This action might not be possible to undo. Are you sure you want to continue?
77 K Street N.E., Suite 2600 • Washington, D.C. 20002 • (202) 927-7000 • Fax (202) 927-5192 • www.seniorexecs.org
February 16, 2012 The Honorable Harry Reid The Honorable Mitch McConnell Senate Majority Leader Senate Minority Leader 522 Hart Senate Office Building 317 Russell Senate Office Building Washington, D.C. 20510 Washington, D.C. 20510 Dear Majority Leader Reid and Minority Leader McConnell: The Senior Executives Association (SEA) represents the interests of career federal executives in government, including those in the Senior Executive Service (SES) and in equivalent positions, such as Senior Level and Scientific and Professional positions. We write to express strong concern with the provisions in S. 2038 (the STOCK Act), as amended by the House, that would unnecessarily and detrimentally affect career Senior Executives. In the version of S. 2038 as passed by the House, career Senior Executives would be subject to prompt reporting of financial transactions and their financial disclosure forms would be made public through a website maintained by the Office of Government Ethics (OGE). Section 6 of the bill requires that not later than 30 days after receiving notification of a transaction, Senior Executives must file a report of the transaction. Section 11 (b) requires OGE to create a public website and database of financial disclosure reports filed by executive branch employees. Each of these provisions is troubling and unnecessarily applicable to career federal employees. One of SEA’s primary concerns with the STOCK Act is its attempt to equate career federal employees with Members of Congress, or even political appointees. SEA is unaware of instances where career Senior Executives have been subject to insider trading accusations. While we cannot guarantee that it has not occurred, we believe that overall, career Senior Executives have little desire or opportunity to engage in the activities addressed by the legislation. Moreover, current reporting requirements are sufficient to address, remedy and prosecute any wrong‐doing that may occur. SEA understands the desire to bring transparency to the financial disclosures of publicly elected officials. What we do not agree with is applying such broad standards to career federal employees. Currently, Senior Executives and equivalent senior level employees are required to file annually financial disclosure reports (OGE Form 278). Although not available on a public website, members of the public can access this information through a requesting process to
OGE. On that form, they are already required to report purchase, sales and exchange of stocks, bonds, commodity futures and other securities when the amount exceeds $ 1,000. As far as SEA is aware, there are no documented problems with access to this information or with the disclosures themselves. The current system provides the necessary oversight and transparency to ensure career Senior Executives are making proper financial disclosures. Attempts to broaden public access as dictated through the STOCK Act appear to be a solution in search of a problem. Requiring financial disclosure forms to be publicly accessible and searchable through a website raises a host of issues. First and foremost, it appears to be a gross violation of the spirit of the Privacy Act. As you know, the Privacy Act of 1974 was promulgated to regulate federal government record keeping and disclosure and recognizes instances where information should be exempt from disclosure. While the public can access OGE Form 278, we can envision legitimate reasons why making financial disclosure forms of federal employees so readily available to the public could not only hurt an individual’s right to privacy, but could also prove outright harmful. For instance, Foreign Service officers or other federal employees serving abroad could come under easy scrutiny by foreign interests, including terrorists. And supervisors within a federal agency could be subject to unwarranted personal scrutiny by their subordinates, causing tension and problems in the workplace. Other concerns with a disclosure website are more technical. It appears to SEA that it would be a complex undertaking for OGE to create the type of website proposed in the legislation. Further, we suspect that extensive resources (both funding and personnel) would be required to create such a database. Given the current budget climate, we question whether this is an appropriate use of OGE’s resources. Finally, we believe these new requirements and the database itself would engender an increased level of requests for ethics guidance by federal employees to OGE, putting a strain on OGE’s ethics officials and designated agency ethics officials. With diminishing resources, this requirement will undoubtedly lack the capacity for full or effective compliance. In terms of the 30 day reporting requirement for financial transactions, we also question the necessity and rationale for expanding coverage to career federal employees. As with the financial disclosures, it does not appear that a lack of reporting on each financial transaction has led to documented insider trading problems within the career SES. Furthermore, such reporting requirements are burdensome and complex. Senior Executives could easily fall afoul of the requirements without realizing they have done so. If a Senior Executive uses a financial advisor or portfolio manager, he or she might not get word of individual financial transactions within the 30 day window, or have the ability to receive the necessary information to make reports on individual transactions. Overall, SEA believes that such extensive, burdensome and public reporting requirements will have a chilling effect on those employees considering entering the SES. We question why anyone would want to subject themselves to such broad, unnecessary scrutiny. If the intent of
this legislation is to increase public confidence in government, we believe that including career Senior Executives within the scope of S. 2086’s requirements does not help achieve that goal. We encourage you to reconsider the House amendments and narrowly tailor this legislation to only apply to Members of Congress, their staff, and political appointees and ask you to remove the provisions in Section 6 and Section 11 that would cover career federal employees. Sincerely, CAROL A. BONOSARO President WILLIAM L. BRANSFORD General Counsel