Ethics Office Warns about Waivers; Memo to Feds Cites Instances after the Fact

Article excerpt

Byline: Jim McElhatton, THE WASHINGTON TIMES

The U.S. Office of Government Ethics is warning federal agencies against retroactively waiving ethics rules for federal employees who've taken actions that pose potential conflicts of interest.

Saying it has learned of several situations of employees getting waivers after making questionable moves, the government's independent ethics office issued a memo to agencies across government in April saying such after-the-fact practices are prohibited.

The directive doesn't identify any employees or agencies by name, but officials recently provided information about waivers involving the Federal Deposit Insurance Corp. and the Federal Energy Regulatory Commission in response to an open-records request by The Washington Times for information referenced in the memo. Both agencies dispute issuing any retroactive waivers.

The newly disclosed records show the ethics office told the FDIC last year that it was gravely concerned about a blanket waiver for senior officials at the FDIC. The waiver aimed to address any potential conflicts arising from the officials' residential mortgages and their FDIC work with banks during the financial crisis, according to records.

The ethics office said such a blanket waiver skirted federal ethics rules.

The granting of a blanket waiver in this instance circumvents the requirement that any case-specific analysis be conducted; indeed, the employees covered by the waiver need not consult with the ethics officer and are left on their own to apply a set of vague criteria .. to their personal circumstances and to determine on their own whether they have violated a federal ethics regulation,

the office wrote in a letter to the FDIC

But FDIC officials said in a response that the waiver was justified because home mortgages are offered to borrowers under terms and conditions largely determined by credit scores and interest rates.

In this situation, it seems to us appropriate to provide a general waiver to officials whose residential mortgages satisfy all financial requirements generally applicable to all applicants for the same type of residential mortgage, the FDIC wrote in a formal reply to the ethics office.

Still, the FDIC withdrew the blanket waiver. …