For Official Use Only UNCLASSIFIED 1 ETHICS for DoD LEADERS March 8, 2011 Presented by Leigh A....

For Official Use Only UNCLASSIFIED 1

ETHICSfor DoD LEADERS

March 8, 2011

Presented byLeigh A. Bradley

Director, DoD Standards of Conduct Office703-695-3422


“Nearly all men can stand adversity, but if you want to test a man’s character — give him power.”

Abraham Lincoln


QUESTION:

You now have assumed significant responsibilities in arguably the largest and most powerful Government bureaucracy on the planet.

How will you exercise your authority, ability to influence, and discretion?


Let’s take a look at the landscape of what not to do.

The following is a small slice of recent criminal actions that are the direct result of ETHICAL LAPSES that have harmed the Public.


SURVEY OF RECENTETHICS-RELATED PROSECUTIONS

• Oct 2010: Retired Navy captain pleaded guilty in San Diego federal court to a conflict-of-interest violation.

• Patrick Seidel, major-program manager for maritime surveillance at Naval Sea Systems Command in San Diego was negotiating employment with a defense firm while helping that firm potentially receive a Navy contract to provide technology for the service's anti-submarine program.

• Seidel had invited the defense firm to send employees to inquire about Navy contracts, sent Navy personnel to the firm to discuss possible contracts, and talked with Navy officials about the firm.

• Sentenced to probation and a fine

• Jan 2009: former Defense Threat Reduction Agency (DTRA) employee, James Wright, sentenced to six months in prison for violating the conflict of interest statute.

• Gist of the crime: While Wright served as director of Security & Counterintelligence Directorate, he formed a corporation (“VMW & Associates”) with another to obtain Govt contracts.

• Wright took actions to steer work to VMW including becoming Source Selection Authority and awarding K to prime with whom VMW was subcontractor.

• Wright never disclosed financial interest in VMW.


SURVEY OF RECENT ETHICS-RELATED PROSECUTIONS

• Dept of Interior employee, Jimmy Mayberry, who was approaching Govt. retirement, with assistance from his supervisor, created a plan whereby he could become a private contractor and be hired back by the agency. Before retiring, he created statement of work for the job that was used to create the criteria for the contracting position. Ultimately, Mayberry was awarded contract b/c he was the only bidder who received an “excellent” score.

• Mayberry pled guilty to criminal conflict of interest (for engaging in activities that affected his personal financial interests) and was sentenced to two years of probation and $2,500 fine



• Former high-ranking official at the National Institutes of Health, Jack Snyder, pled guilty and sentenced for making false statements. Prior to joining NIH, Snyder operated a litigation consulting business. When hired, he was told that he must stop running the business.

• He ignored the direction, continued to manage the business and never reported the financial interest on his SF 278 (including the $165,234 he made the previous year from the outside business).

• He occasionally managed the business on Govt time, using Govt equipment and property. He did not take annual leave to conduct business while at his Federal job, and received $23,000 for unclaimed annual leave when he left NIH.

• Sentenced to 1 year probation, 160 hours of community service and $200,000 fine



• Former Defense Logistics Agency (DLA) employee, Constance Walton, pled guilty to making a false statement; sentenced to 2 years probation and $10,000 fine.

• Offense: Walton created and operated a business on the side that accepted subcontracting work on two Army IT services contracts; she did not disclose the over $100,000 income from the subcontract work on her financial disclosure report.



• Former program manager Curtis Jones at FBI sentenced to two years probation and a fine for accepting a gratuity.

• As a part of his duties, was responsible for negotiating, reviewing , and making recommendations re: blanket agreement to buy shredders valued @ $2M.

• After contract award, Jones accepted Caribbean cruise for himself and his family with winning company executives and salespersons—valued at $7,500.


Darleen Druyun

http://www.cbsnews.com/stories/2005/01/04/60II/main664652.shtml


Timeline of Druyun 18 USC 208 Violation

• 13 August 2002: Druyun, senior ranking career Acquisition official in the Air Force meets with Boeing CFO Sears and discusses in general terms, among other things, the possibility of her future employment with Boeing.

• 29 August 2002: Air Force General Counsel prepares disqualification memo covering Lockheed-Martin and Raytheon, but is not asked to include Boeing

• 26 September 2002: Druyun and CFO Sears negotiate the final price for NATO AWACS Mid-Term Modernization Program contract for $1.32B.

For Official Use Only UNCLASSIFIED 1212As of:

Timeline of Druyun 18 USC 208 Violation

• 17 October 2002: Druyun and Sears meet privately in Orlando airport and discuss terms of employment and reach handshake deal

• 18 October 2002: Sears sends email to senior Boeing managers describing “non-meeting” he had with Druyun regarding her Boeing employment

• 5 November 2002: Druyun submits disqualification letter for Boeing and meets with Sears in the Pentagon to discuss details of employment offer

• 13 November 2002: Boeing sends formal offer of employment to Druyun


Results of the Druyun Case

• Druyun pled guilty to violating 18 USC 208, taking official actions regarding a potential employer. Sentenced to 9 months in jail, 3 years probation, 150 hours of community service, and a $5000 fine.

• Sears pled guilty to aiding and abetting acts affecting a personal financial interest. He was sentenced to four months in prison, a $250,000 fine, and 200 hours of community service.

• The Boeing Company admitted to corruption charges involving conflicts of interest and other unrelated violations.

Boeing settled with the Justice Department for $615 million. $20 billion tanker lease cancelled.


So what is the take-away ?

Public Service is a Public TrustOr

as Thomas Jefferson once said:

“When a man assumes a public trust, he should consider himself as public

property.”


Personal Ethics Requirements


Criminal Conflict of Interest Statutes

• 18 U.S.C. 201: Bribery — Prohibits public officials from seeking, receiving or agreeing to accept anything of value for themselves or others in return for being influenced in an official act

• 18 U.S.C. 203 & 205: Forbids employees from prosecuting or assisting in the prosecution of claims against the U.S. or representing another before a Federal department, agency or court in matters where the U.S. is a party or has a substantial interest

• 18 U.S.C. 207: Post-Government Employment Restrictions — e.g., One year cooling- off for Senior officials and Lifetime Ban on representing back on matters worked on personally and substantially


Criminal Conflict of Interest Statutes

• 18 U.S.C. 208: Financial Conflict of Interest — Bars an employee from participating personally and substantially in an official capacity in any particular Government matter that would have a direct and predictable effect on his own or his family’s financial interests, or the interests of any organization in which he serves as officer, director, general partner, employee.

** Importantly: Applies to entities with whom he or she is negotiating employment

• 18 U.S.C. 209: Dual Compensation — Prohibits employees from receiving any salary or contribution to or supplementation of salary from any source other than the United States as compensation for services as a Government employee.


Financial DisclosureFinancial Disclosure

• Financial Disclosure is required to help ensure that employees do not hold financial interests that conflict with the conscientious performance of duty

• All members of the SES must file a Public Financial Disclosure Report (SF 278)

— Types of Reports: New Entrant (w/in 30 days of appointment), Incumbent (NLT: May 15th), and Termination (w/in 30 days of leaving office)

• Your status as an SF 278 filer also triggers other requirements:

— Complete one-hour of ethics training annually;— Sign annual certification signifying that you

are aware of post-Government employment restrictions and will not violate them


• SES Managers and Supervisors must also:

• Identify Confidential Financial Disclosure filers (OGE Form 450)

• Ensure timely filing of OGE 450 reports

• Review employee reports to identify any potential conflicts of interests

• Approve the outside business activities or compensated employment of those who file if with a “prohibited source.”

• Enforce penalties for employee non-compliance

Financial DisclosureFinancial Disclosure


• All individuals in a “covered position”

• At the GS/GM-15 and below level or below the rank of O-7;

AND

• Whose official responsibilities require them to participate personally and substantially in making decisions or exercising significant judgment, and without substantial supervision and review, in taking official action where the final decision may have a direct and substantial economic impact on non-Federal entity interests. (e.g., CO, TMs etc.)

Who “Must” File an OGE Form 450?Who “Must” File an OGE Form 450?


OR

• Whose SUPERVISOR determines their duties and responsibilities require filing to avoid actual or apparent conflicts of interest.

• All individuals detailed to such positions.

• Individuals identified by procurement regulations.

Who “Must” File an OGE Form 450?Who “Must” File an OGE Form 450?


And the following is a quick reminder about some of the most pertinent Federal Standards of Conduct . . .


Federal Standards of Conduct

• Do Not Use Your Public Office for Private Gain

--Examples: Pushing DoD business toward a friend; using official title to promote a book you or other person personally authored

• Do Not Give Unauthorized Preferential Treatment to Any Private Organization or Individual

--Example: Hosting an individual meeting with a Defense contractor if you are not prepared to meet with the competition

• Do Not Use Your Office, Title, or Position to Support or Endorse a Private Entity

--Example: Official photo and quotation supplied to military magazine extolling virtues of the magazine


Federal Standards of Conduct

• Do Not Participate Actively and Visibly in Fundraising by a Non-Federal Entity in Your Official Capacity

—Examples: You may not serve as honorary chair or sit at head table or stand in receiving line at fundraisers including those that support the troops; you may not be used as “the draw” for such an event

• Do Not Serve on Any Outside Board in Your Official Capacity — Personal Capacity Only

—Examples: AFCEA, NCMA, NDIA, Society of Military Comptrollers, ABA, and similar professional associations that relate to your official duties; don’t use official DoD photo

• Do not misuse Govt resources -IG focus of investigation —Examples: equipment, vehicles, email, time of a subordinate

For Official Use Only UNCLASSIFIED

Representing DoD to Non-Federal Entity

• In your official capacity: You may represent DoD’s interest before an NFE only when SecDef (or his designee) designates you in writing as DoD’s LIAISON to the NFE.

• In your personal capacity, you may serve as an officer of an NFE only if it will not conflict with your official duties and does not require you to represent NFE’s interests back to the U.S. Government.

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For Official Use Only UNCLASSIFIED

Advising or Managing NFEs

• In your official capacity: Never advise or manage a non-Federal entity, except in very rare instances where DoD statutory authority permits it and DoD General Counsel approves.

• In your personal capacity: Permissible, if it does not create a conflict with your official duties, provided it is exclusively outside the scope of your official duties, and you were not invited to serve in this capacity as a result of your official position.

• TIP: Keep your supervisor apprised—beware of violating 18 U.S.C. §§ 203, 205 & 208.

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Federal Standards of Conduct — Gift Rules

• Gifts from Outside Sources – general prohibition on acceptance of gifts given because of your DoD position or from a prohibited source.

• Prohibited Source is an entity seeking official action or business with the agency

• Almost anything of value is a gift, although there are many exceptions to the rule (e.g., gifts of $20 or less may generally be accepted)


Standards of Conduct — Gift Rules

• Gifts Between Employees – General prohibition on acceptance of gifts from subordinates or people who make less than you.

--exception: gift valued at $10 or less on an occasional basis to mark e.g., significant

birthday or promotion

• Obama Ethics Pledge – Prohibits accepting any gift from registered lobbyist

--Pledge applies only to full-time political appointees


How do you, as a senior official, maintain a strong ethics climate throughout your organization?

• Lead by example – this has the strongest impact of all• Do not tolerate “minor” ethical or moral shortcuts• Do not “look away” from ethics or moral mistakes• Speak up when you see problems – large or small• Understand that “knowing tolerance” = Approval• Encourage subordinates to help you spot issues• Encourage subordinates to help you reach answers• Enforce all the programs that emphasize high standards

of conduct and respect for all• Publicly recognize and reward integrity

Setting the Ethics Climate in Your Organization


Contact InformationContact Information─ ─ DoD SOCO DoD SOCO ──

Contact InformationContact Information─ ─ DoD SOCO DoD SOCO ──

Director: Leigh BradleySOCO Staff Attorneys:

• Jeff Green• Eric Rishel• Karen Dalheim• Erica Dornburg

Financial Disclosure Program Manager:• Patricia Franklin

Email: [email protected]

Website: http://www.dod.mil/dodgc/defense_ethics

Tel: (703) 695-3422

Fax: (703) 695-4970


The character that takes command in moments of crucial choices has already been determined. It has been determined by a thousand other choices made earlier in seemingly unimportant moments. It has been determined by all the little choices of years past — by all those times when the voice of conscience was at war with the voice of temptation — whispering the lie that it really doesn't matter. It has been determined by all the day-to-day decisions made when life seemed easy and crises seemed far away — the decisions that, piece by piece, bit by bit, developed habits of discipline - or of laziness, habits of self-sacrifice — or of self-indulgence, habits of duty and honor and integrity — or dishonor and shame.“

— Ronald Reagan, The Citadel, May 15, 1993

“The Character that Takes Command . . .


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