Pete Yost of the Associated Press broke a story yesterday that has put a high-ranking Bush Administration official under the microscope for alleged ethics violations.
According to the AP story, Nancy Victory, Assistant Secretary of Commerce, accepted contributions from phone company lobbyists who helped pay for a private catered reception at her personal residence in Great Falls, Virginia. Some 10 days after the party, Ms. Victory is said to have urged a policy change before the Federal Communications Commission that benefited the industry of her party hosts/sponsors.
Ms. Victory heads up the National Telecommunications and Information Administration (NTIA) of the Department of Commerce. According to the Department’s official web site, in this role, she “serves as the President’s principal adviser on telecommunications policies pertaining to the nation’s economic and technological advancement and to regulation of the telecommunications industry. NTIA plays a key role in attaining the goal of an ‘information superhighway.’ ”
This story reads like a law school final exam in government ethics. Lots of questions are being (and should be) raised by this incident, among them:
- Given Ms. Victory’s official role, was it proper for her to accept the entertainment, apparently paid for in part by individuals who are lobbyists for three companies with an interest in wireless communications?
- And, was it proper for Ms. Victory so soon after being feted, to have a role in urging a policy change that was sought by those very lobbyists who threw the party for her?
- And, should she have reported the “gift” on her public disclosure form?
Here is my take on this issue:
There is no question that the party was a gift. Either Ms. Victory or her ethics advisor, or both, have a lot of explaining to do. (Ms. Victory claims to have received an opinion from her agency ethics official giving her the green light to accept the party.)
Based on the reported facts, how can acceptance of this party not be a problem? At the very least it creates the appearance of impropriety when a high level official argues the lobbyists’ case several days after accepting their generous entertainment. Therefore she would have been well advised to recuse herself from the proceedings before the FCC.
And, acceptance of the gift in the first place is questionable. Whether she should be reporting it on her disclosure form is an issue that pales in the face of accepting a party hosted by industry lobbyists, given Ms. Victory’s official position.
The federal gift rule provides that unless specifically authorized by a gift rule exception, Ms. Victory shall not accept a gift from a “prohibited source” or a gift “given because of the employee’s official position.” (5 CFR 2635.202(a))
The lobbyist hosts may have been personal friends of Ms. Victory, as she claims, but they are nevertheless “prohibited sources” under the federal government’s gift rules, meaning they have “interests that may be substantially affected by performance or nonperformance of [Ms. Victory’s] official duties.”
Now, there are lots of exceptions to the gift rule–including the one for gifts based on a personal relationship that Ms. Victory apparently cites in her defense. But note this strong warning appearing in the lead in to the gift rule exceptions:
“Even though acceptance of a gift may be permitted by one of the exceptions contained”.[in] this section, it is never inappropriate and frequently prudent for an employee to decline a gift offered by a prohibited source or because of his official position.” (5 CFR 2635.204; emphasis added.)
There is also a strong argument that the gift (the party) came about because of Ms. Victory’s official position, given who was throwing the party, when and why, but it is not necessary even to go there to question whether it was permitted to accept the gift.
Turning to the “personal relationship” exception under the federal gift rule, let’s take a look at what it says:
(b) Gifts based on a personal relationship. An employee may accept a gift given under circumstances which make it clear that the gift is motivated by a family relationship or personal friendship rather than the position of the employee. Relevant factors in making such a determination include the history of the relationship and whether the family member or friend personally pays for the gift.
Let’s assume that Ms. Victory made a convincing case to her ethics advisor that this exception applied–that the hosts were personal friends, the friendship existed before her federal appointment, and the friends were personally footing the bill for the party. Nevertheless, when she argued a position favorable to the telecommunications industry just a few days after the party, this would tend to raise again the question of context and the real motivation for the gift.