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:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


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