[Congressional Record Volume 164, Number 41 (Thursday, March 8, 2018)]
[Senate]
[Pages S1588-S1590]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2168. Ms. BALDWIN (for herself, Mr. Blumenthal, and Mr.
Whitehouse) submitted an amendment intended to be proposed by her to
the bill S. 2155, to promote economic growth, provide tailored
regulatory relief, and enhance consumer protections, and for other
purposes; which was ordered to lie on the table; as follows:
At the end, add the following:
TITLE VI--FINANCIAL SERVICES CONFLICTS OF INTEREST
SEC. 601. SHORT TITLE.
This title may be cited as the ``Financial Services
Conflict of Interest Act''.
SEC. 602. RESTRICTIONS ON PRIVATE SECTOR PAYMENT FOR
GOVERNMENT SERVICE.
Section 209 of title 18, United States Code, is amended--
(1) in subsection (a)--
(A) by striking ``any salary'' and inserting ``any bonus or
salary''; and
(B) by striking ``his services'' and inserting ``services
rendered or to be rendered''; and
(2) in subsection (b)--
(A) by inserting ``(1)'' after ``(b)''; and
(B) by adding at the end the following:
``(2) For purposes of paragraph (1), a pension, retirement,
group life, health or accident insurance, profit-sharing,
stock bonus, or other employee welfare or benefit plan that
makes payment of compensation contingent on accepting a
position in the Federal Government shall not be considered
bona fide.
``(3) For purposes of paragraph (2), compensation includes
a retention award or bonus, severance pay, and any other
payment linked to future service in the Federal Government in
any way.''.
SEC. 603. REQUIREMENTS RELATING TO SLOWING THE REVOLVING DOOR
AMONG FINANCIAL SERVICES REGULATORS.
(a) In General.--The Ethics in Government Act of 1978 (5
U.S.C. App.) is amended by adding at the end the following:
``TITLE VI--SPECIAL REQUIREMENTS FOR FINANCIAL SERVICES REGULATORS
``SEC. 601. DEFINITIONS.
``(a) In General.--In this title, the terms `designated
agency ethics official' and `executive branch' have the
meanings given those terms under section 109.
``(b) Other Definitions.--In this title:
``(1) Covered financial services agency.--The term `covered
financial services agency'--
``(A) means a primary financial regulatory agency (as
defined in section 2 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C. 5301)); and
``(B) includes--
``(i) the Board of Governors of the Federal Reserve System;
``(ii) the Office of the Comptroller of the Currency;
``(iii) the Federal Deposit Insurance Corporation;
``(iv) the National Credit Union Administration;
``(v) the Securities and Exchange Commission;
``(vi) the Federal Housing Finance Agency;
``(vii) the Bureau of Consumer Financial Protection;
``(viii) the Commodity Futures Trading Commission;
``(ix) the Department of the Treasury;
``(x) the National Economic Council; and
``(xi) the Council of Economic Advisors.
``(2) Covered financial services regulator.--The term
`covered financial services regulator' means an officer or
employee of a covered financial services agency who
occupies--
``(A) a supervisory position classified above GS-15 of the
General Schedule;
``(B) in the case of a position not under the General
Schedule, a supervisory position for which the rate of basic
pay is not less than 120 percent of the minimum rate of basic
pay for GS-15 of the General Schedule; or
``(C) any other supervisory position determined to be of
equal classification by the Director.
``(3) Director.--The term `Director' means the Director of
the Office of Government Ethics.
``(4) Former client.--The term `former client'--
``(A) means a person for whom a covered financial services
regulator served personally as an agent, attorney, or
consultant during the 2-year period ending on the date (after
such service) on which the covered financial services
regulator begins service in the Federal Government; and
``(B) does not include--
``(i) instances in which the service provided was limited
to a speech or similar appearance; or
``(ii) a client of the former employer of the covered
financial services regulator to whom the covered financial
services regulator did not personally provide such services.
``(5) Former employer.--The term `former employer'--
``(A) means a person for whom a covered financial services
regulator served as an employee, officer, director, trustee,
or general partner during the 2-year period ending on the
date (after such service) on which the covered financial
services regulator begins service in the Federal Government;
and
``(B) does not include--
``(i) an entity in the Federal Government, including an
executive branch agency;
``(ii) a State or local government;
``(iii) the District of Columbia;
``(iv) an Indian tribe, as defined in section 4 of the
Indian Self-Determination and Education Assistance Act (25
U.S.C. 5304); or
``(v) the government of a territory or possession of the
United States.
``SEC. 602. CONFLICT OF INTEREST AND ELIGIBILITY STANDARDS
FOR FINANCIAL SERVICES REGULATORS.
``(a) In General.--A covered financial services regulator
shall not make, participate in making, or in any way attempt
to use the official position of the covered financial
services regulator to influence a particular matter that
provides a direct and substantial pecuniary benefit for a
former employer or former client of the covered financial
services regulator.
``(b) Recusal.--A covered financial services regulator
shall recuse himself or herself from any official action that
would violate subsection (a).
``(c) Waiver.--
``(1) In general.--The head of the covered financial
services agency employing a covered financial services
regulator, in consultation with the Director, may grant a
written waiver of the restrictions under subsection (a) if,
and to the extent that, the head of the covered financial
services agency certifies in writing that--
``(A) the application of the restriction to the particular
matter is inconsistent with the purposes of the restriction;
or
``(B) it is in the public interest to grant the waiver.
``(2) Publication.--The Director shall make each waiver
under paragraph (1) publicly available on the Web site of the
Office of Government Ethics.
``SEC. 603. NEGOTIATING FUTURE PRIVATE SECTOR EMPLOYMENT.
``(a) Prohibition.--Except as provided in subsection (c),
and notwithstanding any other provision of law, a covered
financial services regulator may not participate in any
particular matter which involves, to the knowledge of the
covered financial services regulator, an individual or entity
with whom the covered financial services regulator is in
negotiations of future employment or has an arrangement
concerning prospective employment.
``(b) Disclosure of Employment Negotiations.--
``(1) In general.--If a covered financial services
regulator begins any negotiations of future employment with
another person, or an agent or intermediary of another
person, or other discussion or communication with another
person, or an agent or intermediary of another person,
mutually conducted with a view toward reaching an agreement
regarding possible employment of the covered financial
services regulator, the covered financial services regulator
shall notify the designated agency ethics official of the
covered financial services agency employing the covered
financial services regulator regarding the negotiations,
discussions, or communications.
``(2) Information.--A designated agency ethics official
receiving notice under paragraph (1), after consultation with
the Director, shall inform the covered financial services
regulator of any potential conflicts of interest involved in
any negotiations, discussions, or communications with the
other person and the applicable prohibitions.
``(c) Waivers Only When Exceptional Circumstances Exist.--
``(1) In general.--The head of a covered financial services
agency may only grant a waiver of the prohibition under
subsection (a) if the head determines that exceptional
circumstances exist.
``(2) Review and publication.--For any waiver granted under
paragraph (1), the Director shall--
``(A) review the circumstances relating to the waiver and
the determination that exceptional circumstances exist; and
``(B) make the waiver publicly available on the Web site of
the Office of Government Ethics, which shall include--
``(i) the name of the private person or persons involved in
the negotiations or arrangement concerning prospective
employment; and
``(ii) the date on which the negotiations or arrangements
commenced.
``(d) Scope.--For purposes of this section, the term
`negotiations of future employment' is not limited to
discussions of specific
[[Page S1589]]
terms or conditions of employment in a specific position.
``SEC. 604. RECORDKEEPING.
``The Director shall--
``(1) receive all employment histories, recusal and waiver
records, and other disclosure records for covered executive
branch officials necessary for monitoring compliance with
this title;
``(2) promulgate rules and regulations, in consultation
with the Director of the Office of Personnel Management and
the Attorney General, to implement this title;
``(3) provide guidance and assistance where appropriate to
facilitate compliance with this title;
``(4) review and, where necessary, assist designated agency
ethics officials in providing advice to covered financial
services regulators regarding compliance with this title; and
``(5) if the Director determines that a violation of this
title may have occurred, and in consultation with the
designated agency ethics official and the Counsel to the
President, refer the compliance case to the United States
Attorney for the District of Columbia for enforcement action.
``SEC. 605. PENALTIES AND INJUNCTIONS.
``(a) Criminal Penalties.--
``(1) In general.--Any person who violates section 602 or
603 shall be fined under title 18, United States Code,
imprisoned for not more than 1 year, or both.
``(2) Willful violations.--Any person who willfully
violates section 602 or 603 shall be fined under title 18,
United States Code, imprisoned for not more than 5 years, or
both.
``(b) Civil Enforcement.--
``(1) In general.--The Attorney General may bring a civil
action in an appropriate district court of the United States
against any person who violates, or whom the Attorney General
has reason to believe is engaging in conduct that violates,
section 602 or 603.
``(2) Civil penalty.--
``(A) In general.--Upon proof by a preponderance of the
evidence that a person violated section 602 or 603, the court
shall impose a civil penalty of not more than the greater
of--
``(i) $100,000 for each violation; or
``(ii) the amount of compensation the person received or
was offered for the conduct constituting the violation.
``(B) Rule of construction.--A civil penalty under this
subsection shall be in addition to any other criminal or
civil statutory, common law, or administrative remedy
available to the United States or any other person.
``(3) Injunctive relief.--
``(A) In general.--In a civil action brought under
paragraph (1) against a person, the Attorney General may
petition the court for an order prohibiting the person from
engaging in conduct that violates section 602 or 603.
``(B) Standard.--The court may issue an order under
subparagraph (A) if the court finds by a preponderance of the
evidence that the conduct of the person violates section 602
or 603.
``(C) Rule of construction.--The filing of a petition
seeking injunctive relief under this paragraph shall not
preclude any other remedy that is available by law to the
United States or any other person.''.
SEC. 604. PROHIBITION OF PROCUREMENT OFFICERS ACCEPTING
EMPLOYMENT FROM GOVERNMENT CONTRACTORS.
(a) Expansion of Prohibition on Acceptance by Former
Officials of Compensation From Contractors.--Section 2104 of
title 41, United States Code, is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``or consultant'' and inserting
``consultant, lawyer, or lobbyist''; and
(ii) by striking ``one year'' and inserting ``2 years'';
and
(B) in paragraph (3), by striking ``personally made for the
Federal agency'' and inserting ``participated personally and
substantially in''; and
(2) by striking subsection (b) and inserting the following:
``(b) Prohibition on Compensation From Affiliates and
Subcontractors.--A former official responsible for a
Government contract referred to in paragraph (1), (2), or (3)
of subsection (a) may not accept compensation for 2 years
after awarding the contract from any division, affiliate, or
subcontractor of the contractor.''.
(b) Requirement for Procurement Officers To Disclose Job
Offers Made on Behalf of Relatives.--Section 2103(a) of title
41, United States Code, is amended in the matter preceding
paragraph (1) by inserting after ``that official'' the
following: ``, or for a relative (as defined in section 3110
of title 5) of that official,''.
(c) Requirement on Award of Government Contracts to Former
Employers.--
(1) In general.--Chapter 21 of title 41, United States
Code, is amended by adding at the end the following:
``Sec. 2108. Prohibition on involvement by certain former
contractor employees in procurements
``An employee of the Federal Government may not be
personally and substantially involved with any award of a
contract to, or the administration of a contract awarded to,
a contractor that is a former employer of the employee during
the 2-year period beginning on the date on which the employee
leaves the employment of the contractor.''.
(2) Technical and conforming amendment.--The table of
sections for chapter 21 of title 41, United States Code, is
amended by adding at the end the following:
``2108. Prohibition on involvement by certain former contractor
employees in procurements.''.
(d) Regulations.--The Administrator for Federal Procurement
Policy and the Director of the Office of Management and
Budget shall--
(1) in consultation with the Director of the Office of
Personnel Management and the Counsel to the President,
promulgate regulations to carry out and ensure the
enforcement of chapter 21 of title 41, United States Code, as
amended by this section; and
(2) in consultation with designated agency ethics officials
(as defined under section 601 of the Ethics in Government Act
of 1978 (5 U.S.C. App.), as added by section 603), monitor
compliance with that chapter by individuals and agencies.
SEC. 605. REVOLVING DOOR RESTRICTIONS ON FINANCIAL SERVICES
REGULATORS MOVING INTO THE PRIVATE SECTOR.
(a) In General.--Section 207 of title 18, United States
Code, is amended--
(1) by redesignating subsections (e) through (l) as
subsections (f) through (m), respectively; and
(2) by inserting after subsection (d) the following:
``(e) Restrictions on Employment for Financial Services
Regulators.--
``(1) In general.--In addition to the restrictions set
forth in subsections (a), (b), (c), and (d), a covered
financial services regulator shall not--
``(A) during the 2-year period beginning on the date on
which his or her employment as a covered financial services
regulator ceases--
``(i) knowingly act as agent or attorney for, or otherwise
represent, any other person for compensation (except the
United States) in any formal or informal appearance before;
``(ii) with the intent to influence, make any oral or
written communication on behalf of any other person (except
the United States) to; or
``(iii) knowingly aid, advise, or assist in--
``(I) representing any other person (except the United
States) in any formal or informal appearance before; or
``(II) making, with the intent to influence, any oral or
written communication on behalf of any other person (except
the United States) to,
any court of the United States, or any officer or employee
thereof, in connection with any judicial or other proceeding,
that was actually pending under his or her official
responsibility as a covered financial services regulator
during the 1-year period ending on the date on which his or
her employment as a covered financial services regulator
ceases or in which he or she participated personally and
substantially as a covered financial services regulator; or
``(B) during the 2-year period beginning on the date on
which his or her employment as a covered financial services
regulator ceases--
``(i) knowingly act as a lobbyist or agent for, or
otherwise represent, any other person for compensation
(except the United States) in any formal or informal
appearance before;
``(ii) with the intent to influence, make any oral or
written communication or conduct any lobbying activities on
behalf of any other person (except the United States) to; or
``(iii) knowingly aid, advise, or assist in--
``(I) representing any other person (except the United
States) in any formal or informal appearance before; or
``(II) making, with the intent to influence, any oral or
written communication or conduct any lobbying activities on
behalf of any other person (except the United States) to,
any department or agency of the executive branch or Congress
(including any committee of Congress), or any officer or
employee thereof, in connection with any matter that is
pending before the department, the agency, or Congress.
``(2) Penalty.--Any person who violates paragraph (1) shall
be punished as provided in section 216.
``(3) Definitions.--In this subsection--
``(A) the term `covered financial services regulator' has
the meaning given that term in section 601 of the Ethics in
Government Act of 1978 (5 U.S.C. App.); and
``(B) the terms `lobbying activities' and `lobbyist' have
the meanings given those terms in section 3 of the Lobbying
Disclosure Act of 1995 (2 U.S.C. 1602).''.
(b) Technical and Conforming Amendments.--
(1) Section 103(a) of the Honest Leadership and Open
Government Act of 2007 (2 U.S.C. 4702(a)) is amended by
striking ``section 207(e)'' each place it appears and
inserting ``section 207(f)''.
(2) Section 207 of title 18, United States Code, as amended
by subsection (a), is amended--
(A) in subsection (g)(1), as so redesignated, in the matter
preceding subparagraph (A), by striking ``or (e)'' and
inserting ``or (f)'';
(B) in subsection (j)(1)(B), as so redesignated, by
striking ``subsection (f)'' and inserting ``subsection (g)'';
and
(C) in subsection (k), as so redesignated--
(i) in paragraph (1)(B), by striking ``(25 U.S.C.
450i(j))'' and inserting ``(25 U.S.C. 5323(j))'';
(ii) in paragraph (2), in the matter preceding subparagraph
(A), by striking ``and (e)'' and inserting ``(e), and (f)'';
[[Page S1590]]
(iii) in paragraph (4), by striking ``and (e)'' and
inserting ``(e), and (f)''; and
(iv) in paragraph (7)--
(I) in subparagraph (A), by striking ``and (e)'' and
inserting ``(e), and (f)''; and
(II) in subparagraph (B)(ii), in the matter preceding
subclause (I), by striking ``subsections (c), (d), or (e)''
and inserting ``subsection (c), (d), (e), or (f)''.
(3) Section 141(b)(4) of the Trade Act of 1974 (19 U.S.C.
2171(b)(4)) is amended by striking ``207(f)(3)'' and
inserting ``207(g)(3)''.
(4) Section 7802(b)(3)(B) of the Internal Revenue Code of
1986 is amended by striking ``and (f) of section 207'' and
inserting ``and (g) of section 207''.
(5) Section 3105(c) of the USEC Privatization Act (42
U.S.C. 2297h-3(c)) is amended by striking ``and (d)'' and
inserting ``and (e)''.
(6) Section 106(p)(6)(I)(ii) of title 49, United States
Code, is amended by striking ``and (f) of section 207'' and
inserting ``and (g) of section 207''.
SEC. 606. RESTRICTIONS ON FEDERAL EXAMINERS AND SUPERVISORS
OF FINANCIAL INSTITUTIONS.
(a) In General.--Section 10(k) of the Federal Deposit
Insurance Act (12 U.S.C. 1820(k)) is amended--
(1) in the subsection heading--
(A) by striking ``One-Year'' and inserting ``Two-Year'';
and
(B) by striking ``Examiners'' and inserting ``Examiners and
Supervisors'';
(2) in paragraph (1)--
(A) by striking subparagraph (B) and inserting the
following:
``(B) served--
``(i) not less than 2 months during the final 12 months of
the employment of the person with that agency or entity as
the senior examiner (or a functionally equivalent position)
of a depository institution or depository institution holding
company with continuing, broad responsibility for the
examination (or inspection) of that depository institution or
depository institution holding company on behalf of the
relevant agency or Federal reserve bank; or
``(ii) as a supervisor of the senior examiner with
responsibility for managing the oversight of not more than 5
depository institutions or depository institution holding
companies on behalf of the relevant agency or Federal reserve
bank; and''; and
(B) in subparagraph (C)--
(i) in the matter preceding clause (i), by striking ``1
year'' and inserting ``2 years'';
(ii) in clause (i)--
(I) by striking ``other company'' and inserting ``other
company, firm, or association''; and
(II) by striking ``or'' at the end;
(iii) in clause (ii), by striking the period at the end and
inserting ``; or''; and
(iv) by adding at the end the following:
``(iii) a business entity, firm, or association that
represents the depository institution or depository
institution holding company for compensation.'';
(3) by redesignating paragraphs (2) through (6) as
paragraphs (3) through (7), respectively;
(4) by inserting after paragraph (1) the following:
``(2) Application of penalties for supervisors.--A
supervisor of a covered financial services regulator, or a
supervisor of a senior examiner described in paragraph
(1)(B)(i), shall be subject to the penalties described in
paragraph (7) if the supervisor knowingly accepts
compensation during the 2-year period beginning on the date
on which the service of the supervisor is terminated--
``(A) as--
``(i) an employee;
``(ii) an officer;
``(iii) a director; or
``(iv) a consultant; and
``(B) from--
``(i) a depository institution;
``(ii) a depository institution holding company that is
designated by the Financial Stability Oversight Council as a
systemically important financial market utility under section
804 of the Payment, Clearing, and Settlement Supervision Act
of 2010 (12 U.S.C. 5463); or
``(iii) a business entity, firm, or association that
represents an institution described in clause (ii) for
compensation.'';
(5) in paragraph (3), as so redesignated--
(A) by redesignating subparagraphs (A) and (B) as
subparagraphs (B) and (C), respectively; and
(B) by inserting before subparagraph (B), as so
redesignated, the following:
``(A) the term `covered financial services regulator' has
the meaning given the term in section 601 of the Ethics in
Government Act of 1978 (5 U.S.C. App.);'';
(6) in paragraph (4), as so redesignated, by striking ``or
other company'' each place it appears and inserting ``or
other company, firm, or association''; and
(7) in paragraph (7), as so redesignated--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i), by striking ``other
company'' and inserting ``other company, firm, or
association''; and
(ii) in clause (i)(I), by striking ``other company'' and
inserting ``other company, firm, or association''; and
(B) in subparagraph (C), by striking ``a company'' and
inserting ``a company, firm, or association''.
(b) Technical and Conforming Amendments.--Section 10(k) of
the Federal Deposit Insurance Act (12 U.S.C. 1820(k)), as
amended by subsection (a), is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by striking ``paragraph (6)'' and inserting ``paragraph
(7)'';
(2) in paragraph (5)(A), as so redesignated, by striking
``paragraph (1)(B)'' and inserting ``paragraphs (1)(B) and
(2)''; and
(3) in paragraph (7), as so redesignated--
(A) in subparagraph (A), in the matter preceding clause
(i)--
(i) by striking ``subject to paragraph (1)'' and inserting
``subject to paragraph (1) or (2)''; and
(ii) by striking ``paragraph (1)(C)'' and inserting
``paragraph (1)(C) or (2)''; and
(B) in subparagraph (C)--
(i) by striking ``person described in paragraph (1)'' and
inserting ``person described in paragraph (1) or (2)''; and
(ii) by striking ``the functions described in paragraph
(1)(B)'' and inserting ``the functions or duties described in
paragraph (1)(B) or (2)''.
SEC. 607. SEVERABILITY.
If any provision of this title or any amendment made by
this title, or any application of such provision or amendment
to any person or circumstance, is held to be
unconstitutional, the remainder of the provisions of this
title and the amendments made by this title and the
application of the provision or amendment to any other person
or circumstance shall not be affected.
______