Report | March 31, 2014

Section 847 Ethics Requirements for Senior Defense Officials Seeking Employment with Defense Contractors

DODIG-2014-050

Objective

Our objectives were to (1) address the central database and DoD IG oversight provisions of Public Law 110-181, “The National Defense Authorization Act for Fiscal Year 2008,” Section 847,   “Requirements for Senior Department of Defense Officials Seeking Employment with Defense Contractors,” January 28, 2008; (hereinafter referred to as “section 847”) (2) address subsequent direction from the House Armed Services Committee (HASC); and (3) accordingly determine:

  • Whether written legal opinions required by section 847 were “being provided and retained in accordance with the requirements of this section.” (Public Law 110-181, section 847 [b][2]).
  • “The Department of Defense's record of compliance with section 847 of Public Law 110-181.”  (HASC Report on the National Defense Authorization Act For Fiscal Year 2013).
  • Quantitative data specified by the HASC, as follows:
    • “the total number of opinions issued,
    • the total number of opinions retained in accordance with section 847,
    • any instances in which a request for a written opinion pursuant to section 847 lacked a corresponding written opinion, or
    • in which the written opinion was not provided to the requesting official or former official of the Department of Defense by the appropriate ethics counselor within 30 days after the request for a written opinion.”

Observation

DoD did not retain all required section 847 records in its designated central repository, the After Government Employment Advice Repository (AGEAR).

This occurred because the Department did not:

  • implement the 2010 DoD Inspector General (IG) report recommendation to transfer historical records into AGEAR when the database became operational,
  • centrally supervise section 847 activities by its decentralized Components, and
  • comply with Deputy Secretary guidance making AGEAR use mandatory as of January 1, 2012.

As a result:

  • The AGEAR database was incomplete with limited or no use by specific DoD organizations with significant contracting activity.

Individual section 847 records were located in multiple or decentralized locations, and in a number of cases were inaccurate, incomplete, and not readily accessible for examination.

Discussion

On January 28, 2008, Public Law 110-181, “The National Defense Authorization Act for Fiscal Year 2008,” was enacted.  Section 847 of the law, “Requirements for Senior Department of Defense Officials Seeking Employment with Defense Contractors,” required all officials covered by the law request an ethics opinion from a DoD ethics counselor before starting employment with a DoD contractor.  Defense contractors are required to ensure that covered officials have received the required opinions before employing them.  The law’s recordkeeping requirement also mandated that DoD retain in a “central database or repository for not less than 5 years”:

  • All opinion requests pursuant to the section.
  • All opinions provided pursuant to those requests.

On June 18, 2010, DoD IG report, Review of Department of Defense Compliance with Section 847 of the National Defense Authorization Act for Fiscal Year 2008 (Report No. SPO-2010-003) concluded that the DoD Office of General Counsel (OGC) Standards of Conduct Office (SOCO), had initiated but not completed development and implementation of a central DoD repository to record requests for written opinions and to store copies of opinion letters issued.  The report recommended that DoD OGC-SOCO:

  • expeditiously develop the repository,
  • obtain from DoD Components all requests and opinions rendered since section 847 became law, and
  • when the repository became operational, transfer all records into it.

DoD OGC concurred with this report, explained they were working with information technology experts to develop the AGEAR, and that after AGEAR rollout, they would transfer all existing records into it.

On September 19, 2011, the Deputy Secretary of Defense announced that the Army OGC had developed AGEAR to “capture and store opinions required under section 847;” designated the Secretary of the Army as the DoD Executive Agent to operate, maintain, manage, and fund the system; and made DoD-wide AGEAR use mandatory effective January 1, 2012.

On May 11, 2012, the HASC directed that DoD Office of Inspector General (OIG) “review the database established pursuant to section 847 of Public Law 110-181,” report on DoD’s “record of compliance with section 847 of Public Law 110-181,” and determine specified quantitative data as previously noted in the “Objectives” section.

As indicated in the “Observation” section, the database was incomplete, and individual records were located in multiple or decentralized locations, and were, in a number of cases, inaccurate, incomplete, and not readily accessible or available for examination.  Those conditions existed because the Department did not centrally supervise section 847 compliance, implement the 2010 DoD IG report recommendation to transfer historical records into the AGEAR central repository when the database became operational, or comply with the 2011 Deputy Secretary’s directive that made DoD-wide AGEAR use mandatory as of January 1, 2012.

The DoD OGC-SOCO acknowledged that DoD did not upload pre-existing records when AGEAR became operational in 2010, and did not centrally supervise section 847 compliance by DoD’s decentralized Components.  In explanation, OGC-SOCO asserted that:

  • AGEAR roll out was an unfunded mandate during a time of critically constrained resources.
  • The Federal regulatory scheme decentralized the DoD ethics program and allowed records to be stored in multiple locations.
  • “In the ethics realm,” for personnel assigned outside of the Office of the Secretary of Defense, the role of the Secretary of Defense, and hence SOCO, is generally one of  “policy setting,” not “central supervisory authority.”
  • The U.S. Office of Government Ethics (OGE) had designated 17 “independent” DoD Components responsible to OGE for performance, and subject to OGE audit.

In a follow-on meeting with senior OGE officials and in subsequent written explanation to DoD OIG, OGE explained that with regard to DoD ethics programs:

  • they did not supervise DoD or its Components,
  • they did not decentralize the DoD ethics program or establish independent DoD Components, and
  • they had concurred with a DoD request to appoint a designated agency ethics official (DAEO) in each of the separate DoD Components.

OGE also emphasized that, regardless of the separate DAEO structure, OGE “viewed DoD as one agency" with the Secretary of Defense as the “head of the agency,” and that the separate DAEO structure did not relieve the Secretary of Defense of supervisory responsibility for DoD ethics programs.

Conclusion

The assessment team concluded that the AGEAR database was not complete, that required section 847 records were located in multiple and decentralized locations, and that the records were not readily available for examination.

We concluded that AGEAR was of marginal value for management of DoD section 847 ethics opinions, and, therefore, that DoD may not have fully complied with the intent of this law.

As a result, we could not use AGEAR to reliably determine the quantitative data requested by the HASC.

Recommendations, Management Comments, and Our Response

Recommendation a.

The Deputy Secretary of Defense seek clarification regarding the intent of Public Law 110-181 section 847 with respect to the requirement to retain ethics opinions in a centralized database or repository—specifically whether the law intended a single central database or “multiple ‘central’ databases.”

General Counsel of the Department of Defense on Behalf of the Deputy Secretary of Defense

Management nonconcurred with the recommendation to seek clarification because they asserted section 847 was clear.  Despite their nonconcurrence, management acknowledged that “the Department does not take the position that multiple databases or repositories maintained by the various individual components…constitutes compliance with Section 847.”  In a March 12, 2014 memorandum, the DoD General Counsel noted that SOCO had recently issued a memorandum to the Department DAEOs requesting that they upload historical records into AGEAR from the date of section 847 enactment on January 28, 2008 until AGEAR deployment on January 1, 2012.  

Our Response

We note management’s nonconcurrence with our recommendations, but consider as responsive management’s acknowledgement that multiple databases or repositories do not constitute compliance with Section 847.  We also agree with management’s position that all section 847 requests for opinions, and their corresponding opinions, both predating and postdating the effective date of AGEAR on January 1, 2012, should be entered into AGEAR.  We will request an update on this effort in six months. 

Recommendation b.

The Deputy Secretary of Defense delegate to an appropriate DoD official/office the responsibility and authority to centrally supervise Departmental section 847 compliance sufficient to meet the intent of the law, and determine and assign the needed resources.

General Counsel of the Department of Defense on Behalf of the Deputy Secretary of Defense

Management partially concurred with our recommendation and explained that the DoD SOCO had been providing leadership, education, training, legal interpretation, and guidance regarding Section 847 compliance since the law was enacted.  Management also explained that SOCO would continue to exercise this leadership role in the future, and asserted that delegating supervisory responsibility to another DoD official/office was unnecessary.  However, management qualified SOCO’s leadership role and explained that SOCO was “not equipped, nor should it be tasked with, discharging the ethics programs responsibilities of the separate DAEO components.”

Our Response

We note management’s partial concurrence and consider it partially responsive.  In particular, we take note of management’s clarifying comments with respect to the SOCO role in providing leadership, education, training, and legal interpretations and guidance regarding Section 847 compliance.  With respect to what management characterizes as “taking over line supervision” or “delegating supervisor responsibility,” we agree with management that SOCO does not now have, nor should be delegated this authority and we did not recommend this.  We also agree that “taking over line supervision” of the DAEOs or “delegating supervisor responsibility [of the DAEOs to] another DoD official/office” would be unnecessary and we did not recommend this, either. 

Lines of supervision already exist.  Pursuant to DoD Directive 5145.01, “General Counsel of the Department of Defense,” and DoD Directive 5145.04, “Defense Legal Services Agency”, many lines of supervision run through Defense Legal Services Agency to the DoD General Counsel.  However, others, such as the DoD OIG DAEO, do not.   Therefore, to assist us in identifying and, if need be, assessing the effectiveness of these lines of supervision, we request that, as a follow-up to this review, the Department submit to the OIG, by organization, the position names (positions) of all Department DAEOs and the Department positions to whom those DAEOs directly report, with the exception of the DAEO for the DoD OIG.