SEC’s Revolving Door To Turn A Little Slower

Some senior employees of the Securities and Exchange Commission who leave for the private sector soon will be subject to the same restrictions that have long applied to most ex-SEC senior staff on lobbying their former agency.

The new regulation, which takes effect in April 2014, eliminates agency-requested exemptions for certain staff litigators from rules that bar them for a year once they’ve left federal employment from “knowingly making, with the intent to influence, any communication to or appearance before an employee of the department or agency in which he served in any capacity.” The rule applies to senior employees earning 86.5 percent of the rate of basic pay payable for level II of the Executive Schedule. <p>

The Office of Government Ethics published the final rule in the Federal Register on Thursday.<p>

Beginning in 1991, the SEC won exemptions from longstanding prohibitions on former employees’ efforts to influence their former agency, citing recruiting difficulties, and the fact that SEC litigators do not make financial regulatory policy. The governmentwide ethics office routinely reviews the exemptions and worked with the SEC during the past two years to end the exemptions on the premise that they were no longer necessary. SEC spokesman John Nester told Government Executive that “the exemptions are no longer considered necessary and removing them creates parity with other financial regulators.”<p>

Such a change in rules had long been sought by the nonprofit Project on Government Oversight, which noted in a 2013 report that the SEC’s own inspector general had highlighted cases in which former federal litigators had returned to meet with one-time colleagues to examine issues as a representative of a major financial institution. <p>

Michael Smallberg, a POGO investigator, told Government Executive that “by the SEC’s own admission, this loophole is no longer necessary, and we’re glad to see it closed.” The agency had delayed the change, he added, to give itself time to educate the staff, “which makes me wonder how many employees were able to slip through the revolving door while the SEC took its time to finalize the rule.” <p>

Smallberg says the change “puts no unusual burden on SEC employees while putting them on an even keel with other agencies in abiding by revolving-door rules.” And like all such rules, he said, “this only stops people from personally contacting their agency during their first year out, but it wouldn’t stop them from behind-the-scenes lobbying if they go to work for a bank.” <p>

POGO would like the SEC and agencies across the government to “go further in letting the public know when former employees contact them,” including posting such contacts online. <p>

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.