5 ethical missteps and how to avoid them

Experts point out how maintaining proper federal/industry relationships can be a minefield

If you were to weigh the reams of regulations written to keep federal employees from behaving improperly with representatives from industry, you wouldn’t expect to find any unanswered questions about ethical conduct in government.

Yet here we are again in the middle of what seems like an eternal round of hearings, meetings and debates about ethics and what the government needs to do to make policies more effective.

Most people point to the prosecution of Air Force procurement executive Darleen Druyun as the beginning of the most recent cycle of discussions. Druyun pleaded guilty in 2004 to a charge of conspiracy for negotiating a job with Boeing while she was directing a multibillion-dollar deal for the Air Force to lease tanker aircraft from the company.

A court sentenced her to nine months in jail, several top executives at Boeing lost their jobs, and the congressional hearings, government reviews and investigations into ethics began. Subsequent reports of other ethical lapses, particularly in the wake of hurricanes Katrina and Rita last year, have kept the pot boiling.

Ethical behavior covers a wide range of issues, but here are five that you should know about because they are at the heart of the debate about proper government/ industry relations.

1.The revolving door
Government workers often develop skills and insights that are valuable to private industry, and sometimes they leave government and take highly paid industry jobs. Whether their move to industry is an ethical lapse depends on the circumstances.

In Druyun’s case, getting a job in industry was part of a quid pro quo. Druyun used her influence with the Air Force to steer contracts to Boeing, and Boeing hired Druyun, Druyun’s daughter and the daughter’s boyfriend. Other cases are less clear-cut.

People with strong specialized skills are drawn to private-sector jobs that require such skills, but how can government regulators be sure those people aren’t favoring the companies they feel they have a good shot at working for, even if they do it unconsciously?

“Contracting dollars have almost doubled in the past few years, and along with that, more and more people have been leaving government and taking top jobs with contractors,” said Scott Amey, general counsel for the nonprofit Project on Government Oversight. “That’s what has raised a red flag.”

2. Organizational conflicts of interest
When contractors or consultants are in a position to advise the government on procurements and contracts that would directly benefit them, they have an organizational conflict of interest.

The primary ethical danger is obvious: If a company is a contractor on a program with the government and recommends that the government buy certain materials or services to implement the program, to avoid an ethical issue, that company can’t bid on any contracts for those materials or services.

The Federal Acquisition Regulation has specific and detailed rules and guidance about such matters. But the nature of consolidated businesses that many companies are a part of these days introduces all kinds of potential problems and uncertainties that make contractors feel queasy about doing certain jobs.

“No one wants to do a $50,000 task order to review a $300 million program and then find themselves conflicted out on bidding on the program later,” said Chip Mather, co-founder and partner at Acquisition Solutions.

3. Mixing government and private-sector decisions
Contractors are increasingly in positions in which they are making decisions that are inherently governmental, and in many cases, they are overseeing their own work.

Even when overworked government employees appear to be making the calls, they often are leaning so much on the advice their contractors give that, in effect, it’s the contractors who are at the helm.

The problem in those situations is that even when everyone feels they are acting with the best of intentions, the ultimate goals for each person may be different. The government employee is supposed to be acting in the best interests of the taxpayer. The contractor has dollars and deliverables in mind.

Carl DeMaio, founder and president of the Performance Institute and a member of the Acquisition Advisory Panel, has proposed handling this dilemma similar to the way the government handles security clearances. Contractors would receive clearances at certain levels that would allow them to participate in some inherently governmental activities at predefined levels of authority. So far, he said, he has had no takers for the idea.

4. Who pays for dinner?
Contractors might want to give gifts or pay for the meals and entertainment of their government colleagues, but that raises ethical questions. A government employee who accepts a boat from a contractor has obviously crossed the ethical line. But what about the official who lets a contractor pay for a $20 lunch or bar tab?

Lavish gifts are obvious no-no’s, but smaller gifts raise questions. In the commercial sector, people who do business with one another on a regular basis often go out to dinner together or buy one another drinks. That’s considered normal.

In government circles, however, perception is king. Many government and industry officials prefer to stay away from anything that might send the wrong signal. “There’s nothing inappropriate in people who work closely together going to lunch,” said Larry Allen, executive vice president of the Coalition on Government Procurement. “But today, there’s more attention being paid to even the appearance of something being inappropriate, and that’s led to some ridiculous overreactions. Some people [in government] won’t even take a cup of coffee without paying for it.”

Most people in government know the rules, Allen said. He sees the most need for educating government contractors, particularly those recent players in the government markets that are focused on getting the business and might not be so mindful of ethical requirements.

5. Small items and purchase cards
Federal employees can make small purchases for as much as $2,500, in most cases, without going through a formal procurement process. But agencies have to use controls to ensure that employees don’t abuse that privilege.

Controls are necessary because agencies have found that some users will abuse purchase cards if they think they can get away with it. Federal employees have used government purchase cards to buy personal items and, in some eye-opening cases, paid for cosmetic surgery, pornography and vehicles. In other cases, employees made legitimate work-related purchases but split the cost into multiple payments so they could use the card rather than go through the procurement process required for larger acquisitions.

Ethics FAQsThe guidelines for relationships between government employees and contractors are often murky,leaving many feds and companies with unanswered questions. The Office of Government Ethics offers answers to some frequently asked questions.

Q: Can employees solicit charity donations from contractors with whom they work?
A: No. Employees can engage in personal fund raising within certain limitations. One of those limitations is soliciting contributions from contractors.

Q: Are there limits on the kinds of official information federal employees can share with contractors?
A: Yes. They can’t use nonpublic information to further the private interests of another person.

Q: Can employees moonlight for contractors?
A: That is generally permissible unless the contractor has a substantial financial interest in a contract with the employee’s agency.

Q: Can a federal employee contract with the government or own businesses that do?
A: Generally no, except in special circumstances such as those in which the government’s needs cannot be met in any other way.

Political contributions: Another ethical dilemmaFederal contractors cannot directly contribute to political campaigns, but contributions to political action committees are legal, even though PACs often represent specific business, labor or advocacy groups working to elect or defeat particular candidates.

Federal employees can contribute to candidates from their personal funds, but some watchdog groups have raised questions about the practice of contractors contributing to PACs.

“If someone also attaches their company’s name to the contribution, then do we say that contribution is from the person or the contractor?” asked Scott Amey, general counsel for the Project on Government Oversight.

PACs provide a way for contractors to support issues and causes — and, by extension, the candidates who share their values — without running afoul of the rules. Amey said the practice raises ethical questions that need answers.

— Brian Robinson

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