Ethics NewsGram: Who at the SEC is Covered by the One-Year Post-Employment "Cooling Off" Ban?

February 21, 2007

The criminal post-employment conflict-of-interest statute imposes a number of different restrictions on what you may do if you leave the Commission. All employees are covered by the general restriction on switching sides in matters involving specific parties in which they participated personally and substantially. Other restrictions apply only to highly-placed employees. Section 207(c) of Title 18 of the United States Code imposes a one-year "cooling off" ban on certain senior personnel. Covered employees may not make any appearances before or communications with any officer or employee of the SEC in which the former Commission employee is seeking some official action on behalf of anyone except the former employee or the United States. This restriction applies to matters of general applicability, such as rulemaking or other policy initiatives, as well as to matters that the senior official had never participated in while employed at the SEC. Indeed, the ban applies to matters that did not even begin until after the official had left the SEC.

The purpose of the cooling-off ban is to prevent highly placed former government officials from exercising too much influence over their former agency. As we've stressed over and over again in these NewsGrams, in ethics appearances do matter. Think of how it would look for a Division Director to leave office on Friday and contact his or her former staff on Monday on behalf of a private client. Only a few people at the SEC actually have that sort of clout. The statute, however, defines coverage based on how much you are paid exclusive of any locality adjustments. If you make more than 86.5% of Level II of the Executive Schedule, you would ordinarily be covered. This year that amount is $145,320, or less than the basic rate of pay for SK 16, Step 30 and SK 17, Step 26.

The one drawback to pay parity was that too many Commission employees would have become subject to the cooling-off ban. The Office of Government Ethics, however, has the authority to exempt certain positions from coverage if there is no potential for undue influence or unfair advantage, and imposing the ban would create an undue hardship on the Commission in filling positions.

Based on these criteria, OGE has exempted all SK employees from the cooling-off ban, no matter how much you earn. So, if you are an SK employee, even if you make more than the statutory amount, you need not worry about this restriction if you leave the Commission. The Solicitor, the Chief Litigation Counsel, and the Deputy Chief Litigation Counsel are also exempted from the one-year cooling off ban. If you have any questions, please contact the Ethics Office at (202) 551-5170 or via email at ETHICS@sec.gov.

http://www.sec.gov/about/offices/ethics/postemploymentcoolingoff.htm