Bill Summary
This legislation, titled "A BILL," aims to promote ethics and prevent corruption in Department of Defense contracting and other activities. It includes measures such as extending the time period for former employees from two to four years before they can work for a defense contractor, requiring contractors to report on their lobbying activities and prohibiting them from hiring certain former officials. It also restricts senior officials from working for foreign entities without explicit approval and requires disclosure by large contractors seeking contracts with the Department of Defense. Failure to comply may result in suspension or debarment.
Possible Impacts
1. The increased revolving door requirements will affect former Department of Defense employees by extending the time period before they can work for a defense contractor and requiring their employment history to be publicly available for a longer period of time.
2. The new restrictions on hiring and reporting requirements for contractors will affect both former Department of Defense officials and the contractors themselves, potentially limiting job opportunities and requiring additional paperwork and compliance with regulations.
3. The new requirements for disclosure by large contractors will have a significant impact on the way these companies operate, potentially affecting their financial statements, employee salaries, and political spending. Failure to comply could result in serious consequences such as suspension or debarment.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2396 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 2396
To promote ethics and prevent corruption in Department of Defense
contracting and other activities, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 20, 2021
Ms. Warren introduced the following bill; which was read twice and
referred to the Committee on Armed Services
_______________________________________________________________________
A BILL
To promote ethics and prevent corruption in Department of Defense
contracting and other activities, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Department of
Defense Ethics and Anti-Corruption Act of 2021''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--REVOLVING DOOR AND CONTRACTOR INFLUENCE
Sec. 101. Heightened revolving door requirements.
Sec. 102. Requirements for defense contractors relating to certain
former Department of Defense officials and
lobbying activities.
Sec. 103. Ban on hiring contracting officials enforceable on certain
contracts.
Sec. 104. Ban on hiring senior officials by giant defense contractors.
Sec. 105. Modification of prohibition on lobbying activities with
respect to the Department of Defense by
certain officers of the Armed Forces and
civilian employees of the Department of
Defense following separation from military
service or employment with the Department.
Sec. 106. Enhancement of recusal for conflicts of personal interest
requirements for Department of Defense
officers and employees.
Sec. 107. Prohibition on ownership or trading of stocks in certain
companies by Department of Defense officers
and employees.
TITLE II--LIMITING FOREIGN INFLUENCE
Sec. 201. Advising foreign governments.
Sec. 202. Ban on former military and civilian intelligence officers
from foreign employment.
TITLE III--TRANSPARENCY
Sec. 301. Affirmative contractor record disclosures.
Sec. 302. Ownership of information.
Sec. 303. Financial disclosure by large contractors.
TITLE I--REVOLVING DOOR AND CONTRACTOR INFLUENCE
SEC. 101. HEIGHTENED REVOLVING DOOR REQUIREMENTS.
Section 847 of the National Defense Authorization Act for Fiscal
Year 2008 (Public Law 110-181; 10 U.S.C. 1701 note) is amended--
(1) in subsection (a)(1), by striking ``within two years of
leaving service'' and inserting ``within four years of leaving
service''; and
(2) in subsection (b)--
(A) in paragraph (1)--
(i) by striking ``retained by the
Department of Defense in a central database or
repository maintained by the General Counsel of
the Department for not less than five years''
and inserting ``retained by the Department of
Defense in a central database or repository
maintained by the General Counsel Standards and
Conduct Office of the Department for not less
than ten years''; and
(ii) by inserting ``and shall be posted on
a publicly available Internet website of the
General Counsel Standards and Conduct Office''
after ``opinion was provided''; and
(B) in paragraph (2), by inserting ``not less than
biannually'' after ``conduct periodic reviews''.
SEC. 102. REQUIREMENTS FOR DEFENSE CONTRACTORS RELATING TO CERTAIN
FORMER DEPARTMENT OF DEFENSE OFFICIALS AND LOBBYING
ACTIVITIES.
(a) Requirements.--
(1) In general.--Chapter 141 of title 10, United States
Code is amended by adding at the end the following new section:
``Sec. 2410t. Defense contractors report: requirements concerning
former Department of Defense officials and lobbying
activities
``(a) In General.--Each contract for the procurement of goods or
services in excess of $10,000,000, other than a contract for the
procurement of office supplies or food and beverage (vending) services,
that is entered into by the Department of Defense shall include a
provision under which the contractor agrees to submit to the Secretary
of Defense, not later than April 1 of each year such contract is in
effect, a written report setting forth the information required by
subsection (b).
``(b) Report Information.--Except as provided in subsection (c), a
report by a contractor under subsection (a) shall--
``(1) list the name of each person who--
``(A) is a former officer or employee of the
Department of Defense or a former or retired member of
the armed forces who served--
``(i) in an Executive Schedule position
under subchapter II of chapter 53 of title 5;
``(ii) in a position in the Senior
Executive Service under subchapter VIII of
chapter 53 of title 5;
``(iii) in a position compensated at a rate
of pay for grade O-7 or above under section 201
of title 37; or
``(iv) as a program manager, deputy program
manager, procuring contracting officer,
administrative contracting officer, source
selection authority, member of the source
selection evaluation board, or chief of a
financial or technical evaluation team for a
contract with a value in excess of $10,000,000;
and
``(B) during the preceding calendar year was
provided compensation by the contractor, if such
compensation was first provided by the contractor not
more than four years after such officer, employee, or
member left service in the Department of Defense;
``(2) in the case of each person listed under subparagraph
(A)--
``(A) identify the agency in which such person was
employed or served on active duty during the last two
years of such person's service with the Department of
Defense;
``(B) state such person's job title and identify
each major defense system, contract, modification,
subcontract, task order, and delivery order in excess
of $10,000,000, if any, on which such person performed
any work with the Department of Defense during the last
two years of such person's service with the Department;
and
``(C) state such person's current job title with
the contractor and identify each major defense system,
contract, modification, subcontract, task order, and
delivery order in excess of $10,000,000, on which such
person has performed any work on behalf of the
contractor; and
``(3) if the contractor is a client, include--
``(A) a statement that--
``(i) lists each specific issue for which
the contractor, any employee of the contractor,
or any lobbyist paid by the contractor engaged
in lobbying activities with the Department of
Defense; and
``(ii) specifies the Federal rule or
regulation, Executive order, or other program,
policy, contract, or position of the Department
of Defense to which the lobbying activities
described in clause (i) related;
``(iii) lists each lobbying activity
relating to the Department of Defense that the
contractor, any employee of the contractor, or
any lobbyist paid by the contractor has engaged
in on behalf of the contractor, including--
``(I) each document prepared by the
contractor, any employee of the
contractor, or any lobbyist paid by the
contractor that was submitted to an
officer or employee of the Department
of Defense by the lobbyist;
``(II) each meeting that was a
lobbying contact with an officer or
employee of the Department of Defense,
including the subject of the meeting,
the date of the meeting, and the name
and position of each individual who
attended the meeting;
``(III) each phone call made to an
officer or employee of the Department
of Defense that was a lobbying contact,
including the subject of the phone
call, the date of the phone call, and
the name and position of each
individual who was on the phone call;
and
``(IV) each electronic
communication sent to an officer or
employee of the Department of Defense
that was a lobbying contact, including
the subject of the electronic
communication, the date of the
electronic communication, and the name
and position of each individual who
received the electronic communication;
``(iv) lists the name of each employee of
the contractor who--
``(I) did not participate in a
lobbying contact with an officer or
employee of the Department of Defense;
and
``(II) engaged in lobbying
activities in support of a lobbying
contact with an officer or employee of
the Department of Defense; and
``(v) describes the lobbying activities
referred to in clause (iv)(II); and
``(B) a copy of any document transmitted to an
officer or employee of the Department of Defense in the
course of the lobbying activities described in
subparagraph (A)(iv)(II).
``(c) Duplicate Information Not Required.--An annual report
submitted by a contractor pursuant to subsection (b) need not provide
information with respect to any former officer or employee of the
Department of Defense or former or retired member of the armed forces
if such information has already been provided in a previous annual
report filed by such contractor under this section.
``(d) Definitions.--In subsection (b)(3), the terms `client',
`lobbying activities', `lobbying contact', and `lobbyist' have the
meanings given the terms in section 3 of the Lobbying Disclosure Act of
1995 (2 U.S.C. 1602).''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 141 of such title is amended by adding at
the end the following new item:
``Sec. 2410t. Defense contractors report: requirements concerning
former Department of Defense officials and
lobbying activities.''.
(3) Effective date.--The amendments made by paragraphs (1)
and (2) shall take effect on the date of the enactment of this
Act, and shall apply with respect to contracts entered into on
or after that date.
(b) Future Transfer.--
(1) Transfer and redesignation.--Section 2410t of title 10,
United States Code, as added by subsection (a), is transferred
to chapter 363, as added by section 1862(b) of the William M.
(Mac) Thornberry National Defense Authorization Act for Fiscal
Year 2021 (Public Law 116-283), and redesignated as section
4661.
(2) Clerical amendments.--
(A) Target chapter table of sections.--The table of
sections at the beginning of chapter 363 of title 10,
United States Code, as added by section 1862(b) of the
William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (Public Law 116-
283), is amended by inserting after the item relating
to section 4660 the following:
``Sec. 4661. Defense contractors report: requirements concerning former
Department of Defense officials and
lobbying activities.''.
(B) Origin chapter table of sections.--The table of
sections at the beginning of chapter 141 of title 10,
United States Code, is amended by striking the item
relating to section 2410t.
(3) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2022.
(4) References; savings provisions; rule of construction.--
Sections 1883 through 1885 of the William M. (Mac) Thornberry
National Defense Authorization Act for Fiscal Year 2021 (Public
Law 116-283) shall apply with respect to the amendments made
under this subsection as if such amendments were made under
title XVIII of such Act.
SEC. 103. BAN ON HIRING CONTRACTING OFFICIALS ENFORCEABLE ON CERTAIN
CONTRACTS.
(a) Prohibition.--
(1) In general.--Any contract for the procurement of goods
or services, other than a contract for the procurement of
commercial products or services, with a value of excess of
$10,000,000 shall include a contract clause prohibiting the
contractor from providing compensation to a former Department
of Defense official described in paragraph (2) within four
years after such former official leaves service in the
Department of Defense.
(2) Covered department of defense official.--An official or
former official of the Department of Defense is covered by the
requirements of this section if such official or former
official is a former officer or employee of the Department of
Defense or a former or retired member of the Armed Forces who
served as a program manager, deputy program manager, procuring
contracting officer, administrative contracting officer, source
selection authority, member of the source selection evaluation
board, or chief of a financial or technical evaluation team for
a contract with a value in excess of $10,000,000, and such
person--
(A) participated in the contract or license
selection;
(B) determined or signed off on the technical
requirements of the contract or license; or
(C) granted the contract or license.
(b) Administrative Actions.--In the event that an official or
former official of the Department of Defense described in subsection
(a)(2), or a Department of Defense contractor, knowingly fails to
comply with the requirements of this subsection, the Secretary of
Defense may take any of the administrative actions set forth in section
2105 of title 41, United States Code, that the Secretary of Defense
determines to be appropriate.
SEC. 104. BAN ON HIRING SENIOR OFFICIALS BY GIANT DEFENSE CONTRACTORS.
(a) Prohibition.--
(1) In general.--Any Department of Defense contract for the
procurement of goods or services with a giant defense
contractor shall include a contract clause prohibiting the
contractor from hiring or paying (including as a consultant or
lawyer) any covered Department of Defense official within four
years after such former official leaves service in the
Department of Defense.
(2) Definitions.--In this section:
(A) Covered department of defense official.--The
term ``covered Department of Defense official'' means a
former officer or employee of the Department of Defense
or a former or retired member of the Armed Forces who
served--
(i) in an Executive Schedule position under
subchapter II of chapter 53 of title 5, United
States Code;
(ii) in a position in the Senior Executive
Service under subchapter VIII of chapter 53 of
title 5, United States Code;
(iii) in position compensated at a rate of
pay for grade O-7 or above under section 201 of
title 37, United States Code; or
(iv) in a supervisory position compensated
at a rate of pay for grade GS-15 of the General
Schedule under section 5107 of title 5, United
States Code, or higher.
(B) Giant defense contractor.--The term ``giant
defense contractor'' means a contractor (other than an
institution of higher education) that received an
average of more than $1,000,000,000 in annual revenue
from the Department of Defense or the Department of
Energy for contracted work related to the United States
nuclear program in the previous three fiscal years.
(b) Administrative Actions.--In the event that a covered Department
of Defense official, or a Department of Defense contractor, knowingly
fails to comply with the requirements of this section, the Secretary of
Defense may take any of the administrative actions set forth in section
2105 of title 41, United States Code that the Secretary of Defense
determines to be appropriate.
(c) Annual Report.--The Inspector General of the Department of
Defense shall submit to the Committee on Armed Services of the Senate
and the Committee on Armed Services of the House of Representatives an
annual report listing the officials or former officials of the
Department of Defense described in subsection (a)(2)(A), or any
Department of Defense contractor, subject to any of the administrative
actions from the Secretary of Defense under the requirements of
subsection (b) during the prior calendar year.
SEC. 105. MODIFICATION OF PROHIBITION ON LOBBYING ACTIVITIES WITH
RESPECT TO THE DEPARTMENT OF DEFENSE BY CERTAIN OFFICERS
OF THE ARMED FORCES AND CIVILIAN EMPLOYEES OF THE
DEPARTMENT OF DEFENSE FOLLOWING SEPARATION FROM MILITARY
SERVICE OR EMPLOYMENT WITH THE DEPARTMENT.
Section 1045 of the National Defense Authorization Act for Fiscal
Year 2018 (Public Law 115-91; 131 Stat. 1555) is amended--
(1) in subsection (a)--
(A) in the subsection heading, by striking ``Two-
year Prohibition'' and inserting ``Four-year
Prohibition'';
(B) in paragraph (1), by striking ``during the two-
year period'' and inserting ``during the four-year
period''; and
(C) in paragraph (2)(A), by striking ``grade O-9 or
higher'' and inserting ``grade O-7 or higher'';
(2) by striking subsection (b);
(3) by redesignating subsection (c) as subsection (b); and
(4) in subsection (b)(1)(A), as redesignated by paragraph
(3), by inserting ``, including activities in support of
lobbying contact with an officer or employee of the Department
of Defense'' before the period at the end.
SEC. 106. ENHANCEMENT OF RECUSAL FOR CONFLICTS OF PERSONAL INTEREST
REQUIREMENTS FOR DEPARTMENT OF DEFENSE OFFICERS AND
EMPLOYEES.
(a) In General.--An officer or employee of the Department of
Defense may not participate personally and substantially in any covered
matter that the officer or employee knows, or reasonably should know,
is likely to have a direct and predictable effect on the financial
interests of any of the following:
(1) Any organization, including a trade organization, for
which the officer or employee has served as an employee,
officer, director, trustee, or general partner in the past 4
years.
(2) A former direct competitor or client of any
organization for which the officer or employee has served as an
employee, officer, director, trustee, or general partner in the
past 4 years.
(3) Any employer with whom the officer or employee is
seeking employment.
(b) Construction.--Nothing in this section shall be construed to
terminate, alter, or make inapplicable any other prohibition or
limitation in law or regulation on the participation of officers or
employees of the Department of Defense in covered matters having an
effect on their or related financial or other personal interests.
(c) Covered Matter Defined.--In this section, the term ``covered
matter''--
(1) means any matter that involves deliberation, decision,
or action that is focused upon the interests of specific person
or a discrete and identifiable class of persons; and
(2) includes policy making that is narrowly focused on the
interests of a discrete and identifiable class of persons.
SEC. 107. PROHIBITION ON OWNERSHIP OR TRADING OF STOCKS IN CERTAIN
COMPANIES BY DEPARTMENT OF DEFENSE OFFICERS AND
EMPLOYEES.
(a) Definition.--In this section:
(1) Covered official.--The term ``covered official'' means
any official described in section 847(c) of the National
Defense Authorization Act for Fiscal Year 2008 (10 U.S.C. 1701
note).
(2) Publicly traded stock.--The term ``publicly traded
stock'' does not include a widely held mutual investment fund
as defined in regulations issued by the Office of Government
Ethics under section 208(d)(2) of title 18, United States Code.
(b) Prohibition on Ownership and Trading Publicly Traded Stocks.--
(1) Covered officials.--No covered official may own or
trade a publicly traded stock of a company if, during the
preceding calendar year, the company received more than
$1,000,000,000 in revenue from the Department of Defense,
including through 1 or more contracts with the Department.
(2) Other officers and employees.--No officer or employee
of the Department of Defense who is not a covered official may
own or trade a publicly traded stock of a company that is a
contractor or subcontractor of the Department if the Standards
of Conduct Office of the Office of the General Counsel of the
Department of Defense determines that the value of the stock
may be directly or indirectly influenced by any official action
of the officer or employee.
(3) Penalty.--Whoever violates paragraph (1) or (2) shall
be subject to the penalties set forth in section 216 of title
18, United States Code.
TITLE II--LIMITING FOREIGN INFLUENCE
SEC. 201. ADVISING FOREIGN GOVERNMENTS.
Section 207(f) of title 18, United States Code, is amended--
(1) by redesignating paragraph (3) as paragraph (4); and
(2) by inserting after paragraph (2) the following new
paragraph:
``(3) Permanent restriction without prior approval.--
``(A) In general.--Any person who has been employed
as a senior official in the White House, the Department
of State; the Department of Defense, or the Department
of the Treasury who, without the explicit prior
approval of the Secretary of State, performs
compensated work for the benefit of a foreign entity
that might benefit from the knowledge obtained by the
person as a result of such United States Government
employment, shall be punished as provided in section
216 of this title.
``(B) Limitation on approval.--The Secretary of
State may not approve any work described in
subparagraph (A) that conflicts with the national
security interests of the United States, as determined
by the Secretary and verified by the Director of
National Intelligence.
``(C) Annual report.--The Secretary of State shall
submit an annual report listing all of the approvals
under subparagraph (A), to include the related foreign
entity, the duties as assigned and performed by senior
official, and the work role (billet) held by the senior
official during the prior calendar year to the
Committee on Foreign Relations of the Senate, the
Committee on Armed Services of the Senate, the Select
Committee on Intelligence of the Senate, the Committee
on Foreign Affairs of the House of Representatives, the
Committee on Armed Services of the House of
Representatives, and the Permanent Select Committee on
Intelligence of the House of Representatives.''.
SEC. 202. BAN ON FORMER MILITARY AND CIVILIAN INTELLIGENCE OFFICERS
FROM FOREIGN EMPLOYMENT.
(a) In General.--Except as provided in subsection (b), military and
civilian intelligence personnel employed by a military intelligence
organization possessing a security clearance, upon separation from
service or resignation, are prohibited from obtaining employment with a
foreign government or a private company doing work predominantly on
behalf of a foreign government.
(b) Exemption.--
(1) In general.--Employment with the Government of
Australia, of Canada, of New Zealand, or of the United Kingdom
is not subject to the prohibition under subsection (a).
(2) Waivers.--
(A) Authority.--Individuals may seek and be granted
a waiver by the Secretary of Defense, in consultation
with the Secretary of State, for employment by any
other foreign government. Such waiver will be
presumptively granted in cases that personnel seek
employment in jobs focused on humanitarian aid,
development, or civilian or nonmilitary infrastructure
improvement. Waivers for employment in other jobs shall
be determined based on whether such employment would
reasonably involve the use or disclosure or
appropriation of sources, methods, or skills that could
pose a threat to United States' interests when employed
by other countries or enable the repression of the
nationals of such countries.
(B) Annual report.--The Secretary of Defense shall
submit to the Committee on Armed Services of the Senate
and the Committee on Armed Services of the House of
Representatives an annual report on all waivers granted
under subparagraph (A).
TITLE III--TRANSPARENCY
SEC. 301. AFFIRMATIVE CONTRACTOR RECORD DISCLOSURES.
The Secretary of Defense shall publish on a publicly available
Internet website the following information to the extent such
information is unclassified and non-confidential:
(1) In the case of a contract with the Department of
Defense for goods or services above the simplified acquisition
threshold specified in section 134 of title 41, United States
Code--
(A) copies of each contract and task delivery order
the contractor on such contract has entered into with
the Department of Defense during the previous three
fiscal years; and
(B) past performance information about the
contractor to the extent it is maintained by the
Department.
(2) In the case of a contract with the Department of
Defense for goods or services in excess of $10,000,000, all
correspondence and documents related to the contract.
(3) The contractor report required under section 2410t of
title 10, United States Code, as added by section 102 of this
Act.
SEC. 302. OWNERSHIP OF INFORMATION.
Any entity of the Department of Defense that enters into a contract
or agreement with, or provides funding to, a nongovernmental entity for
the purposes of procuring goods or services shall--
(1) for the purposes of paragraph (3), be deemed to have
control over all information of the entity related to--
(A) any costs or the expenditure of any funds
related to the contract or agreement; and
(B) any other information related to the
performance of the contract or agreement;
(2) provide access to the information described in
paragraph (1), which shall be considered an ``agency record'',
to any person upon request made pursuant to paragraph (3); and
(3) include compliance with this subsection as a material
term in any contract, agreement, or renewal of a contract or
agreement with any nongovernmental entity for the purposes of
procuring goods or services.
SEC. 303. FINANCIAL DISCLOSURE BY LARGE CONTRACTORS.
(a) Disclosure Requirement.--
(1) In general.--The Secretary of Defense shall require a
covered contractor, as a condition for entering into a contract
with the Department of Defense, to make publicly available the
following information (excluding information determined to be
classified by the Secretary):
(A) Audited financial statements.
(B) A listing of the salaries of employees
performing work on the contract that receive
compensation from the contractor in excess of $250,000
per year.
(C) A description of all Federal political
spending, including lobbying, by the contractor.
(2) Suspension and debarment.--The Secretary of Defense may
suspend or debar any covered contractor that fails to comply
with the disclosure requirements under paragraph (1).
(3) Covered contractor defined.--The term ``covered
contractor'' means a contractor (other than an institute of
higher education) that--
(A) received more than $10,000,000 in annual
revenue from Federal Government contracts or licenses
in any of the previous three fiscal years; or
(B) earned more than 20 percent of its total annual
revenue from Federal Government contracts or licenses
in any of the previous three fiscal years.
<all>