biden order further restrict the OGE gifts rules?

Biden’s Order eliminates some exceptions to the extent that these “gifts” are offered by lobbyists or companies that employ lobbyists. Appointees may not accept:

• Gifts provided subject to the $20/$50 exception (gifts with a value of $20 or less per source per occasion, not to exceed $50 per year per source);
• Free attendance at “widely attended gatherings”;
• Food and entertainment when on duty or official travel in a foreign area;
• Gifts provided as part of a bona fide “award or honorary degree”;
• Social invitations, including food, refreshments and entertainment, even if the invitation is from a person who is not a prohibited source;
• Gifts in connection with political activities permitted by the Hatch Act Reform Amendments;
• Benefits resulting from the appointee’s own outside business or employment activities;
• Benefits provided by a former employer to attend a reception or similar event to which other former employees have been invited to attend;
• Gifts of informational material.

Revolving Door Ban Pledge

…for those entering government service:

For a period of two years from the date of appointment, an appointee cannot participate in any particular matter involving specific parties that is directly and substantially related to the appointee’s former employer or former clients, including regulations and contracts. Additional restrictions apply to appointees that were previously registered under the Lobbying Disclosure Act (LDA) or the Foreign Agents Registration Act (FARA) within the two years before the date of appointment.

…for those leaving government service:

Under 18 U.S.C. Sec. 207(c), certain appointees are restricted for a year after their departure from government service from communicating with employees of their former executive agencies. Under the terms of the Executive Order, this period is extended to two years. The Ethics Pledge also extends these restrictions to communicating with the Senior White House staff.

Similarly, the Ethics Pledge expands the restrictions on a senior or very senior appointee who leaves government service under 18 U.S.C. Sec. 207(c) and (d) by requiring the appointee to agree that, in addition to limiting direct communications for a period of one year following the end of the appointment, the appointee, during that same oneyear period, will not materially assist others in making communications or appearances that the appointee is prohibited from undertaking personally by (a) holding him/herself out as being available to engage in lobbying activities in support of any such communications or appearances; or (b) engaging in any such lobbying activities. “Materially assist” means to provide substantive assistance, but does not include providing background or general education on a matter of law or policy based upon an individual’s subject matter expertise, nor any conduct or assistance permitted under section 207(j) of title 18, United States Code.

In addition, the Ethics Pledge requires an appointee to agree that upon leaving Government service, he/she will not lobby (as defined by either the LDA or FARA) any covered federal official for the remainder of the Administration or for two years following the end of his/her appointment, whichever is later.

Practical Advice

Companies and organizations should take care when interacting with an appointee to honor all the limitations on the appointee, including ethics restrictions established by operable federal law and the increased restrictions from the Ethics Pledge. While the Ethics Pledge may only be legally enforceable against the appointee, much of the prohibited conduct could also violate federal law or cause reputational damages if the rules set by the administration are violated. The ethical issues outlined above are important to consider whenever giving anything of value to a federal official, hiring an employee or consultant that previously worked as a political appointee, or when an employee departs to work for the administration.

Gifts: Care must be taken whenever a company or organization gives anything of value, including hospitality, to a federal official. Many officials may still accept some de minimis gifts or hospitality of up to $20 per occasion per source with an annual aggregate of $50 per year. However, these limits are not available if the gift is extended to a covered political appointee by a lobbyist or a company that employs a lobbyist as a “registrant” under the LDA. Accordingly, it is important to know that both the company and the federal official understand the circumstances of the other – companies must know whether or not an official is a covered appointee (and how senior), and officials must know whether a person is registered as a lobbyist or a company that employs lobbyists. Prior to offering anything of value to a federal official, companies should confirm with potential recipients of any gift or hospitality whether or not the official is or is not a signatory to the Ethics Pledge before offering anything of value. For the same reasons, it is important to let the official know that he or she is interacting with a company that is, or employs, lobbyists so that he or she can fulfill their obligations. For widely attended gatherings it may be useful for written invitations to specifically state that the invitation is being extended on behalf of a lobbyist or registrant, and not extended to signatories of the Ethics Pledge.

Employment: Care should be taken when an employee or consultant decides to work for the administration, or an entity hires a former official. These rules also depend on the circumstances, seniority, and the specific administration for whom the official worked. For those considering the employment of former officials, the Trump Executive Order released former Trump appointees from stepped up limits in effect during the last administration, but federal law continues to limit post-employment activities. Care must be taken when employing any former governmental officials to limit their activities and communications as required by applicable law, including limiting their communications with their former agency or colleagues. For those entering government service, it is critical to review employment, pay and contractual relations to ensure that nothing would appear to be payment for future actions as an official.

All these matters can be subject to interpretive guidance and waiver under the appropriate circumstances, and Pillsbury attorneys are available to help navigate these situations.