Within 10 days of Donald Trump’s presidential victory, the Office of Government Ethics was already worried. Its purpose is to ensure an ethical transition, enforcing the laws banning financial conflicts of interest for administration officials. But in the immediate aftermath of the election, the president-elect and his team were AWOL.
Meanwhile, the ethics office faced a monumental task: working closely with the transition team to gather, review, and sign off on thousands of pages of financial disclosures for new appointees and advisers. The vetting ensures Congress and the public are aware of nominees’ financial pasts and that conflicts of interest have been handled before the candidates step into some of the most powerful jobs on the planet. Time is short, the issues are complex, and the office needs the cooperation of the incoming administration.
Trump’s team didn’t seem to care. Walter Shaub, director of the ethics office, sent multiple emails offering help and guidance in the week after the election. The emails, released in response to a Freedom of Information Act request by MSNBC and the James Madison Project, show he grew increasingly concerned as he heard little in response.
“We seem to have lost contact with the Trump-Pence transition since the election,” Shaub concluded November 18, in a strongly worded note urging the transition team to get the office to vet its nominees.
After Shaub’s note, the process finally got underway. But the slow start left a backlog. As the Senate begins confirmation hearings this week, just seven of Trump’s 26 confirmable appointees have finalized agreements that explain how they’ll avoid conflicts of interest. Only half of them have even submitted the necessary paperwork. (President Obama’s transition team, by contrast, submitted reports for 30 appointees to posts requiring Senate confirmation before December 19, 2008, and another 50 in the month before Inauguration Day.)
The two nominees with hearings Tuesday — Sen. Jeff Sessions and retired Gen. John Kelly — finished their paperwork, which is publicly available on the ethics office’s website. But on Thursday, the Senate is set to hold hearings for two nominees, Wilbur Ross and Ben Carson, whose agreements aren’t yet posted.
The president-elect who won the presidency without ever releasing his tax returns is on track to push through a Cabinet embracing the same opacity.
Trump’s team set the tone on ethics right away
When the Office of Government Ethics tells new presidents-elect to emphasize ethics early and often, it’s not just a logistical concern about processing a lot of paperwork in little time. OGE also wants to set the tone, sending a message to the incoming aides and officials that ethics are important. Out of the gate, the Trump administration ignored the office’s overtures and sent a different message: apathy.
“We’re really looking forward to getting down to work on this Presidential transition — which we’re going to make the best one in history!” Shaub wrote at 9:02 am November 9, Trump’s first morning as president-elect. “I’ll have my blackberry with me around the clock.”
But he didn’t get the late-night calls he expected. Instead, email records show Shaub getting increasingly concerned and frustrated about the transition team’s apathy: On November 10, OGE volunteered to drop off guidebooks to help with the transition process. No email was sent in response, and five days later Shaub resorted to asking if he was even contacting the right people: “We're eager to help, but recent news reports have us a little confused about who we should be contacting,” he wrote to several members of the transition team.
That email got a response — so Shaub was emailing the right people. They just weren’t giving him the cooperation he wanted. On November 18 — the day the media reported Jeff Sessions would be Trump’s pick for attorney general — Shaub put the issue in stark terms:
“As we discussed prior to the election, announcing cabinet picks without taking OGE up on the offer to take an early look at financial disclosure picks poses the risk of embarrassment for the President-elect (and the individual candidate for nomination),” Shaub wrote, “in the event that the individual walks away from the nomination after learning what he or she will have to do with his or her financial interests. … We would genuinely like to help you prevent that undesirable outcome.”
White House appointees should be vetted in advance too, Shaub continued. “If we don't get involved early to prevent problems, we won't be able to help them after the fact,” he warned.
By this time, Trump had chosen a chief of staff, a senior adviser, and an attorney general while Shaub was struggling to even get a meeting with the transition team’s top lawyer. But the idea that Trump could be risking embarrassment finally seemed to get through. By December 5, email records show, the process was on track, with the transition team asking technical questions about filing the forms.
Transition officials didn’t respond to questions about why the disconnect between the ethics office and the transition team occurred. Sean Spicer, Trump’s press secretary, said Monday that every nominee with a hearing this week has submitted the requisite paperwork (although that doesn’t mean agreements are finalized). Senate Majority Leader Mitch McConnell — who wanted hearings for Obama’s appointees in 2009 to wait until ethics agreements and background checks were complete — has suggested Democrats who are raising concerns are just bitter about losing the election.
An ethical transition is supposed to start early
The Office of Government Ethics was set up in 1978 amid a wave of post-Watergate reform meant to ensure that officials in the federal government work for the public good and not their own personal gain. The office requires senior officials to share information about their finances and investments and makes a plan to eliminate conflicts of interest.
Nominees for executive branch jobs that require Senate confirmation are legally required to submit their employment, earnings, investment, and clients to the ethics office. The office reviews the disclosures, looks for potential conflicts of interest, and comes up with a plan to deal with them. The nominee could agree to put her investments in a blind trust, for example, or to recuse herself from decisions involving her former employers.
Then the ethics office signs off on the agreement and sends it, along with the financial disclosures, to the Senate before the confirmation process begins.
The process takes, on average, nearly seven weeks from start to finish for a nominee, meaning that presidential transitions are an especially hectic period. But 2016 was supposed to be smoother, because Congress passed new laws requiring campaigns to start planning early and federal agencies to prepare to pass the baton to the next president.
As a result, Trump’s transition team was given a user’s manual for an ethical administration — a pamphlet from OGE walking them through the steps they’d need to take to comply with conflict of interest laws. The office recommended that would-be nominees complete their financial disclosures even before the president publicly announced their nominations.
Although newly elected presidents are under pressure to name a Cabinet and top advisers quickly, which a lengthy ethics review can delay, there’s good reason to follow the ethics office’s advice: Financial disclosures don’t just turn up illegal conflicts of interest. They also can reveal unrelated but embarrassing information that can end up scuttling a nomination, an avoidable setback for a new president.
President Bill Clinton had to withdraw his first two nominees for attorney general when financial disclosures revealed that they’d hired unauthorized immigrants. Tom Daschle, President Obama’s initial pick for health and human services secretary, dropped out of the confirmation process in 2009 after his financial disclosures revealed he didn’t pay $128,000 in taxes on a car and driver.
But the Daschle example aside, the Obama administration largely started early. In the “overwhelming majority” of cases, Shaub wrote in a letter to Senate Democrats on Saturday, nominees were cleared by the ethics office before the president even announced his choices.
Trump’s team, on the other hand, named Reince Priebus as chief of staff, Steve Bannon as a senior adviser, and Jeff Sessions as attorney general without consulting the ethics office at all.
19 nominees haven’t finished their ethics disclosures
The delays already have real consequences. Before Inauguration Day in 2009, Obama’s team submitted about 80 financial disclosures for OGE to review, according to the office’s transition guide.
OGE says the seven ethics agreements it’s hammered out so far with Trump’s nominees, by contrast, represent 54 percent of the submissions — in other words, 13 of Trump’s 26 announced nominees haven’t even finished their paperwork.
Moving quickly! We've precleared 54% of the nominees we’ve received from the transition team vs. 29% on this date during the 2009 transition
— U.S. OGE (@OfficeGovEthics) January 10, 2017
The ethics office has interpreted federal law to mean that nominees’ ethics agreements should be finalized before their Senate hearings, because the law says the agreements should be forwarded to the committee considering the nomination and that the information should be up to date before the first hearing.
That requirement has generally been honored, although Politico reported that Rod Paige, George W. Bush’s first education secretary, didn’t finish his disclosure requirement on time in 2000. In 2009, in cases where nominees had ethical issues, including Daschle and Treasury Secretary Timothy Geithner, the hearing was delayed.
Once the agreements are finalized, their disclosures and agreements are also posted on the ethics office website, usually within 24 hours. So far, just seven of Trump’s nominees have publicly available ethics agreements and financial disclosures:
Sen. Jeff Sessions, attorney general
Ret. Gen. John Kelly, Department of Homeland Security
Rex Tillerson, secretary of state
Elaine Chao, secretary of transportation
Mike Pompeo, CIA director
Gen. James Mattis, secretary of defense
Scott Pruitt, Environmental Protection Agency administrator
That leaves 19 more Senate-confirmable nominees whose agreements are still in the works or who haven’t even submitted their paperwork. And because Trump has drawn heavily on the private sector for his nominees, several of them have known conflicts of interest:
Wilbur Ross (commerce secretary) made his money in the steel business, which is regulated by the Commerce Department. Ross’s confirmation hearing is Thursday.
Betsy DeVos (education secretary) has indirect stock in an online lending company whose business depends in part on the Education Department’s student loan policy. DeVos’s confirmation hearing is next Monday.
Andy Puzder, tapped for labor secretary, is the CEO of a chain of fast-food restaurants affected by the department’s regulations on issues such as overtime and minimum wage. Puzder’s confirmation hearing is Thursday.
Rep. Tom Price, Trump’s choice for secretary of health and human services, traded stock in health care companies while writing legislation that would affect their business, the Wall Street Journal reported in December.
Steven Mnuchin, would-be Treasury secretary, is a longtime investment banker at Goldman Sachs who owns stock in the lender CIT.
Legally, those conflicts have to be resolved before these candidates can serve in the administration. But resolving legal problems doesn’t necessarily solve political ones. Daschle paid his back taxes, for example, but his name was withdrawn from confirmation anyway.
Fourteen other people who will need Senate confirmation also don’t have posted ethics agreements:
Ben Carson (housing and urban development secretary), whose confirmation hearing is Thursday
Todd Ricketts (deputy commerce secretary)
Vincent Viola (secretary of the Army)
Mick Mulvaney (Office of Management and Budget director)
Rick Perry (energy secretary)
Ryan Zinke (interior secretary)
Nikki Haley (United Nations ambassador)
Terry Branstad (ambassador to China)
David Friedman (ambassador to Israel)
Linda McMahon (Small Business Administration)
Robert Lighthizer (US trade representative)
Dan Coats (national intelligence director)
Seema Verma (Centers for Medicare and Medicaid Services)
Jay Clayton (Securities and Exchange Commission)
The ethics office is urging a delay until the agreements are complete. Shaub, the ethics office director, wrote in a letter to Senate Democrats that scheduling nominees who hadn’t finished their ethics agreements was of “great concern” and that going forward with the hearings would be “cause for alarm.” On Monday, Senate Republicans rescheduled DeVos’s hearing, initially scheduled for Wednesday.
But Ross and Carson, who haven’t finished their disclosures, are still on the docket. And Shaub, who wrote November 18 to the Trump transition team that he hoped for “a great start, wholly free of conflicts of interest,” is now taking a darker tone.
“For as long as I remain director,” Shaub wrote to Senate Democrats on Saturday, the ethics office “will not succumb to pressure to cut corners and ignore conflicts of interest.”