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Executive Branch Ethics and Financial
Conflicts of Interest: Disqualification
January 31, 2019
Newly proposed legislation in the 116th Congress concerns government ethics reform, including conflicts
of interest among executive branch officials. Federal officials have a basic duty not to allow private gain
to influence their government service, which includes not hold[ing] financial interests that conflict with
the conscientious performance of duty. Federal statutes, as well as a code of conduct for executive
branch employees, make this principle part of a federal regulatory scheme intended to prevent officials
from benefiting personally from their offices. The current federal statutory scheme regulating conflicts
between an official's personal financial interests and his or her official duties has three prongs:
disclosure, disqualification, and divestiture (i.e., a 3-D system). This discussion of the disqualification
requirement, also known as recusal, is the second in a three-part series examining conflicts of interest in
the executive branch.
Disqualification Requirements in the Executive Branch
The principal disqualification statute for executive branch officials-18 U.S.C. § 208 (section 208)-
imposes criminal penalties for executive branch officials who fail to recuse themselves when their official
role would conflict with their financial interests. Section 208 broadly applies to officers and employees
within executive branch agencies regardless of the officials' seniority or rate of pay. It also expressly
applies to special government employees (SGE) who serve in temporary or intermittent government roles.
Although the statute was originally silent regarding its applicability to the President and Vice President,
Congress later amended it to exclude those officials by definition.
The Office of Government Ethics (OGE) has promulgated regulations interpreting section 208 and
adopting its prohibition as part of the executive branch's code of conduct. According to those regulations,
section 208 prohibits officials from participating personally and substantially in an official capacity in
any particular matter in which, to his knowledge, he or any person whose interests are imputed to him ...
has a financial interest, if the particular matter will have a direct and predictable effect on that interest.
An official's participation is personal when he or she has a direct and active role and is substantial when
the official's involvement is of significance to the matter. Particular matters include a decision,
approval, disapproval, recommendation, advice or investigation when such an action is taken in the
context of a proceeding, application, ruling, contract, claim, controversy, charge, accusation, or arrest.
Congressional Research Service
https://crsreports.congress.gov
LSB10250
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