John Windom was the public face of the Electronic Health Record Modernization (EHRM) project for the Veterans Affairs Department. It’s one of the largest IT modernization projects the federal government has undertaken.
The Justice Department recently charged him with “alleged failure to disclose his receipt of thousands of dollars in cash, casino chips, gift cards and other gifts from contractors while leading the project.”
The indictment says he was “fully aware of ethics laws and regulations restricting his acceptance of gifts.” Yet he “routinely accepted personal benefits such as gifts, meals, alcohol, entertainment and other services” in the course of his duties. Further, he “used his position … to encourage, monitor, and facilitate contracting and subcontracting opportunities.”
Potential weak spots in financial disclosure
Financial disclosure is a mandatory process for any government employee who independently exercises significant judgment in taking action in certain designated areas. The purpose of disclosure is to remove potential conflicts of interest and prevent taxpayer-funded decisions that lead to personal gain.
At the time of this writing, these are only allegations of wrongdoing. Windom is entitled to a presumption of innocence until the matter is settled in court. However, the controversy calls to mind three weaknesses in the financial disclosure process for federal employees.
- People can still conceal financial assets to protect their personal interests. While most civil servants are honest people doing patriotic work, there are always bad actors. Disclosure alone isn’t enough to prevent a bad actor from omitting financial interests that conflict with their duties.
- People will “forum shop” for an ethics official who gives them a desired answer. In other words, someone asks the same ethics question to multiple offices until they get the answer they want.
- There are multiple processes involved in financial disclosure, and these processes are commonly siloed and decentralized. This means there’s no single ethics official or compliance lawyer who sees the whole picture. That may not be true in this instance, or at every agency, but it is not uncommon by any stretch.
3 steps ethics offices can take to reduce risk
Earlier in my career, I served as a government lawyer and became familiar with these issues. In my role now, I work with over 40 different federal agencies on financial disclosure. Indeed, I facilitate a working group of ethics officials focused on sharing best practices.
Those experiences have provided me with a wide-angle view of the financial disclosure landscape — and how to solve these challenges.
1. Create a well-defined and centralized process
Most agencies do have a centralized process for collecting and validating annual financial disclosure forms, such as OGE Form 450 (confidential financial disclosure) or OGE Form 278 (public financial disclosure). What often isn’t centralized is the supplemental forms for widely attended gatherings (WAGs), travel reimbursement and outside activities.
These are all areas of overlap that can be important ethical signals to monitor. For example, travel paid for by third parties can also reveal outside influence or possible conflicts. That signal can go unnoticed in a decentralized environment. The ethics officials who review the annual financial disclosure forms often have no visibility into intermittent travel disclosures by government employees.
The fix is to centralize all related processes. Every ethics official involved in reviewing any of these forms should have access to what is reported by the employee across all forms and previous decisions by other ethics officials, so they have a full picture.
2. Create a clearinghouse and common entry point
A centralized process requires a centralized repository for all related disclosure data. This becomes a clearinghouse for all decisions. Ethics officials should be able to query the system, see who reviewed disclosure forms and see any steps required to mitigate potential conflicts in recent history.
Part and parcel to a centralized process and clearinghouse is a common entry point. Every review of any disclosure form has to start at the same place. This eliminates the opportunity for forum shopping.
3. Drive agency-level alignment on ethics guidelines
The propensity for forum shopping is partly driven by legal interpretation. What one ethics lawyer sees as a potential red flag, another might see as routine.
There are good reasons why this might happen. For example, one ethics official may be less concerned about outside activities, generally, than others in their agency. Or one ethics official has previously encountered issues with certain widely attended gatherings, while another official is unaware of that experience, and so approves of the attendance.
Each agency should strive to align all ethics personnel around common guidelines that fit the needs of their organization. This ensures uniformity, but it can also improve efficiency through self-service tools, like answers to frequently asked questions (FAQs). Ideally, this solves the majority of routine inquiries that fall within a normal distribution.
The best defense against conflicts of interest
Matters like those surrounding John Windom are infrequent, which is a testament to the honesty of the government workforce and the disclosure policies currently in place. However, when incidents do occur, the severity of impact — the cost to taxpayers, negative publicity and the loss of public trust — is quite high.
The best defense is a well-defined and centralized process that gathers every financial or other personal interest disclosure (WAG, travel, outside activities) that any given government employee is required to make. While it cannot prevent a bad actor from concealing gifts and perks intended to influence decision-making, it does facilitate more comprehensive reviews and increases the odds that, at some point, they are going to get caught.
John L. Martin, Esq., is a former government lawyer currently consulting with Intelliworx, where he works with over 40 federal agencies on financial disclosure best practices.
