[House Report 109-445]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-445

======================================================================



 
                  EXECUTIVE BRANCH REFORM ACT OF 2006

                                _______
                                

 April 27, 2006.--Committed to the Committee of the White House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Tom Davis of Virginia, from the Committee on Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5112]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform, to whom was referred 
the bill (H.R. 5112) to provide for reform in the operations of 
the executive branch, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................    00
Section-by-Section...............................................    00
Explanation of Amendments........................................    00
Committee Consideration..........................................    00
Rollcall Votes...................................................    00
Application of Law to the Legislative Branch.....................    00
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    00
Statement of General Performance Goals and Objectives............    00
Constitutional Authority Statement...............................    00
Federal Advisory Committee Act...................................    00
Unfunded Mandate Statement.......................................    00
Committee Estimate...............................................    00
Budget Authority and Congressional Budget Office Cost Estimate...    00
Changes in Existing Law Made by the Bill as Reported.............    00

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 5112, ``The Executive Branch Reform Act of 2006,'' 
would provide enhanced transparency to the operations of the 
executive branch. This landmark legislation would ensure that 
the behavior of our public servants is above reproach and 
worthy of the public trust. This legislation would strike that 
fine balance between reasonable and focused rules of ethical 
behavior and arbitrary restrictions and prohibitions that 
hamstring our officials and prevent them from exercising the 
discretion needed to perform their missions on behalf of our 
citizens. The legislation contains common-sense rules that 
would enhance the public's trust in our executive branch.
    Specifically, H.R. 5112 would bring transparency to 
meetings between the private sector and executive branch 
officials by requiring all political appointees and senior 
officials in federal agencies and the White House to report the 
contacts they have with private parties seeking to influence 
official government action. The reports, which would be filed 
quarterly and maintained on a searchable database at the Office 
of Government Ethics, must disclose the dates of meetings, the 
parties involved, and the subject matter discussed.
    H.R. 5112 would close the revolving door between the 
private sector and government by deeming lawyers, lobbyists and 
executives appointed to high government positions to have a 
prohibited conflict of interest if they take official actions 
affecting their former clients or employers within 2 years of 
entering government. No conflict-of-interest waivers could be 
granted without the approval of the Office of Government 
Ethics. In addition, government officials would be prohibited 
from negotiating future employment with private entities that 
are affected by their official actions. Officials who leave 
government for the private sector would not be able to contact 
their former colleagues for 2 years (current law has only a 1-
year ban) on official matters.
    H.R. 5112 would close the revolving door between 
contractors and government. For the first time, executives who 
worked for private contractors would be barred from awarding 
contracts to their former employers when they enter government. 
The bill also clarifies the current law governing when 
government procurement officials could be hired by companies 
which hold federal contracts.
    H.R. 5112 would provide protection to national security 
whistleblowers by providing whistleblower protections for 
national security personnel. Currently, a federal employee who 
works on national security issues has no effective recourse if 
he loses his security clearance for retaliation for disclosing 
abuses. The bill would give these national security officials 
protections against this retaliation.
    H.R. 5112 would advance the cause of open government by 
eliminating the use of unregulated ``pseudo-classifications'' 
such as ``sensitive but unclassified'' or ``for official use 
only.'' The legislation would require the development of 
regulations and standards governing the use of any information 
control designations by federal agencies. Any use of 
administrative secrecy designations not covered by statute or 
the new regulations would be banned.
    H.R. 5112 would control government-sponsored advertising, 
communications, and propaganda by requiring the federal 
government to disclose its role in funding or disseminating 
advertising and communications and prohibits the expenditure of 
funds on unauthorized propaganda.

                           Section-by-Section


Section 1. Short Title

    This section provides the short title of H.R. 5112 as the 
``Executive Branch Reform Act of 2006.''

Section 2. Requirements relating to significant contacts

    The section would amend the Ethics in Government Act of 
1978 (5 U.S.C. App.4) by adding a new Title VI--Executive 
Branch Disclosure of Significant Contacts--including the 
following new sections:
    Section 601--Recording and Reporting by Certain Executive 
Branch Officials of Significant Contacts Made to Those 
Officials. This section would require covered executive branch 
officials, on a quarterly basis, to file with the Office of 
Government Ethics a report on any significant contacts during 
that quarter between that official and any private party 
relating to an official government action. The report would 
contain the names of the covered official and the private 
party, a summary of the nature of the contact (date, subject 
matter). It would also provide that it does not require the 
filing of information exempt from public disclosure under 
section 552 (b) of title 5, the Freedom of Information Act.
    Section 602--Authorities and Responsibilities of Office of 
Government Ethics. This section would provide that the Director 
of the Office of Government Ethics shall (1) provide guidance 
and assistance on the recording and reporting requirements and 
develop common compliance standards, rules, and procedures; (2) 
review and verify the accuracy, completeness and timeliness of 
the reports; (3) develop systems to carry out the title 
including, publicly available list of all persons who made a 
significant contact, computerized system to minimize burden of 
filing and public access: (4) make publicly available the filed 
reports; (5) retain reports for 6 years; (6) compile and 
summarize information for each reporting period; (7) notify any 
covered executive branch official that may be in noncompliance; 
and (8) notify the US Attorney General for the District of 
Columbia that a covered official may be in noncompliance if the 
official notified under paragraph (7) has failed to provide 
appropriate response with 60 days.
    Section 603--Penalties. This section would provide that a 
person who knowingly fails to remedy a defective filing within 
60 days of notification shall be subject to a civil fine of not 
more than $50,000.
    Section 604--Definitions. This section would define the 
term ``covered executive branch official'' to include officers 
and employees serving in level I, II, III, IV or V of the 
Executive Schedule, certain members of the uniformed services, 
officers and employees serving in confidential, policy 
positions described in 5 U.S.C. 7511(b)(2)(B), and those in the 
Executive Office of the President serving in a confidential, 
policy positions in the Executive Office of the President or 
the Office of the Vice President, but not including the 
President, Vice President andtheir respective chiefs of staff. 
This section would also define the term ``significant contact'' to 
include oral or written contacts in which a private party seeks 
influence, or obtain nonpublic information about official action and 
the term ``private party'' anyone other than a Federal, state, or local 
official. Finally this section would provide that the new title is to 
be effective 1 year after enactment and that the initial regulations 
are to be promulgated in draft not later than 270 days after enactment 
and in final not later than 1 year after enactment.

Section 3. Requirements relating to stopping the revolving door

    This section would amend the Ethics in Government Act of 
1978 (5 U.S.C. App.4) to add a new title VII--Stopping the 
Revolving Door--including the following new sections.
    Section 701--Two-Year Cooling-Off Period for Persons 
Leaving Government Service. This section would prohibit covered 
executive officials from contacting federal agencies to 
influence policy for 2 years after the termination of the 
official's federal employment. The section would extend the 
current 1-year prohibitions contained in 18 USC 207 (c) and (d) 
while not otherwise affecting any waiver or criminal penalties 
under section 207. Subsection (c) prohibits covered officials' 
contacts with the agency the former official served, while 
subsection (d) prohibits contacts by very senior former 
officials with any Federal agency.
    Section 702--Prohibition on Negotiation of Future 
Employment. This section would prohibit a covered executive 
branch official from participating in an official matter if the 
organization with whom the official is negotiating or has an 
arrangement concerning prospective employment has a financial 
interest unless a waiver is obtained. The official responsible 
for the employment of covered executive branch official may 
waive the prohibition, if the responsible official determines 
that exceptional circumstances exist. The Director of the 
Office of Government Ethics would have to investigate and 
review the waiver determination and the waiver would not take 
effect until the Director certified in writing that exceptional 
circumstances exist.
    Section 703--Cooling-Off Period for Certain Persons 
Entering Government Service. This section would provide that a 
covered executive branch official who had been employed by an 
entity as an officer, director, trustee, general partner, 
employee or worked as lobbyist, lawyer, or other representative 
with the last 2 years shall not engage in official activities 
that would be prohibited under 18 USC 208 involving his former 
employer unless a waiver is obtained from the agency's 
designated ethics officer with the approval of the Director of 
the Office of Government Ethics. This section would not 
otherwise affect any waiver or criminal penalties under section 
208. Section 208, in general, prohibits covered officials from 
engaging in official acts affecting the official's personal 
financial interest.
    Section 704--Penalties. This section would provide for 
civil fines of up to $100,000 for violations of sections 701, 
702, or 703.
    Section 705--Definitions. This section would define the 
term ``covered executive branch official'' to include officials 
or employees serving in level I, II, III, IV, or V of the 
Executive Schedule, various members of the uniformed services, 
certain members of the uniformed services, officers and 
employees serving in confidential, policy positions described 
in 5 U.S.C. 7511(b)(2)(B), officials or employees serving in 
the Executive Office of the President or the Office of the Vice 
President serving in confidential, policy positions, including 
the Vice President.

Section 4. Additional provisions relating to procurement officials

    This section would amend the ``Procurement Integrity 
Provisions'' in section 27 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 423) to extend the current 1-year 
prohibition against a former government official accepting 
compensation from a contract as an employee, officer, director 
or consultant to include those serving the contractor as a 
lawyer or as a lobbyist and to extend the prohibition from the 
current 1 year to 2 years. The current prohibition applies to 
former officials who served as selection or evaluation 
officials at the time of the selection of a contractor in an 
acquisition valued at over $10,000,000, as a program manager, 
or similar capacity for a contract in excess of $10,000,000 or 
personally made a decision regarding (1) the award or selection 
of a contract, subcontract, modification, or the award of a 
task or delivery order above $10,000,000, (2) a decision to 
establish overhead or other rates under a contract, (3) issue a 
contract payment in excess of $10,000,000, or (4) to pay or 
settle a claim of more than $10,000,000. This prohibition 
currently applies to the entity of the contractor that produces 
the same or similar products or services that are the subject 
of the covered contract. This section would also tighten the 
coverage of the prohibition by removing the requirement that 
the official must have ``personally'' made a decision impacting 
subjects (1)-(4) above so that the prohibition would attach to 
an official who ``participated personally and substantially 
in'' the decision.
    This section would also amend 41 U.S.C. 423(c)(1) to expand 
that the current requirement that a government official 
participating in an agency procurement who is contacted by an 
offeror under that procurement for prospective employment, 
report the contact and either reject the offered employment or 
disqualify him or herself from participation in the procurement 
to include relatives of the participating government official 
as defined by 5 U.S.C. 3110 who are offered prospective 
employment.
    This section would also provide that the appropriate 
designated agency ethics official may determine that a former 
government official may accept an offer of compensation for 
work to be performed by the former official as a new employee 
in that portion of a contractor's organization other than the 
organization that produced the good or service that was the 
subject of the former government official's action if the 
ethics officer determines that the offer of compensation is not 
a reward for contract actions listed above and the acceptance 
of compensation will not affect the integrity of the 
procurement process.
    This section would also prohibit, for a 2-year period, a 
procurement official who is a former employee of a private-
sector contractor from working on the award or management of a 
contract held by the official's former employee.
    This section would provide that the Administrator for 
Federal Procurement Policy, in consultation with the Director 
of the Office of Government Ethics, should promulgate 
regulations to carry out and ensure the enforcement of the 
section and monitor and investigate agency compliance with the 
section.

Section 5. Prohibition on unauthorized expenditure of funds for 
        publicity or propaganda purposes

    This section would amend Chapter 13 of title 31 of the U.S. 
Code to add a new section 1355 that provides that an officer or 
employee of the Government may not make or authorize 
expenditure for publicity or propaganda within the United 
States unless authorized by law.

Section 6. Requirement for disclosure of federal sponsorship of all 
        federal advertising or other communication materials

    This section would provide that each advertisement or other 
communication paid for by an executive agency, directly or 
through a contract, include a notice that the notice is paid 
for by the agency.

Section 7. Elimination of ``pseudo'' classification

    Subsection (a) would require, six months after enactment, 
each Federal agency to submit to the Archivist of the United 
States (Archivist) and congressional committees, a report 
describing the use of ``pseudo'' classification designations 
that include: the number of ``pseudo'' classification policies 
used, existing guidance regarding their use, number and 
experience of employees and contractor personnel authorized to 
make such designations, cost of placing and maintaining 
information under each such designation, extent to which 
information under such designations have been released under 
the Freedom of Information Act, extent to which such 
designations have been used to withhold from the public 
information not otherwise authorized to be withheld, and a list 
of the statutory provisions that allow federal agencies or 
contractors to control, protect, or otherwise withhold 
information based on security concerns. This subsection would 
require a subsequent report by the Archivist, within 9 months 
after enactment, to the House Committees on Government Reform, 
Judiciary, Homeland Security, and Appropriations and the Senate 
Committees on Homeland Security and Governmental Affairs, 
Judiciary, and Appropriations, on the use of ``pseudo'' 
classifications across the executive branch based on the input 
provided by the agencies, as well as input from the Director of 
National Intelligence, other agencies and contractors. The 
Archivist would be required to provide notice and an 
opportunity for public comment.
    Subsection (b) would require the Archivist to issue 
regulations, not later than 15 months after enactment, banning 
the use of ``pseudo'' classifications. If the Archivist 
determines that there is a need to use information control 
designations (``pseudo'' classifications) to safeguard 
information prior to review for disclosure, beyond designations 
established by statute or an Executive Order relating to the 
classification of national security information, the 
regulations should establish standards for use of such 
designations. The standards should address: standards for 
control designations that are narrowly tailored, procedures for 
providing specified officials with authority to use the 
designations, including training and certification 
requirements, categories of information that may be controlled, 
duration of control designations and the process for removal, 
procedures for identifying, making and tracking the 
designations, specific limitations and prohibitions against 
using the designations, procedures for challenge by the public 
and the manner in which use of the designations relates to 
procedures of each agency under the Freedom of Information Act. 
This regulation should be the sole authority by which federal 
agencies and contractors are permitted to safeguard information 
prior to review for disclosure except for authority granted 
under Federal statute or Executive Order relating to the 
classification of national security information.
    Subsection (c) would require the Archivist's report under 
subsection (b) to examine existing Federal statutes that allow 
Federal agencies or contractors to withhold information and 
include recommendations on these existing Federal statutes that 
would improve public access to information governed by such 
statutes. In developing this regulation, the Archivist shall 
consult with agency acquisition officials, contractors, and 
experts on acquisition, including the Administrator for Federal 
Procurement Policy.
    Subsection (d) would provide for the definition of the term 
``congressional committees'' and define the term ``pseudo 
classification designation'' to mean information control 
designations, including ``sensitive but not classified'' and 
``for official use only'' that are not defined by Federal 
statute or by an Executive order relating to the classification 
of national security information, but are used to manage, 
direct, or route government information, or control the 
accessibility of Government information. Nothing in this 
section shall supercede or affect section 27 of the Office of 
Federal Procurement Policy Act (41 U.S.C.423).

Section 8. National security whistleblower rights

    This section would amend Chapter 23 of title 5 of the US 
Code to add a new section 2303a, ``National Security 
Whistleblower Rights.''
    Subsection (a) would provide that, in addition to rights 
provided in Title VII of P.L. 105-272, 5 U.S.C. 2303, and any 
other applicable law, an employee or applicant for employment 
of a covered agency (covered agencies include, the Central 
Intelligence Agency, Defense Intelligence Agency, National 
Imagery and Mapping Agency, National Security Agency, Federal 
Bureau of Investigation, National Reconnaissance Office and any 
other agency involved in foreign intelligence or 
counterintelligence activities) may not be discharged or 
discriminated against, including denying, suspending, or 
revoking a security clearance or otherwise restricting access 
to classified or sensitive information as a reprisal for 
disclosing covered information to an authorized Member of 
Congress, authorized executive official or the Inspector 
General (IG).
    Subsection (b) would provide that an employee or applicant 
who believes he has been the subject of a reprisal prohibited 
by subsection (a) may complain to the IG and the agency head. 
The IG is to investigate the complaint and report to the agency 
head within 180 days.
    Subsection (c) would provide that within 210 days of the 
filing of the complaint, the agency head, taking into account 
the IG report, shall issue an order accepting or rejecting the 
complaint. If the complaint is accepted, the agency head shall 
implement corrective action returning the complainant as nearly 
as possible to his pre-reprisal condition, including voiding 
any action denying, suspending, or revoking a security 
clearance or other access to classified or sensitive 
information as well as back pay, benefits, costs, and 
consequential damages. If the complaint is denied, the agency 
head shall issue a report detailing the reasons. The subsection 
would further provide that where corrective action by an agency 
head involves voiding a suspension or revocation of a security 
clearance or other access to sensitive or classified 
information, theagency head may re-initiate procedures to 
suspend the clearance or restrict access only if the new actions are 
based exclusively on national security concerns and not related to the 
original reprisal. In such cases the agency head is to issue a report 
to the IG and authorized Members of Congress explaining that the 
actions are based exclusively on national security concerns and shall 
provide periodic updates on the actions.
    This subsection also would provide that if the agency has 
not acted on the complaint within 210 days, the complainant 
would be deemed to have exhausted the administrative remedies 
and may bring an action in the appropriate district court, 
which shall have jurisdiction without regard to the amount in 
controversy. A petition to review a final decision under this 
subsection shall be filed in the U.S. Court of Appeals for the 
Federal Circuit. Also the complainant may, within 60 days, have 
any order issued under the section reviewed by the appropriate 
district court or the U.S. Court of Appeals for the Federal 
Circuit. The review shall conform to chapter 7 of title 5 of 
the U.S. Code. A review of a final decision of the district 
court shall be filed in the U.S. Court of Appeals for the 
Federal Circuit. This subsection would finally contain 
limitations on the executive agency's assertion of the so-
called ``state secrets privilege'' in actions for damages or 
relief under this section.
    Subsection (d) would provide that nothing in this section 
is to be construed to authorize the discharge, demotion or 
discrimination against an employee for a disclosure other than 
one protected by this section or to change a right or remedy 
otherwise available to the employee or applicant.
    Subsection (e) would provide for the definitions of the 
term ``covered information'' to include information, including 
classified information, that an employee reasonably believes 
provides evidence of a violation of any law, rule, or 
regulation, or gross mismanagement, or waste of funds, abuse of 
authority, or substantial and specific danger to public health 
or safety. The subsection would also define the term ``covered 
agency'' to include those agencies listed above and the term 
``authorized Member of Congress'' to include a member of the 
House Permanent Select Committee on Intelligence, the Senate 
Select Committee on Intelligence, the House Committee on 
Government Reform, the Senate Committee on Homeland Security 
and Governmental Affairs and the committees of the House or 
Senate that have oversight over the program about which the 
information is disclosed.

                       Explanation of Amendments

    There were no amendments offered.

                        Committee Consideration

    On Thursday, April 6, 2006, the Committee ordered the bill 
reported to the House by a recorded vote.


              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill provides enhanced transparency to the operations of 
the executive branch. As such this bill does not relate to 
employment or access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 5112. Article I, Section 8, Clause 18 of the 
Constitution of the United States grants the Congress the power 
to enact this law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandate Reform Act, P.L. 104-4) requires a statement whether 
the provisions of the reported include unfunded mandates. In 
compliance with this requirement the Committee has received a 
letter from the Congressional Budget Office included herein.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 5112. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for H.R. 5112 from the Director of 
Congressional Budget Office:

H.R. 5112--Executive Branch Reform Act of 2006

    Summary: H.R. 5112 would amend the Ethics in Government Act 
of 1978 and the Office of Federal Procurement Policy Act. Major 
provisions of the legislation would require increased 
disclosure regarding contacts between certain executive branch 
officials and lobbyists and would expand restrictions on 
certain federal employees and on federal employees leaving 
government service. In addition, H.R. 5112 would require new 
regulations and a report by the National Archives and Records 
Administration (NARA) on the inappropriate designation of 
government information as classified information by federal 
agencies.
    CBO estimates that implementing H.R. 5112 would cost about 
$2 million in fiscal year 2007 and $20 million over the 2007-
2011 period, subject to the availability of appropriated funds. 
Enacting the bill could affect revenues, but CBO estimates that 
any increase in revenue collections would not be significant. 
Enacting the bill would not affect direct spending.
    H.R. 5112 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
government.
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of H.R. 5112 is shown in the following table. 
The costs of this legislation fall within budget function 800 
(general government).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2007    2008    2009    2010    2011
------------------------------------------------------------------------
                  SPENDING SUBJECT TO APPROPRIATION \1\
Office of Government Ethics:
    Authorization Level.........      11      12      12      13      13
    Estimated Outlays...........      11      12      12      13      13
Proposed Changes:
    Estimated Authorization            2       3       4       5       6
     Level......................
    Estimated Outlays...........       2       3       4       5       6
Spending Under H.R. 5112 for the
 Office of Government Ethics:
    Estimated Authorization           13      15      16      18      19
     Level......................
    Estimated Outlays...........      13      15      16      18     19
------------------------------------------------------------------------
\1\ Enacting the bill also could affect revenues, but CBO estimates that
  any such effects would not be significant.

    Basis of Estimate: For this estimate, CBO assumes that the 
H.R. 5112 will be enacted near the end of fiscal year 2006, 
that the necessary amounts will be appropriated over the 2007-
2011 period, and that spending will follow historical spending 
patterns of the Office of Government Ethics (OGE).

Spending subject to appropriation

    The legislation would require certain executive branch 
officials to disclose contacts with private parties seeking to 
influence government actions, and it would expand restrictions 
on certain federal employees leaving or beginning government 
service. H.R. 5112 also would require the Office of Government 
Ethics to enforce the new lobbying restrictions.
    Under current law, OGE manages financial reporting for 
about 1,000 Presidential appointees and provides guidance and 
training to the executive branch regarding workplace ethics 
issues. According to information from the Office of Personnel 
Management (OPM) and data from the uniformed services, CBO 
estimates that approximately 8,000 employees would be affected 
by the expanded reporting requirements proposed in H.R. 5112.
    CBO estimates that OGE would need about 40 new attorneys, 
paralegals, auditors, and administrative personnel and 
additional computer resources to oversee workplace ethics 
reporting and compliance by those additional federal employees. 
In addition, we anticipate that this increase in staffing would 
occur over 4 years. Thus, CBO estimates that implementing the 
legislation would cost about $20 million over the 2007-2011 
period, assuming appropriation of the necessary amounts.
    H.R. 5112 also would require the NARA to report on and 
issue regulations to prevent inappropriate classification of 
information as classified by federal agencies. Based on 
information from the NARA, this provision would codify and 
expand current policy. CBO estimates that preparing regulations 
and a report would cost less than $500,000 over the 2007-2008 
period.

Revenues

    Enacting H.R. 5112 could affect federal revenues as a 
result of new civil penalties for violations of workplace 
ethics rules. Collections of civil penalties are recorded in 
the budget as revenues. CBO estimates, however, that any change 
in revenues that would result from enacting the bill would not 
be significant.
    Intergovernmental and Private-Sector Impact: H.R. 5112 
contains no intergovernmental or private-sector mandates as 
defined in the UMRA and would impose no costs on state, local, 
or tribal government.
    Estimate Prepared by: Federal Costs: Matthew Pickford. 
Impact on State, Local, and Tribal Governments: Sarah Puro. 
Impact on the Private Sector: Amy Petz.
    Estimate Approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

ETHICS IN GOVERNMENT ACT OF 1978

           *       *       *       *       *       *       *


     TITLE VI--EXECUTIVE BRANCH DISCLOSURE OF SIGNIFICANT CONTACTS

SEC. 601. RECORDING AND REPORTING BY CERTAIN EXECUTIVE BRANCH OFFICIALS 
                    OF SIGNIFICANT CONTACTS MADE TO THOSE OFFICIALS.

  (a) In General.--Not later than 30 days after the end of a 
calendar quarter, each covered executive branch official shall 
make a record of, and file with the Office of Government Ethics 
a report on, any significant contacts during the quarter 
between the covered executive branch official and any private 
party relating to an official government action. If no such 
contacts occurred, each such official shall make a record of, 
and file with the Office a report on, this fact, at the same 
time.
  (b) Contents of Record and Report.--Each record made, and 
each report filed, under subsection (a) shall contain--
          (1) the name of the covered executive branch 
        official;
          (2) the name of each private party who had a 
        significant contact with that official; and
          (3) for each private party so named, a summary of the 
        nature of the contact, including--
                  (A) the date of the contact;
                  (B) the subject matter of the contact and the 
                specific executive branch action to which the 
                contact relates; and
                  (C) if the contact was made on behalf of a 
                client, the name of the client.
  (c) Withholding FOIA-Exempt Information.--This section does 
not require the filing with the Office of Government Ethics of 
information that is exempt from public disclosure under section 
552(b) of title 5, United States Code (popularly referred to at 
the ``Freedom of Information Act'').

SEC. 602. AUTHORITIES AND RESPONSIBILITIES OF OFFICE OF GOVERNMENT 
                    ETHICS.

  (a) In General.--The Director of the Office of Government 
Ethics shall--
          (1) promulgate regulations to implement this title, 
        provide guidance and assistance on the recording and 
        reporting requirements of this title, and develop 
        common standards, rules, and procedures for compliance 
        with this title;
          (2) review, and, where necessary, verify the 
        accuracy, completeness, and timeliness of reports;
          (3) develop filing, coding, and cross-indexing 
        systems to carry out the purpose of this title, 
        including--
                  (A) a publicly available list of all private 
                parties who made a significant contact; and
                  (B) computerized systems designed to minimize 
                the burden of filing and maximize public access 
                to reports filed under this title;
          (4) make available for public inspection and copying 
        at reasonable times the reports filed under this title;
          (5) retain reports for a period of at least 6 years 
        after they are filed;
          (6) compile and summarize, with respect to each 
        reporting period, the information contained in reports 
        filed with respect to such period in a clear and 
        complete manner;
          (7) notify any covered executive branch official in 
        writing that may be in noncompliance with this title; 
        and
          (8) notify the United States Attorney for the 
        District of Columbia that a covered executive branch 
        official may be in noncompliance with this title, if 
        the covered executive branch official has been notified 
        in writing and has failed to provide an appropriate 
        response within 60 days after notice was given under 
        paragraph (7).

SEC. 603. PENALTIES.

  Whoever knowingly fails to--
          (1) remedy a defective filing within 60 days after 
        notice was given under paragraph (7); or
          (2) comply with any other provision of this title;
shall, upon proof of such knowing violation by a preponderance 
of the evidence, be subject to a civil fine of not more than 
$50,000, depending on the extent and gravity of the violation.

SEC. 604. DEFINITIONS.

  In this title:
          (1) Covered executive branch official.--The term 
        ``covered executive branch official'' means--
                  (A) any officer or employee serving in a 
                position in level I, II, III, IV, or V of the 
                Executive Schedule, as designated by statute or 
                Executive order;
                  (B) any member of the uniformed services 
                whose pay grade is at or above O-7 under 
                section 201 of title 37, United States Code;
                  (C) any officer or employee serving in a 
                position of a confidential, policy-determining, 
                policy-making, or policy-advocating character 
                described in section 7511(b)(2)(B) of title 5, 
                United States Code; and
                  (D) any officer or employee serving in a 
                position of a confidential, policy-determining, 
                policy-making, or policy advocating character, 
                or any other individual functioning in the 
                capacity of such an officer or employee, in the 
                Executive Office of the President or the Office 
                of the Vice President, but does not include the 
                President or Vice President or the chief of 
                staff of the President or Vice President.
          (2) Significant contact.--The term ``significant 
        contact'' means oral or written communication 
        (including electronic communication) that is made by a 
        private party to a covered executive branch official in 
        which such private party seeks to influence, or obtain 
        nonpublic information about, official action by any 
        officer or employee of the executive branch of the 
        United States.
          (3) Private party.--The term ``private party'' means 
        any person or entity, but does not include a Federal, 
        State, or local government official or a person 
        representing such an official.

                 TITLE VII--STOPPING THE REVOLVING DOOR

SEC. 701. TWO-YEAR COOLING-OFF PERIOD FOR PERSONS LEAVING GOVERNMENT 
                    SERVICE.

  (a) In General.--A covered executive branch official shall 
not, for a period of two years after the termination of his 
employment, engage in any conduct that would be prohibited 
under subsections (c) or (d) of section 207 of title 18, United 
States Code, if it occurred within one year after the 
termination of his employment.
  (b) No Effect on Section 207.--This section does not expand, 
contract, or otherwise affect the application of any waiver or 
criminal penalties under section 207 of title 18, United States 
Code.

SEC. 702. PROHIBITION ON NEGOTIATION OF FUTURE EMPLOYMENT.

  (a) Prohibition.--A covered executive branch official shall 
not participate in any official matter in which, to the 
official's knowledge, a person or organization with whom the 
official is negotiating or has any arrangement concerning 
prospective employment has a financial interest, unless a 
waiver has been granted under subsection (b).
  (b) Waivers Only When Exceptional Circumstances Exist.--A 
waiver to subsection (a) is not available, and shall not be 
granted, to any individual except in a case which the 
Government official responsible for the individual's 
appointment as a covered executive branch official determines 
that exceptional circumstances exist. Whenever such a 
determination is made, the Director of the Office of Government 
Ethics shall independently investigate and review the 
circumstances relating to the determination, and the waiver 
shall not take effect until the date on which the Director 
certifies in writing that exceptional circumstances exist.

SEC. 703. COOLING-OFF PERIOD FOR CERTAIN PERSONS ENTERING GOVERNMENT 
                    SERVICE.

  (a) In General.--A covered executive branch official shall 
not engage in conduct relating to a covered entity that would 
be prohibited under section 208 of title 18, United States 
Code, if the official had a financial interest in the covered 
entity, unless a waiver has been granted under subsection (b).
  (b) Waiver.--An agency's designated ethics officer may, if 
the Director of the Office of Government Ethics approves, waive 
the prohibition in subsection (a) with respect to a covered 
executive branch official of that agency upon a determination 
that the relationship between the covered executive branch 
official and the covered entity is not so substantial as to be 
deemed likely to affect the integrity of the services that the 
Government may expect from the official.
  (c) Definition.--In this section, the term ``covered entity'' 
means an entity--
          (1) in which the official, within the previous 2 
        years, served as an officer, director, trustee, general 
        partner, or employee; or
          (2) for which the official, within the previous 2 
        years, worked as a lobbyist, lawyer, or other 
        representative.
  (d) No Effect on Section 208.--This section does not expand, 
contract, or otherwise affect the application of any criminal 
penalties under section 208 of title 18, United States Code.

SEC. 704. PENALTIES.

  Whoever violates section 701, 702, or 703 of this title 
shall, upon proof of such knowing violation by a preponderance 
of the evidence, be subject to a civil fine of not more than 
$100,000, depending on the extent and gravity of the violation.

SEC. 705. DEFINITION.

  In this title, the term ``covered executive branch official'' 
means--
          (1) any officer or employee serving in a position in 
        level I, II, III, IV, or V of the Executive Schedule, 
        as designated by statute or Executive order;
          (2) any member of the uniformed services whose pay 
        grade is at or above O-7 under section 201 of title 37, 
        United States Code;
          (3) any officer or employee serving in a position of 
        a confidential, policy-determining, policy-making, or 
        policy-advocating character described in section 
        7511(b)(2)(B) of title 5, United States Code; and
          (4) any officer or employee serving in a position of 
        a confidential, policy-determining, policy-making, or 
        policy advocating character, or any other individual 
        functioning in the capacity of such an officer or 
        employee, in the Executive Office of the President or 
        the Office of the Vice President; and
          (5) the Vice President.
                              ----------                              


       SECTION 27 OF THE OFFICE OF FEDERAL PROCUREMENT POLICY ACT

SEC. 27. RESTRICTIONS ON DISCLOSING AND OBTAINING CONTRACTOR BID OR 
                    PROPOSAL INFORMATION OR SOURCE SELECTION 
                    INFORMATION.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Actions Required of Procurement Officers When Contacted 
by Offerors Regarding Non-Federal Employment.--(1) If an agency 
official who is participating personally and substantially in a 
Federal agency procurement for a contract in excess of the 
simplified acquisition threshold contacts or is contacted by a 
person who is a bidder or offeror in that Federal agency 
procurement regarding possible non-Federal employment for that 
official or for a relative of that official (as defined in 
section 3110 of title 5, United States Code),, the official 
shall--
          (A) * * *

           *       *       *       *       *       *       *

  (d) Prohibition on Former Official's Acceptance of 
Compensation From Contractor.--(1) A former official of a 
Federal agency may not accept compensation from a contractor as 
an employee, officer, director, [or consultant] consultant, 
lawyer, or lobbyist of the contractor within a period of [one 
year] two years after such former official--
          (A) * * *

           *       *       *       *       *       *       *

          (C) [personally made for the Federal agency--] 
        participated personally and substantially in--
                  (i) * * *

           *       *       *       *       *       *       *

  [(2) Nothing in paragraph (1) may be construed to prohibit a 
former official of a Federal agency from accepting compensation 
from any division or affiliate of a contractor that does not 
produce the same or similar products or services as the entity 
of the contractor that is responsible for the contract referred 
to in subparagraph (A), (B), or (C) of such paragraph.]
          (2) Paragraph (1) shall not prohibit a former 
        official of a Federal agency from accepting 
        compensation from any division or affiliate of a 
        contractor that does not produce the same or similar 
        products or services as the entity of the contractor 
        that is responsible for the contract referred to in 
        subparagraph (A), (B), or (C) of such paragraph if the 
        agency's designated ethics officer determines that--
                  (A) the offer of compensation is not a reward 
                for any action described in paragraph (1); and
                  (B) acceptance of the compensation is 
                appropriate and will not affect the integrity 
                of the procurement process.

           *       *       *       *       *       *       *

  (i) Prohibition on Involvement by Certain Former Contractor 
Employees in Procurements.--An employee of the Federal 
Government who is a former employee of a contractor with the 
Federal Government shall not be personally and substantially 
involved with any award of a contract to the employee's former 
employer, or the administration of such a contract, for the 
two-year period beginning on the date on which the employee 
leaves the employment of the contractor.
  (j) Regulations.--The Administrator, in consultation with the 
Director of the Office of Government Ethics, shall--
          (1) promulgate regulations to carry out and ensure 
        the enforcement of this section; and
          (2) monitor and investigate individual and agency 
        compliance with this section.
                              ----------                              


               CHAPTER 13 OF TITLE 31, UNITED STATES CODE

                       CHAPTER 13--APPROPRIATIONS

                          SUBCHAPTER I--GENERAL

Sec.
1301.  Application.
     * * * * * * *

         SUBCHAPTER III--LIMITATIONS, EXCEPTIONS, AND PENALTIES

1341.  Limitations on expending and obligating amounts.
     * * * * * * *
1355. Prohibition on unauthorized expenditure of funds for publicity or 
          propaganda purposes.
     * * * * * * *

SUBCHAPTER III--LIMITATIONS, EXCEPTIONS, AND PENALTIES

           *       *       *       *       *       *       *


Sec. 1355. Prohibition on unauthorized expenditure of funds for 
                    publicity or propaganda purposes

  An officer or employee of the United States Government may 
not make or authorize an expenditure or obligation of funds for 
publicity or propaganda purposes within the United States 
unless authorized by law.
                              ----------                              


               CHAPTER 23 OF TITLE 5, UNITED STATES CODE

CHAPTER 23--MERIT SYSTEM PRINCIPLES

           *       *       *       *       *       *       *


Sec. 2303a. National security whistleblower rights

  (a) Prohibition of Reprisals.--In addition to any rights 
provided in Title VII of Public Law 105-272, section 2303 of 
title 5, United States Code, or any other law, an employee or 
applicant for employment of a covered agency may not be 
discharged, demoted, or otherwise discriminated against, 
including denying, suspending, or revoking a security clearance 
or otherwise restricting access to classified or sensitive 
information, as a reprisal for disclosing covered information 
to an authorized Member of Congress or to an authorized 
official of an executive agency, the Department of Justice, or 
the Inspector General of the employee's employing covered 
agency.
  (b) Investigation of Complaints.--An employee or applicant 
for employment of a covered agency who believes he has been 
subjected to a reprisal prohibited by subsection (a) may submit 
a complaint to the Inspector General and head of the covered 
agency. The Inspector General shall investigate the complaint 
and, unless the Inspector General determines that the complaint 
is frivolous, submit a report of the findings of the 
investigation within 180 days to the employee or applicant for 
employment and the head of the covered agency.
  (c) Remedy.--
          (1) Within 210 days of the filing of the complaint, 
        the head of the covered agency shall issue an order 
        accepting or rejecting the complaint, or portions 
        thereof, taking into consideration the report issued by 
        the Inspector General under subsection (b), if any. If 
        the head of the covered agency accepts the complaint, 
        he shall implement corrective action to return the 
        complainant, as nearly as possible, to the position he 
        would have held had the reprisal not occurred, 
        including voiding any directive or order denying, 
        suspending, or revoking a security clearance or 
        otherwise restricting access to classified or sensitive 
        information that constituted a reprisal, as well as 
        providing back pay and related benefits, medical costs 
        incurred, travel expenses, and any other reasonable and 
        foreseeable consequential damages including attorney's 
        fees and costs. If the head of the covered agency 
        rejects the complaint, he shall issue a report to the 
        employee or applicant for employment detailing the 
        reasons for the rejection.
          (2)(A) If the head of the covered agency, in the 
        process of implementing corrective action under (c)(1), 
        voids a directive or order denying, suspending, or 
        revoking a security clearance or otherwise restricting 
        access to classified or sensitive information that 
        constituted a reprisal, the head of the covered agency 
        may re-initiate procedures to issue a directive or 
        order denying, suspending, or revoking a security 
        clearance or otherwise restricting access to classified 
        or sensitive information only if those re-initiated 
        procedures are based exclusively on national security 
        concerns and are unrelated to the actions constituting 
        the original reprisal.
          (B) In any case in which the head of a covered agency 
        re-initiates procedures under (2)(A), the head of the 
        covered agency shall issue an unclassified report to 
        its IG and authorized members of Congress (with a 
        classified annex if necessary), detailing the 
        circumstances of the agency's re-initiated procedures 
        and describing the manner in which those procedures are 
        based exclusively on national security concerns and are 
        unrelated to the actions constituting the original 
        reprisal. The head of the covered agency shall also 
        provide periodic updates to the IG and authorized 
        members of Congress detailing any significant actions 
        taken as a result of those procedures, and shall 
        respond promptly to inquiries from authorized Members 
        of Congress regarding the status of those procedures.
          (3) If the head of the covered agency has not 
        accepted or rejected the complaint within 210 days of 
        the filing of the complaint, and there is no showing 
        that such delay is due to the bad faith of the 
        complainant, the complainant shall be deemed to have 
        exhausted his or her administrative remedies with 
        respect to the complaint, and the complainant may bring 
        an action at law or equity for de novo review to seek 
        any relief described in (c)(1) in the appropriate 
        district court of the United States, which shall have 
        jurisdiction over such action without regard to the 
        amount in controversy. A petition to review a final 
        decision under this subsection shall be filed in the 
        United States Court of Appeals for the Federal Circuit.
          (4) The complainant may obtain review of any order 
        issued under this section in the appropriate district 
        court of the United States or the United States Court 
        of Appeals for the Federal Circuit. No petition seeking 
        such review may be filed more than 60 days after 
        issuance of the order by the head of the agency. Review 
        shall conform to chapter 7 of title 5. A petition to 
        review a final decision of a district court under this 
        subsection shall be filed in the United States Court of 
        Appeals for the Federal Circuit.
          (5)(A) If, in any action for damages or relief under 
        subsections (c)(3) or (c)(4), an executive branch 
        agency moves to withhold information from discovery 
        based on a claim that disclosure would be inimical to 
        national security by asserting the privilege commonly 
        referred to as the ``state secrets privilege,'' and if 
        the assertion of such privilege prevents the plaintiff 
        from establishing an element in support of the 
        plaintiff's claim, the court shall resolve the disputed 
        issue of fact or law in favor of the plaintiff, 
        provided that an inspector general investigation under 
        subsection (b) has resulted in substantial confirmation 
        of that element, or those elements, of the plaintiff's 
        claim.
          (B) In any case in which an executive branch agency 
        asserts the privilege commonly referred to as the 
        ``state secrets privilege,'' whether or not an 
        inspector general has conducted an investigation under 
        subsection (b), the head of that agency shall, at the 
        same time it asserts the privilege, issue a report to 
        authorized Members of Congress, accompanied by a 
        classified annex if necessary, describing the reasons 
        for the assertion, explaining why the court hearing the 
        matter does not have the ability to maintain the 
        protection of classified information related to the 
        assertion, detailing the steps the agency has taken to 
        arrive at a mutually agreeable settlement with the 
        employee or applicant for employment, setting forth the 
        date on which the classified information at issue will 
        be declassified, and providing all relevant information 
        about the underlying substantive matter.
  (d) Construction.--Nothing in this section may be construed 
to authorize the discharge of, demotion of, or discrimination 
against an employee for a disclosure other than a disclosure 
protected by subsection (a) of this section or to modify or 
derogate from a right or remedy otherwise available to the 
employee or applicant for employment.
  (e) Definitions.--In this section:
          (1) The term ``covered information,'' including 
        classified information, is information that an employee 
        reasonably believes to provide direct and specific 
        evidence of--
                  (A) a violation of any law, rule, or 
                regulation, or
                  (B) gross mismanagement, a gross waste of 
                funds, an abuse of authority, or a substantial 
                and specific danger to public health or safety.
          (2) The term ``covered agency'' means one of the 
        following:
                  (A) The Central Intelligence Agency.
                  (B) The Defense Intelligence Agency.
                  (C) The National Imagery and Mapping Agency.
                  (D) The National Security Agency.
                  (E) The Federal Bureau of Investigation.
                  (F) The National Reconnaissance Office.
                  (G) Any other Executive agency, or element or 
                unit thereof, determined by the President under 
                section 2302(a)(2)(C)(ii) of title 5, United 
                States Code, to have as its principal function 
                the conduct of foreign intelligence or 
                counterintelligence activities.
          (3) The term ``authorized member of Congress'' means 
        a member of the House Permanent Select Committee on 
        Intelligence, the Senate Select Committee on 
        Intelligence, the House Committee on Government Reform, 
        the Senate Committee on Homeland Security and 
        Governmental Affairs, and the committees of the House 
        of Representatives or the Senate that have oversight 
        over the program about which the covered information is 
        disclosed.

           *       *       *       *       *       *       *


                                  
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