Shannon Morton: Who pays the legal bills for executive-branch employees?

The White House is reportedly preparing to launch a legal defense fund for mid-level staffers saddled with large attorney’s fees as a consequence of the DOJ’s Russia probe and independent investigations directed by three congressional panels.

Currently there’s no statutory or regulatory framework for establishing legal defense funds for executive branch employees. While the Office of Government Ethics says legal defense funds “must be operated consistent with the ethics rules,” the current gift rules provide inadequate guidance for Federal employees seeking to use these funds.

Legal defense funds or LDFs for executive-branch employees were a prominent topic of discussion in the Clinton administration during the government’s Whitewater investigation. Though perhaps not the subject of the investigation themselves, officials hired attorneys to advise them on testifying before grand juries and congressional committees. This often led to the officials’ assuming enormous legal fees that often exceeded an individual’s ability to pay.

Today, White House officials are facing similar financial burdens because of the government’s Russia probe. And the establishment of LDFs for them continues to raise several ethical concerns beyond the scope of the current gift rules.  

The Office of Government Ethics or OGE recently amended its rules on gifts from outside sources but did not include guidance for operating legal defense funds. In September 2017, this lack of guidance became apparent when White House Staffers began to establish their own LDFs.

In response to mounting pressure, the OGE published an Advisory Letter reaffirming its position that the operation of LDFs implicates the rules regarding the acceptance of gifts from outside sources, which prohibit contributions from anonymous donors. However, the Letter didn’t address a number of other ethics concerns beyond the current gift rules. The concerns include who may establish these funds, how the gift rules apply to LDFs established by third parties, and who should oversee ethics compliance for LDFs.

For example, the OGE’s 1985 Advisory Letter explains that no person involved in setting up the fund, soliciting on behalf of the fund, or actually contributing to the fund may be a person who was disqualified by the provisions of Executive Order 11222, which set standards of ethical conduct for Government officers and employees. But in 1992, the OGE published the Standards of Ethical Conduct for Employees of the Executive Branch to replace Executive Order 11222. Since becoming effective in 1993, OGE has not provided any guidance in its subsequent advisories on how the regulations governing gifts from outside sources have affected OGE’s previous advice.

Nor do the regulations address whether the gift rules apply to LDFs established by third parties. In the past, OGE has taken the position that as long as LDFs are set up by third parties on an employee’s behalf, there are no limits on the size of the contributions, on how the money is solicited, or on publicly disclosing individuals who contribute. The only limits are those imposed voluntarily by the recipient.

Whether this is still the OGE’s position is unclear. However, if the gift rules do not apply to LDFs established by third parties, anyone aiming to influence official action would be able to contribute to these funds. Allowing individuals seeking official action from executive agencies to donate would severely undermine the appearance of those officials’ impartiality, further eroding the public’s confidence in the government.

Finally, the gift rules do not provide clear guidance on overseeing ethics compliance when operating LDFs. The rules neither establish who is responsible for operating legal defense funds in compliance with ethics standards, nor oversight mechanisms responsible for investigating possible abuse.

Without an individual clearly responsible for ensuring compliance, there is no one to hold accountable for ethics violations. Additionally, without effective oversight mechanisms there is no way to enforce ethics compliance and guarantee LDFs comply with ethics regulations. This severely threatens the apparent impartiality of Federal officials.

The Office of Government Ethics should carve out an exception in the gift rules specifically addressing these ethics concerns if it wants to continue allowing executive-branch employees to use LDFs to offset their legal costs. Not only is the OGE capable of providing such detailed guidance, but OGE has done so before by addressing many of the same concerns through regulations for qualified trusts.

Allowing ambiguities to remain in the gift rules regarding legal defense funds will continue to cause confusion and destabilize the effectiveness of Federal ethics programs. On the other hand, clear and sufficient guidance from the Office of Government Ethics can help reinforce the integrity and impartiality of executive branch officials and strengthen the authority of the U.S. government’s ethics code.

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Shannon Morton is a GW Law Pathways to Practice Fellow at the USDA. She earned her J.D. at The George Washington University Law School and can be reached here.

Please note that the views and opinions expressed by the author in this post are her own and do not necessarily reflect those of the U.S. Government.